SALT LAKE CITY, Feb. 14, 2014 /PRNewswire/ -- Dynatronics Corporation (NASDAQ: DYNT) today announced results for its fiscal second quarter ended December 31, 2013.
Net income for the quarter was $44,095 ($.02 per common share), compared to $140,983 ($.06 per common share) for the prior year period. Net loss for the six-month period ended December 31, 2013, was $63,689 ($.03 per common share), compared to net income of $89,839 ($.04 per common share) for the prior year period. Net sales in the quarter decreased to $7,146,787, compared to $7,998,319 in the same period of the prior year. Net sales in the six months ended December 31, 2013, decreased to $14,202,215, compared to $15,204,345 in the same period of the prior year. All per-share amounts reflect the company’s one-for-five reverse stock split, effective December 19, 2012.
“Generating a profit this quarter is a positive sign after losses in three consecutive quarters,” stated Kelvyn H. Cullimore Jr., chairman and president of Dynatronics. “While the profit was not as big as last year when we introduced the new SolarisPlus product line, we made the necessary adjustments to expenses to offset the reported reduction in sales and achieve profitability.
“Due to uncertainty associated with healthcare reform in the United States, we have seen a marked decline in the opening of new clinics and expansion of existing clinics in our marketplace,” continued Cullimore. “The new clinic openings are typically a significant source of demand for capital equipment especially in December, as businesses traditionally take advantage of year-end tax benefits and the utilization of remaining capital budgets. The typical December surge of sales did not materialize this year, as it has historically, contributing significantly to the reported decline in sales.”
To offset these challenges, management of the company has undertaken a multi-faceted approach to (1) expand distribution channels by adding several new dealers and sales representatives, (2) introduce the new Dynatron ThermoStim Probe, and (3) reduce operating costs over the past two years by more than $1.4 million. Since August 2013, the company has added 37 new salespeople, including sales people at dealers, to its team. These seasoned professionals are well-established in the industry and are expected to contribute to expanded sales efforts in the year to come.
The new ThermoStim Probe is a handheld electrode capable of delivering hot or cold therapy in combination with electrical stimulation. It is also designed to allow the practitioner to simultaneously apply soft-tissue mobilization techniques in conjunction with the thermal therapy and electrical stimulation. “Initial feedback from the field regarding this new product has been very encouraging,” reported Larry K. Beardall, executive vice president of sales and marketing. “Practitioners are quickly recognizing the ThermoStim Probe’s unique benefits, which include treatment time savings by delivering three distinct treatments simultaneously and greater ease of use compared to conventional methods. Importantly, patients are enjoying the comfortable treatments provided by this innovative new probe.”
Because the probe is operated from the control console of the SolarisPlus units, demand for the company’s SolarisPlus units is increasing. “We anticipate that the probe will be the catalyst to not only boost sales of our most profitable products, but also attract new distributors to our products,” added Beardall.
“The new ThermoStim Probe is a unique product. There is nothing like it on the market. We have applied for patent protection of this proprietary technology. The introduction of this exciting new product, together with the expansion of our distribution channel and cost reduction program, will be the keys to improving the company’s operating performance,” Cullimore concluded.
Dynatronics has scheduled a conference call for investors, Friday, February 14, 2014, at 2:00 p.m. ET. Those wishing to participate should call (800) 736-4594.
The following is a summary of the financial results as of December 31, 2013 and 2012, and for the quarter and six months then ended:
Summary Selected Financial Data | ||||||||||||||||
Statement of Operations Highlights | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 7,146,787 | $ 7,998,319 | $14,202,215 | $15,204,345 | |||||||||||
Cost of sales | 4,469,256 | 4,899,404 | 8,943,615 | 9,394,582 | ||||||||||||
Gross profit | 2,677,531 | 3,098,915 | 5,258,600 | 5,809,763 | ||||||||||||
Selling, general, and admin. expenses | 2,315,463 | 2,565,282 | 4,694,833 | 5,024,386 | ||||||||||||
Research and development expenses | 238,711 | 274,379 | 553,534 | 540,646 | ||||||||||||
Other expense, net | 49,773 | 59,111 | 105,158 | 118,196 | ||||||||||||
Income (loss) before income taxes | 73,584 | 200,143 | (94,925) | 126,535 | ||||||||||||
Income tax provision (benefit) | 29,489 | 59,160 | (31,236) | 36,696 | ||||||||||||
Net income (loss) | $ | 44,095 | $ 140,983 | $ (63,689) | $ 89,839 | |||||||||||
Basic and diluted net income (loss) | ||||||||||||||||
per common share | $ | 0.02 | $ 0.06 | $ (0.03) | $ 0.04 | |||||||||||
Balance Sheet Highlights | ||||||||
December 31, 2013 | June 30, 2013 | |||||||
Cash and cash equivalents | $ | 418,378 | 302,050 | |||||
Trade accounts receivable | 3,001,381 | 3,246,712 | ||||||
Inventories, net | 6,568,392 | 6,407,553 | ||||||
Total current assets | 11,133,829 | 10,879,449 | ||||||
Total assets | $ | 15,135,334 | 15,104,587 | |||||
Line of credit | 3,676,592 | 3,496,390 | ||||||
Accounts payable | 2,742,238 | 2,751,894 | ||||||
Accrued expenses | 346,834 | 347,221 | ||||||
Accrued payroll and benefits expense | 265,572 | 216,266 | ||||||
Total liabilities | 8,954,426 | 8,895,637 | ||||||
Total liabilities and stockholders’ equity | $ | 15,135,334 | 15,104,587 | |||||
About Dynatronics Corporation:
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.
Safe Harbor Notification
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 introductions and plans to expand distribution. 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.
SOURCE Dynatronics Corporation
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