Dynatronics Corporation reported a significant decline in financial performance for the quarter and nine months ended March 31, 2025, as detailed in its latest 10-Q filing. The company recorded net sales of $6.15 million for the third quarter, a decrease of 19.7% from $7.66 million in the same period last year. For the nine-month period, net sales fell to $21.05 million, down 16.3% from $25.16 million. The decline in revenue is attributed to reduced demand from original equipment manufacturer (OEM) customers and a general downturn in the orthopedic soft bracing product category.
The company's gross profit also suffered, decreasing by 39.7% to $1.10 million for the quarter, representing 17.8% of net sales, compared to 23.7% in the prior year. For the nine months, gross profit dropped to $4.72 million, or 22.4% of net sales, down from 23.6% in the previous year. Despite a reduction in selling, general, and administrative (SG&A) expenses, which fell by 14.6% to $2.04 million for the quarter, the overall financial results led to a net loss of $999,000, compared to a loss of $668,000 in the same quarter of 2024.
In terms of operational metrics, Dynatronics reported a decrease in trade accounts receivable, which fell by 17.6% to $2.84 million, reflecting the decline in sales. The company also noted an increase in accounts payable, which rose by 36.4% to $3.70 million, primarily due to timing of payments. The total liabilities decreased slightly to $11.43 million from $11.78 million as of June 30, 2024, while stockholders' equity dropped to $12.02 million from $14.16 million, largely due to the accumulated net losses.
Looking ahead, Dynatronics is implementing several strategic initiatives to address its financial challenges. Management has initiated cost-control measures aimed at reducing expenses by approximately $600,000 for fiscal year 2025 and $1.7 million on an annualized basis. The company is also optimizing its operational footprint and working to reduce excess inventory. However, the company faces uncertainties related to recent tariff changes between the U.S. and China, which could adversely impact future costs and operations. Despite these challenges, management believes that the implemented strategies will provide sufficient liquidity to meet obligations over the next twelve months.
About DYNATRONICS CORP
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