Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments in the medical device sector? Specifically, are you tracking Dynatronics Corporation (DYNT), a manufacturer of athletic training, physical therapy, and rehabilitation products? With a $32.53 million in revenue for 2024, a 19.89% decrease compared to the previous year, and a net loss of $3.43 million, a 39.47% less than in 2023, understanding the financial health of Dynatronics is crucial for making informed investment decisions. Dive in to explore the key insights that can help you navigate the complexities surrounding Dynatronics' performance and strategic direction.

Dynatronics Corporation (DYNT) Revenue Analysis

A comprehensive look at Dynatronics Corporation's revenue streams is essential for investors seeking to understand the company's financial health and future prospects. Here's a breakdown of key aspects related to their revenue performance:

Dynatronics primarily generates revenue through the sale of a variety of products:

• Capital equipment
• Treatment tables
• Consumable clinical supplies

These products cater to physical therapists, athletic trainers, chiropractors, physicians, and other medical professionals.

Analyzing Dynatronics' year-over-year revenue growth provides insights into its performance trends. According to the data from the third quarter of fiscal year 2024, Dynatronics reported net sales of $10.3 million, which is a decrease of $0.8 million, or 7.2%, compared to $11.1 million for the three months ended March 31, 2023.

For the nine months ended March 31, 2024, the Company reported net sales of $31.8 million, a decrease of $0.7 million, or 2.1%, compared to $32.5 million for the nine months ended March 31, 2023.

Here's a summary of Dynatronics' financial results for the third quarter and nine months of fiscal year 2024, in comparison to the previous year:

The decrease in net sales for the three and nine months ended March 31, 2024 was primarily attributable to decreased sales of $0.8 million and $0.6 million, respectively, in the Company’s domestic sales channel.

Understanding who is investing in Dynatronics Corporation is crucial. Dive deeper into the investor landscape: Exploring Dynatronics Corporation (DYNT) Investor Profile: Who’s Buying and Why?

Dynatronics Corporation (DYNT) Profitability Metrics

Assessing Dynatronics Corporation's financial health requires a close examination of its profitability metrics. Profitability measures how well a company generates profit from its resources. Here's an analysis of Dynatronics' key profitability indicators:

For detailed insights into the company's strategic direction, you can explore the Mission Statement, Vision, & Core Values of Dynatronics Corporation (DYNT).

Gross Profit Margin:

• Q3 Fiscal Year 2024: Dynatronics reported a gross profit margin of 23.7%.
• Q2 Fiscal Year 2024: The gross profit margin was 22.3%.
• Q1 Fiscal Year 2024: The gross profit margin stood at 24.7%.
• Fiscal Year 2024: Based on trailing twelve months data leading into late 2024, the gross profit margins remained relatively stable at approximately 29.5%.
• For the quarter ended December 31, 2024, gross profit was $1.65 million, or 22.5% of net sales.
• For the six-month period ended December 31, 2024, gross profit was $3.63 million, or 24.3% of net sales.

Operating Profit:

• Fiscal Year 2024: Dynatronics faced profitability challenges, reporting an operating loss primarily due to SG&A expenses outpacing gross profit generation.
• Operating Margin % for the fiscal year that ended in June 2024 was -6.99%.
• Operating Margin % for the quarter that ended in December 2024 was -9.14%.

Net Profit Margin:

• Q3 Fiscal Year 2024: The net loss attributable to common stockholders was $0.9 million, compared to a net loss of $1.4 million in Q3 fiscal year 2023.
• Q2 Fiscal Year 2024: Net loss was $1.0 million, compared to a net loss of $0.8 million in Q2 fiscal year 2023.
• Q1 Fiscal Year 2024: Net loss was $0.3 million, improved from $0.5 million in Q1 fiscal year 2023.
• Fiscal Year 2024: The net loss was $2.698 million, an improvement from a net loss of $4.973 million in fiscal year 2023.
• Net loss attributable to common stockholders was $3.429 million ($1.00 per share), an improvement from a net loss of $5.664 million ($1.46 per share) in fiscal year 2023.

Trends in Profitability Over Time:

• The company has shown some improvement in net loss compared to previous years, but it still faces challenges in achieving overall profitability.
• Efforts centered on optimizing operations, managing inventory, and navigating supply chain challenges within the physical therapy market. Financial results in 2024 reflected these ongoing adjustments.

Analysis of Operational Efficiency:

• The company is implementing cost-control initiatives, including reducing non-essential positions and optimizing square footage for its business segments, which are expected to yield significant cost savings.
• Dynatronics is actively working to reduce excess inventory by promoting discounted prices to convert inventory to cash, which is part of its strategy to improve liquidity.
• The company reduced expenses by approximately $400,000 for fiscal year 2025 and expects annualized savings of about $1,000,000 through various operational efficiencies.
• Management is optimizing the square footage needed for the orthopedic bracing and therapeutic modalities business segments, which could yield additional annual expense reductions of approximately $600,000.

Additional Financial Data:

• Total annual revenue hovered around $57.5 million based on trailing twelve months data leading into late 2024.
• For the third quarter ended September 30, 2024, the company reported net sales of $7.4 million and a gross profit of $1.9 million, representing a gross margin of 25.7%.
• The company reaffirmed net sales guidance for fiscal year 2024 of $34 million to $37 million.

Revenue Breakdown:

• Physical Therapy & Rehabilitation Products: Approximately 80% of total revenue (stable).
• Other Distributed Medical Products: Approximately 20% of total revenue (stable).

Net Sales:

• Net Sales: $32.534 million, a decrease of $8.075 million or 19.9% compared to fiscal year 2023.

Major Customers:

• In fiscal year 2024, three major customers were responsible for 13.0%, 12.7%, and 12.7% of total net sales.

Balance Sheet Highlights:

• As of June 30, 2024, the company had $484,000 in cash and cash equivalents.
• As of December 31, 2024, Dynatronics had $791,000 in total cash.

Operating Margin % Calculation

Dynatronics's Operating Margin % for the fiscal year that ended in Jun. 2024 is calculated as:

Operating Margin % = Operating Income (A: Jun. 2024) / Revenue (A: Jun. 2024) = -2.273 / 32.534 = -6.99%

Dynatronics's Operating Margin % for the quarter that ended in Dec. 2024 is calculated as:

Operating Margin % = Operating Income (Q: Dec. 2024) / Revenue (Q: Dec. 2024) = -0.667 / 7.3 = -9.14%

Financial Ratios

Here's a table summarizing key financial ratios for Dynatronics Corporation:

Revenue Segments:

For the six months ended December 31, 2024:

• Physical Therapy and Rehabilitation Products generated $8,244,040 in sales.
• Orthopedic Soft Bracing Products brought in $6,608,853.
• Other products accounted for $49,580.

Net Income:

Net Income In Thousands, USD:

• TTM: (2,497)
• FY 2024: (2,698)

EBITDA:

EBITDA In Thousands, USD:

• TTM: (829)
• FY 2024: (976)

Revenue:

Revenue In Thousands, USD:

• TTM: 29,933
• FY 2024: 32,534

This data provides a comprehensive view of Dynatronics' recent financial performance and its efforts to improve profitability through strategic initiatives and cost management.

Dynatronics Corporation (DYNT) Debt vs. Equity Structure

Understanding how Dynatronics Corporation finances its operations and growth is crucial for investors. This involves examining the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity funding.

As of the quarter ended March 31, 2024, Dynatronics Corporation reported the following debt details:

• Total current liabilities: $7.23 million
• Total liabilities: $13.89 million

Dynatronics' liabilities consist of both short-term and long-term obligations. Short-term debt includes accounts payable, accrued expenses, and any portion of long-term debt due within one year. Long-term debt represents obligations extending beyond one year, such as loans and capital leases. As of March 31, 2024, Dynatronics had total assets worth $21.98 million.

The debt-to-equity ratio is a key metric used to assess a company's financial leverage. It indicates the proportion of debt and equity a company uses to finance its assets. A high ratio suggests the company relies more on debt, which can increase financial risk. As of March 31, 2024, Dynatronics' debt-to-equity ratio can be derived from its total liabilities and total equity. Given total liabilities of $13.89 million and total equity of $8.09 million, the debt-to-equity ratio is approximately 1.72.

To provide context, it's helpful to compare Dynatronics' debt-to-equity ratio to industry standards. The medical equipment and supplies industry, in which Dynatronics operates, can have varying norms depending on the specific sub-sector and the size of the companies being compared. A general benchmark might consider a debt-to-equity ratio of around 1.0 or lower as conservative, while ratios above 2.0 could indicate higher leverage. Dynatronics' ratio of 1.72 suggests a moderate level of leverage within this context.

Information regarding recent debt issuances, credit ratings, or refinancing activities can offer insights into Dynatronics' financial strategy and creditworthiness. Investors often monitor these activities to understand how the company manages its debt obligations and capital structure. As of the latest updates, specific details on recent debt issuances, credit ratings, or refinancing activities were not prominently featured in the provided search results.

Dynatronics balances debt financing and equity funding to optimize its capital structure. Debt financing can provide capital for growth initiatives and operational needs, while equity funding can strengthen the balance sheet and reduce financial risk. The company's approach to balancing these two forms of financing impacts its financial flexibility and overall stability. As of March 31, 2024, the company’s balance sheet shows:

• Total equity: $8.09 million

This indicates the portion of the company financed by equity, reflecting retained earnings and shareholders' investments.

Here is a summary of Dynatronics' key financial data as of March 31, 2024:

For further insights into Dynatronics Corporation, consider exploring their investor profile: Exploring Dynatronics Corporation (DYNT) Investor Profile: Who’s Buying and Why?

Dynatronics Corporation (DYNT) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Dynatronics Corporation (DYNT), assessing these metrics provides valuable insights into its financial stability and risk profile. Here's an analysis of Dynatronics' liquidity, working capital, and cash flow trends, alongside potential concerns and strengths. Further insights into the investor profile of Dynatronics can be found at: Exploring Dynatronics Corporation (DYNT) Investor Profile: Who’s Buying and Why?

Assessing Dynatronics Corporation (DYNT)'s Liquidity:

A company's liquidity position is typically evaluated using the current and quick ratios. These ratios measure a company's ability to cover its short-term liabilities with its short-term assets.

• Current Ratio: The current ratio is calculated by dividing current assets by current liabilities. A higher current ratio generally indicates a stronger liquidity position.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more conservative measure of liquidity. It excludes inventory from current assets, as inventory may not be easily converted into cash.

Analysis of Working Capital Trends:

Working capital, defined as current assets minus current liabilities, is a crucial measure of a company's operational efficiency and short-term financial health. Trends in working capital can indicate whether a company is effectively managing its resources.

Monitoring trends in working capital involves examining changes in its components:

• Accounts Receivable: A rise in accounts receivable could signal revenue growth, but also potential issues in collecting payments.
• Inventory Levels: Changes in inventory levels can indicate shifts in sales demand or production efficiency.
• Accounts Payable: An increase in accounts payable might suggest better management of supplier payments or potential cash flow constraints.

Cash Flow Statements Overview:

Cash flow statements provide a detailed look at how a company generates and uses cash through its operating, investing, and financing activities. Analyzing these cash flow trends can reveal important insights into Dynatronics' financial health.

• Operating Cash Flow: Positive operating cash flow indicates that a company is generating enough cash from its core business activities to cover its expenses and invest in future growth.
• Investing Cash Flow: Investing cash flow typically involves the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Cash Flow: Financing cash flow relates to activities involving debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

When evaluating Dynatronics' liquidity position, it's essential to consider both potential strengths and weaknesses.

• Strengths:
  • Healthy cash reserves.
  • Efficient working capital management.
  • Positive operating cash flow trends.
• Concerns:
  • High levels of debt.
  • Negative trends in operating cash flow.
  • Declining current and quick ratios.

Dynatronics Corporation (DYNT) Valuation Analysis

Assessing whether Dynatronics Corporation (DYNT) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, and analyst consensus.

Currently, information on specific P/E, P/B, and EV/EBITDA ratios for Dynatronics is limited. Accessing real-time financial data from reputable sources is essential for an accurate valuation. As of now, comprehensive data for these metrics relevant to fiscal year 2024 is not readily available.

To determine whether Dynatronics is overvalued or undervalued, consider the following:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation if it's significantly above the industry average, whereas a lower P/E could indicate undervaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A P/B ratio less than 1 may suggest the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is often used to value companies with significant debt. A lower EV/EBITDA ratio compared to peers could indicate undervaluation.

Analyzing Dynatronics' stock price trends over the last 12 months (or longer) can provide insights into market sentiment and historical performance. Recent data indicates:

• On April 18, 2024, Dynatronics' stock closed at $1.44.
• The 52-week high was $1.74, and the 52-week low was $0.86.

These figures suggest considerable volatility and potential opportunities depending on an investor's risk tolerance and investment horizon.

Dynatronics does not currently offer a dividend yield, so dividend payout ratios are not applicable.

Analyst consensus on Dynatronics' stock valuation is mixed. It's important to consult multiple sources and consider their rationale. Keep in mind that analyst ratings can vary widely.

For a deeper dive into Dynatronics Corporation, explore: Exploring Dynatronics Corporation (DYNT) Investor Profile: Who’s Buying and Why?

Dynatronics Corporation (DYNT) Risk Factors

Understanding the risks facing Dynatronics Corporation (DYNT) is crucial for investors. These risks can stem from both internal vulnerabilities and external pressures, impacting the company's financial stability and future prospects. Key areas of concern include industry competition, regulatory changes, and overall market conditions.

Industry Competition: The landscape for medical devices and equipment is intensely competitive. Dynatronics faces pressure from both larger, established players and smaller, innovative companies. This competition can impact pricing, market share, and ultimately, profitability.

Regulatory Changes: The medical device industry is heavily regulated. Changes in regulations, whether related to product approvals, manufacturing standards, or reimbursement policies, can create significant challenges. Compliance costs can increase, and delays in product launches can occur.

Market Conditions: Economic downturns or shifts in healthcare spending can affect demand for Dynatronics' products. Additionally, changes in healthcare delivery models or insurance coverage can impact the company's revenue streams.

To delve deeper into Dynatronics Corporation's financial health and strategic insights, explore: Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors

Recent earnings reports and filings may highlight specific operational, financial, or strategic risks. These could include:

• Operational Risks: Manufacturing disruptions, supply chain issues, or product recalls can negatively affect Dynatronics' ability to meet customer demand and maintain its reputation.
• Financial Risks: Debt levels, cash flow constraints, or difficulties in securing financing can limit the company's financial flexibility and growth potential.
• Strategic Risks: Unsuccessful acquisitions, failure to innovate, or inability to adapt to changing market dynamics can hinder Dynatronics' long-term success.

While specific mitigation strategies are not detailed here, companies typically employ various tactics to address these risks. These may include:

• Diversifying product lines to reduce reliance on specific markets or products.
• Investing in research and development to maintain a competitive edge.
• Implementing robust quality control processes to minimize product defects and recalls.
• Strengthening relationships with suppliers to ensure a stable supply chain.
• Maintaining a strong balance sheet to provide financial flexibility.

Dynatronics Corporation (DYNT) Growth Opportunities

Several factors could influence the future growth of Dynatronics Corporation (DYNT). These encompass product innovations, strategic market expansions, and potential acquisitions.

Analysis of key growth drivers:

• Product Innovations: Dynatronics has a history of integrating advanced technology into its products. For example, they were the first to integrate infrared phototherapy into a combination therapy device and introduced the ThermoStim probe. Continued investment in research and development is expected to result in new product introductions that promote sales and profitability. The company maintains academic research partnerships to drive product innovation.
• Market Expansions: Dynatronics utilizes a hybrid distribution model, combining direct sales with a dealer network, to achieve broad market coverage. The company focuses on strengthening partnerships with key strategic accounts and delivering a superior customer experience.
• Acquisitions: Dynatronics has strategically used acquisitions to expand its product portfolio and distribution coverage. Past acquisitions, such as Bird & Cronin, Inc. and Hausmann Industries, have expanded the company's product offerings and increased annual revenue. The company is actively pursuing merger and acquisition opportunities in core markets.

Future revenue growth projections and earnings estimates:

Dynatronics faces several challenges that could affect revenue growth and earnings, including:

• Demand and Customer Relationships: Lowered revenue guidance reflects ongoing challenges in demand and customer relationships.
• Operational Challenges: The company faced a reduction in overall volume for OEM customers and a general reduction in demand for the orthopedic soft bracing product category, impacting sales performance. Net sales for the quarter ended December 31, 2024, were $7.3 million, a 10.4% decrease compared to the same quarter last year.
• Net Losses: Dynatronics has experienced recent financial pressures, reflected in a net loss of $3.4 million during the first nine months of fiscal year 2024. The net loss for fiscal year 2022 was $4.0 million.

Strategic initiatives or partnerships that may drive future growth:

• Strategic Alliance with Zimmer MedizinSysteme: Dynatronics has an exclusive distribution agreement with Zimmer for select therapy equipment in the United States. This partnership provides Dynatronics customers with a complete range of modality products.
• Cost Reduction Initiatives: The company has reduced expenses by approximately $400,000 for fiscal year 2025 and expects annualized savings of about $1,000,000 through various operational efficiencies.
• Facility Optimization: Management is optimizing the square footage needed for the orthopedic bracing and therapeutic modalities business segments, which could yield additional annual expense reductions of approximately $600,000.

Competitive advantages that position the company for growth:

• Established Brand Recognition: Decades of operation have built trust and familiarity among healthcare professionals.
• Comprehensive Product Offering: The company provides a wide array of equipment and supplies, serving as a single source for many clinics.
• Hybrid Distribution Model: Combining direct sales with a dealer network allows for broad market coverage and penetration across different customer segments.

Dynatronics leverages several key strengths to compete effectively in the rehabilitation and physical medicine market. The company's future growth depends on navigating supply chain pressures, capitalizing on demographic trends favoring rehabilitation services, and effectively managing competition.

To gain a deeper understanding of the company's guiding principles, explore the Mission Statement, Vision, & Core Values of Dynatronics Corporation (DYNT).