PRO-DEX Posts 17% Q4 Sales Growth as Gross Margin Jumps to 35%

Pro-Dex (PDEX) reported fiscal fourth-quarter net sales of $20.4 million, up $2.9 million or 17% from $17.5 million a year earlier, with net income more than doubling to $2.9 million, or $0.87 per diluted share, from $1.2 million, or $0.36. The Irvine, California-based maker of battery-powered surgical drivers and shavers closed its fiscal year on June 30, 2026, and attributed the growth primarily to higher revenue from its largest customer's next generation orthopedic handpiece.

Gross profit in the quarter rose 103% to $7.1 million from $3.5 million, lifting gross margin from 20% to 35%. Pro-Dex pointed to favorable product mix, better absorption of indirect manufacturing costs and margins from Advanced Precision Machining (APM), the aerospace and defense parts subsidiary it acquired in the third quarter of fiscal 2026.

The comparison is flattered by the prior-year period, when the company was still shipping its largest customer the legacy handpiece until that customer released its product hold late in the quarter, at which point production of the next-generation device resumed.

Quarterly operating expenses climbed $1.4 million to $3.6 million, including a $349,000 allowance for uncollectible receivables, $436,000 of APM administrative costs and $250,000 in consulting payments to APM's founder. Operating income still rose 163% to $3.5 million.

For the full year, net sales increased 16% to $77.5 million from $66.6 million, driven by a $15.3 million rise in revenue from the largest customer, partly offset by a $6.0 million drop in repair revenue. NRE revenue added $952,000 and APM contributed $718,000 since the February 9, 2026 acquisition.

Full-year net income was $13.7 million, or $4.12 per diluted share, versus $9.0 million, or $2.67, in fiscal 2025. Those figures include gains on marketable equity investments of $5.7 million and $2.1 million respectively, which the company notes are recorded at fair value and can be highly volatile. Operating income rose 22% to $13.0 million.

Cash and equivalents ended the year at $8.2 million, up from $419,000, with operating cash flow swinging to $7.2 million from a $1.7 million outflow. Goodwill of $6.5 million appeared on the balance sheet following the APM deal, and the company repurchased $3.4 million of stock, leaving 3,186,135 shares outstanding versus 3,261,043 a year earlier.

Chief Executive Richard L. Van Kirk said the company was very pleased with our fiscal 2026 performance including completing the acquisition of APM and increasing sales by 16%.

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