Pro-Dex, Inc. Announces Fiscal 2023 Second Quarter and Six-Month Results

PRO-DEX, INC. (NasdaqCM:PDEX) today announced financial results for its fiscal 2023 second quarter ended December 31, 2022.

IRVINE, CA / ACCESSWIRE / February 2, 2023 / Pro-Dex, Inc.  (NasdaqCM:PDEX) today announced financial results for its fiscal 2023 second quarter ended December 31, 2022. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2023 with the Securities and Exchange Commission today.

Quarter Ended December 31, 2022

Net sales for the three months ended December 31, 2022 increased $1.1 million, or 11%, to $11.3 million from $10.2 million for the three months ended December 31, 2021, due primarily to sales of the orthopedic surgical handpiece that we sell to our largest customer coupled with increased repair revenue of that same handpiece.

Gross profit for the three months ended December 31, 2022 decreased $781,000, or 23%, to $2.6 million from $3.4 million for the same period in fiscal 2022, due to continuing price increases for components, especially chips for our printed circuit board assemblies, as well higher repair costs for the surgical handpiece that we sell to our largest customer. As previously disclosed, beginning in fiscal 2023 and continuing through the end of the second quarter of fiscal 2023, we began implementing a customer upgrade request for our largest customer. We have proceeded in good faith to upgrade all units returned for repair to the newest release of the handpiece while we continue to negotiate with this customer to obtain additional compensation for these more costly upgraded repairs.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2022 decreased $316,000, or 18%, to $1.5 million compared to $1.8 million in the prior fiscal year's corresponding quarter, reflecting in part the higher number of billable engineering projects in the current fiscal quarter compared to the same period in the prior fiscal year and reduced general and administrative expenses mostly due to declining non-cash stock compensation expense.

Net income for the quarter ended December 31, 2022 was $879,000, or $0.24 per diluted share, compared to $925,000, or $0.25 per diluted share, for the corresponding quarter in fiscal 2022.

Six Months Ended December 31, 2022

Net sales for the six months ended December 31, 2022 increased $2.2 million, or 11%, to $22.4 million from $20.2 million for the six months ended December 31, 2021, due primarily to increased repair revenue from the orthopedic surgical handpiece that we sell to our largest customer and increased non-recurring engineering and proto-type revenue.

Gross profitfor the six months ended December 31, 2022decreased $1.3 million, or 18%, compared to the same period in fiscal 2022 due to the increased costs incurred in the repairs of the surgical handpiece we sell to our largest customer as described above, continuing component price increases, and higher cost structures in our machine shop, assembly, materials, and quality departments.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2022 decreased $420,000, or 11%, to $3.5 million compared to $3.9 million in the prior fiscal year's corresponding period.

Net income for the six months ended December 31, 2022 and 2021 remained flat at $2.0 million, or $0.53 per diluted share.

CEO Comments

Richard L. ("Rick") Van Kirk, the Company's President and Chief Executive Officer, commented, "We are pleased with our second quarter and year-to-date results especially considering the challenging environment facing businesses today." Mr. Van Kirk continued, "We are excited to begin operations in the Franklin facility this fiscal quarter and we remain positive that the building will allow for our continued expected 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 which appeal to our customers, primarily medical device distributors. Pro-Dex, Inc. also sells rotary air motors to a wide range of industries. 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, the anticipated commencement of operations in the Franklin facility and expected future growth), 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 disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.

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PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)

    December 31,
2022
   
June 30,
2022
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 382     $ 849  
Investments
    1,134       755  
Accounts receivable, net of allowance for doubtful accounts of $2 and $0 at December 31, 2022 and at June 30, 2022, respectively
    12,195       15,384  
Deferred costs
    877       710  
Inventory
    15,135       12,678  
Prepaid expenses and other current assets
    1,664       790  
Total current assets
    31,387       31,166  
Land and building, net
    6,296       6,343  
Equipment and leasehold improvements, net.
    5,203       4,833  
Right-of-use asset, net
    2,063       2,248  
Intangibles, net
    98       118  
Deferred income taxes, net
    764       797  
Investments
    1,726       1,779  
Other assets
    42       42  
Total assets
  $ 47,579     $ 47,326  
 
               
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
  $ 3,364     $ 3,761  
Accrued expenses
    3,314       2,751  
Income taxes payable
    1,026       544  
Deferred revenue
    851       1,013  
Notes payable
    3,110       3,285  
Total current liabilities
    11,665       11,354  
Lease liability, net of current portion
    1,850       2,054  
Notes payable, net of current portion
    9,590       10,250  
Total non-current liabilities
    11,440       12,304  
Total liabilities
    23,105       23,658  
 
Shareholders' equity:
               
Common shares; no par value; 50,000,000 shares authorized; 3,553,929 and 3,596,131 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively
    6,533       7,682  
Retained earnings
    17,941       15,986  
Total shareholders' equity
    24,474       23,668  
Total liabilities and shareholders' equity
  $ 47,579     $ 47,326  
 
               

PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)

 
  Three Months Ended
December 31,
    Six Months Ended
December 31,
 
 
  2022     2021     2022     2021  
                         
Net sales
  $ 11,282     $ 10,173     $ 22,369     $ 20,161  
Cost of sales
    8,659       6,769       16,791       13,329  
Gross profit
    2,623       3,404       5,578       6,832  
                                 
Operating expenses:
Selling expenses
    68       22       122       59  
General and administrative expenses
    951       1,165       1,975       2,257  
Research and development costs
    467       615       1,395       1,596  
Total operating expenses
    1,486       1,802       3,492       3,912  
                                 
Operating income
    1,137       1,602       2,086       2,920  
Interest expense
    (128 )     (117 )     (258 )     (237 )
Unrealized gain (loss) on marketable equity investments
    158       (300 )     408       (152 )
Interest and other income
    7       25       225       49  
Gain on sale of investments
    -       -       7       -  
Income before income taxes
    1,174       1,210       2,468       2,580  
Income tax expense
    (295 )     (285 )     (513 )     (592 )
Net income
  $ 879     $ 925     $ 1,955     $ 1,988  
                                 
Basic net income per share:
                               
Net income
  $ 0.25     $ 0.25     $ 0.54     $ 0.54  
Diluted net income per share:
                               
Net income
  $ 0.24     $ 0.25     $ 0.53     $ 0.53  
                                 
                                 
Weighted average common shares outstanding:
                               
Basic
    3,574       3,657       3,595       3,654  
Diluted
    3,652       3,767       3,672       3,774  
Common shares outstanding
    3,554       3,642       3,554       3,642  

Contact:

Richard L. Van Kirk, Chief Executive Officer
(949) 769-3200

SOURCE: Pro-Dex, Inc.

 


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