Dynatronics Announces Third Quarter Financial Results
SALT LAKE CITY, May 13, 2014 /PRNewswire/ -- Dynatronics Corporation (NASDAQ: DYNT) today announced results for its fiscal third quarter ended March 31, 2014.
Net sales in the quarter decreased 12.5% to $6,185,642, compared to $7,070,292 in the same period of the prior year. Net sales in the nine months ended March 31, 2014, decreased 8.5% to $20,387,856, compared to $22,274,637 in the prior year. Net loss for the quarter was $161,752 ($.06 per common share), compared to net loss of $61,121 ($.02 per common share) for the prior year. Net loss for the nine-month period ended March 31, 2014, was $225,441 ($.09 per common share), compared to net income of $28,718 ($.01 per common share) for the nine months ended March 31, 2013. All per-share amounts reflect the company's one-for-five reverse stock split, effective December 19, 2012.
"Uncertainty among customers regarding delivery of care and reimbursement under the new paradigms of the Affordable Care Act (ACA) has led to diminished demand in our market," stated Kelvyn H. Cullimore Jr., chairman and president of Dynatronics. "There has been a marked decline in the opening of new clinics and expansion of existing clinics which typically are a significant source of demand for our products. This hesitancy in purchasing new equipment and expanding practices can be directly tied to the effects of the ACA as well as continued economic weakness in certain geographic regions."
"With a currently shrinking market, it is necessary to implement strategies to increase market share," Cullimore continued. "To accomplish that, management has undertaken efforts to expand our distribution channels by adding several new dealers and sales representatives, and to stimulate sales of the new Dynatron ThermoStim Probe and other new products."
The company's ThermoStim probe delivers thermal (hot and cold) therapy and/or electrotherapy in a targeted, attended treatment. Because the probe is operated from the control console of the SolarisPlus units, demand for SolarisPlus units has risen commensurate with the demand for the ThermoStim probe.
"Demand for the new ThermoStim probe and the associated family of SolarisPlus products has been a bright spot in an otherwise disappointing quarter," reported Larry K. Beardall, executive vice president of sales and marketing. "The unique advantages of the ThermoStim Probe, which include treatment time savings by delivering three distinct treatments simultaneously and greater ease of use compared to conventional methods, make this important new tool a "must have" for clinicians."
The company also reported plans to sell a building that currently houses operations in Utah and leasing back the premises. "The sale of this property will generate significant resources to reduce debt. Management is confident that this sale will generate a significant profit in the quarter in which the transaction occurs. We believe the amount of cash generated by this sale will be between $3,000,000 and $4,000,000 which will be used to reduce debt obligations of the company and yield a reportable profit of approximately $2,500,000 to $3,000,000," reported Cullimore. "This will be sufficient to utilize the majority, if not all of our deferred tax assets."
"The introduction of new ThermoStim probe, together with the expansion of our distribution channel and sale of one of our buildings, will afford us the opportunity to improve the company's operating performance going forward," concluded Cullimore.
Dynatronics has scheduled a conference call for investors, Tuesday, May 13, 2014, at 1:00 p.m. ET. Those wishing to participate should call (866) 881-0466.
The following is a summary of the financial results as of March 31, 2014 and 2013, and for the quarter and nine months then ended:
| Summary Selected Financial Data |
|||||||||||||
| Statement of Operations Highlights |
|||||||||||||
| Three Months Ended |
Nine Months Ended |
||||||||||||
| March 31 |
March 31 |
||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||
| Net sales |
$ |
6,185,642 |
$ 7,070,292 |
$20,387,856 |
$22,274,637 |
||||||||
| Cost of sales |
3,929,523 |
4,450,528 |
12,873,138 |
13,845,110 |
|||||||||
| Gross profit |
2,256,119 |
2,619,764 |
7,514,718 |
8,429,527 |
|||||||||
| Selling, general, and admin. expenses |
2,245,595 |
2,383,871 |
6,940,427 |
7,408,257 |
|||||||||
| Research and development expenses |
212,905 |
271,735 |
766,438 |
812,382 |
|||||||||
| Other expense, net |
52,465 |
59,555 |
157,624 |
177,750 |
|||||||||
| Income (loss) before income taxes |
(254,846) |
(95,397) |
(349,771) |
31,138 |
|||||||||
| Income tax provision (benefit) |
(93,094) |
(34,276) |
(124,330) |
2,420 |
|||||||||
| Net income (loss) |
$ |
(161,752) |
$ (61,121) |
$ (225,441) |
$ 28,718 |
||||||||
| Basic and diluted net income (loss) |
|||||||||||||
| per common share |
$ |
(0.06) |
$ (0.02) |
$ (0.09) |
$ 0.01 |
||||||||
| Balance Sheet Highlights |
||||||
| December 31, 2013 |
June 30, 2013 |
|||||
| Cash and cash equivalents |
$ |
132,394 |
302,050 |
|||
| Trade accounts receivable |
2,905,918 |
3,246,712 |
||||
| Inventories, net |
6,237,266 |
6,407,553 |
||||
| Total current assets |
10,428,317 |
10,879,449 |
||||
| Total assets |
$ |
14,413,198 |
15,104,587 |
|||
| Line of credit |
3,672,793 |
3,496,390 |
||||
| Accounts payable |
2,308,611 |
2,751,894 |
||||
| Accrued expenses |
260,729 |
347,221 |
||||
| Accrued payroll and benefits expense |
304,681 |
216,266 |
||||
| Total liabilities |
8,376,420 |
8,895,637 |
||||
| Total liabilities and stockholders' equity |
$ |
14,413,198 |
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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