Pro-Dex fiscal 2014 first quarter sales decrease 26% to $2.6 million

Nov 14 2013

PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2014 first quarter ended September 30, 2013.

Sales for the quarter ended September 30, 2013 decreased 26% to $2.6 million from $3.5 million for the corresponding quarter in 2012.  This decrease was due primarily to a deferral in the timing of product orders from the Company's current largest powered surgical instrument customer, partially offset by increases in surgical instrument sales to other customers, and to a decrease in motion control product sales. 

Gross profit for the quarter ended September 30, 2013 decreased to $945,000, compared to gross profit of $1.2 million for the year-ago period, primarily as a result of the sales volume decrease between periods, partially offset by a decrease in product warranty costs. Gross profit as a percentage of sales was 37% for the quarter ended September 30, 2013, as compared to 36% for the corresponding quarter in 2012, resulting primarily from improvements in production efficiency.   

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2013 decreased 28% to $924,000 from $1.3 million in the prior year's corresponding quarter, reflecting the effects of the Company's cost reduction program.

Income from continuing operations for the quarter ended September 30, 2013 was $18,000, compared to a loss from continuing operations of $59,000 in the corresponding quarter in 2012.  Net income for the quarter ended September 30, 2013 was $212,000, or $0.06 per diluted share, compared to a net loss of $17,000, or $0.01 per diluted share, for the corresponding quarter in 2012.  The 2013 quarter reflects a $167,000 gain from the previously announced sale in July 2013 of the Company's facility in Carson City, Nevada, that had housed the Company's former Astromec fractional horsepower motor business, which the Company accounts for as a discontinued operation. 

CEO Comments

Harold A. ("Hal") Hurwitz, the Company's President and Chief Executive Officer, commented, "It is good to report profitable operating results again.  Certainly, one quarter does not create, nor imply, a trend.  Even so, the operating results for the quarter ended September 30, 2013 reflect the long, painful, and now rewarding process of right-sizing our cost footprint to our current revenue base."

"Without question, achieving the goal of a rebuilt revenue base is still ahead of us, and we maintain our focus on that goal.  During the quarter ended September 30, 2013, we continued to make significant progress on engineering projects, with a goal to deliver to our customers in late fiscal 2014 or early fiscal 2015 a next-generation platform for powered surgical instruments in which we will retain significant intellectual property rights. In addition, we have several active proposals in the hands of existing and prospective customers for similar such projects."

"Also during the quarter, we continued engineering work in collaboration with an existing customer on a contract manufacturing project related to a new surgical system, the development phase of which is also expected to culminate in the late fiscal 2014 or early fiscal 2015 time frame." 

"Fiscal 2014 marks the first year in which the full effect of our cost reduction efforts of the past year will be reflected in our results.  This said, our efforts in cost reduction and control are not yet complete.  Nonetheless, year-over-year stability of gross margins despite lower sales volumes, together with year-over-year decreases of 66% in selling expenses, 25% in general and administrative expenses, and 8% in research and development expenses, we believe clearly demonstrate how far we have come."

SOURCE Pro-Dex, Inc.