Dynatronics Corporation Reports First Quarter Fiscal Year 2024 Financial Results

November 09, 2023 8:30 AM EST | Source: Dynatronics Corp.

Eagan, Minnesota--(Newsfile Corp. - November 9, 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 first quarter of fiscal year 2024 ended September 30, 2023.

CEO Commentary

"We met our sales expectations and were profitable on an EBITDA basis in the first quarter," said Brian Baker, Chief Executive Officer of Dynatronics. "We must continue to improve our performance and refine our execution, but the early results this year are encouraging. Our teams are committed to meeting our customers' needs, while focusing on cost reduction and margin expansion opportunities over the long-term."

Key Financial Results

Q1 Fiscal Year '24 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 $9.4 million.
  • Gross profit margin of 24.7%.
  • Net loss of $0.3 million improved from $0.5 million in Q1 fiscal year '23.

Notable Balance Sheet Highlights

  • Net cash of $0.6 million unchanged from $0.6 million as of June 30, 2023.
  • As of September 30, 2023, $1.8 million drawn, with an additional $2.8 million available on working capital asset-based line of credit established on August 1, 2023.
  • Proceeds from line of credit reduced accounts payable and accrued expenses by $0.9 million and funded $0.8 million of prepaid expenses.

Guidance for Fiscal Year '24

Dynatronics reaffirmed net sales guidance for fiscal year '24 of $34 million to $37 million. The Company expects the distribution of net sales across the quarters in fiscal year '24 to align with historical trends, which are 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.

The Company reaffirmed its guidance on Selling, general, and administrative expenses that are anticipated to be 29% to 33% of net sales in fiscal year '24.

The Company's financial guidance for fiscal year '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.

Conference Call Q1 Fiscal Year '24 Results

The company will hold a conference call, consisting of prepared remarks by management, and a question-and-answer session with analysts, at 11:00 AM ET on Thursday, November 9, 2023, to review its first quarter results.

Interested persons may access the live conference call by dialing 1-800-898-3989 and entering the passcode 1005804# (U.S./Canada callers) or by visiting this link https://www.confsolutions.ca/ILT?oss=7P1R8008983989 (international callers), using passcode 1005804#. 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 December 9, 2023, by dialing 1-800-408-3053 and entering the passcode 6594208# (U.S./Canada callers) or visiting this link https://www.confsolutions.ca/ILT?oss=4P1R8004083053 (international callers).

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, hospitals, and consumers. 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

Following is a summary of operating results for the periods ended September 30, 2023, the balance sheet highlights at September 30, 2023 and cash flow for periods ended September 30, 2023.

Summary Selected Financial Data 
Statements of Operations Highlights
In thousands, except share and per share amounts

    Quarter Ended  
    September 30,  
    2023      2022  
Net sales $ 9,352    $ 12,053  
Cost of sales   7,046      8,410  
Gross Profit   2,306      3,643  
    24.7%      30.2%  
Selling, general and administrative expenses   2,546      4,118  
Other (expense) income, net   (91 )    (31 )
Net income (loss) $ (331 )  $ (506 )
Preferred stock dividend, in common stock, issued or to be issued   (197 )    (171 )
Net income (loss) attributable to common stockholders $ (528 )  $ (677 )
Net loss attributable to common stockholders per             
common share - basic and diluted $ (0.12 )  $ (0.18 )
Weighted-average common shares outstanding - basic and diluted


Balance Sheet Highlights
In thousands

    September 30, 2023
  June 30, 2023 
Cash and cash equivalents and restricted cash $ 587
$ 553 
Trade accounts receivable, net   4,260
Inventories, net   6,838
Prepaids & other   1,539
Total current assets   13,224
Non-current assets   17,123
Total assets $ 30,347
$ 30,063 
Accounts payable $ 3,873
$ 4,530 
Accrued payroll and benefits expense   488
Accrued expenses   1,067
Other current liabilities   1,671
Line of credit   1,804
 Total current liabilities 8,903
Non-current liabilities   4,899
Total liabilities   13,802
Stockholders' equity   16,545
Total liabilities and stockholders' equity $ 30,347
$ 30,063 


Cash Flow Highlights
In thousands

    Quarter Ended  
    September 30,  
    2023      2022  
Net loss $ (331 )  $ (506 )
Depreciation and amortization   320      344  
Stock-based compensation    19      60  
(Gain) loss on sale of property and equipment    2      -  
Receivables   (537 )    (113 )
Inventory   565      173  
Prepaid and other assets   (793 )    90  
Accounts payable, accrued expenses, and other liabilities   (910 )    318  
Net cash provided by (used in) operating activities   (1,665 )    366  
Net cash used in investing activities   (35 )    (20 )
Payments on non-current liabilities   1,734      (91 )
Net cash used in financing activities   1,734      (91 )
Net change in cash and cash equivalents   34      255  
Cash and cash equivalents at beginning of the period   553      700  
Cash and cash equivalents at end of the period $ 587    $ 955  



Dynatronics Corporation
Investor Relations

For additional information, please visit: www.dynatronics.com

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SOURCE: Dynatronics Corporation

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