Interview With The Chairman, President And CEO: Dynatronics Corporation (DYNT) - Kelvyn H. Cullimore Jr.
March 20, 2012 - The Wall Street Transcript has just published Medical Devices Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Kelvyn H. Cullimore Jr. has been the Chairman since January 2005 and President and Chief Executive Officer since 1992 at Dynatronics Corporation. He served as the company's Secretary/Treasurer from 1983 to 1992 and as Administrative Vice President from 1988 to 1992. In addition to his involvement with Dynatronics, Mr. Cullimore served as Executive Vice President and a Director of the former parent company. He has served previously on the board of directors of a printing company, lumber company, theater and restaurant company and travel agency. Mr. Cullimore is a member of the board of the Medical Device Manufacturers Association, a national medical device trade association headquartered in Washington, D.C. He also serves as the Mayor of Cottonwood Heights, Utah, a suburb of Salt Lake City, where Dynatronics' corporate headquarters is located. Mr. Cullimore graduated cum laude from Brigham Young University in 1980 with a bachelor's degree in financial and estate planning.
TWST: Please give us a brief summary on the Dynatronics Corporation, a historical sketch and then bring us up to date. What do you see as challenges and opportunities for the company today?
Mr. Cullimore: Dynatronics (DYNT)is a manufacturer and distributor of medical devices and supplies to the physical therapy, chiropractic and athletic training market. We have been in business for about 30 years. We have specialized for many of those years in designing/engineering and manufacturing the highest technology and best-value devices on the market. In the last four years, we have broadened our strategic business model through the vertical integration and acquisition of some of our top dealers so that we could sell direct to the end users. We feel this change has been a significant enhancement to our business model, allowing us to be much more competitive and offer a much broader line of products. We now carry products from literally hundreds of other manufacturers, thereby creating a one-stop shop for practitioners. While this has been a big challenge to integrate that over the last four years, we are just now starting to see the fruit of those labors as we began to work on large national accounts and group purchasing organizations that were not previously available to us.
TWST: What do you see in the medical device and equipment industry today as the key issues or dominant trends? And what positive or worrisome aspects do these issues and trends present over the next two years for Dynatronics?
Mr. Cullimore: The capital equipment market has been our strength for many years. We are getting ready to introduce more new products in calendar 2012 than any other year in our history. These new products will reinvigorate existing lines, bring new technology to the market and energize our sales base. The challenges on the capital equipment side of the market include the general economic malaise, which has dampened the number of new clinic openings compared to prior years, when economic times were better. Nevertheless, we think the market will improve as the economy warms up and consumer confidence is restored and we see a little more stability at the federal level.
TWST: In March 2011, Dynatronics began the process of introducing its own branded products to group purchasing organizations, GPOs, but acceptance of these products is taking longer than management expected. What will be your response to these developments?
Mr. Cullimore: There are five large GPOs in the United States that are the gateway for about 75% to 80% of all the products to hospitals or affiliated clinics. It is a segment of the market we had never had access to in the past because our product offering was too small. When we acquired the dealers four years ago, we began on the path that opened up new opportunities for us with GPOs. In 2011, we signed contracts with a number of important GPOs, which provide us with a license to go out and call on their members. We are currently working on two much larger contracts right now that will be awarded this summer. We are learning that we must cultivate this business. It doesn't just come to you. Over the next couple of years, we think we will be able to solidify the GPO process much better. We are new to it and we do have a learning curve that we are going through right now, but once that's achieved we think we will be much better positioned especially if these next two GPOs elect to put us on contract as we are hoping.
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