EX-99.1 2 pdex_ex99z1.htm PRESS RELEASE Press Release

 


EXHIBIT 99.1

[pdex_ex99z1001.jpg]


Contact:  Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200


For Immediate Release


PRO-DEX, INC. ANNOUNCES FISCAL 2021 SECOND QUARTER

AND SIX-MONTH RESULTS

 

IRVINE, CA, February 4, 2021 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2021 second quarter ended December 31, 2020. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2021 with the Securities and Exchange Commission today.

 

Quarter Ended December 31, 2020

 

Net sales for the three months ended December 31, 2020, increased $304,000, or 4%, to $8.3 million from $8.0 million for the three months ended December 31, 2019, due primarily to sales of our newest product, a thoracic driver, to an existing customer.

 

Gross profit for the three months ended December 31, 2020, decreased $268,000, or 9%, to $2.6 million from $2.9 million for the same period in fiscal 2020, due to under-absorbed fixed manufacturing costs and warranty accruals. Our under-absorbed fixed manufacturing costs increased during the three months ended December 31, 2020 compared to the corresponding period of the prior fiscal year due in part to COVID-19 related paid absences in our machine shop, assembly, and quality operations that did not occur in the corresponding quarter of fiscal 2020.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2020, increased $879,000, or 74%, to $2.1 million compared to $1.2 million in the prior fiscal year’s corresponding quarter, reflecting our planned investments in research and development, selling, and general and administrative expenses in an effort to release new products and garner new customer relationships.

 

Net income for the quarter ended December 31, 2020, was $337,000, or $0.08 per diluted share, compared to $1.2 million, or $0.31 per diluted share, for the corresponding quarter in fiscal 2020.

 

Six Months Ended December 31, 2020

 

Net sales for the six months ended December 31, 2020, increased $1.6 million, or 11%, to $16.9 million from $15.2 million for the six months ended December 31, 2019, due primarily to sales of our new thoracic driver.

 

Gross profit for the six months ended December 31, 2020, increased $427,000, or 8%, compared to the same period in fiscal 2020 due to the increase in sales described above.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2020, increased $1.5 million, or 61% to $4.0 million from $2.5 million in the prior fiscal year’s corresponding period, reflecting our planned investments in research and development in an effort to release new products as well as increases in general and administrative expenses, in part due to expenses related to the new facility that we acquired in November, 2020, as we continue its build-out to ready it for our employees.

 

Net income for the six months ended December 31, 2020 was $1.6 million, or $0.40 per diluted share, compared to $2.4 million, or $0.58 per diluted share, for the corresponding period in fiscal 2020.

 

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 and our net sales growth.” Mr. Van Kirk continued, “We believe this will be a year of transition, as we complete the build-out of our new building and continue to make investments in facilities, personnel, and engineering projects to expand our foundation and allow for continued growth.”

 




 


The amount spent on projects under development as well as the estimated market launch date and estimated future annual revenue is summarized below (in thousands):

 

 

 

Three and Six Months ended
December 31, 2020

 

 

Three and Six Months ended
December 31, 2019

 

 

Est Market Launch(1)

 

Est Annual Revenue

 

Total Research & Development costs:

 

$

989

 

 

$

2,080

 

 

$

397

 

 

$

881

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products in development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ENT Shaver

 

 

76

 

 

 

258

 

 

 

66

 

 

 

155

 

 

Q4 2021

 

$

1,000

 

Vital Ventilator

 

 

8

 

 

 

65

 

 

 

 

 

 

 

 

Q1 2022

 

$

1,500

 

CMF Driver

 

 

279

 

 

 

468

 

 

 

29

 

 

 

46

 

 

Q3 2021

 

$

1,000

 

Sustaining & Other

 

 

626

 

 

 

1,289

 

 

 

302

 

 

 

680

 

 

 

 

 

 

 

Total

 

$

989

 

 

$

2,080

 

 

$

397

 

 

$

881

 

 

 

 

 

 

 

———————

(1)

Represents the calendar quarter of expected market launch.

 

We are nearing completion of an additional round of verification and validation of a new CMF driver, which we will be selling to our existing largest customer under a distribution agreement, that we executed in the first quarter of fiscal 2021. Additionally, as previously disclosed, we anticipate the release to manufacture of a new ENT Shaver in the fall of 2021 and our Director of Business Development is working with a promising medical device distributor to potentially commercialize this product.

 

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 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, 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 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)

 

 

 

 

December 31,
2020

 

 

June 30,
2020

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,523

 

 

$

6,421

 

Investments

 

 

2,884

 

 

 

2,560

 

Accounts receivable, net of allowance for doubtful accounts of $4 and $6 at December 31, 2020 and at June 30, 2020, respectively

 

 

4,621

 

 

 

5,155

 

Deferred costs

 

 

138

 

 

 

155

 

Inventory

 

 

9,152

 

 

 

8,238

 

Prepaid expenses and other current assets

 

 

392

 

 

 

145

 

Total current assets

 

 

22,710

 

 

 

22,674

 

Land and building, net

 

 

6,484

 

 

 

 

Equipment and leasehold improvements, net

 

 

2,704

 

 

 

2,686

 

Right of use asset, net

 

 

2,777

 

 

 

2,943

 

Intangibles, net

 

 

158

 

 

 

162

 

Deferred income taxes, net

 

 

259

 

 

 

259

 

Investments

 

 

3,238

 

 

 

2,360

 

Other assets

 

 

42

 

 

 

42

 

Total assets

 

$

38,372

 

 

$

31,126

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,470

 

 

$

1,965

 

Accrued expenses

 

 

1,785

 

 

 

2,411

 

Deferred revenue

 

 

200

 

 

 

200

 

Note payable and capital lease obligations

 

 

479

 

 

 

651

 

Total current liabilities

 

 

4,934

 

 

 

5,227

 

Lease liability, net of current portion

 

 

2,609

 

 

 

2,750

 

Income taxes payable

 

 

615

 

 

 

804

 

Notes and capital leases payable, net of current portion

 

 

8,375

 

 

 

3,283

 

Total non-current liabilities

 

 

11,599

 

 

 

6,837

 

Total liabilities

 

 

16,533

 

 

 

12,064

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common shares; no par value; 50,000,000 shares authorized; 3,860,639 and 3,811,137 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively

 

 

12,621

 

 

 

12,752

 

Accumulated other comprehensive income (loss)

 

 

(280

)

 

 

(1,586

)

Retained earnings

 

 

9,498

 

 

 

7,896

 

Total shareholders’ equity

 

 

21,839

 

 

 

19,062

 

Total liabilities and shareholders’ equity

 

$

38,372

 

 

$

31,126

 

 





 


PRO-DEX, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

Three Months Ended
December 31,

 

 

Six Months Ended
December 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

8,265

 

 

$

7,961

 

 

$

16,855

 

 

$

15,201

 

Cost of sales

 

 

5,669

 

 

 

5,097

 

 

 

10,784

 

 

 

9,557

 

Gross profit

 

 

2,596

 

 

 

2,864

 

 

 

6,071

 

 

 

5,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

150

 

 

 

135

 

 

 

280

 

 

 

277

 

General and administrative expenses

 

 

936

 

 

 

664

 

 

 

1,641

 

 

 

1,327

 

Research and development costs

 

 

989

 

 

 

397

 

 

 

2,080

 

 

 

881

 

Total operating expenses

 

 

2,075

 

 

 

1,196

 

 

 

4,001

 

 

 

2,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

521

 

 

 

1,668

 

 

 

2,070

 

 

 

3,159

 

Interest expense

 

 

(75

)

 

 

(63

)

 

 

(129

)

 

 

(122

)

Interest and other income

 

 

20

 

 

 

33

 

 

 

61

 

 

 

68

 

Gain on sale of investments

 

 

 

 

 

 

 

 

12

 

 

 

 

Income from operations before income taxes

 

 

466

 

 

 

1,638

 

 

 

2,014

 

 

 

3,105

 

Income tax expense

 

 

(129

)

 

 

(389

)

 

 

(412

)

 

 

(751

)

Net income

 

$

337

 

 

$

1,249

 

 

$

1,602

 

 

$

2,354

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized income from marketable equity investments

 

 

1,413

 

 

 

705

 

 

 

1,306

 

 

 

649

 

Comprehensive income

 

$

1,750

 

 

$

1,954

 

 

$

2,908

 

 

$

3,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.09

 

 

$

0.32

 

 

$

0.42

 

 

$

0.59

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.08

 

 

$

0.31

 

 

$

0.40

 

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,861

 

 

 

3,950

 

 

 

3,856

 

 

 

3,979

 

Diluted

 

 

4,012

 

 

 

4,053

 

 

 

4,014

 

 

 

4,082

 

Common shares outstanding

 

 

3,861

 

 

 

3,884

 

 

 

3,861

 

 

 

3,884