DYNATRONICS CORP

Dynatronics Corp Annual Investment Review

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1. Business Performance 📊

• Sales Slump:

  • 2025 Sales: $27.4M (down 16% from $32.5M in 2024)
  • Think of it like: A local grocery store losing 1,600 loyal customers overnight.

• Profit Reality Check:

  • 2025 Net Loss: -$10.9M (vs. -$1.1M loss in 2024)
  • A single $7.1M asset write-off (like overpaying for a website domain that lost value) caused 65% of this loss.

• Cash Flow Glimmer:

  • 2025 Operating Cash Flow: +$300k (vs. -$1.6M in 2024)
  • Translation: They stopped overspending $4,400/month and now live paycheck-to-paycheck.
  • Spending Cut: Slashed equipment purchases by 88% ($30k vs. $243k in 2024).

• Shrinking Safety Net:

  • Stockholders' equity (the company’s "net worth") dropped 77% from $14.2M (2024) to $3.3M (2025).

The company didn’t share specific plans to reverse sales declines, which investors should watch closely.

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2. What Could Go Wrong? 🔍

• Double Trouble: Sales are falling and losses are growing—a risky combo for paying debts.

• Equity Erosion: With only $3.3M in net worth, another bad year could wipe out remaining value.

• Debt Squeeze 🔐:

  • Owes $3.70 for every $1 it owns ($12.2M liabilities vs. $3.3M equity).
  • Lease Lock-Ins: Must pay $1.3M/year in rent through 2028—that’s 85% of their annual cash flow.

• Cash Crunch Alert 💸:

  • Only $377k cash left. While they’re now generating $300k/year from operations, they still need to pay $556k-$747k/year just to keep the lights on.

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The Bottom Line (Plain English)

Dynatronics is treading water in a storm:

• 🔴 Business Decline: Sales dropped 16%, losses jumped 10x.
• 🔴 Weak Foundation: Net worth fell 77% in one year.

Small Wins:

• First positive cash flow in years (+$300k).
• Cut equipment spending by 88%.
• Reduced credit line debt by $125k (still owes $2M).

Big Worries:

• Lease payments eat up most cash flow.
• No clear path to growth shared in the report.

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Should You Invest?

Proceed with extreme caution. The company is:
✅ Doing better at managing day-to-day cash.
❌ Struggling with shrinking sales, heavy debt, and razor-thin safety margins.

This report lacks details on growth strategies or new opportunities, which could mean less transparency for investors. Always research further!

Final Takeaway: Dynatronics needs a major turnaround. Only consider if you’re comfortable with high risk and have faith in unproven leadership plans.

Remember: This is a snapshot—your own research is key! 😊