Pro-Dex, Inc. Announces Fiscal 2022 Fourth Quarter And Full-Year Results

Net sales for the three months ended June 30, 2022 increased $3.2 million, or34%, to $12.6 million from $9.4 million for the three months ended June 30, 2021, due primarily to increased medical device sales and repair revenue. Grossprofit for the threemonths ended June 30, 2022 increased $0.3 million, or 10%, to $3.4 million from $3.1 million for the same period in 2021. Although gross profit increased, our gross margin fell from 33% for the three months ended June 30, 2021 to 27% for the three months ended June 30, 2022, due to continued price increases in many of our purchased components oftentimes out pacing our ability to pass along these increases to our customers.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended June 30, 2022 decreased 11% to $2.3 million from $2.5 million in the prior year's corresponding quarter, due primarily to decreased expenditures of $474,000 in research and development costs as much of our engineering efforts shifted to billable customer contracts in the current fiscal year.

Net income for the quarter ended June 30, 2022 increased by $0.6 million to $1.4 million, or $0.38 per diluted share, compared to $0.8 million, or $0.20 per diluted share, in the corresponding quarter in 2021.

Year Ended June 30, 2022

Net sales for the fiscal year ended June 30, 2022 increased $4.0 million, or 11%, to $42.0 million from $38.0 million for the fiscal year ended June 30, 2021, due primarily to increases in medical device revenues and repair revenues. Specifically, we generated an increase in sales of $3.8 million in fiscal 2022 over fiscal 2021 due to the orthopedic device we sell to our largest customer, in part due to fulfilling orders for the launch of their next generation handpiece.

Grossprofit for the fiscal yearended June 30, 2022 decreased $0.4 million, or 3%, to $13.1 million compared to $13.6 million for fiscal 2021, due to increased cost of sales.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the fiscal year ended June 30, 2022 decreased 12% to $8.0 million from $9.1 million in the prior fiscal year. Of the total decrease in operating expenses, $1.4 million relates to a decrease in research and development costs from fiscal 2021 to fiscal 2022 resulting from a shift in engineering efforts from internally developed products to billable customer projects.

Net income for the fiscal year ended June 30, 2022 was $3.9 million, or $1.02 per diluted share, compared to $5.8 million, or $1.48 per diluted share, for fiscal 2021.

Although we have released our earnings prior to our Annual Report on Form 10-K with the Securities and Exchange Commission, we are able to do this because we are a non-accelerated filer and as a result have more time to do so at fiscal year-end. During our quarterly reporting periods, we anticipate that our earnings releases will continue to be released at the same time as our Form 10-Q's are filed with the Securities and Exchange Commission. We anticipate filing our Form 10-K with the Securities and Exchange Commission on September 8, 2022.

Guidance

Pro-Dex typically does not provide sales, earnings, or other guidance, and while the COVID-19 pandemic did not materially adversely affect our financial results in our fiscal year ended June 30, 2022, we did experience disruptions in our supply chain in the form of delayed shipments, longer lead times, and higher prices, much of which our suppliers indicate have been caused by the pandemic. If any of these conditions persist or are exacerbated in the future, we could be negatively impacted. We have and continue to implement plans and processes to mitigate these challenges that many manufacturers similarly face. Our prospects remain positive with additional capacity forthcoming to allow for continued sales growth through our aggressive product development efforts.

CEO Comments

"We are very pleased with our continued year-over-year sales growth, especially given the challenging environment we faced related to sourcing components this fiscal year, as well as the progress we have made in our validation efforts at our new building." said the Company's President and Chief Executive Officer Richard L. ("Rick") Van Kirk. "With our new building and additional capacity coming online this year, combined with our focus on new business development and technology, we are excited about the continued growth we expect to see in the next fiscal year and beyond."

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, the potential future impact of the COVID-19 pandemic, the Company's ability to mitigate supply chain issues, and 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.

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SOURCE: Pro-Dex, Inc.