DYNT - Earnings call 4 2023 | Dynatronics Corporation

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Operator

Welcome to the Dynatronics Fourth Quarter Results for Fiscal 2023 Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to John Krier, Chief Executive Officer and Chief Financial Officer of Dynatronics. Please go ahead.

John Krier

Thank you, operator. thanks Dynatronics and today. everyone, morning, for call joining Good Brian and Chief Officer; President I Officer, Krier, Officer and Chief Operating our am John is Executive Financial me and Chief Baker. with

call financial your we statement. note performance current forward-looking during that expectations, I make Before call, will regarding attention Please we begin, this statements our safe to plans, harbor will our projections and could These of risks our business. today. forward-looking actual that today and and to our discussed as statements differ relating view to involve only may uncertainties those materially cause results reflect from

revise and could Management caution issued conclusion, welcome results line and with begin, a transition have XX-K statements full uncertainties operator back details year as brief admiration commentary. to X, Dynatronics or is previously XX, financial Fourth respect for succession opening the make and permanent and At obligation over Quarter Team recent of no morning reliance Brian Accounting CEO are release the along you the to related Brian we Important the Executive the Financial Chief results. We effective cause factors I economic with financial with CEO and those of as an forward-looking on of closing transition company Fiscal undue press Baker. Today, in the next in turn forward-looking XXXX, and results Baker days. from turning plan May to will of statements. announced the a included report differ for forward-looking The update Then ended and Consultant provide will October great I the release undertake announcing will Officer, that call this XXXX, this projected other it that Board on a the a in the of search risks Directors few press by to statements I include our phone CFO. announced our We the our Brian, broader actual business or provide for to it of SEC will morning. the not to reports additional We for remarks, as and June I most few detailed materially to Brian environment we Interim place filed a plan the our to implied the year. with of part executive while additional back the CEO Brian company's continue via remarks. details as open questions. To provide will final we continue this

and the last support want lead turn we I have work he pandemic turn during especially Dynatronics been achieve right XXXX, call during to over talent, continued will to as and moment set has challenging to our to the and to the and the skill present stakeholders and am joined the in analysts move able of environment. I've company X-plus take had I Brian for collectively thank over pleasure with since the call Brian. and your past Brian, I years. customers, I all investors, suppliers, to Before a the proud employees, partnership what energy we forward. operating now I extremely

Brian Baker

Thank John. you,

our employees, months, and customers For our forward-looking the been with X partners past X plans. to speaking assess vendor I've to

cuts order and by pricing. sharpen will believe to the in our guidance. believe we were performance revenue these we June opportunity take the a offer XX, have focus we do conversations, financial to implemented of to to this, needs our significant levels business. These have reductions cost the improve all at competitive our completed our customers' areas In the XXXX, in largely products at I us enable these As of result they on and

Our in to demonstrate improvement goal year profitability is fiscal during operating XXXX. steady

on regard. manage XXXX, in to credit also working the and capital the executed that operating we line of We flexibility our which continue this will X, August intend to provide us

environment can both the our believe will be markets business financial I ahead in report. provide us. remains navigating nimble Dynatronics While uncertain, more challenges of now a in opportunities the John and

John Krier

were quarter. and for review Thanks, and XXXX can compared income quarter year-end and performance to Brian. the ended the XX-K, The found year's here. Net June last I and million will results. now analysis I during summarize the the them full be quarter financial cover in the $X.X discussion sales million XX, $XX.X in statement will management

prior larger driven to net our lower a XX, the fiscal of or revenue levels. million quarter Bracing. Gross same prior sales QX full XXXX, compared fiscal XX.X% QX in is of or sales profit was fiscal in million prior the year-over-year net ended acquisition reduced net year product margin discussed. reduction revenue compared of June full million compared margin million year's were 'XX, decrease a net last million ended period. primarily by or the $X.X profit in of decrease reduction and realization. Selling, and ended due was additional June the profit driven sales included product year. 'XX to of XX, in X of The in for $X.X The The related from was charges compared gross to XX.X% severance fiscal year sales reduction the a price $XX.X of reserves Soft compared million $X.X sales year to were million net $X.X of our previously year-over-year a specific of $XX.X XXXX, million in year-over-year percentage XX, lower of have as the onetime $XX.X the year and $X.X $X.X $XX.X effect of million and the general sales disruption gross year decrease been XXXX, million. other period. Gross $X.X ended For X for the expenses on equally net $X.X net June the or in to customers year the XX% fiscal would sales QX revenue million to improvement fiscal of XXXX, including year. of primarily SG&A months in compared to was demand administrative one expenses $X.X by in XX.X% to months reduction the a million gross XX, competitor inventory the the million a rehabilitation XXXX. by for of the result million of profit category attributable decreased before, to June Orthopedic to in $X.X prior of of

and year's the June X down was income million million due other from a XX, Other decrease for months year the For to of $X.X expense compared the primarily $X XXXX, SG&A fiscal ended in full prior period. million was lower year, $X.X salaries last to $X.X of benefits.

absence quarterly For months compared $X.X million $X.X fiscal is in to XX, credit full of other the was million $X.X due income compared to The ended loss severance other loss the quarter for fiscal of in of million in million and the COGS current for the $X.X $X.X related $X.X QX XXXX. employee to The of compared income year year. ended last net year. related and other loss year of June XXXX to of included retention million. XX, total to income million $X $X.X full SG&A Net XXXX, was for the the the a decrease costs year, reserves million June the X the additional in of onetime $X.X same million loss fiscal inventory loss of other to was net prior costs year. Net a for

our We expect to in shares of price. depending our on range the per outstanding share quarter, increase XXX,XXX

As of XXXX, the number September X.X was of common approximately shares million. XX, outstanding

As June XXXX. of compared million $X.X XX, $X.X was million June cash XXXX, on net XX, to

Dynatronics line on of a XXXX. based capital new As working credit August executed a X, reminder,

September $X.X of balance our of line As credit was XXXX, XX, million. approximately

XXXX. approximately $X.X of borrowing credit to accounts on to credit financial as Brian. million. Proceeds ended June the the line now million summary of approximately concludes compared company line will of turn I approximately to enabled availability the our period million $X.X the XX, the $X.X September This from back payable call Additional balance reduce of XX, XXXX a by was base results. of

Brian Baker

Thank you, John.

be fiscal million we expected $XX revenue is the trends. align The terms of distribution historical year of revenue of to to range the with million. guidance for $XX In XXXX, in to net expect

We guidance providing at margin gross are this not time.

our more Given the million shares to XX% the to before operating turn considering is our increase investor fiscal recent to September my have such to to reductions ongoing of will Outstanding and on financial as for support. generally data depending currently it reinstituting flexibility. focus per of our profitability and for over XXX,XXX summary, like operator will share $X.X be as strengthen current guidance. SG&A now we shares, for quarter, is anticipated We appreciate in net questions. employees for the XX, thank the I revenue costs, and year sales our their customer and fiscal base year. range approximately relationships we'd the XX% XXXX, price. In improve in of

Operator

you. Thank

We Street will Lake Capital Markets. question from of now question-and-answer begin Instructions] Our the [indiscernible] first comes session. [Operator

Unknown Analyst

Brooks morning. [ This the line this is Aaron on ] for

talking demand want just I So general. about to start the off in

in You mentioned overall of a how environment sort little change QX? of a been in general demand product now, And in terms is operations? orthopedics, reduction affected and macro mix the significant but there in has from a just bit about your

John Krier

with is John. this Aaron], that. [ start And I'll

general at that categories product demand it's year-over-year it still the revenues category think become certainly an to the year, demand pretty and position recent and the XX% our X% categories. pricing Our we issue overall But overall growth. We've our categories our of of XX% look to quarter-over-quarter term. the X%, ourselves out And we the little a going consistent. of quarter this in and where forward, we our mix talked that bit rehabilitation product as in roughly continue reorganize We market single about there the you demand is about last X% low consistent. in business seen be will more When orthopedic bracing steady. ended is in is digits, in

Unknown Analyst

you think as product then about of new sort activity. And helpful. That's

that the give give any more early could grow that and If there, being future X products this the year? great. in encouragement might you leased or you'd X that some You opportunity next current some color accepted? since specific be about us are products Are offer would to these XXXX. there How highlights

Brian Baker

jump Aaron I'll on [ Brian. is This ]. Yes. this in

few do existing we're customers. or revenue And go, a overall seeing products come modifications products. There new that can And getting we're portfolio. additions, changes with some some about we to -- X% feedback opportunity from our are as of new that or we we to for new are tracking still new can related far add in. products to some additions product As our these our

Operator

Jeffrey comes of from Ladenburg. question next Our Cohen

Jeffrey Cohen

Brian, end. just John and questions a our from of couple

and credit of you terms could line the Firstly, us on any further insight there, give please? the

Brian Baker

terms there, The of line that Yes. line X. around credit on It's inventory and August asset-based accounts our an of credit we executed centered receivable.

I $X.X as million So a it's facility. said,

going as be is our and size. of $X.X Our our to roughly September borrowing base million. AR XXth driven size That's inventory by

In of capital flexibility terms XX% and covenant rate But for our of terms interest team great going of roughly terms it. forward. one it at the and it's been addition on has today for primary the about a overall, agreement, of working in it's SOFR X%, the

Jeffrey Cohen

Okay. big and geographical any about how picture et channels, see customers in and you current number for 'XX. it. Got customers, talk potential we And shift cetera? of process, may Could channels

John Krier

today. our pretty a no major the this half a going still now. We we one be existing consistent. shift of see significant be we it's similar that and throughout of discussions of some forward the fiscal Brian year. mix Both seeing customers. to going think category Jeff, highlighted we business, obviously to that, of major overall we're shift what last at by base when may seeing should look acquisition the year we're the we're customer, there than in very having customer revenue, took next penetration digesting overall as of some that and we're for other our But our first continue product new very results. product in with consistent see to this with I competitors But

Jeffrey Cohen

cadence we Should that readout? as indication Got any far it. years previous for And good color then 'XX on any lastly as us, seasonality are assume a quarter-wise?

John Krier

XX% at in seasonality play season of least higher be quarter the believe, in We out Fourth playing assume about out, Quarters. and First Revenue the the We that. and revenue. they lower way account That's that expect Typically, a the is and way should XX% revenue, the about to we QX of QX. the our same. should our for little

given we've guidance do to to we out for So that revenue. that expect and out follow play there the

Jeffrey Cohen

it. Got

on more 'XX? for on one Any And expectations, levels Okay. lastly, margins. then margin outlook helps aspirations

John Krier

SG&A in things. provided at Yes, provided talk One XX% I'd is we XX% say a fiscal you'll lower this range couple is to of thing profitable that in past we at like we than made let's Brian talked we May this needed highlighted. year we've SG&A notice first. business. the of That's in steer the what that about to to a be continuation when recognize in lower changes One, we significant business revenue the levels, that

be So and quarters the the in the that's something margin guidance And our that we see our of and quarters. lower of our we because at we overall of the We're rightsize First to our end want shifts not quarters, a change on is range that in based operations just Quarter of plants. Typically, the and our number. on little revenue to in higher-margin in of that's that give future. end higher will just all one ready bit range in now, know that gross the as middle us revenue higher

not current that's because we had our However, QX. disruption QX in and state reliable in such

we're that going we into back likelihood data, we while we'd digest and and be get getting year. our with little But as to QX looking rightsized looking So QX provide rightsized everybody more and try more plants the that at and as is operations clarity. we'll saying, to more our soon have a --

Operator

session. the over to Mr. concludes This back conference Krier I question-and-answer the like would any turn closing for remarks. to

John Krier

for in your transition to I'm years the the in to in and success forward of thank and this Dynatronics. pleased Brian look operator, you, quarters supporting watching Thank be the organization to and all you the interest come.

If them you any questions, day. please to a may the Operator, call. you further have direct ir@dynatronics.com. Have end great

Operator

Thank today's conference concludes you. This call.

You a may lines. you your participating pleasant and day. disconnect Thank have for

Dynatronics (DYNT) 28 Sep 232023 Q4 Earnings call transcript