8-K
DYNATRONICS CORP (DYNTQ)
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 14, 2020
__________________________________________
Dynatronics Corporation
(Exact name of registrant as specified in its charter)
__________________________________________
| Utah | 0-12697 | 87-0398434 |
|---|---|---|
| (State<br>or Other Jurisdiction of Incorporation) | Commission<br>File Number | (IRS<br>Employer Identification Number) |
| 1200 Trapp Rd, Eagan, Minnesota | 55121 | |
| --- | --- | |
| (Address<br>of principal executive offices) | (Zip<br>Code) | |
| (801) 568-7000 | ||
| --- | ||
| (Registrant's<br>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<br>stock, no par value | DYNT | The<br>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 14, 2020, Dynatronics Corporation (the “Company” or “we”) issued a press release reporting financial results relating to the quarter ended March 31, 2020 and held a conference call in which management discussed the results of operations with investors and analysts. We had previously announced on April 2, 2020, that we were withdrawing our prior financial guidance and that we would not provide financial guidance at this time for future periods, due to uncertainties resulting from the COVID-19 pandemic. A copy of the press release is furnished herewith as Exhibit 99.1. A recording of the conference call with management is available as indicated in the press release.
The information under this Item 2.02 and in Exhibit 99.1 is being furnished and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not to be incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Item 7.01. Regulation FD Disclosure.
The information provided in Item 2.02 is incorporated herein by reference.
The information set forth under this Item 7.01 and in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Caution Concerning Forward-Looking Statements
This Form 8-K contains information that includes or is based on forward-looking statements within the meaning of the federal securities laws that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such statements include, but are not limited to, those regarding our financial performance and the impact of the novel coronavirus COVID-19 (“COVID-19”) outbreak on our operations and financial results and are subject to, among other risks, the COVID-19 pandemic and any related policies and actions by governments or other third parties.
Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.
Item 9.01 Financial Statements and Exhibits
| Exhibit Number | Description |
|---|---|
| 99.1 | Earnings<br>Announcement for period ended March 31, 2020 |
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.
| DYNATRONICS<br>CORPORATION | ||
|---|---|---|
| Date: May 14,<br>2020 | By: | /s/ <br>Brian<br>Baker |
| Name: | Brian<br>Baker | |
| Title: | Chief Executive<br>Officer |
dynt_ex991
Exhibit 99.1
Dynatronics Reports Third Quarter Results for Fiscal 2020
Eagan, MN (May 14, 2020) – Dynatronics Corporation (NASDAQ:DYNT), a leading manufacturer of athletic training, physical therapy, and rehabilitation products, today announced financial results for its third quarter of fiscal year 2020.
Net sales for the quarter ended March 31, 2020 were $13.7 million, a decrease of $845,000, or 5.8%, compared to $14.6 million in the same period of the prior year. Gross profit for the quarter decreased $461,000, or 10.5%, to $3.9 million. The decrease in net sales and gross profit were primarily attributable to lower sales of physical therapy and rehabilitation products as well as a decline due to COVID-19 stay-at-home restrictions and governmental holds on elective procedures. Gross margin for the quarter was 28.8% compared to 30.3% in the same period of the prior year.
Net loss for the quarter ended March 31, 2020 was approximately $1.1 million, compared to a net loss of $563,000 for the same quarter of the prior fiscal year. Depreciation, amortization, and other non-cash expenses were $488,000 and the Company experienced negative cash flow from operating activities of $367,000 in the third quarter of fiscal 2020.
“We are pleased with the sales outcome for the third quarter, considering the effect the COVID-19 pandemic had on our business in March,” said Brian Baker, President and CEO of Dynatronics Corporation. “In working with our customers, suppliers, and employees during this difficult time, we are humbled to see so many good people come together in support of the larger national and international community. We will continue to do our part as an essential manufacturer to support our customers, clinicians, medical facilities and their patients.”
The Company continues to take decisive actions in response to the COVID-19 pandemic. Management acted quickly to safeguard employees, control costs, and manage working capital. The Company also accelerated its consolidation activity from its Utah facility to Minnesota, furloughed production employees, and adjusted inventory management to align with current levels of demand.
In order to strengthen its financial position, during the month of April, 2020, the Company obtained a loan of $3.5 million under the CARES Act Paycheck Protection Program to enable it to retain employees and cover payroll costs and other allowable expenditures. The Company also raised $2.3 million in net proceeds pursuant to at-the market sales of common stock.
The Company withdrew its previously provided guidance on April 2, 2020 and is not providing forward-looking guidance at this time.
Conference Call
Dynatronics has scheduled a conference call for investors on May 14, 2020, 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 (877) 481-4010, Pin 34333.
About Dynatronics Corporation
Dynatronics Corporation 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.
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. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include references to our financial guidance, expected revenues, gross profit, and selling, general, and administrative expenses. 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 including uncertainties involving the impact of the COVID-19 pandemic. 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 most recent filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which was filed on September 25, 2019. Dynatronics does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Summary Financial Results
The following is a summary of operating results for the three- nine-month periods ended March 31, 2020 and March 31, 2019 and balance sheet highlights at March 31, 2020 and June 30, 2019.
Summary Selected Financial Data
Statement of Operation Highlights
In thousands, except share and per share amounts
| Quarter<br>Ended | Nine Months<br>Ended | |||
|---|---|---|---|---|
| March<br>31, | March<br>31, | |||
| 2020 | 2019 | 2020 | 2019 | |
| Net<br>sales | $13,706 | $14,552 | $45,293 | $47,057 |
| Cost of<br>sales | 9,762 | 10,146 | 31,609 | 32,425 |
| Gross<br>profit | 3,944 | 4,405 | 13,684 | 14,632 |
| Selling, general,<br>and admin. expenses | 4,907 | 4,818 | 14,450 | 15,087 |
| Other (expense)<br>income, net | (128) | (118) | (364) | 3 |
| Income tax<br>provision | - | (32) | - | (237) |
| Net<br>loss | (1,091) | (563) | (1,130) | (689) |
| Deemed dividend on<br>convertible preferred stock and accretion of discount | (65) | - | (174) | - |
| Convertible<br>preferred stock dividend, in common stock | (168) | (196) | (538) | (586) |
| Net loss<br>attributable to common stockholders | $(1,325) | $(760) | $(1,841) | $(1,275) |
| Net loss<br>attributable to common stockholders per common share – basic<br>and diluted | $(0.13) | $(0.09) | $(0.20) | $(0.16) |
| Weighted-average<br>common shares outstanding – basic and diluted | 10,168,596 | 8,307,117 | 9,216,027 | 8,189,890 |
Balance Sheet Highlights
In thousands
| Mar.<br>31,<br><br><br>2020 | June<br>30,<br><br><br>2019 | |
|---|---|---|
| Cash, cash<br>equivalents, and restricted cash | $1,530 | $256 |
| Trade accounts<br>receivable, net | 6,635 | 7,495 |
| Inventories,<br>net | 11,323 | 11,528 |
| Prepaid &<br>other | 764 | 635 |
| Total<br>current assets | $20,252 | $19,914 |
| Accounts<br>payable | $5,540 | $3,990 |
| Accrued payroll and<br>benefits expense | 1,479 | 1,373 |
| Accrued<br>expenses | 768 | 1,039 |
| Other current<br>liabilities | 1,728 | 833 |
| Line of<br>credit | 6,369 | 6,540 |
| Current portion of<br>acquisition earn-out liability | - | 500 |
| Total<br>current liabilities | $15,884 | $14,275 |
Contact:
Dynatronics Corporation
Investor Relations
Skyler Black
(801) 676-7201
skyler.black@dynatronics.com
For additional information, please visit: www.dynatronics.com
Like Dynatronics on Facebook
Connect with Dynatronics on LinkedIn
Follow us on Twitter