Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors

If you're looking at Dynatronics Corporation (DYNT), you need to look past the recent stock volatility and focus on the fundamentals, which tell a story of a company at a critical inflection point. The headline number from the fiscal year 2025 (FY2025) Annual Report is stark: net sales fell by 15.8% to $27,393,000, mostly due to a drop in demand for their orthopedic soft bracing products and lower volume from Original Equipment Manufacturer (OEM) customers. This top-line pressure, plus a significant goodwill impairment charge, pushed the net loss to a staggering $10,902,000 for FY2025, a massive increase from the $2,698,000 loss the year before. Here's the quick math: the company is burning cash, and its liquidity issues are so pronounced that management has flagged a substantial doubt about its ability to continue as a going concern. But, to be fair, they are fighting back; the Q1 FY2026 report showed a net loss improvement to $202,000 (from $367,000 a year prior) as cost-cutting measures, like reducing Selling, General, and Administrative (SG&A) expenses, start to take hold. The real near-term opportunity lies in their strategic move to bring therapeutic modality production in-house, which should cut third-party markups and boost that 21.9% gross profit margin. We defintely need to break down if these actions are enough to stabilize the ship and turn the tide for investors.

Revenue Analysis

The core takeaway for Dynatronics Corporation (DYNT) in fiscal year (FY) 2025 is a significant revenue contraction, driven by a drop in key product lines and a strategic portfolio clean-up. The company reported net sales of only $27,393,000 for the year ended June 30, 2025, which is a clear signal that the business model is under pressure.

This top-line figure represents a substantial year-over-year decrease of 15.8% from the FY 2024 net sales of $32,534,000. That kind of double-digit revenue decline is a flashing red light for any investor, and it was primarily caused by two factors: a reduction in overall volume from Original Equipment Manufacturer (OEM) customers and a general drop in demand for the orthopedic soft bracing products. They are facing a tough market, and the numbers defintely show it.

Dynatronics Corporation operates as a single business segment, focusing on medical products for the orthopedic, physical therapy, and rehabilitation markets. However, we can break down their sales into two primary product categories to see where the revenue is actually coming from, and where the pain points are.

• Physical Therapy and Rehabilitation Products: The largest revenue source.
• Orthopedic Soft Bracing Products: The segment facing the most significant demand headwind.

Here's the quick math on how the primary product lines contributed to the total FY 2025 net sales of $27.39 million.

The most significant change in the revenue profile is the strategic shift the company is undertaking to improve margins, even at the expense of immediate revenue. They are transitioning the production of their therapeutic modalities from a contract manufacturer to internal operations, which aims to cut costs by eliminating third-party markups. Also, they have been working to eliminate low-margin, third-party distributed products, which is a necessary but painful move that reduces revenue now to focus on higher-margin, manufactured products later. This move, while strategically sound for long-term margin improvement, is contributing to the current revenue decline. You need to weigh the short-term revenue risk against the long-term margin opportunity. For a deeper dive into the market's perception of these moves, you should be Exploring Dynatronics Corporation (DYNT) Investor Profile: Who's Buying and Why?

Profitability Metrics

The profitability picture for Dynatronics Corporation (DYNT) in the 2025 fiscal year is stark, showing a significant widening of losses despite some success in cutting administrative costs. The direct takeaway is that while the company is managing its day-to-day selling and general expenses, the core business is struggling with revenue and gross margin pressure, compounded by substantial non-cash charges.

For the fiscal year ended June 30, 2025, Dynatronics Corporation reported net sales of $27,393,000, a drop of 15.8% from the prior year. This decline directly squeezed the gross profit, which fell to $6,011,000. That puts the Gross Profit Margin at just 21.9%. Honestly, that's a tough place to start when your industry peers are operating with a median gross margin closer to 61.6%.

Here's the quick math on the key profitability ratios for Dynatronics Corporation in FY 2025:

To be fair, the Operating Loss (Earnings Before Interest and Taxes, or EBIT) of approximately -$2,000,000 (a -7.3% margin) shows that the loss from core operations, before massive non-cash charges, is actually much better than the industry median operating margin of -26.8%. But still, the full Net Loss ballooned to $10,902,000, a dramatic increase from the $2,698,000 loss in FY 2024.

That massive jump in the net loss is a red flag, defintely. It was primarily driven by significant non-cash impairment charges, including $7,117,000 in goodwill impairment, which you can't ignore. What this estimate hides is the one-time nature of these charges, but they reflect a necessary write-down of asset values due to the declining business outlook.

The trend shows operational efficiency is a mixed bag. The Gross Profit Margin has been sliding, dropping from 23.5% in FY 2024 to 21.9% in FY 2025, which points to cost of goods sold (COGS) issues or pricing pressure. This is a core problem. However, the company is attempting to manage costs elsewhere, reducing Selling, General, and Administrative (SG&A) expenses by 14.6% to $8,464,000 in FY 2025.

The key points on operational efficiency are clear:

• Gross Margin is under pressure due to lower sales volume, especially from OEM customers and soft bracing products.
• Cost management is visible in the 14.6% reduction in SG&A expenses year-over-year.
• The company is transitioning manufacturing in-house for therapeutic modalities, a move that could eventually help gross margin but presents near-term execution risk.

The company's Net Profit Margin of -39.8% is essentially in line with the industry median of -38.7% for Surgical and Medical Instruments and Apparatus. But you need to remember that Dynatronics Corporation's figure includes those huge impairment charges. The real opportunity for Dynatronics Corporation is to stabilize its revenue and push that Gross Margin back up, because you can only cut SG&A so much before you hurt your ability to sell. For a deeper dive, check out Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

When you look at Dynatronics Corporation's (DYNT) balance sheet, the first thing that jumps out is the aggressive capital structure, which leans heavily on debt relative to shareholder equity. This is a critical factor for any investor or decision-maker to understand, as it directly maps to the company's financial risk.

As of the most recent quarter, Dynatronics Corporation's debt-to-equity (D/E) ratio stood at a high of approximately 203.25% (or 2.03x). Here's the quick math: with Total Debt at around $6.63 million and Total Equity at $3.262 million (as of June 30, 2025), the leverage is clear. For context, the median D/E ratio for the Surgical and Medical Instruments and Apparatus industry is closer to 0.70 (70%), meaning Dynatronics Corporation is operating with nearly three times the debt leverage of its median peer.

This high ratio signals that the company is primarily funding its operations and assets through borrowing rather than through retained earnings or new equity investment. It is a defintely a high-risk profile, especially for a company that has been dealing with a negative retained earnings balance of $-40.51 million. A D/E ratio over 1.5x is generally considered a red flag for most industries, and 2.03x is a significant burden.

Looking at the composition of that debt gives you a clearer picture of the near-term obligations versus the long-term strategic financing. The company's line of credit remains a key part of its funding, with an outstanding balance of $1,997,000 as of June 30, 2025. While they slightly reduced this balance from the prior year, the overall debt load remains substantial against the equity base.

The total debt is split between current (short-term) and non-current (long-term) liabilities, reflecting the immediate pressure points on liquidity. This breakdown shows where the cash flow demands will hit first:

• Current Debt (Short-term): Approximately $3.336 million
• Long-term Debt (Non-current): Approximately $1.108 million

The reliance on debt has been a major concern, so much so that the company's auditor raised a 'Going Concern' doubt in October 2025, which is the most serious warning sign about a company's ability to stay in business. This is why the market has reacted, with the stock transitioning to the OTC Markets Group.

The balance between debt and equity is not a stable one for Dynatronics Corporation right now. They need to shift their focus from debt financing to either significant new equity raises or, more critically, to generating enough operational cash flow to aggressively pay down the debt. For a deeper dive into the company's overall financial picture, check out the full post: Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors.

Next step: Financial team needs to model a 12-month debt-reduction scenario with a target D/E ratio below 1.0x.

Liquidity and Solvency

You need to know if Dynatronics Corporation (DYNT) can cover its near-term bills. Honestly, the picture is tight. The company's liquidity position, which is its ability to meet short-term obligations, shows significant pressure, but there are a few recent bright spots in cash generation you shouldn't ignore.

Looking at the fiscal year ended June 30, 2025, the Current Ratio sits at just 1.09. This means for every dollar of current liabilities (bills due within a year), Dynatronics Corporation has $1.09 in current assets. That's barely above the 1.0 floor, and it defintely doesn't give much cushion. The quick math here is that the company is relying heavily on its inventory to make that number work.

The Quick Ratio confirms this reliance, coming in at a low 0.40 for the same period. The Quick Ratio, or acid-test ratio, strips out inventory-which can be slow to convert to cash-so a number below 1.0 is a clear warning sign. It shows Dynatronics Corporation only has $0.40 in highly liquid assets (cash, receivables) for every dollar of immediate debt. They need to sell that inventory, and fast.

Working capital, which is current assets minus current liabilities, is technically positive based on the Current Ratio, but the trend has been a struggle. The low Quick Ratio means the company's working capital is mostly tied up in inventory and receivables. If customers take longer to pay, or if inventory becomes obsolete, that small positive working capital evaporates instantly.

The cash flow statement overview for the Trailing Twelve Months (TTM) leading up to the end of the fiscal year 2025 tells a more nuanced story, which is crucial for a business like this:

• Operating Cash Flow (OCF): This was a positive $300.58K (TTM). Generating cash from core business operations is a major turnaround from prior negative trends and is a true strength.
• Investing Cash Flow (ICF): This was a minor outflow of -$30.45K (TTM). This low number reflects minimal capital expenditure (CapEx), which is common for companies focused on conserving cash.
• Financing Cash Flow (FCF): This showed a net outflow of -$427,709 for the fiscal year ended June 30, 2025. This was primarily driven by principal payments on finance lease liabilities, meaning they are paying down debt obligations, which is good, but it reduces their cash on hand.

Here is a quick snapshot of the cash flow trends:

The biggest potential liquidity concern is the company's own assessment: management has determined there is substantial doubt about its ability to continue as a going concern. This is a serious, canonical entity in financial reporting, triggered by recurring operating losses and continued reduction in liquidity. While the positive operating cash flow is a step in the right direction, it's not enough to fully offset the overall financial strain. You can dive deeper into the ownership structure in Exploring Dynatronics Corporation (DYNT) Investor Profile: Who's Buying and Why?

Next Step: Review the latest 10-Q to see if the positive OCF trend has continued past June 2025, as this is the single most important metric for near-term survival.

Valuation Analysis

You are looking at Dynatronics Corporation (DYNT) and wondering if the market has it right. The direct takeaway is that, based on traditional metrics, Dynatronics Corporation appears significantly undervalued relative to analyst price targets, but its negative profitability ratios signal deep financial distress, making it a high-risk turnaround play.

The company's valuation is complicated because it is currently losing money. For the 2025 fiscal year, Dynatronics Corporation reported revenue of $27.39 million but a net loss of -$11.60 million, which skews the standard profitability ratios. You can't just look at a low P/E and call it a bargain; you have to understand why the ratios are where they are.

Here's the quick math on key valuation multiples, which point to a company trading for pennies on the dollar, but also facing existential challenges:

• Price-to-Earnings (P/E) Ratio: The current P/E ratio is -0.03x (based on TTM data as of November 2025). This negative figure is a red flag, indicating the company is not profitable. A negative P/E means the company has negative earnings per share (EPS), so the ratio is not a useful tool for valuation here.
• Price-to-Book (P/B) Ratio: The current P/B ratio is a low 0.20. This suggests the stock is trading at only 20 cents for every dollar of book value (assets minus liabilities), which is a classic sign of a deeply undervalued stock-or a value trap.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA is also negative, sitting at approximately -5.65 as of November 2025, due to a trailing twelve-month (TTM) EBITDA of -$1.35 million. Negative EBITDA means the company's core operations aren't generating enough cash before debt, taxes, and depreciation, making this ratio unhelpful for comparison.

The stock price trend over the last 12 months shows extreme volatility and a major decline. Shares in Dynatronics Corporation closed recently around $0.04 to $0.05, having traded in a 52-week range between $0.04 and $0.20. The stock price has fallen by -66.89% over the past 365 days, a stark indicator of investor pessimism and the company's transition to the OTC Markets Group.

One clean one-liner: The stock is cheap for a reason.

Dynatronics Corporation does not pay a cash dividend to common shareholders, so the dividend yield is 0.00%. This is typical for a company focused on retaining capital to fund operations and manage its recurring losses.

To be fair, the analyst consensus presents a radically different picture than the current stock price. The average price target from 7 analysts is a staggering $4.08, leading to a consensus recommendation of Buy. This implies an upside of over 8,000% from the current price, a clear signal that some analysts see a massive turnaround or a significant corporate action on the horizon. However, other technical analyses show short- and long-term sell signals, suggesting a more cautious Hold or accumulate position is warranted while awaiting further development. This wide gap between the current price and the target is the definition of a high-stakes bet. For more on the institutional interest, see Exploring Dynatronics Corporation (DYNT) Investor Profile: Who's Buying and Why?

Here is a summary of the key valuation data:

What this estimate hides is the significant risk of loan default and thin liquidity that the company is facing, as disclosed in its recent filings. The 'Buy' rating is a bet on a successful restructuring or a major catalyst, defintely not a reflection of current financial health.

Risk Factors

You're looking at Dynatronics Corporation (DYNT) and seeing a complex risk profile, which is defintely the right way to approach this. The direct takeaway is that the company faces an existential financial risk-a substantial doubt about its ability to continue as a going concern-driven by a history of losses and critically tight liquidity.

The core issue is a combination of financial distress and operational headwinds that make the path to profitability extremely challenging. Here's the quick math on the financial strain: Dynatronics reported a net loss of over $10.9 million for the fiscal year ended June 30, 2025, which is a massive jump from the prior year. That loss included significant non-cash charges, but it still highlights the severity of the financial downturn.

• Financial and Liquidity Risk: The most pressing risk is the 'going concern' warning from the auditor. The company's working capital stood at only $718,000 as of June 30, 2025, down sharply from the prior year, reflecting severe liquidity constraints. Plus, they are relying on a line of credit that is currently under a default notice.
• Revenue and Operational Risk: Net sales for FY 2025 dropped to $27,393,000, a decrease of 15.8%. This decline is concentrated in two areas: lower volume from Original Equipment Manufacturer (OEM) customers and a general reduction in demand for orthopedic soft bracing products. This shows a vulnerability in their product mix and customer base.
• Impairment Charges: The FY 2025 results were heavily impacted by non-cash charges, specifically $7,117,000 in goodwill impairment and $950,000 in intangible impairment charges. These charges are a clear signal that the carrying value of previous acquisitions and assets is no longer supported by the expected future cash flows.
• Customer Concentration: A strategic risk lies in customer concentration. In FY 2025, two major customers accounted for 14.5% and 12.0% of total net sales. Losing either one would immediately cut more than a tenth of the company's revenue.

On the external front, Dynatronics Corporation operates in a highly competitive medical device industry, facing numerous competitors of varying sizes. Also, like many companies with international supply chains, they face market condition risks from macroeconomic pressures and the uncertainty of recent tariff changes between the U.S. and China, which could significantly affect future costs of revenue.

Mitigation Strategies and Limits

To be fair, management isn't sitting still. They are implementing a comprehensive plan to stabilize the business. The company has focused on cost control, successfully reducing Selling, General, and Administrative (SG&A) expenses by 14.6% to $8,464,000 in FY 2025.

Strategically, they are shifting production of most therapeutic modalities to internal operations from a contract manufacturer. This aims to cut third-party markups and improve quality control, which should help gross margins over time. They are also promoting discounted prices to convert excess inventory to cash, a necessary, if painful, short-term liquidity fix.

What this estimate hides is the execution risk. These mitigation strategies are critical, but they are a race against the clock given the going concern warning and the default on the line of credit. The success of the internal production shift and the ability to generate positive operating cash flow are the two key action items to monitor. Want more detail on the financial health? Check out Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Dynatronics Corporation (DYNT) and seeing a tough fiscal year 2025, which is fair. The reality is the company posted net sales of only $27,393,000, a significant drop of 15.8% from the prior year, and a net loss of $10,902,000. Honestly, the auditor even raised a substantial doubt about the company's ability to continue as a going concern due to recurring losses. So, where is the growth supposed to come from?

The growth story for Dynatronics Corporation isn't about massive new markets right now; it's about a critical operational turnaround designed to stabilize the business and then scale. The near-term opportunity lies in their strategic initiatives to cut costs and consolidate market share, which is a defintely necessary step before any real expansion can happen.

Strategic Actions Driving Future Revenue

The core of the company's plan is to shift from a high-cost, high-complexity model to a leaner, vertically integrated one. This isn't a flashy product launch, but it's the only way to fix their gross margin problem. Specifically, they are transitioning production from a contract manufacturer to internal operations to better control quality and, crucially, to reduce costs and improve supply chain reliability. This move is the foundation for future profitability.

Plus, Dynatronics Corporation is actively pursuing an acquisition strategy to consolidate other manufacturers in its core physical therapy and rehabilitation markets. This is a smart way to grow revenue quickly and eliminate competitors, especially when their own working capital is tight at only $718,000 as of June 30, 2025. They need to be very disciplined about M&A integration to make it work, though.

• Transition to in-house manufacturing for cost control.
• Pursue targeted M&A to consolidate core markets.
• Implement cost reduction and operational streamlining.

Product and Market Positioning

The company's competitive advantage rests on its portfolio of established, high-quality brands that are trusted by orthopedists, physical therapists, and athletic trainers. You're buying into a portfolio of known entities, not a single speculative product. Their key brands, like Bird & Cronin® for soft bracing and Hausmann™ for treatment tables, are staples in the market, along with their advanced therapeutic modalities like the Solaris® Plus and the new Thermostim.

The current analyst consensus, despite the grim 2025 results, projects a significant revenue increase, which suggests a belief in the success of these strategic shifts. Here's the quick math on the projected top-line growth:

What this estimate hides is the execution risk. That $38.3 Million revenue projection, representing a potential 17.7% increase, is dependent on the successful execution of the internal manufacturing transition and the realization of cost synergies from new acquisitions. If management can deliver on the cost side, the revenue increase will finally lead to positive earnings per share (EPS), which is currently projected at -0.4 for the year. For a deeper dive into the risks and opportunities, you should read our comprehensive analysis: Breaking Down Dynatronics Corporation (DYNT) Financial Health: Key Insights for Investors.