Full Press Release Details
Contact: Richard L. Van Kirk,
Chief Executive Officer
PRO-DEX, INC. ANNOUNCES FISCAL 2024 FIRST QUARTER
IRVINE, CA, November 2,
2023 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 first quarter ended September 30, 2023. The
Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2024 with the Securities and Exchange Commission
sales for the three months ended September 30, 2023, increased $851,000, or 8%, to $11.9 million from $11.1 million for the three
months ended September 30, 2022. The increase is driven primarily by $1.8 million in increased repairs
of the surgical handpiece we sell to our largest customer offset primarily by a decrease of $0.7 million in sales of our NRE & proto-type
profit for the three months ended September 30, 2023, increased $702,000, or 24%, compared to the year-ago period. Gross margin increased
by 4 percentage points to 31% during the three months ended September 30, 2023, compared to 27% during the corresponding year-ago period,
due primarily to the prior year cost of sales including approximately $450,000 in repair costs to upgrade the handpiece we sell our largest
customer at no additional costs. We had no similar expenses in the current fiscal year.
Operating expenses (which include
selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2023, decreased $181,000
from the corresponding year-ago period. The decrease resulted from decreased research and development expenses as we have fewer expenses
related to internal development projects in the first quarter of fiscal 2024 compared to the corresponding period of the prior fiscal
Net loss for the quarter ended
September 30, 2023, was $615,000, or $0.17 per diluted share, compared to net income of $1.2 million, or $0.33 per diluted share, for
the quarter ended September 30, 2022. Our net loss includes non-operating expense of $2.7 million for the quarter ended September 30,
2023, consisting primarily of unrealized losses on investments of $2.6 million. Most of the unrealized loss on investments relates to
our Warrant to purchase common stock of Monogram Orthopaedics Inc. (NasdaqCM: MGRM), which had a $2.5 million reduction in estimated fair
value for the first quarter ended September 30, 2023, but still has an estimated fair value of $3.7 million as of September 30, 2023.
Our investments are recorded at estimated fair value, and the valuation can be highly volatile.
Van Kirk, the Company's President and Chief Executive Officer, commented, "We are pleased with our first quarter results and
excited to share that sales for the first quarter ended September 30, 2023, includes approximately $1.1 million related to the launch
of a new product in our Thoracic driver product line." Mr. Van Kirk concluded, "We are confident that with our assembly and
repairs operations fully transitioned to the Franklin facility we are poised for continued long-term growth."
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.
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| September 30, 2023 | June 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 1,904 | $ | 2,936 | ||||
| Investments | 1,010 | 1,134 | ||||||
| Accounts receivable, net of allowance for credit losses of $0 at September 30, 2023 and at June 30, 2023, respectively | 11,034 | 9,952 | ||||||
| Deferred costs | 591 | 494 | ||||||
| Income taxes receivable | 420 | - | ||||||
| Inventory | 16,264 | 16,167 | ||||||
| Prepaid expenses and other current assets | 201 | 296 | ||||||
| Total current assets | 31,424 | 30,979 | ||||||
| Land and building, net | 6,226 | 6,249 | ||||||
| Equipment and leasehold improvements, net | 4,952 | 5,079 | ||||||
| Right-of-use asset, net | 1,774 | 1,872 | ||||||
| Intangibles, net | 75 | 81 | ||||||
| Investments | 5,092 | 7,521 | ||||||
| Other assets | 42 | 42 | ||||||
| Total assets | $ | 49,585 | $ | 51,823 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,740 | $ | 2,261 | ||||
| Accrued liabilities | 2,701 | 3,135 | ||||||
| Income taxes payable | - | 453 | ||||||
| Notes payable | 2,840 | 3,827 | ||||||
| Total current liabilities | 8,281 | 9,676 | ||||||
| Lease liability, net of current portion | 1,529 | 1,638 | ||||||
| Deferred income taxes, net | 8 | 8 | ||||||
| Notes payable, net of current portion | 8,572 | 8,911 | ||||||
| Total non-current liabilities | 10,109 | 10,557 | ||||||
| Total liabilities | 18,390 | 20,233 | ||||||
| Shareholders' Equity: | ||||||||
| Common stock; no par value; 50,000,000 shares authorized; 3,547,330 and 3,545,309 shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively | 6,987 | 6,767 | ||||||
| Retained earnings | 24,208 | 24,823 | ||||||
| Total shareholders' equity | 31,195 | 31,590 | ||||||
| Total liabilities and shareholders' equity | $ | 49,585 | $ | 51,823 |
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
| Three Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| (as restated) | ||||||||
| Net sales | $ | 11,938 | $ | 11,087 | ||||
| Cost of sales | 8,280 | 8,131 | ||||||
| Gross profit | 3,658 | 2,956 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 25 | 53 | ||||||
| General and administrative expenses | 995 | 1,024 | ||||||
| Research and development costs | 805 | 929 | ||||||
| Total operating expenses | 1,825 | 2,006 | ||||||
| Operating income | 1,833 | 950 | ||||||
| Other income (expense): | ||||||||
| Interest and dividend income | 24 | 218 | ||||||
| Realized gain on sale of marketable equity investments | - | 6 | ||||||
| Unrealized gain on marketable equity investments | (2,553 | ) | 425 | |||||
| Interest expense | (133 | ) | (130 | ) | ||||
| Total other income | (2,662 | ) | 519 | |||||
| Income before income taxes | (829 | ) | 1,469 | |||||
| Provision for income taxes | (214 | ) | 266 | |||||
| Net income | $ | (615 | ) | $ | 1,203 | |||
| Basic and diluted net income per share: | ||||||||
| Basic net income per share | $ | (0.17 | ) | $ | 0.33 | |||
| Diluted net income per share | $ | (0.17 | ) | $ | 0.33 | |||
| Weighted average common shares outstanding: | ||||||||
| Basic | 3,546,737 | 3,616,392 | ||||||
| Diluted | 3,546,737 | 3,694,959 | ||||||
| Common shares outstanding | 3,547,330 | 3,606,422 |