Dynatronics Corporation (NASDAQ:DYNT)

DYNT (Closed at $2.54; Marked up to $3.10), a medical device company, announced the acquisition of Bird & Cronin, a manufacturer of orthopedic soft goods and specialty patient care products.  DYNT will pay $14.5 million in cash and stock for the acquisition.

Bird & Cronin trailing twelve month revenues were ~$23.2 million, operating income of $2.1 million and adjusted EBITDA of $2.3 million.

Prior to this acquisition DYNT had trailing twelve month revenues of $35.7 million and had a net loss from operation of $1.8 million.  

First Quarter Results:

• Net income for the quarter ended March 31, 2011, increased 22 percent to $117,260 ($.01 per common share), compared to$96,099 ($.01 per common share) for the same quarter in the prior fiscal year.
• Sales for the quarter ended March 31, 2011, increased 1.8 percent to $8,383,842, compared to $8,235,060 for the quarter ended March 31, 2010.

"Profits increased 22 percent for the quarter despite heavy R&D expenses," stated Kelvyn H. Cullimore Jr., chairman and president of Dynatronics. "Other than higher R&D expenses, we improved every other category including higher sales, better gross profit margins, slightly lower SG&A expense and lower interest expense. With several new products currently under development, our R&D expenses represent an investment in the future - an investment we believe will strengthen future profitability."

The company recently announced the signing of major contracts with two group purchasing organizations ("GPOs"): Premier and Amerinet. Together, these GPOs represent tens of thousands of clinics and hospitals around the nation, spending an estimated $50 million on physical medicine products annually.

"We believe these landmark agreements will be a game-changer for Dynatronics," said Larry K. Beardall, executive vice-president of sales and marketing. "Obtaining contracts with GPOs is something we have been working on for nearly three years. While it will take time to convert the vast number of clinics to our brand of products, we are already receiving requests for product quotes from GPO customers."

"As we begin to solicit sales orders under these GPO arrangements, we are gearing up our production capacity for a new level of operations," added Cullimore. "With over 12,000 products now available through our catalog and e-commerce website, we are in a good position to supply this high-volume segment of the physical medicine market."