DYNT - Earnings call transcript Q4 2020

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Operator

Good day, ladies and gentlemen, and welcome to your Dynatronics Fourth Quarter 2020 Earnings Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, John Krier, President and CEO. Sir, the floor is yours.

John Krier

Good morning, and thank you for participating in today's call. I'm John Krier, President and Chief Executive Officer. our Officer, is Black. me with Principal Skyler Accounting And XX, announcing release results and We June press morning, full the ended quarter issued a fiscal this financial fourth of year XXXX. our brief commentary, I it to for Skyler provide Today financial and over report. will a I will then turn a the the At open we questions. for have will lines conclusion, operator the phone federal I the Safe on will our securities of laws. reliance now ask you Skyler under to the remind Harbor

Skyler Black

you, John. Thank

of to you plans, Important filed view other Before discussed from we These included results today this results performance differ we course in or cause those me actual statements they most that materially during regarding call, expectations, factors reflect remind as and make SEC. current that differ could relating only, by and recent begin, could projections today. involve statements reports forward-looking our materially from business. implied are today with forward-looking our statements will to the and let the projected risks of our financial those to our that our forward-looking cause and our actual uncertainties XX-K

forward-looking you reliance on make risks addition, the to pandemic In the statements. We We undertake the morning. not this update on undue caution revise impact business to and to place forward-looking or COVID-XX statements results. we of the related uncertainties that obligation no

John Krier

Officer, X Baker months. year, Chief expanded Leader. to lead the COVID-XX Brian Commercial By of to role Financial of been joined way Dynatronics introduction, Chief I President Skyler. July health and this and you, due for in have In Officer Thank the Executive to this was March as I company as lingering resigned Dynatronics issues. year my of with

months, organization the Over I my pandemic. leading great events time focused our of unprecedented of through global have these a the deal X initial

quarter each our remaining brands other tremendous to taking sites across have events of and June teammates, care a Our ended customers. XX, are report fiscal Today, committed to we adapting and our changing year of providing XXXX. been and and fourth employees our all continuously on

by over revenue have that concerning net fiscal to from our and the start fourth nearly of focusing which sales to sequential XX% disclosed XX% experienced key momentum. then July, we the our when positive me revenue fiscal finished compared Let fiscal fiscal approximately Since a prior QX year XX% in in XX% in few XXXX. period XXXX the same the experienced and XXXX continued our August same updates. XXXX, net the year July XX% our reduction a year in of discuss we to revenues, XXXX XXXX, quarter disclosure period. are we to for XXXX compared lower April improvement April XXXX, disclosures, year sales on early was additional period updates than

Given the continue ongoing pandemic, markets guidance. uncertainty the our will we to in due COVID-XX to suspend

and significant to continue We to costs take operating profitability scalability. reducing increasing by improve actions

Chattanooga, facility. First, decision year, of in close we the announced Tennessee June to our this

and Minnesota, XXXX, Jersey being XXXX. X, We is on we provider, operations with a logistics transition New executed Tennessee completed to and commenced agreement Operations for facilities service Outsourcing mid Millstone third-party manufacturing the inventory July on have Medical from transferred our operations existing have a to transferred of final September we in distribution Millstone and schedule.

months the our pursue to additional the in coming generate liquidity our to sale to We Chattanooga goals. flexibility continue facility of

cost cumulative to ongoing operational to costs enabled Second, effectiveness operating of expenses. company. the reduce us our have we reductions effect continue across and reduce improve The

as enabled has $XXX,XXX the and improvements, flow efficiencies, future. our plan. and the operating Third, program despite capital The working in the Dynatronics period uncertain to in this the from SBA a stabilize ATM stock operations proceeds of sale paycheck reductions company significant effect prepare loan working time executed cumulative protection the generated QX, for cash revenue employees in capital COVID-XX due of to positive

strategy steady. for overall the Our company remains

markets Our we focus our continues our opportunities now for a Skyler products. to balance will report. provide the uncertain and environment financial with present in business see the

Skyler Black

lower margin gross or to the XX.X% quarter from contributed prior the year. $X.X a Selling, of the to financial million, or and $X.X I sales million and prior and the the due $X.X same or am management primarily of to the ended to included about a sales the of in COVID-XX John. of XX.X% related year. quarter, year. profit. a prior loss percentage elective quarter million Net results. $X reduction XXXX to XX.X% same $X.X expenses The gross year and administrative general quarter the personnel quarter on in XX, million selling million to sales for Lower of $X.X expenses compared administrative in general cause million the year. loss decreased expenses to cover decreased million profit the other of to to costs. as million million million reduction million. decrease due decrease compared in in of was by sales June Thanks, quarter decrease pleased for to compared to $X.X $XX.X in or procedures. of in the $X.X $X.X approximately the primarily review briefly were $X.X representing sales performance XX% sales XX.X% approximately The to the net same lower during end in $X.X restrictions for the and for million decrease compared and quarter of result the prior of gross decreased Net to lower same decrease profit of The quarter approximately reducing salaries XX.X% fixed million holds stay-at-home million $X.X primary was quarter lower $X.X commissions, the the Gross the $X.X XX.X% million

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

of outstanding an line on $X.X credit June and of cash balances our we As balance million of XX, had million. XXXX, approximately of $X

line. have currently have of currently no line approximately we line into that current million of $XX we that borrowing We taking availability The of XX.X $XX.X the and total and on approximately credit, as borrowings $X.X the was million. based the XX.X under base account common XX, has million and June our of preferred The common shares approximately on million. have shares XXXX including is shares million company outstanding an asset-based outstanding currently number

results. approximately This the We our by now price. shares expect call will of increased our turn back I outstanding share to is dependent our which per on XXX,XXX operating concludes summary John. quarter,

John Krier

Skyler. for last X These opportunities tremendous and challenges you, Dynatronics. Thank have months provided

execute market, each ongoing focused have questions. and our dedicated on highlighted a other and will Despite together. approach our opportunity turn employees to continue me market to their customers, investor and we disciplined have now reshaped energies to footprint, we present advantage our look our for has the over of strong thank take committed employees Our and opportunities as brands this employees operating Dynatronics for and care operator base business. will support. operating taking of our We uncertain appreciate themselves. it they I for the to and

Operator

Weinstein go Aegis. take Thank Please our you. [Operator Instructions] first question with ahead, sir. from We'll Nathan

Nathan Weinstein

taking and my John questions. morning, for Skyler. Good Thanks

John Krier

Good morning, Nathan.

Nathan Weinstein

morning. Good

product just year? portfolio? if of demand as of come been the curious it's part Just into we firstly, a equipment, trend the personal the your how kind And has of back protective if so, material half

John Krier

local portion supplied We our in of selected have do portion it's overbed a a not such Minnesota certain our and significant or providers facilities we limited than other portfolio. sales as pop-up of Hausmann face division for tables overall large or that's on masks that with partners. a of business. for our products that, Yes, basis, out temporary for our not But

Nathan Weinstein

it. largely going as the And that to the comes you think intact in on so a there. that meet your Got demand good question, back footprint described distribution on that then changes the side, position and and Thanks. Is relationships just forward? revenue demand second you manufacturing you're with

John Krier

Yes, that's correct.

ramp or We the dial that ability different factors that have back up on the seeing in that based to we're market. the

with in So operating executed the footprint we've like that different we changes the business. do our

Nathan Weinstein

And one question Thanks. it. me. just Got for then final

could potential any exciting interesting new there's products if that guys? curious see you you coming new or products in, be Just for

John Krier

evaluating changing a may continue evaluating may as of but we'll certainly constantly as we're result We a and especially for what we this that, that to constantly be demands understand different certain term. or look view don't have portfolio different We're longer continue that with point, COVID-XX, not products. to to at

Nathan Weinstein

John. taking Thanks lot my Okay, for a questions.

Operator

We'll take our next Please with Maxim Group. question Vendetti from go Anthony ahead.

Anthony Vendetti

about Thank some you. just wondering, initiatives. I you’re was reduction SG&A talking obviously

XX% be, July bit on better of same XX% of to more sales a last you that on would [technical August right about to are were magnitude those either in a where basis now just Just a year of could during a Because little bit percentage and months. get try that the to what right? little sales difficulty], if outline

how wondering you're just the was rightsizing SG&A? I So

John Krier

a I would absolutely. Yes, couple different do of things.

and at business. when QX, we in look earnings our reductions if So the you had the we about made call, talked we permanent QX QX

approximately And year. into was million gross $X.X QX so from going the it change to QX a

if to the salaries at The was you costs. QX for revenue. made, that, about at lower QX, of our changes about And talked large running also of looked to volume we've with We was overall facilities. example, SG&A prior our Tennessee and that related XX% commission

So a points. to to plan -- have certainly continue get back to to look we those

Anthony Vendetti

of revenues XX% be about To SG&A? in total

John Krier

QX for had we what QX. That's and

Anthony Vendetti

Okay.

there used pipeline. opportunities at new of focused just been you -- have to pipeline? opportunities to know on the you fewer opportunities? a back of look stated seeing business opportunities products, on COVID, probably terms terms you the horizon, how of in in trying just then I then those you because or be are or more But you're And even burner, getting are an seeing because acquisition on or make see put you are Okay. at if of least acquisition goal your And opportunities back, a

John Krier

highlighted it capital presents has put us an to opportunity of in say operating no that different in business, try an of don't the couple per se. I good in a very, we're those itself. this we've I that more would for are a the Skyler uncertain we of environment. working less call at had and say, given and of our tackle also there's operating that advantage or if line me very I highlighted know of currently, the would borrowings example, with that Let cash take maintain do at stronger that all to this forward. a and say, position our we've active to I part is able current on despite if be that our where a footprint it in start going credit, would pipeline balances I execution made in strategy we ways. that important position continued moves

comes one around. forward certainly So pipeline targets with look we to those take conversations if our of advantage continuing and it

Anthony Vendetti

right. Okay, hop All queue. in the great. I'll back Thanks.

John Krier

Thanks.

Operator

take Henry We'll next Please Scott ROTH question ahead. with Capital. from go our

Scott Henry

Thank morning. you and good A of questions. couple

John Krier

Hi, Scott.

Scott Henry

I could what have about I sure make you correct. you repeat First, August, said wanted and like that to July

John Krier

Absolutely.

was So to that what XX% July and we prior are August compared discussed year. XX% running revenues to approximately

Scott Henry

Is the versus that? you it or Okay, same? great. see the staying how it seeing within is worse in in And how getting States trend or you the better how are United And that internationally? do -- trend, it getting the is

John Krier

Yes.

So couple let's things at of this about point. we that a know talk

the So QX of running quarter was about of year, of to our year. XX% FY prior XX% at largest 'XX

trend be positive. Our continues to

finished the two-thirds approximately for in XX% at April QX. nearly reduction So quarter

what of for a We've that'll the demonstrated that serve. within facilities July to be approximately see have activity on seen sequential future. versus in to Relative we've that August. international, this certainty certainly point, dependent all to continued small continued the domestic very and X.X%. business we we that So the know international No We improvement.

a significant U.S. focus here our not contributor all the activities we'll that's So and in of our to energies

Scott Henry

a these from that again great. think at rate levels? gross we this should QX over improvement quarters. should as in line? Or the the percent Okay, QX. COGS And coming continue, these some about Is assuming we how should we think trends margin jumped about see

John Krier

that. on highlight will points a couple I

in the So percentage was margin certainly to volume. That's the related for sales our decline XX.X% certainly at QX. gross

to as well. QX, that running you level that, approximately XX% If QX, prior look at that's

is facility staffing to take at those look to Tennessee those plan out of our made, with that we've and So to the to levels. a we've hard the the transition levels go our and production look focus in to changes continue energies made, work changes our

Scott Henry

Okay. are levels achievable run at revenue lower And do you those think rates?

John Krier

those a points. right plan have able do comment be. on that to to to back I can't we what know I the be don't that would future. to get to work size very resources the view in hard to our and demand I to

Scott Henry

at Okay. there, well. final you which some products, of out market? business there products mean, there of margin is there a given I'm think perhaps right have of that type as guys could innovative make, you that are opportunities out would that Just could sense opportunities you Kind be margins. think some just kind question, circled or get I now? maybe I other you the beneficial the what that guys wanted low to of capitalize of very higher curious, be some your know PPP might around on,

John Krier

Yes, for insignificant that us has been market to us. contributed

in great we've are about that's on. energy protective some a just that products our general, Speaking broadly brands product just irrespective the of personal focusing there equipment, out can we difference say products, on. what And and excellent make opportunities with there got we're

continues COVID-XX, there, of our and the really are rehabilitation products of all a our how key health pandemic or space. to back the focusing we're need so energy for And people get regardless

And and energy so there. thoughts focusing our we're

Scott Henry

the Okay. you Great. for question. taking Thank

John Krier

Thanks, Scott.

Operator

[Operator that remarks. today. turn appears the have the Instructions] for I'll to Krier And be to we all that closing Mr. back questions over for call

John Krier

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

Black. please further contact, you them our Relations call. the you Skyler may questions, end to operator, direct And If any have Investor

Operator

We you. thank and this Thank teleconference. does gentlemen, Ladies for participation. today's your conclude you

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

Dynatronics (DYNT) 24 Sep 202020 Q4 Earnings call transcript