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Dynatronics Corporation Reports Third Quarter Fiscal Year 2024 Financial Results

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Dynatronics , a leading manufacturer of athletic training, physical therapy, and rehabilitation products, reported financial results for its third quarter of fiscal year 2024. The CEO highlighted progress in sales goals and positive EBITDA. New product lines were introduced to enhance sales. Key financial results include total net sales of $7.7 million, a gross profit margin of 23.7%, and a net loss attributable to common stockholders of $0.9 million. The company provided guidance for fiscal year 2024, estimating net revenue to be $32.5 million to $34 million, with ongoing volatility expected due to economic challenges. Dynatronics will hold a conference call to review its third quarter results.

Positive
  • CEO highlighted progress in achieving sales goals and positive EBITDA.

  • New product lines introduced to enhance sales.

  • Total net sales of $7.7 million in the third quarter of fiscal year 2024.

  • Gross profit margin of 23.7% reported.

  • Notable balance sheet highlights include $0.6 million in net cash and additional credit available.

Negative
  • Net loss attributable to common stockholders of $0.9 million in the third quarter.

  • Guidance for fiscal year 2024 indicates slower demand in rehabilitation space and changes to private label customer relationships.

  • No gross margin guidance currently provided due to revenue reductions.

  • Volatility expected due to economic challenges and business optimization.

Insights

Reviewing the financial results for Dynatronics Corporation's third quarter of FY 2024, a few key figures stand out. The company reports total net sales of $7.7 million, with a gross profit margin of 23.7%. However, they also experienced a net loss attributable to common stockholders of $0.9 million, which is an improvement from the $1.4 million loss in the same quarter of the previous year. This suggests a positive direction in terms of loss reduction, yet the company remains unprofitable. With a static net cash position of $0.6 million and over half of their working capital line of credit drawn, the balance sheet indicates a potential need for further financial maneuvering or cost control measures to ensure stability and fund operations. Given the cautious revenue guidance of $32.5 million to $34 million for the fiscal year, reflecting slower demand and changes in customer relationships, as a retail investor, one should consider the realism of the company's path to profitability and the associated risks of market volatility, competitive and inflationary pressures and supply chain challenges.

The business context for Dynatronics Corporation requires a deeper look into the rehabilitation and physical therapy market trends. The company's acknowledgment of slower demand within the rehabilitation space may reflect a broader shift in the market, possibly due to changes in healthcare policies, insurance coverage, or consumer behavior. Despite the introduction of new products like the Timber, Titan Premier and Forged lines, the company is not projecting significant immediate revenue contributions, implying a period of market penetration and customer adoption is required. For investors considering the long-term potential, the strategic focus on product expansion could eventually pay off. However, in the near term, challenges such as supply chain disruptions and competitive pressures underscore the importance of operational efficiency and market agility. Investors need to weigh the prospects of Dynatronics' ability to capture market share against the backdrop of these broader industry challenges.

Eagan, Minnesota--(Newsfile Corp. - May 9, 2024) - 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 third quarter of fiscal year 2024 ended March 31, 2024.

CEO Commentary

"We continue to make progress on achieving our sales goals and finding our path to positive EBITDA," said Brian Baker, Chief Executive Officer of Dynatronics. "We continue our focus on our fiscal year 2024 operating plan and making progress on our strategic priorities with encouraging results. We worked closely with our customers and key distributors to design three new additions to our rehabilitation furniture line. Our new Timber line provides a high-quality, economical solid treatment furniture option and our Titan Premier line introduces new highly functional hi-lo treatment tables. The new Forged line complements our Hausmann legacy ProTeam wood products sold to the athletic training centers. While it is too early to estimate the level of revenue contribution from these new product lines, we are optimistic that they will enhance our existing sales base."

Key Financial Results

Q3 Fiscal Year '24 Financial Highlights
Note: All financials referenced in this release are in conformity with U.S. Generally Accepted Accounting Principles and comparisons in this release are to the same period in the prior year unless otherwise noted.

  • Total net sales of $7.7 million.
  • Gross profit margin of 23.7%.
  • Net loss attributable to common stockholders of $0.9 million compared to net loss attributable to common stockholders of $1.4 million in Q3 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 March 31, 2024, $2.4 million drawn, with an additional $1.9 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 $1.7 million and funded $0.4 million of prepaid expenses.

Guidance for Fiscal Year '24

In terms of guidance for the fiscal year 2024, we estimate net revenue to be $32.5 million to $34 million, due to slower demand in the rehabilitation space and changes to our private label customer relationships.

We are not providing gross margin guidance currently. Given our reductions in revenue expectations, we are seeking improved stabilization in the business before considering reinstituting such guidance.

SG&A is anticipated to be in the range of 30% to 32% of net sales for the fiscal year.

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 Q3 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 10:00 AM ET on Thursday, May 9, 2024, to review its fiscal year '24 third quarter results.

Interested persons may access the live conference call by dialing 1-800-898-3989 (U.S./Canada callers) and entering the passcode: 3800128# or by dialing the applicable number which can be found at this link: https://www.confsolutions.ca/ILT?oss=7P1R8008983989 (international callers) and entering the passcode: 3800128#. 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 June 8, 2024, by dialing 1-800-408-3053 (U.S./Canada callers) and entering the replay passcode: 6524429# or by dialing the applicable number which can be found at this link: https://www.confsolutions.ca/ILT?oss=4P1R8004083053 (international callers) and entering the replay passcode 6524429.

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, orthopedics, 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®, 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 product launches, 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 March 31, 2024, the balance sheet highlights at March 31, 2024 and cash flow for periods ended March 31, 2024.

Statements of Operations Highlights
In thousands, except share and per share amounts

 Quarter Ended  Nine Months Ended
 March 31,  March 31,
 2024 2023  2024 2023
      
Net sales$  7,658  $ 9,236   $25,161 $ 32,172
Cost of sales$  5,841  $ 7,028   $19,218 $ 23,258
Gross Profit$ 1,817  $ 2,208   $5,943 $ $ 8,913
      
      
Selling, general and administrative expenses$  2,389  $ 3,429   $7,656 $ 11,409
Other (expense) income, net  $ (96) $ (25)  $(297) $ $ (97)
Net income (loss)$  (668) $ (1,245)  $(2,010) $ (2,592)
      
Preferred stock dividend, in common stock, issued or to be issued$  (184) $ (175)  $(572) $ (518)
Net income (loss) attributable to common stockholders$  (852) $ (1,420)  $(2,582) $ (3,111)
      
Net loss attributable to common stockholders per      
common share - basic and diluted$  (0.17) $ (0.36)  $(0.57) $ (0.82)
Weighted-average common shares outstanding - basic and      
diluted$  4,878,512  $ 3,929,577   $4,553,847 $ 3,809,610

 

Balance Sheet Highlights
In Thousands

 March 31, 2024 June 30, 2023
Cash and cash equivalents and restricted cash $ 596  $ 553
Trade accounts receivable, net  3,716   3,722
Inventories, net  6,184   7,403
Prepaids & other  1,513   741
Total current assets  12,009   12,419
  
Non-current assets  15,756   17,644
Total assets $ 27,765  $ 30,063
  
Accounts payable $ 3,571  $ 4,530
Accrued payroll and benefits expense  439   878
Accrued expenses  759   891
Other current liabilities  1,461   1,642
Line of credit  2,352   -
Total current liabilities  8,582   7,941
  
Non-current liabilities  4,337   5,265
Total liabilities  12,919   13,206
  
Stockholders' equity  14,846   16,857
Total liabilities and stockholders' equity $ 27,765  $30,063

 

Cash Flow Highlights
In thousands

Nine Months Ended
March 31
2024 2023
  
Net loss$(2,010) $ (2,592)
  
Depreciation and amortization984  1,008
Stock-based compensation (1) 
109
(Gain) loss on sale of property and equipment 41  -
Receivables5  1,050
Inventory1,219  2,368
Prepaid and other assets(438) 
67
Accounts payable, accrued expenses, and other liabilities(1,655) 
(1,605)
Net cash provided by (used in) operating activities(1,855) 
405
  
Net cash used in investing activities(241) 
(177)
  
Payments on non-current liabilities2,139  (259)
Net cash provided by (used in) financing activities2,139  (259)
  
Net change in cash and cash equivalents43  (31)
Cash and cash equivalents at beginning of the period553  701
Cash and cash equivalents at end of the period$596 $ 670

 

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/208254

FAQ

What were Dynatronics' total net sales in the third quarter of fiscal year 2024?

Dynatronics reported total net sales of $7.7 million in the third quarter of fiscal year 2024.

What is Dynatronics' guidance for net revenue in fiscal year 2024?

Dynatronics estimates net revenue to be $32.5 million to $34 million for fiscal year 2024.

When will Dynatronics hold a conference call to review its third quarter results?

Dynatronics will hold a conference call at 10:00 AM ET on Thursday, May 9, 2024, to review its fiscal year '24 third quarter results.

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