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Offering light therapy is giving
Dynatronics a leg up on the competition
Healthcare
Medical Equipment & Supplies
(DYNT – NASD)
Dynatronics Corporation
7030 Park Centre Drive
Salt Lake, UT 84121
Phone: 801-568-7000
Kelvyn H. Cullimore, Jr.
President and
Chief Executive Officer
Interview Conducted by:
Diane Reynolds
Associate Publisher
CEOCFOinterviews.com
April 2004
BIO of Kelvyn H. Cullimore, Jr.
Kelvyn H. Cullimore, Jr. was elected President and Chief Executive Officer
of the Company in December of 1992. He has been a Director since the incorporation
of the Company. He served as secretary/Treasurer of the Company from 1983 until
1992. Mr. Cullimore graduated from Brigham Young University with a degree in
Financial and Estate Planning in 1980. Mr. Cullimore has served on the Board of
Directors of several businesses, including Dynatronics Marketing Company and C=ACI.
He currently serves on the Board of ITECT and Dynatronics Marketing Company.
From 1983 until 1992 Mr. Cullimore served as Executive Vice President and Chief
Operating Officer of ACI. In June 2003, Mr. Cullimore was elected to the board of
the Medical Device Manufacturers Association, a national medical device trade association
headquartered in Washington, D. C.
Company Profile:
Dynatronics Corp. (NASDAQ: DYNT) is a leader in the physical medicine market. The company
manufactures and/or distributes over 1,500 products used by physical therapists,
chiropractors, podiatrists and sports medicine practitioners.
CEOCFOinterviews: Mr.
Kelvyn H. Cullimore, Jr., please give us a brief description of Dynatronics.
Mr. Cullimore: “Dynatronics
is a medical device manufacturer focusing specifically on physical medicine products. Our
markets include the fields of physical therapy, athletic training, chiropractic, podiatry
and general practitioners. We also manufacturer products for the aesthetic market for
cellulite reduction and for microdermabrasion. We’ve been in business since 1979 and
are approaching our 25th anniversary. We went public in 1984. Over the
past eight years, sales have quadrupled to $20 million this year.”
CEOCFOinterviews: As far
as the products themselves, where are they being manufactured?
Mr. Cullimore: “We
have two facilities, one in Salt Lake City, Utah, which is our corporate headquarters and
where we manufacture all of our high tech equipment. We also have a facility in
Chattanooga Tennessee where we manufacturer some of the lower tech items such as hot packs
and cold packs as well as wood and metal motorized treatment tables, belts, supports and
exercise equipment. We currently manufacture and/or distribute over a 1,500 products
in our full-line product catalog.”
CEOCFOinterviews: How do
you distribute your products?
Mr. Cullimore: “We
distribute our products through a network of over 300 independent dealers
nationwide."
CEOCFOinterviews: Do you
distribute on an international basis?
Mr. Cullimore: “Yes,
we have distribution in several foreign countries. We are an ISO approved facility, which
means our products carry the CE mark allowing for distribution in the European community
and in Asia."
CEOCFOinterviews: Please
describe your new product called Light Therapy.
Mr. Cullimore: “In September 2003, Dynatronics
introduced its new line of Solaris Light Therapy products. These units offer
infrared light therapy that can be plugged into a combination electrotherapy/ultrasound
therapy unit and used for pain management and wound healing.”
CEOCFOinterviews: Why
has it taken so long to introduce light therapy into the marketplace?
Mr. Cullimore: “Light
therapy has been around for many years in Europe and Asia. Only recently has the FDA
allowed it to be marketed in the United States. It is probably the best-researched
modality of any physical therapy treatment with hundreds of clinical research studies
performed on this technology over the past 40 years. Light therapy provides a
photo-stimulating effect on the cells. It has been shown to be effective in reducing pain
and stimulating the body’s own healing processes by increasing cellular metabolism.
It’s been a very exciting new modality and the first new modality in physical
medicine in over a decade.”
CEOCFOinterviews: Going
forward, what do you see for Dynatronics, will you continue an aggressive approach to
R&D?
Mr. Cullimore: “Dynatronics,
within the last few years, embarked on one if it’s most aggressive R&D campaigns
in its history. We’ve spent over $1 million in R&D each year and intend on
continuing that pace. One of the exciting thing about the new Solaris products is they
were specifically designed to accommodate multiple light therapy probes. The probes can be
different sizes or produce light at different wavelengths depending on the need and the
indication being treated. This provides us with an opportunity to sell additional light
probes to practitioners already using Solaris. Our next light probe will be a laser
probe and will be introduced this summer. We have three other probes currently under
development.”
CEOCFOinterviews: Can
these products be used at home?
Mr. Cullimore: “No,
our units must be used by a licensed medical practitioner. They have not been approved for
over-the-counter use.”
CEOCFOinterviews: How
expensive are your light therapy products. Are they feasible for the small doctor’s
offices?
Mr. Cullimore: “Yes
they are. The Solaris products are designed to offer a multitude of combinations.
Practitioners can buy the top of the line model which retails for $6,000.00.
They could also purchase a single ultrasound or electrotherapy modality with light
therapy, which would run about $3,000.00.”
CEOCFOinterviews: Do you
have any competition in your area at this point?
Mr. Cullimore: “At
the present time, there are a few companies that have stand alone light therapy products,
that sell for between $5,000 and $10,000. Having to make a decision to spend $5,000
to $10,000 on a stand-alone product makes it a much more difficult sale. Our strategy has
been to offer a combination unit with light therapy and our popular
electrotherapy/ultrasound modalities. We feel that our approach has put us at the
forefront of the market and allowed us to capture the leading market share.”
CEOCFOinterviews: As
your reach your 25th anniversary, how do you see this company?
Mr. Cullimore: “We
have been very patient and have worked hard to build a strong foundation. The company is
very strong fiscally, with an excellent track record. We have been profitable for 17 of
the last 18 eighteen years. We have grown from $12 million to $20 million in the last six
years. Our hope is that the foundation that we have built is sufficiently solid to support
continued double-digit growth in sales. We hope that we can supplement our organic growth
with some strategic acquisitions or strategic partnerships and emerge as a much stronger
company.”
CEOCFOinterviews: You
mentioned acquisitions, what exactly are you looking for in an acquisition?
Mr. Cullimore: “I
think it would need to be complimentary to what we are doing. It would have to be
something that adds a strategic element that could be sold into the same marketplace that
we are currently in."
CEOCFOinterviews: Is
there something that someone new to your company should know?
Mr. Cullimore: “I
think people may be interested in knowing that back in August, when our company’s
stock was trading at a dollar, the board recognized that the stock was undervalued and
authorized $500,000 to repurchase shares in the open market. We have been pursuing
that course and currently have over $400,000 available to purchase stock.”
CEOCFOinterviews: Do the
ups and downs of the economy have any affect on your company?
Mr. Cullimore: “The
medical field is somewhat recession resistant because the demand for medical services does
not go away during a recession. Some believe the demand actually increases during
difficult times.”
CEOCFOinterviews: In
closing, can you tell us the comparison of earnings between this year and last year?
Mr. Cullimore: “Sales
so far this year have exceeded last year’s figures by more than 20%. Earnings
are ahead 48% in the first quarter and 415% in the second quarter. The reason for
the significant improvement is our new Solaris light therapy technology which we
introduced to the market last fall. It has been very well received and is helping
many people across the country get relief from pain.”
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