XML 27 R16.htm IDEA: XBRL DOCUMENT v3.21.1
Note 10. Subsequent Event
9 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]  
Subsequent Event

On April 2, 2021, the Company and Maple Leaf Realco II, LLC entered into a Purchase and Sale Agreement for the sale of Dynatronics’ former manufacturing facility building located at 6607 Mountainview Road, Ooltewah, Tennessee for a purchase price of $1.75 million USD. Consummation of the sale is subject to customary closing conditions and is anticipated in the quarter ending June 30, 2021. There can be no assurance that the sale will be consummated. The agreement also contains customary representations, warranties and covenants, and other terms and conditions.

 

On April 22, 2021, the Company announced strategic actions taken and expected to be taken with the objective to improve the Company’s overall financial performance and to optimize its business. The Company will focus on higher margin manufactured products and eliminate approximately 1,600 SKUs of low-margin, third-party distributed products. The Company will streamline physical therapy and rehabilitation product sales exclusively to dealers, which it expects will reduce complexity and associated support costs. The Company expects to incur approximately $1.2 million in restructuring charges related to the optimization plan, of which $0.4 million is expected to result in cash expenditures. The Company expects to recognize the majority of these expenses during the fourth quarter of fiscal year 2021. No restructuring costs were incurred during the three months ended March 31, 2021. The Company anticipates that the elimination of its distributed products portfolio will result in an approximate $11 million reduction in annual net sales for fiscal year 2022 compared to fiscal year 2021, but that annual gross margin and operating income in fiscal year 2022 will improve relative to fiscal year 2021.