Dynatronics Reports $7.02 Million in Net Sales, Faces Revenue Decline and Liquidity Challenges

Dynatronics Corporation reported a net sales figure of $7.02 million for the quarter ending September 30, 2025, reflecting a decrease of 7.6% from $7.60 million in the same period last year. 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. Gross profit also fell to $1.73 million, down 12.6% from $1.98 million, resulting in a gross margin of 24.7%, compared to 26.1% in the prior year. The company recorded an operating loss of $88,463, an improvement from the loss of $250,996 reported in the same quarter of 2024.

In terms of expenses, Dynatronics successfully reduced its selling, general, and administrative (SG&A) costs by 18.5%, totaling $1.82 million compared to $2.23 million in the previous year. This reduction was primarily driven by lower salaries, benefits, and professional expenses. The net loss for the quarter was $201,857, a significant decrease from the $366,648 loss reported in the prior year, with net loss attributable to common stockholders also improving to $385,407 from $534,386. The basic and diluted net loss per share was $0.03, compared to $0.09 in the same quarter last year.

Operationally, Dynatronics has been focusing on improving its liquidity and addressing ongoing challenges. As of September 30, 2025, the company had $761,748 in cash and cash equivalents, up from $326,344 at the end of June 2025. However, working capital decreased to $592,564 from $718,110, indicating ongoing liquidity concerns. The company’s line of credit increased to $2.60 million, up from $1.99 million, reflecting its reliance on external financing. The total liabilities decreased to $11.94 million from $12.18 million, while stockholders' equity fell to $3.06 million from $3.26 million.

Dynatronics is currently implementing a comprehensive plan to enhance its operational efficiency and revenue generation. This includes transitioning the production of therapeutic modalities from contract manufacturing to in-house operations, which is expected to reduce costs and improve quality control. The company is also evaluating its inventory position to mitigate excess inventory exposure and is actively working to promote discounted prices to convert inventory into cash. Despite these efforts, the company acknowledges substantial doubt regarding its ability to continue as a going concern, primarily due to ongoing operating losses and liquidity challenges.

Looking ahead, Dynatronics faces uncertainties related to recent tariff changes between the U.S. and China, which could significantly impact its cost of goods sold. The company is taking proactive measures to manage inventory and supplier relationships to mitigate potential tariff-related costs. Additionally, the broader economic environment and global supply chain issues continue to pose risks to its liquidity and operational stability. The company remains committed to exploring new revenue streams and improving operational efficiency to navigate these challenges effectively.