Company maintained strong momentum to deliver
another quarter of record revenue and earnings, while continuing to
invest in multiple strategic growth initiatives
Electromed, Inc. (“Electromed” or the “Company”) (NYSE American:
ELMD), a leader in innovative airway clearance technologies, today
announced financial results for the three and six months ended
December 31, 2024 (“Q2 FY 2025”).
Q2 FY 2025 Company Highlights
- Net revenue increased 18.7% to a record $16.3 million in Q2 FY
2025, from $13.7 million in the second quarter of the prior fiscal
year.
- Operating income increased to a record $2.5 million, 15.6% of
net revenues and a year-over-year increase of 12.3%.
- Net income was $2.0 million, or $0.22 per diluted share,
compared to $1.7 million, or $0.19 per diluted share in Q2 FY
2024.
- Continued to deliberately expand the sales force, ending the
quarter with 54 reps.
- Reached over 10,000 clinicians through the “Triple Down on
Bronchiectasis” educational campaign launched in Q1 FY 2025.
“Our team’s performance across the board in sales, marketing,
manufacturing, and order fulfillment was outstanding,” said Jim
Cunniff, President, and Chief Executive Officer. “The impact of
their work is plain to see, with strong growth in all three of our
customer categories, record quarterly revenues and solid operating
and net income during the quarter. A prime example of our sterling
performance is our ability to improve our working capital by
reducing inventory while continuing to meet our patients’ therapy
needs. This is particularly important for us given our unique
direct-to-patient model. We are also continually seeking ways to
improve efficiency across the organization, and during the quarter
we initiated an investment in a new CRM system to further enhance
our commercial team’s productivity. I am proud of Electromed’s
position as a growing and profitable MedTech company, and we expect
to report continued improvements throughout the remainder of fiscal
2025.”
Q2 FY 2025 Results
All amounts below are for the three months ended December 31,
2024, and compare to the three months ended December 31, 2023 (“Q2
FY 2024”).
Net revenues grew 18.7% to $16.3 million, from $13.7
million.
Revenue in our direct homecare business increased year-over-year
by 15.2% to $14.6 million, from $12.7 million. The increase in
revenue was due to an increase in referrals and approvals driven by
an increase in direct sales representatives, higher net revenues
per approval, and efficiencies within our reimbursement department.
Field sales force employees totaled 60 at quarter end, 54 of which
were direct sales representatives. The annualized homecare revenue
per weighted average direct sales representative in Q2 was
$1,077,000, slightly higher than Electromed’s target range of
$900,000 to $1,000,000.
Gross profit increased to $12.6 million or 77.7% of net revenues
from $10.5 million or 77.0% of net revenues. The increase in gross
profit dollars and percentage were primarily a result of increased
volumes and higher average net revenue per device.
Selling, general and administrative (“SG&A”) expenses were
$9.8 million representing an increase of $1.7 million or 20.3%. The
increase in the current year period was primarily due to the
accelerated recognition of non-cash share-based compensation
associated with the vesting of performance-based equity awards,
along with increased salaries and incentive compensation related to
the higher average number of sales, sales support, marketing, and
reimbursement personnel to process higher patient referrals.
Operating income was a record $2.5 million, compared to $2.3
million. The increase in operating income was driven primarily by
increased revenue and gross profit.
Net income was a record $2.0 million, or $0.22 per diluted
share, compared to $1.7 million, or $0.19 per diluted share.
As of December 31, 2024, Electromed had $16.2 million in cash,
$22.8 million in accounts receivable and no debt, achieving a
working capital of $35.5 million and total shareholders’ equity of
$43.6 million. The cash balance reflects an increase of $0.2
million for the six months ended December 31, 2024, compared to an
increase in cash of $3.1 million in the six months ended December
31, 2023. The increase in cash for the 6 months ended December 31,
2024, was driven by $5.5 million of positive operating cash flow,
offset by share repurchases of approximately $4.5 million of
Electromed common stock and $0.8 million of taxes paid from net
share settlement of vested stock.
Conference Call and Webcast Information
The conference call with members of Electromed management will
be held at 5:00 p.m. Eastern Time on Tuesday, February 11,
2025.
Interested parties may participate in the call by dialing (844)
826-3033 (Domestic) or (412) 317-5185 (International) using
passcode 0177798.
The live conference call webcast will be accessible in the
Investor Relations section of Electromed’s website and directly via
the following link:
https://viavid.webcasts.com/starthere.jsp?ei=1705037&tp_key=8af23b601f.
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 10196088.
Additionally, an online replay will be available for one year in
the Investor Relations section of Electromed’s web site at:
https://investors.smartvest.com/events-and-presentations/default.aspx
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,” “believe,” “continue,” “estimate,” “expect,”
“intend,” “may,” “plan” “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 the Company include, but are not limited to,
competitive nature of our market; changes to Medicare, Medicaid, or
private insurance reimbursement policies; 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 the
Company’s reports filed with the Securities and Exchange Commission
(including the Company’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 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.
Electromed, Inc.
Condensed Balance
Sheets
December 31, 2024
June 30, 2024
(Unaudited)
(Audited)
Assets
Current Assets
Cash and cash equivalents
$
16,235,000
$
16,080,000
Accounts receivable (net of allowances for
credit losses of $45,000)
22,775,000
23,333,000
Contract assets
997,000
719,000
Inventories
3,081,000
3,712,000
Income taxes receivable
514,000
-
Prepaid expenses and other current
assets
587,000
329,000
Total current assets
44,189,000
44,173,000
Property and equipment, net
5,216,000
5,165,000
Finite-life intangible assets, net
609,000
657,000
Other assets
108,000
87,000
Deferred income taxes
2,152,000
2,152,000
Total assets
$
52,274,000
$
52,234,000
Liabilities and Shareholders'
Equity
Current Liabilities
Accounts payable
1,506,000
1,010,000
Accrued compensation
3,623,000
3,893,000
Income tax payable
-
277,000
Warranty reserve
1,599,000
1,567,000
Other accrued liabilities
1,939,000
930,000
Total current liabilities
8,667,000
7,677,000
Other long-term liabilities
4,000
12,000
Total liabilities
8,671,000
7,689,000
Commitments and Contingencies
Shareholders' Equity
Common stock, $0.01 par value per share,
13,000,000 shares authorized;
8,556,844 and 8,637,833 shares issued and
outstanding, as of December 31, 2024 and June 30, 2024,
respectively
86,000
87,000
Additional paid-in capital
20,940,000
20,790,000
Retained earnings
22,577,000
23,668,000
Total shareholders' equity
43,603,000
44,545,000
Total liabilities and shareholders'
equity
$
52,274,000
$
52,234,000
Electromed, Inc.
Condensed Statements of
Operations
Three Months Ended
Six Months Ended
December 31,
December 31,
2024
2023
2024
2023
Net revenues
$
16,255,000
$
13,689,000
$
30,923,000
$
26,013,000
Cost of revenues
3,628,000
3,144,000
6,805,000
5,970,000
Gross profit
12,627,000
10,545,000
24,118,000
20,043,000
Operating expenses
Selling, general and administrative
9,834,000
8,175,000
19,221,000
17,325,000
Research and development
251,000
107,000
417,000
313,000
Total operating expenses
10,085,000
8,282,000
19,638,000
17,638,000
Operating income
2,542,000
2,263,000
4,480,000
2,405,000
Interest income, net
152,000
96,000
347,000
173,000
Net income before income taxes
2,694,000
2,359,000
4,827,000
2,578,000
Income tax expense
726,000
685,000
1,385,000
749,000
Net income
$
1,968,000
$
1,674,000
$
3,442,000
$
1,829,000
Income per share:
Basic
$
0.23
$
0.20
$
0.41
$
0.21
Diluted
$
0.22
$
0.19
$
0.38
$
0.21
Weighted-average common shares
outstanding:
Basic
8,424,534
8,545,120
8,494,511
8,541,254
Diluted
8,953,349
8,800,172
8,983,726
8,791,519
Electromed, Inc.
Condensed Statements of Cash
Flows
Six Months Ended December
31,
2024
2023
(Unaudited)
(Unaudited)
Cash Flows From Operating Activities
Net income
$
3,442,000
$
1,829,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
414,000
398,000
Amortization of finite-life intangible
assets
78,000
25,000
Share-based compensation expense
1,652,000
791,000
Changes in operating assets and
liabilities:
Accounts receivable
558,000
1,142,000
Contract assets
(278,000
)
(87,000
)
Inventories
500,000
(509,000
)
Prepaid expenses and other assets
(279,000
)
1,104,000
Income taxes receivable, net
(791,000
)
(83,000
)
Accounts payable and accrued
liabilities
434,000
(1,171,000
)
Accrued compensation
(270,000
)
(212,000
)
Net cash provided by operating
activities
5,460,000
3,227,000
Cash Flows From Investing Activities
Expenditures for property and
equipment
(270,000
)
(180,000
)
Expenditures for finite-life intangible
assets
(25,000
)
(40,000
)
Net cash used for investing
activities
(295,000
)
(220,000
)
Cash Flows From Financing Activities
Issuance of common stock upon exercise of
options
346,000
55,000
Taxes paid on net share settlement of
stock awards
(820,000
)
-
Repurchase of common stock
(4,536,000
)
-
Net cash (used for) provided by
financing activities
(5,010,000
)
55,000
Net increase in cash
155,000
3,062,000
Cash And Cash Equivalents
Beginning of period
16,080,000
7,372,000
End of period
$
16,235,000
$
10,434,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250211877373/en/
Brad Nagel, Chief Financial Officer (952) 758-9299
investorrelations@electromed.com Mike Cavanaugh, Investor Relations
ICR Healthcare (617) 877-9641 mike.cavanaugh@icrhealthcare.com
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