Pro-Dex, Inc. reported robust financial results for the fourth quarter of fiscal 2024, showing an increase in both earnings per share and revenues. The company’s quarterly net income rose to $1.6 million, translating to 46 cents per share, up from 42 cents per share in the same quarter the previous year.
Accompanying the earnings growth was a remarkable 41% surge in quarterly net sales, reaching $15 million compared to $10.6 million in the prior-year period. This significant growth was primarily driven by a $3.4 million increase in revenues from Pro-Dex’s largest customer, encompassing a combination of enhanced repair program revenues and new unit sales.
The financial performance in the fiscal fourth quarter reflects Pro-Dex’s strategic improvement in operational execution. The company effectively increased its sales and managed operating expenses, although it faced challenges in maintaining gross margin levels. Management highlighted successful sales strategies and operational efficiencies. The impact of unrealized gains and losses on investments affected net income figures, showcasing the volatility in investment valuations that Pro-Dex experiences.
Pro-Dex, Inc. Price, Consensus and EPS Surprise
Quarterly Performance Overview
Pro-Dex witnessed substantial sales growth in the quarter, despite a contraction in gross margin from 32% to 27%. The decline in gross margin reflects ongoing price pressures and increased indirect labor costs to support the company’s expansion.
Operating expenses remained stable at $1.7 million, consistent with the prior year figures. A strategic reduction in general and administrative costs alongside a slight increase in engineering expenses indicate a shift toward sustaining engineering activities over billable project tasks.
Operating income for the quarter surged by 46% year over year to $2.4 million, highlighting the effectiveness of Pro-Dex’s operational adjustments and sales initiatives.
Balance Sheet Update (As of June 30, 2024)
Pro-Dex’s cash and cash equivalents amounted to $2.6 million, down from $2.9 million at the end of the prior fiscal year.
Total assets increased marginally from $51.8 million to $52.5 million. Additionally, the lease liability, net of the current portion, decreased from $1.6 million in the previous fiscal year-end to $1.2 million.
Shareholders’ equity also experienced a decrease from $31.6 million to $30.9 million.
Cash Flows
Pro-Dex generated $6.2 million in operating cash flows during fiscal 2024, showing an increase compared to the $5.5 million generated in the prior year.
Fiscal 2024 Update
Annual net sales increased by 17% to $53.8 million, primarily driven by recurring growth in repair and new unit sales to the primary customer. Despite the overall growth, annual net income saw a substantial decline to $2.1 million, or 60 cents per share, down from $1.95 per share in the previous year. This contrast in net income year-over-year is mostly due to a $4.1 million unrealized loss on marketable equity investments, emphasizing the volatile nature of investment valuations overshadowing operational income growth.
The year also saw a steady rise in research and development expenditures, reflecting the company’s continued investment in technology and product development to solidify its competitive position in the medical device sector.