Dynatronics reaffirmed net sales guidance for fiscal year ’23 of $45 million to $48 million. The midpoint of this range is a 5% improvement over the Company’s $44.3 million net sales in fiscal year ’22. The Company expects the distribution of net sales across the quarters in fiscal year ’23 to align with historical trends, which are highest in the first quarter, lower in the second and third quarters, with a bounce back in the fourth quarter. Given the persistent inflationary pressure, the Company is deferring providing gross margin guidance. Dynatronics does expect fiscal year ’23 to continue to expand towards its longer-term target of 40%. Selling, general, and administrative expenses are anticipated to be 30% to 35% of net sales in fiscal year ’23. Inventory is expected to remain at an elevated level to meet customer demand, and current market and supply chain conditions. Cash flow from operations in fiscal year ’23 should begin to improve as the Company sells down the inventory strategically built over the past year. The Company’s financial guidance for fiscal year ’23 is subject to the risks identified in its safe harbor notification below. The Company continues to expect volatility due to the challenges related to the broader economic environment and the COVID-19 global pandemic, including higher raw material, delivery and shipment costs, supply chain disruptions, extended handling times and delays or disruption in procedure volume. Dynatronics also expects some ongoing volatility from the Company’s business optimization.
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