Pro-Dex, Inc. Announces Fiscal 2021 Third Quarter and Nine-Month Results
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Pro-Dex, Inc. Announces Fiscal 2021 Third Quarter and Nine-Month Results

Thursday, May 6, 2021 4:05 PM
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Earnings

IRVINE, CA / ACCESSWIRE / May 6, 2021 / PRO-DEX, INC. (NASDAQ: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 from operations 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  
                                 

CONTACT:
Richard L. Van Kirk
Chief Executive Officer
(949) 769-3200

SOURCE: Pro-Dex, Inc.

Pro-Dex, Inc.
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