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): February 9, 2023

__________________________________________

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)

1200 Trapp Rd, Eagan, Minnesota	55121
(Address of principal executive offices)	(Zip Code)

(801) 568-7000

(Registrant’s telephone number, including area code)

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 14(d)-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 Symbol(s)	Name of each exchange  on which registered
Common stock, no par value	DYNT	The 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 February 9, 2023, Dynatronics Corporation (“Company”) issued a press release reporting, among other things, financial results relating to the quarter ended December 31, 2022. Also, as previously announced by a press release issued on January 26, 2023, on February 9, 2023, the Company held a conference call in which executives of the Company reviewed the fiscal 2023 second quarter results. A replay will be available through February 16, 2023, by dialing (877) 481-4010, using passcode 47501. 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 February 9, 2023
99.2	Slide Presentation accompanying earnings conference call held February 9, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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: February 9, 2023	DYNATRONICS CORPORATION
	By:	/s/ John A. Krier
	Name:	John A. Krier
	Title:	President, Chief Executive Officer, and Chief Financial Officer

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EX-99.1

EXHIBIT 99.1

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

EAGAN, MN / ACCESSWIRE / February 9, 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 second quarter of fiscal year 2023 ended December 31, 2022, and provided an update on the business.

CEO Commentary

“The year-over-year improvement in gross margin of 8.4% or nearly $1.0 million in gross profit was a solid improvement.  We are pleased with our progression, but we have more work to do.  New, targeted, and innovative, product releases are the third pillar of our gross margin improvement plan, and we plan to continue to improve our performance in this area,” said John Krier, Chief Executive Officer of Dynatronics.

“Our inventory balance was reduced to $10.7 million with a reduction of approximately $1.4 million from the balance on June 30, 2022.  Reducing inventory by this level, allowed us to strengthen our supplier relationships with a reduction in accounts payable of approximately $0.9 million in the second quarter.  This is an important development as we work to optimize our inventory with selected reductions while preparing for future new product introductions and historical seasonality-related growth expected in our fiscal fourth quarter,” concluded Krier.

Key Financial Highlights

Q2 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 $10.9 million.

· Gross profit margin of 28.1% up from 19.8% in Q2 fiscal year ‘22.

· Net loss of $0.8 million improved from $1.4 million in Q2 fiscal year ‘22.

· Current liabilities reduced by $1.0 million in Q2 fiscal year ‘22.

· Cash of $0.7 million, flat from $0.7 million at the end of Q4 fiscal year ‘22.

· 10^th consecutive quarter of no debt.

 

Guidance for Fiscal Year ‘23

Dynatronics reaffirmed net sales guidance for fiscal year ‘23 of $45 million to $48 million. The midpoint of this range is a 5% improvement over the Company’s $44.3 million net sales in fiscal year ‘22. The Company expects the distribution of net sales across the quarters in fiscal year ‘23 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. The second quarter of fiscal year 2023 continued this historical seasonality trend.

Even as it expects fiscal year ‘23 to showcase continued improvement toward its 40% long-term goal, given the persistent inflationary pressure and macro-economic impacts the Company is deferring providing gross margin guidance. 

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Selling, general, and administrative expenses are anticipated to be 30% to 35% of net sales in fiscal year ‘23.

Dynatronics expects to continue its strategic approach to optimize inventory levels with selected reductions while preparing for future new product introductions and historical seasonality-related growth expected in our fiscal fourth quarter.  This approach allowed the company to generate positive cash flow from operations of $0.3 million for the first six months of the fiscal year.

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.

Growth Priorities

The Company has delivered sales growth that outpaced market growth, and its baseline continued product net sales expectation for the seventh consecutive quarter. Dynatronics employs multiple levers to drive sales growth – by capturing market share, product innovations, and through acquisitions.

Conference Call and Webcast Q1 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, February 9, 2023.

Interested persons may access the live conference call by dialing 888-506-0062 (U.S./Canada callers) or 973-528-0011 (international callers), using passcode 547446. It is recommended that participants call or log in 10 minutes ahead of the scheduled start time to ensure a proper connection. An audio replay will be available one hour after the live call until Midnight on February 16, 2023, by dialing 877-481-4010, using passcode 47501.

The live webcast and slide presentation can be accessed on the Company’s Investor webpage under the Events & Presentations tab at https://investors.dynatronics.com/services. 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.

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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 expected improvement in overall performance, expectations that the Company will improve 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, and uncertainties related to the broader economic environment and the impact of the COVID-19 global pandemic on the Company’s results of operations and financial condition. 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.

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 December 31, 2022, the balance sheet highlights at December 31, 2022 and cash flow for periods ended December 31, 2022.

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Summary Selected Financial Data

Statement of Operation Highlights

In thousands, except share and per share amounts

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Contact:

Dynatronics Corporation

Investor Relations

ir@dynatronics.com

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

Connect with Dynatronics on LinkedIn

SOURCE: Dynatronics Corporation

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EX-99.2

EXHIBIT 99.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XML

Cover	Feb. 09, 2023
Cover [Abstract]
Entity Registrant Name	Dynatronics Corporation
Entity Central Index Key	0000720875
Document Type	8-K
Amendment Flag	false
Entity Emerging Growth Company	false
Document Period End Date	Feb. 09, 2023
Entity Incorporation State Country Code	UT
Entity Tax Identification Number	87-0398434
Written Communications	false
Soliciting Material	false
Pre Commencement Issuer Tender Offer	false
Entity File Number	0-12697
Entity Address Address Line 1	1200 Trapp Rd
Entity Address City Or Town	Eagan
Entity Address State Or Province	MN
Entity Address Postal Zip Code	55121
City Area Code	801
Local Phone Number	568-7000
Security 12b Title	Common stock, no par value
Trading Symbol	DYNT
Security Exchange Name	NASDAQ
Pre Commencement Tender Offer	false