Pro-Dex(US:PDEX)2025-01-30 21:00Sales 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].