Full Press Release Details
Contact: Richard L. Van Kirk, Chief Executive
PRO-DEX, INC. ANNOUNCES FISCAL 2022 FIRST
IRVINE, CA, November
15, 2021 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2022 first quarter ended September 30, 2021.
The Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2022 with the Securities and Exchange Commission
sales for the three months ended September 30, 2021, increased $1.4 million, or 16%, to $10.0 million from $8.6 million for the three
months ended September 30, 2020. The increase is driven by increased sales of the surgical handpiece
we sell to our largest customer as well as increases in sales of our CMF drivers. Offsetting these increases, sales of our newest thoracic
driver declined due to the fulfillment of our customer's distribution network. As previously described, sales are often not on a
continuous upward trajectory due to variability in new product launches and customer planned inventory builds.
profit for the three months ended September 30, 2021 decreased $47,000, or 1%, compared to the year-ago period. Gross margin decreased
by 6 percentage points to 34% during the three months ended September 30, 2021, compared to 40% during the corresponding year-ago period
due primarily to unfavorable product mix.
Operating expenses (which include
selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2021 increased $184,000
from the corresponding year-ago period. The increase is related to increased compensation expense related to non-qualified stock options
granted in the prior fiscal year.
Net income for the quarter ended
September 30, 2021 was $1.1 million, or $0.28 per diluted share, compared to $1.2 million, or $0.29 per diluted share, for the quarter
ended September 30, 2020.
Van Kirk, the Company's President and Chief Executive Officer, commented, "We are pleased with our first quarter results.
In the first quarter we have been awarded several NRE projects from new and existing customers to provide proof of concept analysis on
several handpieces and attachments. Although these projects are not material to our first quarter results, we are pleased that these projects
allow us the opportunity to continue to expand our portfolio of products. Finally," concluded Mr. Van Kirk, "we are completing
necessary validation activities to prepare to move some of our employees to the new Franklin facility in the near future."
The amount spent on internal
projects under development, along with the current estimated commercial launch date and estimated recurring annual revenue, is summarized
below (in thousands):
| For the Three Months Ended September 30, | ||||||||||||||||
| 2021 | 2020 | Market Launch (1) | Est. Annual Revenue | |||||||||||||
| Total Research & Development costs: | $ | 980 | $ | 1,091 | ||||||||||||
| Products in development: | ||||||||||||||||
| ENT Shaver | $ | 232 | $ | 183 | Q4 2021 | $ | 1,000 | |||||||||
| VITAL Ventilator | 115 | 57 | Q1 2022 | $ | 1,500 | |||||||||||
| CMF Driver | - | 189 | (2 | ) | $ | 1,000 | ||||||||||
| Sustaining & Other | 633 | 662 | ||||||||||||||
| Total | $ | 980 | $ | 1,091 |
As we introduce new products
into the market, we expect to see an increase in sustaining and other engineering expenses. Typical examples of sustaining engineering
activities include, but are not limited to, end-of- life component replacement, especially in electronic components found in our printed
circuit board assemblies, analysis of customer complaint data to improve process and design, replacement and enhancement of tooling and
fixtures used in the machine shop, assembly operations, and inspection areas to improve efficiency and through-put. Additionally, these
costs include development projects that may be in their infancy and may or may not result in a full-fledged product development effort.
About Pro-Dex, Inc.:
Pro-Dex, Inc. specializes in
the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used
primarily in the orthopedic, thoracic, and maxocranial facial markets. We have patented adoptive torque-limiting software and proprietary
sealing solutions that appeal to our customers, primarily medical device distributors. Pro-Dex also sells compact pneumatic air motors
for a variety of industrial applications. Pro-Dex's products are found in hospitals and medical engineering labs around the world. For
more information, visit the Company's website at www.pro-dex.com.
Statements herein concerning
the Company's plans, growth, and strategies may include 'forward-looking statements' within the context of the federal securities laws.
Statements regarding the Company's future events, developments, and future performance (including, but not limited to, estimated product
launch dates and estimated future revenue), as well as management's expectations, beliefs, plans, estimates or projections relating to
the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those
suggested as a result of various factors. Interested parties should refer to the risk factors and other disclosures concerning the operational
and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| September 30, 2021 | June 30, 2021 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 5,177 | $ | 3,721 | ||||
| Investments | 1,506 | 1,295 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $7 and $2 at September 30, 2021 and at June 30, 2021, respectively | 10,093 | 10,933 | ||||||
| Deferred costs | 184 | 193 | ||||||
| Inventory | 8,907 | 8,437 | ||||||
| Prepaid expenses and other current assets | 151 | 434 | ||||||
| Total current assets | 26,018 | 25,013 | ||||||
| Land and building, net | 6,413 | 6,437 | ||||||
| Equipment and leasehold improvements, net | 4,535 | 3,845 | ||||||
| Right of use asset, net | 2,518 | 2,605 | ||||||
| Intangibles, net | 195 | 186 | ||||||
| Deferred income taxes, net | 463 | 463 | ||||||
| Investments | 1,656 | 1,704 | ||||||
| Other assets | 67 | 67 | ||||||
| Total assets | $ | 41,865 | $ | 40,320 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,476 | $ | 2,288 | ||||
| Accrued expenses | 2,195 | 2,198 | ||||||
| Deferred revenue | 293 | 150 | ||||||
| Note payable | 1,248 | 1,236 | ||||||
| Total current liabilities | 6,212 | 5,872 | ||||||
| Lease liability, net of current portion | 2,342 | 2,432 | ||||||
| Income taxes payable | 709 | 397 | ||||||
| Notes payable, net of current portion | 11,219 | 11,535 | ||||||
| Total non-current liabilities | 14,270 | 14,364 | ||||||
| Total liabilities | 20,482 | 20,236 | ||||||
| Shareholders' Equity: | ||||||||
| Common stock; no par value; 50,000,000 shares authorized; 3,666,319 and 3,645,660 shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively | 8,188 | 7,953 | ||||||
| Retained earnings | 13,195 | 12,131 | ||||||
| Total shareholders' equity | 21,383 | 20,084 | ||||||
| Total liabilities and shareholders' equity | $ | 41,865 | $ | 40,320 |
PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Net sales | $ | 9,988 | $ | 8,590 | ||||
| Cost of sales | 6,560 | 5,115 | ||||||
| Gross profit | 3,428 | 3,475 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 37 | 130 | ||||||
| General and administrative expenses | 1,093 | 705 | ||||||
| Research and development costs | 980 | 1,091 | ||||||
| Total operating expenses | 2,110 | 1,926 | ||||||
| Operating income | 1,318 | 1,549 | ||||||
| Other income (expense): | ||||||||
| Interest and miscellaneous income | 24 | 53 | ||||||
| Unrealized gain (loss) on marketable equity investments | 149 | (107 | ) | |||||
| Interest expense | (120 | ) | (54 | ) | ||||
| Total other expense | 53 | (108 | ) | |||||
| Income before income taxes | 1,371 | 1,441 | ||||||
| Provision for income taxes | 307 | 283 | ||||||
| Net income | $ | 1,064 | $ | 1,158 | ||||
| Basic and diluted income per share: | ||||||||
| Basic net income per share | $ | 0.29 | $ | 0.30 | ||||
| Diluted net income per share | $ | 0.28 | $ | 0.29 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 3,651,334 | 3,850,838 | ||||||
| Diluted | 3,777,118 | 3,975,063 | ||||||
| Common shares outstanding | 3,666,319 | 3,858,251 |