COTTONWOOD HEIGHTS, Utah, Feb. 13, 2017 — Dynatronics Corporation (NASDAQ:DYNT) today announced financial results for its fiscal 2017 second quarter ended December 31, 2016.
Net sales for the quarter increased 16.6 percent to $8.7 million, compared to $7.5 million in the same period of the prior year. Gross profit for the quarter increased $396,000 or approximately 14.8 percent to $3.1 million, or 35.3 percent of net sales. This gross margin compares to 35.8 percent of sales for the quarter ended December 31, 2015. Gross margin during the current quarter was impacted as a greater proportion of sales came from distributed capital equipment, which carries a somewhat lower gross margin than the company’s combined average gross margin. Increased sales of distributed capital equipment resulted from our sales focus on the long term care market during the past year.
“The 16.6 percent increase in sales for the quarter reflects a return on the investments we are making to better support our sales team,” explained Jeff Gephart, senior vice president of sales at Dynatronics. “We are continuing to refine our sales strategies to achieve sales growth, margin growth, and expanded coverage in the markets we serve.”
Net loss for the quarter ended December 31, 2016, was approximately $95,000, compared to a net loss of $125,000 for the quarter ended December 31, 2015. The decrease in net loss is attributable primarily to higher gross profit from increased sales, partially offset by higher selling costs and personnel expenses related to the implementation our strategic plans for organic growth and potential acquisition activity.
Net loss applicable to common stockholders for the quarter ended December 31, 2016, was approximately $560,000 compared to a loss of $205,000 for the quarter ended December 31, 2015. Net loss applicable to common stockholders recognizes a deemed dividend of $376,000 on the Series A 8% Convertible Preferred Stock that was issued in December 2016 as well as dividends accrued on preferred stock during the quarter, which totaled approximately $89,000. These dividends were paid in common stock, other than approximately $1,000 which was paid in cash.
“We have energized our operations over the last year by hiring a new head of sales and marketing, new leadership in international sales and clinical education, a new chief financial officer and new management for our Chattanooga, Tennessee facility,” commented Company President and CEO, Kelvyn H. Cullimore, Jr. “We are also currently searching for a new leader of global operations to focus on improved manufacturing methods and enhanced gross profit margins, and to assist with possible acquisitions during 2017.”
In December, 2016, holders of Dynatronic’s Series A Preferred stock affirmed their support of the company’s strategic plans by participating in a $975,000 offering of the Company’s remaining Series A Preferred stock. Erin Enright, a member of Dynatronic’s Board of Directors and a managing partner of Prettybrook Partners, whose affiliates led the investment, commented, “Recent improved sales performance is validating management’s important strategic moves, and the acquisition pipeline is promising. We continue to be confident of the Company’s direction and growth prospects.”
Dynatronics has scheduled a conference call for investors on February 13, 2017, at 4:30 PM EST. Those wishing to participate should call (888) 882-8941 and use the passcode 4071404.
The following is a summary of the financial results for the quarters ended December 31, 2016 and 2015 and as of December 31, 2016 and June 30, 2016:
|
Summary Selected Financial Data |
|||||||
|
Quarter Ended |
Six Months Ended |
||||||
|
December 31, |
December 31, |
||||||
|
2016 |
2015 |
2016 |
2015 |
||||
|
Net sales |
$8,713 |
$7,475 |
$16,876 |
$14,872 |
|||
|
Cost of sales |
5,640 |
4,798 |
11,008 |
9,684 |
|||
|
Gross profit |
$3,073 |
$2,677 |
$5,868 |
$5,188 |
|||
|
Selling, general, and admin. expenses |
$2,851 |
$2,469 |
$5,616 |
$4,825 |
|||
|
Research and development expenses |
309 |
254 |
588 |
519 |
|||
|
Other expense, net |
8 |
73 |
45 |
150 |
|||
|
Loss before income taxes |
($95) |
($119) |
($381) |
($306) |
|||
|
Income tax (provision) benefit |
0 |
(6) |
0 |
0 |
|||
|
Net loss |
($95) |
($125) |
($381) |
($306) |
|||
|
Deemed dividend on 8% convertible preferred stock |
($376) |
$0 |
($376) |
$0 |
|||
|
8% convertible preferred stock dividend |
(89) |
(81) |
(178) |
(161) |
|||
|
Net loss attributable to common stockholders |
($560) |
($205) |
($935) |
($467) |
|||
|
Net loss attributable to common stockholders per share – basic |
(0.19) |
(0.08) |
(0.33) |
(0.18) |
|||
|
Weighted-average common shares outstanding |
2,881,111 |
2,670,124 |
2,861,299 |
2,656,711 |
|||
|
Balance Sheet Highlights |
||||
|
Dec. 31, 2016 |
June 30, 2016 |
|||
|
Cash and cash equivalents |
$1,666 |
$966 |
||
|
Trade accounts receivable |
3,385 |
3,524 |
||
|
Inventories, net |
5,585 |
4,997 |
||
|
Prepaid & other |
470 |
268 |
||
|
Total current assets |
$11,106 |
$9,755 |
||
|
Accounts payable |
$2,793 |
$1,914 |
||
|
Accrued payroll and benefits expense |
895 |
1,035 |
||
|
Accrued expenses |
286 |
358 |
||
|
Other current liabilities |
629 |
627 |
||
|
Total current liabilities |
$4,603 |
$3,934 |
||
About Dynatronics Corporation
Dynatronics designs, manufactures, distributes, markets and sells physical medicine and rehabilitation products primarily to physical therapists, chiropractors, athletic trainers and sports medicine practitioners. More information 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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dynatronics-announces-166-increase-in-revenues-for-fiscal-2017-second-quarter-300405948.html
SOURCE Dynatronics Corporation
