Full Press Release Details
Contact: Richard L. Van Kirk, Chief Executive Officer
PRO-DEX, INC. ANNOUNCES FISCAL 2023 FIRST QUARTER
IRVINE, CA, November 3, 2022
- PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2023 first quarter ended September 30, 2022. The Company
also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2023 with the Securities and Exchange Commission today.
sales for the three months ended September 30, 2022 increased $1.1 million, or 11%, to $11.1 million from $10.0 million for the three
months ended September 30, 2021. The increase is driven primarily by $0.8 million in increased repairs
of the surgical handpiece we sell to our largest customer as well as increases of $0.7 million in sales of our NRE & proto-type offerings.
Offsetting these increases, sales of our medical devices decreased approximately $397,000 in the first quarter of fiscal 2023 compared
to the corresponding period of the prior fiscal year. As previously described, sales are often not on a continuous upward trajectory due
to variability in new product launches and customer planned inventory builds, but we remain confident in our continued long-term sales
profit for the three months ended September 30, 2022, decreased $472,000, or 14%, compared to the year-ago period. Gross margin decreased
by 7 percentage points to 27% during the three months ended September 30, 2022, compared to 34% during the corresponding year-ago period,
due primarily to repairs of the surgical handpiece we sell to our largest customer. Beginning in fiscal 2023 we began upgrading all repaired
units for this customer to the newest release of the handpiece at no additional cost. We have continued to deliver these upgrades in good
faith, while continuing negotiations with this customer to compensate us for these more costly upgrades.
Operating expenses (which include
selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2022 decreased $104,000
from the corresponding year-ago period. The decrease resulted from decreased non-cash stock compensation expense related to previously
issued awards as well as reduced research and development expenses as we have more billable projects in the first quarter of fiscal 2023
compared to the corresponding period of the prior fiscal year.
Net income for the quarter ended
September 30, 2022 was $1.1 million, or $0.29 per diluted share, compared to $1.1 million, or $0.28 per diluted share, for the quarter
ended September 30, 2021.
Van Kirk, the Company's President and Chief Executive Officer, commented, "We are pleased with our first quarter results and
to share that the FDA has authorized commencement of manufacturing activities at the Franklin facility. Additionally," concluded
Mr. Van Kirk, "we are confident that our negotiations with our largest customer related to upgrades will conclude with an infusion
of additional revenue."
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, 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, 2022 | June 30, 2022 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,798 | $ | 849 | ||||
| Investments | 813 | 755 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $2 and $0 at September 30, 2022 and at June 30, 2022, respectively | 11,045 | 15,384 | ||||||
| Deferred costs | 587 | 710 | ||||||
| Inventory | 15,664 | 12,678 | ||||||
| Prepaid expenses and other current assets | 928 | 790 | ||||||
| Total current assets | 31,835 | 31,166 | ||||||
| Land and building, net | 6,319 | 6,343 | ||||||
| Equipment and leasehold improvements, net | 4,852 | 4,833 | ||||||
| Right of use asset, net | 2,156 | 2,248 | ||||||
| Intangibles, net | 108 | 118 | ||||||
| Deferred income taxes, net | 764 | 797 | ||||||
| Investments | 1,889 | 1,779 | ||||||
| Other assets | 42 | 42 | ||||||
| Total assets | $ | 47,965 | $ | 47,326 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 3,549 | $ | 3,761 | ||||
| Accrued liabilities | 3,245 | 2,751 | ||||||
| Income taxes payable | 731 | 544 | ||||||
| Deferred revenue | 851 | 1,013 | ||||||
| Note payable | 3,297 | 3,285 | ||||||
| Total current liabilities | 11,673 | 11,354 | ||||||
| Lease liability, net of current portion | 1,954 | 2,054 | ||||||
| Notes payable, net of current portion | 9,922 | 10,250 | ||||||
| Total non-current liabilities | 11,876 | 12,304 | ||||||
| Total liabilities | 23,549 | 23,658 | ||||||
| Shareholders' Equity: | ||||||||
| Common stock; no par value; 50,000,000 shares authorized; 3,606,422 and 3,596,131 shares issued and outstanding at September 30, 2022 and June 30, 2022, respectively | 7,354 | 7,682 | ||||||
| Retained earnings | 17,062 | 15,986 | ||||||
| Total shareholders' equity | 24,416 | 23,668 | ||||||
| Total liabilities and shareholders' equity | $ | 47,965 | $ | 47,326 |
PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
| Three Months Ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Net sales | $ | 11,087 | $ | 9,988 | ||||
| Cost of sales | 8,131 | 6,560 | ||||||
| Gross profit | 2,956 | 3,428 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 53 | 37 | ||||||
| General and administrative expenses | 1,024 | 1,093 | ||||||
| Research and development costs | 929 | 980 | ||||||
| Total operating expenses | 2,006 | 2,110 | ||||||
| Operating income | 950 | 1,318 | ||||||
| Other income (expense): | ||||||||
| Interest and dividend income | 218 | 24 | ||||||
| Realized gain on sale of marketable equity investments | 6 | - | ||||||
| Unrealized gain on marketable equity investments | 250 | 149 | ||||||
| Interest expense | (130 | ) | (120 | ) | ||||
| Total other income | 344 | 53 | ||||||
| Income before income taxes | 1,294 | 1,371 | ||||||
| Provision for income taxes | 218 | 307 | ||||||
| Net income | $ | 1,076 | $ | 1,064 | ||||
| Basic and diluted net income per share: | ||||||||
| Basic net income per share | $ | 0.30 | $ | 0.29 | ||||
| Diluted net income per share | $ | 0.29 | $ | 0.28 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 3,616,392 | 3,651,334 | ||||||
| Diluted | 3,694,959 | 3,777,118 | ||||||
| Common shares outstanding | 3,606,422 | 3,666,319 |