Pro-Dex, Inc. Announces Fiscal 2024 Fourth Quarter and Full-Year Results
IRVINE, CA / ACCESSWIRE / September 5, 2024 / PRO-DEX, INC. (NASDAQ:PDEX) today announced financial results for its fiscal 2024 fourth quarter and full-year ended June 30, 2024.
Quarter Ended June 30, 2024
Net sales for the three months ended June 30, 2024 increased $4.4 million, or 41%, to $15.0 million from $10.6 million for the three months ended June 30, 2023, due primarily to increased revenue in the amount of $3.4 million from our largest customer. Specifically, the increase relates to a $1.4 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 $2.0 million in sales of new units to that same customer. Gross profit for the three months ended June 30, 2024 increased $729,000, or 22%. Although gross profit increased, our gross margin decreased from 32% for the three months ended June 30, 2023, to 27% for the three months ended June 30, 2024, due to continued price pressures and increased indirect labor in our operations group to manage our growth.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended June 30, 2024, remained relatively flat at $1.7 million, compared to $1.8 million for the prior fiscal year's corresponding quarter. While these total operating expense amounts have remained flat, we reduced general and administrative expenses by $182,000 and increased engineering expenses by $141,000 for the quarter ended June 30, 2024, compared to the corresponding quarter in 2023. The decrease in general and administrative expenses is a result of reduced equity compensation expenses due to employee forfeitures and the increase in engineering relates to a higher proportion of sustaining engineering expenses as opposed to billable customer contract expenses.
Our operating income for the quarter ended June 30, 2024, increased $742,000, or 46%, to $2.4 million compared to $1.6 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 June 30, 2024, increased slightly by $86,000 to $1.6 million, or $0.46 per diluted share, compared to $1.5 million, or $0.42 per diluted share, in the corresponding quarter in 2023. The difference in the growth rate of net income and operating income is primarily due to unrealized gains and losses of investments. In the current quarter, operating income increased 46% over the corresponding quarter of the prior fiscal year compared to the slight increase in net income for the same period.
Year Ended June 30, 2024
Net sales for the fiscal year ended June 30, 2024 increased $7.8 million, or 17%, to $53.8 million from $46.0 million for the fiscal year ended June 30, 2023, due primarily to increases in revenue from our largest customer. Specifically, the increase relates to a $3.6 million increase in repair revenue as well as an increase of $3.5 million in sales of new units to that same customer.
Gross profit for the fiscal year ended June 30, 2024, increased $1.8 million, or 14%, to $14.5 million compared to $12.7 million for fiscal 2023.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the fiscal year ended June 30, 2024, increased 6% to $7.4 million from $7.0 million in the prior fiscal year. The increase relates primarily to an increase in research and development costs because in fiscal 2024 our expenditures related primarily to sustaining engineering activities rather than billable customer projects which are reclassified to cost of sales.
Our operating income for the year ended June 30, 2024, increased $1.4 million, or 25%, to $7.2 million compared to $5.8 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 fiscal year ended June 30, 2024, was $2.1 million, or $0.60 per diluted share, compared to $7.1 million, or $1.95 per diluted share, for fiscal 2023. Our net income for the year ended June 30, 2024, contains unrealized losses on our marketable equity investments of $4.1 million while our net income for the year ended June 30, 2023, contains unrealized gains on our marketable equity investments of $3.9 million. The difference in the growth rate of net income and operating income is primarily due to unrealized gains and losses of investments. In the current fiscal year operating income increased 25% over the prior fiscal year, compared to the 70% decrease in net income for the same period. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.
CEO Comments
"We are very pleased with our performance including increasing sales and an increase of $1.4 million in operating income," said the Company's President and Chief Executive Officer Richard L. ("Rick") Van Kirk. "While this fiscal year included the challenges of transitioning to a multiple-facility operation, we continued to grow the business. I remain grateful to the entire Pro-Dex team for their ongoing efforts and teamwork."
Mr. Van Kirk continued, "Additionally, we are excited to announce that we hired a new Director of Operations in the first quarter of fiscal 2025, Mr. Jawahar Garg, who has extensive manufacturing operations and supply chain experience to assist our team to continue on our growth trajectory."
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 sells rotary air motors. 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, prospects for 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 risks of the Company set forth in the Company's filings with the Securities and Exchange Commission.
(tables follow)
PRO-DEX, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
| June 30, |
| ||||||
| 2024 |
|
| 2023 |
| |||
| ASSETS |
|
|
|
|
|
| ||
| Current assets: |
|
|
|
|
|
| ||
| Cash and cash equivalents |
| $ | 2,631 |
|
| $ | 2,936 |
|
| Investments |
|
| 4,217 |
|
|
| 1,134 |
|
| Accounts receivable |
|
| 13,887 |
|
|
| 9,952 |
|
| Deferred costs |
|
| 262 |
|
|
| 494 |
|
| Inventory |
|
| 15,269 |
|
|
| 16,167 |
|
| Prepaid expenses |
|
| 345 |
|
|
| 296 |
|
| Total current assets |
|
| 36,611 |
|
|
| 30,979 |
|
| Land and building, net |
|
| 6,155 |
|
|
| 6,249 |
|
| Equipment and improvements, net |
|
| 5,024 |
|
|
| 5,079 |
|
| Right of use asset, net |
|
| 1,473 |
|
|
| 1,872 |
|
| Intangibles, net |
|
| 54 |
|
|
| 81 |
|
| Deferred income taxes, net |
|
| 1,555 |
|
|
| - |
|
| Investments |
|
| 1,563 |
|
|
| 7,521 |
|
| Other assets |
|
| 42 |
|
|
| 42 |
|
| Total assets |
| $ | 52,477 |
|
| $ | 51,823 |
|
|
|
|
|
|
|
|
| |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable |
| $ | 4,513 |
|
| $ | 2,261 |
|
| Accrued liabilities |
|
| 3,359 |
|
|
| 3,135 |
|
| Income taxes payable |
|
| 632 |
|
|
| 453 |
|
| Deferred revenue |
|
| 14 |
|
|
| - |
|
| Notes payable |
|
| 4,374 |
|
|
| 3,827 |
|
| Total current liabilities |
|
| 12,892 |
|
|
| 9,676 |
|
| Non-current liabilities: |
|
|
|
|
|
|
|
|
| Lease liability, net of current portion |
|
| 1,182 |
|
|
| 1,638 |
|
| Deferred income taxes, net |
|
| - |
|
|
| 8 |
|
| Notes payable, net of current portion |
|
| 7,536 |
|
|
| 8,911 |
|
| Total non-current liabilities |
|
| 8,718 |
|
|
| 10,557 |
|
| Total liabilities |
|
| 21,610 |
|
|
| 20,233 |
|
|
|
|
|
|
|
|
| |
| Commitments and Contingencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Shareholders' equity: |
|
|
|
|
|
|
|
|
| Common stock, no par value, 50,000,000 shares authorized; 3,363,412 and 3,545,309 shares issued and outstanding at June 30, 2024 and 2023, respectively |
|
| 3,917 |
|
|
| 6,767 |
|
| Retained earnings |
|
| 26,950 |
|
|
| 24,823 |
|
| Total shareholders' equity |
|
| 30,867 |
|
|
| 31,590 |
|
| Total liabilities and shareholders' equity |
| $ | 52,477 |
|
| $ | 51,823 |
|
PRO-DEX, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share data)
| Three Months Ended |
|
| Years Ended |
| |||||||||||
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| |||||
| Net sales |
| $ | 15,025 |
|
| $ | 10,639 |
|
| $ | 53,844 |
|
| $ | 46,087 |
|
| Cost of sales |
|
| 10,936 |
|
|
| 7,279 |
|
|
| 39,293 |
|
|
| 33,338 |
|
| Gross profit |
|
| 4,089 |
|
|
| 3,360 |
|
|
| 14,551 |
|
|
| 12,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling expenses |
|
| 37 |
|
|
| 9 |
|
|
| 117 |
|
|
| 155 |
|
| General and administrative expenses |
|
| 864 |
|
|
| 1,046 |
|
|
| 4,072 |
|
|
| 4,028 |
|
| Research and development costs |
|
| 836 |
|
|
| 695 |
|
|
| 3,189 |
|
|
| 2,804 |
|
| Total operating expenses |
|
| 1,737 |
|
|
| 1,750 |
|
|
| 7,378 |
|
|
| 6,987 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Operating income |
|
| 2,352 |
|
|
| 1,610 |
|
|
| 7,173 |
|
|
| 5,762 |
|
| Interest expense |
|
| (150 | ) |
|
| (145 | ) |
|
| (558 | ) |
|
| (533 | ) |
| Unrealized gain (loss) on investments |
|
| (340 | ) |
|
| 492 |
|
|
| (4,125 | ) |
|
| 3,899 |
|
| Gain on sale of investments |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 6 |
|
| Interest and dividend income |
|
| 68 |
|
|
| 58 |
|
|
| 144 |
|
|
| 294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Income before income taxes |
|
| 1,930 |
|
|
| 2,015 |
|
|
| 2,634 |
|
|
| 9,428 |
|
| Income tax expense |
|
| 343 |
|
|
| 514 |
|
|
| 507 |
|
|
| 2,354 |
|
| Net income |
| $ | 1,587 |
|
| $ | 1,501 |
|
| $ | 2,127 |
|
| $ | 7,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Basic & Diluted income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic net income per share |
| $ | 0.47 |
|
| $ | 0.42 |
|
| $ | 0.61 |
|
| $ | 1.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Diluted net income per share |
| $ | 0.46 |
|
| $ | 0.42 |
|
| $ | 0.60 |
|
| $ | 1.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
| 3,400,767 |
|
|
| 3,545,309 |
|
|
| 3,498,807 |
|
|
| 3,571,044 |
|
| Diluted |
|
| 3,473,167 |
|
|
| 3,610,109 |
|
|
| 3,571,207 |
|
|
| 3,636,944 |
|
PRO-DEX, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Years Ended June 30, |
| ||||||
| 2024 |
|
| 2023 |
| |||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
| Net income |
| $ | 2,127 |
|
| $ | 7,074 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
| 1,160 |
|
|
| 857 |
|
| Unrealized (gain) loss on marketable equity investments |
|
| 4,125 |
|
|
| (3,899 | ) |
| Gain on sale of investments |
|
| - |
|
|
| (6 | ) |
| Non-cash lease recovery |
|
| (17 | ) |
|
| (2 | ) |
| Amortization of loan fees, net |
|
| (13 | ) |
|
| 12 |
|
| Share-based compensation |
|
| 605 |
|
|
| 766 |
|
| Deferred income taxes |
|
| (1,563 | ) |
|
| 264 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
| (3,935 | ) |
|
| 5,432 |
|
| Deferred costs |
|
| 232 |
|
|
| 216 |
|
| Inventory |
|
| 898 |
|
|
| (3,489 | ) |
| Prepaid expenses |
|
| (49 | ) |
|
| 494 |
|
| Accounts payable and accrued expenses |
|
| 2,436 |
|
|
| (1,153 | ) |
| Deferred revenue |
|
| 14 |
|
|
| (1,013 | ) |
| Income taxes payable |
|
| 179 |
|
|
| (91 | ) |
| Net cash provided by operating activities |
|
| 6,199 |
|
|
| 5,462 |
|
|
|
|
|
|
|
|
| |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
| Purchases of equipment and improvements |
|
| (983 | ) |
|
| (974 | ) |
| Proceeds from sale of investments |
|
| - |
|
|
| 89 |
|
| Investment in Monogram |
|
| (1,250 | ) |
|
| - |
|
| Net cash used in investing activities |
|
| (2,233 | ) |
|
| (885 | ) |
|
|
|
|
|
|
|
| |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| Principal payments on notes payable |
|
| (4,816 | ) |
|
| (6,093 | ) |
| Borrowing from Minnesota Bank & Trust, net of loan origination fees |
|
| 4,000 |
|
|
| 5,284 |
|
| Repurchases of common stock |
|
| (3,505 | ) |
|
| (1,547 | ) |
| Payments of employee taxes on net issuance of common stock |
|
| - |
|
|
| (223 | ) |
| Proceeds from exercise of stock options and ESPP contributions |
|
| 50 |
|
|
| 89 |
|
| Net cash used in financing activities |
|
| (4,271 | ) |
|
| (2,490 | ) |
|
|
|
|
|
|
|
| |
| Net increase (decrease) in cash and cash equivalents |
|
| (305 | ) |
|
| 2,087 |
|
| Cash and cash equivalents, beginning of year |
|
| 2,936 |
|
|
| 849 |
|
| Cash and cash equivalents, end of year |
| $ | 2,631 |
|
| $ | 2,936 |
|
Contact: Richard L. Van Kirk, Chief Executive Officer
(949) 769-3200
SOURCE: Pro-Dex, Inc.
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