8-K
PRO DEX INC (PDEX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange 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, zipcode)
(949) 769-3200
(Registrant’s telephone number includingarea 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<br> 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
ForImmediate 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.
QuarterEnded 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.
SixMonths 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.
CEOComments
“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.”
AboutPro-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)
| June<br> 30, <br>2023 | |||
|---|---|---|---|
| ASSETS | |||
| Current assets: | |||
| Cash and cash<br> equivalents | 1,289 | $ | 2,936 |
| Investments | 5,803 | 1,134 | |
| Accounts<br> 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<br> expenses and other current assets | 901 | 296 | |
| Total<br> current assets | 36,600 | 30,979 | |
| Land<br> and building, net | 6,202 | 6,249 | |
| Equipment and leasehold improvements,<br> net | 5,331 | 5,079 | |
| Right-of-use asset, net | 1,675 | 1,872 | |
| Intangibles, net | 68 | 81 | |
| Investments | 1,509 | 7,521 | |
| Other<br> assets | 42 | 42 | |
| Total<br> assets | 51,427 | $ | 51,823 |
| LIABILITIES<br> AND SHAREHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Accounts payable | 2,909 | $ | 2,261 |
| Accrued liabilities | 2,846 | 3,135 | |
| Income taxes payable | 389 | 453 | |
| Notes<br> payable | 3,846 | 3,827 | |
| Total<br> current liabilities | 9,990 | 9,676 | |
| Lease liability, net of current<br> portion | 1,415 | 1,638 | |
| Deferred income taxes, net | 8 | 8 | |
| Notes<br> payable, net of current portion | 8,228 | 8,911 | |
| Total<br> non-current liabilities | 9,651 | 10,557 | |
| Total<br> liabilities | 19,641 | 20,233 | |
| Shareholders’<br> equity: | |||
| Common<br> stock; no par value; 50,000,000 shares authorized; 3,541,045 and 3,545,309 shares issued and outstanding at December 31, 2023<br> and June 30, 2023, respectively | 7,078 | 6,767 | |
| Retained<br> earnings | 24,708 | 24,823 | |
| Total<br> shareholders’ equity | 31,786 | 31,590 | |
| Total<br> liabilities and shareholders’ equity | 51,427 | $ | 51,823 |
All values are in US Dollars.
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
| Three<br> Months Ended<br> December 31, | Six<br> Months Ended<br> 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: <br>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 |