Pro-Dex Inc. reports fiscal 1997 third- quarter and nine-month operating results including significant non-recurring and unusual charges.
Revenues for the third quarter were $4,397,093, as compared with fiscal 1996 third quarter revenues of $5,902,581, net of sales from discontinued operations (dental centers and Pnu-Light) of $507,172 in fiscal 1997 and $587,289 in fiscal 1996.
During the third quarter of fiscal 1997, the company experienced a loss of $1,211,964, or 13 cents per share, compared with net income of $412,277 or 5 cents per share in the like period a year ago.
Revenues for the first nine months of fiscal 1997 were $13,605,814, as compared with $15,220,185, net of sales from discontinued operations (dental centers and Pnu-Light) of $1,714,178 in fiscal 1997 and $1,763,554 in fiscal 1996. During the first nine months of fiscal 1997, the company experienced a loss of $1,720,500, or 19 cents per share, compared with net income of $949,911, or 11 cents per share, in fiscal 1996.
In reviewing operations, Searl indicated that several factors impacted the company's fiscal 1997 third-quarter and nine-month operating results including: lower sales levels to the company's OEM dental customers, as well as lower sales of motion control boards to the semiconductor industry.
Operating expenses during the nine-month period increased from $7.1 million in fiscal 1996 to $8.3 million this year, including a 57 percent increase in research and development costs to enhance the company's product lines. In addition, the company restructured its continuing operations to reduce operating expenses, including a 13 percent reduction in its workforce which resulted in non-recurring and unusual charges of $475,000.
Also, interest expense increased to $914,000 from $663,000 for the same period of the prior year, including a non-recurring prepayment penalty of $260,000 related to the refinancing of debt with more favorable terms. Total non-recurring and unusual charges for the nine months ended March 31, 1997, were $735,000. The loss from discontinued operations was $767,000, compared with $13,000 for the same period of the prior year.
Searl further stated: "In spite of the disappointing financial results, we believe that the elimination of losses from discontinued operations of $767,000 and non-recurring and unusual charges of $735,000, coupled with a reduction of approximately $1 million in operating expenses as a result of the 13 percent reduction in the company's workforce, will result in a significant positive effect on future operating results."
Searl concluded: "As a result of strong growth in the semiconductor market and an expanding customer base, the backlog at Oregon Micro Systems has continued to increase substantially during the fourth quarter and this trend is expected to continue for the foreseeable future. Micro Motors continues to increase its revenue from its branded handpiece line as well as its OEM business.
"New products scheduled for introduction during the fourth quarter at Biotrol and Challenge should contribute to both revenue and earnings for the balance of this year and beyond."
Pro-Dex is a Colorado-based holding company with the following wholly owned subsidiaries: Micro Motors Inc., located in Santa Ana, Calif., is the manufacturer of miniature pneumatic (air) motors and handpieces used in dental, medical and industrial applications; Oregon Micro Systems Inc., located in Beaverton, Ore., manufactures motion control circuit boards; Biotrol International Inc., located in Louisville, Colo., is a manufacturer and marketer of a full line of infection control and preventative products specifically designed for the dental care provider; Challenge Products Inc., manufactures preventative care products including a complete line of fluoride gels and polishing pastes that are marketed through Biotrol and other private label distributors; and PDM, which leases, equips and staffs five dental centers in Sacramento-area Sears retail stores.
Except for the historical information contained herein, the matters discussed in this release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected.
These include the timely development and acceptance of new products, the impact of competitive products and pricing and other risks detailed frequently in Pro-Dex's SEC reports, including the report on Form 10-KSB for the year ended June 30, 1996. -0-
Pro-Dex Inc. and Subsidiaries Consolidated Statements of Income Quarter Ended March 31, 1997 1996 (unaudited) (unaudited) Net sales (net of sales from discontinued operations of $507,172 and $587,289) $ 4,397,093 $ 5,902,581 Cost of Sales 2,023,105 2,378,677 Gross Profits 2,373,988 3,523,904 Operating expenses: Selling 1,143,202 1,216,197 General and administrative 1,415,071 1,168,936 Research and development 205,367 153,924 Amortization 236,567 213,301 Total operating expenses 3,000,207 2,752,358 Income (loss) from operations (626,219) 771,546 Other income (expense): Interest expense 354,920 242,194 Other income, net 11,760 16,482 Total 343,160 225,712 Income (loss) before income taxes (benefit) and (loss) from discontinued operations (969,379) 545,834 Income taxes (benefit) (246,972) 163,759 Income (loss) before income (loss) from discontinued operations (722,407) 382,075 Income (loss) from discontinued operations (net of income tax (benefit)) (489,557) 30,202 Net income (loss) $(1,211,964) $ 412,277 Earnings per common and common equivalent share: Income (loss) from continuing operations $ (0.08) $ 0.05 (Loss) from discontinued operations (0.05) 0.00 Net income (loss) per share $ (0.13) $ 0.05 -0- Pro-Dex Inc. and Subsidiaries Consolidated Statements of Income Nine months ended March 31, 1997 1996 (unaudited) (unaudited) Net sales (net of sales from discontinued operations of $1,714,178 and $1,763,554) $13,605,814 $15,220,185 Cost of Sales 5,769,020 6,115,376 Gross Profits 7,836,794 9,104,809 Operating expenses: Selling 3,151,024 2,900,883 General and administrative 3,791,093 3,231,884 Research and development 625,174 397,976 Amortization 693,649 568,803 Total operating expenses 8,260,940 7,099,546 Income (loss) from operations (424,146) 2,005,263 Other income (expense) Interest expense 914,094 663,089 Other income, net 38,987 33,136 Total 875,107 629,953 Income (loss) before income taxes (benefit) and (loss) from discontinued operations (1,299,253) 1,375,310 Income taxes (benefit) (345,872) 412,593 Income (loss) before (losses) from discontinued operations (953,381) 962,717 Income (loss) from discontinued operations (net of tax benefit) (767,119) (12,806) Net income (loss) $(1,720,500) $ 949,911 Earnings per common and common equivalent share: Income (loss) from continuing operations $ (0.10) $ 0.11 (Loss) from discontinued operations (0.09) 0.00 Net income (loss) per share $ (0.19) $ 0.11 -0- Pro-Dex Inc. and Subsidiaries Consolidated Balance Sheet Assets March 31, June 30, 1997 1996 (unaudited) Current assets: Cash & cash equivalents $ 605,270 $ 407,722 Accounts receivable, net 4,091,936 5,069,942 Inventories, at cost 4,903,648 4,699,567 Deferred taxes 1,002,417 398,300 Prepaid expenses 468,043 257,898 Total current assets 11,071,314 10,833,429 Property and equipment 5,944,150 5,505,127 Less accumulated depreciation 2,673,598 2,186,233 Net property and equipment 3,270,552 3,318,894 Other assets: Deferred taxes 404,000 387,000 Other 383,054 133,761 Intangibles 12,883,691 13,654,404 Total other assets 13,670,745 14,175,165 Total assets $28,012,611 $28,327,488 Liabilities & Stockholders' Equity Current liabilities: Notes payable $ 62,223 $ 1,162,465 Current portion of long-term debt 1,155,248 1,236,570 Accounts payable 887,020 1,039,706 Accrued expenses 924,049 1,330,450 Income taxes payable -- 547,007 Deferred revenue 215,466 208,485 Total current liabilities 3,244,006 5,524,683 Long-term debt, net of current portion 9,087,876 5,371,264 Total liabilities 12,331,882 10,895,947 Commitments and contingencies Stockholders' equity: Series A convertible preferred stock, no par value, 10 million shares authorized; 78,129 shares issued and outstanding 282,990 282,990 Common stock, no par value; 50 million shares authorized; 9,080,783 shares issued and outstanding 16,705,161 16,697,660 Additional paid in capital 1,004,541 1,004,541 Accumulated deficit (2,252,850) (532,350) 15,739,842 17,452,841 Receivable from employee stock ownership plan (ESOP) (59,113) (21,300) Total stockholders' equity 15,680,729 17,431,541 Total liabilities and stockholders' equity $28,012,611 $28,327,488
CONTACT: Pro-Dex Inc.
George Isaac, 303/443-6136
Kehoe, White, Savage & Co. Inc.
James K. White, 310/437-0655
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|Date:||May 15, 1997|
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