-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IZJsNnlbvvPsSn59AnQ26rANUkJSaSjFt+b/chhK0DXnDmqYjDm2BO5wcU+0g+M6 1jKxKvkCPt6lfHmN5/ZADQ== 0001275287-06-004956.txt : 20060927 0001275287-06-004956.hdr.sgml : 20060927 20060927163048 ACCESSION NUMBER: 0001275287-06-004956 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060927 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060927 DATE AS OF CHANGE: 20060927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRO DEX INC CENTRAL INDEX KEY: 0000788920 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 841261240 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14942 FILM NUMBER: 061111527 BUSINESS ADDRESS: STREET 1: MICRO MOTORS, INC. STREET 2: 151 EAST COLUMBINE CITY: SANTA ANA STATE: CA ZIP: 92707 BUSINESS PHONE: 714-241-4411 MAIL ADDRESS: STREET 1: MICRO MOTORS INC. STREET 2: 151 EAST COLUMBINE CITY: SANTA ANA STATE: CA ZIP: 92707 8-K 1 pr7341.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) September 27, 2006 PRO-DEX, INC. (Exact name of registrant as specified in its charter) COLORADO 0-14942 84-1261240 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 151 East Columbine Avenue Santa Ana, California 92707 (Address of Principal Executive Offices) (714) 241-4411 (Registrant's Telephone Number, Including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On September 27, 2006, Pro-Dex, Inc. issued a press release announcing its financial performance for the fourth quarter period and fiscal 2006 results. On that same date, Pro-Dex, Inc. conducted a conference call concerning its performance for the fourth quarter period and fiscal 2006. A copy of the news release is attached to this Form 8-K as Exhibit 99.1. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits. Exhibit 99.1 Press release dated September 27, 2006 of Pro-Dex Inc. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: September 27, 2006 PRO-DEX, INC (REGISTRANT). By: /s/ Mark P. Murphy ----------------------- Mark P. Murphy Chief Executive Officer 3 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION - ------- --------------------------------------------------------------------- 99.1 Press Release dated September 27, 2006 4 EX-99.1 2 pr7341ex991.txt EXHIBIT 99.1 Exhibit 99.1 Contact: Mark Murphy, Chief Executive Officer (714) 241-4411 Brett Maas, Investor Relations Hayden Communications, Inc. (646) 536-7331 FOR IMMEDIATE RELEASE PRO-DEX, INC. ANNOUNCES FOURTH QUARTER AND FISCAL 2006 RESULTS SALES INCREASE 27% FOR THE QUARTER, 23% FOR THE YEAR; EARNINGS AT HIGH-END OF RANGE PROVIDED AUGUST 14 BACKLOG REACHES $11.7 MILLION AS OF JUNE 30, 2006 SANTA ANA, CA, September 27, 2006 - PRO-DEX, INC. (NASDAQ: PDEX), a developer and manufacturer of embedded motion control, miniature rotary drive systems and fractional horsepower DC motors, which enables speed-to-market for customers who serve the medical, dental, factory automation, scientific research, aerospace and military markets, today announced financial results for the fourth quarter and full-year period ending June 30, 2006. The audited annual results met the revenue expectations for the year and the earnings were at the high-end of the Company's preliminary earnings outlook provided August 14, 2006. Consolidated net sales for the fourth quarter were $5.3 million, a sequential increase of 27 percent compared to the third quarter and an increase of 22 percent compared to the $4.4 million reported during the fourth quarter of fiscal 2005. For the fiscal year ended June 30, 2006, the Company reported revenues of $17.1 million, 23% higher than the $13.8 million reported for fiscal year 2005. Net income for the fourth quarter was $231,000, or $0.02 per basic and diluted share, compared to net income of $6,000, or $0.00 per basic and diluted share for the third quarter and compared to net income of $928,000, or $0.09 per basic and diluted share for the three months ended June 30, 2005. The Company reported net income for the year of $827,000, or $0.09 per basic and $0.08 per fully diluted share, compared to net income of $1.9 million, or $0.20 per basic and $0.19 per fully diluted share last year. Last year's fourth quarter earnings included a $227,000 favorable reversal of an income tax valuation reserve that was not repeated this year. In calculating earnings per share for fiscal year 2006, the Company utilized 10.0 million fully diluted shares compared to 9.7 million fully diluted shares for the fiscal year 2005. Mark Murphy, the Company's President and Chief Executive Officer, commented, "We reported top and bottom line improvements in our fourth quarter results compared to last quarter, but recognize the pressing need to make further adjustments in our processes and our organizational structure to fully realize the Company's earnings potential. We continue to see strong demand for our expertise in helping customers accelerate the development of their products. Our goal is to increase our quality and engineering capacity to meet this growing demand in a more efficient manner with high standards for quality. During fiscal 2006, we made two strategic asset acquisitions, strengthening our product line by adding a high impact specialty dental product and a component supplier with a majority of its sales to the aerospace market. These acquisitions are expected to provide additional capacity for growth and a high-margin product for us to market directly to the dental industry. We remain excited by the potential of these two acquisitions and believe that we can leverage these new assets to benefit shareholders." Gross profit for the fourth quarter was $1.7 million, or 31.9 percent of sales, compared to gross profit of $2.0 million, or 44.8 percent of sales for the fourth quarter last year. The fourth quarter gross profit this year was unfavorably impacted by $155,000 in warranty costs and $230,000 excess inventory costs. Gross profit for the year was $6.6 million, or 38.5 percent of sales, compared to gross profit of $7.1 million, or 51.2 percent of sales last year. Gross profit for the year was impacted by over $700,000 in warranty costs and over $500,000 in obsolete inventory costs. Operating expenses increased by 21 percent to $1,468,000 compared to $1,208,000 in the fourth quarter last year, due to expenses associated with the Intraflow product launch of $150,000 and by incurring the normal operating costs acquired with the Astromec acquisition of $161,000. For the full fiscal year, operating expense increased 13.4 percent to $5.4 million from $4.8 million last year, but as a percentage of sales, was reduced from 34.1 percent to 31.9 percent. Mr. Murphy continued, "We completed the year with a backlog of $11.7 million compared with a backlog of $10.7 million at March 31, 2006 and $7.9 million at June 30, 2005 and recorded over $17 million in new order bookings during fiscal year 2006, demonstrating ongoing demand for our expertise. The quality issues we faced did not result in the loss of any customers, demonstrating the Company's commitment to deliver on its promises. We look forward to meeting the challenges which face our business today, and believe we can build an even stronger Company, with more consistent revenue growth and profitability, as we fully integrate our speed to market capability with industry leading quality." We completed the fiscal year with cash and cash equivalents of $358,000 compared to cash and cash equivalents of $2.6 million as of June 30, 2005, with the decrease due to the acquisitions made during the year. We generated over $200,000 in operating cash during the fourth quarter and reduced our credit line borrowings by $100,000 during that period, leaving $1.1 million of our credit line available at the end of the quarter. Total working capital was $6.1 million as of June 30, 2006 compared to $8.3 million on June 30, 2005. Shareholder's equity increased 8.6 percent to $12.1 million from $11.1 million as of June 30, 2005. OUTLOOK: - -------- For fiscal 2007, the Company does not currently plan to provide sales and earnings guidance. TELECONFERENCE INFORMATION: - --------------------------- Investors and all others are invited to listen to a conference call discussing the fourth quarter and fiscal 2006 results, today at 4:30 p.m. Eastern Time. The call is scheduled to be broadcast live over the Internet on Wednesday, September 27, 2006 at 4:30 p.m. Eastern Time and may be accessed by visiting the Company's website at www.pro-dex.com. Mark Murphy, Chief Executive Officer and Jeff Ritchey, Chief Financial Officer, plan to host the call. If you would like to join the call, dial (866) 323-3543 U.S. and (706) 679-0672 International, conference I.D. 7132629. You may identify the call as the Pro-Dex Fourth Quarter Earnings Call. Pro-Dex Inc., with operations in Santa Ana, California and Beaverton, Oregon, specializes in bringing speed to market in the development and manufacture of technology-based solutions that incorporate embedded motion control and miniature rotary drive systems, serving the medical, dental, factory automation, and scientific research markets. Pro-Dex's products are found in hospitals, dental offices, medical engineering labs, scientific research facilities and high tech manufacturing operations around the world. For more information, visit the Company's website at www.pro-dex.com. Statements herein concerning the Company's plans, growth and strategies may include 'forward-looking statements' within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. Interested parties should refer to the disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission. 2 PRO-DEX, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
30-Jun-06 30-Jun-05 -------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 358,000 $ 2,584,000 Accounts receivable, net of allowance for doubtful accounts of $40,000 at June 30, 2006 and $100,000 at June 30, 2005 3,841,000 3,521,000 Inventories, net 3,980,000 3,145,000 Prepaid expenses 91,000 66,000 Income tax receivable 222,000 96,000 Deferred income taxes 766,000 519,000 -------------- -------------- Total current assets 9,258,000 9,931,000 -------------- -------------- Property, plant, equipment and leasehold improvements, net 3,726,000 1,156,000 -------------- -------------- Other assets: Goodwill 2,931,000 1,110,000 Intangibles - Patents, net 1,417,000 - Deferred income taxes 378,000 541,000 Other 44,000 18,000 -------------- -------------- Total other assets 4,770,000 1,669,000 -------------- -------------- Total assets $ 17,754,000 $ 12,756,000 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Line of credit $ 900,000 $ - Accounts payable 952,000 1,158,000 Accrued expenses 971,000 472,000 Income taxes payable - 13,000 Current portion of term note 250,000 - Current portion of real estate loan 27,000 - Current portion of "patent" deferred payable 71,000 - -------------- -------------- Total current liabilities 3,171,000 1,643,000 Long-term liabilities: Term note 646,000 - Real estate loan 1,619,000 - Patent deferred payable 245,000 - -------------- -------------- Total long-term liabilities 2,510,000 - -------------- -------------- Total liabilities 5,681,000 1,643,000 -------------- -------------- Commitments and contingencies Shareholders' equity: Common shares; no par value; 50,000,000 shares authorized; 9,539,792 shares issued and outstanding June 30, 2006 9,449,396 shares issued and outstanding June 30, 2005 16,066,000 15,933,000 Accumulated deficit (3,993,000) (4,820,000) -------------- -------------- Total shareholders' equity 12,073,000 11,113,000 -------------- -------------- Total liabilities and shareholders' equity $ 17,754,000 $ 12,756,000 ============== ==============
See notes to unaudited consolidated financial statements. 3 PRO-DEX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED JUNE 30
2006 2005 -------------- -------------- Net sales $ 17,061,000 $ 13,834,000 Cost of sales 10,485,000 6,754,000 -------------- -------------- Gross profit 6,576,000 7,080,000 Operating expenses: Selling 1,191,000 957,000 General and administrative expenses 2,230,000 2,091,000 Research and development costs 2,009,000 1,740,000 -------------- -------------- Total operating expenses 5,430,000 4,788,000 -------------- -------------- Income from operations 1,146,000 2,292,000 Other: Other income (expense), net (19,000) 40,000 Royalty income 51,000 77,000 Interest income (expense), net (25,000) 21,000 -------------- -------------- Total 7,000 138,000 -------------- -------------- Income before income taxes provision 1,153,000 2,430,000 Income taxes provision 326,000 581,000 -------------- -------------- Net income $ 827,000 $ 1,849,000 -------------- -------------- Net Income per share: -------------- -------------- Basic $ 0.09 $ 0.20 -------------- -------------- Diluted $ 0.08 $ 0.19 -------------- -------------- Weighted average shares outstanding - basic 9,502,652 9,106,846 -------------- -------------- Weighted average shares outstanding - diluted 9,988,569 9,650,980 -------------- --------------
See notes to consolidated financial statements. 4 PRO-DEX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30
2006 2005 -------------- -------------- Cash Flows from Operating Activities: Net Income $ 827,000 $ 1,849,000 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 356,000 348,000 Loss on disposal 7,000 - (Recovery of) Provision for doubtful accounts (60,000) 60,000 (Recovery of) Reserve for obsolete inventory 502,000 (18,000) Stock based compensation - 25,000 Deferred taxes (84,000) 521,000 Changes in: (Increase) in accounts receivable (259,000) (1,212,000) (Increase) in inventories (1,336,000) (585,000) (Increase) decrease in prepaid expenses (25,000) 10,000 (Increase) in other assets (26,000) (1,000) Increase in accounts payable and accrued expenses 292,000 453,000 (Decrease) in income taxes payable (139,000) (893,000) -------------- -------------- Net Cash provided by Operating Activities 55,000 557,000 -------------- -------------- Cash Flows From Investing Activities: Acquisition of Astromec, net of assets acquired (2,398,000) - Proceeds from equipment sale 1,000 - Purchase of equipment and leasehold improvements (642,000) (474,000) Purchase of Intangible Assets - Patents related to Interflow (1,167,000) - -------------- -------------- Net Cash (used in) Investing Activities (4,206,000) (474,000) -------------- -------------- Cash Flows from Financing Activities: Principal payments on long-term shareholder borrowings - (145,000) Borrowing on Line of Credit 900,000 - Borrowing on Term Note 1,000,000 - Principal payments on Term Note (104,000) - Principal payments on Mortgage (4,000) - Proceeds from option and warrant exercise 133,000 576,000 -------------- -------------- Net Cash provided by Financing Activities 1,925,000 431,000 -------------- -------------- Net (decrease) increase in Cash and Cash Equivalents (2,226,000) 514,000 Cash and Cash Equivalents, beginning of period 2,584,000 2,070,000 -------------- -------------- Cash and Cash Equivalents, end of period $ 358,000 $ 2,584,000 ============== ============== Supplemental Information Cash payments for interest $ 68,000 $ 9,000 Cash payments for income taxes $ 543,000 $ 943,000 Non-Cash Disclosure of Investing and Financing Activities Long term payable incurred in acquisition of intangible assets $ 316,000 $ - Acquisition of building and land - real estate loan $ 1,650,000 $ - Intravantage deferred payable $ 317,000 $ -
See notes to consolidated financial statements. 5 -----END PRIVACY-ENHANCED MESSAGE-----