SALT LAKE CITY, Aug. 11, 2014 /PRNewswire/ -- Dynatronics Corporation (NASDAQ: DYNT) today announced the completion of a $3.8 million sale and leaseback of its facility in Cottonwood Heights, UT. The purchaser was AIC Ventures of Austin, Texas.
"The sale of this property frees up a large amount of equity and will generate significant resources to reduce debt," stated Kelvyn H. Cullimore, Jr., president and CEO of Dynatronics. "The transaction will result in paying down approximately $2,750,000 in debt of the company. The balance of the sale proceeds will fund commissions, tax reserves, closing costs and lease deposits."
In accordance with accounting rules, the profit generated by this sale will not be fully recognized in the quarter in which the transaction occurs. Instead, the gain will be amortized over the 15-year term of the lease. Management believes that increased rent expense and other related occupancy expenses will mostly offset the annual gain recognition in future years.
"This sale will be sufficient to utilize the majority, if not all, of our deferred tax assets thus significantly offsetting the tax obligations associated with this sale and leaving more proceeds to pay down debt," Cullimore added.
AIC Ventures is an investment fund manager focused on single tenant industrial and office property throughout the U.S.A. "Real estate sale leaseback transactions are done for a variety of reasons," said Luis F. Medina, managing partner of acquisitions at AIC Ventures. "Here, Dynatronics was able to capture full market value for their real estate and reduce debt, while retaining long-term control. We are pleased to have partnered up with the company to help them achieve their financial objectives, and we look forward to a long and successful relationship with Mr. Cullimore and the rest of the management team."
"AIC Ventures has been extremely professional," continued Cullimore. "The AIC team delivered on the deal presented in the original letter of intent and demonstrated great speed and efficiency in documenting and closing the transaction.
"This transaction will provide a catalyst to help us execute important strategic plans currently being developed by management," concluded Cullimore.
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.
AIC Ventures is a leading provider of alternative capital to middle-market companies via real estate sale leasebacks and also acquires existing net-leased investment properties. With over $1.2 billion in completed transactions, AIC's capital helps companies strengthen their balance sheets, fund growth initiatives including acquisitions, fund succession planning and generate liquidity at an attractive cost. The company has closed 157 transactions in 31 states. For more information, please visit www.aicventures.com.
This press release contains forward-looking statements. Those statements include references to the company's expectations and similar statements. 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