8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of Report

(Date of earliest event reported)

February 14, 2008

PRO-DEX, INC.

(Exact name of registrant as specified in its charter)

COLORADO	0-14942	84-1261240
(State or other	(Commission File Number)	(I.R.S. Employer
jurisdiction of		Identification Number)
incorporation)

151 East Columbine Avenue, Santa Ana, California 92707

(Address of principal executive offices, zip code)

(714) 241-4411

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

     o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On February 14, 2008 Pro-Dex, Inc. issued a press release announcing its financial performance for the second quarter period of fiscal year 2008. On that same date, Pro-Dex, Inc. conducted a conference call concerning its performance for the second quarter period of fiscal year 2008. A copy of the news release is attached to this Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

Exhibit 99.1Press release dated February 14, 2008 of Pro-Dex Inc.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 14, 2008	PRO-DEX, Inc (Registrant).
	By:	/s/ Mark P. Murphy
		Mark P. Murphy
		Chief Executive Officer

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INDEX TO EXHIBITS

Exhibit
Number	Description
99.1	Press Release dated February 14, 2008

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EX-99.1

Contact:	Mark Murphy, Chief Executive Officer
	(714) 241-4411
	Jeff Stanlis, Investor Relations
	Hayden Communications, Inc.
	(602) 476-1821

For Immediate Release

PRO-DEX, INC. ANNOUNCES

SECOND QUARTER 2008 RESULTS

Sales increase 32% for the quarter

Backlog reaches $11.7 million as of December 31, 2007

SANTA ANA, CA, February 14, 2008 - PRO-DEX, INC. (NASDAQ: PDEX) a developer and manufacturer of embedded motion control, miniature rotary drive systems and fractional horsepower DC motors, which enables speed-to-market for customers who serve the medical, dental, factory automation, scientific research, aerospace and military markets, today announced financial results for the second fiscal quarter and six month period for fiscal 2008, the periods ending December 31, 2007.

Consolidated net sales for the second quarter were $6.1 million, an increase of 32% compared to the $4.6 million reported for the second quarter of fiscal 2007. For the six months ended December 31, 2007, consolidated net sales were $12.1 million, an increase of 23% compared to $9.9 million for the year ago period.

Net income for the second quarter was $305,000 or $0.03 per basic and diluted share (based on 9.7 and 9.9 million shares, respectively) compared to a net loss of $(138,000) or $(0.01) loss per basic and diluted share for the second quarter last year. The Company reported net income for the six months of $631,000 or $0.06 per basic and diluted share compared to net income of $103,000, or $0.01 per basic and fully diluted share for the year-ago period.

Mark P. Murphy, the Company’s President and Chief Executive Officer, commented, “We have completed a strong start to fiscal 2008 and significantly improved our financial performance compared to last year. I am confident we have set the stage for continued improvements, establishing a solid baseline of performance upon which we can build. In the short-term, we will complete our move into a new corporate headquarters, providing the space and efficiency to support our growth. The move is currently scheduled to occur in mid-April, impacting our fourth fiscal quarter by $250,000 to $350,000 in related non-recurring expenses and inefficiencies. Other than this anticipated one-time charge, we look forward to continued strength in our operating performance.”

Consolidated gross profit for the quarter ended December 31, 2007 increased $988,000 or 73% over the same quarter in the previous year. Gross profit for the second quarter was $2.4 million, or 38% gross profit margin, compared to gross profit of $1.4 million, or 30% gross profit margin last year, primarily due to the higher level of sales and increased profitability in medical products. Gross profit for the six months was $4.5 million, or 37% gross profit margin compared to gross profit of $3.4 million, or 34% gross profit margin for the year-ago period. Higher development fees as well as greater manufacturing efficiencies and cost controls had a positive impact on gross profit in the first half of fiscal 2008.

Second quarter operating expenses increased by 11% to $1.9 million, compared to $1.7 million in the second quarter last year, but as a percentage of sales was reduced from 36% to 30%. For the six months, operating expense increased 8% to $3.5 million from $3.2 million in the year-ago period, but as a percentage of sales, was reduced from 33% to 29%.

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Mr. Murphy continued, “Our backlog at the end of the second fiscal quarter was $11.7 million, unchanged from the backlog as of December 31, 2006. This demonstrates the progress we have made in landing new business, while increasing shipments. With our new Vice President of Engineering, Dick Corrington, on board we are fully staffed and ready to refine and grow our value proposition.”

The Companycompleted the December 31, 2007 quarter with cash and cash equivalents of $220,000 compared to cash and cash equivalents of $403,000 as of June 30, 2007. Total working capital was $6.4 million as of December 31, 2007. Shareholders’ equity increased 5.1 percent to $13.5 million from $12.9 million as of June 30, 2007.

Teleconference Information:

Investors and all others are invited to listen to a conference call discussing the second fiscal quarter 2008 results, today at 4:30 p.m. Eastern Time. The call is scheduled to be broadcast live over the Internet and may be accessed by visiting the Company's website at http://www.pro-dex.com. Mark Murphy, Chief Executive Officer and Jeff Ritchey, Chief Financial Officer plan to host the call. If you would like to join the call, dial (866) 323-3543 U.S. and (706) 679-0672 international, conference I.D. 34459746. You may identify the call as the Pro-Dex Second Quarter Earnings Call. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible on the Company's website for 30 days. Additionally, a telephone replay will be available 2 hours after the call for 48 hours by dialing (800) 642-1687 U.S. or (706) 645-9291 for international callers, conference I.D. number 3459746.

Pro-Dex Inc., with operations in Santa Ana, California; Beaverton, Oregon; and Carson City Nevada, specializes in bringing speed to market in the development and manufacture of technology-based solutions that incorporate embedded motion control, miniature rotary drive systems and fractional horsepower DC motors, serving the medical, dental, semi-conductor, scientific research and aerospace markets. Pro-Dex's products are found in hospitals, dental offices, medical engineering labs, scientific research facilities, commercial and military aircraft, and high tech manufacturing operations globally.

For more information, visit the Company's website at www.pro-dex.com.

Statements herein concerning the Company's plans, growth and strategies may include 'forward-looking statements' within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. Interested parties should refer to the disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.

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PRO-DEX, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	December 31, 2007 (unaudited)			June 30,2007 (audited)
ASSETS
Current assets:
Cash and cash equivalents	$	220,000		$	403,000
Accounts receivable, net of allowance for doubtful
accounts of $135,000 at December 31 and $153,000 at June 30		3,059,000			3,436,000
Inventories, net		5,007,000			4,622,000
Prepaid expenses		284,000			205,000
Deferred income taxes		1,178,000			1,091,000
Total current assets		9,748,000			9,757,000
Property, plant, equipment and leasehold improvements, net		4,355,000			3,778,000
Other assets:
Goodwill		2,997,000			2,997,000
Intangibles - Patents, net		1,271,000			1,321,000
Deferred income taxes		229,000			229,000
Other		33,000			25,000
Total other assets		4,530,000			4,572,000
Total assets	$	18,633,000		$	18,107,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Credit Line	$	-		$	300,000
Accounts payable		1,319,000			1,110,000
Accrued expenses		1,467,000			1,183,000
Income taxes payable		212,000			158,000
Current portion of term note		250,000			250,000
Current portion of real estate loan		29,000			26,000
Current portion of "patent" deferred payable		-			82,000
Total current liabilities		3,277,000			3,109,000
Long-term liabilities
Term note		271,000			396,000
Real estate loan		1,576,000			1,593,000
Patent deferred payable		-			158,000
Total long-term liabilities		1,847,000			2,147,000
Total liabilities		5,124,000			5,256,000
Commitments and contingencies
Shareholders' equity:
Common shares; no par value; 50,000,000 shares authorized;
9,718,366 shares issued and outstanding December 31, 2007,
9,718,366 shares issued and outstanding June 30, 2007,		16,443,000			16,340,000
Accumulated deficit		(2,934,000	)		(3,489,000	)
Total shareholders’ equity		13,509,000			12,851,000
Total liabilities and shareholders’ equity	$	18,633,000		$	18,107,000

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PRO-DEX, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended December 31 (unaudited)
	2007			2006
Net sales	$	6,123,000		$	4,631,000
Cost of sales		3,769,000			3,262,000
Gross profit		2,354,000			1,369,000
Operating expenses:
Selling		352,000			340,000
General and administrative expenses		866,000			746,000
Research and development costs		635,000			579,000
Total operating expenses		1,853,000			1,665,000
(Loss) income from operations		501,000			(296,000	)
Other income (expense):
Other income (expense), net		48,000
Royalty income		14,000			18,000
Interest income (expense)		(40,000	)		(58,000	)
Total		22,000			(40,000	)
(Loss) income before (benefit) provision for income taxes		523,000			(336,000	)
(Benefit) provision for income taxes		218,000			(198,000	)
Net (loss) income	$	305,000		$	(138,000	)
Net (loss) income per share:
Basic	$	0.03		$	(0.01	)
Diluted	$	0.03		$	(0.01	)
Weighted average shares outstanding - basic		9,718,366			9,550,521
Weighted average shares outstanding - diluted		9,888,356			9,550,521

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PRO-DEX, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Six months ended December 31 (unaudited)
	2007			2006
Net sales	$	12,114,000		$	9,864,000
Cost of sales		7,608,000			6,514,000
Gross profit		4,506,000			3,350,000
Operating expenses:
Selling		675,000			678,000
General and administrative expenses		1,601,000			1,316,000
Research and development costs		1,209,000			1,226,000
Total operating expenses		3,485,000			3,220,000
Income from operations		1,021,000			130,000
Other income (expense):
Other income (expense), net		48,000			-
Royalty income		20,000			25,000
Interest income (expense )		(82,000	)		(112,000	)
Total		(14,000	)		(87,000	)
Income before (benefit) provision for income taxes		1,007,000			43,000
(Benefit) provision for income taxes		376,000			(60,000	)
Net income	$	631,000		$	103,000
Net Income per share:
Basic	$	0.06		$	0.01
Diluted	$	0.06		$	0.01
Weighted average shares outstanding - basic		9,718,366			9,545,757
Weighted average shares outstanding - diluted		9,926,305			9,769,444

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PRO-DEX, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended December 31 (unaudited)
	2007			2006
Cash Flows from Operating Activities:
Net Income	$	631,000		$	103,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		243,000			232,000
Stock based compensation		103,000			85,000
(Recovery) provision for doubtful accounts		(18,000	)		77,000
Reserve reduction (provision) for obsolete inventory		(173,000	)		200,000
(Decrease) increase in deferred taxes		(87,000	)		(305,000	)
Changes in:
Decrease in accounts receivable		395,000			422,000
(Increase) in inventories		(212,000	)		(963,000	)
(Increase) in prepaid expenses		(79,000	)		(90,000	)
(Increase) in other assets		(8,000	)		(30,000	)
Increase in accounts payable and accrued expenses		417,000			346,000
Increase in income taxes payable		54,000			127,000
Net Cash provided by Operating Activities		1,266,000			204,000
Cash Flows From Investing Activities:
Additions to Astromec acquisition cost		-			(66,000	)
Additions to Intangible assets - Patents related to Intraflow		-			(2,000	)
Purchases of equipment and leasehold improvements		(770,000	)		(217,000	)
Net Cash used in Investing Activities		(770,000	)		(285,000	)
Cash Flows from Financing Activities:
Net (payments) borrowing on line of credit		(300,000	)		300,000
Principal (payments) on term note		(125,000	)		(125,000	)
Principal (payments) on mortgage		(14,000	)		(13,000	)
Principal (payment) on patent deferred payable		(240,000	)		(76,000	)
Proceeds from option exercise		-			3,000
Net Cash provided by Financing Activities		(679,000	)		89,000
Net Increase (decrease) in Cash and Cash Equivalents		(183,000	)		8,000
Cash and Cash Equivalents, beginning of period		403,000			358,000
Cash and Cash Equivalents, end of period	$	220,000		$	366,000
Supplemental Information
Cash payments for interest	$	95,000		$	150,000
Cash payments for income taxes	$	560,000		$	137,000

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