Here are a couple of analogies to describe Pro-Dex:

• The Shimano for surgical instruments. (They develop and manufacture specialized, high-performance components and tools that other medical device companies integrate into their offerings, much like Shimano does for bicycles.)
• The Qualcomm for specialized surgical power tools. (They are a critical, behind-the-scenes supplier of core powered instruments for medical device OEMs, similar to how Qualcomm provides essential chips for smartphone manufacturers.)

• Powered Surgical Instruments: Designs, develops, and manufactures autoclavable, battery-powered, electric, and multi-function surgical drivers and shavers for medical device original equipment manufacturers.
• Consulting Services: Provides engineering, quality, and regulatory consulting services.
• Rotary Air Motors: Manufactures and sells rotary air motors to various industries.

Pro-Dex (PDEX) primarily sells its products and services to other companies (B2B).

The company designs, develops, and manufactures powered surgical instruments for medical device original equipment manufacturers (OEMs) worldwide. It also sells rotary air motors to various industries and provides engineering, quality, and regulatory consulting services. While Pro-Dex's SEC filings indicate that a significant portion of its revenue comes from a limited number of major customers (primarily OEMs), the specific names of these customer companies are not publicly disclosed by the company in its financial reports or other public statements.

Richard L. Van Kirk joined Pro-Dex in January 2006, was named Vice President of Manufacturing in December 2006, and became Chief Operating Officer in April 2013, before being appointed Chief Executive Officer in January 2015. With approximately 40 years in the manufacturing world, including 19 years at Pro-Dex, his career prior to Pro-Dex included roles as Manufacturing Manager and Manager of Product Development at Comarco Wireless Technologies, ChargeSource Division, and General Manager at Dynacast, a leader in precision die casting.

Alisha Charlton joined Pro-Dex in January 2014 as Senior Director of Finance and was promoted to Chief Financial Officer in January 2015. Before joining Pro-Dex, Ms. Charlton held various accounting positions at Comarco, Inc. from October 2000 to January 2014, ultimately serving as Chief Accounting Officer from April 2011. Prior to her 13-year tenure at Comarco, she held accounting and finance positions with CKE Restaurants, Inc. from February 1995 to October 2000. She began her career in July 1991 with KPMG Peat Marwick (now KPMG LLP) and is a formerly certified public accountant.

Angel Domingo joined Pro-Dex in 2005 and has served as the Director of Quality Systems and Regulatory Affairs since 2014. She also joined Pro-Dex's Board of Directors in December 2021. Ms. Domingo possesses extensive experience in the MedTech industry, encompassing Medical Device, In Vitro Diagnostics, Pharmaceuticals, and Bulk Pharm/Chemicals. Her responsibilities involve ensuring that the company's products and Quality Management Systems adhere to industry, regulatory, and customer requirements throughout the device lifecycle.

Jorge Cuervo joined Pro-Dex in October 2023, bringing over 25 years of experience in Operations, Project Management, Lean Facilitation, Sales, and Consulting across North America, Europe, and Asia. Most recently, he led the PMO and Operations teams at a sector of Bio-Techne. He is recognized for his contributions to Business Operations and holds a BA in Business Management from Loyola Marymount University.

Nicholas J. Swenson has served on Pro-Dex's Board of Directors since January 2013 and currently holds the position of Chairman of the Board. Mr. Swenson is an active investor in both private and public companies.

Here are the key risks to Pro-Dex's business:

1. Customer Concentration: Pro-Dex faces significant risk due to its high dependence on a small number of customers. In fiscal year 2025, the company's largest customer alone accounted for 75% of its total sales, and the top three customers collectively represented 94% of sales. The loss of even one key customer could have a material adverse effect on Pro-Dex's business, financial condition, and operational results. This high customer concentration is consistently highlighted as the primary structural risk for the company.
2. Regulatory and Product Liability Risks: As a manufacturer of powered surgical instruments, Pro-Dex operates in the highly regulated medical device industry. The company is subject to complex and evolving regulatory frameworks, including those from the FDA, European Union, and International Organization for Standardization (ISO). Failure to maintain strict regulatory compliance can lead to severe consequences such as fines, penalties, loss of market access, and costly product recalls. Additionally, there is an inherent risk of product liability if a medical device malfunctions or causes harm to a patient, which could result in significant legal and financial repercussions.
3. Supply Chain Disruptions: Pro-Dex, like other medical device contract manufacturers, is vulnerable to disruptions in its supply chain. Challenges such as material shortages, delays, or issues with supplier reliability can directly impact production schedules and the timely delivery of its surgical instruments. Effective management of the supply chain is critical to ensure consistent product quality and meet customer demands, and any failure in this area could affect the company's manufacturing operations and financial performance.

Pro-Dex (PDEX) operates in several distinct addressable markets for its main products and services. The market sizes for these areas are as follows:

Powered Surgical Instruments

• Global Market: The global powered surgical instruments market was valued at approximately USD 2.6 billion in 2023 and is projected to grow to USD 3.7 billion by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 4% from 2024 to 2032. Another estimate placed the global market size at USD 2.61 billion in 2025, with a projection to reach USD 3.92 billion by 2034, at a CAGR of 4.6%. A higher estimate suggests the global powered surgical instruments market size was valued at USD 12.94 billion in 2024 and is estimated to reach USD 23.26 billion by 2033, with a CAGR of 6.77% from 2025 to 2033. The broader global surgical power tools market is expected to reach USD 3.25 billion by 2032 with a CAGR of 4.3%.
• North America Market: The North America powered surgical instruments market was valued at USD 1.2 billion in 2023. In 2025, North America held a 35.02% share of the global market. The U.S. market specifically is projected to reach USD 0.79 billion in 2026.

Market Segments for Powered Surgical Instruments:

• Orthopedic Surgery: This segment of the global powered surgical instruments market dominated with a revenue of USD 864.1 million in 2023. It is estimated to hold a 33.3% share in 2026. The global orthopedic power tools market size is expected to be valued at US$ 1.9 billion in 2026 and is projected to reach US$ 2.6 billion by 2033, growing at a CAGR of 4.4% between 2026 and 2033.
• Thoracic Surgery Devices: The global thoracic surgery devices market was valued at USD 6.1 billion in 2024 and is expected to reach USD 9.3 billion by 2030, with a CAGR of 7.2%. A different source estimates the global thoracic surgery devices market size at USD 790.92 million in 2024, projected to increase to approximately USD 1,466.18 million by 2034, expanding at a CAGR of 6.37% from 2025 to 2034. North America led this market with a 40% revenue share in 2024.
• Craniomaxillofacial (CMF) Devices: The global craniomaxillofacial devices market was estimated at USD 1.8 billion in 2023 and is projected to reach USD 3.5 billion by 2030, growing at a CAGR of 9.5% from 2024 to 2030. Another analysis valued the global CMF devices market at USD 2.2 billion in 2024, with an estimated growth to USD 4.2 billion by 2033, at a CAGR of 7.1% from 2025-2033. North America held a significant share, with over 78.6% in 2022 and 78.0% in 2024.
• Surgical Shavers: The surgical shavers market is expected to grow at a 4.5% CAGR globally during the forecast period for 2023-2031. North America held the largest share of this market, followed by Europe.

Rotary Air Motors

• Global Market: The global air motor market size is forecast to increase by USD 1.14 billion at a CAGR of 4.06% between 2023 and 2028. This market includes various types of air motors, including rotary models.

Engineering, Quality, and Regulatory Consulting Services

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Pro-Dex, Inc. (PDEX) is poised for future revenue growth over the next 2-3 years, driven by several key factors:

1. Continued Adoption of Next-Generation Surgical Handpieces: The successful transition to and increasing shipments of its next-generation orthopedic handpiece for Pro-Dex's largest customer are significant revenue drivers. This product has substantially contributed to recent sales increases and is anticipated to continue fueling growth. The company extended its contract with this key customer through December 31, 2028, which includes minimum purchase volumes for 2026 and 2027, providing strong visibility into future revenue.
2. Expansion of Craniomaxillofacial (CMF) Product Line: Pro-Dex is actively expanding its offerings in the CMF market. The company reported increased shipments of CMF drivers and batteries to various distributors in the second fiscal quarter of 2026. Furthermore, Pro-Dex plans to launch the new "Helios driver for CMF applications," featuring adaptive torque-limiting software, later this fiscal year, indicating further growth in this specialized area.
3. Strategic Acquisition of Advanced Precision Machining (APM): The acquisition of Advanced Precision Machining LLC (APM) in February 2026 is a key part of Pro-Dex's expansion strategy. This acquisition is expected to not only streamline Pro-Dex's manufacturing operations but also enable the company to maintain and expand APM's business with other industries, such as aerospace and defense, diversifying its revenue streams beyond medical devices.
4. Strengthening and Deepening Customer Relationships: Pro-Dex's strategy focuses on enhancing relationships and increasing penetration with its existing customer base, particularly its top accounts. The multi-year contract extension with its largest customer, ensuring minimum purchase volumes, underscores the company's commitment to long-term partnerships and provides a stable foundation for revenue growth.
5. Leveraging a Robust Order Backlog: The company reported a substantial order backlog of $50.4 million as of June 30, 2025, which management expects to support continued revenue and operating income growth in fiscal year 2026. A record backlog of $58.8 million was also noted in Q1 of fiscal year 2025, signaling strong demand for Pro-Dex's products.

Share Repurchases

• Pro-Dex authorized a share repurchase program for up to 1 million shares of common stock on December 13, 2019, which has no stated expiration.
• As of December 31, 2025, the company had repurchased 822,481 shares for $19.08 million under the December 2019 buyback plan.
• From October 1, 2025, to December 31, 2025, Pro-Dex repurchased 55,000 shares for $2.2 million.

Share Issuance

• Common stock issued by Pro-Dex amounted to $42,000 in fiscal year 2025, $50,000 in 2024, $89,000 in 2023, $60,000 in 2022, and $96,000 in 2021.
• The number of outstanding shares decreased from 3.65 million in 2021 to 3.26 million in 2025, indicating net share repurchases over issuances.
• In November 2025, an executive received a grant of 1,000 restricted shares under the company's equity incentive plan.

Outbound Investments

• Pro-Dex completed the acquisition of Advanced Precision Machining for $8.5 million on February 12, 2026, enhancing its manufacturing capabilities.
• During fiscal year 2025, Pro-Dex liquidated some equity investments, receiving proceeds of $1.9 million.

Capital Expenditures

• Capital expenditures were approximately $913,000 in the last 12 months as of an unspecified date in 2025.
• The company's property, plant, and equipment (PPE) investments were -$1,246,000 in 2025, -$983,000 in 2024, -$974,000 in 2023, -$1,638,000 in 2022, and -$8,268,000 in 2021.
• Pro-Dex purchased an industrial building in Tustin, California, to create additional capacity for expected future growth.