Dynatronics Announces Fourth Quarter and Year-end Financial Results
SALT LAKE CITY, Sept. 29, 2014 /PRNewswire/ -- Dynatronics Corporation (NASDAQ: DYNT) today announced results for its fiscal fourth quarter and year ended June 30, 2014.
Net sales in the quarter decreased 2.9 percent to $7,056,367, compared to $7,263,639 in the same period of the prior year. Net loss for the quarter was $45,701 ($.02 per common share), compared to net loss of $73,089 ($.03 per common share) for the prior year. Net sales for the year ended June 30, 2014, decreased 7.1 percent to $27,444,223, compared to $29,538,275 in the prior year. Net loss for the year ended June 30, 2014, was $271,142 ($.11 per common share), compared to net loss of $44,371 ($.02 per common share) for the year ended June 30, 2013.
"Health care reform has continued to have a negative impact on our operations. Not only were we required to pay $160,000 in medical device excise taxes this past year accounting for 40% of our pre-tax losses, but the uncertainty among customers regarding delivery of care and reimbursement under the new paradigms of health care reform have significantly dampened any appetite for growth or expansion in our market," stated Kelvyn H. Cullimore Jr., chairman and president of Dynatronics. "We have observed a marked decline in the opening of new clinics and expansion of existing clinics over the past few years, which we attribute to the health care law changes. However, beginning in May 2014, we have seen a noticeable improvement in our market.
"The 2.9 percent reduction in Q4 sales is significantly better than the 12.5 percent decline in Q3," Cullimore continued. "This positive trend has continued into Q1 of fiscal year 2015, and as a result, we expect to show improved results for the quarter ending September 30, 2014, compared to the prior year period. This is due, in part, to improving market conditions. In addition, management has undertaken efforts to reduce expenses, expand our distribution channels by adding several new dealers and sales representatives, and emphasize sales of the new Dynatron ThermoStim Probe and other new products.
"In addition, during fiscal year 2014, we signed an exclusive sole-source agreement with Amerinet, one of the five largest group purchasing organizations, or GPOs, in the United States, to supply medical products to its acute care and alternate care members. Amerinet is one of the nation's leading healthcare GPOs, helping its members to reduce healthcare costs and improve healthcare quality. The three-year agreement with Amerinet became effective July 1, 2014."
Dynatronics also reported the August 8, 2014, sale of the land and building that currently houses its operations in Utah. The company is leasing back the premises. Net proceeds from the sale, after paying taxes and related selling costs, were used to reduce debt by $2.7 million and will allow Dynatronics to utilize its deferred tax assets.
"With the improving market conditions, expense reductions, the Amerinet contract, the introduction of the new ThermoStim probe, the expansion of our distribution channel and the sale of our building, we believe the company is well positioned to improve its operating results," concluded Cullimore.
Dynatronics has scheduled a conference call for investors on Monday, September 29, 2014, at 2:00 p.m. ET. Those wishing to participate should call (800) 771-7838.
The following is a summary of the financial results as of June 30, 2014 and 2013, and for the quarter and year then ended:
| Summary Selected Financial Data |
|||||||||||||
| Three Months Ended |
Year Ended |
||||||||||||
| June 30 |
June 30 |
||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||
| Net sales |
$ |
7,056,367 |
$ 7,263,639 |
$27,444,223 |
$29,538,275 |
||||||||
| Cost of sales |
4,550,713 |
4,606,564 |
17,423,851 |
18,451,673 |
|||||||||
| Gross profit |
2,505,654 |
2,657,075 |
10,020,372 |
11,086,602 |
|||||||||
| Selling, general, and admin. expenses |
2,273,006 |
2,452,708 |
9,213,433 |
9,860,964 |
|||||||||
| Research and development expenses |
226,290 |
308,505 |
992,729 |
1,120,887 |
|||||||||
| Other expense, net |
53,752 |
58,125 |
211,375 |
235,876 |
|||||||||
| Income (loss) before income taxes |
(47,394) |
(162,263) |
(397,165) |
(131,125) |
|||||||||
| Income tax provision (benefit) |
(1,693) |
(89,174) |
(126,023) |
(86,754) |
|||||||||
|
Net income (loss) |
$ |
(45,701) |
$ (73,089) |
$ (271,142) |
$ (44,371) |
||||||||
| Basic and diluted net income (loss) |
|||||||||||||
| per common share |
$ |
(0.02) |
$ (0.03) |
$ (0.11) |
$ (0.02) |
||||||||
| Balance Sheet Highlights |
||||||
| June 30, 2014 |
June 30, 2013 |
|||||
| Cash and cash equivalents |
$ |
332,800 |
$ 302,050 |
|||
| Trade accounts receivable |
3,165,396 |
3,246,712 |
||||
| Inventories, net |
6,157,848 |
6,407,553 |
||||
| Total current assets |
10,378,927 |
10,879,449 |
||||
| Total assets |
$ |
14,295,144 |
15,104,587 |
|||
| Line of credit |
3,521,209 |
3,496,390 |
||||
| Accounts payable |
2,433,534 |
2,751,894 |
||||
| Accrued expenses |
342,716 |
347,221 |
||||
| Accrued payroll and benefits expense |
243,394 |
216,266 |
||||
| Total liabilities |
8,286,465 |
8,895,637 |
||||
| Total liabilities and stockholders' equity |
$ |
14,295,144 |
$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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