Dynatronics Corp., a Cottonwood Heights-based company that manufacturers and sells equipment used by physical therapists and sports-medicine practitioners, said its third-quarter net income increased 22 percent over a year ago.

The company said its net income for the quarter ended March 31 reached $117,260, or 1 cent per share. A year ago, Dynatronics recorded net income of $96,099, also 1 cent per share.

"Profits increased 22 percent for the quarter despite our heavy [research-and-development] expenses," Dynatronics President Kelvyn H. Cullimore Jr. said in a conference call with investors. "With several new products under development, our R&D expenses represent an investment in the future — an investment we believe will strengthen future profitability."

Revenue for the quarter increased 1.8 percent, to $8.3 million, compared with $8.2 million for the year ago quarter, the company reported.

Cullimore noted that Dynatronics signed contracts with a three-group purchasing organization (GPO) that will make the company's products available to tens of thousands of clinics and hospitals.

"Cultivating business through those GPO contracts and seeking additional contracts with other GPOs will be a major focal point for us over the coming years," he added.

Net income for the nine months ended March 31 was $202,112, or 2 cents per share, compared with $353,022, or 3 cents per share, reported for the same quarter a year earlier. The company said $400,000 in increased R&D costs primarily accounted for the lower nine-month profits.

Sales for that period were $24.5 million, compared with $25 million for the similar period in the prior year.

The website Seeking Alpha said it may take a few months for Dynatronics to ramp up production for its new GPO contracts, so investors should expect to see one more "in the trough" quarter before sales and earnings begin to accelerate.

Dynatronics shares closed down 3 cents in Nasdaq trading, at $1.77.

steve@sltrib.com

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