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Untitled Document
ac·cel·er·an·do
adv. Mus. 1. Gradually quickening in tempo. –
Used as a direction
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Having
returned Pro-Dex to profitability in fiscal year 2003, the Company's
focus shifted this past year to accelerating the growth of sales and profits
through the continued development of new products, the creation of new strategic
partnerships and the enhancement of financial performance at every level
of the Company. We had reached "critical mass" as a company,
achieving a balance in the cost of doing business and the benefit of doing
business . . . refining an operational infrastructure that provided profitability,
but more significantly, positioned the company to accelerate profitability
without accelerating costs.
Reflecting back on fiscal year 2004, it's gratifying to know that
we accomplished what we set out to achieve. We quickened the tempo of the
Company in every aspect. We grew sales, grew gross profitability, controlled
expenses, increased earnings and generated strong positive cash flow. We
invested in people, equipment and facilities, all with an eye to speeding
the growth of the Company.
Most importantly, we took advantage of the operational foundation we had
built specifically to accelerate the tempo of the Company. We added $2.2
million to top line sales and generated nearly a million dollars in additional
earnings, demonstrating the Company's ability to effectively convert
incremental sales growth into exponential earnings growth. Believing that
we can still increase production by 40% without adding any significant infrastructure,
Pro-Dex remains highly leveraged with regard to generating increased earning
from future sales growth, circumstances that bode well for fiscal year 2005. |
tem·po
n. 1. Indicating speed. 2. The
rate or rhythm of something : pace
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I'm often asked
"what Pro-Dex does" and despite my enthusiasm for talking about
the Company, I still struggle with giving the short answer that is usually
expected. It's a complex question to which I've found no simple
answer. As a small cap company, Pro-Dex distinguishes itself by not relying
on a single invention, a single product, a single customer or a single market.
Instead, Pro-Dex is a company that understands its fundamental core competencies
and successfully identifies the best applications for those core competencies
given current market conditions. More importantly, Pro-Dex is a company
that does not take current market conditions for granted and constantly
evaluates how we can create new opportunities given changes in market conditions.
There are numerous companies that design, develop and manufacture products,
but there is something more important about "what Pro-Dex does."
Pro-Dex creates speed. We create speed in understanding the challenges that
our customers face in their business, speed in developing new products that
provide our customers with competitive advantage and speed in getting our
customers to market faster with a better product. In short, we leverage
our core competencies to enable speed, accelerating our customers, as well
as ourselves, toward the attainment of strategic goals. |
per·form
v. 1. To begin or carry out : accomplish. 2.
To fulfill. 3. To function in a certain way : act 4.
To give a performance.
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Fiscal 2004 was a year
filled with noteworthy performance. We grew sales by 18% or $2,200,000 .
. . an admirable accomplishment. More impressively, we drove 75% or $1,684,000
of that sales increase to the pre-tax profit line. We did this by not just
focusing on "sales growth," but by focusing on "profitable
sales growth." We concentrated our product development and sales efforts
on markets where favorable pricing is more readily available. We reconstructed
our manufacturing process to better fit a changing product mix and we stretched
our fixed expenses over a greater revenue base. The end result, a 38% increase
in gross profit dollars and a 7% increase in gross margin measured as a
percent of sales.
We increased our spending on sales and marketing activities by 18%, activities
intended to grow top line sales, while we made further strides to reduce
the cost of "administering" the Company. At the same time, we
increased spending on research and development by 23%, knowing that continued
growth in sales and profitability will come from the design and introduction
of new products. All of these efforts resulted in nearly a 750% increase
in net earnings and the generation of more than $2 million in free cash
flow. |
con·duc·tor
n. 1. One who conducts, esp : a.
The person who leads a group of performers, indicating tempo, phrasing,
dynamics and style by gesturer and physical expression.
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For me, great leadership
comes from the passionate desire to accomplish something great and the knowing
that greatness is seldom achieved on one's own. To be a great leader,
I believe that one has to love what they do, that what one does needs to
be a source of self-expression in the world and that self expression must
become the catalyst for others to seek the same greatness. It is in the
creative exchange that takes place between passionate and dedicated professionals
that great performances are found. It is in this place that Pro-Dex now
finds itself.
When I think about Pro-Dex, I can see its future like the notes on the pages
of a musical manuscript . . . the sum of individual responsibilities, differing
in magnitude and effect, but nonetheless coordinated in scale and pace.
In the past year, we have accelerated the tempo of the Company and in doing
so we have delivered great performance with continued promise for the same.
It's both a privilege and a pleasure to be entrusted with the leadership
of the Company and I want to thank all of our shareholders for their continued
support and confidence in our performance.
My Highest and Best Regards,
Patrick L. Johnson
CEO & President |
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