Dynatronics Corporation Announces Fiscal First Quarter Results
Sales for the quarter ended September 30, 2010 were $7,919,288, compared to $8,282,463 in the quarter ended September 30, 2009. Net income for the quarter ended September 30, 2010, was $17,012 ($.00 per common share), compared to $68,625 ($.01 per common share) for the same quarter in the prior fiscal year.
Reduced sales for the quarter of $363,175 were offset by lower SG&A expenses. However, higher R&D costs contributed to lower overall profitability for the quarter ended September 30, 2010 compared to the same quarter of the prior year.
"Investment in R&D was up $134,000 over the same period last year," stated Kelvyn H. Cullimore Jr., chairman and president of Dynatronics. "Plans to introduce redesigned products in the mid to latter part of calendar 2011 may drive higher R&D expenditures now, but we believe it will also drive higher sales of new products next year."
"Demand for higher priced capital products remains soft which contributed to lower overall sales this quarter. However, our supplies business continues to be as strong as ever, and we have a large backlog of orders that we expect to exhaust in the next quarter," said Cullimore.
"The volume of business transitioning to the company's e-commerce portal has exceeded our expectations," reported Larry K. Beardall, executive vice-president of sales and marketing. "Projections of a 10 percent conversion rate in the first four months were eclipsed as e-commerce orders achieved 20-25 percent of all orders four months after implementation. We expect that this will ultimately allow further streamlining of operations and improved efficiencies."
"Along with our successful e-commerce launch, we are retooling our corporate information systems infrastructure," Cullimore added. "Our investments in R&D and information systems infrastructure will help us compete more effectively in our ever-evolving market, including competing for business with group purchasing organizations (GPO's) and other national and regional accounts. We anticipate announcing significant progress with GPO's in the coming month."
Dynatronics has scheduled a conference call for investors on Thursday, November 11, 2010, at 2:15 p.m. ET. Those wishing to participate should call (800) 943-2431 and use access code: 5687000.
A summary of the financial results as of September 30, 2010, and June 30, 2010, and for the three month periods ended September 30, 2010 and 2009 follows:
Summary Selected Financial Data | |||
Statement of Income Highlights | |||
Three Months Ended | |||
September 30, | |||
2010 | 2009 | ||
Net sales | $7,919,288 | $8,282,463 | |
Cost of sales | 4,967,455 | 5,103,121 | |
Gross profit | 2,951,833 | 3,179,342 | |
SG&A expenses | 2,500,517 | 2,712,368 | |
R&D expenses | 349,796 | 215,968 | |
Other expenses, net | 71,783 | 109,231 | |
Net income before income taxes | 29,737 | 141,775 | |
Income tax provision | (12,725) | (73,150) | |
Net income | $17,012 | $68,625 | |
Diluted income per common share | $ 0.00 | $ 0.01 | |
Balance Sheet Highlights | |||
September 30, | June 30, | ||
2010 | 2010 | ||
Cash | $188,998 | $383,756 | |
Accounts receivable | 3,922,264 | 3,735,251 | |
Inventories | 5,718,664 | 5,766,800 | |
Total current assets | 10,619,676 | 10,609,813 | |
Total assets | $14,944,056 | $15,090,329 | |
Accounts payable | 1,764,637 | $1,404,022 | |
Accrued expenses | 374,205 | 462,641 | |
Line of credit | 2,688,791 | 2,768,492 | |
Total current liabilities | 5,703,107 | 5,686,280 | |
Total liabilities | 8,216,223 | 8,291,052 | |
Total liabilities and equity | $14,944,056 | $15,090,329 | |
Dynatronics manufactures, markets and distributes advanced-technology medical devices, orthopedic soft goods and supplies, treatment tables and rehabilitation equipment for the physical therapy, sports medicine, chiropractic, podiatry, plastic surgery, dermatology and other related medical, cosmetic and aesthetic markets. More information regarding Dynatronics is available at www.dynatronics.com.
This press release contains forward-looking statements. Those statements include references to the company's expectations and similar statements such as the statement regarding expectations for future new product line introductions and GPO contracts. Actual results may vary from the views expressed in the forward-looking statements contained in this release. The development and sale of the company's products are subject to a number of risks and uncertainties, including, but not limited to, changes in the regulatory environment, competitive factors, inventory risks due to shifts in market demand, market demand for the company's products, availability of financing at cost effective rates, and the risk factors listed from time to time in the company's SEC reports including, but not limited to, the report on Form 10-K for the year ended June 30, 2010.
SOURCE Dynatronics Corporation