Pro-Dex, Inc. (NasdaqCM: PDEX) announced financial results for its fiscal 2027 first quarter, which ended September 30, 2026. The company reported a 11% increase in net sales to $20.6 million for the three months ended September 30, 2026, compared to $18.5 million in the same period of the prior fiscal year. The revenue growth was attributed to a $3.3 million increase in medical device revenue, including rebates, driven by a next-generation handpiece sold to a largest customer, offset by a decrease in legacy handpiece repairs. Additionally, the company recognized $511,000 in revenue from its newly acquired subsidiary, Advanced Precision Machining, LLC (APM).
Gross profit for the quarter increased by $1.5 million, or 28%, to $6.9 million, resulting in a gross margin of 33%, an increase of 4 percentage points from the prior year's 29%. This improvement was driven by a favorable product mix. However, operating expenses increased by $1.1 million, or 48%, to $3.3 million. This rise was primarily due to a $442,000 increase in engineering costs and a $642,000 increase in selling, general, and administrative expenses, largely related to the operations of APM and higher personnel costs.
Despite the revenue and gross profit growth, net income for the quarter decreased to $3.0 million, or $0.92 per diluted share, compared to $4.7 million, or $1.40 per diluted share, in the prior year. The company attributes the net income decline to a significant reduction in unrealized gains on marketable equity investments. In the prior year, the company recorded $3.3 million in such gains, whereas the current quarter recorded only $73,000. The company noted that investment valuations can be volatile.
On the balance sheet, as of September 30, 2026, the company reported cash and cash equivalents of $11.8 million and total assets of $76.6 million. The company also disclosed that it received $8.9 million in cash proceeds from the sale of its investment in Monogram Technologies, Inc. to Zimmer Biomet Holdings, Inc., which was valued at the cash price received upon acquisition in October 2025.
