Pro-Dex Inc. said its fourth-quarter results were negatively impacted by a pause in production for its largest customer.
The Irvine-based contract manufacturer said that late into the third quarter, the customer requested it hold off on production and shipments of a next-generation orthopedic handpiece but resumed activity in the fourth quarter.
“While this fiscal year included disruption in transitioning to our largest customer’s next-generation handpiece, we continued to meet our customers’ requests by nimbly shifting assembly schedules to their requested mix of legacy and new product,” Chief Executive Richard Van Kirk said in a statement.
Pro-Dex on Sept. 4 reported fourth quarter earnings per share of 36 cents, below the Zack’s consensus estimate of 47 cents. Revenue in the fourth quarter increased 16% to $17.5 million, missing the $17.9 million estimated by analysts.
The earnings miss caused shares to drop 17% to $38.19 and a $130.8 million market cap in the subsequent trading session (Nasdaq: PDEX).
Shares hit an all-time high of $70.26 in April on investor excitement that new products were boosting its gross margins. While down since then, the shares are still up 44% in the past year.
Pro-Dex is Orange County’s 19th largest medical device maker, specializing in powered surgical instruments, with 186 local employees as of April.
Full-Year Earnings
Revenue for the full-year went up 24% to $66.6 million, driven primarily by resuming production and shipment of the next-gen surgical device for its largest customer.
Work on the device for the undisclosed customer accounted for $12 million in sales, according to Pro-Dex.
Operating expenses, however, increased 20% to $8.8 million. The company attributed this to an increase in personnel costs in selling, as well as general and administrative expenses to support continued growth.
“We expect fiscal 2026 to continue our trend of revenue and operating income growth, especially as evidenced by our June 30th backlog in the amount of $50.4 million,” Van Kirk said.
Van Kirk added that Pro-Dex has begun working with customers to share some of its tariff costs.
The company said that since 2022, it has faced challenges with its suppliers increasing lead times, raising prices or temporarily adding surcharges and having delays in shipments.
Contract Manufacturer for Various Industries
Pro-Dex is a contract manufacturer for a wide array of industries including medical, dental, industrial, aerospace and military. Its three largest customers accounted for 94% of its sales in fiscal 2025, up from 88% in fiscal 2024. Confidentiality agreements prevent disclosures of the names of those customers, Pro-Dex said in its annual report.
The company makes products ranging from orthopedic surgical shavers to numbing tools for dentists.
Its patented torque-limiting technology and proprietary sealing solutions are a big draw to medical device companies.
Some of the company’s clients include global medical device companies such as Smith & Nephew, Arthrex, KLS Martin Group and Medtronic, which has its neurovascular unit based in Irvine.
Medical device sales currently account for a majority of its business, Pro-Dex says.
Pro-Dex also manufactures and sells rotary air motors to other industries, with some of them being used in parts for Boeing Co., Airbus SAS and NASA.
ÂThe company machines its products in Irvine and assembles them in Tustin.
