Dynatronics (DYNT) Stock: Why It Fell 3.56% Today

By Amit Chowdhry ● Sep 22, 2022
  • The stock price of Dynatronics (DYNT) fell by 3.56% today. This is why.

The stock price of Dynatronics (DYNT) fell by 3.56% today. 

Why: Dynatronics reported financial results for its fourth quarter and fiscal year ending June 30, 2022, and provided an update on recent business highlights.

Q4 FY ’22 Financial Highlights

— Total net sales of $11.2 million.

— 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.

— Gross profit margin of 24.1% in FY ’22 from 27.0% in FY ’21.

— Net loss of $4 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. And the midpoint of this range is a 5% improvement relative to the $44.3 million in 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.

— Plus Dynatronics is continuing its recent practice of not providing gross margin guidance given the persistent inflationary pressure, ongoing impacts of COVID-19, and supply chain challenges. And 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. And 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.

KEY QUOTES:

“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. 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.” 

— John Krier, Chief Executive Officer of Dynatronics