PDEX ProDex Inc

 

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): February 8, 2024

 

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 February 8, 2024, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the second quarter and six months ended December 31, 2023. 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  9.01

Financial Statements and Exhibits.

 (d) Exhibits.

Exhibit 99.1	Press Release dated February 8, 2024.
Exhibit 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:  February 8, 2024	Pro-Dex, Inc.
	By:	/s/ Alisha K. Charlton
		Alisha K. Charlton
		Chief Financial Officer

 

 

 

Exhibit 99.1

 

  

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

 

For Immediate Release

 

PRO-DEX, INC. ANNOUNCES FISCAL 2024 SECOND QUARTER

AND SIX-MONTH RESULTS

 

IRVINE, CA, February 8, 2024 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 second quarter ended December 31, 2023. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2024 with the Securities and Exchange Commission today.

 

Quarter Ended December 31, 2023

 

Net sales for the three months ended December 31, 2023, increased $1.3 million, or 12%, to $12.6 million from $11.3 million for the three months ended December 31, 2022, due primarily to an increase in repair revenue related to the orthopedic surgical handpiece that we sell to our largest customer. As previously disclosed, we began an enhanced repair program in the prior fiscal year to upgrade our customer’s handpieces to the most current revision.

 

Gross profit for the three months ended December 31, 2023, increased $179,000, or 7%, to $2.8 million from $2.6 million for the same period in fiscal 2023. The improvement in gross margin is primarily because we have seen a reduction in the requirement for us to supply components to our suppliers for our printed circuit board assemblies.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2023 increased $539,000, or 36%, to $2.0 million compared to $1.5 million in the prior fiscal year’s corresponding quarter, reflecting in part the reduced number of billable engineering projects in the current fiscal quarter compared to the same period in the prior fiscal year and increased general and administrative expenses mostly due to higher professional fees related to audit and valuation services.

 

Our operating income for the quarter ended December 31, 2023, decreased $360,000, or 32%, to $777,000 compared to $1.1 million for the prior fiscal year’s corresponding quarter. Although sales and gross profit have increased, as described above, our operating expenses have increased at a higher rate.

 

Net income for the quarter ended December 31, 2023, was $500,000 or $0.14 per diluted share, compared to $2.8 million, or $0.75 per diluted share, for the corresponding quarter in fiscal 2023. Our net income for the three months ended December 31, 2023, contains unrealized losses on our marketable equity investments of $40,000 while our net income for the three months ended December 31,2022 contains unrealized gains on our marketable equity investments of $2.7 million. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.

 

Six Months Ended December 31, 2023

 

Net sales for the six months ended December 31, 2023, increased $2.2 million, or 10%, to $24.5 million from $22.4 million for the six months ended December 31, 2022, due primarily to increased repair revenue from the orthopedic surgical handpiece that we sell to our largest customer as well as the launch of our second thoracic driver, offset by decreased non-recurring engineering and proto-type revenue.

 

Gross profit for the six months ended December 31, 2023, increased $882,000, or 16%, compared to the same period in fiscal 2023 due to a decline in the requirement for us to source components at elevated prices on behalf of our suppliers in order to meet delivery requirements of our customers, which we believe was a temporary COVID related disruption that impacted our business.

 

Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2023, increased $359,000, or 10%, to $3.9 million compared to $3.5 million in the prior fiscal year’s corresponding period. The increase is related to increased research and development costs due to fewer billable projects in the current fiscal year than the prior fiscal year as well as higher general and administrative expenses mostly due to higher professional fees mostly related to audit and valuation services.

 

Our operating income for six months ended December 31, 2023, increased $523,000, or 25%, to $2.6 million compared to $2.1 million for the corresponding period of the prior fiscal year. The increase in operating income is attributable to higher sales and gross profit offset by the higher operating expenses described above.

 

Net loss for the six months ended December 31, 2023, was $115,000 or $0.03 per diluted share, compared to net income of $4.0 million, or $1.08 per diluted share for the six months ended December 31, 2022. Our net income for the six months ended December 31, 2023, contains unrealized losses on our marketable equity investments of $2.6 million and our net income for the six months ended December 31, 2022, contains unrealized gains on our marketable equity investments of $3.2 million. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.

 

CEO Comments

 

“We are pleased with our second quarter and year-to-date results.” said Richard L. (“Rick”) Van Kirk, the Company’s President and Chief Executive Officer. “We would also like to share that we have implemented a new stock buy-back program and have begun to decrease our inventory levels.” Mr. Van Kirk continued, “We are excited about our continued sales growth as well as our prospects for continued future growth, as we are increasing our investment in our sales channels.”

 

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, Inc. 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, 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 SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)

  

		December 31, 2023				June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	1,289			$	2,936
Investments			5,803				1,134
Accounts receivable, net of allowance for expected credit losses of $0 at December 31, 2023 and at June 30, 2023, respectively			13,169				9,952
Deferred costs			412				494
Inventory			15,026				16,167
Prepaid expenses and other current assets			901				296
Total current assets			36,600				30,979
Land and building, net			6,202				6,249
Equipment and leasehold improvements, net			5,331				5,079
Right-of-use asset, net			1,675				1,872
Intangibles, net			68				81
Investments			1,509				7,521
Other assets			42				42
Total assets		$	51,427			$	51,823
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,909			$	2,261
Accrued liabilities			2,846				3,135
Income taxes payable			389				453
Notes payable			3,846				3,827
Total current liabilities			9,990				9,676
Lease liability, net of current portion			1,415				1,638
Deferred income taxes, net			8				8
Notes payable, net of current portion			8,228				8,911
Total non-current liabilities			9,651				10,557
Total liabilities			19,641				20,233
Shareholders’ equity:
Common stock; no par value; 50,000,000 shares authorized; 3,541,045 and 3,545,309 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively			7,078				6,767
Retained earnings			24,708				24,823
Total shareholders’ equity			31,786				31,590
Total liabilities and shareholders’ equity		$	51,427			$	51,823

 

 

  

 

PRO-DEX, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

 

 

		Three Months Ended December 31,								Six Months Ended December 31,
		2023				2022				2023				2022
						(restated)								(restated)
Net sales		$	12,588			$	11,282			$	24,526			$	22,369
Cost of sales			9,786				8,659				18,066				16,791
Gross profit			2,802				2,623				6,460				5,578
Operating expenses: Selling expenses			37				68				63				122
General and administrative expenses			1,200				951				2,195				1,975
Research and development costs			788				467				1,593				1,395
Total operating expenses			2,025				1,486				3,851				3,492
Operating income			777				1,137				2,609				2,086
Interest expense			(139	)			(128	)			(271	)			(258	)
Unrealized gain (loss) on marketable equity investments			(40	)			2,740				(2,593	)			3,165
Interest and other income			22				7				46				225
Gain on sale of investments			—				—				—				7
Income (loss) before income taxes			620				3,756				(209	)			5,225
Income tax benefit (expense)			(120	)			(1,004	)			94				(1,270	)
Net income (loss)		$	500			$	2,752			$	(115	)		$	3,955
Basic net income (loss) per share:
Net income (loss)		$	0.14			$	0.77			$	(0.03	)		$	1.10
Diluted net income (loss) per share:
Net income (loss)		$	0.14			$	0.75			$	(0.03	)		$	1.08
Weighted-average common shares outstanding:
Basic			3,547				3,574				3,547				3,595
Diluted			3,612				3,652				3,547				3,672
Common shares outstanding			3,541				3,554				3,541				3,554

 

v3.24.0.1

Cover	Feb. 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 08, 2024
Entity File Number	0-14942
Entity Registrant Name	PRO-DEX, INC.
Entity Central Index Key	0000788920
Entity Tax Identification Number	84-1261240
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	2361 McGaw Avenue
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92614
City Area Code	(949)
Local Phone Number	769-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	PDEX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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