Company reports third quarter sales of $6.2 million, earnings of $0.02 per share, operating cash generation of $1.7 million, and a record high backlog of $13.2 million.
IRVINE, Calif., April 29 /PRNewswire-FirstCall/ -- PRO-DEX, INC. (Nasdaq: PDEX) today announced its financial results for the third fiscal quarter ended March 31, 2010.
Sales for the quarter ended March 31, 2010 increased 25% to $6.2 million compared to $4.6 million for the previous year's third quarter due to better performance in all three product lines (medical device, motors and industrial motion control). Net income for the third quarter was $174,000 or $0.02 per share compared to a net loss of $3,011,000 or $0.31 per share for the previous year's third quarter.
To more accurately compare the operating results of the third quarter of fiscal 2009 to the third quarter of fiscal 2010, it is helpful to exclude the effects of non-recurring and tax items. Excluding the non-recurring $997,000 write-off of goodwill, $45,000 in severance and the $1.96 million reserve for deferred tax benefits in the third quarter of fiscal 2009, the net loss would have been ($0.04) per share. Comparatively, excluding the non-recurring items in the third quarter of fiscal 2010, consisting of $250,000 of revenue, $113,000 of severance, and $224,000 of income tax estimate adjustments, the net income would have been $0.04 per share.
Mark Murphy, the Company's President and Chief Executive Officer, commented, "We are pleased to report our fourth consecutive quarter of solid sales, earnings and cash generation. Over the last 12 months, Pro-Dex has shipped $23.1 million, earned $0.12 per share, created $2.0 million of EBITDA, and generated $3.5 million in operating cash. These numbers represent significant improvements over our year-ago performance. Our bookings have been strong, resulting in a record high backlog of $13.2 million on March 31, 2010, up from $11.6 million a year earlier."
Gross profit for the quarter ended March 31, 2010 increased to $2.3 million, a 37% gross profit margin, compared to gross profit of $1.1 million or 24% gross profit margin in last year's third quarter. The gross profit increase was due to increased sales, better fixed cost utilization and a more favorable margin mix of products. Approximately 3 percentage points of the margin increase were due to the previously noted non-recurring revenue which had no cost of goods sold associated with it in the current quarter.
Operating income for the third quarter (excluding the non-recurring charges) increased from to a loss of $671,000 to a profit of $272,000 due to higher sales, better margins, and controlled operating expenses.
During the third quarter of fiscal year 2010, the Company continued to strengthen its balance sheet, generating an additional $1,691,000 of operating cash, of which $549,000 was from the collection of a claim for federal income taxes due to enhanced NOL carryback rules implemented in 2009. In the first nine months of fiscal year 2010, the Company generated $2,661,000 in operating cash, up $1,821,000 from the $840,000 in cash provided in the first nine months of fiscal year 2009. At March 31, 2010, the Company had cash and cash equivalents of $3,352,000 compared to cash and cash equivalents of $504,000 as of March 31, 2009. The Company had net cash (total cash less debt) of $340,000 at March 31, 2010, a significant improvement from $3.0 million of net debt at March 31, 2009.
Teleconference Information:
Investors and all others are invited to listen to a conference call discussing the third fiscal quarter 2010 results, today at 4:30 p.m. Eastern Time. The call is scheduled to be broadcast live over the Internet and may be accessed by visiting the Company's website at http://www.pro-dex.com or directly at http://www.videonewswire.com/event.asp?id=68584. Mark Murphy, Chief Executive Officer, and Jeff Ritchey, Chief Financial Officer, plan to host the call. If you would like to join the call, dial (866) 317-6010 U.S. and (412) 317-6010 International, conference I.D. 440155. You may identify the call as the Pro-Dex Third Quarter Earnings Call. An online archive of the broadcast will be available within two hours of the completion of the call and will be accessible on the Company's website for 365 days. Additionally, a telephone replay will be available 2 hours after the call for 48 hours by dialing (877) 344-7529 U.S. or (412) 317-0088 for international callers, conference I.D. number 440155.
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 miniature rotary 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.
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)
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PRO-DEX, INC. and SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
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3/31/2010 |
6/30/2009 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 3,352,000 |
$ 1,124,000 |
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Accounts receivable, net of allowance for doubtful accounts |
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of $51,000 at 03/31/2010 and $52,000 at 6/30/09 |
2,776,000 |
2,515,000 |
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Other Current Receivables |
- |
16,000 |
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Inventories |
2,856,000 |
3,365,000 |
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Prepaid expenses |
232,000 |
117,000 |
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Prepaid income taxes |
- |
118,000 |
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Total current assets |
9,216,000 |
7,255,000 |
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Property, plant, equipment and leasehold improvements, net |
5,551,000 |
5,981,000 |
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Other assets: |
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Goodwill |
2,997,000 |
2,997,000 |
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Intangibles - Patents, net |
- |
147,000 |
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Other |
87,000 |
87,000 |
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Total other assets |
3,084,000 |
3,231,000 |
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Total assets |
$ 17,851,000 |
$ 16,467,000 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ 829,000 |
$ 827,000 |
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Accrued expenses |
2,069,000 |
1,394,000 |
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Income taxes payable |
- |
53,000 |
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Current Portion of T.I. Loan |
400,000 |
400,000 |
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Current portion of real estate loan |
34,000 |
33,000 |
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Total current liabilities |
3,332,000 |
2,707,000 |
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Long-term liabilities: |
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Notes Payable - T.I. Loan |
1,067,000 |
1,367,000 |
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Real estate loan |
1,502,000 |
1,528,000 |
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Deferred income taxes |
188,000 |
171,000 |
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Deferred rent |
247,000 |
212,000 |
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Total long-term liabilities |
3,004,000 |
3,278,000 |
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Total liabilities |
6,336,000 |
5,985,000 |
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Commitments and contingencies |
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Shareholders' equity: |
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Common shares; no par value; 50,000,000 shares authorized; |
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9,680,149 shares issued and outstanding Mar 31, 2010 |
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9,668,671 shares issued and outstanding June 30, 2009 |
16,670,000 |
16,574,000 |
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Accumulated deficit |
(5,155,000) |
(6,092,000) |
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Total shareholders’ equity |
11,515,000 |
10,482,000 |
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Total liabilities and shareholders’ equity |
$ 17,851,000 |
$ 16,467,000 |
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PRO-DEX, INC. and SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Three months ended March 31 (unaudited) |
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2010 |
2009 |
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Net sales |
$ 6,161,000 |
$ 4,608,000 |
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Cost of sales |
3,869,000 |
3,497,000 |
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Gross profit |
2,292,000 |
1,111,000 |
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Operating expenses: |
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Selling expense |
383,000 |
315,000 |
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General and administrative expenses |
886,000 |
781,000 |
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Impairment of intangible asset |
- |
997,000 |
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Research and development costs |
614,000 |
686,000 |
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Total operating expenses |
1,883,000 |
2,779,000 |
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Income (Loss) from operations |
409,000 |
(1,668,000) |
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Other income (expense): |
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Royalty income |
40,000 |
- |
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Interest expense |
(50,000) |
(56,000) |
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Total |
(10,000) |
(56,000) |
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Income (Loss) before provision (benefit) for income taxes |
399,000 |
(1,724,000) |
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Provision for income taxes |
225,000 |
1,287,000 |
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Net Income (Loss) |
$ 174,000 |
$ (3,011,000) |
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Net Income (Loss) per share: |
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Basic |
$ 0.02 |
$ (0.31) |
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Diluted |
$ 0.02 |
$ (0.31) |
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Weighted average shares outstanding - basic |
9,703,615 |
9,684,071 |
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Weighted average shares outstanding - diluted |
9,721,693 |
9,684,071 |
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See notes to condensed consolidated financial statements. |
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PRO-DEX, INC. and SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Nine months ended March 31 (unaudited) |
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2010 |
2009 |
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Net sales |
$ 17,490,000 |
$ 15,501,000 |
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Cost of sales |
11,324,000 |
10,703,000 |
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Gross profit |
6,166,000 |
4,798,000 |
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Operating expenses: |
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Selling expense |
1,025,000 |
988,000 |
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General and administrative expenses |
2,412,000 |
2,461,000 |
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Impairment of intangible asset |
140,000 |
997,000 |
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Research and development costs |
1,811,000 |
2,083,000 |
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Total operating expenses |
5,388,000 |
6,529,000 |
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Income (loss) from operations |
778,000 |
(1,731,000) |
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Other income (expense): |
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Royalty income |
44,000 |
9,000 |
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Interest expense |
(154,000) |
(176,000) |
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Total |
(110,000) |
(167,000) |
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Income (Loss) before (benefit) Provision for income taxes |
668,000 |
(1,898,000) |
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(Benefit) Provision for income taxes |
(269,000) |
1,149,000 |
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Net Income (loss) |
$ 937,000 |
$ (3,047,000) |
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Net income (loss) per share: |
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Basic |
$ 0.10 |
$ (0.31) |
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Diluted |
$ 0.10 |
$ (0.31) |
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Weighted average shares outstanding - basic |
9,680,149 |
9,722,408 |
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Weighted average shares outstanding - diluted |
9,699,138 |
9,722,408 |
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See notes to condensed consolidated financial statements. |
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PRO-DEX, INC. and SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Nine months ended March 31 (unaudited) |
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2010 |
2009 |
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Cash Flows from Operating Activities: |
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Net Income (loss) |
$ 937,000 |
$ (3,047,000) |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
546,000 |
611,000 |
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Impairment of intangible asset |
140,000 |
997,000 |
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Stock based compensation |
96,000 |
129,000 |
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Recovery of doubtful accounts |
(1,000) |
(35,000) |
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Increase (Decrease) in deferred taxes |
- |
(923,000) |
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Increase in deferred tax allowance |
118,000 |
1,960,000 |
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Changes in: |
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(Increase) Decrease in accounts receivable |
(245,000) |
1,043,000 |
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Decrease in inventories |
509,000 |
1,347,000 |
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(Increase) Decrease in prepaid expenses |
(115,000) |
55,000 |
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(Increase) in other assets |
- |
(20,000) |
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Increase (Decrease) in accounts payable and accrued expenses |
712,000 |
(1,341,000) |
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(Decrease) in income taxes payable |
(36,000) |
64,000 |
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Net Cash provided by Operating Activities |
2,661,000 |
840,000 |
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Cash Flows From Investing Activities: |
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Purchases of equipment and leasehold improvements |
(109,000) |
(181,000) |
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Net Cash used in Investing Activities |
(109,000) |
(181,000) |
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Cash Flows from Financing Activities: |
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Net (payments) on line of credit |
- |
(2,000,000) |
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Principal (payments) on term note |
- |
(396,000) |
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Net Principal (Payments) borrowing on TI Loan |
(300,000) |
1,866,000 |
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Principal (payments) on mortgage |
(24,000) |
(23,000) |
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Stock repurchases |
- |
(119,000) |
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Net Cash used by Financing Activities |
(324,000) |
(672,000) |
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Net increase (decrease) in Cash and Cash Equivalents |
2,228,000 |
(13,000) |
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Cash and Cash Equivalents, beginning of period |
1,124,000 |
517,000 |
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Cash and Cash Equivalents, end of period |
$ 3,352,000 |
$ 504,000 |
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Supplemental Information |
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Cash payments for interest |
$ 157,000 |
$ 178,000 |
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Cash payments for income taxes |
$ 87,000 |
$ - |
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SOURCE Pro-Dex, Inc.