COTTONWOOD HEIGHTS, Utah, Nov. 13, 2015 /PRNewswire/ -- Dynatronics Corporation (NASDAQ: DYNT) today announced financial and operating results for its fiscal 2016 first quarter ended September 30, 2015.
“The strategic direction of the past few months, including the completion of the sale of $4 million in preferred stock to affiliates of Prettybrook Partners, is designed to accelerate our growth in the coming years,” commented Kelvyn H. Cullimore Jr., Chairman and Chief Executive Officer. “The financing has significantly strengthened our balance sheet and provides the resources to increase our market and geographic footprint while maintaining our status as the innovative leader in rehabilitation and physical therapy products.”
“We are focused on growing organically, both in the US and internationally,” continued Cullimore. “In addition, we are implementing an M&A strategy to acquire businesses that simultaneously fit our criteria and enhance our offering. We are currently evaluating acquisition opportunities and anticipate executing on one of these in calendar year 2016. We believe these actions will cause Dynatronics to grow faster than our market segment.”
Net sales for the fiscal first quarter were $7.4 million, a 2.5% increase compared to $7.2 million in the same period of the prior year. Gross margin for the fiscal first quarter was 33.9% compared to 35.6% for the quarter ended September 30, 2014, reflecting higher sales of distributed products which carry lower than average margins. Net loss for the quarter ended September 30, 2015, was $181,562, compared to net income of $40,923 for the quarter ended September 30, 2014. The increase in net loss is attributable to 1) slightly lower gross profit margins, 2) higher expenses incurred in the implementation of organic and M&A growth initiatives, 3) elevated R&D costs associated with new products planned for introduction later this fiscal year and 4) higher interest expense.
Net loss applicable to common shareholders for the quarter ended September 30, 2015, was $262,062, compared to net income of $40,923 for the quarter ended September 30, 2014. Net loss applicable to common shareholders recognizes the dividend accrued on preferred stock during the quarter, which totaled $80,500 and was payable in common stock.
“We are witnessing a better market environment today compared to the past several years,” commented Larry K. Beardall, Executive Vice President of Sales. “Our sales representatives left our recent national sales meeting excited and energized about our plans to expand into new markets such as podiatry, home health, hospitals and long-term care. Internationally, the recent regulatory approvals in Europe and Japan extend our geographical reach and will allow us to provide these products on a more global scale.”
“The actions we have taken over the past several months position Dynatronics to benefit from what we perceive to be a pent-up demand for new products and to leverage the market’s more favorable conditions,” concluded Beardall.
Dynatronics has scheduled a conference call for investors on November 13, 2015, at 1:30 p.m. ET (11:30 a.m. MT). Those wishing to participate should call (877) 407-7184.
The following is a summary of the financial results as of September 30, 2015 and 2014, and for the quarter then ended:
Summary Selected Financial Data | ||||||||||||||
Statement of Operations Highlights | ||||||||||||||
In thousands, except per share amounts | ||||||||||||||
Quarter Ended | ||||||||||||||
September 30, | ||||||||||||||
2015 | 2014 | |||||||||||||
Net sales | $7,397 | $7,216 | ||||||||||||
Cost of sales | 4,886 | 4,649 | ||||||||||||
Gross profit | 2,511 | 2,568 | ||||||||||||
Selling, general, and admin. expenses | 2,356 | 2,252 | ||||||||||||
Research and development expenses | 265 | 217 | ||||||||||||
Other expense, net | 77 | 43 | ||||||||||||
Income (Loss) before income taxes | (187) | 56 | ||||||||||||
Income tax provision (benefit) | (6) | 16 | ||||||||||||
Net income (loss) | $ (182) | $ 41 | ||||||||||||
8% convertible preferred stock dividend | (81) | - | ||||||||||||
Net loss attributable to common stockholders | $ (262) | $ 41 | ||||||||||||
Net loss attributable to common stockholders per share - basic and diluted | $ (.10) | $ .02 | ||||||||||||
Balance Sheet Highlights | |||||||
In thousands, except per share amounts | |||||||
September 30, 2015 | June 30, 2015 | ||||||
Cash and cash equivalents | $ 2,081 | $ 3,926 | |||||
Trade accounts receivable | 3,173 | 3,347 | |||||
Inventories, net | 5,466 | 5,422 | |||||
Total current assets | 11,421 | 13,313 | |||||
Line of credit | 718 | 1,910 | |||||
Accounts payable | 1,956 | 2,520 | |||||
Accrued expenses | 159 | 280 | |||||
Accrued payroll and benefits expense | 385 | 263 | |||||
Total current liabilities | 3,821 | 5,572 | |||||
About Dynatronics Corporation:
Dynatronics manufactures, markets and sells advanced-technology medical devices, orthopedic soft goods and supplies, treatment tables and rehabilitation equipment for the physical therapy, sports medicine, chiropractic, and podiatry markets. More information regarding Dynatronics is available at www.dynatronics.com.
Safe Harbor Notification
This press release contains forward-looking statements. Those statements include references to the company’s expectations and similar statements. Forward-looking statements in this press release include statements regarding expansion into new markets. 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.
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SOURCE Dynatronics Corporation
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