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Dynatronics Corporation today announced financial and operating results for its fiscal 2016 first quarter ended September 30, 2015.
"The strategic direction of the past few months, including the completion of the sale of $4 million in preferred stock to affiliates of Prettybrook Partners, is designed to accelerate our growth in the coming years," commented Kelvyn H. Cullimore Jr., Chairman and Chief Executive Officer. "The financing has significantly strengthened our balance sheet and provides the resources to increase our market and geographic footprint while maintaining our status as the innovative leader in rehabilitation and physical therapy products."
"We are focused on growing organically, both in the US and internationally," continued Cullimore. "In addition, we are implementing an M&A strategy to acquire businesses that simultaneously fit our criteria and enhance our offering. We are currently evaluating acquisition opportunities and anticipate executing on one of these in calendar year 2016. We believe these actions will cause Dynatronics to grow faster than our market segment."
Net sales for the fiscal first quarter were $7.4 million, a 2.5% increase compared to $7.2 million in the same period of the prior year. Gross margin for the fiscal first quarter was 33.9% compared to 35.6% for the quarter ended September 30, 2014, reflecting higher sales of distributed products which carry lower than average margins. Net loss for the quarter ended September 30, 2015, was $181,562, compared to net income of $40,923 for the quarter ended September 30, 2014. The increase in net loss is attributable to 1) slightly lower gross profit margins, 2) higher expenses incurred in the implementation of organic and M&A growth initiatives, 3) elevated R&D costs associated with new products planned for introduction later this fiscal year and 4) higher interest expense.
Net loss applicable to common shareholders for the quarter ended September 30, 2015, was $262,062, compared to net income of $40,923 for the quarter ended September 30, 2014. Net loss applicable to common shareholders recognizes the dividend accrued on preferred stock during the quarter, which totaled $80,500 and was payable in common stock.
"We are witnessing a better market environment today compared to the past several years," commented Larry K. Beardall, Executive Vice President of Sales. "Our sales representatives left our recent national sales meeting excited and energized about our plans to expand into new markets such as podiatry, home health, hospitals and long-term care. Internationally, the recent regulatory approvals in Europe and Japan extend our geographical reach and will allow us to provide these products on a more global scale."
"The actions we have taken over the past several months position Dynatronics to benefit from what we perceive to be a pent-up demand for new products and to leverage the market's more favorable conditions," concluded Beardall.
About Dynatronics Corporation
Dynatronics manufactures, markets and sells advanced-technology medical devices, orthopedic soft goods and supplies, treatment tables and rehabilitation equipment for the physical therapy, sports medicine, chiropractic, and podiatry markets.