Pro-Dex Sales Growth Slows After June Quarter
Net sales rose 11% to $20.6 million in the fiscal 2027 first quarter as next-generation handpiece shipments to its largest customer more than offset a drop in legacy repairs.
Pro-Dex, Inc. (PDEX), a maker of autoclavable surgical drivers and shavers, reported net sales of $20.6 million for the three months ended September 30, 2026, up $2.1 million, or 11%, from $18.5 million a year earlier. That year-over-year pace slowed from the 17% increase to $20.4 million recorded in the fiscal 2026 fourth quarter ended June 30, 2026.
The company said the sales increase was driven primarily by a $3.3 million rise in medical device revenue, inclusive of rebates, of which $1.8 million related to the next-generation handpiece sold to its largest customer. That gain was offset by a $1.7 million decrease in repairs of the legacy handpiece sold to the same customer. Newly acquired Advanced Precision Machining, LLC, added $511,000 of revenue exclusive of $814,000 of inter-company sales eliminated in consolidation.
Gross profit increased $1.5 million, or 28%, to $6.9 million from $5.4 million in the year-ago quarter. Gross margin rose 4 percentage points to 33% from 29%, which the company attributed primarily to favorable product mix. In the immediately preceding quarter, gross margin had been 35%.
Operating expenses rose $1.1 million, or 48%, to $3.3 million from $2.3 million a year earlier. The company said the increase related to a $442,000 rise in engineering, tied to personnel costs and higher internal project expenditures, and a $642,000 rise in selling, general and administrative expenses. SG&A included $466,000 of APM’s separate operations and $195,000 of higher personnel costs related to accounting, mergers and acquisitions, human resources, and information technology. Selling, general and administrative expenses were $2.1 million and research and development costs were $1.2 million.
Operating income increased $406,000, or 13%, to $3.5 million from $3.1 million a year earlier, reflecting higher gross profit offset by higher operating expenses.
Net income decreased to $3.0 million, or $0.92 a share on a diluted basis, from $4.7 million, or $1.40 a share, a year earlier. The current quarter included $73,000 of unrealized gains on marketable equity investments, compared with $3.3 million of such gains in the year-ago period. The company said its investment in Monogram Technologies, Inc. was valued as of September 30, 2025, at the cash price received in October 2025 upon Zimmer Biomet Holdings, Inc.’s acquisition of Monogram, at $4.04 a share for a total of $8.9 million in cash proceeds.
Cash and cash equivalents were $11.8 million at September 30, 2026, up from $8.2 million at June 30, 2026. Accounts receivable, net of an allowance for credit losses of $285,000, were $17.5 million, down from $21.2 million at June 30. Inventory was $21.9 million. Total assets were $76.6 million and shareholders’ equity was $49.3 million.
President and Chief Executive Officer Richard L. Van Kirk said the company was pleased with first-quarter results and continued top-line revenue growth. He said Pro-Dex is working with the Monogram and Zimmer Biomet teams and expects to ship validation units later in fiscal 2027.
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