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PDEX Pro-Dex Inc. (co)

Filed: 5 Nov 20, 4:26pm

 


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 FIRST QUARTER RESULTS


IRVINE, CA, November 5, 2020 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2021 first quarter ended September 30, 2020. The Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2021 with the Securities and Exchange Commission today.


Net sales for the three months ended September 30, 2020, increased $1.4 million, or 19%, to $8.6 million from $7.2 million for the three months ended September 30, 2019.  The increase is driven by sales of our newest thoracic driver.


Gross profit for the three months ended September 30, 2020, increased $695,000, or 25%, to $3.5 million, compared to $2.8 million for the year-ago period. Gross margin increased by 2 percentage points to 40% during the three months ended September 30, 2020, compared to 38% during the corresponding year-ago period due to favorable product mix and increased absorption of our fixed manufacturing overhead expenses.


Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2020, increased $637,000 from the corresponding year-ago period. We are increasing these expenditures in an effort to release new products and garner new customer relationships.


Net income for the quarter ended September 30, 2020, was $1.3 million, or $0.32 per diluted share, compared to $1.1 million, or $0.27 per diluted share, for the quarter ended September 30, 2019.


CEO Comments


Richard L. (“Rick”) Van Kirk, the Company’s President and Chief Executive Officer, commented, “We are pleased with our first quarter results. We continue to reinvest our profits in research and development to continue to grow our core medical device business and expect to close on the purchase of a new building to expand our operations as early as tomorrow. Finally,” concluded Mr. Van Kirk, “we expect to introduce another CMF driver and our ENT shaver by the end of the current fiscal year.”


The amount spent on projects under development, along with the current estimated commercial launch date and estimated recurring annual revenue, is summarized below (in thousands):


 

 

For the Three Months Ended
September 30,

 

 

 

 

 

 

2020

 

 

2019

 

 

Market Launch(1)

 

 

Est Annual Revenue

 

Total Research & Development costs:

 

$

1,091

 

 

$

484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products in development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thoracic Driver(2)

 

$

 

 

$

19

 

 

(2)

 

 

$4,000

 

Arthroscopic Shaver(3)

 

 

 

 

 

6

 

 

(3)

 

 

$   600

 

ENT Shaver

 

 

183

 

 

 

89

 

 

Q2 2021

 

 

$1,000

 

VITAL Ventilator

 

 

57

 

 

 

 

 

Q3 2021

 

 

$1,500

 

CMF Driver

 

 

189

 

 

 

17

 

 

Q1 2021

 

 

$1,000

 

Sustaining & Other

 

 

662

 

 

 

353

 

 

 

 

 

 

 

 

 

Total

 

$

1,091

 

 

$

484

 

 

 

 

 

 

 

 

 


(1)

Represents the calendar quarter of expected market launch.




 


(2)

We completed the thoracic driver and began initial shipments of a private-labeled version to an existing CMF customer during the third quarter of fiscal 2020. We incurred cumulative expenditures of $1.1 million spanning from fiscal 2017 to fiscal 2020 related to this product development. Current thoracic related expenditures are included in sustaining and other. We generated sales from this product of $3.1 million and $1.6 million during fiscal 2020 and the first quarter of fiscal 2021, respectively. Accordingly, we will remove this product from the above table next quarter.

(3)

This product has been internally pushed back to focus on our Pro-Dex branded ENT shaver. Accordingly, we will remove this product from the above table next quarter until such time as we reinstate this project.


In the fourth quarter of fiscal 2020, we were one of eight US-based companies awarded a license to manufacture the Jet Propulsion Laboratory’s Ventilator Intervention Technology Accessible Locally (“VITAL”), a high-pressure, lower cost ventilator.  In order to manufacture this product, we will require a full clean room, which we plan to install in our Tustin facility (assuming we close on the property, which is expected to occur on or around November 6, 2020). We are also nearing completion on the verification and validation of a new CMF driver, which we will be selling to our existing largest customer under a distribution agreement, that we executed in the first quarter of fiscal 2021.  Finally, we also anticipate the release to manufacture of a new ENT Shaver in the spring of 2021 and our Director of Business Development is working with a promising medical device distributor to commercialize this product.


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 that appeal to our customers, primarily medical device distributors. Pro-Dex also sells compact pneumatic air motors for a variety of industrial applications. 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 risk factors and other disclosures 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 BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)


 

 

September 30,
2020

 

 

June 30,
2020

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,202

 

 

$

6,421

 

Investments

 

 

2,400

 

 

 

2,560

 

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

 

 

6,138

 

 

 

5,155

 

Deferred costs

 

 

142

 

 

 

155

 

Inventory

 

 

8,313

 

 

 

8,238

 

Prepaid expenses and other current assets

 

 

343

 

 

 

145

 

Total current assets

 

 

22,538

 

 

 

22,674

 

Equipment and leasehold improvements, net

 

 

2,629

 

 

 

2,686

 

Right of use asset, net

 

 

2,861

 

 

 

2,943

 

Intangibles, net

 

 

159

 

 

 

162

 

Deferred income taxes, net

 

 

259

 

 

 

259

 

Investments

 

 

2,309

 

 

 

2,360

 

Other assets

 

 

42

 

 

 

42

 

Total assets

 

$

30,797

 

 

$

31,126

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,834

 

 

$

1,965

 

Accrued expenses

 

 

1,757

 

 

 

2,411

 

Deferred revenue

 

 

200

 

 

 

200

 

Note payable and capital lease obligations

 

 

660

 

 

 

651

 

Total current liabilities

 

 

4,451

 

 

 

5,227

 

Lease liability, net of current portion

 

 

2,695

 

 

 

2,750

 

Income taxes payable

 

 

486

 

 

 

804

 

Notes and capital leases payable, net of current portion

 

 

3,114

 

 

 

3,283

 

Total non-current liabilities

 

 

6,295

 

 

 

6,837

 

Total liabilities

 

 

10,746

 

 

 

12,064

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Common shares; no par value; 50,000,000 shares authorized; 3,858,251 and 3,811,137 shares issued and outstanding at September 30, 2020 and June 30, 2020, respectively

 

 

12,583

 

 

 

12,752

 

Accumulated other comprehensive loss

 

 

(1,693

)

 

 

(1,586

)

Retained earnings

 

 

9,161

 

 

 

7,896

 

Total shareholders’ equity

 

 

20,051

 

 

 

19,062

 

Total liabilities and shareholders’ equity

 

$

30,797

 

 

$

31,126

 









 


PRO-DEX, INC.

CONDENSED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME  

(Unaudited)

(In thousands, except share and per share amounts)


 

 

Three Months Ended
September 30,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Net sales

 

$

8,590

 

 

$

7,240

 

Cost of sales

 

 

5,115

 

 

 

4,460

 

Gross profit

 

 

3,475

 

 

 

2,780

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling expenses

 

 

130

 

 

 

142

 

General and administrative expenses

 

 

705

 

 

 

663

 

Research and development costs

 

 

1,091

 

 

 

484

 

Total operating expenses

 

 

1,926

 

 

 

1,289

 

Operating income

 

 

1,549

 

 

 

1,491

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest and miscellaneous income

 

 

53

 

 

 

35

 

Interest expense

 

 

(54

)

 

 

(59

)

Total other income (expense)

 

 

(1

)

 

 

(24

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

1,548

 

 

 

1,467

 

Provision for income taxes

 

 

283

 

 

 

363

 

Net income

 

 

1,265

 

 

 

1,104

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

Unrealized loss from marketable equity investments, net of taxes

 

 

(107

)

 

 

(57

)

Comprehensive income

 

$

1,158

 

 

$

1,047

 

 

 

 

 

 

 

 

 

 

Basic and diluted income per share:

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.33

 

 

$

0.28

 

Diluted net income per share

 

$

0.32

 

 

$

0.27

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

3,850,838

 

 

 

4,008,017

 

Diluted

 

 

3,975,063

 

 

 

4,110,414

 

Common shares outstanding

 

 

3,858,251

 

 

 

3,990,995