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Dynatronics Corporation Reports Fourth Quarter and Fiscal Year 2023 Financial Results and Update on CEO Succession Plan
September 28, 2023 8:00 AM EDT | Source: Dynatronics Corp.
Eagan, Minnesota--(Newsfile Corp. - September 28, 2023) - Dynatronics Corporation (NASDAQ: DYNT) ("Dynatronics" or the "Company"), a leading manufacturer of athletic training, physical therapy, and rehabilitation products, today reported financial results for its fourth quarter and fiscal year ended June 30, 2023, and provided additional details on the previously announced CEO succession plan.
CEO Succession Plan
Effective October 1, 2023, Brian Baker will assume the roles of Chief Executive Officer and Board Member as part of the Company's executive transition plan announced in May 2023. John Krier, the Company's current Chief Executive Officer and Chief Financial Officer will remain as an executive consultant and Interim Chief Financial Officer while the Company continues the search for a permanent Chief Financial Officer.
Key Financial Highlights
Q4 FY '23 Financial Highlights
Note: All financials referenced in this release are in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and comparisons in this release are to the same period in the prior year unless otherwise noted.
- Total net sales of $8.4 million.
- Gross profit margin of 14.7%.
- Net loss of $2.4 million.
FY '23 Financial Highlights
- Total net sales of $40.6 million.
- Gross profit margin of 25.0%.
- Net loss of $5.0 million.
Notable Balance Sheet Highlights
- Net cash of $0.6 million.
- As of September 15, 2023, $1.8 million drawn, with $2.6 million available on previously announced working capital asset-based line of credit established on August 1, 2023.
- Proceeds from line of credit used for $2.0 million reduction in accounts payable as of September 15, 2023, compared to June 30, 2023.
Guidance for FY '24
Dynatronics reiterates its previous net sales guidance for FY '24 of $34 million to $37 million. The Company expects the distribution of net sales across the quarters in FY '24 to align with historical trends, highest in the first quarter, lower in the second and third quarters, with a bounce back in the fourth quarter.
The Company is continuing its recent practice of not providing gross margin guidance given the recent reductions in revenue and operating costs.
Selling, general, and administrative expenses are anticipated to be 29% to 33% of net sales in FY '24.
The Company's financial guidance for FY '24 is subject to the risks identified in its safe harbor notification below. The Company continues to expect volatility due to the challenges related to the broader economic environment, including competitive pressures, inflationary pressures, supply chain disruptions, extended handling times and delays or disruption in procedure volume. Dynatronics also expects some ongoing volatility from the Company's business optimization.
Fiscal Year 2024 Priorities
The Company also reiterates its goals to strengthen customer relationships, while improving operating profitability and financial flexibility.
Conference Call FY '23 Q4 and Year End Results
The Company will hold a conference call, consisting of prepared remarks by management, and a question-and-answer session with analysts, at 8:00 AM ET on Thursday, September 28, 2023, to review its fourth quarter and fiscal year 2023 results.
Interested persons may access the live conference call by dialing 800-319-4610 (U.S./Canada callers) or 604-638-5340 (international callers). It is recommended that participants call or login 10 minutes ahead of the scheduled start time to ensure proper connection. An audio replay will be available one hour after the live call until Midnight on October 5, 2023, by dialing 855-669-9658 (U.S./Canada callers) or 604-674-8052 (international callers), using replay access code 3039.
About Dynatronics Corporation
Dynatronics is a leading medical device company committed to providing high-quality restorative products designed to accelerate achieving optimal health. The Company designs, manufactures, and sells a broad range of products for clinical use in physical therapy, rehabilitation, pain management, and athletic training. Through its distribution channels, Dynatronics markets and sells to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals. The Company's products are marketed under a portfolio of high-quality, well-known industry brands including Bird & Cronin®, Solaris™, Hausmann®, Physician's Choice®, and PROTEAM™, among others. More information is available at www.dynatronics.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements include references to the Company's expectations and similar statements. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our statements regarding the Company's planned management transition, expected overall performance, expectations regarding net sales, distribution of net sales, and selling general and administrative costs in fiscal year 2024, and uncertainties related to the broader economic environment, including higher raw material, delivery and shipment costs, supply chain disruptions, extended handling times and delays or disruption in procedure volume and volatility resulting from continued execution of the Company's business optimization strategy.. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. The contents of this release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in the Company's annual, quarterly, and other reports filed with the Securities and Exchange Commission. Dynatronics does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Summary Financial Results
The following is a summary of operating results for the periods ended June 30, 2023 and 2022, the balance sheet highlights at June 30, 2023 and June 30, 2022 and cash flow for periods ended June 30, 2023 and 2022.
Summary Selected Financial Data
Statements of Operations Highlights
In thousands, except share and per share amounts
| Quarter Ended | Year Ended | |||||||||||
| | June 30 | June 30 | ||||||||||
| 2023 | | 2022 | | 2023 | | 2022 | ||||||
| Net sales | $ | 8,438 | $ | 11,191 | $ | 40,609 | $ | 44,338 | ||||
| Cost of sales | 7,201 | 8,574 | 30,459 | 33,665 | ||||||||
| Gross Profit | 1,237 | 2,617 | 10,150 | 10,673 | ||||||||
| 14.7% | 23.4% | 25.0% | 24.1% | |||||||||
| Selling, general and administrative expenses | 3,593 | 4,102 | 15,002 | 15,430 | ||||||||
| Other (expense) income, net | (25 | ) | (78 | ) | (121 | ) | 764 | |||||
| Net income (loss) | $ | (2,381 | ) | $ | (1,563 | ) | $ | (4,973 | ) | $ | (3,993 | ) |
| Preferred stock dividend, in common stock, issued or to be issued | (172 | ) | (182 | ) | (691 | ) | (733 | ) | ||||
| Net income (loss) attributable to common stockholders | $ | (2,553 | ) | $ | (1,745 | ) | $ | (5,664 | ) | $ | (4,726 | ) |
| Net loss attributable to common stockholders per | ||||||||||||
| common share - basic and diluted | $ | (0.63 | ) | $ | (0.48 | ) | $ | (1.46 | ) | $ | (1.32 | ) |
| Weighted-average common shares outstanding - basic and diluted | 4,039,618 | 3,637,449 | 3,870,670 | 3,570,655 | ||||||||
Balance Sheet Highlights
In thousands
| June 30, 2023 | June 30, 2022 | |||||
| Cash and cash equivalents and restricted cash | $ | 553 | $ | 701 | ||
| Trade accounts receivable, net | 3,722 | 5,416 | ||||
| Inventories, net | 7,403 | 12,071 | ||||
| Prepaids & other | 741 | | 1,038 | |||
| Total current assets | 12,419 | 19,226 | ||||
| Non-current assets | 17,644 | 16,208 | ||||
| Total assets | $ | 30,063 | $ | 35,434 | ||
| Accounts payable | $ | 4,530 | $ | 6,169 | ||
| Accrued payroll and benefits expense | 878 | 1,360 | ||||
| Accrued expenses | 891 | 862 | ||||
| Other current liabilities | 1,642 | 1,544 | ||||
| Line of credit | - | - | ||||
| Total current liabilities | 7,941 | 9,935 | ||||
| Non-current liabilities | 5,265 | 3,800 | ||||
| Total liabilities | 13,206 | 13,735 | ||||
| Stockholders' equity | 16,857 | | 21,699 | |||
| Total liabilities and stockholders' equity | $ | 30,063 | $ | 35,434 |
Cash Flow Highlights
In thousands
| Quarter Ended | Twelve Months Ended | |||||||||||
| | June 30 | June 30 | ||||||||||
| 2023 | | 2022 | | 2023 | | 2022 | ||||||
| Net loss | $ | (2,381 | ) | $ | (1,563 | ) | $ | (4,973 | ) | $ | (3,993 | ) |
| Depreciation and amortization | 341 | 313 | 1,349 | 1,435 | ||||||||
| Stock-based compensation | 22 | 29 | 131 | 178 | ||||||||
| (Gain) loss on sale of property and equipment | - | 23 | - | 24 | ||||||||
| Receivables | 645 | (290 | ) | 1,695 | 227 | |||||||
| Inventory | 2,300 | (468 | ) | 4,668 | (5,573 | ) | ||||||
| Prepaid and other assets | (226 | ) | 512 | (159 | ) | 1,463 | ||||||
| Accounts payable, accrued expenses, and other liabilities | (734 | ) | | (181 | ) | | (2,339 | ) | | 1,355 | ||
| Net cash provided by (used in) operating activities | (33 | ) | | (1,625 | ) | | 372 | | (4,884 | ) | ||
| Net cash used in investing activities | (10 | ) | (57 | ) | (187 | ) | (318 | ) | ||||
| Payments on non-current liabilities | (74 | ) | (90 | ) | (333 | ) | (350 | ) | ||||
| Proceeds from issuance of common stock, net | - | - | - | - | ||||||||
| Net cash used in financing activities | (74 | ) | (90 | ) | (333 | ) | (350 | ) | ||||
| Net change in cash and cash equivalents | (117 | ) | (1,772 | ) | (148 | ) | (5,552 | ) | ||||
| Cash and cash equivalents at beginning of the period | 670 | 2,473 | 701 | 6,253 | ||||||||
| Cash and cash equivalents at end of the period | $ | 553 | $ | 701 | $ | 553 | $ | 701 | | |||
Contact:
Dynatronics Corporation
Investor Relations
ir@dynatronics.com
For additional information, please visit: www.dynatronics.com
Connect with Dynatronics on LinkedIn
SOURCE: Dynatronics Corporation
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/182146