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 15, 2019

DYNATRONICS CORPORATION

(Exact name of registrant as specified in its charter)

Utah	0-12697	87-0398434
(State or Other Jurisdiction of Incorporation)	Commission File Number	(IRS Employer Identification Number)

7030 Park Centre Dr., Cottonwood Heights, Utah	84121
(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))

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). ☐

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 14, 2019, Dynatronics Corporation (the “Company”) issued a press release reporting, among other things, financial results relating to the quarter ended March 31, 2019. A copy of the press release is furnished herewith as Exhibit 99.1. Also as previously announced by press release issued on May 8, 2019, on May 14, 2019, the Company held a conference call during which executives reviewed the fiscal 2019 third quarter and provided forward guidance. A replay will be available by dialing (919) 882-2331, Pin 47756.

The information reported under Item 2.02, including Exhibit 99.1, is being "furnished" and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release – May 14, 2019*

* Furnished herewith

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SIGNATURES

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.

	DYNATRONICS CORPORATION
Date: May 15, 2019	By:	/s/ David A. Wirthlin
		David A. Wirthlin
		Chief Financial Officer (Principal Financial Officer)

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EX-99.1

Exhibit 99.1

Dynatronics Announces Financial Results for Third Fiscal Quarter 2019

Cottonwood Heights, Utah (May 14, 2019) – Dynatronics Corporation (NASDAQ:DYNT), a leading manufacturer of athletic training, physical therapy, and rehabilitation products, today announced financial results for its third fiscal quarter ended March 31, 2019.

Net sales for the quarter were $14.6 million, a decrease of $2.0 million, or 12.5 percent, compared to $16.6 million in the same period of the prior year. Gross profit for the quarter decreased $886,000, or 16.8 percent, to $4.4 million.

The lower revenue and gross profit were in-line with our expectations. Gross margin for the quarter was 30.3 percent, compared to 31.8 percent in the same period of the prior year. Consistent with last quarter, the decrease in gross margin was driven primarily by lower overall sales levels and by a larger portion of our products being sold through third-party distribution partners.

“We continue to transition the legacy business with a focus on cost-reductions and improved operating cash flow, while building our restorative products platform for longer-term success,” explained Dr. Christopher R. von Jako, CEO of Dynatronics. “We are confident that the steps we are taking will position us to capitalize on evolving market opportunities.”

Net loss for the quarter ended March 31, 2019 was approximately $563,000, an improvement from a net loss of $1.3 million for the quarter ended March 31, 2018. The decrease in net loss is primarily attributable to a decrease of $785,000 in severance expense, and approximately $853,000 of reduced operating expense driven by our initiatives to increase profitability. These decreases were partially offset by the $886,000 decrease in gross profit. These decreases were partially offset by the $886,000 decrease in gross profit.

“Our team continues to take decisive measures to manage the business for improved profitability and operating cash flow through this transitional period,” said Dr. von Jako. “Our cost reduction efforts have continued to be effective as evidenced by our ability to generate a positive $1.6 million in operating cash flow for the latest nine months.”

Conference Call

Dynatronics has scheduled a conference call for investors on May 14, 2019, at 8:30 AM ET. Those wishing to participate should call (844) 602-0380 (U.S./Canada callers) or (862) 298-0970 (international callers). A replay will be available by dialing (919) 882-2331, Pin 47756.

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 products are marketed under a portfolio of high-quality, well-known industry brands including Bird & Cronin®, Dynatron Solaris®, Hausmann™, Physician’s Choice®, and PROTEAM™, among others. More information is available at www.dynatronics.com.

Safe Harbor Notification

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Those statements include references to the company's expectations and similar statements. Actual results could differ materially from those projected in these forward-looking statements, which involve a number of risks and uncertainties, including global economic conditions generally, competitive factors, inventory risks due to shifts in market demand, market demand for our products, and availability of financing at cost-effective rates. The contents of this press release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in the company’s most recent filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the year ended June 30, 2018 which was filed on September 27, 2018.

The following is a summary of operating results for the quarter and nine months ended March 31, 2019 and 2018 and balance sheet highlights as of March 31, 2019 and June 30, 2018.

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Summary Selected Financial Data

Statement of Operations Highlights

In thousands, except share and per share amounts

	Quarter Ended		Nine Months Ended
	March 31,		March 31,
	2019	2018	2019	2018
Net sales	$14,552	$16,634	$47,057	$47,513
Cost of sales	10,147	11,342	32,425	32,112
Gross profit	4,405	5,292	14,632	15,401
Selling, general, and admin. expenses	4,818	6,456	15,087	16,194
Other (expense) income, net	(118)	(113)	3	(271)
Loss before income taxes	(531)	(1,277)	(452)	(1,064)
Income tax provision	(32)	-	(237)	-
Net loss	(563)	(1,277)	(689)	(1,064)
Deemed dividend on convertible preferred stock and accretion of discount	-	-	-	(1,024)
Preferred stock dividend, cash	-	-	-	(105)
Convertible preferred stock dividend, in common stock	(197)	(191)	(586)	(578)
Net loss attributable to common stockholders	$(760)	$(1,468)	$(1,275)	$(2,771)
Net loss attributable to common stockholders per common share – basic and diluted	$(0.09)	$(0.18)	$(0.16)	$(0.45)
Weighted-average common shares outstanding – basic and diluted	8,307,117	7,962,179	8,189,890	6,135,224

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Balance Sheet Highlights

In thousands

	Mar. 31, 2019	June 30, 2018
Cash and cash equivalents	$414	$1,696
Trade accounts receivable	6,854	7,811
Inventories, net	11,219	10,988
Prepaid & other	772	927
Total current assets	$19,259	$21,422
Accounts payable	$4,249	$3,413
Accrued payroll and benefits expense	1,469	1,929
Accrued expenses	1,147	830
Other current liabilities	810	747
Line of credit	4,794	6,286
Current portion of acquisition holdback and earn-out liability	966	1,380
Total current liabilities	$13,435	$14,585

Contact:

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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