Exhibit 99.1
NEWS RELEASE
Contact:
Jim Ogilvie, 800-874-6251 or 801-568-7000
Dynatronics Announces Significant Top Line Sales
Increase
●
115.6% increase in sales for fiscal 2018 third quarter
●
95.9% increase in gross profit for fiscal 2018 third
quarter
●
Increases due to performance at newly acquired
operations
Cottonwood Heights, Utah (May 15, 2018)
–
Dynatronics
Corporation
(NASDAQ:DYNT) today announced financial results
for its fiscal 2018 third quarter ended March 31,
2018.
Financial Performance
Net
sales for the quarter increased $8.9 million, or 115.6 percent, to
$16.6 million, compared to $7.7 million in the same period of the
prior year. Gross profit for the quarter increased $2.6 million, or
95.9 percent, to $5.3 million. The increase in net sales and gross
profit were attributable to the company’s acquisitions of
Hausmann and Bird & Cronin in the previous twelve months. These
acquired operations contributed combined sales of $9.7 million and
gross profit of $3.1 million in the quarter. Sales from the Therapy
Products Division, or Therapy Products, declined approximately $0.8
million, primarily attributable to lower volume of therapeutic
modality and distributed supply sales. Gross margin for the quarter
was 31.8 percent, compared to 35.0 percent in the same period of
the prior year. The margin decrease was primarily due to the
addition of Hausmann sales at a lower gross margin, as well as some
gross margin decline at Therapy Products.
“We
continue to see a meaningful impact from the acquisitions of
Hausmann and Bird & Cronin,” said Kelvyn H. Cullimore
Jr., Dynatronics’ CEO. “They are both performing to
expectations operationally, and we are confident in the leadership
teams within the divisions.”
Net
loss for the quarter ended March 31, 2018 was approximately $1.3
million, compared to a net loss of $0.8 million for the quarter
ended March 31, 2017. Depreciation, amortization, and other
non-cash expenses were $0.6 million in the quarter. The $0.5
million increase in net loss primarily is attributable to
previously announced severance and related expenses of $0.9 million
in the quarter. Exclusive of these charges, adjusted net loss,
which is a non-GAAP performance measure, was approximately $0.4
million, or a bottom line improvement of $0.4 million compared to
the same quarter last year.
Net
loss attributable to common stockholders for the quarter ended
March 31, 2018 was approximately $1.5 million compared to a loss of
$0.8 million for the quarter ended March 31, 2017 and includes
preferred stock dividends of $0.2 million accrued in the quarter
ended March 31, 2018 that were paid after the quarter end with
shares of common stock. Preferred stock dividends increased,
compared to the same quarter of the prior year, due to the issuance
of additional preferred shares in April 2017 in connection with the
acquisition of Hausmann.
Leadership Transition, Therapy Products Division
“As
we continued with our transition plans during the quarter, we
announced several leadership changes at the company that have had
or that we expect will have a direct impact on our results of
operations. We outlined the plan to begin searching for a new CEO,
with an anticipated completion of that search and transition to the
new CEO in June of this year,” said Cullimore. “It has
been my distinct pleasure to serve Dynatronics since 1979, and I am
confident that the new CEO will lead us through our continued
growth to the next level as a larger
enterprise.”
“We
also announced the hiring in the third quarter of Brian Baker as
President of Therapy Products. We are excited about Brian’s
leadership and believe he has the skills, knowledge, and experience
needed to help drive growth and profitability within that
division,” continued Mr. Cullimore. “Brian has already
implemented a stock keeping unit (SKU) reduction plan and a
targeted reduction in staff to drive profitability within the
division. Due to these changes, we expect to incur one-time
severance expense of approximately $140,000 that will be recognized
in the quarter ending June 30, 2018.”
"The
leadership changes at Therapy Products and the strategic hires at
the corporate level (including a new chief information officer and
regulatory and quality director) will strengthen the company's
management foundation and support its growth and profitability,"
added David A. Wirthlin, Chief Financial Officer. "We are excited
about the company’s prospects and look forward to building on
the progress already achieved."
Conference Call
Dynatronics has scheduled a conference call for investors on May
15, 2018, at 8:30 AM ET. Those wishing to participate should call
(877) 407-8033 or (201) 689-8033 for international
callers
.
Universal Shelf Registration Statement
Dynatronics also announced that it has filed a universal shelf
registration statement on Form S-3 with the Securities and
Exchange Commission, or SEC. While the company has no current plans
to issue securities under the new registration statement, it is
intended to provide Dynatronics additional flexibility to finance
future business opportunities through timely and cost-effective
access to the capital markets.
Once the registration statement is declared effective by the SEC,
subject to market conditions and other factors, Dynatronics may
from time to time issue various types of securities, including
common stock, preferred stock, debt securities and/or warrants, or
any combination of such securities, up to an aggregate amount of
$50 million. The terms of any offering of securities under the
registration statement would be established at the time of offering
and will be made solely by means of a prospectus and an
accompanying prospectus supplement relating to that offering.
Dynatronics may use the net proceeds from sales of securities under
the shelf registration for general corporate purposes as described
in the prospectus or a prospectus supplement.
The registration statement on Form S-3 relating to these securities
has been filed with the SEC, but has not yet become effective, and
these securities may not be sold, nor may offers to buy be accepted
before the registration statement becomes effective. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of these securities
in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.
About Dynatronics Corporation
Dynatronics
Corporation (NASDAQ:DYNT) designs, manufactures, markets, and
distributes advanced-technology medical devices, therapeutic and
medical treatment tables, rehabilitation equipment, custom athletic
training treatment tables and equipment, institutional cabinetry,
orthopedic soft goods, as well as other specialty patient,
rehabilitation and therapy products and supplies. Through its
various distribution channels, the company markets and sells its
products to physical therapists, chiropractors, athletic trainers,
sports medicine practitioners, orthopedists, hospitals, clinics,
and other medical professionals, and institutions. More information
including earnings releases and other financial information are
available at
www.dynatronics.com/investors
.
Information about the company’s products and services is
available at
www.dynatronics.com
,
www.hausmann.com
,
and
www.birdcronin.com
.
Use of Non-GAAP Financial Measures
Dynatronics’
management believes that in order to better understand the
company's short-term and long-term financial trends, investors may
wish to consider certain non-GAAP financial measures as a
supplement to financial performance measures prepared in accordance
with GAAP. Non-GAAP measures should be considered in addition to,
and not as a substitute for, financial performance measures in
accordance with GAAP. In this press release, the company has
reported non-GAAP adjusted net loss after adjusting for the impact
of one-time severance payments and related expenses in the current
period that were episodic and did not occur in the prior year. The
GAAP results are reported in the press release and in the financial
statement tables included in this press release.
Safe Harbor
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. Our actual
results could differ materially from those projected in these
forward-looking statements, which involve a number of risks and
uncertainties, including global economic conditions generally,
competitive factors, inventory risks due to shifts in market
demand, market demand for our products, and availability of
financing at cost-effective rates. The contents of this press
release should be considered in conjunction with the risk factors,
warnings, and cautionary statements that are contained in our most
recent filings with the Securities and Exchange
Commission.
The
following is a summary of the financial results for the quarters
ended March 31, 2018 and 2017 and as of March 31, 2018 and June 30,
2017:
Summary Selected Financial Data
Statement of Operations Highlights
In thousands, except per share amounts
|
|
Quarter
Ended
|
Nine Months
Ended
|
||
|
|
March
31,
|
March
31,
|
||
|
|
2018
|
2017
|
2018
|
2017
|
|
|
|
|
|
|
|
Net
sales
|
$
16,634
|
$
7,716
|
$
47,513
|
$
24,592
|
|
Cost of
sales
|
11,343
|
5,014
|
32,112
|
16,022
|
|
Gross
profit
|
$
5,291
|
$
2,702
|
$
15,401
|
$
8,570
|
|
|
|
|
|
|
|
Selling, general,
and admin. expenses
|
$
6,213
|
$
3,153
|
$
15,146
|
$
8,769
|
|
Research and
development expenses
|
242
|
231
|
1,048
|
819
|
|
Other expense,
net
|
113
|
73
|
271
|
118
|
|
Loss before income
taxes
|
$
(1,277
)
|
$
(755
)
|
$
(1,064
)
|
$
(1,136
)
|
|
Income tax
(provision) benefit
|
0
|
0
|
0
|
0
|
|
Net income
(loss)
|
$
(1,277
)
|
$
(755
)
|
$
(1,064
)
|
$
(1,136
)
|
|
|
|
|
|
|
|
Deemed dividend on
8% convertible preferred stock
|
$
-
|
$
-
|
$
(1,024
)
|
$
(376
)
|
|
Preferred stock
dividend, cash
|
-
|
-
|
(105
)
|
-
|
|
8% convertible
preferred stock dividend
|
(191
)
|
(94
)
|
(578
)
|
(271
)
|
|
Net loss
attributable to common stockholders
|
$
(1,468
)
|
$
(849
)
|
$
(2,771
)
|
$
(1,783
)
|
|
Net loss
attributable to common stockholders per share – basic and
diluted
|
(0.18
)
|
(0.28
)
|
(0.45
)
|
(0.61
)
|
|
Weighted-average
common shares outstanding – basic and diluted
|
7,962,179
|
3,022,443
|
6,135,224
|
2,914,229
|
Balance Sheet Highlights
In thousands, except per share amounts
Dynatronics
Corporation
Investor
Relations
Jim
Ogilvie
(801)
727-1755
jim.ogilvie@dynatronics.com
For
additional information, please visit:
www.dynatronics.com
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Source:
Dynatronics Corporation