Dynatronics(US:DYNT)2024-02-06 16:00Financial Performance - Revenue for the three months ended December 31, 2023, totaled $8,151,351, a decrease of 25.1% compared to $10,882,557 for the same period in 2022 [49]. - Net sales decreased by $2,732,000, or 25.1%, to $8,151,000 for the quarter ended December 31, 2023, compared to $10,883,000 for the same quarter in 2022 [57]. - Gross profit for the quarter ended December 31, 2023, decreased by $1,242,000, or about 40.6%, to $1,820,000, representing 22.3% of net sales [59]. - Net loss for the quarter ended December 31, 2023, was $1,011,000, compared to a net loss of $841,000 for the same quarter in 2022 [65]. - The company recorded a net other expense of $110,000 for the quarter ended December 31, 2023, compared to $37,000 for the same quarter in 2022 [62]. Assets and Liabilities - As of December 31, 2023, the Company had inventories valued at $4,734,308 in raw materials, $53,813 in work in process, and $2,550,560 in finished goods [40]. - As of December 31, 2023, working capital was $3,721,000, down from $4,478,000 as of June 30, 2023 [70]. - The company has $401,000 in cash and cash equivalents as of December 31, 2023, compared to $399,000 as of June 30, 2023 [69]. - Cash and cash equivalents and restricted cash increased by $2,000 to $555,000 as of December 31, 2023, compared to $553,000 as of June 30, 2023 [82]. - Trade accounts receivable increased by approximately $16,000 or 0.4%, to $3,738,000 as of December 31, 2023, from $3,722,000 as of June 30, 2023 [83]. - Inventories decreased by $650,000 or 8.8%, to $6,753,000 as of December 31, 2023, compared to $7,403,000 as of June 30, 2023 [84]. - Accounts payable decreased by approximately $555,000 or 12.3%, to $3,975,000 as of December 31, 2023, from $4,530,000 as of June 30, 2023 [85]. - Finance lease liability totaled approximately $1,877,000 as of December 31, 2023, down from $2,018,000 as of June 30, 2023 [87]. - Operating lease liability decreased to approximately $3,134,000 as of December 31, 2023, from $3,630,000 as of June 30, 2023 [88]. - A full valuation allowance was recorded against net deferred income tax assets as of December 31, 2023, indicating uncertainty in realizability [89]. Financing and Capital Structure - The Company had a line of credit of $1,897,322 as of December 31, 2023, compared to $0 as of June 30, 2023 [42]. - The Company entered into a Loan Agreement on August 1, 2023, with a maximum availability of $7,500,000 for operating capital, bearing interest at SOFR plus 5.00% [43]. - The outstanding balance of the line of credit was $1,897,000 as of December 31, 2023, compared to $0 as of June 30, 2023 [86]. - The Company paid $191,244 in preferred stock dividends during January 2024, issuing 341,384 shares of common stock for the three months ended December 31, 2023 [39]. - Approximately $449,000 remained of the stock repurchase plan authorization as of December 31, 2023, with no purchases made since September 2011 [90]. - The company plans to raise up to $3,875,000 through an equity distribution agreement for potential liquidity needs [72]. Related-Party Transactions and Other Matters - Related-party transactions for the three months ended December 31, 2023, amounted to $332,989, an increase from $249,366 in the same period of 2022 [47]. - The net rebate liability increased to $360,314 as of December 31, 2023, from $191,459 as of June 30, 2023 [48]. - The Company adopted ASU 2016-13 on July 1, 2023, which did not have a material impact on its condensed consolidated financial statements [33]. - A proposed reverse stock split ratio between one-for-five to one-for-ten was approved by shareholders on December 7, 2023 [81]. - There were no off-balance sheet arrangements as of December 31, 2023 [91].