Dynatronics Corp (NASDAQ:DYNT) Q1 2020 Earnings Conference Call - Final Transcript
Nov 12, 2019 • 08:30 am ET
Ladies and gentlemen, hello and thank you all for joining this Dynatronics' First Quarter 2020 Earnings Call. [Operator Instructions]
And now for opening remarks and introductions I am pleased to turn the floor over to your host, Mr. Brian Baker. Welcome Brian.
Good morning, and thank you for participating in today's call. I'm Brian Baker, President and Chief Executive Officer; and with me is our Chief Financial Officer, David Wirthlin.
We issued a press release this morning announcing the financial results of our quarter ended September 30th, 2019. Today, I'll provide a brief commentary, and then I'll turn it over to David for a financial report. I'll follow David's report by confirming our guidance on the 2020 fiscal year. After conclusion, the operator will open the phone lines for questions.
I will now ask David to remind you of our reliance on the Safe Harbor under the Federal Securities Laws.
Thank you, Brian. Before we begin, let me remind you that during the course of this call, we will make forward-looking statements regarding our current expectations, plans, projections and financial performance relating to our business. These forward-looking statements reflect our view as of today only, and they involve risks and uncertainties that could cause our actual results to differ materially from those discussed today.
Important factors that could cause actual results to differ materially from those projected or implied by our forward-looking statements today are included in our most recent 10-K and other reports filed with the SEC. We caution you not to place undue reliance on forward-looking statements we make this morning. We undertake no obligation to update or revise forward-looking statements.
Thank you, David. Dynatronics delivered a profitable quarter that reflects the continued execution of our operating plan and achievement of our guidance. My team's focus on operational improvements and cost reductions contributed to reduced SG&A, reduced cost of goods sold and improved cash flow from operations.
Management's actions have created an improved foundation to scale the business for organic revenue growth and future acquisitions. While many of these changes are not fully reflected in our financial statements, our progress can be seen through the $572,000 reduction in SG&A and $178,000 increase in operating income compared to the first quarter of the prior fiscal year. These incremental improvements have led to a highest level of operating income in two years.
As an example of our operational changes we are making, over the last year we have qualified a contract manufacturer to produce our Solaris product line. We have transferred approximately 50% of our demand to this vendor. In addition, we've moved manufacturing of cut and sell products and a large portion of our wood products from our Tennessee facility to our Minnesota and New Jersey plants. Our aim is to create centers of excellence across the organization that eliminate redundant manufacturing, enhance supply chain processes, and standardized quality systems while maintaining the highest level of customer care.
As we look forward to growth in the business, we will add