Dynatronics Corporation, a medical device manufacturer specializing in products for physical therapy, rehabilitation, orthopedics, pain management, and athletic training, reported a decline in financial performance for the three months ended September 30, 2024. Net sales decreased to $7.6 million, down 18.7% from $9.4 million in the same period of the previous year. This decline was attributed to reduced revenue from both physical therapy and rehabilitation products, which generated $4.2 million compared to $4.8 million in the prior year, and orthopedic soft bracing products, which fell from $4.5 million to $3.4 million.

Gross profit for the quarter also decreased, totaling $2.0 million, a decline of 14.1% from $2.3 million in the prior year. However, the gross profit margin improved slightly to 26.1% from 24.7%, reflecting higher product margin rates in the physical therapy and rehabilitation segment despite the overall drop in sales. Selling, general, and administrative (SG&A) expenses decreased by 12.3% to $2.2 million, driven by reductions in salaries, benefits, and other operational costs.

The company reported a net loss of $366,648 for the quarter, compared to a loss of $330,654 in the same period last year. The net loss attributable to common stockholders was $534,386, slightly up from $527,713 in the previous year. The basic and diluted net loss per share improved to $(0.09) from $(0.12), reflecting an increase in the weighted average shares outstanding.

As of September 30, 2024, Dynatronics had cash and cash equivalents of $278,443, a significant decrease from $483,918 as of June 30, 2024. Total current assets also fell to $9.8 million from $10.6 million, while total assets decreased to $25.1 million from $25.9 million. Current liabilities decreased to $7.3 million, contributing to a working capital of $2.5 million, down from $2.9 million.

In terms of strategic developments, the board approved a proposed reverse stock split on October 9, 2023, with shareholder approval received on December 7, 2023. The company is also evaluating the impact of new accounting standards effective for future fiscal years. Additionally, Dynatronics entered into a Loan Agreement on August 1, 2023, providing asset-based financing of up to $7.5 million, secured by a first-priority interest in its assets.