Pro-Dex, Inc. Announces Fiscal 2025 Third Quarter and Nine-Month Results

Rhea-AI Summary

Pro-Dex (PDEX) reported strong financial results for Q3 FY2025. Net sales increased 22% to $17.4 million, driven by $6.2 million in shipments of their largest customer's next-generation orthopedic handpiece. Gross profit rose 45% to $5.8 million due to favorable product mix. Operating income grew 65% to $3.6 million, while net income surged to $3.3 million ($0.98 per diluted share) from $655,000 ($0.19 per diluted share) year-over-year. For the nine-month period, net sales increased 27% to $49.1 million, with net income reaching $7.8 million ($2.31 per diluted share). The company is on track for a record revenue year, benefiting from strong demand for its surgical devices and improved operational efficiency.

Positive

• Net sales increased 22% YoY to $17.4 million in Q3 FY2025
• Operating income grew 65% to $3.6 million
• Net income surged to $3.3 million from $655,000 YoY
• Gross profit margin improved due to favorable product mix
• Company is on track for record fiscal year revenue
• Successfully launched next-generation orthopedic handpiece with $6.2 million in shipments

Negative

• Operating expenses increased 21% due to higher personnel costs
• Dependence on largest customer for significant revenue
• Legacy product sales decreased by $4.4 million

Insights

Financial Analyst

Pro-Dex shows remarkable Q3 growth with net income jumping 400%, driven by successful new product transition and investment gains.

Pro-Dex's Q3 results demonstrate substantial financial improvements across all key metrics. Revenue increased 22% to $17.4 million, driven by $6.2 million in sales from their next-generation orthopedic handpiece, which more than offset the $4.4 million decline in legacy product revenue.

The company's profitability metrics show even stronger momentum. Gross profit surged 45% to $5.8 million, with management attributing the disproportionate increase to favorable product mix. Operating income jumped 65% to $3.6 million, reflecting operational leverage as operating expenses increased just 21% while supporting higher sales volumes.

Net income presents the most dramatic improvement, reaching $3.3 million ($0.98 per diluted share) compared to $655,000 ($0.19 per diluted share) in the year-ago quarter. This 400% increase stems from both operational improvements and investment performance, including $550,000 in unrealized gains on marketable equity investments (versus losses of $1.2 million last year) and $595,000 in realized gains from investment sales.

The balance sheet shows strategic positioning for growth, with inventory increasing 53% to $23.4 million from $15.3 million in June 2024. This inventory build-up corresponds with the production ramp of their next-generation product. Notes payable increased to $18.3 million from $11.9 million in June 2024, suggesting increased leverage to support growth initiatives.

The nine-month figures reinforce these positive trends, with sales up 27%, gross profit up 53%, and operating income nearly doubling with a 94% increase. With the CEO confirming they're on track for a record revenue year, Pro-Dex appears to be executing effectively on its product transition strategy.

Medical Device Industry Expert

Pro-Dex successfully transitions key customer to next-gen surgical handpiece, driving higher margins and revenue growth.

Pro-Dex's quarterly results highlight a textbook example of successful product lifecycle management in the specialized medical device sector. The company has effectively managed the transition from a legacy surgical handpiece to a next-generation product for its largest customer, resulting in a net revenue gain of $1.8 million for this product line alone ($6.2 million in new product sales minus $4.4 million in legacy product decline).

The progression from limited market release in Q1 to production shipments in Q2 and now significant revenue contribution in Q3 demonstrates proper execution of the standard medical device launch sequence. This methodical approach allows for clinical feedback incorporation and manufacturing scale optimization before full commercial deployment.

The 45% increase in gross profit outpacing the 22% revenue growth confirms the next-generation product carries improved margins—a critical factor in the medical device industry where R&D and regulatory costs demand higher margin profiles for sustainable growth.

The $0.7 million increase in repair revenue from the same customer indicates an expanding installed base of Pro-Dex devices in clinical settings. In the medical device sector, a growing service revenue stream typically signals increasing market penetration and provides a recurring revenue component that complements new equipment sales.

R&D expenditures increased 25% to $947,000, representing approximately 5.4% of quarterly revenue—a healthy reinvestment rate for a specialized medical device manufacturer focused on maintaining technological differentiation in surgical power tools.

The substantial inventory increase to $23.4 million aligns with production scaling for the new generation handpiece, suggesting confidence in continued demand. However, this increased inventory position requires careful management, as excessive inventory in specialized medical devices can lead to obsolescence risks if product iterations occur rapidly.

IRVINE, CA / ACCESS Newswire / May 1, 2025 / PRO-DEX, INC. (NasdaqCM:PDEX) today announced financial results for its fiscal 2025 third quarter ended March 31, 2025. The Company also filed its Quarterly Report on Form 10-Q for the third quarter of fiscal year 2025 with the Securities and Exchange Commission today.

Quarter Ended March 31, 2025

Net sales for the three months ended March 31, 2025, increased $3.1 million, or 22%, to $17.4 million from $14.3 million for the three months ended March 31, 2024, primarily due to the shipment of $6.2 million of our largest customer's next generation orthopedic handpiece, offset by a $4.4 million decrease in their legacy product, as well as an increase in repair revenue of $0.7 million similarly generated from our largest customer. As previously disclosed, we supported our largest customer's limited market release quantities of their next generation end effector during the first quarter of this fiscal year and began production shipments in the second quarter of this fiscal year.

Gross profit for the three months ended March 31, 2025, increased $1.8 million, or 45%, to $5.8 million from $4.0 million for the same period in fiscal 2024. While the gross profit increase is consistent with our increase in net sales, its percentage increase is comparatively higher than the percentage increase in net sales primarily due to favorable product mix.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended March 31, 2025, increased $369,000, or 21%, compared to the same period in fiscal 2024 due to increases in research and development, general and administrative and selling expenses, primarily related to increased personnel related expenses.

Our operating income for the quarter ended March 31, 2025, increased $1.4 million, or 65%, to $3.6 million compared to $2.2 million for the prior fiscal year's corresponding quarter. The increase reflects our increased sales and gross profit, as described above.

Net income for the quarter ended March 31, 2025, was $3.3 million, or $0.98 per diluted share, compared to $655,000, or $0.19 per diluted share, for the corresponding quarter in fiscal 2024. Our net income for the three months ended March 31, 2025, contains unrealized gains on our marketable equity investments of $550,000 while our net income for the three months ended March 31, 2024, contains unrealized losses on our marketable equity investments of $1.2 million. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile. Additionally, during the quarter ended March 31, 2025 we sold some of our marketable equity investments and recorded a realized gain in the amount of $595,000. We had no sales of marketable equity investments during the quarter ended March 31, 2024.

Nine Months Ended March 31, 2025

Net sales for the nine months ended March 31, 2025, increased $10.3 million, or 27%, to $49.1 million from $38.8 million for the nine months ended March 31, 2024 due primarily to $10.9 million in shipments of the newest generation handpiece we sell our largest customer.

Gross profit for the nine months ended March 31, 2025, increased $5.6 million, or 53%, compared to the same period in fiscal 2024. While the gross profit increase is consistent with our increase in net sales, its percentage increase is comparatively higher than the percentage increase in net sales primarily due to favorable product mix.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the nine months ended March 31, 2025, increased 18% to $6.7 million from $5.6 million in the prior fiscal year's corresponding period, due primarily to an overall increase in personnel costs and legal fees.

Our operating income for the nine months ended March 31, 2025, increased $4.5 million, or 94%, to $9.3 million compared to $4.8 million for the corresponding period of the prior fiscal year. The increase in operating income is attributable to higher sales and gross profit offset by the higher operating expenses described above.

Net income for the nine months ended March 31, 2025, was $7.8 million, or $2.31 per diluted share, compared to $540,000, or $0.15 per diluted share, for the corresponding period in fiscal 2024. Our net income for the nine months ended March 31, 2025, contains unrealized gains on our marketable equity investments of $1.1 million and our net income for the nine months ended March 31, 2024, contains unrealized losses on our marketable equity investments of $3.8 million. All of our investments are recorded at estimated fair value, and the valuation can be highly volatile.

CEO Comments

"We are pleased with our performance including increasing sales and operating income," said the Company's President and Chief Executive Officer, Richard L. ("Rick") Van Kirk. "We are tracking toward another record fiscal year from a revenue perspective, and I continue to be grateful to the entire Pro-Dex team for their contributions, resilience, and teamwork."

About Pro-Dex, Inc.:

Pro-Dex, Inc. specializes in the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used primarily in the orthopedic, thoracic, and maxocranial facial markets. We have patented adoptive torque-limiting software and proprietary sealing solutions which appeal to our customers, primarily medical device distributors. Pro-Dex also manufactures and sells rotary air motors to a wide range of industries. Pro-Dex's products are found in hospitals and medical engineering labs 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, (including, but not limited to, expected fiscal year revenue), 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.

Contact: Richard L. Van Kirk, Chief Executive Officer
(949) 769-3200

(tables follow)

PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)

		March 31, 2025				June 30, 2024
ASSETS
Current Assets:
Cash and cash equivalents		$	4,473			$	2,631
Investments			5,417				4,217
Accounts receivable, net of allowance for expected credit losses of $0 at March 31, 2025 and at June 30, 2024, respectively			15,861				13,887
Deferred costs			141				262
Inventory			23,432				15,269
Prepaid expenses and other current assets			619				345
Total current assets			49,943				36,611
Land and building, net			6,085				6,155
Equipment and leasehold improvements, net			5,344				5,024
Right of use asset, net			1,158				1,473
Intangibles, net			33				54
Deferred income taxes, net			1,555				1,555
Investments			111				1,563
Other assets			44				42
Total assets		$	64,273			$	52,477
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	5,962			$	4,513
Accrued expenses			3,542				3,359
Deferred revenue			-				14
Income taxes payable			385				632
Note payable			8,428				4,374
Total current liabilities			18,317				12,892
Lease liability, net of current portion			813				1,182
Notes payable, net of current portion			9,861				7,536
Total non-current liabilities			10,674				8,718
Total liabilities			28,991				21,610
Shareholders' equity:
Common shares; no par value; 50,000,000 shares authorized; 3,261,043 and 3,363,412 shares issued and outstanding at March 31, 2025 and June 30, 2024, respectively			551				3,917
Retained earnings			34,731				26,950
Total shareholders' equity			35,282				30,867
Total liabilities and shareholders' equity		$	64,273			$	52,477

PRO-DEX, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(In thousands, except per share amounts)

		Three Months Ended March 31,								Nine Months Ended March 31,
		2025				2024				2025				2024
Net sales		$	17,414			$	14,293			$	49,099			$	38,819
Cost of sales			11,616				10,291				33,080				28,357
Gross profit			5,798				4,002				16,019				10,462
Operating expenses:
Selling expenses			113				17				211				79
General and administrative expenses			1,098				1,012				3,732				3,208
Research and development costs			947				760				2,731				2,353
Total operating expenses			2,158				1,789				6,674				5,640
Operating income			3,640				2,213				9,345				4,822
Interest expense			(246	)			(138	)			(602	)			(409	)
Unrealized gain (loss) on marketable equity investments			550				(1,192	)			1,060				(3,785	)
Interest and other income			15				30				61				76
Gain on sale of investments			595				-				595				-
Income before income taxes			4,554				913				10,459				704
Income tax expense			1,279				258				2,678				164
Net income		$	3,275			$	655			$	7,781			$	540
Basic net income per share:
Net income		$	1.00			$	0.19			$	2.36			$	0.15
Diluted net income per share:
Net income		$	0.98			$	0.19			$	2.31			$	0.15
Weighted average common shares outstanding:
Basic			3,261,043				3,451,423				3,296,744				3,531,249
Diluted			3,337,312				3,523,823				3,366,099				3,603,649
Common shares outstanding			3,261,043				3,451,423				3,261,043				3,451,423

SOURCE: Pro-Dex, Inc.

View the original press release on ACCESS Newswire

FAQ

What were Pro-Dex (PDEX) earnings per share in Q3 2025?

Pro-Dex reported earnings of $0.98 per diluted share in Q3 FY2025, compared to $0.19 per diluted share in Q3 FY2024.

How much did Pro-Dex (PDEX) revenue grow in Q3 2025?

Pro-Dex's revenue grew 22% year-over-year to $17.4 million in Q3 FY2025, up from $14.3 million in Q3 FY2024.

What drove Pro-Dex (PDEX) sales growth in Q3 2025?

The sales growth was primarily driven by $6.2 million in shipments of their largest customer's next-generation orthopedic handpiece and a $0.7 million increase in repair revenue.

What was Pro-Dex (PDEX) operating income in Q3 2025?

Pro-Dex's operating income for Q3 FY2025 was $3.6 million, a 65% increase from $2.2 million in the same quarter last year.

How much did Pro-Dex (PDEX) gross profit increase in Q3 2025?

Gross profit increased 45% to $5.8 million in Q3 FY2025 from $4.0 million in Q3 FY2024, driven by favorable product mix.