8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 11, 2023

DYNATRONICS CORP.
(Exact name of registrant as specified in its charter)

Utah	000-12697	87-0398434
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

1200 Trapp Rd, Eagan
Minnesota, Utah, United States 55121
(Address of principal executive offices) (ZIP Code)

Registrant’s telephone number, including area code: (801) 568-7000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common stock, no par value	DYNT	NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On May 11, 2023, Dynatronics Corporation ("Company") issued a press release reporting, among other things, financial results relating to the quarter ended March 31, 2023. Also, as previously announced by a press release issued on April 27, 2023, on May 11, 2023, the Company held a conference call in which executives of the Company reviewed the fiscal 2023 third quarter results. The live webcast and slide presentation can be accessed via the Company's Investor Relations website under the Events & Presentations tab at https://investors.dynatronics.com/services. The full text of the press release is furnished herewith as Exhibit 99.1. The slide presentation that accompanied the earnings conference call is furnished as Exhibit 99.2.

The information under this Item 2.02 and in Exhibits 99.1 and 99.2, is being "furnished" and is not being "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933, whether made before or after the date hereof, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

Exhibit Number	Description
99.1	Press Release dated May 11, 2023
99.2	Slide Presentation accompanying earnings conference call held May 11, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 11, 2023	DYNATRONICS CORPORATION
	By:	/s/John A. Krier
	Name:	John A. Krier
	Title:	President, Chief Executive Officer, and Chief Financial Officer

3

EX-99.1

Dynatronics Corporation Reports Third Quarter Fiscal Year 2023 Financial Results and Business Highlights

EAGAN, MN / ACCESSWIRE / May 11, 2023 / 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.

CEO Commentary

"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 11^th 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.
• 11^th 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.

Conference Call and Webcast Q3 Fiscal Year '23 Results

The Company will hold a conference call and live audio webcast to discuss the results, consisting of prepared remarks by management, slide presentation, and a question-and-answer session with analysts, beginning at 8:00 AM ET on Thursday, May 11, 2023.

Interested persons may access the live conference call by dialing 800-319-4610 (U.S./Canada callers) or 604-638-5340 (international callers).  To join the call, it is recommended that participants call or log in 10 minutes ahead of the scheduled start time to ensure proper connection, and simply ask to join the Dynatronics call. No passcode is required.

The live webcast and slide presentation can be accessed on the Company's Investor webpage under the Events & Presentations tab at https://www.dynatronics.com/investors/. The webcast will be archived on the website for future viewing.

About Dynatronics Corporation

Dynatronics 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.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements include references to the Company's expectations and similar statements. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our statements regarding the Company's expected overall performance, expectations regarding the Company's long-term gross margins, operating income and cash flow from operations, expectations regarding net sales, gross margin, selling general and administrative costs, and other income in fiscal year 2023, expectations regarding the timing and scope of new product releases, and uncertainties related to the broader economic environment, the impact of the COVID-19 global pandemic on the Company's gross margin, and volatility resulting from continued execution of the Company's business optimization strategy. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. The contents of this release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in the Company's annual, quarterly, and other reports filed with the Securities and Exchange Commission.  Dynatronics does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.

About Non-GAAP Financial Measures

Continued product net sales as used in this press release is a non-GAAP measure as defined under the rules of the Securities and Exchange Commission. The Company defines continued product net sales as sales excluding discontinued products and sales of physical therapy and rehabilitation products through our direct sales channel. Management uses this non-GAAP measure to evaluate our operating performance and to forecast future periods. Management believes this non-GAAP measure provides investors with additional information about the Company's ongoing operating performance and is not intended as a substitute for, or superior to, the financial measure prepared in accordance with GAAP. Investors are cautioned against placing undue reliance on this non-GAAP measure. $37 million annual and $9.25 million quarterly baseline continued product net sales set in April 2021 is based on annual net sales of approximately $48 million in FY '21 less estimated annual discontinued product sales of approximately $11 million.

Summary Financial Results

Following is a summary of operating results for the periods ended March 31, 2023, the balance sheet highlights at March 31, 2023 and cash flow for periods ended March 31, 2023.

Summary Selected Financial Data
Statements of Operation Highlights
In thousands, except share and per share amounts

		Quarter Ended
		March 31
		2023			2022
Net sales	$	9,235		$	10,316
Cost of sales		7,028			8,005
Gross Profit		2,207			2,311
		23.9%			22.4%
Selling, general and administrative expenses		3,429			3,747
Other (expense) income, net		(25	)		(36	)
Net income (loss)	$	(1,247	)	$	(1,472	)
Preferred stock dividend, in common stock, issued or to be issued		(175	)		(182	)
Net income (loss) attributable to common stockholders	$	(1,422	)	$	(1,654	)
Net loss attributable to common stockholders per
common share - basic and diluted	$	(0.36	)	$	(0.46	)
Weighted-average common shares outstanding - basic and
diluted		3,929,577			3,587,857

Balance Sheet Highlights
In thousands

		March 31, 2023		June 30, 2022
Cash and cash equivalents and restricted cash	$	670	$	701
Trade accounts receivable, net		4,367		5,416
Inventories, net		9,703		12,071
Prepaids & other		993		1,038
Total current assets		15,733		19,226
Non-current assets		17,706		16,208
Total assets	$	33,439	$	35,434
Accounts payable	$	6,167	$	6,169
Accrued payroll and benefits expense		812		1,360
Accrued expenses		16		862
Other current liabilities		1,594		1,544
Line of credit		-		-
Total current liabilities		8,589		9,935
Non-current liabilities		5,635		3,800
Total liabilities		14,224		13,735
Stockholders' equity		19,215		21,699
Total liabilities and stockholders' equity	$	33,439	$	35,434

Cash Flow Highlights
In thousands

		Nine Months Ended
		March 31
		2023			2022
Net loss	$	(2,592	)	$	(2,427	)
Depreciation and amortization		1,008			1,085
Stock-based compensation		109			149
(Gain) loss on sale of property and equipment		-			-
Receivables		1,050			516
Inventory		2,368			(5,105	)
Prepaid and other assets		67			951
Accounts payable, accrued expenses, and other liabilities		(1,605	)		1,571
Net cash provided by (used in) operating activities		405			(3,260	)
Net cash used in investing activities		(177	)		(261	)
Payments on non-current liabilities		(259	)		(261	)
Proceeds from issuance of common stock, net		-			-
Net cash used in financing activities		(259	)		(261	)
Net change in cash and cash equivalents		(31	)		(3,782	)
Cash and cash equivalents at beginning of the period		701			6,253
Cash and cash equivalents at end of the period	$	670		$	2,471

Contact:

Dynatronics Corporation

Investor Relations

ir@dynatronics.com

For additional information, please visit: www.dynatronics.com

Connect with Dynatronics on LinkedIn

SOURCE: Dynatronics Corporation

EX-99.2

XML

Document and Entity Information Document	May 11, 2023
Document Information [Line Items]
Document Type	8-K
Document Creation Date	May 11, 2023
Document Period End Date	May 11, 2023
Amendment Flag	false
Entity Registrant Name	Dynatronics Corp.
Entity Address, Address Line One	1200 Trapp Rd, Eagan
Entity Address, City or Town	Minnesota
Entity Address, State or Province	UT
Entity Address, Country	US
Entity Address, Postal Zip Code	55121
Entity Incorporation, State Country Name	UT
City Area Code	801
Local Phone Number	568-7000
Entity File Number	000-12697
Entity Central Index Key	0000720875
Entity Emerging Growth Company	false
Entity Tax Identification Number	87-0398434
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, no par value
Trading Symbol	DYNT
Security Exchange Name	NASDAQ