UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.02. | Results of Operations and Financial Condition. |
The information in this Item 2.02 of this Form 8-K, as well as Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On May 2, 2024, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the third quarter and nine months ended March 31, 2024. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, which is incorporated herein by this reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit 99.1 | |
| Exhibit 104 |
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 2, 2024 | Pro-Dex, Inc. | |
| By: | /s/ Alisha K. Charlton | |
| Alisha K. Charlton | ||
| Chief Financial Officer | ||
Exhibit 99.1
Contact: Richard L. Van Kirk, Chief Executive Officer
(949) 769-3200
For Immediate Release
PRO-DEX, INC. ANNOUNCES FISCAL 2024 THIRD QUARTER
AND NINE-MONTH RESULTS
IRVINE, CA, May 2, 2024 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 third quarter ended March 31, 2024. The Company also filed its Quarterly Report on Form 10-Q for the third quarter of fiscal year 2024 with the Securities and Exchange Commission today.
Quarter Ended March 31, 2024
Net sales for the three months ended March 31, 2024, increased $1.2 million, or 9%, to $14.3 million from $13.1 million for the three months ended March 31, 2023, due primarily to an increase in medical device product revenue of $2.8 million offset by a decrease in non-recurring engineering and repair revenue of $736,000 and $635,000 respectively.
Gross profit for the three months ended March 31, 2024, increased $191,000, or 5%, to $4.0 million from $3.8 million for the same period in fiscal 2023. While the gross profit increase is consistent with our increase in net sales, its percentage increase is comparatively lower than the percentage increase in net sales in part due to the mix of revenue generated in the quarter ended March 31, 2024, compared to the same period in fiscal 2023.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended March 31, 2024, increased slightly, by 2%, compared to the same period in fiscal 2023 mostly due to increased research and development costs.
Our operating income for the quarter ended March 31, 2024, increased $148,000, or 7%, to $2.2 million compared to $2.1 million for the prior fiscal year’s corresponding quarter. The increase reflects our increased sales and gross profit, as described above.
Net income for the quarter ended March 31, 2024, was $655,000, or $0.19 per diluted share, compared to $1.6 million, or $0.45 per diluted share, for the corresponding quarter in fiscal 2023. Our net income for the three months ended March 31, 2024, contains unrealized losses on our marketable equity investments of $1.2 million while our net income for the three months ended March 31, 2023, contains unrealized gains on our marketable equity investments of $242,000. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.
Nine Months Ended March 31, 2024
Net sales for the nine months ended March 31, 2024, increased $3.4 million, or 10%, to $38.8 million from $35.4 million for the nine months ended March 31, 2023. The increase in sales relates to a $2.3 million increase in repair revenue related to the enhanced repair program we began last fiscal year to refurbish the orthopedic handpiece we sell to our largest customer, as well as an increase of $1.9 million in sales of new units to that same customer, and an increase in thoracic driver sales of $1.6 million offset by a decrease of $1.6 million in non-recurring engineering revenue and a decrease of $567,000 in CMF driver sales.
Gross profit for the nine months ended March 31, 2024, increased $1.1 million, or 11%, compared to the same period in fiscal 2023. The gross profit increase is consistent with the increase in revenue for the same period.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the nine months ended March 31, 2024, increased 8% to $5.6 million from $5.2 million in the prior fiscal year’s corresponding period, due to an increase in general and administrative expenses and research and development costs during the nine months ended March 31, 2024, compared to the corresponding period of the prior fiscal year.
Our operating income for the nine months ended March 31, 2024, increased $670,000, or 16%, to $4.8 million compared to $4.2 million for the corresponding period of the prior fiscal year. The increase in operating income is attributable to higher sales and gross profit offset by the higher operating expenses described above.
Net income for the nine months ended March 31, 2024, was $540,000, or $0.15 per diluted share, compared to $5.6 million, or $1.52 per diluted share, for the corresponding period in fiscal 2023. Our net income for the nine months ended March 31, 2024, contains unrealized losses on our marketable equity investments of $3.8 million and our net income for the nine months ended March 31, 2023, contains unrealized gains on our marketable equity investments of $3.4 million. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.
CEO Comments
“We are pleased with our third quarter operating results driven by consistent execution,” said the Company’s President and Chief Executive Officer, Richard L. (“Rick”) Van Kirk. “We are tracking toward another record fiscal year from a revenue perspective, and am confident in our ability to carry this momentum into fiscal 2025 and beyond.”
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 also manufactures and 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, expected fiscal year 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 disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.
(tables follow)
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
| March
31, 2024 | June 30,
2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 3,219 | $ | 2,936 | ||||
| Investments | 4,577 | 1,134 | ||||||
| Accounts receivable, net of allowance for expected credit losses of $1 and $0 at March 31, 2024 and at June 30, 2023, respectively | 12,516 | 9,952 | ||||||
| Deferred costs | 331 | 494 | ||||||
| Inventory | 14,242 | 16,167 | ||||||
| Prepaid expenses and other current assets | 1,072 | 296 | ||||||
| Total current assets | 35,957 | 30,979 | ||||||
| Land and building, net | 6,179 | 6,249 | ||||||
| Equipment and leasehold improvements, net | 5,191 | 5,079 | ||||||
| Right of use asset, net | 1,575 | 1,872 | ||||||
| Intangibles, net | 61 | 81 | ||||||
| Investments | 1,543 | 7,521 | ||||||
| Other assets | 42 | 42 | ||||||
| Total assets | $ | 50,548 | $ | 51,823 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 3,435 | $ | 2,261 | ||||
| Accrued expenses | 2,701 | 3,135 | ||||||
| Deferred revenue | 35 | — | ||||||
| Income taxes payable | 390 | 453 | ||||||
| Note payable | 3,858 | 3,827 | ||||||
| Total current liabilities | 10,419 | 9,676 | ||||||
| Lease liability, net of current portion | 1,299 | 1,638 | ||||||
| Deferred income taxes, net | 8 | 8 | ||||||
| Notes payable, net of current portion | 7,884 | 8,911 | ||||||
| Total non-current liabilities | 9,191 | 10,557 | ||||||
| Total liabilities | 19,610 | 20,233 | ||||||
| Shareholders’ equity: | ||||||||
| Common shares; no par value; 50,000,000 shares authorized; 3,451,423 and 3,545,309 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively | 5,575 | 6,767 | ||||||
| Retained earnings | 25,363 | 24,823 | ||||||
| Total shareholders’ equity | 30,938 | 31,590 | ||||||
| Total liabilities and shareholders’ equity | $ | 50,548 | $ | 51,823 | ||||
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (restated) | (restated) | |||||||||||||||
| Net sales | $ | 14,293 | $ | 13,079 | $ | 38,819 | $ | 35,448 | ||||||||
| Cost of sales | 10,291 | 9,268 | 28,357 | 26,058 | ||||||||||||
| Gross profit | 4,002 | 3,811 | 10,462 | 9,390 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 17 | 24 | 79 | 146 | ||||||||||||
| General and administrative expenses | 1,012 | 1,009 | 3,208 | 2,983 | ||||||||||||
| Research and development costs | 760 | 713 | 2,353 | 2,109 | ||||||||||||
| Total operating expenses | 1,789 | 1,746 | 5,640 | 5,238 | ||||||||||||
| Operating income | 2,213 | 2,065 | 4,822 | 4,152 | ||||||||||||
| Interest expense | 138 | 131 | 409 | 389 | ||||||||||||
| Unrealized gain (loss) on marketable equity investments | (1,192 | ) | 242 | (3,785 | ) | 3,407 | ||||||||||
| Interest and other income | 30 | 11 | 76 | 235 | ||||||||||||
| Gain on sale of investments | — | — | — | 7 | ||||||||||||
| Income before income taxes | 913 | 2,187 | 704 | 7,412 | ||||||||||||
| Income tax expense | 258 | 570 | 164 | 1,840 | ||||||||||||
| Net income | $ | 655 | $ | 1,617 | $ | 540 | $ | 5,572 | ||||||||
| Basic net income per share: | ||||||||||||||||
| Net income | $ | 0.19 | $ | 0.46 | $ | 0.15 | $ | 1.56 | ||||||||
| Diluted net income per share: | ||||||||||||||||
| Net income | $ | 0.19 | $ | 0.45 | $ | 0.15 | $ | 1.52 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 3,451 | 3,548 | 3,531 | 3,580 | ||||||||||||
| Diluted | 3,524 | 3,623 | 3,604 | 3,656 | ||||||||||||
| Common shares outstanding | 3,451 | 3,545 | 3,451 | 3,545 | ||||||||||||