Full Press Release Details
Inc. Announces Fiscal 2018 First Quarter Financial Results
16.5% year-over-year increase in home care revenue --
Prague, Minnesota - November 7, 2017 - Electromed, Inc. ("Electromed" or the "Company")
(NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced financial results for the three months
ended September 30, 2017 ("Q1 FY 2018").
Skarvan, President and Chief Executive Officer of Electromed, commented, "We achieved strong top-line growth in the first
quarter of fiscal 2018, driven by a 16.5% year-over-year increase in home care revenue, and remained profitable despite a higher
level of investment in the business. This quarter we executed on our growth strategies and continued to increase investment in
our sales and reimbursement teams with a focus on adult pulmonology, calling attention to evidence-based studies that differentiate
SmartVest and gaining traction in the deployment of SmartVest Connect , our innovative wireless connectivity
and patient monitoring solution. We also have strengthened our senior leadership team. Last month, we were excited to announce
the appointment of Kathryn Thompson, an accomplished healthcare industry veteran, as Vice President of Reimbursement. Kathryn
will lead Electromed's preeminent reimbursement and customer care team, supporting referring clinics and patients who use
the SmartVest Airway Clearance System."
Ms. Skarvan continued, "This month
we will commence shipping of SmartVest Connect to targeted, strategic adult pulmonology clinics throughout the United States based
on positive feedback from patients and clinicians in the pediatric and cystic fibrosis markets. We expect the number of adult clinics
involved to grow steadily as clinicians recognize the value of using wireless monitoring together with SmartVest to improve therapy
adherence and quality of life for patients with compromised pulmonary function. All in all, our organic growth strategy is tracking
on plan and we expect a higher level of investment in the business to deliver enhanced revenue growth beginning in the second half
revenue increased 15.1% to $6.4 million in Q1 FY 2018 from $5.5 million in Q1 FY 2017, driven by higher home care revenue. Home
care revenue rose 16.5% to $6.0 million in Q1 FY 2018 from $5.1 million in Q1 FY 2017. This increase was primarily due to an increase
in approvals and referrals, driven by a higher number of field sales employees.
profit increased 14.1% to $4.9 million, or 77.4% of net revenue, in Q1 FY 2018 from $4.3 million, or 78.0% of net revenue, in
Q1 FY 2017. The increase in gross profit resulted primarily from an increase in home care revenue.
expenses, which include SG&A as well as research and development ("R&D") expenses, totaled $4.8 million, or
74.8% of net revenue, in Q1 FY 2018 compared with $4.0 million, or 72.8% of net revenue, in the same period of the prior year.
SG&A expenses increased 27.5% to $4.7 million in Q1 FY 2018 from $3.7 million in Q1 FY 2017, primarily due to higher payroll
and compensation-related expenses, higher professional fees, increased recruiting fees driven by expansion of our sales employees
and increased travel, meals and entertainment expenses. R&D expenses totaled $71,000 in Q1 FY 2018 compared to $351,000 in
income decreased to $162,000 in Q1 FY 2018, from $289,000 in Q1 FY 2017, primarily due to higher SG&A expense. The higher
level of SG&A expense in Q1 FY 2018 is consistent with the Company's strategy to increase its investment in revenue
income before income tax expense totaled $158,000 in Q1 FY 2018, compared to $272,000 in Q1 FY 2017.
income equaled $121,000, or $0.01 per diluted share, in Q1 FY 2018, compared to $191,000, or $0.02 per diluted share, in Q1 FY
2017. In Q1 FY 2018, income tax expense totaled $37,000, compared to $81,000 in the same period of the prior year.
balance sheet at September 30, 2017 included cash of $5.8 million, long-term debt including current maturities of $1.1 million,
working capital of $15.9 million, and shareholders' equity of $19.4 million.
will host a conference call on November 8, 2017 at 8:00 am CT (9:00 am ET) to discuss Q1 FY 2018 financial results and other matters.
parties may participate in the call by dialing:
conference call will also be accessible via the following link:
those who cannot listen to the live broadcast, an online webcast replay will be available in the Investor Relations section of
Electromed's web site at: http://www.smartvest.com/electromed/investor-relations/.
Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest
Airway Clearance System, to patients with compromised pulmonary function. The Company is headquartered in New Prague, Minnesota
and was founded in 1992. Further information about Electromed can be found at www.smartvest.com.
statements in this release constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act
of 1995. Forward-looking statements reflect current views with respect to future events and financial performance and include
any statement that does not directly relate to a current or historical fact. Forward-looking statements can generally be identified
by the words "anticipate," "believe," "estimate,"
and similar words. Forward-looking statements in this release include estimated revenue trends, changes in sales opportunities
and our sales force, product and service innovations, referral quality and processing, financial performance, profitability and
market trends. Forward-looking statements cannot be guaranteed and actual results may vary materially due to the uncertainties
and risks, known and unknown, associated with such statements. Examples of risks and uncertainties for the Company include, but
are not limited to, the impact of emerging and existing competitors, the effect of new legislation on the Company's industry
and business, the effectiveness of the Company's sales and marketing and cost control initiatives, changes to reimbursement
programs, as well as other factors described from time to time in the Company's reports to 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 reports on
Form 10-Q and 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 release.
| Contacts: | ||
| Electromed, Inc. | The Equity Group Inc. | |
| Jeremy Brock, Chief Financial Officer | Kalle Ahl, CFA | |
| (952) 758-9299 | (212) 836-9614 | |
| investorrelations@electromed.com | kahl@equityny.com | |
| Devin Sullivan | ||
| (212) 836-9608 | ||
| dsullivan@equityny.com |
Condensed Balance Sheets
| September 30, 2017 | June 30, 2017 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 5,786,992 | $ | 5,573,709 | ||||
| Accounts receivable (net of allowances for doubtful accounts of $45,000) | 9,644,132 | 9,949,759 | ||||||
| Inventories | 2,454,153 | 2,559,485 | ||||||
| Prepaid expenses and other current assets | 565,878 | 393,319 | ||||||
| Income tax receivable | 226,582 | - | ||||||
| Total current assets | 18,677,737 | 18,476,272 | ||||||
| Property and equipment, net | 3,262,474 | 3,303,233 | ||||||
| Finite-life intangible assets, net | 700,454 | 721,276 | ||||||
| Other assets | 98,188 | 99,868 | ||||||
| Deferred income taxes | 467,000 | 460,000 | ||||||
| Total assets | $ | 23,205,853 | $ | 23,060,649 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Current maturities of long-term debt | $ | 51,207 | $ | 50,703 | ||||
| Accounts payable | 678,933 | 663,376 | ||||||
| Accrued compensation | 785,032 | 946,623 | ||||||
| Income taxes payable | - | 156,524 | ||||||
| Warranty reserve | 690,000 | 640,000 | ||||||
| Other accrued liabilities | 536,423 | 438,748 | ||||||
| Total current liabilities | 2,741,595 | 2,895,974 | ||||||
| Long-term debt, less current maturities and net of debt issuance costs | 1,085,203 | 1,097,125 | ||||||
| Total liabilities | 3,826,798 | 3,993,099 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Common stock, $0.01 par value; authorized: 13,000,000 shares; 8,260,167 and 8,230,167 issued and outstanding at September 30, 2017 and June 30, 2017, respectively | 82,602 | 82,302 | ||||||
| Additional paid-in capital | 14,218,687 | 14,028,602 | ||||||
| Retained earnings | 5,077,766 | 4,956,646 | ||||||
| Total shareholders' equity | 19,379,055 | 19,067,550 | ||||||
| Total liabilities and shareholders' equity | $ | 23,205,853 | $ | 23,060,649 |
Statements of Operations
| For the Three Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Net revenues | $ | 6,381,778 | $ | 5,545,363 | ||||
| Cost of revenues | 1,445,284 | 1,217,736 | ||||||
| Gross profit | 4,936,494 | 4,327,627 | ||||||
| Operating expenses | ||||||||
| Selling, general and administrative | 4,703,592 | 3,687,908 | ||||||
| Research and development | 70,583 | 350,840 | ||||||
| Total operating expenses | 4,774,175 | 4,038,748 | ||||||
| Operating income | 162,319 | 288,879 | ||||||
| Interest expense, net of interest income of $9,630 and $3,366, respectively | 4,199 | 16,707 | ||||||
| Net income before income taxes | 158,120 | 272,172 | ||||||
| Income tax expense | 37,000 | 81,000 | ||||||
| Net income | $ | 121,120 | $ | 191,172 | ||||
| Income per share: | ||||||||
| Basic | $ | 0.01 | $ | 0.02 | ||||
| Diluted | $ | 0.01 | $ | 0.02 | ||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | 8,200,167 | 8,167,112 | ||||||
| Diluted | 8,614,633 | 8,452,780 |
Statements of Cash Flows
| Three Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | 121,120 | $ | 191,172 | ||||
| Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||
| Depreciation | 164,070 | 155,781 | ||||||
| Amortization of finite-life intangible assets | 28,258 | 30,674 | ||||||
| Amortization of debt issuance costs | 2,197 | 4,344 | ||||||
| Share-based compensation expense | 190,385 | 109,208 | ||||||
| Deferred income taxes | (7,000 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 305,627 | (432,128 | ) | |||||
| Inventories | 115,588 | (100,596 | ) | |||||
| Prepaid expenses and other assets | (172,097 | ) | (12,500 | ) | ||||
| Income tax receivable | (226,582 | ) | 58,289 | |||||
| Income tax payable | (156,524 | ) | - | |||||
| Accounts payable and accrued liabilities | (36,915 | ) | (1,220,113 | ) | ||||
| Net cash provided (used) by operating activities | 328,127 | (1,215,869 | ) | |||||
| Cash Flows From Investing Activities | ||||||||
| Expenditures for property and equipment | (95,011 | ) | (49,462 | ) | ||||
| Expenditures for finite-life intangible assets | (7,436 | ) | (21,494 | ) | ||||
| Net cash used in investing activities | (102,447 | ) | (70,956 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Principal payments on long-term debt including capital lease obligations | (12,397 | ) | (12,518 | ) | ||||
| Net increase (decrease) in cash | 213,283 | (1,299,343 | ) | |||||
| Cash | ||||||||
| Beginning of period | 5,573,709 | 5,123,355 | ||||||
| End of period | $ | 5,786,992 | $ | 3,824,012 |