Quarterly Net Revenue Increase of 19%
Year-over-Year
Electromed, Inc. (“Electromed”) (NYSE American: ELMD), a leader
in innovative airway clearance technologies, today announced
financial results for the three months ended March 31, 2023 (“Q3 FY
2023”).
Q3 FY 2023 Highlights
- Record quarterly net revenues of $12.1 million, a 19%
year-over-year increase
- Homecare revenue of $11.0 million, an increase of 21%
year-over-year
- Generated operating income of $1.2 million, an increase of 39%
year-over-year
- Net income of $1.1 million, or $0.12 per fully diluted share,
compared with net income of $645,000 in the same period a year
ago
- Cash as of March 31, 2023 was $6.8 million
“I’m very pleased to report 19% revenue growth in the third
quarter of fiscal year 2023 coupled with net income growth that
further demonstrates that our investments in growth are yielding
strong results,” said Kathleen Skarvan, President and Chief
Executive Officer. “Our revenue growth was driven by strong
referral growth, improved productivity by our expanded sales team
and the recent launch to the homecare market of our next generation
SmartVest Clearway.”
Ms. Skarvan continued, “Our SmartVest Clearway has been received
very positively by clinicians and patients due to its
state-of-the-art patient experience with a simple touch screen user
interface, remote monitoring of data, and is the lightest HFCWO
generator on the market. We believe that Electromed is
well-positioned for growth and profitability in calendar 2023.”
Fiscal Third Quarter Results
Net revenues for Q3 FY 2023 increased by 19% year-over-year to
$12.1 million, compared with $10.1 million in the same period the
prior year. The increase over the prior year was driven by an
increase in referrals and approvals due to an expanded sales force
and reimbursement team.
Home care revenue increased by $1,938,000, or 21.5%, for the
three months ended March 31, 2023 compared to the same period in
the prior year. The increase was primarily due to an increase in
referrals and approvals. The increase in referrals was due to an
increase in direct sales representatives as well as positive market
momentum from the introduction of our newest generation SmartVest
Clearway in the quarter and was partially offset by a temporary
interruption in supply chain and associated operations in the
quarter. Field sales force employees totaled 57 at quarter end, 48
of which were direct sales representatives. Sales productivity
remained within our expected range during the quarter, with
annualized home care revenues per direct sales representative at
$908,000, within Electromed’s target range of $850,000 to
$950,000.
Gross profit increased to $9,056,000, or 75.0% of net revenues,
for the three months ended March 31, 2023, from $7,743,000, or
76.4% of net revenues, in the same period in the prior year. The
decrease in gross profit as a percentage of net revenues compared
to the same period in the prior year was primarily due to increased
material costs and component broker fees incurred to ramp up supply
for the Clearway product.
Selling, general and administrative (“SG&A”) expenses were
$7,694,000 for the three months ended March 31, 2023, representing
an increase of $1,150,000, or 17.6%, compared to the same period in
the prior year. The increase in SG&A expense was primarily due
to increased payroll and compensation expense related to the higher
average number of sales, sales support, marketing, and
reimbursement personnel to process higher patient referrals.
Operating income for the three months ended March 31, 2023 was
$1,196,000, compared to $863,000 for the same period in the prior
year. The increase in operating income was driven primarily by
revenue growth and a decrease in Research & Development
expenses but partially offset by increased SG&A expenses
related to our sales and reimbursement investments, as well as
increased material costs and broker fees incurred to accelerate the
ramp up supply for the Clearway product.
Net income for the three months ended March 31, 2023 was
$1,075,000, or $0.12 per diluted share, compared to $645,000, or
$0.07 per diluted share, for the same period in the prior year.
As of March 31, 2023, Electromed had $6.8 million in cash, $22.3
million in accounts receivable, working capital of $28.8 million,
and total shareholders’ equity of $36.4 million.
Conference Call and Webcast Information
The conference call will be held at 5:00 p.m. Eastern Time on
Tuesday, May 9, 2023.
Interested parties may participate in the call by dialing (888)
999-5318 (Domestic) or (848) 280-6460 (International). The live
conference call webcast will be accessible in the Investor
Relations section of Electromed’s web site and directly via the
following link: Fiscal Third Quarter Earnings Webcast.
For those who cannot listen to the live broadcast, a replay will
be available by dialing (844) 512-2921 (Domestic) or (412) 317-6671
(International) and referencing the replay pin number 0151926.
Additionally, an online replay will be available in the Investor
Relations section of Electromed’s web site at:
http://investors.smartvest.com/.
About Electromed, Inc.
Electromed, Inc. manufactures, markets, and sells products that
provide airway clearance therapy, including the SmartVest® Airway
Clearance System, to patients with compromised pulmonary function.
It is headquartered in New Prague, Minnesota, and was founded in
1992. Further information about Electromed can be found at
www.smartvest.com.
Cautionary Statements
Certain statements in this press release constitute
forward-looking statements as defined in the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can generally be identified by words such as
“anticipate,” “assume,” “believe,” “continue,” “expect,” “may,”
“potential,” “should,” “will,” and similar expressions, including
the negative of these terms, but they are not the exclusive means
of identifying such statements. Forward-looking statements cannot
be guaranteed, and actual results may vary materially due to the
uncertainties and risks, known or unknown associated with such
statements. Examples of risks and uncertainties for Electromed
include, but are not limited to, component or raw material
shortages, changes to lead times or significant price increases,
changes to Medicare, Medicaid, or private insurance reimbursement
policies; the duration, extent and severity of the COVID-19
pandemic, including its effects on our business, supply chain,
operations and employees as well as its impact on our customers and
distribution channels and on economies and markets more generally;
the competitive nature of our market; changes to state and federal
health care laws; changes affecting the medical device industry;
our ability to develop new sales channels for our products such as
the homecare distributor channel; our need to maintain regulatory
compliance and to gain future regulatory approvals and clearances;
new drug or pharmaceutical discoveries; general economic and
business conditions; our ability to renew our line of credit or
obtain additional credit as necessary; our ability to protect and
expand our intellectual property portfolio; the risks associated
with expansion into international markets, as well as other factors
we may describe from time to time in Electromed’s reports filed
with the Securities and Exchange Commission (including Electromed’s
most recent Annual Report on Form 10-K, as amended from time to
time, and subsequent Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K). Investors should not consider any list of
such factors to be an exhaustive statement of all of the risks,
uncertainties or potentially inaccurate assumptions investors
should take into account when making investment decisions.
Shareholders and other readers should not place undue reliance on
“forward-looking statements,” as such statements speak only as of
the date of this press release. We undertake no obligation to
update them in light of new information or future events.
Source: Electromed, Inc.
Financial Tables Follow:
Electromed, Inc.
Condensed Balance
Sheets
March 31, 2023
June 30,
2022
(Unaudited)
Assets
Current Assets
Cash and cash equivalents
$
6,776,000
$
8,153,000
Accounts receivable (net of allowances for
doubtful accounts of $45,000)
22,345,000
21,052,000
Contract assets
570,000
286,000
Inventories
3,451,000
3,178,000
Prepaid expenses and other current
assets
1,808,000
1,870,000
Income tax receivable
219,000
-
Total current assets
35,169,000
34,539,000
Property and equipment, net
5,502,000
4,568,000
Finite-life intangible assets, net
604,000
599,000
Other assets
60,000
120,000
Deferred income taxes
1,506,000
1,538,000
Total assets
$
42,841,000
$
41,364,000
Liabilities and Shareholders'
Equity
Current Liabilities
Accounts payable
1,289,000
1,261,000
Accrued compensation
2,082,000
2,742,000
Income tax payable
-
51,000
Warranty reserve
1,333,000
1,256,000
Other accrued liabilities
1,713,000
1,840,000
Total current liabilities
6,417,000
7,150,000
Other long-term liabilities
30,000
41,000
Total liabilities
6,447,000
7,191,000
Commitments and Contingencies
Shareholders' Equity
Common stock, $0.01 par value per share,
13,000,000 shares authorized;
8,556,600 and 8,475,438 shares issued and
outstanding, as of March 31, 2023 and June 30, 2022,
respectively
86,000
85,000
Additional paid-in capital
18,548,000
18,308,000
Retained earnings
17,760,000
15,780,000
Total shareholders' equity
36,394,000
34,173,000
Total liabilities and shareholders'
equity
$
42,841,000
$
41,364,000
Electromed, Inc.
Condensed Statements of
Operations (Unaudited)
Three Months Ended
Nine Months Ended
March 31,
March 31,
2023
2022
2023
2022
Net revenues
$
12,068,000
$
10,141,000
$
34,455,000
$
30,390,000
Cost of revenues
3,012,000
2,398,000
8,386,000
7,066,000
Gross profit
9,056,000
7,743,000
26,069,000
23,324,000
Operating expenses
Selling, general and administrative
7,694,000
6,544,000
22,937,000
19,806,000
Research and development
166,000
336,000
618,000
1,041,000
Total operating expenses
7,860,000
6,880,000
23,555,000
20,847,000
Operating income
1,196,000
863,000
2,514,000
2,477,000
Interest income, net
26,000
6,000
37,000
21,000
Net income before income taxes
1,222,000
869,000
2,551,000
2,498,000
Income tax expense
147,000
224,000
418,000
576,000
Net income
$
1,075,000
$
645,000
$
2,133,000
$
1,922,000
Income per share:
Basic
$
0.13
$
0.08
$
0.25
$
0.23
Diluted
$
0.12
$
0.07
$
0.25
$
0.22
Weighted-average common shares
outstanding:
Basic
8,461,531
8,454,504
8,449,623
8,485,856
Diluted
8,710,106
8,744,535
8,694,407
8,762,963
Electromed, Inc.
Condensed Statements of Cash
Flows (Unaudited)
Nine Months Ended March
31,
2023
2022
Cash Flows From Operating Activities
Net income
$
2,133,000
$
1,922,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
370,000
368,000
Amortization of finite-life intangible
assets
52,000
105,000
Share-based compensation expense
506,000
703,000
Deferred income taxes
32,000
15,000
Changes in operating assets and
liabilities:
Accounts receivable
(1,293,000
)
(2,582,000
)
Contract assets
(284,000
)
98,000
Inventories
(264,000
)
9,000
Prepaid expenses and other assets
105,000
(519,000
)
Income tax receivable, net
(270,000
)
(443,000
)
Accounts payable and accrued
liabilities
(111,000
)
550,000
Accrued compensation
(660,000
)
(173,000
)
Net cash provided by operating
activities
316,000
53,000
Cash Flows From Investing Activities
Investment in property and equipment
(1,221,000
)
(980,000
)
Investment in finite-life intangible
assets
(54,000
)
(86,000
)
Net cash used in investing
activities
(1,275,000
)
(1,066,000
)
Cash Flows From Financing Activities
Issuance of common stock upon exercise of
options
40,000
-
Taxes paid on stock options exercised on a
net basis
(305,000
)
(70,000
)
Repurchase of common stock
(153,000
)
(962,000
)
Net cash used in financing
activities
(418,000
)
(1,032,000
)
Net (decrease) increase in cash
(1,377,000
)
(2,045,000
)
Cash And Cash Equivalents
Beginning of period
8,153,000
11,889,000
End of period
$
6,776,000
$
9,844,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005307/en/
Brad Nagel, Chief Financial Officer (952) 758-9299
investorrelations@electromed.com Mike Cavanaugh, Investor Relations
ICR Westwicke (617) 877-9641 mike.cavanaugh@westwicke.com
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