Blueprint
NEWS RELEASE
Contact:
Jim Ogilvie, 800-874-6251 or 801-568-7000
Dynatronics Announces 107.5% increase in Top Line Sales for Fiscal
2018 Second Quarter
Cottonwood Heights, Utah (February 13, 2018) –
Dynatronics
Corporation (NASDAQ:DYNT) today announced financial results
for its fiscal 2018 second quarter ended December 31,
2017.
Net
sales for the quarter increased $9.4 million, or 107.5 percent, to
$18.1 million, compared to $8.7 million in the same period of the
prior year. Gross profit for the quarter increased $2.7 million, or
87.7 percent, to $5.8 million. The increase in net sales and gross
profit were attributable to our acquisitions of Hausmann and Bird
& Cronin in the past year. These acquired operations
contributed sales of $4.4 million and $5.7 million, respectively,
and gross profit of $1.1 million and $2.1 million, respectively, in
the quarter. Revenue from the legacy operation declined
approximately $700,000, primarily attributable to a single order in
2017 not repeating in 2018. Gross margin for the quarter was 31.9
percent, compared to 35.3 percent in the same period of the prior
year. As with sales and gross profit, the gross margin reflects the
consolidation of all operations for the first time.
“With
the acquisitions of Hausmann and Bird & Cronin, we more than
doubled our sales over the prior year’s quarter,”
emphasized Kelvyn H. Cullimore Jr., Dynatronics’ CEO.
“The integrations of both Hausmann and Bird & Cronin have
gone smoothly as we expected and are generating positive cash flow
for the consolidated operations.”
Net
income for the quarter ended December 31, 2017 was approximately
$14,000, compared to a net loss of $95,000 for the quarter ended
December 31, 2016. The improvement in net income is attributable
primarily to gross profit contributed from the acquisitions of
Hausmann and Bird & Cronin, partially offset by the selling,
general and administrative costs from those operations. In the
quarter, we recorded $325,000 in expenses related to an abandoned
R&D project and we incurred $100,000 in acquisition costs.
Depreciation, amortization, and other non-cash expenses were
$362,000 in the quarter.
Net
loss applicable to common stockholders for the quarter ended
December 31, 2017 was approximately $1,315,000 compared to a loss
of $560,000 for the quarter ended December 31, 2016. Net loss
applicable to common stockholders recognizes a deemed dividend of
$1,024,000 related to the issuance and partial conversion of the
Series C Preferred Stock issued in October 2017. This deemed
dividend is a non-cash accounting charge that does not result in
the payment of dividends in cash or stock. We also paid dividends
of $105,000 in cash and incurred $200,000 of accrued dividends
subsequently paid with shares of our common stock. The increase in
dividends in the quarter as compared with the prior year period is
attributable to the issuance of additional preferred shares in
December 2016, April 2017, and October 2017.
“This
quarter is a significant milestone in that it reflects, for the
first time, the full impact of both of the acquired
operations,” explained Mr. Cullimore. “We are confident
in our strategy and will continue to execute on organic growth and
strategic acquisitions. With the foundation established by these
two recent acquisitions, the investments we are continuing to make
in seasoned executive leaders, and our partnership with Prettybrook
Partners, we believe we are gaining momentum in all of our
divisions.”
Dynatronics
has scheduled a conference call for investors on February 13, 2018,
at 4:30 PM EST. Those wishing to participate should call (877)
407-8033 or (201) 689-8033 for international callers.
The
following is a summary of the financial results for the quarters
ended December 31, 2017 and 2015 and as of December 31, 2017 and
June 30, 2016:
Summary Selected Financial Data
Statement of Operations Highlights
In thousands, except per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$18,085
|
$8,713
|
$30,883
|
$16,876
|
|
Cost of
sales
|
12,315
|
5,640
|
20,773
|
11,008
|
|
Gross
profit
|
$5,770
|
$3,073
|
$10,109
|
$5,868
|
|
|
|
|
|
|
|
Selling, general,
and admin. expenses
|
$5,110
|
$2,851
|
$8,933
|
$5,616
|
|
Research and
development expenses
|
553
|
309
|
805
|
588
|
|
Other expense,
net
|
92
|
8
|
159
|
45
|
|
Loss before income
taxes
|
$14
|
$(95)
|
$213
|
$(381)
|
|
Income tax
(provision) benefit
|
-
|
-
|
-
|
-
|
|
Net income
(loss)
|
$14
|
$(95)
|
$213
|
$(381)
|
|
|
|
|
|
|
|
Deemed dividend on
8% convertible preferred stock
|
$(1,024)
|
$(376)
|
$(1,024)
|
$(376)
|
|
Preferred stock
dividend, cash
|
(105)
|
0
|
(105)
|
0
|
|
8% convertible
preferred stock dividend
|
(201)
|
(89)
|
(388)
|
(178)
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
$(1,315)
|
$(560)
|
$(1,303)
|
$(935)
|
|
Net loss
attributable to common stockholders per share –
basic
|
(0.23)
|
(0.19)
|
(0.25)
|
(0.33)
|
|
Weighted-average
common shares outstanding
|
5,735,159
|
2,881,111
|
5,241,604
|
2,861,299
|
Balance Sheet Highlights
In thousands, except per share
amounts
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
$3,652
|
$255
|
|
Trade
accounts receivable
|
7,222
|
5,281
|
|
Inventories,
net
|
11,605
|
7,398
|
|
Prepaid
& other
|
1,033
|
537
|
|
Total
current assets
|
$23,513
|
$13,471
|
|
|
|
|
|
Accounts
payable
|
$4,451
|
$2,335
|
|
Accrued
payroll and benefits expense
|
1,359
|
1,473
|
|
Accrued
expenses
|
714
|
657
|
|
Other
current liabilities
|
1,155
|
1,001
|
|
Line
of credit
|
6,743
|
2,172
|
|
Total
current liabilities
|
$14,422
|
$7,637
|
About Dynatronics Corporation
Dynatronics
Corporation (NASDAQ:DYNT) designs, manufactures, markets, and
distributes advanced-technology medical devices, therapeutic and
medical treatment tables, rehabilitation equipment, custom athletic
training treatment tables and equipment, institutional cabinetry,
orthopedic soft goods, as well as other specialty patient,
rehabilitation and therapy products and supplies. Through its
various distribution channels, the company markets and sells its
products to physical therapists, chiropractors, athletic trainers,
sports medicine practitioners, orthopedists, hospitals, clinics,
and other medical professionals, and institutions. More information
including earnings releases and other financial information are
available at www.dynatronics.com/investors.
Information about the company’s products and services is
available at www.dynatronics.com,
www.hausmann.com,
and www.birdcronin.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 future acquisition activities. 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.
Dynatronics
Corporation
Investor
Relations
Jim
Ogilvie
(801)
727-1755
jim.ogilvie@dynatronics.com
For
additional information, please visit: www.dynatronics.com
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