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): February 11, 2021
__________________________________________
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 February 11, 2021, Dynatronics Corporation (the "Company") issued a press release reporting, among other things, financial results relating to the quarter ended December 31, 2020. Also, as previously announced by a press release issued on January 29, 2021, on February 11, 2021, the Company held a conference call and slide presentation in which executives of the Company reviewed the fiscal 2021 second quarter results. A replay will be available through February 18, 2021, by dialing 877-481-4010, using passcode 39738. 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<br>Release dated February 11, 2021 |
| 99.2 | Slide<br>Presentation accompanying investor conference call held February<br>11, 2021 |
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: February 11,<br>2021 | By: | /s/ <br>John<br>Krier |
| Name: | John<br>Krier | |
| Title: | Chief Executive<br>Officer |
dyna_ex991
Exhibit 99.1
Dynatronics Reports Second Quarter Results
Eagan, MN (February 11, 2021) – Dynatronics Corporation (NASDAQ:DYNT), a leading manufacturer of athletic training, physical therapy, and rehabilitation products, today announced financial results for its second quarter of fiscal year 2021 for the period ended December 31, 2020.
Fiscal Q2 2021 Financial Highlights
●
Net sales of $12 million were steady with net sales of $12 million in the prior quarter
●
Selling, general, and administrative expenses of $3.9 million were 7% lower compared to the prior quarter
●
GAAP net loss of $673,000 compared to net loss of $377,000 in the prior quarter
●
Generated $1.5 million in positive operating cash flow, representing 34% gain over the prior quarter
●
Zero balance on our line of credit and a borrowing base of approximately $5.4 million as of the end of Fiscal Q2 2021
Subsequent to the Quarter’s End
●
Announced launch of two new Hausmann tables with initial orders
●
Received notification from NASDAQ that DYNT shares have regained compliance with minimum bid price listing requirements
CEO Commentary
“Over the last two quarters, we have taken a number of decisive actions to stabilize and strengthen our business to take advantage of the growth markets we serve,” said John Krier, President and CEO of Dynatronics Corporation. “We generated over $1 million in operating cash flow for the second consecutive quarter, reduced our operating expenses, and added top-notch leadership experience to the team. We introduced two new products in January, and we expect additional product launches focusing on our growth markets.”
“Our fiscal year 2021 second quarter results reflect continued challenges due to COVID-19, including customers operating with reduced capacity and operating hours, higher delivery and shipment costs and extended handling times. Despite these challenges, we are excited to transition the company to a more stable and predictable financial model that better leverages our brands and our customer base as it takes advantage of growth opportunities. We are expecting some continued volatility ahead as we optimize the business to emphasize higher margins and stable cash flow generation,” concluded Mr. Krier.
Financial Review
Net sales for the quarter ended December 31, 2020 were $12.0 million, a decrease of $3.2 million, or 21%, compared to $15.2 million in the same period of the prior year. Gross profit decreased $1.2 million, or 27%, to $3.3 million, or 28% of net sales. The decrease in net sales and gross profit were primarily attributable to COVID-19 precautions and associated impacts of the pandemic on changes to the mix of sales driven by changes in elective procedures. Gross margin for the quarter was 27.9% compared to 30.2% in the same period of the prior year.
Net loss for the quarter ended December 31, 2020 was approximately $0.7 million, compared to a net loss of $0.1 million for the same quarter of the prior fiscal year. The company experienced positive cash flow from operating activities of $1.5 million in the second quarter of fiscal year 2021.
Outlook
Due to continued uncertainty resulting from the ongoing COVID-19 pandemic, Dynatronics will not provide guidance for fiscal year 2021.
Conference Call
Dynatronicswill hold a conference call for investors on February 11, 2021 at 8:30 AM ET to discuss the results. Interested persons may access the live call by dialing 888-506-0062 (U.S./Canada callers) or 973-528-0011 (international callers). It is recommended that participants call or log on 10 minutes ahead of the scheduled start time to ensure proper connection. Accompanying slides will be available with webcast registration or on the Dynatronics website in the investor relations section.
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®, Dynatron Solaris®, Hausmann™, Physician’s Choice®, and PROTEAM™, among others. More information is available at www.dynatronics.com.
Forward Looking Statements
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 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, 2020, which was filed on September 24, 2020. Dynatronics does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Summary Financial Results
Following is a summary of operating results for the periods ended December 31, 2020 and 2019, the balance sheet highlights at December 31, 2020 and June 30, 2020 and the operating cash flow for quarters ended December 31, 2020 and 2019.
| Summary<br>Selected Financial Data | ||||
|---|---|---|---|---|
| Statement<br>of Operation Highlights | ||||
| In thousands, except share and per share amounts | ||||
| Quarter Ended | Six Months Ended | |||
| December 31, | December 31, | |||
| 2020 | 2019 | 2020 | 2019 | |
| Net<br>sales | $11,968 | $15,197 | $24,101 | $31,587 |
| Cost<br>of sales | 8,627 | 10,611 | 16,858 | 21,847 |
| Gross<br>profit | 3,341 | 4,586 | 7,243 | 9,740 |
| 27.9% | 30.2% | 30.1% | 30.8% | |
| Selling,<br>general, and admin. expenses | 3,938 | 4,618 | 8,183 | 9,543 |
| Other<br>(expense) income, net | (66) | (105) | (100) | (236) |
| Income<br>tax provision | (10) | - | (10) | - |
| Net<br>loss | $(673) | $(137) | $(1,050) | $(39) |
| Deemed<br>dividend on convertible preferred stock and accretion of<br>discount | (51) | (109) | (51) | (109) |
| Convertible<br>preferred stock dividend, in common stock | (182) | (202) | (376) | (369) |
| Net<br>loss attributable to common stockholders | $(906) | $(448) | $(1,477) | $(517) |
| Net<br>loss attributable to common stockholders per common share - basic<br>and diluted | $(0.06) | $(0.05) | $(0.10) | $(0.06) |
| Weighted-average<br>common shares outstanding - basic and diluted | 14,601,186 | 9,023,406 | 14,340,774 | 8,800,184 |
| Balance Sheet Highlights | ||||
| --- | --- | --- | ||
| In thousands | ||||
| December 31,<br><br><br>2020 | June 30,<br><br><br>2020 | |||
| Cash<br>and cash equivalents | $3,610 | $2,316 | ||
| Trade<br>accounts receivable, net | 5,068 | 4,894 | ||
| Inventories,<br>net | 6,141 | 8,372 | ||
| Prepaid<br>& other | 3,297 | 493 | ||
| Total<br>current assets | $18,116 | $16,075 | ||
| Accounts<br>payable | $4,827 | $3,014 | ||
| Accrued<br>payroll and benefits expense | 1,476 | 1,205 | ||
| Accrued<br>expenses | 1,372 | 768 | ||
| Other<br>current liabilities | 3,345 | 1,679 | ||
| Line<br>of credit | - | 1,013 | ||
| Total<br>current liabilities | $11,020 | $7,679 | ||
| Operating<br>Cash Flow Highlights | ||||
| --- | --- | --- | --- | --- |
| In thousands | ||||
| Quarter Ended | Six Months Ended | |||
| December 31, | December 31, | |||
| 2020 | 2019 | 2020 | 2019 | |
| Net<br>loss | $(673) | $(138) | $(1,051) | $(39) |
| Depreciation<br>and amortization | 368 | 400 | 756 | 802 |
| Stock<br>based compensation | 51 | 58 | 98 | 188 |
| Receivables | 541 | 315 | (174) | 507 |
| Inventory | (237) | (254) | 986 | 144 |
| Prepaid<br>and other assets | (361) | (103) | (681) | (118) |
| Accounts<br>payable, accrued expenses, and other liabilities | 1,818 | 646 | 2,698 | 1,432 |
| Net<br>cash provided by operating activities | $1,507 | $924 | $2,632 | $2,916 |
Contact:
Dynatronics Corporation
Investor Relations
Skyler Black
(801) 676-7201
skyler.black@dynatronics.com
Darrow Associates
Peter Seltzberg, Managing Director
(516) 419-9915
pseltzberg@darrowir.com
For additional information, please visit: www.dynatronics.com
Connect with Dynatronics on LinkedIn
dyntq2conferencecallslide
Exhibit 99.2
