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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): January 30, 2025
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 January 30, 2025, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the second quarter and six months ended December 31, 2024. 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 Number | Description |
| 99.1 | |
| 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: January 30, 2025 | 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 2025 SECOND QUARTER
AND SIX-MONTH RESULTS
IRVINE, CA, January 30, 2025 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2025 second quarter ended December 31, 2024. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2025 with the Securities and Exchange Commission today.
Quarter Ended December 31, 2024
Net sales for the three months ended December 31, 2024, increased $4.2 million, or 33%, to $16.8 million from $12.6 million for the three months ended December 31, 2023, primarily due to the shipment of $3.1 million of our largest customer’s next generation orthopedic handpiece as well as an increase in repair revenue of $1.6 million similarly generated from our largest customer. As previously disclosed, we supported our largest customer’s limited market release quantities of their next generation end effector last fiscal quarter and this quarter we began production shipments. We anticipate that the third and fourth quarters will reflect increases in revenue compared to the corresponding periods of the prior year due to the continued production shipments of this next generation handpiece.
Gross profit for the three months ended December 31, 2024, increased $2.3 million, or 81%, to $5.1 million from $2.8 million for the same period in fiscal 2024. Gross margin increased by 8 percentage points to 30% for the three months ended December 31, 2024, compared to 22% for the corresponding period of the prior fiscal year. The improvement in gross margin is primarily due to increased sales and favorable product mix.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2024, increased $355,000, or 18%, to $2.4 million compared to $2.0 million in the prior fiscal year’s corresponding quarter, reflecting increases in both research and development costs as well as general and administrative expenses mostly due to higher personnel related expenses.
Operating income for the quarter ended December 31, 2024, increased $1.9 million, or 247%, to $2.7 million compared to $777,000 for the prior fiscal year’s corresponding quarter. The increase is attributable to higher sales and improved gross margins.
Net income for the quarter ended December 31, 2024, was $2.0 million or $0.61 per diluted share, compared to $500,000, or $0.14 per diluted share, for the corresponding quarter in fiscal 2024.
Six Months Ended December 31, 2024
Net sales for the six months ended December 31, 2024, increased $7.2 million, or 29%, to $31.7 million from $24.5 million for the six months ended December 31, 2023, due primarily to $4.7 million in shipments of the newest generation handpiece we sell our largest customer as well as $2.7 million in increased repair revenue from the orthopedic surgical handpiece that we sell to our largest customer.
Gross profit for the six months ended December 31, 2024, increased $3.8 million, or 58%, compared to the same period in fiscal 2024 due to increased sales and favorable product mix. Our gross margin increased by 6 percentage points to 32% for the six months ended December 31, 2024, compared to 26% for the corresponding period of the prior fiscal year.
Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2024, increased $666,000, or 17%, to $4.5 million compared to $3.9 million in the prior fiscal year’s corresponding period. The increase is related to increased research and development costs and general and administrative expenses mostly due to higher personnel related expenses.
Operating income for six months ended December 31, 2024, increased $3.1 million, or 119%, to $5.7 million compared to $2.6 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 income for the six months ended December 31, 2024, was $4.5 million or $1.33 per diluted share, compared to a net loss of $115,000, or $0.03 per diluted share for the six months ended December 31, 2023. Our net income for the six months ended December 31, 2024, contains unrealized gains on our marketable equity investments of $510,000 and our net loss for the six months ended December 31, 2023, contained unrealized losses on our marketable equity investments of $2.6 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 are ramping up our staff to meet the commitments of our increased backlog.” Mr. Van Kirk continued, “We are excited about our continued sales growth and looking forward to the challenges ahead.”
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, 2024 |
June 30,
2024 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 66 | $ | 2,631 | ||||
| Investments | 4,671 | 4,217 | ||||||
| Accounts receivable, net of allowance for expected credit losses of $27 and $0 at December 31, 2024 and at June 30, 2024, respectively | 18,467 | 13,887 | ||||||
| Deferred costs | 152 | 262 | ||||||
| Inventory | 19,611 | 15,269 | ||||||
| Prepaid expenses and other current assets | 1,333 | 345 | ||||||
| Total current assets | 44,300 | 36,611 | ||||||
| Land and building, net | 6,108 | 6,155 | ||||||
| Equipment and leasehold improvements, net | 5,443 | 5,024 | ||||||
| Right-of-use asset, net | 1,265 | 1,473 | ||||||
| Intangibles, net | 40 | 54 | ||||||
| Deferred income taxes, net | 1,555 | 1,555 | ||||||
| Investments | 1,619 | 1,563 | ||||||
| Other assets | 44 | 42 | ||||||
| Total assets | $ | 60,374 | $ | 52,477 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,689 | $ | 4,513 | ||||
| Accrued liabilities | 5,234 | 3,359 | ||||||
| Income taxes payable | 303 | 632 | ||||||
| Deferred revenue | — | 14 | ||||||
| Notes payable | 5,913 | 4,374 | ||||||
| Total current liabilities | 17,139 | 12,892 | ||||||
| Lease liability, net of current portion | 939 | 1,182 | ||||||
| Notes payable, net of current portion | 10,474 | 7,536 | ||||||
| Total non-current liabilities | 11,413 | 8,718 | ||||||
| Total liabilities | 28,552 | 21,610 | ||||||
|
Shareholders’ equity: |
||||||||
| Common stock; no par value; 50,000,000 shares authorized; 3,260,390 and 3,363,412 shares issued and outstanding at December 31, 2024 and June 30, 2024, respectively | 366 | 3,917 | ||||||
| Retained earnings | 31,456 | 26,950 | ||||||
| Total shareholders’ equity | 31,822 | 30,867 | ||||||
| Total liabilities and shareholders’ equity | $ | 60,374 | $ | 52,477 | ||||
PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
| Three
Months Ended December 31, |
Six Months
Ended December 31, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 16,793 | $ | 12,588 | $ | 31,686 | $ | 24,526 | ||||||||
| Cost of sales | 11,721 | 9,786 | 21,464 | 18,066 | ||||||||||||
| Gross profit | 5,072 | 2,802 | 10,222 | 6,460 | ||||||||||||
| Operating expenses: Selling expenses |
49 | 37 | 98 | 63 | ||||||||||||
| General and administrative expenses | 1,389 | 1,200 | 2,635 | 2,195 | ||||||||||||
| Research and development costs | 942 | 788 | 1,784 | 1,593 | ||||||||||||
| Total operating expenses | 2,380 | 2,025 | 4,517 | 3,851 | ||||||||||||
| Operating income | 2,692 | 777 | 5,705 | 2,609 | ||||||||||||
| Interest expense | (204 | ) | (139 | ) | (357 | ) | (271 | ) | ||||||||
| Unrealized gain (loss) on marketable equity investments | 77 | (40 | ) | 510 | (2,593 | ) | ||||||||||
| Interest and other income | 21 | 22 | 46 | 46 | ||||||||||||
| Income (loss) before income taxes | 2,586 | 620 | 5,904 | (209 | ) | |||||||||||
| Income tax benefit (expense) | (546 | ) | (120 | ) | (1,398 | ) | 94 | |||||||||
| Net income (loss) | $ | 2,040 | $ | 500 | $ | 4,506 | $ | (115 | ) | |||||||
| Basic net income (loss) per share: | ||||||||||||||||
| Net income (loss) per share | $ | 0.63 | $ | 0.14 | $ | 1.36 | $ | (0.03 | ) | |||||||
| Diluted net income (loss) per share: | ||||||||||||||||
| Net income (loss) per share | $ | 0.61 | $ | 0.14 | $ | 1.33 | $ | (0.03 | ) | |||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 3,261,145 | 3,546,901 | 3,314,207 | 3,546,819 | ||||||||||||
| Diluted | 3,337,337 | 3,611,701 | 3,378,862 | 3,546,819 | ||||||||||||
| Common shares outstanding | 3,260,390 | 3,541,045 | 3,260,390 | 3,541,045 | ||||||||||||