Pro-Dex, Inc. Announces Fiscal 2016 Second Quarter And Six-Month Results

Feb 11, 2016, 16:05 ET from Pro-Dex, Inc.

IRVINE, Calif., Feb. 11, 2016 /PRNewswire/ -- PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2016 second quarter ended December 31, 2015. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2016 with the Securities and Exchange Commission today.

Quarter Ended December 31, 2015

Net sales for the three months ended December 31, 2015 increased $2.6 million, or 95%, to $5.4 million from $2.8 million for the three months ended December 31, 2014, due primarily to increases in medical device revenues as well as an additional medical device product launch during the quarter. Gross profit for the three months ended December 31, 2015 increased $843,000, or 121%, to $1.5 million from $696,000 for the same period in fiscal 2015.  Contributing to this increase were the increase in sales volume, described above, and improved absorption of our fixed manufacturing overhead as compared to the corresponding quarter in fiscal 2015.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2015 increased $54,000 or 5% to $1.1 million compared to the prior fiscal year's corresponding quarter, reflecting primarily increased selling expenses.

Income from continuing operations for the quarter ended December 31, 2015 increased by $593,000 to $391,000, compared to a loss from continuing operations of $202,000 in the corresponding quarter in fiscal 2015.  Net income for the quarter ended December 31, 2015 was $391,000, or $0.09 per share, compared to a net loss of $192,000, or $0.05 per share, for the corresponding quarter in fiscal 2015.

Six Months Ended December 31, 2015

Net sales for the six months ended December 31, 2015 increased $4.1 million, or 77%, to $9.5 million from $5.4 million for the six months ended December 31, 2014, due primarily to increases in medical device revenues, which represents approximately 70% of our revenue for the six months ended December 31, 2015.

Gross profit for the six months ended December 31, 2015 increased $1.1 million, or 70% compared to the same period in fiscal 2015.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2015 increased 10% to $2.3 million from $2.1 million in the prior fiscal year's corresponding period, reflecting primarily increased selling expenses associated with our Fineline Molds division, a business we acquired in the third quarter of fiscal 2015, and increased general and administrative expenses mostly related to our investment in real property located in Ramsey, Minnesota as well as increased research and development personnel costs to assist with our growing portfolio of medical drivers.

Income from continuing operations for the six months ended December 31, 2015 was $265,000, compared to a loss from continuing operations of $383,000 for the corresponding period in fiscal 2015.  Net income for the six months ended December 31, 2015 was $265,000, or $0.06 per share, compared to a net loss of $248,000, or $0.09 per share, for the corresponding period in fiscal 2015. 

CEO Comments

Richard L. ("Rick") Van Kirk, the Company's President and Chief Executive Officer, commented, "We are extremely pleased with our second quarter results as our turnaround continues and gains momentum.  I commend the entire Pro-Dex team for their success in making timely shipments to our key customers and completing the design of another important surgical driver which marks the third completed product development project in the last nine months. In addition, we remain excited about our strong backlog as well as new opportunities in our core medical device business as we look to grow the company further."

"While we are excited to have announced a return to profitability, and appreciate the patience of our shareholders while we have made numerous changes, we believe strongly in continuous improvement.  To that end we anticipate making appropriate and measured investments to continue to strengthen our team and operations."

About Pro-Dex, Inc.:

Pro-Dex, Inc., with operations in California and Oregon, specializes in the design, development and manufacture of powered rotary drive surgical and dental instruments used primarily in the orthopedic, spine, maxocranial facial and dental markets.  Its OMS division designs and manufactures embedded motion control systems serving the medical, factory automation, semi-conductor and scientific research markets. Its Fineline Molds division manufactures plastic injection molding for a variety of industries. Pro-Dex's products are found in hospitals, dental offices, medical engineering labs, scientific research facilities and high tech manufacturing operations around the world.  

Pro-Dex also provides quality and regulatory consulting services, as well as engineering consulting and placement services through its Engineering Services Division.  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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)




December 31,
2015


June 30,

2015

ASSETS








    Current Assets:








       Cash and cash equivalents


$

1,053


$

697


        Accounts receivable, net of allowance for doubtful accounts of $20 and $36, respectively



1,831



2,326


Due from factor



912




Unbilled receivables



108



853


Other current receivables



10



28


       Inventory



4,481



4,310


         Prepaid expenses



122



124


Investment in Ramsey property and related notes receivable



1,461




       Deferred income taxes



43



70


           Total current assets



10,021



8,408


    Equipment and leasehold improvements, net



1,225



1,470


       Investment in Ramsey property and related notes receivable





1,652


    Goodwill



353



353


    Intangibles



480



547


    Other assets



88



86


       Total assets


$

12,167


$

12,516










LIABILITIES AND SHAREHOLDERS' EQUITY








    Current Liabilities:








       Accounts payable


$

1,286


$

1,867


         Accrued expenses



1,036



1,202


         Deferred revenue



282



594


         Notes payable



522



24


       Capital lease obligations



1



7


           Total current liabilities



3,127



3,694


           Deferred income taxes



43



70


           Deferred rent



173



204


           Note payable, net of current portion



58



70


           Total non-current liabilities



274



344


       Total liabilities



3,401



4,038


Shareholders' equity:








Common shares; no par value; 50,000,000 shares authorized; 4,149,004 and 4,139,579 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively



18,434



18,411


       Accumulated deficit



(9,668)



(9,933)


           Total shareholders' equity



8,766



8,478


               Total liabilities and shareholders' equity


$

12,167


$

12,516










 

PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per share amounts)








Three Months Ended
December 31,


Six Months Ended
December 31,



2015


2014


2015


2014














Net sales


$

5,439


$

2,792


$

9,535


$

5,387

Cost of sales



3,900



2,096



6,938



3,863

Gross profit



1,539



696



2,597



1,524














Operating expenses:

Selling expenses



256



186



470



328

General and administrative expenses



452



459



986



950

Research and development costs



435



444



863



829

Total operating expenses



1,143



1,089



2,319



2,107














Operating income (loss)



396



(393)



278



(583)

Interest expense



(20)



(2)



(26)



(3)

Interest income



1



4





5

Gain from disposal of equipment



14



1



14



1

Realized gain on sale of investments





59





59














Income (loss) from continuing operations before income taxes



391



(331)



266



(521)

Income tax (expense) benefit





129



(1)



138














Income (loss) from continuing operations



391



(202)



265



(383)

Income from discontinued operations,
net of income taxes





10





21

Net income (loss)


$

391


$

(192)


$

265


$

(362)

Other comprehensive income, net of tax:

Unrealized gain from marketable equity investments





162





173

Less: Reclassification of realized gains included in net loss





(59)





(59)

Comprehensive income (loss)


$

391


$

(89)


$

265


$

(248)














Basic and diluted net income (loss) per share:













     Income (loss) from continuing operations


$

0.09


$

(0.05)


$

0.06


$

(0.09)

     Income from discontinued operations









     Net income (loss)


$

0.09


$

(0.05)


$

0.06


$

(0.09)














Weighted average common shares outstanding:













     Basic



4,143



4,170



4,142



4,190

     Diluted



4,165



4,170



4,161



4,190

Common shares outstanding



4,149



4,170



4,149



4,170

 

PRO-DEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)






Six Months Ended
December 31,



2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES:







Net income (loss)


$

265


$

(362)

Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:







     Depreciation and amortization



334



259

     Gain on sale of investments





(59)

     Gain from disposal of equipment



(14)



(1)

     Share-based compensation



2



11

     Deferred income tax benefit





(77)

     Bad debt expense (recovery)



(16)



(3)

     Changes in operating assets and liabilities:







          Accounts receivable, due from factor and other current receivables



(383)



673

Unbilled receivables



745



(342)

          Inventory



(171)



(275)

          Prepaid expenses and other assets



(2)



(103)

          Accounts payable, accrued expenses and deferred rent



(778)



326

          Deferred revenue



(312)



269

          Income taxes payable





(53)

Net cash provided by (used in) operating activities



(328)



263








CASH FLOWS FROM INVESTING ACTIVITIES:







     Purchases of investments





(12)

     Purchases of equipment and leasehold improvements



(21)



(209)

    Acquisition of Huber Precision





(209)

    Purchase of Investment in Ramsey property and related notes receivable



(86)



(1,205)

     Proceeds from liquidation of  Ramsey assets



277



    Proceeds from sale of equipment



14



1

     Proceeds from sale of investments





318

     Increase in intangibles



(1)



(61)

Net cash provided by (used in) investing activities



183



(1,377)








CASH FLOWS FROM FINANCING ACTIVITIES:







     Purchase of common stock





(94)

    Proceeds from note payable



500



    Proceeds from exercise of options and ESPP contributions



21



    Payments made for common stock rights offering





(3)

    Borrowings from Summit Loan



1,600



    Repayments on Summit Loan



(1,600)



     Principal payments on notes payable and capital lease



(20)



(4)

Net cash provided by (used in) financing activities



501



(101)








Net increase (decrease) in cash and cash equivalents



356



(1,215)

Cash and cash equivalents, beginning of period



697



3,188

Cash and cash equivalents, end of period


$

1,053


$

1,973








 

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SOURCE Pro-Dex, Inc.



RELATED LINKS

http://www.pro-dex.com