DYNT - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Dynatronics Fourth Quarter 2019 Earnings Call. [Operator Instructions]. At this time, it's my pleasure to turn the floor over to Mr. Brian Baker, CEO. Sir, the floor is yours.

Brian Baker

you in thank call. and morning, for today's participating Good with Executive our I'm Chief and me Wirthlin. Brian Baker, David Officer is Officer, Chief Financial results XX, XXXX. press announcing quarter a this full of financial and June issued fiscal our ended We year fourth release the morning for a David financial I'll over provide I'll it commentary brief Today, report. then and turn to a I'll follow fiscal XXXX year. up this by our providing guidance on have for we'll conclusion, the questions. the the lines operator At phone open

safe harbor of I the will our to laws. you ask the now reliance under David remind securities federal on

David Wirthlin

you, Brian. Thank

of Before to we financial the risks involve our we differ forward-looking begin, our our results let you that today cause uncertainties and those our that are discussed by and as to filed morning. actual factors forward-looking results differ regarding place relating performance me materially will only, cause course during remind These and current statements those projections reflect business. call, revise they this We of plans, from that could Important to expectations, with this in the our from statements no forward-looking included undertake forward-looking to or make could our obligation and most on not we recent statements SEC. materially other today. undue to you XX-K We make statements. implied reports actual statements forward-looking or caution update projected reliance today view

Brian Baker

expanded make years. I operations company to was Tennessee. I By introduction, legacy Dynatronics this May and year, the of I've about David. a joined the direct I Officer. way and Operating transition In my X.X you, February with with and lead Utah focused Thank to XXXX a been vendors in working Chief in time Dynatronics' each to role of for leaders evolution I and company fostered force natural CEO my sales inside believe have of will employees, the operational our outside of key for distributors, customers. my at deal our locations. relationship great

year Lifesciences Global nearly of for new sites, many sold XXXX. Southern operational My Industries, on in was part my and that experience Integra operated Integra Early grew I I and spinout I Dynatronics, was shareholders XX relationships our the joined called our Operations consolidated the Head of years leadership systems XX, I business California. Integra Physician in of company develop distribution time at fiscal Today, I and a to which acquired our the for organization. with Before and I largest Integra June from two the me before SeaSpine we report information team and career, with established to fourth ended directors, providing Lifesciences. are Prettybrook enabled Partners. shareholder, including since quarter management

by Let me few highlights. focusing on a start

the are our recent business quarter sales we on sales fiscal First, our provided last that we in year are most delivered and guidance. pleased and strive forecast to on accurately, with we the We line fourth guidance call. the

significant operating been Second, we in improve approximately fiscal reduce expenses operational made to enabled that by $X.X have XXXX. to us and costs. and organizational We've operational reduce ongoing effectiveness improvements million working

XXXX. fiscal in collections. the affected cash negatively working quarter. had to This increases our the of operations from short-term In timing in flow and cash related flow sourcing quarter, positive generated the company international fourth the for Third, we capital

generated we the for flow. However, cash year, positive full $XXX,XXX in operating

restorative aim and focus performance operational overall continue improving remains will recognized solutions. our to the to become steady. We achieve our be Our for term, the strategy in near the stated In company to standard guidance. our

provide a financial report. now will David

David Wirthlin

physical therapy a to prior million year. direct primarily to decrease products XXXX, to quarter of ended now The both rehabilitation or the reduction June the pleased for to due of $XX.X am I $X.X everyone. quarter review and sales and results. was performance million our Net the in morning, good during compared channels. decreased the financial same cover in X.X% and in the and $XX.X quarter XX, briefly our Brian, Thanks, year-end million dealer the sales

Gross compared in decreased same prior profit to primary $X for the percentage approximately the was XX.X% to XX.X% quarter sales in to XX.X% profit. $XXX,XXX cause the the sales the decrease, of contributed sales or XX.X% profit quarter from million of of in decrease gross the representing gross or reduction reducing year. gross $X.X X.X% million, Lower The $XXX,XXX. $XX,XXX margin by to of about

approximately prior selling development, for primarily of million and decrease year. $X.X general or in compared fixed includes and salaries Selling, and quarter $X.X $XXX,XXX of expenses, the a development included of decrease which decreased the other decrease general The $XXX,XXX of to XX.X% of lower the administrative and to in lower research quarter expenses. million lower administrative $XXX,XXX, and $XXX,XXX in research a management and sales expenses consisting commissions, same expenses

the approximately $XXX,XXX Net the of loss same net in of loss compared to for prior year. quarter was $XXX,XXX quarter the

few a year, points. fiscal the For highlight just I'll

guidance Brian on fiscal year sales sales most our million. as with $XX.X delivered noted, we recent First, of XXXX

we improved by our decreased loss we $XXX,XXX. SG&A by Second, $X.X and net operating And by profitability million third, improved $XXX,XXX. expenses our

of As XX, $XXX,XXX. we of XXXX, June had approximately cash balances

of asset-based We which elevated. credit, worth credit pursuant balance to have million is It line we that June noting $X.X million. the of XX was an had $XX borrowed line somewhat

operating base. accounts to This working line credit flow negative of capital fourth the the XXXX, to reflects and on the cash flow June approximately million since balance currently decrease million. quarter. September about our We have decreases in on expect in of XX, We activities from operating positive current offsetting based our cash $X.X availability $X.X borrowing XX, our

results. operating Brian. turn This concludes our to now of the back I will time summary

Brian Baker

David. you, Thank

sales of $XX be for net XXXX, to million $XX terms consolidated guidance our in we of million. to the expect fiscal range In

revenue our between We given fee trends. of align to have distribution the expect historical guidance. quarterly We with quarters not historically

fiscal expect XXXX two with years, first activities volatility past capital million complete, to the the we to to net Consistent nearly in expect based with of positive quarter from fiscal in However, range working can flow we some in quarters we quarter sales million. operating on be generate changes. with say fiscal the $XX.X $XX.X cash

to XX% for margin of We to about gross there We or be in improve of charges. of believe opportunity financial the million all metrics. continues expect approximately be XX% SG&A noncash including current to in be sales to year, and in our $X.X X% sales fiscal range the

The number of common XX, million. June XXXX, outstanding shares X.X as approximately was of

the impact We current to per on expect potential is statements include our XXX,XXX in uncertainties increase any risk does All is other guidance guidance with of not our outstanding operations also by and forward-looking approximately contained Again, based shares to subject quarter. the and our acquisitions. factors this SEC. and filings

on Dynatronics, I about grow the in markets and optimistic time we with am our of the the opportunity future reflected serve. As my I've company to have we

market, and that but are for brands have on right I These operations will We structuring confident the in to the in reputation our with strong am changes financial long-term reflected we fully the some require we statements, success. excellent be path. patience are

We deliver to continue our will back to on stated execute growth the on and steps necessary to bring guidance. to business the

appreciate investor products by and ongoing our providing and effectively support. our optimal thank accelerate to We base restorative We're health. serving employees that their committed customers for

over it turn questions. to for operator now the will I

Operator

go first Capital. Scott Henry to We'll Instructions]. Roth with [Operator

Scott Henry

questions. couple A of

growth, organic that first or from of in be created comps, the because going starting should through revenue The -- half, still an for about standpoint, should think XXXX sort comps organic we factoring of that's in growth albeit, but be some is rationalization. difficult thinking year? had growth the to which XXXX the not least of question a this about up but we rationalization how the modest you're at after some XXXX, is, some of First, rationalization revenues in against

David Wirthlin

Yes. you our there And morning. far looking got a We numbers [ph] be see in enhance back continue your you plan that relationships. to is our what that like nice tactical hear do can on, provided. [current] we we we those Coming to guidance hit Scott, at on some is. customer work place reflect the call we areas guidance more and as to revenue, would I good believe to that it's question, this to as to

brand and market, the a we our distribution dealers. For example, leveraging national having and regional expand position and are that respected product in establish to of have distributors to we well-known advantage

Scott Henry

Okay.

Another it's past? margins still as we target term? improving think think to gross those gross sort outlook long you XX% think about goal of we a the even question in high for How flattish guidance. XXXX I and do somewhat should And about the XXXX of in margins, with as heard that? How regards corporate I've should

David Wirthlin

recent you Yes. plans was to want [current] have guidance. our would on guidance would on go at term, just how again by as what look I, controlling look how our than costs it our short guidance our we how margins further that beyond you look protecting and are. I really the in as, to reflected and wouldn't profitability, in back [ph] margins out And our and Scott, we at we're refer

Scott Henry

Okay. final think you I if additional surprised should the but and to a how about far announce out deal we looking in Or is recognize are a the today, do the I'm guess the didn't you there? be have environment sense don't as in mean you for XXXX? get anything acquisitional you I acquisitions. what question, environment would I trying like as process just where of to and

David Wirthlin

Yes. Sure.

to that the a up have continue have we companies of list. that strong built over we and We pipeline years, to add

would stages a continue discussions value-oriented and maintain of look regard several of various We as ourselves approach I to are we at it our with steady we And those to companies. acquisition strategy, as in buyers.

Operator

And we'll [Operator go with Aegis Nathan Weinstein next to Capital. Instructions].

Nathan Weinstein

you comment organization that to them Hausmann, Bird in Do how the had Cronin a of those couple for performing in consummated on and are any & the make have you've years? are Just XXXX. on acquisitions now those

David Wirthlin

don't Thanks of report I moved kind structure, of question. a for is performance organizational the pleased away level, the this with we've can from Nathan, acquisitions. of divisional say and that We we're but division those Dave. both on

Nathan Weinstein

question following up on the just you pipeline. prior the acquisition discussing were where And

a sort you more anecdotal have looking make make on you money for multiples their comments just in about maybe the for, any Do people guess, Are environment? I If risen? acquisition can you the space the environment? comment the companies? could of Have

David Wirthlin

historically. those we're I reiterate, stages is Nathan, don't think we're we the in It just with still environment I'll various with with. that companies last Yes. engage talking over again, conversation And year. changed that did companies of pipeline the the has

Nathan Weinstein

goal as last that the business? million the question have, being guys are is for just still thinking $XXX attainable something then that the I you revenue And of Okay. XXXX, for of

David Wirthlin

Yes.

plan. all, we Our Nathan. at strategic has the changed current that focus strategy there year in We out not five our maintain put

as strategy We organically margin. expand to and And solution, and as our that we acquisitions the recognized become well. at to objectives to want we for continue again, are do part in the of opportunities stated look growth we looking standard grow restorative to look

Operator

be like Mr. to Instructions]. at to this the call any for turn comments. Baker, back [Operator time. there you appears I'd further no closing to questions over

Brian Baker

your Thank you for Dynatronics. questions the interest for and in

Relations further Jim direct you the any to have call. contact, them questions, you If our may please Ogilvie. end Investor Operator,

Operator

participation. gentlemen, Thank you. and conclude And We this today's ladies teleconference. appreciate does your

have You and time, your lines a this great may disconnect at day.

Dynatronics (DYNT) 25 Sep 192019 Q4 Earnings call transcript