Pro-Dex(PDEX) - 2025 Q1 - Quarterly Report

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]