8-K
DYNATRONICS CORP (DYNTQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): September 22, 2022
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| Dynatronics Corporation |
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| (Exact name of registrant as specified in its charter) |
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| Utah | 0-12697 | 87-0398434 |
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| (State or other jurisdiction of incorporation) | Commission File Number | (IRS Employer Identification Number) |
| 1200 Trapp Rd, Eagan, Minnesota | 55121 | |
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| (Address of principal executive offices) | (Zip Code) | |
| (801) 568-7000 | ||
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| (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 September 22, 2021, Dynatronics Corporation ("Dynatronics" or "Company") issued a press release reporting, among other things, financial results relating to the quarter and full year ended June 30, 2022. Also, as previously announced by a press release issued on September 8, 2022, on September 22, 2022, the Company held a conference call in which executives of the Company reviewed the fiscal 2022 fourth quarter and full year results. A replay will be available through September 29, 2022, by dialing (877) 481-4010, using passcode 46504. 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<br><br>Number | Description |
|---|---|
| 99.1 | Press Release dated September 22, 2022 |
| 99.2 | Slide Presentation accompanying earnings conference call held September 22, 2022 |
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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: September 22, 2022 | DYNATRONICS CORPORATION | |
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| By: | /s/John A. Krier | |
| Name: | John A. Krier | |
| Title: | President, Chief Executive Officer, and Chief Financial Officer | |
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dynt_ex991.htm EXHIBIT 99.1
Dynatronics Corporation Reports Fourth Quarter and Fiscal Year 2022 Financial Results and Business Highlights
EAGAN, MN / ACCESSWIRE / September 22, 2022 / Dynatronics Corporation (NASDAQ:DYNT) (“Dynatronics” or the “Company”), a leading manufacturer of athletic training, physical therapy, and rehabilitation products, today reported financial results for its fourth quarter and fiscal year ended June 30, 2022, and provided an update on recent business highlights.
CEO Commentary
"The fourth quarter of fiscal year 2022 represented the fifth consecutive quarter of exceeding the market and our baseline net sales expectation. Net sales growth of 14% in the fourth quarter relative to continued product net sales in the same period in the prior year was a result of our customers’ positive reaction to our updated business model," said John Krier, Chief Executive Officer of Dynatronics. "Strong demand, coupled with our commitment to disciplined execution, has generated confidence in our outlook, despite the significant impacts of COVID-19.”
“We expect our gross margin in Q1 of fiscal year ’23 to show continued expansion as we benefit from price increases for our products. Cash flow from operations in fiscal year ‘23 should begin to improve as we sell down the inventory we strategically built over the past year," concluded Krier.
Key Financial Highlights
Q4 FY '22 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 $11.2 million. |
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| · | Gross profit margin sequential increase to 23.4% in Q4 FY ’22 from 22.4% in Q3 FY ’22. |
| · | Net loss of $1.6 million. |
| · | Cash of $0.7 million, $12.1 million of inventory and no debt as of June 30, 2022. |
FY '22 Financial Highlights
| · | Total net sales of $44.3 million. |
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| · | Gross profit margin of 24.1% in FY ’22 from 27.0% in FY ’21. |
| · | Net loss of $4.0 million. |
Guidance for FY ’23
Dynatronics issued net sales guidance for FY ’23 of $45 million to $48 million, assuming similar procedure volume despite the impacts of COVID-19. The midpoint of this range is a 5% improvement relative to the $44.3 million net sales in fiscal year ‘22. The Company expects the distribution of net sales across the quarters in FY ’23 to align with historical trends, highest in the first quarter, lower in the second and third quarters, with a bounce back in the fourth quarter.
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The Company is continuing its recent practice to not provide gross margin guidance given the persistent inflationary pressure, on-going impacts of COVID-19, and supply chain challenges. That said, Dynatronics does expect Q1 of fiscal year ’23 to continue the sequential expansion towards the longer-term target of 40%.
Selling, general, and administrative expenses are anticipated to be 30% to 35% of net sales in FY ’23.
Inventory is expected to remain at an elevated level to meet customer demand, and current market and supply chain conditions. Cash flow from operations in fiscal year ‘23 should begin to show improvement as the Company sells down the inventory strategically built over the past year.
The Company's financial guidance for FY ’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 baseline expectation for the fifth consecutive quarter. These are the levers to drive sales growth at the macro level: winning market share by partnering with the Company’s customers, driving favorable mix shift to new product innovations, and a value creating M&A strategy.
Conference Call and Webcast Q4 and full-year FY ’22 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, September 22, 2022.
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 767607. 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 September 29, 2022, by dialing 877-481-4010, using passcode 46504.
The live webcast and slide presentation can be accessed on the Company's Investor webpage under the Events & Presentations tab at https://irdirect.net/DYNT/corporate_document/1982. 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 reduction in leased space in fiscal year 2022, expectations regarding net sales, gross margin, selling general and administrative costs, and other income in fiscal year 2022, and uncertainties involving 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 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 June 30, 2022 and 2021, the balance sheet highlights at June 30, 2022 and June 30, 2021 and cash flow for periods ended June 30, 2022 and 2021.
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| Summary Selected Financial Data |
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| Statement of Operation Highlights | | | | | | | | | | | | |
| In thousands, except share and per share amounts |
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| | June 30, | | | | | | June 30, | | | | | |
| | 2022 | | | 2021 | | | 2022 | | | 2021 | | | | Net sales | $ | 11,191 | | $ | 12,238 | | $ | 44,338 | | $ | 47,799 | |
| Cost of sales | | 8,574 | | | 9,900 | | | 33,665 | | | 34,913 | |
| Gross profit | | 2,617 | | | 2,338 | | | 10,673 | | | 12,886 | |
| | | 23.4 | % | | 19.1 | % | | 24.1 | % | | 27.0 | % |
| Selling, general, and admin. expenses | | 4,102 | | | 4,558 | | | 15,430 | | | 16,646 | |
| Other (expense) income, net | | (78 | ) | | 5,134 | | | 764 | | | 5,752 | |
| Income tax provision | | - | | | 20 | | | - | | | 10 | |
| Net (loss) income | $ | (1,563 | ) | $ | 2,934 | | $ | (3,993 | ) | $ | 2,002 | | | Deemed dividend on convertible preferred stock and accretion of discount | | - | | | - | | | - | | | (51 | ) |
| Convertible preferred stock dividend, in common stock | | (182 | ) | | (182 | ) | | (733 | ) | | (741 | ) |
| Net (loss) income attributable to common stockholders | $ | (1,745 | ) | $ | 2,752 | | $ | (4,726 | ) | $ | 1,210 | | | Net (loss) income attributable to common stockholders per common share - basic and diluted | $ | (0.10 | ) | $ | 0.16 | | $ | (0.26 | ) | $ | 0.08 | |
| Weighted-average common shares outstanding - basic and diluted | | 18,187,243 | | | 17,557,595 | | | 17,853,276 | | | 15,461,339 | |
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| Balance Sheet Highlights |
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| In thousands |
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| Cash and cash equivalents and restricted cash | $ | 701 | $ | 6,254 |
| Trade accounts receivable, net | | 5,416 | | 5,643 |
| Inventories, net | | 12,071 | | 6,526 |
| Prepaid & other | | 1,038 | | 2,483 |
| Total current assets | | 19,226 | | 20,906 | | Non-current assets | | 16,208 | | 18,234 |
| Total assets | $ | 35,434 | $ | 39,140 | | Accounts payable | $ | 6,169 | $ | 3,738 |
| Accrued payroll and benefits expense | | 1,360 | | 1,656 |
| Accrued expenses | | 862 | | 1,485 |
| Other current liabilities | | 1,544 | | 1,593 |
| Total current liabilities | | 9,935 | | 8,472 | | Non-current liabilities | | 3,800 | | 5,154 |
| Total liabilities | | 13,735 | | 13,626 | | Stockholders' equity | | 21,699 | | 25,514 |
| Total liabilities and stockholders' equity | $ | 35,434 | $ | 39,140 |
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| Cash Flow Highlights |
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| In thousands |
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| | June 30, | | | | | | June 30, | | | | | |
| | 2022 | | | 2021 | | | 2022 | | | 2021 | | | | Net (loss) income | $ | (1,563 | ) | $ | 2,934 | | $ | (3,993 | ) | $ | 2,002 | | | Depreciation and amortization | | 313 | | | 368 | | | 1,285 | | | 1,480 | |
| Stock based compensation | | 29 | | | 26 | | | 178 | | | 154 | |
| Gain on extinguishment of debt | | - | | | (3,518 | ) | | - | | | (3,518 | ) |
| (Gain) loss on sale of property and equipment | | 23 | | | (745 | ) | | 24 | | | (717 | ) |
| Receivables | | (290 | ) | | 160 | | | 227 | | | (749 | ) |
| Inventory | | (468 | ) | | 403 | | | (5,573 | ) | | 551 | |
| Prepaid and other assets | | 512 | | | 313 | | | 1,463 | | | (741 | ) |
| Accounts payable, accrued expenses, and other liabilities | | (181 | ) | | 128 | | | 1,505 | | | 1,922 | |
| Net cash (used in) provided by operating activities | | (1,625 | ) | | 69 | | | (4,884 | ) | | 384 | | | Net cash (used in) provided by investing activities | | (57 | ) | | 1,620 | | | (319 | ) | | 1,531 | | | Net cash (used in) provided by financing activities | | (90 | ) | | (86 | ) | | (350 | ) | | 2,023 | | | Net change in cash and cash equivalents | | (1,772 | ) | | 1,603 | | | (5,553 | ) | | 3,938 | |
| Cash and cash equivalents at beginning of the period | | 2,473 | | | 4,651 | | | 6,254 | | | 2,316 | |
| Cash and cash equivalents at end of the period | $ | 701 | | $ | 6,254 | | $ | 701 | | $ | 6,254 | |
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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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dynt_ex992.htm EXHIBIT 99.2
Growing Sales Above The Market l Margin Expansion Developing September 22, 2022 | NASDAQ:DYNT Dynatronics Corporation
This presentation 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 margin, operating income and cash flow from operations, expectations regarding net sales, gross margin, and selling general and administrative costs in fiscal year 2023, and uncertainties and risks 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 presentation 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. Dynatronics does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise. Continued product net sales as used in this presentation 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 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. $37M annual and $9.25M quarterly baseline continued product net sales set in April 2021 is based on annual net sales of approximately $48M in FY ‘21 less estimated annual discontinued product sales of approximately $11M. Safe Harbor
Key takeaways – Fourth Quarter FY ‘22 Confident in revenue growth trajectory and gross margin expansion 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.
Q4 FY ‘22 and Full-year FY ‘22 Financial and Operations Highlights Financial Highlights: 14.3% increase in net sales to $11.2M in Q4 FY ’22 relative to continued product net sales in FY ‘21. Annual net sales of $44.3M in FY ‘22, up 19.7% relative to $37M continued product net sales baseline set in April 2021. Q4 FY ‘22 net sales is the fifth consecutive quarter of exceeding the market and our $9.25M continued product net sales quarterly baseline set in April 2021. 23.4% gross margin in Q4 FY ’22, 1.0-point sequential increase. Gross margin muted by impact of COVID-19, and supply chain challenges including higher raw material, freight, and labor costs. Gross margin target >40% over time. Cash balance of $0.7M, $12.1M of inventory, and no debt at 6/30/22. Inventory is at an elevated level to meet customer demand, and current market and supply chain conditions. Cash used in operating activities of $4.9M in FY ‘22 was primarily due to the $5.6M strategic inventory build to serve customer demand growth and build safety stock to offset supply chain disruptions. Business and Operations Highlights: Mike Withers joined Dynatronics full-time in May 2022. He was former Vice President of Information Technology at SeaSpine. 20+ years of experience in medical-device industry. Product innovations realizing success utilizing dealer and customer feedback: Mammoth launch in FY ‘22 exceeding expectations and will enable longer-term margin expansion. Target several product launches in FY ’23.
+5% Annual sales Growth guidance in FY ’23 Baseline1 Organic Q4 FY ’21 Organic Quarterly Sales Q1 FY ’222 Baseline1 Organic FY ’222 Organic Annual Sales Net sales distribution across the quarters in FY ‘22 aligned with historical trends: higher in the first and fourth quarters, and lower in the second and third quarters 1 Baseline set in April 2021 I 2 GAAP net sales in FY ’22, including $450K of discontinued product net sales. 3 Midpoint of Q4 and annual guidance I 4 Net sales in Q4 FY ’22 relative to continued product net sales in Q4 FY ’21 Q2 FY ’222 Organic $12.3M - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $10.5M Q3 FY ’222 Organic Q4 FY ’222 Organic $10.3M $11.2M $9.8M 5 consecutive quarters of net sales growth exceeding the market and our baseline sales expectation. ˜$37M $44.3M FY ’23E3 Organic Up ~20% Organic Guidance midpoint of $46.5M in FY ’23 Represents 5% organic net sales growth Up 14% YOY4 Business transformation and market share gains driving sustained growth ~$46.5M Up ~5% Organic
Significant progress to gross margin Target >40% Gross Margin (GAAP) Gross margin includes impact of COVID-19 and supply chain challenges in each quarter of FY ’22 and continued volatility expected in FY ‘23. 27.0% 29.8% 19.8% 22.4% >40% FY ’21 Q1 FY ’22 Q2 FY ’22 Q3 FY ’22 Q4 FY ’22E FY ’23E Gross margin (GM) expansion is short-term focus >40% consolidated GM is long term target Target GM similar to peers pre-COVID 19 Product innovation and M&A target is higher than long-term target Delivering higher GM: Shifted focus to higher margin, differentiated products that we manufacture Scale: Continue to grow sales faster than the 3% to 4% market growth Volume-tiered pricing that rewards customer loyalty and supports GM expansion Improved factory yields with larger scale Alternative sourcing relationships Gross margin expansion is short-term focus driving sustained growth COVID-19 23.4%
Net Sales:: Net sales of $45.0 to $48.0M in FY ’23. The FY ’23 net sales midpoint of $46.5M is a 5% improvement relative to the $44.3M net sales in FY ‘22. guidance for FY ‘23 Details Gross Margin: 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. Anticipate gross margin higher in Q1 FY ’23 relative to the 23.4% in Q4 FY ‘22. The Company will provide gross margin guidance when it feels confident in doing so, which Dynatronics expects in fiscal year ‘23. Selling, General, and Administrative Expenses (“SG&A”): SG&A of 30.0% to 35.0% of net sales in FY ’23. Target earnings growth faster than net sales growth with larger scale. Operating environment:
Well-positioned to execute our near and long-term growth strategies Deliver commercial success, emphasizing quality for cost and a differentiated customer experience Improve long-term margins through consolidations and financial discipline Timely commercial launch of new products focused on growth markets Optimize manufacturing and supply chain Rationalize product portfolio and pricing for attractive growth trends Continue focus on cash flow from operations Target acquisitions in existing or adjacent markets with customer uptake Improving results in these seven strategies enables a scalable and sustainable sales growth model in our attractive markets. We will continuously drive to deliver improving results in each strategy. “Gross margin expansion is our short-term focus. We have made solid strides in this area and expect expansion in fiscal year ‘23.” John Krier, CEO of Dynatronics
Dynatronics Net Sales Growth > Market Growth 3% to 4%1 Market Growth Higher Growth Organic Market Growth is 3% to 4% Win Market Share Product Innovations Synergistic M&A DYNT Organic Net Sales Growth > Market Growth… …Bolstered by DYNT Inorganic Opportunities 1 3% to 4% is the estimated growth of selective target Rehabilitation and Bracing markets from 2021 to 2025.
How we win market share Proven playbook: Listen to dealers and customers and deliver to them Strong reputation for quality products and delivery experience Consistently differentiated experience to our dealers and customers New dealers and customers. Brand awareness Superior economic value: volume-tiered pricing that rewards customer loyalty and supports higher gross margin Favorable mix shift to product innovations will contribute to higher gross margin over time Expanded pipeline of new product categories for Dynatronics Utilizing dealer and customer feedback Product innovations target gross margin >40% Targeted M&A further enhances our product portfolio Grow net sales faster than the 3% to 4% market growth rate Product Innovation Expertise Superior Commercial Execution The Result Now growing sales above the market 5 consecutive quarters of net sales growth exceeding the market and our baseline $44.3M annual net sales in FY ’22, up ~20% relative to the $37M continued product net sales baseline in FY ‘21
Focused Leadership Proven commercial success and business transformations in medical device markets. New talent helping to drive growth and win market share. Previous Affiliations Previous Affiliations Previous Affiliations Previous Affiliations Previous Affiliations Previous Affiliations Previous Affiliations Previous Affiliations
M&A Strategy Acquisition growth opportunities in a fragmented market to add scale with an accomplished M&A team and demonstrated ability to successfully integrate
investment highlights of Dynatronics Up 19.7% YOY net sales growth in FY ’22 from continued product net sales baseline. Underpenetrated (˜10%) customer base + share gain opportunity + value creating M&A strategy Gross margin of 23.4% in Q4 FY ‘22, 3.6-point increase since Q2. >40% gross margin is long term target 3% to 4% U.S. market growth. Significant U.S. TAM of +$3.5 billion Pure play focus on rehabilitation and bracing markets Exciting new product pipeline: launched six new products and applications since January 2021 Management incentive compensation is linked to sales and EBITDA growth Discipline for efficient scaling and profitable cash flow growth Gross margin expansion and positive cash flow remain our short-term focus Expanding Product Portfolio Serving Growth Markets Experienced, Highly Motivated Team Driving Growth Enterprise value as of 9/15/22 Peers are USPH, ZYXI, VIVE, OMI, IMAC, KIDS, KRMD (Peer Group Average used is Median) Attractive Investment Appeal Shares are trading at 0.3x EV to revenues vs. peer group of 4.2x(1) Dynatronics is growing net sales above the market Proven Commercial and Financial Innovation
Dynatronics ir@dynatronics.com Investor Relations Contacts Dynatronics Corporation
Dynatronics at a Glance + Thousands of Private Practice Therapists and Athletic Trainers Provider of high-quality restorative medical device products to the orthopedic and rehabilitation industry designed to accelerate achieving optimal health – favorable market trends Driving change and results to deliver a compelling and durable business model, demonstrating strong financial performance from emerging scalable operations Leadership Team, prior to joining Dynatronics: Proven commercial success and business transformations in medical device markets Customers Excluding preferred stock
Capitalization / Ownership Convertible one for one into Common; 8% annual dividend payable in cash or stock at company preference Share price of $0.62 on 9/15/22 Includes Line of Credit only Share count as of June 30, 2022