Dynatronics Corporation Reports Third Quarter Fiscal Year 2023 Financial Results and Business Highlights
Dynatronics Corporation (NASDAQ: DYNT) (“Dynatronics” or the “Company”), a manufacturer of athletic training, physical therapy, and rehabilitation products, today reported financial results for its third quarter of fiscal year 2023 ended March 31, 2023, and provided an update on the business.
“Dynatronics experienced revenue challenges in our third fiscal quarter as a result of three external factors. As a result, we are adjusting our spending and revenue expectations as we respond to the specific impacts of:
- Competitive acquisitions by a significant rehabilitation customer;
- Reduction in specific SKUs of an OEM customer for the bracing category; and
- General market choppiness.
“We are being more conservative in our baseline case and have focused our actions on what we can control,” said John Krier, Chief Executive Officer of Dynatronics.
“Despite the revenue headwinds caused by these external factors, gross margin continued to improve year-over-year at 23.9% versus 22.4% in the prior year. Our inventory balance was reduced to $9.7 million with a reduction of approximately $2.4 million from the balance on June 30, 2022. Q3 represented our 11th consecutive quarter of operating with no debt, but we are mindful of the need to retain flexibility through additional working capital reductions, strategic evaluation of an asset-based line of credit, and possible use of our ATM facility, as appropriate,” concluded Krier.
Key Financial Highlights
Q3 Fiscal Year ’23 Financial Highlights
Note: All financials referenced in this release are in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) and comparisons in this release are to the same period in the prior year unless otherwise noted.
- Total net sales of $9.2 million.
- Gross profit margin of 23.9% up from 22.4% in Q3 fiscal year ’22.
- Net loss of $1.2 million improved from $1.5 million in Q3 fiscal year ’22.
- Current liabilities reduced by $1.6 million in Q3 compared to Q3 of FY ’22.
- Cash of $0.7 million, flat from $0.7 million at the end of Q4 fiscal year ’22.
- 11th consecutive quarter of no debt.
Guidance for Fiscal Year ’23
Dynatronics reassessed net sales guidance for fiscal year ’23 based on the impact of the previously mentioned external events to $39.5 million to $40.5 million. Q4 of fiscal year ’23 is expected to be $7.5 million to $8.5 million. The Company has reset its quarterly net sales baseline for fiscal year ’24 to $9.25 million and expects the distribution of net sales across future quarters to align with historical trends, which are highest in the first quarter, lower in the second and third quarters, with a bounce back in the fourth quarter.
Given the external events that have caused a reduction in revenue and the continued macro-economic challenges, the Company is deferring providing gross margin guidance.
Selling, general, and administrative expenses are anticipated to be 35% to 40% of net sales in Q4 of fiscal year ’23. The Company highlighted approximately $1.5 million to $2.0 million in expected cost reductions in selling, general, and administrative expenses in fiscal year 2024, from the run-rate as of March 2023.
Dynatronics expects to continue to strategically optimize its working capital position while aiming to improve supplier relationships. This approach allowed the company to generate positive cash flow from operations of $0.4 million for the first nine months of the fiscal year while reducing current liabilities by $1.3 million over the same period.
The Company’s financial guidance for fiscal year ’23 is subject to the risks identified in its safe harbor notification below. The Company continues to expect volatility due to the challenges related to the broader economic environment and the COVID-19 global pandemic, including higher raw material, delivery and shipment costs, supply chain disruptions, extended handling times and delays or disruption in procedure volume. Dynatronics also expects some ongoing volatility from the Company’s business optimization.
For the complete press release, click here.
About Dynatronics Corporation
Dynatronics (NASDAQ:DYNT) is a leading medical device company committed to providing high-quality restorative products designed to accelerate achieving optimal health. The Company designs, manufactures and sells a broad range of products for clinical use in physical therapy, rehabilitation, pain management, and athletic training. Through its distribution channels, Dynatronics markets and sells to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, hospitals, and consumers. The Company’s products are marketed under a portfolio of high-quality, well-known industry brands including Bird & Cronin®, Solaris™, Hausmann®, Physician’s Choice®, and PROTEAM™, among others. More information is available at www.dynatronics.com.
Source: Dynatronics Corporation