Pro-Dex Inc PDEX

1st QTR result: 72% more in earnings

[pd11474]

Pro-Dex, Inc. Announces Significantly Improved First Quarter Financial Results; Sales Increase 30% from Prior Year; Earnings Increase 72% from Previous Quarter 11/5/03 SANTA ANA, Calif., Nov 5, 2003 (BUSINESS WIRE) -- Pro-Dex, Inc. (Nasdaq: PDEX) today announced financial results for the quarter ended September 30, 2003. The Company reported net income for the three months ended September 30, 2003 of $193,000 or $0.02 per share on a basic and $0.02 per share on a diluted basis, as compared to a net (loss) of ($6,000) or ($0.00) per share on a basic and ($0.00) per share on a diluted basis, for the three months ended September 30, 2002. This represents an increase in reported net income of $199,000 over the previous year and a sequential increase of $81,000 or 72% over the previous quarter, producing the fifth consecutive increase in quarterly net profit. Consolidated net sales increased $811,000 or 30% to $3,528,000 for the three months ended September 30, 2003, compared to the three months ended September 30, 2002. On a sequential basis, consolidated sales increased $226,000 or 6.8% for the three months ended September 30, 2003 compared to the fourth quarter of fiscal 2003. This represents the Company's eighth consecutive quarter of increased sales. Commenting on the Company's financial performance, Pro-Dex's President and CEO, Patrick Johnson said, 'We're very pleased to report another quarter of improved financial performance, having built on the successes of the past year in transforming Pro-Dex into a company that any shareholder would be proud to own. We've continued to grow our top-line sales and the gross margin produced by those sales. At the same time, we've controlled our operating expenses, continue to invest in new product development and reduce our overall corporate expenses. All of these efforts have resulted in improved bottom-line profitability, both year over year and quarter over quarter. We're very pleased with the end result.' At the Company's Micro Motors subsidiary, sales increased to $731,000 or 35% to $2,807,000 for the three months ended September 30, 2003, compared to the same period of the prior year. This also represents a sequential quarter-to-quarter increase in sales of $233,000 or 8.9%. 'Micro Motors has focused on a strategy of incrementally growing its dental product business, while looking for exponential growth in its medical device business and that strategy is continuing to work,'stated Mr. Johnson. 'For the quarter, our core dental sales increased 14% over last year and at the same time our medical device sales increased 149%. We're encouraged that our independent sales representatives are really beginning to create some momentum in the sales of our branded dental products and we anticipate continued growth from that segment. We're also looking for growth out of several of the new medical devices we launched last year as those products become approved for sale in the U.S.' Revenue from the Company's Oregon Micro Systems (OMS) subsidiary increased 13% to $721,000 for the three months ended September 30, 2003 compared to the previous year. 'OMS had strong new order bookings in the fourth quarter of last year which continued into this year with the receipt of a $500,000 blanket purchase order from a leading manufacturer of semi-conductor manufacturing equipment,'reported Mr. Johnson. 'Unfortunately, restructuring in that customer's own manufacturing organization has delayed initial shipments against this order, which are now scheduled to commence at the end of the second quarter. The good news is that despite the delayed shipment of those orders, OMS still hit its internal sales and profit targets for the quarter, providing a sizable backlog going into the middle of the year.' The Company's consolidated gross profit for the three months ended September 30, 2003 increased 34% or $391,000 compared to the same three months in the previous year. Gross profit as a percentage of sales increased to 43.7% for the three months ended September 30, 2003 compared to 42.3% for the three months ended September 30, 2002 and compared to a gross margin percentage of 40.1% for the previous quarter. Operating expenses increased 4.7% to $1,206,000 for the three months ended September 30, 2003 from $1,152,000 for the three months ended September 30, 2002. This increase was due primarily to the expenses related to the Company's annual audit and increased selling expenses at Micro Motors. Mr. Johnson stated, 'Our annual audit went so smoothly this year, expenses that have traditionally been incurred in the second quarter of the year, hit during the first quarter this year which are significant expenses for a company our size. This shift in expenses should however result in the Company having more favorable expenses in the second quarter of the year.' Addressing the Company's on-going operations, Mr. Johnson noted, 'We're really feeling like we are in the groove, making incremental progress every month and every quarter. We are now focusing on improving the efficiencies of our manufacturing operations, trying to improve the gross margin of existing sales while continuing to develop new sales.'Commenting on the Company's near term prospects, Mr. Johnson said, 'Our efforts over the past five quarters have positioned the Company extremely well for continued growth in both top and bottom line performance. In no way are we resting on our laurels nor do we believe that we've come close to tapping the potential of the business, but we are proud that we've already turned some of the Company's potential into tangible results and we intend to continue that positive trend into the second quarter and beyond.' Investors and all others are invited to listen to a conference call discussing the first quarter and fiscal 2004 outlook, today at 4:30 p.m. Eastern Time. The call will be broadcast over the Internet at www.pro-dex.com. An online replay will be available for 30 days. Additionally, a telephone replay will be available two hours after the call for 48-hours by dialing [phone] for domestic callers and [phone] for international callers; conference ID# 3714624. Pro-Dex, Inc., is a California-based holding company with the following wholly-owned operating subsidiaries: Micro Motors, Inc., located in Santa Ana, California, manufactures miniature electric, pneumatic and battery powered rotary drive systems for use in the high tech medical, dental and industrial industries; and Oregon Micro Systems, Inc., located in Beaverton, Oregon, manufactures motion control products used in factory automation and the semiconductor industries.