Dynatronics(DYNT) - 2021 Q4 - Annual Report

FORM 10-K General Information Filing Details This document is an Annual Report on Form 10-K for Dynatronics Corporation, filed for the fiscal year ended June 30, 2021, with its common stock trading on NASDAQ under DYNT - The report is an Annual Report on Form 10-K for the fiscal year ended June 30, 2021[2] - Dynatronics Corporation's common stock trades on The NASDAQ Capital Market under the symbol DYNT[2] Registrant Information Dynatronics Corporation, a Utah corporation headquartered in Eagan, Minnesota, reported 17.57 million common shares outstanding as of September 20, 2021, and is classified as a smaller reporting company - Dynatronics Corporation is a Utah corporation[4] - Principal executive offices are located at 1200 Trapp Road, Eagan, Minnesota 55121[4] Shares Outstanding and Company Classification | Metric | Value | | :----- | :---- | | Common Stock Outstanding (as of Sep 20, 2021) | 17,574,296 shares | | Aggregate Market Value of Common Stock (non-affiliates, Dec 31, 2020) | ~$9.5 million | | Filer Status | Smaller reporting company | Cautionary Note Regarding Forward-Looking Statements Forward-Looking Statements Disclosure This section warns that the report contains forward-looking statements subject to inherent uncertainties and risks, including the COVID-19 pandemic, which may cause actual results to differ materially - The report contains 'forward-looking statements' as defined by the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act[15] - Forward-looking statements are based on current beliefs, expectations, and assumptions, and are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and often outside the company's control[16] - Key risks include the impact or duration of the COVID-19 pandemic, and other factors discussed in 'Business' (Part I, Item 1) and 'Risk Factors' (Part I, Item 1A)[16] Item 1. Business Company Background Dynatronics Corporation designs, manufactures, and sells physical therapy, rehabilitation, pain management, and athletic training products under brands like Bird & Cronin® and Hausmann™ - Dynatronics Corporation designs, manufactures, and sells products for clinical use in physical therapy, rehabilitation, pain management, and athletic training[18] - The company markets to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals[18] - Products are marketed under brands including Bird & Cronin®, Solaris™, Hausmann™, Physician's Choice®, and PROTEAM™[18] Business Strategy Dynatronics aims for organic growth and value-driven acquisitions to become a recognized standard in restorative solutions, focusing on sustained revenue and strong financial performance - Dynatronics' strategy is to grow organically and through value-driven acquisitions to become the recognized standard in restorative solutions[20] - The core strategy focuses on sustained revenue growth, strong financial performance, and focused business development[20] Corporate Information Founded in 1983, Dynatronics Corporation, a Utah corporation headquartered in Eagan, Minnesota, operates on a June 30 fiscal year and provides investor information online - Dynatronics Corporation was founded in 1983 and is headquartered in Eagan, Minnesota[22] - The company operates on a fiscal year ending June 30[24] - Investor information, including SEC filings, press releases, and corporate governance documents, is available on the company's website[22] Recent Developments In fiscal year 2021, Dynatronics implemented a business optimization plan, sold its Tennessee manufacturing facility for a gain, and had its $3.5 million PPP loan forgiven - In April 2021, Dynatronics committed to a strategic business optimization plan to eliminate approximately 1,600 SKUs of low-margin, third-party distributed products and streamline physical therapy and rehabilitation product sales exclusively to dealers[26] Business Optimization Costs (FY2021) | Category | Amount | | :------- | :----- | | Total Costs | $1,001,000 | | Cash Charges (severance, retention) | $158,000 | | Non-Cash Charges (inventory, doubtful accounts, impairment) | $843,000 | - The company sold its former manufacturing facility in Ooltewah, Tennessee, for $1,750,000, resulting in net proceeds of $1,650,000 and a gain of $812,000[28] - The entire $3,518,000 Paycheck Protection Program loan, including accrued interest, was forgiven by the SBA on June 29, 2021[29] Our Products Dynatronics manufactures and distributes a broad range of restorative products, with Manufactured Products accounting for 79% of net sales in fiscal year 2021, and no single product exceeding 10% of total revenues - Dynatronics offers a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training[32] - Manufactured Products accounted for approximately 79% of net sales in fiscal year 2021, up from 75% in fiscal year 2020[31][41] - No single product accounted for more than 10% of total revenues in fiscal years 2021 and 2020[41] Orthopedic Soft Bracing Products Bird & Cronin® orthopedic soft bracing products support pre- and post-surgical intervention, fracture recovery, joint stabilization, and ligament injury with various supports and immobilizers - Orthopedic soft bracing products are designed to accelerate health for patients pre- and post-surgical intervention, during fracture recovery, joint stabilization, and ligament injury[34] - Bird & Cronin® Manufactured Products include cervical collars, shoulder immobilizers, arm slings, wrist and elbow supports, abdominal and lumbosacral supports, maternity supports, knee immobilizers and supports, ankle walkers and supports, plantar fasciitis splints, and cold therapy[35] Physical Therapy and Rehabilitation Products Marketed under Solaris®, Hausmann™, and PROTEAM™ brands, these products include treatment tables, rehabilitation equipment, and therapeutic modalities for diverse clinical settings - Physical therapy and rehabilitation products are designed for use in physical therapy, rehabilitation, pain management, and athletic training[37] - These products are marketed under Solaris®, Hausmann™, and PROTEAM™ brands[37] Therapeutic Modalities Dynatronics offers premium therapeutic modality devices, including electrotherapy, ultrasound, and phototherapy, effective for pain treatment, circulation, and muscle re-education - The company manufactures and distributes therapeutic modality devices such as electrotherapy, ultrasound, phototherapy, therapeutic laser, shortwave diathermy, radial pulse therapy, hot and cold therapy, compression therapy, and electrodes[38] - These modalities are effective in treating pain, increasing local blood circulation, promoting muscle relaxation, preventing disuse atrophy, and accelerating muscle re-education[38] Treatment Tables, Exercise and Rehabilitation Equipment Dynatronics manufactures and distributes essential power and manually operated treatment tables, mat platforms, and exercise equipment for patient treatment in various clinical settings - The company manufactures and distributes power and manually operated treatment tables, mat platforms, work tables, parallel bars, training stairs, and weight racks[39] - These products are essential for treating patients in a variety of clinical settings[39] Supplies Dynatronics manufactures and distributes various clinical supplies, including exercise bands and tubing, lotions and gels, orthopedic bracing, and paper products - The company manufactures and distributes clinical supplies such as exercise bands and tubing, lotions and gels, orthopedic bracing, and paper products[40] Sales Mix of Manufactured Products Manufactured Products comprised the majority of total product sales in fiscal years 2021 and 2020, with no single product representing over 10% of total revenues Sales Mix of Manufactured Products | Fiscal Year | % of Total Product Sales (excluding freight and other revenue) | | :---------- | :------------------------------------------------------------- | | 2021 | 79% | | 2020 | 75% | - No single product accounted for more than 10% of total revenues in fiscal years 2021 and 2020[41] Patents and Trademarks Dynatronics holds U.S. patents for thermoelectric and phototherapy technologies, owns key trademarks like Dynatron® and Bird & Cronin®, and protects trade secrets through confidentiality agreements - Dynatronics owns U.S. patents for thermoelectric technology (until Feb 2033), combination traction/phototherapy technology (until Dec 2026), and phototherapy technology (until Aug 2025)[42] - Significant U.S. trademark registrations include Dynatron®, Dynatron Solaris®, Dynaheat®, BodyIce®, Powermatic®, Bird & Cronin®, Physician's Choice®, and the Hausmann designed logo[43] - The company protects trade secrets through confidentiality agreements with key employees and partners[46] Warranty Service Manufactured Products carry warranties from 90 days to five years, serviced at company facilities, while Distributed Products are covered solely by original manufacturers' warranties - Manufactured Products come with warranties typically ranging from 90 days to five years[48] - Warranty claims for Manufactured Products are serviced at the company's Utah, New Jersey, and Minnesota sites[48] - Distributed Products are covered by their original manufacturers' warranties, with no additional coverage from Dynatronics[49] Customers and Markets Dynatronics sells to licensed practitioners, sports teams, hospitals, and clinics through over 300 independent U.S. dealers, with international sales representing approximately 2.4% of net sales - Customers include orthopedists, physical therapists, chiropractors, athletic trainers, professional sports teams, universities, hospitals, clinics, retail distributors, and OEM partners[50] - The company utilizes a network of over 300 independent dealers throughout the United States[50] International Sales Performance | Fiscal Year | International Sales | % of Net Sales | | :---------- | :------------------ | :------------- | | 2021 | ~$1,160,000 | ~2.4% | | 2020 | ~$1,286,000 | ~2.4% | Competition Operating in a fragmented industry, Dynatronics competes on trusted brands, on-time delivery, and superior customer care, distinguishing its therapeutic modality devices with integrated advanced technology - The industry is highly fragmented with numerous competitors of varying sizes, including personal care companies, branded consumer healthcare companies, and private label manufacturers[54] - Key competitive factors for Dynatronics are trusted high-quality brands, on-time product delivery, and superior customer care[57] - Dynatronics-branded therapeutic modality devices are distinguished by integrated advanced technology, such as being the first to integrate infrared phototherapy into a combination therapy device[56] Manufacturing and Quality Assurance Dynatronics manufactures products in New Jersey, Minnesota, and Utah, adhering to FDA cGMP and ISO standards, with electrotherapy products assembled by Ascentron - Manufactured Products are produced at facilities in Northvale, New Jersey, Eagan, Minnesota, and Cottonwood Heights, Utah[58] - Electrotherapy products are manufactured and assembled by Ascentron to company specifications[59] - The company complies with FDA's Current Good Manufacturing Practices (cGMP) and International Organization for Standardization (ISO) standards, holding ISO 13485:2016 certification for its Utah facility[59][60] Research and Development Research and development expenses for Dynatronics significantly decreased in fiscal year 2021 compared to fiscal year 2020 Research and Development Expenses | Fiscal Year | R&D Expenses | | :---------- | :----------- | | 2021 | $10,000 | | 2020 | $95,000 | - R&D expenses decreased by $85,000 (89.5%) from fiscal year 2020 to fiscal year 2021[61] Regulatory Matters Dynatronics' products are subject to extensive U.S. and international regulations, including FDA registration, Quality Systems Regulations, and pre-market clearance, with non-compliance risking significant penalties - The manufacture, packaging, labeling, advertising, promotion, distribution, and sale of products are regulated by national and local governmental agencies, including the FDA and FTC in the U.S[63] - As a medical device manufacturer, Dynatronics must register with the FDA, comply with Quality Systems Regulations (cGMP), and adhere to medical device reporting requirements[64][68] - All therapeutic treatment devices are cleared for marketing under section 510(k) of the Medical Device Amendment to the FD&C Act or are 510(k) exempt[64] - The Affordable Care Act requires reporting of payments or transfers of value to certain healthcare providers, with potential significant penalties for non-compliance[66] Foreign Government Regulation Future international expansion would subject Dynatronics' products to diverse foreign governmental regulations, including product standards, tariffs, and import restrictions, with potential severe penalties for non-compliance - Future international expansion would subject products to diverse foreign governmental regulations, including product standards, packaging, labeling, and import restrictions[74] - Each country has its own tariff regulations, duties, and tax requirements[74] - Failure to comply with foreign regulations could result in fines, suspension of approvals, product recalls, seizures, operating restrictions, and criminal prosecution[74] Environment Environmental regulations and compliance costs are not material to Dynatronics' business, and the company believes it complies with relevant laws like California's Proposition 65 - Environmental regulations and compliance costs are not material to the business[75] - The company believes it is compliant with laws like California's Proposition 65, which requires disclosure of specified ingredient chemicals and warning labels[75] Seasonality Dynatronics' business experiences seasonality, with higher sales in the first and fourth fiscal quarters (summer and spring) and lower sales in the second and third fiscal quarters (fall and winter) - Sales are typically higher in the first and fourth fiscal quarters (summer and spring months)[76] - Sales are generally lower in the second and third fiscal quarters (fall and winter months)[76] - Quarterly operating results are not necessarily indicative of full-year or future operating results due to seasonality[76] Employees As of June 30, 2021, Dynatronics employed 175 people, with 38 (22%) covered by a collective bargaining agreement expiring in February 2022, and labor relations are considered satisfactory Employee Statistics (as of June 30, 2021) | Metric | Count | | :----- | :---- | | Total Employees | 175 | | Full-time Employees | 170 | | Employees under Collective Bargaining Agreement | 38 (approx. 22% of workforce) | - The collective bargaining agreement is scheduled to expire in February 2022[78] - The company believes its labor relations with both union and non-union employees are satisfactory[78] Item 1A. Risk Factors Risks Related to Our Business and Industry Dynatronics faces risks including reliance on third-party manufacturers, supply chain disruptions, a history of losses, potential funding needs, regulatory compliance, intense competition, and intellectual property litigation - Reliance on third-party manufacturers for electrotherapy products poses risks related to quality, manufacturing standards, and supply continuity[80][82][83] - Disruption of the supply chain due to weather, natural disasters, pandemics (like COVID-19), or disputes with suppliers could adversely impact business operations and financial results[84][85][86][87] - The company has a history of net losses in nine of the last ten fiscal years, and future profitability is not guaranteed[90] - Additional funding may be required for business opportunities or acquisitions, and inability to raise capital on favorable terms could adversely affect operations[91] - The company's level of indebtedness could harm financial condition by dedicating cash flow to debt payments, increasing vulnerability to economic changes, and limiting future financing[92][93][94] - Challenges in managing growth through acquisitions, including integration difficulties, unbudgeted costs, and potential dilution from equity financing, could harm operating results[96][97] - Failure to establish or maintain sales and distribution relationships, or ineffective third-party distributors, could adversely impact results and growth[98] - Healthcare reform (e.g., Affordable Care Act) and increasing scrutiny by government agencies on product sales, marketing, and relationships with healthcare providers pose compliance risks and potential penalties[99][100][104] - Changing market patterns towards evidence-based practices could reduce demand for products lacking sufficient efficacy evidence[102] - Increased scrutiny on international commercial activities, particularly regarding corruption (FCPA, U.K. Anti-Bribery Act) and trade sanctions, presents heightened political, economic, and operational risks[105] - Significant tariffs or trade restrictions could materially harm revenue and results of operations by increasing costs or reducing demand[106] - Failure to obtain foreign regulatory approvals (e.g., CE Mark) would prevent market entry in those jurisdictions[108] - Complex and evolving privacy and data protection laws (e.g., CCPA, GDPR, CSL) could lead to increased compliance costs, investigations, and reputational damage[109][110][111][112][113] - Failures, damage, or interruptions in IT systems, including cyber-attacks, could disrupt operations, lead to loss of sensitive information, and incur significant expenses[115] - Limited market access due to the emergence of Group Purchasing Organizations (GPOs) that control product flow to acute care customers[115] - A significant portion of the workforce is subject to a collective bargaining agreement expiring in February 2022, and inability to renew or work stoppages could adversely affect the business[116] - Inadequate protection of intellectual property (patents, trade secrets, agreements) could lead to infringement claims, significant expenses, or prevent product sales[117][122] - Market and technological obsolescence of products, and inability to compete effectively against rivals, could negatively impact operating results[118] - Dependence on a limited number of third-party suppliers for components and raw materials creates risks of supply disruptions, higher costs, and reputational damage[120] - Exposure to product liability claims, unfavorable court decisions, or legal settlements could result in significant expenses and harm business reputation[121] Risks Related to Our Common Stock The price of Dynatronics' common stock is volatile, and investors face potential dilution from preferred stock conversions, warrant exercises, and future equity issuances, while preferred stock can deter takeovers - The price of common stock is volatile, with a range from $0.52 to $2.56 during the year ended June 30, 2021[125] - Volatility is driven by factors such as quarterly operating results, market expectations, strategic decisions, industry trends, and general economic/political conditions, including the COVID-19 pandemic[125][126] - Investors may experience substantial dilution from the conversion of outstanding preferred stock (3,351,000 shares), exercise of warrants (4,323,500 shares), and future issuances of common or preferred stock[128] - The Board of Directors can issue preferred stock with greater rights and preferences than common stock, potentially delaying or preventing takeover attempts[130][135] - Dividends on Series A and Series B Preferred Stock accrue at 8% annually and can be paid in cash or common stock, potentially diluting existing shareholders[131] - Concentrated equity ownership by Prettybrook Partners, LLC and its affiliates (approx. 15% voting power as of June 30, 2021) may limit other shareholders' ability to influence corporate matters and could discourage changes of control[132] Item 1B. Unresolved Staff Comments Unresolved Staff Comments Status This section confirms the absence of any unresolved staff comments from the SEC - Not applicable, indicating no unresolved staff comments[136] Item 2. Properties Leased Facilities Dynatronics leases three primary facilities in Minnesota, New Jersey, and Utah for manufacturing, warehousing, and offices, which are deemed adequate for current and expected growth - Leases an 85,000 sq-ft manufacturing, warehouse, and office facility in Eagan, Minnesota, serving as corporate headquarters. Lease extended through October 2022[137] - Leases a 60,000 sq-ft manufacturing and office facility in Northvale, New Jersey, for Hausmann Enterprises, LLC operations. Lease extended through April 2023[138] - Leases a 36,000 sq-ft manufacturing, warehouse, and office facility in Cottonwood Heights, Utah, under a finance lease arrangement that terminates in 2029[139] - The company believes current facilities are adequate for present needs and expected growth, but additional facilities or expansion may be required in the future[140] Item 3. Legal Proceedings Legal Proceedings Status Dynatronics reports no pending legal proceedings of a material nature - There are no pending legal proceedings of a material nature to which the company is a party or to which any of its property is the subject[148] Item 4. Mine Safety Disclosure Mine Safety Disclosure Status This section indicates that mine safety disclosure is not applicable to Dynatronics Corporation - Mine Safety Disclosure is not applicable to the company[142] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Dynatronics' common stock trades on NASDAQ with price volatility, 17.57 million shares outstanding as of September 20, 2021, no cash dividends paid, and $3.46 million net proceeds from common stock sales in FY2021 - Common stock is listed on the NASDAQ Capital Market (symbol: DYNT)[144] Common Stock Price Range (Fiscal Years 2020-2021) | Quarter | FY2021 High | FY2021 Low | FY2020 High | FY2020 Low | | :------ | :---------- | :--------- | :---------- | :--------- | | Q1 (Jul-Sep) | $1.07 | $0.63 | $1.86 | $1.00 | | Q2 (Oct-Dec) | $0.93 | $0.52 | $1.28 | $0.63 | | Q3 (Jan-Mar) | $2.56 | $0.80 | $3.70 | $0.81 | | Q4 (Apr-Jun) | $1.38 | $1.01 | $1.30 | $0.63 | Outstanding Common Shares and Shareholders (as of Sep 20, 2021) | Metric | Value | | :----- | :---- | | Common Stock Outstanding | 17,574,296 shares | | Shareholders of Record | ~400 | - The company has never paid cash dividends on its common stock and intends to retain earnings to finance business development[146] - Preferred stock (Series A and B) has senior rights and accrues 8% annual dividends, payable quarterly in cash or common stock, which can dilute common shareholders[149] Equity Securities Sales and Purchases (FY2021) | Activity | FY2021 | | :------- | :----- | | Common Stock Sold | 2,230,600 shares | | Offering Costs | $138,000 | | Net Proceeds from Sales | $3,462,000 | | Common Stock Purchased | None | Item 6. Selected Financial Data This section states that selected financial data is not applicable for this report - Selected Financial Data is not applicable[152] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Dynatronics achieved a net income of $2.0 million in FY2021, a significant improvement from a loss in FY2020, driven by debt forgiveness and other income, despite a 10.5% sales decrease, while pursuing strategic optimization and acquisitions Overview Dynatronics designs, manufactures, and sells restorative products for physical therapy, rehabilitation, orthopedics, pain management, and athletic training, distributing them to various medical practitioners and facilities - Dynatronics designs, manufactures, and sells a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training[155] - Products are marketed and sold to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals through distribution channels[155] Results of Operations In fiscal year 2021, Dynatronics' net sales decreased by 10.5% to $47.8 million, but the company achieved a net income of $2.0 million, a significant turnaround from a $3.4 million net loss in FY2020, largely driven by a $3.5 million gain on debt extinguishment and a $2.4 million increase in other income Net Sales Net sales for fiscal year 2021 decreased by 10.5% compared to fiscal year 2020, primarily due to the ongoing impact of the COVID-19 pandemic Net Sales (FY2021 vs. FY2020) | Fiscal Year | Net Sales | | :---------- | :-------- | | 2021 | $47,799,000 | | 2020 | $53,409,000 | | Change | -$5,610,000 (-10.5%) | - The decrease was primarily due to the continued impact of COVID-19, including reduced demand, capacity, operating hours, supply chain disruptions, and extended handling times[156] Gross Profit Gross profit decreased by 14.7% in fiscal year 2021, with the gross margin percentage declining to 27.0% from 28.3% in FY2020, mainly due to lower sales, business optimization costs, and higher freight Gross Profit (FY2021 vs. FY2020) | Fiscal Year | Gross Profit | Gross Margin % | | :---------- | :----------- | :------------- | | 2021 | $12,886,000 | 27.0% | | 2020 | $15,098,000 | 28.3% | | Change | -$2,212,000 (-14.7%) | -1.3 percentage points | - The decrease in gross margin percentage was primarily due to $488,000 in costs from business optimization exit activities, higher freight and material costs, and lower production efficiency[158] - Partially offset by a $175,000 employee retention credit under the CARES Act[158] Selling, General, and Administrative Expenses SG&A expenses decreased by 8.0% to $16.6 million in fiscal year 2021, driven by lower selling and G&A expenses, partially offset by business optimization costs SG&A Expenses (FY2021 vs. FY2020) | Fiscal Year | SG&A Expenses | | :---------- | :------------ | | 2021 | $16,646,000 | | 2020 | $18,091,000 | | Change | -$1,445,000 (-8.0%) | - Selling expenses decreased by $1,383,000 due to lower commissions and sales management salaries[159] - G&A expenses decreased by $62,000, benefiting from a $216,000 employee retention credit and headcount reductions, but offset by $513,000 in business optimization exit costs[159] Interest Expense Interest expense decreased by 50.5% to $216,000 in fiscal year 2021, primarily due to lower interest rates and reduced average borrowings on the line of credit Interest Expense (FY2021 vs. FY2020) | Fiscal Year | Interest Expense | | :---------- | :--------------- | | 2021 | $216,000 | | 2020 | $436,000 | | Change | -$220,000 (-50.5%) | - Decrease primarily related to lower interest rates and lower average borrowings on the line of credit[160] - Imputed interest from the Utah facility sale/leaseback was $143,000 in FY2021 and $156,000 in FY2020[160] Gain on Extinguishment of Debt Dynatronics recognized a $3.5 million gain on extinguishment of debt in fiscal year 2021 due to the forgiveness of its Paycheck Protection Program loan Gain on Extinguishment of Debt (FY2021 vs. FY2020) | Fiscal Year | Gain on Extinguishment of Debt | | :---------- | :----------------------------- | | 2021 | $3,518,000 | | 2020 | $0 | - The gain resulted from the forgiveness of the Paycheck Protection Program loan[161] Other Income (Expense) Other income significantly increased to $2.4 million in fiscal year 2021, primarily driven by a $717,000 gain on property sale and a $1.7 million employee retention credit Other Income (Expense) (FY2021 vs. FY2020) | Fiscal Year | Other Income (Expense) | | :---------- | :--------------------- | | 2021 | $2,449,000 | | 2020 | -$7,000 | | Change | +$2,456,000 | - Increase primarily due to a $717,000 gain on the sale of property and equipment (Tennessee property) and a $1,726,000 employee retention credit[162] Net Income (Loss) Before Income Tax Pre-tax income for fiscal year 2021 was $1.99 million, a substantial improvement from a $3.44 million loss in fiscal year 2020, mainly due to decreased expenses and increased other income Pre-Tax Income (Loss) (FY2021 vs. FY2020) | Fiscal Year | Pre-Tax Income (Loss) | | :---------- | :-------------------- | | 2021 | $1,991,000 | | 2020 | -$3,436,000 | | Change | +$5,427,000 | - Increase primarily attributable to a decrease of $1,445,000 in SG&A, $220,000 in interest expense, and an increase of $5,974,000 in other income, offset by a decrease of $2,212,000 in gross profit[163] Income Tax Income tax benefit remained consistent at $10,000 for both fiscal years 2021 and 2020 Income Tax Benefit (FY2021 vs. FY2020) | Fiscal Year | Income Tax Benefit | | :---------- | :----------------- | | 2021 | $10,000 | | 2020 | $10,000 | Net Income (Loss) Dynatronics reported a net income of $2.0 million in fiscal year 2021, a significant improvement from a net loss of $3.4 million in fiscal year 2020 Net Income (Loss) (FY2021 vs. FY2020) | Fiscal Year | Net Income (Loss) | | :---------- | :---------------- | | 2021 | $2,001,000 | | 2020 | -$3,425,000 | [Net Income (Loss) Attributable to Common Stockholders](index=28&type=section&id=Net%