DYNT share: why it has increased today

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  • Dynatronics Corporation (NASDAQ: DYNT) share price rose more than 10% this morning. That’s why it happened.

The share price of Dynatronics Corporation (NASDAQ: DYNT) – a leading manufacturer of athletic training, physiotherapy and rehabilitation products – rose more than 10% this morning. Investors are responding positively to Dynatronics’ fourth quarter and full year 2021 financial results.

Product sales in Fiscal Year ’22 will represent the products the Company plans to offer in the future as the optimization initiatives announced on April 22, 2021 were substantially completed in Fiscal Year ’21. And net sales are on track to reach around $ 11.5 million to $ 12.0 million for the first quarter of fiscal ’22, surpassing the benchmark quarterly net product sales figure of $ 9.25 million. set in April 2021 and $ 9.8 million in continuing product net sales in the fourth quarter of fiscal ’21.

The company expects that, assuming continued growth in litigation volume despite the recent surge in COVID-19, fiscal year ’22 net sales will be between $ 40 million and $ 45 million. The midpoint of that range is a 15% improvement from the benchmark of $ 37 million in annual net sales of continuing products established in April 2021. And the company expects the distribution of net sales to quarters of fiscal 22 aligns with historical trends, which have tended to be somewhat higher in the first and fourth quarters and lower in the second and third quarters. There may be some variability in this model as the company adapts to order models in its rehabilitation market given the shift to an exclusive dealer-based sales model.

The company aims to improve gross margin, operating income and operating cash flow over time. And in the absence of significant impacts from the COVID-19 outbreaks, the company expects these financial metrics to improve in FY ’22 compared to FY ’21, at exclusion of notable events of other income occurring in the fourth quarter of fiscal year ’21.

Selling, general and administrative expenses are expected to represent 30-35% of net sales in the first quarter of fiscal year ’22. Other income is expected to include an employee retention credit benefit of approximately $ 0.6 million in the first quarter of fiscal ’22.

The company and its customers expect to face ongoing challenges from COVID-19, including higher delivery and shipping costs, supply chain disruptions, and extended processing times. And Dynatronics also expects some continued volatility in the company’s business optimization.

Key financial highlights

– Total net sales of $ 12.2 million and gross profit margin of 19.1% (GAAP results).

– Continued net product sales of $ 9.8 million (non-GAAP financial measure).

– Net income of $ 2.9 million compared to a net loss of $ 2.3 million in the same quarter last year.

Notable events in the fourth quarter of fiscal year 21:

– Cost of sales and general and administrative expenses collectively affected by $ 1.0 million in costs related to optimization activities.

– Other income benefited from the cancellation of the PPP loan of $ 3.5 million, the employee retention credit of $ 0.9 million and the gain of $ 0.8 million on the sale of the former Tennessee manufacturing plant.

– No debt, zero line of credit balance and borrowing base of approximately $ 5.0 million at the end of the fourth quarter of fiscal ’21.

– Cash position of $ 6.1 million at the end of the fourth quarter of Fiscal ’21, the highest cash position in recent years.

– Dynatronics defines continuing net product sales as sales in the fourth quarter of fiscal ’21 on products that the company plans to continue to offer to customers in fiscal ’22.

Financial highlights for the year ’21

– Total net sales of $ 47.8 million and gross profit margin of 27.0% (GAAP results). Excluding the optimization exit activity costs of $ 0.5 million, the fiscal year 21 gross profit margin on total net sales would have been 28.0% (non-GAAP financial measure) .

Guidelines for the year ’22

– Forecasts of customer and dealer demand have given the company the confidence to launch net sales forecasts for fiscal year ’22.

KEY QUOTE:

“Customer and dealer reaction to Dynatronics’ optimization strategy has confirmed the changes and decisions we made in April 2021, and our transformation remains the top priority. Forecasting customer and dealer demand gave us the confidence to initiate revenue forecasting. We expect good progress in fiscal year ’22, with revenues benefiting our growing markets as we work to improve margins and create long-term value for our shareholders. “

– John Krier, CEO of Dynatronics

Disclaimer: This content is intended for informational purposes. Before you make an investment, you need to do your own analysis.

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