Financial Performance - Pro-Dex, Inc. reported quarterly earnings of $0.61 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and showing a significant increase from $0.14 per share a year ago, representing an earnings surprise of 60.53% [1] - The company posted revenues of $16.79 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 21.69%, compared to $12.59 million in the same quarter last year [2] - Over the last four quarters, Pro-Dex has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Stock Performance - Pro-Dex shares have declined approximately 7.5% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The current Zacks Rank for Pro-Dex is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $15.7 million, and for the current fiscal year, it is $2 on revenues of $61 million [7] - The estimate revisions trend for Pro-Dex is mixed, and changes in earnings expectations may occur following the recent earnings report [6] Industry Context - Pro-Dex operates within the Medical - Dental Supplies industry, which is currently ranked in the bottom 40% of over 250 Zacks industries [8] - The performance of Pro-Dex's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Net sales for the second quarter ended December 31, 2024, increased by $4.2 million, or 33%, to $16.8 million compared to $12.6 million for the same period in 2023[3] - Gross profit for the second quarter increased by $2.3 million, or 81%, to $5.1 million, with a gross margin improvement of 8 percentage points to 30%[4] - Operating income for the second quarter rose by $1.9 million, or 247%, to $2.7 million compared to $777,000 for the same quarter in the prior year[6] - Net income for the second quarter was $2.0 million, or $0.61 per diluted share, compared to $500,000, or $0.14 per diluted share, for the same quarter in fiscal 2024[6] - For the six months ended December 31, 2024, net sales increased by $7.2 million, or 29%, to $31.7 million from $24.5 million for the same period in 2023[7] - Gross profit for the six months increased by $3.8 million, or 58%, with a gross margin increase of 6 percentage points to 32%[9] - Operating income for the six months rose by $3.1 million, or 119%, to $5.7 million compared to $2.6 million for the same period in the prior year[11] - Net income for the six months was $4.5 million, or $1.33 per diluted share, compared to a net loss of $115,000, or $0.03 per diluted share, for the same period in 2023[12] Operational Capacity - The company is ramping up staff to meet increased backlog commitments, indicating a focus on operational capacity to support sales growth[13] - The company anticipates continued revenue increases in the third and fourth quarters due to ongoing production shipments of the next generation handpiece[3]

Sales Performance - Medical device product sales increased by $3.3 million, or 37%, for the three months ended December 31, 2024, and by $5.4 million, or 32%, for the six months ended December 31, 2024, compared to the prior fiscal year [86]. - Orthopedic sales rose by $3.8 million, or 69%, for the three months ended December 31, 2024, and by $5.7 million, or 55%, for the six months ended December 31, 2024, primarily due to the launch of a next-generation handpiece [86]. - Repair revenue increased by $1.6 million, or 48%, for the three months ended December 31, 2024, and by $2.7 million, or 37%, for the six months ended December 31, 2024, due to an increased number of repairs of orthopedic handpieces [88]. - The proportion of medical device products in total sales was 73% for the three months ended December 31, 2024, compared to 71% in the same period of the prior year [86]. - Recurring revenue from cranio-maxillofacial (CMF) drivers decreased by $920,000, or 33%, for the three months ended December 31, 2024, compared to the prior year [86]. Financial Overview - Total cost of sales for the three months ended December 31, 2024, increased by $1.9 million, or 20%, compared to the same period in 2023, while revenue increased by 33% [90]. - Gross profit for the three months ended December 31, 2024, increased by $2.3 million, or 81%, compared to the same period in 2023, with gross margin rising to 30% from 22% [91]. - Operating expenses for the three months ended December 31, 2024, totaled $2.4 million, representing 14% of net sales, an increase of 18% year-over-year [92]. - Research and development costs for the three months ended December 31, 2024, increased by $154,000, or 20%, compared to the same period in 2023 [94]. - The effective tax rate for the three months ended December 31, 2024, was 21%, compared to 19% for the same period in 2023 [100]. Cash Flow and Working Capital - Cash and cash equivalents decreased to $66,000 as of December 31, 2024, down from $2.6 million at June 30, 2024 [101]. - Net cash used in operating activities for the six months ended December 31, 2024, was $2.3 million, despite a net income of $4.5 million [103]. - Net cash used in investing activities for the six months ended December 31, 2024, was $973,000, primarily for equipment purchases [105]. - Net cash provided by financing activities for the six months ended December 31, 2024, included net borrowings of $4.5 million, offset by a $3.5 million stock repurchase [107]. - Working capital as of December 31, 2024, was $27.2 million, with an estimated fair market value of marketable equity investments at $6.3 million [109]. Backlog and Capacity Expansion - The backlog at December 31, 2024, was approximately $48.1 million, with $36.3 million scheduled for delivery in fiscal 2025 [89]. - The company continues to focus on expanding manufacturing capacity at the newly acquired Franklin Property to support anticipated growth [83]. - The company is investing in research and development to design unique medical devices and leverage its patented torque-limiting software [84]. Product Sales Decline - Revenue from non-recurring engineering (NRE) and prototype projects decreased by $297,000, or 88%, for the three months ended December 31, 2024, due to a reduction in billable contracts [87]. - Sales of compact pneumatic air motors decreased by $72,000, or 30%, for the three months ended December 31, 2024, indicating a decline in legacy product revenue [87].

Core Viewpoint - Pro-Dex, Inc. (PDEX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Pro-Dex Earnings Outlook - For the fiscal year ending June 2025, Pro-Dex is expected to earn $2 per share, reflecting a 233.3% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Pro-Dex has risen by 40.8%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Pro-Dex's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Group 1: Pro-Dex, Inc. (PDEX) - PDEX shares increased by 23% to close at $57.78, following a notable trading volume compared to typical sessions, despite a 12.6% loss over the past four weeks [1] - The recent surge in PDEX shares is linked to positive market sentiment due to strong financial performance and a robust business model, with over 200% return in the past six months [2] - The company is expected to report quarterly earnings of $0.38 per share, reflecting a year-over-year increase of 171.4%, with revenues projected at $13.8 million, up 9.6% from the previous year [3] Group 2: Earnings Estimates and Market Position - The consensus EPS estimate for PDEX has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - PDEX holds a Zacks Rank of 1 (Strong Buy), indicating strong investor interest and confidence in the stock [4] - In comparison, Staar Surgical (STAA), another company in the same medical-dental supplies industry, has a Zacks Rank of 3 (Hold) and has seen a decline of 3% in the past month [4][5]

Company Overview - Pro-Dex, Inc. (PDEX) has experienced rapid growth over the past year, with its valuation reaching an all-time high [1] - Founded in 1978 and headquartered in Irvine, CA, Pro-Dex specializes in tech-based solutions for various markets, including medical, dental, semiconductor, scientific research, and aerospace [2] - The company operates in multiple locations, including Santa Ana, Beaverton, OR, and Carson City, NV [2] Financial Performance - Pro-Dex has achieved a remarkable 239.7% increase in share price over the past five years, with a compound earnings per share growth of 11% per year [4] - In the first quarter of fiscal 2025, Pro-Dex reported earnings of 75 cents per share, significantly surpassing the Zacks Consensus Estimate of 29 cents [5] - The company is expected to report earnings of 38 cents per share for the next release on February 13, 2025, indicating a year-over-year increase of 171.43% [5] Market Position - Pro-Dex holds a Zacks Rank 1 (Strong Buy) and is part of the Zacks Medical – Dental Supplies industry, which is in the top 10% of all industries in the Zacks universe [3][6] - Over the past 12 months, Pro-Dex's stock has surged 193.8%, outperforming its Zacks Peer Group, which saw a rally of 171.8% [3] - The company's shares soared 23% to $57.78 on January 6, reflecting strong market confidence [4]

Financial Performance - Net sales for Q1 FY2025 increased by $3.0 million, or 25%, to $14.9 million compared to $11.9 million in Q1 FY2024[2] - Gross profit for Q1 FY2025 rose by $1.5 million, or 41%, with a gross margin increase of 4 percentage points to 35%[3] - Operating income for Q1 FY2025 increased by $1.2 million, or 64%, to $3.0 million compared to $1.8 million in the prior year[5] - Net income for Q1 FY2025 was $2.5 million, or $0.75 per diluted share, compared to a net loss of $615,000, or $0.17 per diluted share, in Q1 FY2024[6] - Unrealized gains on marketable equity investments contributed $433,000 to net income in Q1 FY2025, contrasting with unrealized losses of $2.6 million in Q1 FY2024[6] Operating Expenses - Operating expenses for Q1 FY2025 increased by $312,000, or 17%, to $2.1 million, primarily due to higher personnel costs and bonus accruals[4] Cash and Assets - Cash and cash equivalents as of September 30, 2024, were $3.1 million, up from $2.6 million at June 30, 2024[9] - Total assets increased to $54.3 million as of September 30, 2024, compared to $52.5 million at June 30, 2024[9] - Total shareholders' equity remained stable at $30.9 million as of September 30, 2024, compared to $30.9 million at June 30, 2024[9] Future Expectations - The company expects to ship production volumes of the new handpiece during the second half of FY2025[7]

Financial Performance - Net sales for the three months ended September 30, 2024, were $14.892 million, a 25% increase from $11.938 million in the same period of 2023[64] - Gross profit increased to $5.150 million, representing 35% of net sales, compared to $3.658 million or 31% of net sales in the prior year[64] - The company reported an operating income of $3.013 million, which is 20% of net sales, compared to $1.833 million or 15% in the previous year[64] - Gross profit increased by approximately $1.5 million, or 41%, for the three months ended September 30, 2024, with gross margin improving by four percentage points[72] - Operating expenses totaled $2.1 million, a 17% increase from $1.8 million in the prior year, with selling expenses rising by 92% to $48,000[73] Sales Breakdown - Medical device sales accounted for $9.912 million, or 67% of total net sales, up 27% from $7.808 million, driven primarily by orthopedic sales which increased by 38%[65][66] - Repair revenue increased by $1.1 million, or 28%, due to a higher number of repairs for orthopedic handpieces[68] - Recurring revenue from distributors of CMF drivers increased by $567,000, or 35%, compared to the same period last year[66] Costs and Expenses - Research and development costs were $843,000, representing 6% of net sales, slightly down from 7% in the prior year[64] - Cost of sales for the three months ended September 30, 2024, increased by $1.5 million, or 18%, compared to the same period in 2023, consistent with a 25% increase in revenue[71] - General and administrative expenses increased by $251,000, or 25%, primarily due to higher payroll and personnel expenses[74] - Research and development costs rose by $38,000, or 5%, driven by increased internal project spending[75] Cash Flow and Working Capital - Cash and cash equivalents increased by $450,000 to $3.1 million as of September 30, 2024, compared to $2.6 million at June 30, 2024[81] - Net cash provided by operating activities for the three months ended September 30, 2024, totaled $1.9 million, compared to $392,000 in the same period of 2023[83] - Net cash used in investing activities was $431,000 for the three months ended September 30, 2024, related to equipment purchases[85] - Net cash used in financing activities included the repurchase of $2.3 million of common stock and proceeds of $5.0 million from a new term loan[86] - Working capital as of September 30, 2024, was $27.2 million, indicating sufficient funds to meet cash requirements for at least the next 12 months[88] Future Outlook - The backlog at September 30, 2024, was approximately $56.8 million, with $45.6 million scheduled for delivery during the remainder of fiscal 2025[70] - The company expects production shipments of the next generation handpiece to ramp up in the third and fourth quarters of fiscal 2025[66] - Discounts and other increased by $126,000 due to volume rebates related to the orthopedic handpiece[69]

Core Insights - Pro-Dex, Inc. reported strong financial results for Q4 fiscal 2024, with net income of $1.6 million or 46 cents per share, an increase from 42 cents per share year-over-year [1][3] - Quarterly net sales surged by 41% to $15 million, up from $10.6 million in the same quarter last year, driven by a $3.4 million revenue increase from the largest customer [2][8] - The company faced challenges in maintaining gross margin levels, which contracted from 32% to 27%, attributed to price pressures and rising indirect labor costs [4][9] Quarterly Performance Overview - Operating expenses remained stable at $1.7 million, with a strategic reduction in general and administrative costs and a slight increase in engineering expenses [5] - Operating income rose by 46% year-over-year to $2.4 million, reflecting effective operational adjustments and sales initiatives [5] - The financial health of Pro-Dex indicates a strategic enhancement in operational execution, despite the impact of unrealized gains and losses on investments [3][9] Balance Sheet Update - As of June 30, 2024, Pro-Dex's cash and cash equivalents decreased to $2.6 million from $2.9 million at the end of the previous fiscal year [6] - Total assets increased slightly from $51.8 million to $52.5 million, while shareholders' equity decreased from $31.6 million to $30.9 million [6] Cash Flows - Pro-Dex generated $6.2 million in operating cash flows for fiscal 2024, an increase from $5.5 million in the prior year [7] Fiscal 2024 Update - Annual net sales increased by 17% to $53.8 million, primarily driven by recurring increases in repair and new unit sales to the primary customer [8] - Annual net income declined to $2.1 million or 60 cents per share, down from $1.95 per share in the previous year, largely due to a $4.1 million unrealized loss on marketable equity investments [9] - The year also saw a steady increase in research and development expenditures, reflecting the company's commitment to technology and product development [10]

Financial Performance - Net sales for Q4 2024 increased by $4.4 million, or 41%, to $15.0 million compared to $10.6 million in Q4 2023, driven primarily by a $3.4 million revenue increase from the largest customer[2] - Gross profit for Q4 2024 rose by $729,000, or 22%, but gross margin decreased from 32% in Q4 2023 to 27% in Q4 2024 due to price pressures and increased indirect labor costs[2] - Operating income for Q4 2024 increased by $742,000, or 46%, to $2.4 million compared to $1.6 million in Q4 2023[4] - Net income for Q4 2024 was $1.6 million, or $0.46 per diluted share, a slight increase from $1.5 million, or $0.42 per diluted share, in Q4 2023[4] - For the fiscal year 2024, net sales increased by $7.8 million, or 17%, to $53.8 million from $46.0 million in fiscal 2023, primarily due to revenue increases from the largest customer[5] - Gross profit for the fiscal year 2024 increased by $1.8 million, or 14%, to $14.5 million compared to $12.7 million in fiscal 2023[5] - Net income for the fiscal year 2024 was $2.1 million, or $0.60 per diluted share, down from $7.1 million, or $1.95 per diluted share, in fiscal 2023, impacted by unrealized losses on marketable equity investments of $4.1 million[7] - Net income for the year ended June 30, 2024, was $2,127,000, a decrease of 70% compared to $7,074,000 in 2023[11] Operating Expenses and Investments - Operating expenses for the fiscal year 2024 rose by 6% to $7.4 million from $7.0 million in the prior fiscal year, mainly due to increased research and development costs[6] - Depreciation and amortization increased to $1,160,000 from $857,000, reflecting a rise of 35%[11] - The company made an investment of $1,250,000 in Monogram during the year[11] Cash Flow and Financial Position - Net cash provided by operating activities was $6,199,000, up from $5,462,000, indicating an increase of 13.5%[11] - Net cash used in investing activities was $2,233,000, compared to $885,000 in the previous year, representing a significant increase of 152%[11] - Net cash used in financing activities totaled $4,271,000, an increase from $2,490,000, marking a rise of 71.7%[11] - Cash and cash equivalents at the end of the year were $2,631,000, down from $2,936,000, reflecting a decrease of 10.4%[11] - Accounts receivable decreased by $3,935,000, compared to an increase of $5,432,000 in the previous year[11] - Inventory increased by $898,000, contrasting with a decrease of $3,489,000 in the prior year[11] - Principal payments on notes payable were $4,816,000, down from $6,093,000, indicating a decrease of 21%[11] Strategic Focus - The company hired a new Director of Operations in Q1 fiscal 2025 to support growth, indicating a focus on operational efficiency and expansion[8] - The company continues to focus on developing new products and technologies, particularly in the orthopedic market, leveraging patented software and proprietary solutions[8]