Form 8-K - Current report

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): September 5, 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, 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 September 5, 2024, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the fourth fiscal quarter and fiscal year ended June 30, 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	Press release dated September 5, 2024
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: September 5, 2024	Pro-Dex, Inc.


	By:	/s/ Alisha K. Charlton
		Alisha K. Charlton
		Chief Financial Officer

Exhibit 99.1

ProDexLogoAndTag_High Res

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

For Immediate Release

PRO-DEX, INC. ANNOUNCES FISCAL 2024

FOURTH QUARTER AND FULL-YEAR RESULTS

IRVINE, CA, September 5, 2024 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 fourth quarter and full-year ended June 30, 2024.

Quarter Ended June 30, 2024

Net sales for the three months ended June 30, 2024 increased $4.4 million, or 41%, to $15.0 million from $10.6 million for the three months ended June 30, 2023, due primarily to increased revenue in the amount of $3.4 million from our largest customer. Specifically, the increase relates to a $1.4 million increase in repair revenue related to the enhanced repair program we began last fiscal year to refurbish the orthopedic handpiece we sell to our largest customer, as well as an increase of $2.0 million in sales of new units to that same customer. Gross profit for the three months ended June 30, 2024 increased $729,000, or 22%. Although gross profit increased, our gross margin decreased from 32% for the three months ended June 30, 2023, to 27% for the three months ended June 30, 2024, due to continued price pressures and increased indirect labor in our operations group to manage our growth.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended June 30, 2024, remained relatively flat at $1.7 million, compared to $1.8 million for the prior fiscal year’s corresponding quarter. While these total operating expense amounts have remained flat, we reduced general and administrative expenses by $182,000 and increased engineering expenses by $141,000 for the quarter ended June 30, 2024, compared to the corresponding quarter in 2023. The decrease in general and administrative expenses is a result of reduced equity compensation expenses due to employee forfeitures and the increase in engineering relates to a higher proportion of sustaining engineering expenses as opposed to billable customer contract expenses.

Our operating income for the quarter ended June 30, 2024, increased $742,000, or 46%, to $2.4 million compared to $1.6 million for the prior fiscal year’s corresponding quarter. The increase reflects our increased sales and gross profit, as described above.

Net income for the quarter ended June 30, 2024, increased slightly by $86,000 to $1.6 million, or $0.46 per diluted share, compared to $1.5 million, or $0.42 per diluted share, in the corresponding quarter in 2023. The difference in the growth rate of net income and operating income is primarily due to unrealized gains and losses of investments. In the current quarter, operating income increased 46% over the corresponding quarter of the prior fiscal year compared to the slight increase in net income for the same period.

Year Ended June 30, 2024

Net sales for the fiscal year ended June 30, 2024 increased $7.8 million, or 17%, to $53.8 million from $46.0 million for the fiscal year ended June 30, 2023, due primarily to increases in revenue from our largest customer. Specifically, the increase relates to a $3.6 million increase in repair revenue as well as an increase of $3.5 million in sales of new units to that same customer.

Gross profit for the fiscal year ended June 30, 2024, increased $1.8 million, or 14%, to $14.5 million compared to $12.7 million for fiscal 2023.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the fiscal year ended June 30, 2024, increased 6% to $7.4 million from $7.0 million in the prior fiscal year. The increase relates primarily to an increase in research and development costs because in fiscal 2024 our expenditures related primarily to sustaining engineering activities rather than billable customer projects which are reclassified to cost of sales.

Our operating income for the year ended June 30, 2024, increased $1.4 million, or 25%, to $7.2 million compared to $5.8 million for the prior fiscal year’s corresponding quarter. The increase reflects our increased sales and gross profit, as described above.

Net income for the fiscal year ended June 30, 2024, was $2.1 million, or $0.60 per diluted share, compared to $7.1 million, or $1.95 per diluted share, for fiscal 2023. Our net income for the year ended June 30, 2024, contains unrealized losses on our marketable equity investments of $4.1 million while our net income for the year ended June 30, 2023, contains unrealized gains on our marketable equity investments of $3.9 million. The difference in the growth rate of net income and operating income is primarily due to unrealized gains and losses of investments. In the current fiscal year operating income increased 25% over the prior fiscal year, compared to the 70% decrease in net income for the same period. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.

CEO Comments

“We are very pleased with our performance including increasing sales and an increase of $1.4 million in operating income.” said the Company’s President and Chief Executive Officer Richard L. (“Rick”) Van Kirk. “While this fiscal year included the challenges of transitioning to a multiple-facility operation, we continued to grow the business. I remain grateful to the entire Pro-Dex team for their ongoing efforts and teamwork.” Mr. Van Kirk continued, “Additionally, we are excited to announce that we hired a new Director of Operations in the first quarter of fiscal 2025, Mr. Jawahar Garg, who has extensive manufacturing operations and supply chain experience to assist our team to continue on our growth trajectory.”

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 also sells rotary air motors. 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 (including, but not limited to, prospects for future growth) 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 risks of the Company set forth in the Company's filings with the Securities and Exchange Commission.

(tables follow)

PRO-DEX, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data

	June 30,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	2,631	$	2,936
Investments		4,217		1,134
Accounts receivable		13,887		9,952
Deferred costs		262		494
Inventory		15,269		16,167
Prepaid expenses		345		296
Total current assets		36,611		30,979
Land and building, net		6,155		6,249
Equipment and improvements, net		5,024		5,079
Right of use asset, net		1,473		1,872
Intangibles, net		54		81
Deferred income taxes, net		1,555		—
Investments		1,563		7,521
Other assets		42		42
Total assets	$	52,477	$	51,823

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,513	$	2,261
Accrued liabilities		3,359		3,135
Income taxes payable		632		453
Deferred revenue		14		—
Notes payable		4,374		3,827
Total current liabilities		12,892		9,676
Non-current liabilities:
Lease liability, net of current portion		1,182		1,638
Deferred income taxes, net		—		8
Notes payable, net of current portion		7,536		8,911
Total non-current liabilities		8,718		10,557
Total liabilities		21,610		20,233

Commitments and Contingencies:

Shareholders’ equity:
Common stock, no par value, 50,000,000 shares authorized; 3,363,412 and 3,545,309 shares issued and outstanding at June 30, 2024 and 2023, respectively		3,917		6,767
Retained earnings		26,950		24,823
Total shareholders’ equity		30,867		31,590
Total liabilities and shareholders’ equity	$	52,477	$	51,823

PRO-DEX, INC. AND SUBSIDIARY

CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share data)

	Three Months Ended June 30, (Unaudited)						Years Ended June 30,
	2024			2023			2024			2023

Net sales	$	15,025		$	10,639		$	53,844		$	46,087
Cost of sales		10,936			7,279			39,293			33,338
Gross profit		4,089			3,360			14,551			12,749

Operating expenses:		37			9			117			155
Selling expenses
General and administrative expenses		864			1,046			4,072			4,028
Research and development costs		836			695			3,189			2,804
Total operating expenses		1,737			1,750			7,378			6,987

Operating income		2,352			1,610			7,173			5,762
Interest expense		(150	)		(145	)		(558	)		(533	)
Unrealized gain (loss) on investments		(340	)		492			(4,125	)		3,899
Gain on sale of investments		—			—			—			6
Interest and dividend income		68			58			144			294

Income before income taxes		1,930			2,015			2,634			9,428
Income tax expense		343			514			507			2,354
Net income	$	1,587		$	1,501		$	2,127		$	7,074

Basic & Diluted income per share:
Basic net income per share	$	0.47		$	0.42		$	0.61		$	1.98

Diluted net income per share	$	0.46		$	0.42		$	0.60		$	1.95

Weighted average shares outstanding:
Basic		3,400,767			3,545,309			3,498,807			3,571,044
Diluted		3,473,167			3,610,109			3,571,207			3,636,944

PRO-DEX, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,127		$	7,074
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,160			857
Unrealized (gain) loss on marketable equity investments		4,125			(3,899	)
Gain on sale of investments		—			(6	)
Non-cash lease recovery		(17	)		(2	)
Amortization of loan fees, net		(13	)		12
Share-based compensation		605			766
Deferred income taxes		(1,563	)		264
Changes in operating assets and liabilities:
Accounts receivable		(3,935	)		5,432
Deferred costs		232			216
Inventory		898			(3,489	)
Prepaid expenses		(49	)		494
Accounts payable and accrued expenses		2,436			(1,153	)
Deferred revenue		14			(1,013	)
Income taxes payable		179			(91	)
Net cash provided by operating activities		6,199			5,462

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and improvements		(983	)		(974	)
Proceeds from sale of investments		—			89
Investment in Monogram		(1,250	)		—
Net cash used in investing activities		(2,233	)		(885	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable		(4,816	)		(6,093	)
Borrowing from Minnesota Bank & Trust, net of loan origination fees		4,000			5,284
Repurchases of common stock		(3,505	)		(1,547	)
Payments of employee taxes on net issuance of common stock		—			(223	)
Proceeds from exercise of stock options and ESPP contributions		50			89
Net cash used in financing activities		(4,271	)		(2,490	)

Net increase (decrease) in cash and cash equivalents		(305	)		2,087
Cash and cash equivalents, beginning of year		2,936			849
Cash and cash equivalents, end of year	$	2,631		$	2,936

Cover	Sep. 05, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 05, 2024
Entity File Number	0-14942
Entity Registrant Name	PRO-DEX, INC.
Entity Central Index Key	0000788920
Entity Tax Identification Number	84-1261240
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	2361 McGaw Avenue
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92614
City Area Code	(949)
Local Phone Number	769-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	PDEX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false