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Pro Dex Inc (PDEX) SEC Filing 8-K Material Event for the period ending Thursday, May 5, 2022

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 THIRD QUARTER

AND NINE-MONTH RESULTS

 

IRVINE, CA, May 5, 2022 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2022 third quarter ended March 31, 2022. The Company also filed its Quarterly Report on Form 10-Q for the third quarter of fiscal year 2022 with the Securities and Exchange Commission today.

 

Quarter Ended March 31, 2022

 

Net sales for the three months ended March 31, 2022, decreased $2.5 million, or 21%, to $9.3 million from $11.7 million for the three months ended March 31, 2021, due primarily to decreased sales of $2.8 million of our thoracic driver, which is as expected after a significant launch and fulfillment of our customer’s distribution network. While we expect future sales of this product, the revenue may not follow a consistent trajectory.

 

Gross profit for the three months ended March 31, 2022, decreased $1.5 million, or 35%, to $2.9 million from $4.4 million for the same period in fiscal 2021. The gross profit decrease is related in part to procurement of long-lead time components for many of our printed circuit board assemblies at higher prices given the world-wide shortages of these parts. These components were necessary to support customer requirements. As an example, a component normally costing $5 each was available at only $70 each due to these shortages. Total non-standard component costs were approximately $340,000 for the third quarter. While this remains an issue, we are hopeful that the most challenging cost issues are behind us.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended March 31, 2022, decreased $683,000, or 27%, compared to the same period in fiscal 2021 mostly due to reduced spending on internal product development projects as our engineering team focused more on billable customer projects.

 

Net income for the quarter ended March 31, 2022, was $462,000, or $0.12 per diluted share, compared to $2.1 million, or $0.54 per diluted share, for the corresponding quarter in fiscal 2021. Net income for the quarter ended March 31, 2021, included $919,000 of combined realized and unrealized gains on our investment portfolio, while the quarter ended March 31, 2022, included unrealized losses of $275,000.

 

Nine Months Ended March 31, 2022

 

Net sales for the nine months ended March 31, 2022, increased $832,000, or 3%, to $29.4 million from $28.6 million for the nine months ended March 31, 2021, due to increased billable non-recurring engineering projects and despite the above mentioned component challenges.

 

Gross profit for the nine months ended March 31, 2022, decreased $767,000, or 7%, compared to the same period in fiscal 2021. The gross profit decline for the nine months ended March 31, 2022, is similarly due to the supply chain issues mentioned above.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the nine months ended March 31, 2022, decreased 12% to $5.7 million from $6.5 million in the prior fiscal year’s corresponding period, mostly due to reduced spending on internal product development projects and reduced selling expenses offset by increased general and administrative expenses due to non-cash stock based compensation expense.

 

 

 
 

 

Net income for the nine months ended March 31, 2022 was $2.5 million, or $0.65, per diluted share, compared to $5.0 million, or $1.26 per diluted share, for the corresponding period in fiscal 2021. Net income for the nine months ended March 31, 2021, included $2.2 million of combined realized and unrealized gains on our investment portfolio, while the nine months ended March 31, 2022, included unrealized losses of $427,000.

 

CEO Comments

 

“As disclosed in our second quarter earnings release, we knew that we were facing supply chain challenges related to component shortages and we are pleased that while this quarter did not set any records, we were able to meet our customers’ expectations and report profitable results during this challenging period,” said the Company’s President and Chief Executive Officer Richard L. (“Rick”) Van Kirk. “While we are still sourcing parts that have proven difficult and costly to obtain, we have successfully navigated these sourcing challenges. We are looking forward to a good fourth quarter and we are tracking toward record sales for the fiscal year from a revenue perspective as we have a healthy backlog and have secured the components we need. We also have absorbed much of the additional component costs in our third quarter. We remain optimistic going forward as we have a healthy pipeline and the additional capacity our new building provides.

 

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, future sale of products and the ability to navigate future supply chain challenges), 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 SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)

 

 

    March 31,
2022
   

June 30,

2021

 
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 4,761     $ 3,721  
Investments     1,129       1,295  
Accounts receivable, net of allowance for doubtful accounts of $0 and $2 at March 31, 2022 and at June 30, 2021, respectively     8,680       10,933  
Deferred costs     341       193  
Inventory     11,866       8,437  
Prepaid expenses and other current assets     1,322       434  
Total current assets     28,099       25,013  
Land and building, net     6,366       6,437  
Equipment and leasehold improvements, net     4,635       3,845  
Right of use asset, net     2,339       2,605  
Intangibles, net     162       186  
Deferred income taxes, net     463       463  
Investments     1,778       1,704  
Other assets     42       67  
Total assets   $ 43,884     $ 40,320  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liabilities:                
Accounts payable   $ 3,533     $ 2,288  
Accrued expenses     1,652       2,198  
Deferred revenue     896       150  
Note payable     1,642       1,236  
Total current liabilities     7,723       5,872  
Lease liability, net of current portion     2,151       2,432  
Income taxes payable     1,164       397  
Notes payable, net of current portion     10,575       11,535  
Total non-current liabilities     13,890       14,364  
Total liabilities     21,613       20,236  
Shareholders’ equity:                
Common shares; no par value; 50,000,000 shares authorized; 3,618,663 and 3,645,660 shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively     7,690       7,953  
Retained earnings     14,581       12,131  
Total shareholders’ equity     22,271       20,084  
Total liabilities and shareholders’ equity   $ 43,884     $ 40,320  
                 

 

 

 
 

 

PRO-DEX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

    Three Months Ended
March 31,
    Nine Months Ended
March 31,
 
    2022     2021     2022     2021  
                         
Net sales   $ 9,265     $ 11,739     $ 29,426     $ 28,594  
Cost of sales     6,407       7,354       19,737       18,138  
Gross profit     2,858       4,385       9,689       10,456  
                                 
Operating expenses:                                
Selling expenses     20       136       79       415  
General and administrative expenses     1,145       1,280       3,402       2,922  
Loss on disposal of equipment     14             14        
Research and development costs     658       1,104       2,254       3,184  
Total operating expenses     1,837       2,520       5,749       6,521  
                                 
Operating income     1,021       1,865       3,940       3,935  
Interest expense     (112 )     (102 )     (349 )     (231 )
Unrealized gain (loss) on marketable equity investments     (275 )     136       (427 )     1,442  
Interest and other income           41       50       102  
Gain on sale of investments           783             795  
Income before income taxes     634       2,723       3,214       6,043  
Income tax expense     (172 )     (592 )     (764 )     (1,004 )
Net income   $ 462     $ 2,131     $ 2,450     $ 5,039  
                                 
Basic net income per share:                                
Net income   $ 0.13     $ 0.56     $ 0.67     $ 1.31  
Diluted net income per share:                                
Net income   $ 0.12     $ 0.54     $ 0.65     $ 1.26  
                                 
                                 
Weighted average common shares outstanding:                                
Basic     3,626       3,817       3,645       3,843  
Diluted     3,749       3,966       3,774       3,998  
Common shares outstanding     3,618       3,701       3,618       3,701  

 

 

 

0000788920 false 0000788920 2022-05-05 2022-05-05 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 5, 2022

 

PRO-DEX, INC.

(Exact name of registrant as specified in charter)

 

Colorado 0-14942 84-1261240
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)

 

2361 McGaw Avenue

Irvine, California 92614

(Address of principal executive offices, zip code)

 

(949) 769-3200

(Registrant’s telephone number including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, no par value PDEX NASDAQ Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company    

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 
 
 
 

 

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 5, 2022, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the third quarter and nine months ended March 31, 2022. 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 9.01Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number   Description
99.1   Press Release dated May 5, 2022.
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 5, 2022 Pro-Dex, Inc.
   
     
  By: /s/ Alisha K. Charlton
    Alisha K. Charlton
    Chief Financial Officer

 

 

 

 

 

 
 

INDEX TO EXHIBITS

 

Exhibit Number   Description
99.1   Press Release dated May 5, 2022.
104   Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)

 

 

 

 

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Ticker: PDEX
CIK: 788920
Form Type: 8-K Corporate News
Accession Number: 0001553350-22-000398
Submitted to the SEC: Thu May 05 2022 4:02:49 PM EST
Accepted by the SEC: Thu May 05 2022
Period: Thursday, May 5, 2022
Industry: Surgical And Medical Instruments And Apparatus
Events:
  1. Earnings Release
  2. Financial Exhibit

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