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 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 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
 
 
 
 
Press Release dated February 11, 2021
 
Slide Presentation accompanying investor conference call held February 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 CORPORATION
 
 
 
 
 
Date: February 11, 2021
By:  
/s/  John Krier
 
 
Name:  
John Krier 
 
 
Title:  
Chief Executive Officer 
 
 
 
 
 
 
 
  
 
 
  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 Selected Financial Data
 
 
Statement 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 sales
 $11,968 
 $15,197 
 $24,101 
 $31,587 
Cost of sales
  8,627 
  10,611 
  16,858 
  21,847 
Gross profit
  3,341 
  4,586 
  7,243 
  9,740 
 
  27.9%
  30.2%
  30.1%
  30.8%
Selling, general, and admin. expenses
  3,938 
  4,618 
  8,183 
  9,543 
Other (expense) income, net
  (66)
  (105)
  (100)
  (236)
Income tax provision
  (10)
  - 
  (10)
  - 
Net loss
 $(673)
 $(137)
 $(1,050)
 $(39)
 
    
    
    
    
Deemed dividend on convertible preferred stock and accretion of discount
  (51)
  (109)
  (51)
  (109)
Convertible preferred stock dividend, in common stock
  (182)
  (202)
  (376)
  (369)
Net loss attributable to common stockholders
 $(906)
 $(448)
 $(1,477)
 $(517)
 
    
    
    
    
Net loss attributable to common stockholders per common share - basic and diluted
 $(0.06)
 $(0.05)
 $(0.10)
 $(0.06)
Weighted-average 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,
2020
 
 
June 30,
2020
 
Cash and cash equivalents
 $3,610 
 $2,316 
Trade accounts receivable, net
  5,068 
  4,894 
Inventories, net
  6,141 
  8,372 
Prepaid & other
  3,297 
  493 
Total current assets
 $18,116 
 $16,075 
 
    
    
Accounts payable
 $4,827 
 $3,014 
Accrued payroll and benefits expense
  1,476 
  1,205 
Accrued expenses
  1,372 
  768 
Other current liabilities
  3,345 
  1,679 
Line of credit
  - 
  1,013 
Total current liabilities
 $11,020 
 $7,679 
 
 
 
 
 
Operating Cash Flow Highlights
 
 
In thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
Six Months Ended
 
 
 
December 31,
 
 
December 31,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 $(673)
 $(138)
 $(1,051)
 $(39)
 
    
    
    
    
Depreciation and amortization
  368 
  400 
  756 
  802 
Stock based compensation
  51 
  58 
  98 
  188 
 
    
    
    
    
Receivables
  541 
  315 
  (174)
  507 
Inventory
  (237)
  (254)
  986 
  144 
Prepaid and other assets
  (361)
  (103)
  (681)
  (118)
Accounts payable, accrued expenses, and other liabilities
  1,818 
  646 
  2,698 
  1,432 
Net 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
 
 
 Exhibit 99.2