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Pro Dex Inc (PDEX) SEC Filing 8-K Material Event for the period ending Monday, November 15, 2021

Pro Dex Inc

CIK: 788920 Ticker: PDEX

 

EXHIBIT 99.1

ProDexLogoAndTag_High Res

 

 

 

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

 

For Immediate Release

 

PRO-DEX, INC. ANNOUNCES FISCAL 2022 FIRST QUARTER RESULTS

 

IRVINE, CA, November 15, 2021 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2022 first quarter ended September 30, 2021. The Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2022 with the Securities and Exchange Commission today.

 

Net sales for the three months ended September 30, 2021, increased $1.4 million, or 16%, to $10.0 million from $8.6 million for the three months ended September 30, 2020. The increase is driven by increased sales of the surgical handpiece we sell to our largest customer as well as increases in sales of our CMF drivers. Offsetting these increases, sales of our newest thoracic driver declined due to the fulfillment of our customer’s distribution network. As previously described, sales are often not on a continuous upward trajectory due to variability in new product launches and customer planned inventory builds.

 

Gross profit for the three months ended September 30, 2021 decreased $47,000, or 1%, compared to the year-ago period. Gross margin decreased by 6 percentage points to 34% during the three months ended September 30, 2021, compared to 40% during the corresponding year-ago period due primarily to unfavorable product mix.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2021 increased $184,000 from the corresponding year-ago period. The increase is related to increased compensation expense related to non-qualified stock options granted in the prior fiscal year.

 

Net income for the quarter ended September 30, 2021 was $1.1 million, or $0.28 per diluted share, compared to $1.2 million, or $0.29 per diluted share, for the quarter ended September 30, 2020.

 

CEO Comments

 

Richard L. (“Rick”) Van Kirk, the Company’s President and Chief Executive Officer, commented, “We are pleased with our first quarter results. In the first quarter we have been awarded several NRE projects from new and existing customers to provide proof of concept analysis on several handpieces and attachments. Although these projects are not material to our first quarter results, we are pleased that these projects allow us the opportunity to continue to expand our portfolio of products. Finally,” concluded Mr. Van Kirk, “we are completing necessary validation activities to prepare to move some of our employees to the new Franklin facility in the near future.”

 

 
 

 

 

The amount spent on internal projects under development, along with the current estimated commercial launch date and estimated recurring annual revenue, is summarized below (in thousands):

 

    For the Three Months Ended
September 30,
             
    2021     2020     Market Launch(1)     Est. Annual Revenue  
Total Research & Development costs:   $ 980     $ 1,091                  
                                 
Products in development:                                
ENT Shaver   $ 232     $ 183       Q4 2021     $ 1,000  
VITAL Ventilator     115       57       Q1 2022     $ 1,500  
CMF Driver           189       (2 )   $ 1,000  
Sustaining & Other     633       662                  
Total   $ 980     $ 1,091                  

 

(1) Represents the calendar quarter of expected market launch.

 

(2) The CMF Driver was completed in the third quarter of fiscal 2021 and began shipping to our existing largest customer under a distribution agreement we executed in the first quarter of fiscal 2021.

 

As we introduce new products into the market, we expect to see an increase in sustaining and other engineering expenses. Typical examples of sustaining engineering activities include, but are not limited to, end-of- life component replacement, especially in electronic components found in our printed circuit board assemblies, analysis of customer complaint data to improve process and design, replacement and enhancement of tooling and fixtures used in the machine shop, assembly operations, and inspection areas to improve efficiency and through-put. Additionally, these costs include development projects that may be in their infancy and may or may not result in a full-fledged product development effort.

 

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 (including, but not limited to, estimated product launch dates and estimated future 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 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.

 

(tables follow)

 
 

 

 

PRO-DEX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)

 

                 
    September 30,
2021
    June 30,
2021
 
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 5,177     $ 3,721  
Investments     1,506       1,295  
Accounts receivable, net of allowance for doubtful accounts of $7 and $2 at September 30, 2021 and at June 30, 2021, respectively     10,093       10,933  
Deferred costs     184       193  
Inventory     8,907       8,437  
Prepaid expenses and other current assets     151       434  
Total current assets     26,018       25,013  
Land and building, net     6,413       6,437  
Equipment and leasehold improvements, net     4,535       3,845  
Right of use asset, net     2,518       2,605  
Intangibles, net     195       186  
Deferred income taxes, net     463       463  
Investments     1,656       1,704  
Other assets     67       67  
Total assets   $ 41,865     $ 40,320  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liabilities:                
Accounts payable   $ 2,476     $ 2,288  
Accrued expenses     2,195       2,198  
Deferred revenue     293       150  
Note payable     1,248       1,236  
Total current liabilities     6,212       5,872  
Lease liability, net of current portion     2,342       2,432  
Income taxes payable     709       397  
Notes payable, net of current portion     11,219       11,535  
Total non-current liabilities     14,270       14,364  
Total liabilities     20,482       20,236  
                 
Shareholders’ Equity:                
Common stock; no par value; 50,000,000 shares authorized; 3,666,319 and 3,645,660 shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively     8,188       7,953  
Retained earnings     13,195       12,131  
Total shareholders’ equity     21,383       20,084  
Total liabilities and shareholders’ equity   $ 41,865     $ 40,320  

 

 
 

 

PRO-DEX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except share and per share amounts)

 

                 
    Three Months Ended
September 30,
 
    2021     2020  
             
Net sales   $ 9,988     $ 8,590  
Cost of sales     6,560       5,115  
Gross profit     3,428       3,475  
                 
Operating expenses:                
Selling expenses     37       130  
General and administrative expenses     1,093       705  
Research and development costs     980       1,091  
Total operating expenses     2,110       1,926  
Operating income     1,318       1,549  
                 
Other income (expense):                
Interest and miscellaneous income     24       53  
Unrealized gain (loss) on marketable equity investments     149       (107 )
Interest expense     (120 )     (54 )
Total other expense     53       (108 )
                 
Income before income taxes     1,371       1,441  
Provision for income taxes     307       283  
Net income   $ 1,064     $ 1,158  
                 
Basic and diluted income per share:                
Basic net income per share   $ 0.29     $ 0.30  
Diluted net income per share   $ 0.28     $ 0.29  
                 
Weighted average common shares outstanding:                
Basic     3,651,334       3,850,838  
Diluted     3,777,118       3,975,063  
Common shares outstanding     3,666,319       3,858,251  

 

 

 

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Ticker: PDEX
CIK: 788920
Form Type: 8-K Corporate News
Accession Number: 0001553350-21-001031
Submitted to the SEC: Mon Nov 15 2021 4:10:18 PM EST
Accepted by the SEC: Mon Nov 15 2021
Period: Monday, November 15, 2021
Industry: Surgical And Medical Instruments And Apparatus
Events:
  1. Earnings Release
  2. Financial Exhibit

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