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 THIRD QUARTER

AND NINE-MONTH RESULTS


IRVINE, CA, May 6, 2021 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2021 third quarter ended March 31, 2021. The Company also filed its Quarterly Report on Form 10-Q for the third quarter of fiscal year 2021 with the Securities and Exchange Commission today.


Quarter Ended March 31, 2021


Net sales for the three months ended March 31, 2021 increased $3.2 million, or 38%, to $11.7 million from $8.5 million for the three months ended March 31, 2020, due primarily to increased sales of $2.6 million of our thoracic driver, which was launched in the third quarter of the prior fiscal year, as well as increased sales of $923,000 of our CMF drivers, which we sell to various distributors including to our existing largest customer.


Gross profit for the three months ended March 31, 2020 increased $1.2 million, or 37%, to $4.4 million from $3.2 million for the same period in fiscal 2020.


Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended March 31, 2021 increased $1.0 million, or 67%, compared to the same period in fiscal 2021 mostly due to increased investment in internal product development and stock compensation expense.


Net income for the quarter ended March 31, 2021 was $2.0 million, or $0.50 per diluted share, compared to $1.2 million, or $0.30 per diluted share, for the corresponding quarter in fiscal 2020.


Nine Months Ended March 31, 2021


Net sales for the nine months ended March 31, 2021 increased $4.9 million, or 21%, to $28.6 million from $23.7 million for the nine months ended March 31, 2021, due primarily to increased sales of $4.9 million of our thoracic driver, which was launched in the third quarter of the prior fiscal year.


Gross profit for the nine months ended March 31, 2021 increased $1.6 million, or 18%, compared to the same period in fiscal 2020.  The gross profit increase is directly related to our 21% increase in revenue and our ability to better absorb our fixed manufacturing costs.


Operating expenses (which include selling, general and administrative, and research and development expenses) for the nine months ended March 31, 2021 increased 63% to $6.5 million from $4.0 million in the prior fiscal year’s corresponding period, mostly due to increased investment in internal product development and sustaining engineering of $1.7 million  and increased general and administrative expenses of $0.9 million, including stock based compensation expense and operating costs related to our new commercial building.


Net income for the nine months ended March 31, 2021 was $3.6 million, or $0.90, per diluted share, compared to $3.6 million, or $0.88 per diluted share, for the corresponding period in fiscal 2020.



CEO Comments


 “We are extremely pleased with our third quarter results.  We are also very proud of the team here at Pro-Dex that produced quarterly and monthly shipment records while at the same time commissioning a new building and managing through a pandemic. We have come very far as a company and we could not be more pleased,” said the Company’s President and Chief Executive Officer Richard L. (“Rick”) Van Kirk.  “While not every quarter will set records, we will strive to execute properly and continue to drive year over year growth.”



 


R&D Projects


The amount spent on projects under development is summarized below (in thousands):


 

 

Three and Nine Months Ended March 31, 2021

 

 

Three and Nine Months Ended March 31, 2020

 

 

Market Launch (1)

 

 

Est Annual Revenue

 

Total Research & Development costs:

 

$

1,104

 

 

$

3,184

 

 

$

620

 

 

$

1,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products in development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ENT Shaver

 

 

192

 

 

 

450

 

 

 

136

 

 

 

291

 

 

 

Q4 2021

 

 

$

1,000

 

Vital Ventilator

 

 

26

 

 

 

91

 

 

 

—

 

 

 

—

 

 

 

Q1 2022

 

 

$

1,500

 

CMF Driver

 

 

263

 

 

 

731

 

 

 

60

 

 

 

106

 

 

 

(2)

 

 

$

1,000

 

Sustaining & Other

 

 

623

 

 

 

1,912

 

 

 

424

 

 

 

1,104

 

 

 

 

 

 

 

 

 

Total

 

$

1,104

 

 

$

3,184

 

 

$

620

 

 

$

1,501

 

 

 

 

 

 

 

 

 

———————

(1)

Represents the calendar quarter of expected market launch.

(2)

The CMF Driver was completed in the third quarter of fiscal 2021 and shipped to our existing largest customer under a distribution agreement we executed in the first quarter of fiscal 2021. We generated revenue of $220,000 related to these initial shipments during the third quarter ended March 31, 2021. This project is now complete and future engineering expenses related to this project will be included in sustaining and other.

 

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, 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)

 

 

 

March 31,
2021

 

 

June 30,
2020

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,874

 

 

$

6,421

 

Investments

 

 

1,123

 

 

 

2,560

 

Accounts receivable, net of allowance for doubtful accounts of $9 and $6 at March 31, 2021 and at June 30, 2020, respectively

 

 

11,921

 

 

 

5,155

 

Deferred costs

 

 

173

 

 

 

155

 

Inventory

 

 

8,368

 

 

 

8,238

 

Prepaid expenses and other current assets

 

 

1,108

 

 

 

145

 

Total current assets

 

 

26,567

 

 

 

22,674

 

Land and building, net

 

 

6,460

 

 

 

—

 

Equipment and leasehold improvements, net

 

 

3,106

 

 

 

2,686

 

Right of use asset, net

 

 

2,692

 

 

 

2,943

 

Intangibles, net

 

 

163

 

 

 

162

 

Deferred income taxes, net

 

 

259

 

 

 

259

 

Investments

 

 

3,026

 

 

 

2,360

 

Other assets

 

 

42

 

 

 

42

 

Total assets

 

$

42,315

 

 

$

31,126

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,524

 

 

$

1,965

 

Accrued expenses

 

 

2,642

 

 

 

2,411

 

Deferred revenue

 

 

200

 

 

 

200

 

Note payable and finance lease obligations

 

 

1,110

 

 

 

651

 

Total current liabilities

 

 

6,476

 

 

 

5,227

 

Lease liability, net of current portion

 

 

2,521

 

 

 

2,750

 

Income taxes payable

 

 

1,207

 

 

 

804

 

Notes and finance lease payable, net of current portion

 

 

11,703

 

 

 

3,283

 

Total non-current liabilities

 

 

15,431

 

 

 

6,837

 

Total liabilities

 

 

21,907

 

 

 

12,064

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common shares; no par value; 50,000,000 shares authorized; 3,700,540 and 3,811,137 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively

 

 

9,059

 

 

 

12,752

 

Accumulated other comprehensive loss

 

 

(144

)

 

 

(1,586

)

Retained earnings

 

 

11,493

 

 

 

7,896

 

Total shareholders’ equity

 

 

20,408

 

 

 

19,062

 

Total liabilities and shareholders’ equity

 

$

42,315

 

 

$

31,126

 

 

 




 


PRO-DEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended
March 31,

 

 

Nine Months Ended
March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

11,739

 

 

$

8,508

 

 

$

28,594

 

 

$

23,710

 

Cost of sales

 

 

7,354

 

 

 

5,298

 

 

 

18,138

 

 

 

14,855

 

Gross profit

 

 

4,385

 

 

 

3,210

 

 

 

10,456

 

 

 

8,855

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

136

 

 

 

161

 

 

 

415

 

 

 

438

 

General and administrative expenses

 

 

1,280

 

 

 

725

 

 

 

2,922

 

 

 

2,052

 

Research and development costs

 

 

1,104

 

 

 

620

 

 

 

3,184

 

 

 

1,501

 

Total operating expenses

 

 

2,520

 

 

 

1,506

 

 

 

6,521

 

 

 

3,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,865

 

 

 

1,704

 

 

 

3,935

 

 

 

4,864

 

Interest expense

 

 

(102

)

 

 

(58

)

 

 

(231

)

 

 

(180

)

Interest and other income

 

 

41

 

 

 

9

 

 

 

102

 

 

 

77

 

Gain on sale of investments

 

 

783

 

 

 

—

 

 

 

795

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

2,587

 

 

 

1,655

 

 

 

4,601

 

 

 

4,761

 

Income tax expense

 

 

(592

)

 

 

(442

)

 

 

(1,004

)

 

 

(1,194

)

Net income

 

$

1,995

 

 

$

1,213

 

 

$

3,597

 

 

$

3,567

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized income (loss) from marketable equity investments

 

 

136

 

 

 

(1,262

)

 

 

1,442

 

 

 

(613

)

Comprehensive income (loss)

 

$

2,131

 

 

$

(49

)

 

$

5,039

 

 

$

2,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.52

 

 

$

0.31

 

 

$

0.94

 

 

$

0.90

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

0.50

 

 

$

0.30

 

 

$

0.90

 

 

$

0.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,817

 

 

 

3,871

 

 

 

3,843

 

 

 

3,944

 

Diluted

 

 

3,966

 

 

 

3,999

 

 

 

3,998

 

 

 

4,071

 

Common shares outstanding

 

 

3,701

 

 

 

3,837

 

 

 

3,701

 

 

 

3,837