Exhibit 99.1
| | | | |
| | Contact: | | Mark Murphy, Chief Executive Officer |
| | | | (949) 769-3200 |
For Immediate Release
PRO-DEX, INC. ANNOUNCES FISCAL SECOND QUARTER AND SIX MONTH RESULTS
IRVINE, CA,February 6, 2012 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal second quarter and six months ended December 31, 2011.
Sales for the quarter ended December 31, 2011 decreased 20% to $4.9 million from $6.2 million for the corresponding quarter in 2010. For the six months ended December 31, 2011, sales decreased 9% to $10.9 million from $12.0 million for the corresponding period in 2010. The lower sales in both 2011 periods as compared to the corresponding periods in 2010 resulted primarily from decreases in sales of the Company’s medical device products to its largest customer.
Operating loss was $282,000 for the quarter, compared to operating income of $571,000 in the corresponding 2010 period. For the six months ended December 31, 2011, operating income was $176,000, as compared to $977,000 for the corresponding six-month period in 2010.
Net loss for the 2011 quarter was $292,000, or $0.09 per fully-diluted share, as compared to net income of $401,000, or $0.12 per fully-diluted share, in the corresponding 2010 quarter. For the six months ended December 31, 2011, net income was $154,000, or $0.05 per fully-diluted share, as compared to net income of $743,000, or $0.23 per fully diluted share for the corresponding period in 2010.
Gross profit for the quarter ended December 31, 2011 was $1.4 million, a 29% gross profit margin, compared to gross profit of $2.4 million, a 39% gross profit margin, for the year-ago period. For the six months ended December 31, 2011, gross profit was $3.7 million, a 34% gross profit margin, compared to gross profit and margin of $4.6 million and 38%, respectively, for the corresponding six-month period in 2010. These decreases resulted primarily from the year-over-year decrease in sales, higher warranty expenses due to an increase in the estimated per-unit cost to repair units that may be returned within the warranty period, and, with respect to the three-month period ended December 31, 2011, reduced manufacturing efficiencies commensurate with the lower sales volume.
Mark Murphy, the Company’s President and Chief Executive Officer, commented, “During the first half of fiscal 2012, we experienced the decreases in sales to our largest customer we had anticipated, which significantly impacted our gross margins. Midway through our fiscal second quarter, we initiated a headcount reduction, allowing us to enhance manufacturing efficiencies while continuing to meet demand for our products. We will maintain close management our cost structure as we continue to vigorously pursue new revenue opportunities.”
Teleconference Information:
Investors and analysts are invited to listen to a broadcast review of the Company’s fiscal 2012 second quarter financial results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) that may be
accessed by visiting the Company’s website atwww.pro-dex.com. The conference call may also be accessed atwww.InvestorCalendar.com. Investors and analysts who would like to participate in the conference call may do so via telephone at (877) 407-8033, or at (201) 689-8033 if calling from outside the U.S. or Canada.
For those who cannot access the live broadcast, a replay will be available approximately two hours after the completion of the call until midnight (Eastern Time) on February 20, 2012 by calling (877) 660-6853, or (201) 612-7415 if calling from outside the U.S. or Canada, and then entering account number 286 and conference I.D. number 387491. An online archive of the broadcast will be available on the Company’s websitewww.pro-dex.com for a period of 365 days.
Pro-Dex, Inc., with operations in California, Oregon and Nevada, specializes in bringing speed to market in the development and manufacture of technology-based solutions that incorporate powered surgical device drive systems, embedded motion control and fractional horsepower DC motors, serving the medical, dental, semi-conductor, scientific research and aerospace markets. Pro-Dex’s products are found in hospitals, dental offices, medical engineering labs, commercial and military aircraft, scientific research facilities and high tech manufacturing operations around the world. For more information, visit the Company’s website atwww.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)
| | | | | | | | |
| | | December 31,
2011 | | | June 30,
2011 | |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 4,267,000 | | | $ | 4,689,000 | |
Accounts receivable, net of allowance for doubtful accounts of $13,000 at December 31, 2011 and $7,000 at June 30, 2011 | | | 2,248,000 | | | | 3,128,000 | |
Other current receivables | | | 52,000 | | | | 12,000 | |
Inventories | | | 4,733,000 | | | | 3,703,000 | |
Prepaid expenses | | | 234,000 | | | | 145,000 | |
Deferred income taxes | | | 162,000 | | | | 163,000 | |
| | | | | | | | |
Total current assets | | | 11,696,000 | | | | 11,840,000 | |
Property, plant, equipment and leasehold improvements, net | | | 3,559,000 | | | | 3,661,000 | |
Other assets | | | 53,000 | | | | 60,000 | |
| | | | | | | | |
Total assets | | $ | 15,308,000 | | | $ | 15,561,000 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 1,624,000 | | | $ | 1,207,000 | |
Accrued expenses | | | 1,744,000 | | | | 2,379,000 | |
Income taxes payable | | | 30,000 | | | | 78,000 | |
Current portion of bank term loan | | | 357,000 | | | | 357,000 | |
| | | | | | | | |
Total current liabilities | | | 3,755,000 | | | | 4,021,000 | |
| | | | | | | | |
Non-current liabilities: | | | | | | | | |
Bank term loan | | | 595,000 | | | | 774,000 | |
Deferred income taxes | | | 162,000 | | | | 163,000 | |
Deferred rent | | | 285,000 | | | | 279,000 | |
| | | | | | | | |
Total non-current liabilities | | | 1,042,000 | | | | 1,216,000 | |
| | | | | | | | |
Total liabilities | | | 4,797,000 | | | | 5,237,000 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | | |
Shareholders’ equity: | | | | | | | | |
Common shares; no par value; 50,000,000 shares authorized; 3,272,350 shares issued and outstanding at December 31, 2011 and at June 30, 2011 | | | 16,777,000 | | | | 16,744,000 | |
Accumulated deficit | | | (6,266,000 | ) | | | (6,420,000 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 10,511,000 | | | | 10,324,000 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 15,308,000 | | | $ | 15,561,000 | |
| | | | | | | | |
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| | | | | | | | |
| | | For The Three Months Ended
December 31, | |
| | | 2011 | | | 2010 | |
Net sales | | $ | 4,907,000 | | | $ | 6,157,000 | |
Cost of sales | | | 3,504,000 | | | | 3,733,000 | |
| | | | | | | | |
Gross profit | | | 1,403,000 | | | | 2,424,000 | |
| | | | | | | | |
Operating expenses: | | | | | | | | |
Selling expenses | | | 369,000 | | | | 351,000 | |
General and administrative expenses | | | 709,000 | | | | 897,000 | |
Research and development costs | | | 607,000 | | | | 605,000 | |
| | | | | | | | |
Total operating expenses | | | 1,685,000 | | | | 1,853,000 | |
| | | | | | | | |
Income (loss) from operations | | | (282,000 | ) | | | 571,000 | |
Other income (expense): | | | | | | | | |
Interest expense, net | | | (9,000 | ) | | | (22,000 | ) |
| | | | | | | | |
Total other income (expense) | | | (9,000 | ) | | | (22,000 | ) |
| | | | | | | | |
Income (loss) before provision for income taxes | | | (291,000 | ) | | | 549,000 | |
Provision for income taxes | | | 1,000 | | | | 148,000 | |
| | | | | | | | |
Net income (loss) | | $ | (292,000 | ) | | $ | 401,000 | |
| | | | | | | | |
Net income (loss) per share: | | | | | | | | |
Basic | | $ | (0.09 | ) | | $ | 0.12 | |
| | | | | | | | |
Diluted | | $ | (0.09 | ) | | $ | 0.12 | |
| | | | | | | | |
Weighted average shares outstanding – basic | | | 3,272,350 | | | | 3,263,437 | |
| | | | | | | | |
Weighted average shares outstanding – diluted | | | 3,272,350 | | | | 3,272,152 | |
| | | | | | | | |
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| | | | | | | | |
| | | For the Six Months Ended
December 31, | |
| | | 2011 | | | 2010 | |
Net sales | | $ | 10,937,000 | | | $ | 11,986,000 | |
Cost of sales | | | 7,205,000 | | | | 7,378,000 | |
| | | | | | | | |
Gross profit | | | 3,732,000 | | | | 4,608,000 | |
| | | | | | | | |
Operating expenses: | | | | | | | | |
Selling expenses | | | 743,000 | | | | 775,000 | |
General and administrative expenses | | | 1,544,000 | | | | 1,660,000 | |
Research and development costs | | | 1,269,000 | | | | 1,196,000 | |
| | | | | | | | |
Total operating expenses | | | 3,556,000 | | | | 3,631,000 | |
| | | | | | | | |
Income from operations | | | 176,000 | | | | 977,000 | |
Other income (expense): | | | | | | | | |
Interest expense, net | | | (20,000 | ) | | | (80,000 | ) |
| | | | | | | | |
Total other income (expense) | | | (20,000 | ) | | | (80,000 | ) |
| | | | | | | | |
Income before provision for income taxes | | | 156,000 | | | | 897,000 | |
Provision for income taxes | | | 2,000 | | | | 154,000 | |
| | | | | | | | |
Net income | | $ | 154,000 | | | $ | 743,000 | |
| | | | | | | | |
Net income per share: | | | | | | | | |
Basic | | $ | 0.05 | | | $ | 0.23 | |
| | | | | | | | |
Diluted | | $ | 0.05 | | | $ | 0.23 | |
| | | | | | | | |
Weighted average shares outstanding – basic | | | 3,272,350 | | | | 3,257,643 | |
| | | | | | | | |
Weighted average shares outstanding – diluted | | | 3,292,508 | | | | 3,263,654 | |
| | | | | | | | |
PRO-DEX, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| | | | | | | | |
| | | For The Six Months Ended
December 31, | |
| | | 2011 | | | 2010 | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 154,000 | | | $ | 743,000 | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | |
Depreciation and amortization | | | 339,000 | | | | 342,000 | |
Allowance for doubtful accounts | | | 6,000 | | | | (10,000 | ) |
Share-based compensation | | | 33,000 | | | | 12,000 | |
Changes in: | | | | | | | | |
Accounts receivable | | | 834,000 | | | | 148,000 | |
Inventories | | | (1,030,000 | ) | | | (678,000 | ) |
Prepaid expenses | | | (88,000 | ) | | | (30,000 | ) |
Other assets | | | 8,000 | | | | 17,000 | |
Accounts payable and accrued expenses | | | (213,000 | ) | | | (597,000 | ) |
Income taxes payable | | | (49,000 | ) | | | (5,000 | ) |
| | | | | | | | |
Net cash used in operating activities | | | (6,000 | ) | | | (58,000 | ) |
| | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
Purchases of equipment and leasehold improvements | | | (237,000 | ) | | | (16,000 | ) |
| | | | | | | | |
Net cash used in investing activities | | | (237,000 | ) | | | (16,000 | ) |
| | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
Principal payments on term loan | | | (179,000 | ) | | | (200,000 | ) |
Principal payments on mortgage | | | — | | | | (1,528,000 | ) |
Proceeds from exercise of stock options | | | — | | | | 27,000 | |
| | | | | | | | |
Net cash used in financing activities | | | (179,000 | ) | | | (1,701,000 | ) |
| | | | | | | | |
Net decrease in cash and cash equivalents | | | (422,000 | ) | | | (1,775,000 | ) |
Cash and cash equivalents, beginning of period | | | 4,689,000 | | | | 3,794,000 | |
| | | | | | | | |
Cash and cash equivalents, end of period | | $ | 4,267,000 | | | $ | 2,019,000 | |
| | | | | | | | |
|
| Supplemental Information | |
Cash payments for interest | | $ | 10,000 | | | $ | 21,000 | |
Cash payments for income taxes | | $ | 53,000 | | | $ | 159,000 | |
