Dynatronics Corp (DYNT) 2023 Q2 法說會逐字稿

Welcome to Dynatronics' Second Quarter Fiscal Year 2023 Earnings Call. My name is Jenny, and I will be your operator for today's call. As a reminder, this conference call is being recorded for replay purposes. Following today's presentation, there will be a question-and-answer session with analysts. (Operator Instructions)

歡迎來到 Dynatronics 2023 財年第二季度財報電話會議。我叫珍妮，我將擔任今天電話的接線員。提醒一下，正在錄製此電話會議以供重播。在今天的演講之後，將有分析師的問答環節。 （操作員說明）

It is now my pleasure to turn the floor over to your host, Mr. John Krier, the company's President, Chief Executive Officer and Chief Financial Officer. John, the floor is yours.

現在我很高興將發言權交給東道主 John Krier 先生，他是公司的總裁、首席執行官兼首席財務官。約翰，地板是你的。

Thank you, operator. Good morning, everyone, and welcome to Dynatronics' second quarter earnings call.

謝謝你，運營商。大家早上好，歡迎來到 Dynatronics 第二季度財報電話會議。

Before we begin, I will call your attention to our safe harbor statement. I remind you that the discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. We caution you not to place undue reliance on forward-looking statements we may make this morning. We undertake no obligation to update or revise forward-looking statements.

在我們開始之前，我會提請您注意我們的安全港聲明。我提醒您，本次電話會議期間的討論將包括前瞻性陳述。公司最近向美國證券交易委員會提交的文件中討論了可能導致實際結果出現重大差異的因素。我們告誡您不要過分依賴我們今天上午可能做出的前瞻性陳述。我們不承擔更新或修改前瞻性陳述的義務。

During our prepared remarks, we will be referring to slides that are available for viewing in the webcast and posted on our Investor Center page at dynatronics.com.

在我們準備好的評論中，我們將參考可在網絡廣播中查看並發佈在 dynatronics.com 的投資者中心頁面上的幻燈片。

On today's call, we will cover the highlights and achievements of the second quarter of fiscal year 2023, as well as provide commentary on the financials. And then we will have the operator open the phone lines for questions from our analysts.

在今天的電話會議上，我們將介紹 2023 財年第二季度的亮點和成就，並提供財務評論。然後我們將讓接線員打開電話線，接受我們分析師的提問。

Slide 3 highlight a few of our recent accomplishments as we continue our journey to exceed market revenue growth rates and establish a sustainable business that generates consistent profitability.

幻燈片 3 重點介紹了我們最近取得的一些成就，因為我們繼續超越市場收入增長率並建立可持續的業務以產生持續的盈利能力。

Three key takeaways for our second quarter. I will begin at the highest level to briefly speak to the macroeconomic environment we are seeing. We, like our competitors and other industries, continue to face inflationary pressures, supply chain challenges and inconsistent utilization, all of which work to somewhat dampen our quarterly results.

我們第二季度的三個關鍵要點。我將從最高級別開始簡要介紹我們所看到的宏觀經濟環境。與我們的競爭對手和其他行業一樣，我們繼續面臨通脹壓力、供應鏈挑戰和不一致的利用率，所有這些都在一定程度上削弱了我們的季度業績。

We are happy to report, however, that despite these headwinds, we continued to stabilize and improve our gross margin profile. Our Q2 gross margin was 28.1% or an increase of 8.4% from the prior fiscal year. Though the macroeconomic headwinds prevented us from achieving quarter-over-quarter margin expansion. We expect raw material availability, inflationary pressures and freight volatility to improve throughout calendar 2023 and remain confident in the business outlook and in our differentiated strategy. And we'll maintain our net sales guidance of $45 million to $48 million for fiscal year 2023.

然而，我們很高興地報告，儘管存在這些不利因素，我們繼續穩定並改善我們的毛利率狀況。我們第二季度的毛利率為 28.1%，比上一財年增長 8.4%。儘管宏觀經濟逆風阻礙了我們實現利潤率環比增長。我們預計原材料供應、通脹壓力和運費波動將在整個 2023 年得到改善，並對業務前景和我們的差異化戰略充滿信心。我們將維持 2023 財年 4500 萬至 4800 萬美元的淨銷售額指引。

And finally, our commercial execution delivered the 7th consecutive quarter of organic revenue growth, above the baseline we set in April 2021 and at or above market growth rates. We are executing with a clean balance sheet, managing our inventory balances to appropriate levels, all while handling the increased demand for our products amidst the backdrop of new product innovations.

最後，我們的商業執行實現了連續第 7 個季度的有機收入增長，高於我們在 2021 年 4 月設定的基線，並且達到或高於市場增長率。我們正在執行一個乾淨的資產負債表，將我們的庫存餘額管理到適當的水平，同時在新產品創新的背景下處理對我們產品不斷增長的需求。

Moving to Slide 4. As a reminder, the full income statement and management discussion and analysis can be found in the 10-Q queue. I will summarize some of the key financials here. Net sales were $10.9 million for the second quarter of fiscal year '23. That compares to net sales of $10.5 million in the prior-year period, representing an organic growth rate of 3.3%. Gross profit for the quarter was $3.1 million, or, as I noted earlier, 28.1% of net sales, compared to $2.1 million, or 19.8% of net sales in the same period the prior year. The increase in gross profit as a percentage of net sales was driven by a combination of net price realization and better overall product mix.

轉到幻燈片 4。提醒一下，完整的損益表以及管理層的討論和分析可以在 10-Q 隊列中找到。我將在這裡總結一些主要的財務數據。 23 財年第二季度的淨銷售額為 1090 萬美元。相比之下，去年同期的淨銷售額為 1050 萬美元，有機增長率為 3.3%。本季度的毛利潤為 310 萬美元，或者如我之前所述，占淨銷售額的 28.1%，而去年同期為 210 萬美元，占淨銷售額的 19.8%。毛利潤占淨銷售額百分比的增加是由淨價實現和更好的整體產品組合共同推動的。

While we have seen a slowing of cost increases during Q2 of fiscal year '23 in both freight and raw materials, specifically inbound freight, we remain cautious and have modeled cost pressures to continue for the remainder of calendar 2023. Selling, general and administrative expenses increased $0.4 million, or 10.9%, to $3.9 million for the quarter ended December 31, 2022, compared to $3.5 million for the quarter ended December 31, 2021. Investments in marketing and marketing programs were the primary drivers of the increase.

雖然我們看到 23 財年第二季度運費和原材料（特別是入境運費）的成本增長放緩，但我們仍然保持謹慎，並模擬了成本壓力將在 2023 年剩餘時間持續。銷售、一般和管理費用截至 2022 年 12 月 31 日的季度增加 40 萬美元或 10.9% 至 390 萬美元，而截至 2021 年 12 月 31 日的季度為 350 萬美元。營銷和營銷計劃的投資是增長的主要驅動力。

Net loss for Q2 fiscal year '23 was $0.8 million. That compares to a net loss of $1.4 million in the same period of fiscal year 2022. Separately, the company completed its reverse stock split on February 1, 2023. And additional details will be provided later in today's presentation. Outstanding shares will increase approximately 75,000 per quarter, depending on our share price. The approximately 75,000 shares per quarter is based on a reverse stock split adjusted share price of $2.25 per share.

23 財年第二季度的淨虧損為 80 萬美元。相比之下，2022 財年同期的淨虧損為 140 萬美元。另外，該公司於 2023 年 2 月 1 日完成了反向股票拆分。更多詳細信息將在今天的演示文稿中提供。根據我們的股價，流通股每季度將增加約 75,000 股。每季度約 75,000 股是基於每股 2.25 美元的反向股票分割調整後的股價。

The net cash balance was approximately $0.7 million on December 31, 2022. The same as on June 30, 2022. We reduced our inventory balance to $10.7 million, with a reduction of approximately $1.4 million from the balance on June 30, 2022. We will continue to strategically optimize our inventory while preparing for new product introductions and seasonal growth in our fiscal fourth quarter. Cash generated by operating activities was $0.3 million for the first 6 months of our fiscal year 2023 which compares to cash used by operating activities of $2.4 million in the same 6 months of the prior year.

2022 年 12 月 31 日的淨現金餘額約為 70 萬美元。與 2022 年 6 月 30 日相同。我們將庫存餘額減少至 1070 萬美元，比 2022 年 6 月 30 日的餘額減少約 140 萬美元。我們將繼續戰略性地優化我們的庫存，同時為第四財季的新產品推出和季節性增長做準備。 2023 財年前 6 個月，經營活動產生的現金為 30 萬美元，而去年同期的 6 個月，經營活動使用的現金為 240 萬美元。

This concludes our summary of the financial and operating results.

我們對財務和經營業績的總結到此結束。

Turning to Slide 5. We will continue to provide guidance on metrics that we are confident with. And we are affirming our expectation that net sales in fiscal year '23 be in the range of $45 million to $48 million. The midpoint of this sales guidance represents a 5% organic growth rate relative to the $44.3 million annual net sales in fiscal year '22. The company expects the distribution of net sales in fiscal year '23 across the quarters to align with historical trends. Highest in the first quarter, lower in the second and third quarters with higher growth again in the fourth quarter. Our second quarter continued this historical seasonal trend.

轉到幻燈片 5。我們將繼續就我們有信心的指標提供指導。我們確認我們對 23 財年淨銷售額在 4500 萬美元至 4800 萬美元之間的預期。相對於 22 財年 4430 萬美元的年度淨銷售額，該銷售指導的中點代表了 5% 的有機增長率。公司預計 23 財年各季度的淨銷售額分佈將與歷史趨勢保持一致。第一季度最高，第二和第三季度較低，第四季度再次增長。我們的第二季度延續了這一歷史季節性趨勢。

Moving to Slide 6. As we have stated in earlier calls, gross margin expansion remains a key focus. Gross margin increased to 28.1% in Q2, an 8.4% increase from the prior-year gross margin of 19.8%. Sequentially, the decrease in gross margin of 2.1% from Q1 reflects seasonality coupled with macroeconomic supply chain challenges. As a company, we are executing on a 6-point gross margin plan.

轉到幻燈片 6。正如我們在之前的電話會議中所說，毛利率擴張仍然是一個關鍵焦點。第二季度毛利率增至 28.1%，較上年同期的 19.8% 增長 8.4%。因此，毛利率較第一季度下降 2.1%，反映了季節性因素以及宏觀經濟供應鏈的挑戰。作為一家公司，我們正在執行 6 點毛利率計劃。

Number one, price rationalization. An example is our tiered pricing strategy which rewards customer loyalty. This strategy is being tested with recent competitive acquisitions in our rehabilitation market. However, our dealer network has remained strongly aligned to our strategy. We remain committed to rewarding those dealers who demonstrate loyalty to our brands. And we remain 100% a dealer-centric organization in our rehabilitation product categories.

第一，價格合理化。一個例子是我們獎勵客戶忠誠度的分層定價策略。這一戰略正在接受我們康復市場最近的競爭性收購的考驗。然而，我們的經銷商網絡一直與我們的戰略保持一致。我們仍然致力於獎勵那些對我們的品牌表現出忠誠度的經銷商。在我們的康復產品類別中，我們仍然是 100% 以經銷商為中心的組織。

Number two, rationalized product. In addition to the major shift in April 2021, we routinely execute on streamlining our product offering. Internally, we simply say we must grow over the disruption. This is routine product lifecycle maintenance. Our disciplined execution in this area is a key to longer-term margin expansion.

第二，合理化產品。除了 2021 年 4 月的重大轉變外，我們還定期執行精簡我們的產品供應。在內部，我們只是說我們必須在顛覆中成長。這是例行的產品生命週期維護。我們在這一領域的嚴格執行是長期利潤擴張的關鍵。

Number three, new product introductions. In the past quarter we exceeded 1 million in Mammoth table sales orders after less than a year on the market.

第三，新產品介紹。在上個季度，我們在上市不到一年後的 Mammoth 餐桌銷售訂單就超過了 100 萬張。

The remaining 3 opportunities in our 6-point plan are number four, manufacturing efficiencies; number five, revenue scale; and number six, mergers and acquisitions. We continue to explore all options to drive these 3 additional elements of our plan.

我們 6 點計劃中剩下的 3 個機會是第四，製造效率；第五，收入規模；第六，併購。我們將繼續探索所有選項來推動我們計劃的這 3 個額外要素。

My team and I are committed to execute our strategy and move us from the current approximate 30% year-to-date gross margin performance to our future potential based on the 6-point plan.

我和我的團隊致力於執行我們的戰略，並根據 6 點計劃將我們的毛利率從目前大約 30% 的年初至今表現提高到我們的未來潛力。

Slide 7 reaffirms Dynatronics' fiscal year '23 guidance details. Net Sales are expected to be in the range of $45 million to $48 million. The midpoint of this range, $46.5 million, represent 5% organic revenue growth.

幻燈片 7 重申了 Dynatronics 的 23 財年指導細節。淨銷售額預計在 4500 萬至 4800 萬美元之間。該範圍的中點為 4650 萬美元，代表 5% 的有機收入增長。

Given the persistent inflationary pressure, macroeconomic impacts and supply chain challenges, we are deferring providing gross margin guidance. We do expect fiscal year '23 to continue the expansion towards our longer-term target of 40%. Year-to-date, we have improved gross margin by 4.1%. We anticipate selling, general and administrative expenses of 30% to 35% of net sales in the fiscal year '23. As we gain revenue scale, we expect to continually leverage our SG&A cost base. Year-to-date, selling, general and administrative expenses are 34.8% of net sales. And we expect this to slightly improve and fall firmly within the range we anticipate.

鑑於持續的通脹壓力、宏觀經濟影響和供應鏈挑戰，我們推遲提供毛利率指引。我們確實預計 23 財年將繼續向我們 40% 的長期目標擴張。今年迄今為止，我們的毛利率提高了 4.1%。我們預計 23 財年的銷售、一般和管理費用將占淨銷售額的 30% 至 35%。隨著我們獲得收入規模，我們希望繼續利用我們的 SG&A 成本基礎。年初至今，銷售、一般和管理費用占淨銷售額的 34.8%。我們預計這會略有改善並穩穩地落在我們預期的範圍內。

We understand what it takes to build a scalable platform, to grow our customer and sales base, to be a much larger company in our markets, drive margin expansion and consistently deliver strong cash flow from operations to create value for shareholders. We will continue to focus on further improving all our financial metrics. This guidance is based on our current operations and it's subject to the risk factors and other forward-looking statements and uncertainties contained in this presentation and in our filings with the SEC.

我們了解構建可擴展平台、擴大我們的客戶和銷售基礎、在我們的市場中成為一家更大的公司、推動利潤率增長並持續提供強勁的運營現金流以為股東創造價值需要什麼。我們將繼續專注於進一步改善我們所有的財務指標。本指南基於我們目前的運營，並受本演示文稿和我們向美國證券交易委員會提交的文件中包含的風險因素和其他前瞻性陳述和不確定因素的影響。

Turning to Slide 9. The Dynatronics differentiated growth platform targets initiatives in each of these strategic priorities. Momentum has been building on our gross margin expansion and as we move into Q3 and Q4 of our fiscal 2023. While we acknowledge the year-over-year improvement, we are not satisfied with our progress. New, targeted and innovative product releases are the third pillar of our gross margin improvement plan. And we plan to continue to improve our performance in this area.

轉到幻燈片 9。Dynatronics 差異化增長平台針對每個戰略優先事項中的舉措。隨著我們進入 2023 財年的第三季度和第四季度，我們的毛利率增長勢頭一直在增強。雖然我們承認同比有所改善，但我們對我們的進展並不滿意。新的、有針對性的創新產品發布是我們毛利率改善計劃的第三大支柱。我們計劃繼續提高我們在這方面的表現。

Let's move to Slide 9. Healthy med tech companies, depending on industry or subspecialty, routinely drive 15% to 20% of revenue from products released in the past 3 years. The best companies often raise this bar to 30%-plus of net sales. The Dynatronics team has now reached approximately 6% of revenue coming from products released in the past 3 years. And this was launched from a standing start at the end of calendar 2020. I'm incredibly proud of our marketing, engineering, supply chain and operations teams for helping initiate this growth culture. And there's more to come.

讓我們轉到幻燈片 9。根據行業或子專業的不同，健康醫療技術公司通常會從過去 3 年發布的產品中獲得 15% 到 20% 的收入。最好的公司通常將這一標準提高到淨銷售額的 30% 以上。 Dynatronics 團隊現在已達到約 6% 的收入來自過去 3 年發布的產品。這是在 2020 日曆年底從一個固定的開始啟動的。我為我們的營銷、工程、供應鍊和運營團隊幫助啟動這種增長文化感到無比自豪。還有更多。

Please turn to Slide 10 on winning market share. We strive to be an organization that consistently demonstrates execution to its plan. Not just words, but solid execution to simple principles. We win market share through, number one, superior commercial execution. Make the dealers' and customers' lives as easy as possible and make it simpler to do business with us. And two, favorable mix shift to product innovations. We remain focused on driving improvement in our dealer and end-customer experience, offering volume-tiered pricing that rewards customer loyalty and delivering product innovations that give dealers reasons to continue moving their end-customers to Dynatronics. Dynatronics' management team is focused on methodical execution and continually seeking a strong differentiated understanding of the commercial landscape in the product categories we compete in.

請轉到有關贏得市場份額的幻燈片 10。我們努力成為一個始終如一地執行其計劃的組織。不僅僅是言語，而是對簡單原則的紮實執行。第一，我們通過卓越的商業執行贏得了市場份額。讓經銷商和客戶的生活盡可能輕鬆，讓與我們做生意更簡單。第二，有利的組合轉向產品創新。我們仍然專注於推動經銷商和最終客戶體驗的改善，提供獎勵客戶忠誠度的批量定價，並提供產品創新，讓經銷商有理由繼續將他們的最終客戶轉移到 Dynatronics。 Dynatronics 的管理團隊專注於有條不紊的執行，並不斷尋求對我們競爭的產品類別中的商業前景的強烈差異化理解。

Before I close with the investment highlights of Dynatronics, I want to share additional details of the recently completed reverse stock split as shown on Slide 11. As background, our shareholders authorized the Board of Directors to affect this split to ensure Nasdaq compliance with the $1 minimum bid requirement. The reverse stock split was effective at 5 p.m. Eastern Time, on Wednesday, February 1, 2023. The 1 for 5 split was authorized and approved at the annual shareholder meeting on November 17, 2022.

在我結束 Dynatronics 的投資亮點之前，我想分享一下最近完成的反向股票拆分的更多細節，如幻燈片 11 所示。作為背景，我們的股東授權董事會影響這一拆分，以確保納斯達克遵守 1 美元最低投標要求。反向股票分割於下午 5 點生效。東部時間，2023 年 2 月 1 日，星期三。1 股 5 股的拆分在 2022 年 11 月 17 日的年度股東大會上獲得授權和批准。

Key reverse stock split execution points. Outstanding common shares were reduced from approximately 19.6 million shares to approximately 3.9 million shares. Preferred shares remain unchanged. However, the conversion feature was reduced in the same 1-for-5 ratio, from 3,351,000 shares to 670,200 shares. Additional comparative details are available in the appendix of today's presentation.

關鍵反向股票分割執行點。已發行普通股從約 1960 萬股減少至約 390 萬股。優先股保持不變。但是，轉換功能以相同的 1 比 5 的比例減少，從 3,351,000 股減少到 670,200 股。更多比較詳細信息可在今天的演示文稿的附錄中找到。

Slide 12 shows the investment highlights for Dynatronics. The markets we serve, rehabilitation and bracing, have stable growth profiles. Our sales and share growth have been driven by customer and dealer reaction to our business transformation. Sales have exceeded the market or our baseline expectation for 7 consecutive quarters now. We target improvement in gross margin in fiscal year '23 despite the macroeconomic environment. We have approximately $0.7 million of cash and $10.7 million of inventory on the balance sheet at the end of December, with no debt. Dynatronics has not borrowed against its asset base of inventory or accounts receivable since July 2020, representing 10 consecutive quarters of no debt.

幻燈片 12 顯示了 Dynatronics 的投資亮點。我們服務的康復和支撐市場具有穩定的增長前景。我們的銷售額和份額增長是由客戶和經銷商對我們業務轉型的反應推動的。銷售額已經連續 7 個季度超過市場或我們的基線預期。儘管宏觀經濟環境不佳，但我們的目標是在 23 財年提高毛利率。截至 12 月底，我們的資產負債表上有大約 70 萬美元的現金和 1070 萬美元的存貨，沒有債務。自 2020 年 7 月以來，Dynatronics 沒有以其存貨或應收賬款資產基礎借款，連續 10 個季度沒有債務。

We are demonstrating progress against each of our strategic goals, with more to come. The investment community is actively listening to our story. And we will continue to share our progress and update as we move through our fiscal year 2023. I will now turn it over for questions.

我們正在展示我們每一個戰略目標的進展，還有更多。投資界正在積極傾聽我們的故事。隨著 2023 財年的推進，我們將繼續分享我們的進展和更新。現在我將把它交給大家提問。

(Operator Instructions) Your first question is coming from Brooks O'Neil of Lake Street Capital.

（操作員說明）您的第一個問題來自 Lake Street Capital 的 Brooks O'Neil。

John, I'm hoping you could just tell us a little bit about how you sense the end-customer demand and operating environment is, and whether you see a distressed end-customer environment or whether you're beginning to see some improvement out there?

約翰，我希望你能告訴我們一些你對最終客戶需求和運營環境的看法，以及你是否看到了苦惱的最終客戶環境，或者你是否開始看到一些改善？

Good morning, Brooks. I would say what we're seeing more than anything is just inconsistent utilization due to the factors that others are reporting, such as staffing levels and such. I think we're not seeing maybe this crazy growth or this crazy decline, just inconsistent utilization and a stable market. We haven't seen anything different than that. I think that's consistent with the med tech space that we've all been around for quite some time.

早上好，布魯克斯。我要說的是，由於其他人報告的因素（例如人員配備水平等），我們看到的最多的只是不一致的利用率。我認為我們可能沒有看到這種瘋狂的增長或這種瘋狂的下降，只是利用率不一致和市場穩定。我們沒有看到任何不同之處。我認為這與我們已經存在了很長一段時間的醫療技術領域是一致的。

Sure. Secondly, I don't know if you feel in a position or want to talk at all about specifics related to pending or future new products. Can you give us any color at all in terms of areas of interest and opportunity that you see? Or any specifics will be helpful.

當然。其次，我不知道您是否覺得有條件或想談談與待定或未來新產品相關的細節。就您所看到的興趣和機會領域而言，您能給我們一些顏色嗎？或者任何細節都會有所幫助。

Absolutely. The first thing I would say is, I'm incredibly proud of our team for going from 0% of revenue of new product sales in 3 years to 6% over really the last call it 24 months, 18 to 24 months with 9 new releases. So think about that, to get a product, a med tech product up and through development and approved and commercialized in that period of time. And at 6% on a $46.5 million projected midpoint of a range, that's $3 million of new revenue in a very short period of time. So that is a key part of not only our organic revenue plan, but also our gross margin plan. So what I would tell you is this we're going to have a consistent cadence going forward. I suspect that the next releases will happen more in the turn of Q4. And so the benefit of those is not going to be felt really until our next fiscal year. But there's a lot of factors that go into those releases. As it relates to the categories, you see when you look at our slide on Page 9 and you see some of our products, the majority of the releases so far have been in our rehabilitation space. And it's one of the reasons when you look at the rehabilitation product category revenue, you can see this significant growth. I mean, that category alone was up 17% in Q2. And so you can see that new product releases were a very important part of that. We need to expand it, we need to also innovate in our other product categories such as bracing and supports to match that but you'll see it in both categories and you're going to see it towards the tail end of this fiscal year and again growing into next year.

絕對地。我要說的第一件事是，我為我們的團隊感到無比自豪，因為我們的團隊在 3 年內從 0% 的新產品銷售收入增加到 6%，實際上是上一次發布 24 個月、18 到 24 個月的 9 個新版本.所以想一想，要獲得一種產品，一種醫療技術產品，並在那個時期內通過開發、批准和商業化。以 4650 萬美元的預計範圍中點為 6%，這是在很短的時間內增加 300 萬美元的新收入。因此，這不僅是我們有機收入計劃的關鍵部分，也是我們毛利率計劃的關鍵部分。所以我要告訴你的是，我們將以一致的節奏前進。我懷疑下一個版本將在第 4 季度發布更多。因此，在我們的下一個財政年度之前，我們不會真正感受到這些好處。但是這些版本有很多因素。由於它與類別相關，當您查看第 9 頁上的幻燈片並看到我們的一些產品時，您會看到，到目前為止，大多數版本都在我們的康復空間中。當您查看康復產品類別收入時，這就是原因之一，您可以看到這種顯著增長。我的意思是，僅該類別在第二季度就增長了 17%。所以你可以看到新產品發布是其中非常重要的一部分。我們需要擴展它，我們還需要在我們的其他產品類別中進行創新，例如支撐和支撐以匹配它，但你會在這兩個類別中看到它，你將在本財政年度的尾聲看到它，明年再次成長。

Great. Let me just ask one more. Obviously SG&A was up a little bit. I assume that's just the tight labor market and whatnot. But would you anticipate that staying elevated during the balance of the fiscal year? Is there anything you can do to kind of tamp that down a little bit?

偉大的。讓我再問一個。顯然，SG&A 上漲了一點。我認為這只是勞動力市場緊張等等。但你會預計在本財政年度的平衡期間保持高位嗎？你能做些什麼來稍微壓低一點嗎？

That investment in SG&A was very specific in marketing, $400,000 in marketing and marketing programs. And that's consistent with our new product introductions and our expectations of new product introductions coming forward. So I would say if you look at it to the first 6 months of the fiscal year, we're running 34.8% of net sales. That's at the higher end of our range of 30% to 35%. So you can expect that to slightly come down in the upcoming quarters and land squarely in the midpoint of our range by the end of the year.

對 SG&A 的投資在營銷方面非常具體，400,000 美元用於營銷和營銷計劃。這與我們推出的新產品以及我們對即將推出的新產品的期望是一致的。所以我想說，如果你看看本財年的前 6 個月，我們的淨銷售額佔 34.8%。這是我們 30% 到 35% 範圍的較高端。因此，您可以預期在接下來的幾個季度中會略有下降，並在年底前正好落在我們範圍的中點。

Your next question is coming from Jeffrey Cohen of Ladenburg Thalmann.

您的下一個問題來自 Ladenburg Thalmann 的 Jeffrey Cohen。

Just a couple of questions from our end. So it sounds like you're not going to provide any specific guidance on the margin front. However, based on your Slide 6, it looks like you anticipate that that will make some further increases in the back half of the year from 30.2% in the first quarter and 28.1% in the second quarter. Is that an accurate assessment?

我們這邊只是幾個問題。所以聽起來你不會在保證金方面提供任何具體指導。但是，根據您的幻燈片 6，您似乎預計今年下半年會從第一季度的 30.2% 和第二季度的 28.1% 進一步增長。這樣的評價準確嗎？

That's an accurate assessment. I can give a little bit of color too on the Q1 versus Q2. So if you look at Q1, in an ideal world, we'd be able to continue to show sequential expansion but the macroeconomic headwinds kept us back. Typically, when we look back historically, say fiscal '18, '19, '20, where we had the same collection of assets pre-COVID impact, our Q2 historically dropped about 2 percentage points in gross margin, almost exactly what it did here. Except that we're operating in a much different macroeconomic environment of freight and labor. So it means that we are expanding and improving the underlying core operations, but we couldn't outrun the headwinds. So I think that that trend will continue. And it's one of the reasons we're deferring guidance. But we'll expect it to come back a little bit in q4 as our seasonality kicks in.

這是一個準確的評估。我也可以給 Q1 和 Q2 一些顏色。因此，如果你看看第一季度，在理想情況下，我們能夠繼續顯示連續擴張，但宏觀經濟的逆風讓我們退縮了。通常，當我們回顧歷史時，比如 18、19、20 財年，在 COVID 之前我們受到相同資產集合的影響，我們第二季度的毛利率歷史上下降了約 2 個百分點，幾乎與這裡的情況完全相同.除了我們在一個截然不同的貨運和勞動力宏觀經濟環境中運營。因此，這意味著我們正在擴展和改進基礎核心業務，但我們無法擺脫逆風。所以我認為這種趨勢將繼續下去。這是我們推遲指導的原因之一。但隨著我們的季節性到來，我們預計它會在第四季度有所恢復。

Perfect. And then secondly for us, could you comment a little bit, I mean, on one hand nice job of bringing the inventory levels down to $10.75 million for the quarter. On the other hand, I guess, could you talk about current inventory and the freshness of inventory and if we would anticipate that that would continue to decrease? Is that inventory level being filled with new products or higher margins, with kind of the more historic products still sitting there at lower margins? Or could you talk about the inventory a little bit, please?

完美的。其次，對於我們來說，您能否發表一點評論，我的意思是，一方面，將本季度的庫存水平降至 1075 萬美元是一件好事。另一方面，我想，您能否談談當前的庫存和庫存的新鮮度，以及我們是否預計會繼續減少？庫存水平是否被新產品或更高的利潤率所填補，而歷史悠久的產品仍然以較低的利潤率坐在那裡？或者你能談談庫存嗎？

Absolutely. Our expectation would be that it come down further. We are targeting some additional strategic reductions. As I mentioned before, finishing last fiscal year at $12.1 million in inventory is too high. $6.5 million the year before, too low. And so the answer is somewhere in between. The wildcard for us is we're adding new products related to our product releases. So we're building inventory in advance of those releases. You're seeing that with the releases that you see contained in the materials on Slide 9 today while we move out in end-of-life, certain other products to improve our gross margin mix. So long story short, I expect it to come down. I can't tell you exactly where it's going to land, because it's going to really depend on how quickly we can get new product launches out, but it's a key driver of just running a fiscally healthy company, is to use and have a good inventory level.

絕對地。我們的預期是它會進一步下降。我們的目標是進行一些額外的戰略削減。正如我之前提到的，上一財年結束時庫存為 1210 萬美元太高了。前一年 650 萬美元，太低了。所以答案介於兩者之間。對我們來說，通配符是我們正在添加與我們的產品發布相關的新產品。因此，我們正在這些版本之前建立庫存。當我們在生命週期結束時退出時，您會看到今天幻燈片 9 上的材料中包含的版本，某些其他產品可以改善我們的毛利率組合。長話短說，我希望它能降下來。我無法確切地告訴你它會在哪裡著陸，因為這真的取決於我們能以多快的速度推出新產品，但它是經營一家財務健康的公司的關鍵驅動因素，就是使用並擁有良好的庫存水平。

Thank you very much. There are no further questions in the queue. I would now like to turn the floor back over to John for any closing comments.

非常感謝。隊列中沒有其他問題。我現在想把發言權轉回給 John，請他發表任何結束評論。

Thank you, operator. And thank you for your interest in Dynatronics. We are actively sharing our story with the investment community as we move forward in our markets. We hope to meet with you at upcoming investor events. Notable upcoming events include the Canaccord Musculoskeletal Conference on March 7, 2023, Roth Investor Conference, March 12 through the 14, 2023, and the Virtual Investor Summit on March 29, 2023. If you have any further questions, please direct them to ir@dynatronics.com. Have a great day. And operator, you may end the call.

謝謝你，運營商。感謝您對 Dynatronics 的關注。隨著我們在市場上的發展，我們正在積極與投資界分享我們的故事。我們希望在即將舉行的投資者活動中與您見面。即將舉行的重要活動包括 2023 年 3 月 7 日的 Canaccord 肌肉骨骼會議、2023 年 3 月 12 日至 14 日的 Roth 投資者會議，以及 2023 年 3 月 29 日的虛擬投資者峰會。如果您有任何其他問題，請聯繫 ir@ dynatronics.com.祝你有美好的一天。接線員，你可以結束通話了。

Thank you, John. This does conclude today's conference call, and you may disconnect your phone lines at this time. Thank you for your participation.

謝謝你，約翰。今天的電話會議到此結束，此時您可以斷開電話線。感謝您的參與。