Full Press Release Details
Inc. Announces Fiscal 2022 Fourth Quarter and Full Year Financial Results
Annual Revenue and Growth Rate
Fourth Quarter Revenue Increased 19% Year-Over-Year; Full Year Revenue Increased 16.5%
-- Leveraging Strategic Investments to Accelerate Growth --
PRAGUE, Minn.--(BUSINESS WIRE)-- Electromed, Inc. ("Electromed" or the "Company") (NYSE American: ELMD),
a leader in innovative airway clearance technologies, today announced financial results for the three months ("Q4 FY 2022")
and full year ("FY 2022") ended June 30, 2022.
FY 2022 Financial Highlights
2022 Financial Highlights
2022 Strategic Investments to Enhance Future Growth
had a highly successful fiscal 2022 as we managed through the pandemic and began to realize the benefits of our multiple strategic
growth initiatives," said Kathleen Skarvan, President and Chief Executive Officer of Electromed. "The team has delivered
exceptional results, including record revenues in both the fourth quarter and the fiscal year, and growing our estimated home
care market share to approximately 19% from 15% over the past three years. The continued investments in our commercial organization,
marketing and brand recognition and organizational execution have been pivotal in this fiscal year's growth and success,
and we will continue on this path as we look to the year ahead."
2023 Strategic Priorities
Skarvan continued, "During fiscal year 2022, we made excellent strides on our four key strategic pillars: continued sales
force growth, direct to consumer marketing, infrastructure to support anticipated sales growth and clinical studies. Looking forward
to fiscal year 2023, we will again leverage these strategic growth initiatives to capture additional market share. Pending FDA
clearance of our Next Generation SmartVest, we estimate a limited market release in fiscal quarter two. We are confident that
our investments in these strategic priorities will accelerate growth and enhance shareholder value. Our long-term objectives:
fiscal 2023, strategic investments and priorities include:
revenue in the fourth quarter of the Company's fiscal year ending June 30, 2022 ("fiscal 2022") increased 18.9%
to $11.3 million, from $9.5 million in the fourth quarter of the Company's fiscal year ended June 30, 2021 ("fiscal
2021"), primarily driven by 21.6% growth in the home care business which benefitted from an increase in direct sales representatives,
increased sales representative productivity driven by increased clinic access and patient flow, our sales team refining their
selling process and clinic targeting methodology, and benefits of the CMS waiver on the non-commercial Medicare portion of our
home care revenue. Field sales employees totaled 52, of which 43 were direct sales, at the end of the fourth quarter of fiscal
2022, compared to 46 at the end of the fourth quarter of fiscal 2021, of which 37 were direct sales. Sales force productivity
continued to improve during the quarter, with annualized home care revenue per direct sales rep at $953,000, above the targeted
range of $800,000 to $900,000.
revenue increased 300% to $0.4 million in the fourth quarter of fiscal 2022 from $0.1 million in the same period in fiscal 2021,
primarily due to increased demand from one of our key distribution partners. Institutional revenue declined 6.5% to $0.5 million in the fourth quarter of fiscal 2022, and international revenue decreased 75.3% to $0.1 million in the fourth quarter of fiscal 2022.
profit in the fourth quarter of fiscal 2022 increased to $8.1 million, or 72.0% of net revenues, from $6.9 million, or 73.2% of
net revenues, in the fourth quarter of fiscal 2021, as rising raw material and shipping costs were offset by higher Medicare allowable
pricing, increased operational efficiencies and fixed cost leverage on higher revenue. Electromed expects gross margin percentage
to be in the mid 70% range during fiscal 2023, which is consistent with our historical gross margin performance range.
Operating income totaled $0.5 million in the fourth quarter of fiscal 2022, compared to $0.7 million in the fourth quarter of fiscal 2021. The higher operating cost was driven by increased strategic investment in sales, general and administrative costs, offset by 19% revenue growth compared to the fourth quarter of fiscal 2021.
income for the fourth quarter of fiscal 2022 was $0.4 million, or $0.04 per diluted share, compared to $0.4 million, or $0.04
per diluted share, in the fourth quarter of fiscal 2021.
of June 30, 2022 Electromed had $8.2 million in cash, $21.1 million in accounts receivable, no debt, for a working capital of $27.4
million, and shareholders' equity of $34.2 million.
the fiscal year ended June 30, 2022, revenue grew 16.5% to $41.7 million, from $35.8 million in FY 2021, driven by a 15.2% increase
in home care revenue, 7.2% increase in institutional revenue, and 161.8% increase in distributor revenue, which more than offset
a 20.8% decline in international revenue. Gross margins were 75.5%, compared to 76.4% in the prior fiscal year, while net income
was $2.3 million, or $0.26 per diluted share, compared to $2.4 million, or $0.27 per diluted share, in FY 2021. The Company's
cash decreased by $3.7 million, driven by $1.4 million of cash used to repurchase shares during the year as well as $1.5 million
used in investing activities.
May 2021, Electromed's Board of Directors approved a new $3.0 million share repurchase program. During the quarter, we also
repurchased approximately 41,000 shares at a total cost of $0.5 million.
parties may participate in the call by dialing (877) 407-0789 (Domestic) or (201) 689-8562 (International), and using pin number
live conference call webcast will be accessible in the Investor Relations section of Electromed's web site and directly
via the following link:
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 13730926. Additionally, an online replay will be available in the Investor
Relations section of Electromed's website at: http://investors.smartvest.com/.
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.
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,"
"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, the duration, extent and severity of the Covid-19 pandemic, including its effects
on our business, 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 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 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.
Wirtz, Interim Chief Financial Officer
Cavanaugh, Investor Relations
| June 30, 2022 | June 30, 2021 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 8,153,000 | $ | 11,889,000 | ||||
| Accounts receivable (net of allowances for doubtful accounts of $45,000) | 21,052,000 | 17,032,000 | ||||||
| Contract assets | 286,000 | 393,000 | ||||||
| Inventories | 3,178,000 | 2,114,000 | ||||||
| Prepaid expenses and other current assets | 1,870,000 | 276,000 | ||||||
| Total current assets | 34,539,000 | 31,704,000 | ||||||
| Property and equipment, net | 4,568,000 | 3,605,000 | ||||||
| Finite-life intangible assets, net | 599,000 | 663,000 | ||||||
| Other assets | 120,000 | 88,000 | ||||||
| Deferred income taxes | 1,538,000 | 1,049,000 | ||||||
| Total assets | $ | 41,364,000 | $ | 37,109,000 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 1,261,000 | $ | 685,000 | ||||
| Accrued compensation | 2,742,000 | 2,474,000 | ||||||
| Income tax payable | 51,000 | 288,000 | ||||||
| Warranty reserve | 1,256,000 | 940,000 | ||||||
| Other accrued liabilities | 1,840,000 | 252,000 | ||||||
| Total current liabilities | 7,150,000 | 4,639,000 | ||||||
| Other long-term liabilities | 41,000 | 54,000 | ||||||
| Total liabilities | 7,191,000 | 4,693,000 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Common stock, $0.01 par value per share, 13,000,000 shares authorized; 8,475,438 and 8,533,209 shares issued and outstanding, respectively | 85,000 | 85,000 | ||||||
| Additional paid-in capital | 18,308,000 | 17,409,000 | ||||||
| Retained earnings | 15,780,000 | 14,922,000 | ||||||
| Total shareholders' equity | 34,173,000 | 32,416,000 | ||||||
| Total liabilities and shareholders' equity | $ | 41,364,000 | $ | 37,109,000 |
Statements of Operations
| Three Months Ended June 30 | Twelve Months Ended June 30 | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Net revenues | $ | 11,268,000 | $ | 9,469,000 | $ | 41,659,000 | $ | 35,756,000 | ||||||||
| Cost of revenues | 3,152,000 | 2,536,000 | 10,217,000 | 8,451,000 | ||||||||||||
| Gross profit | 8,116,000 | 6,931,000 | 31,442,000 | 27,305,000 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 7,309,000 | 5,953,000 | 27,114,000 | 22,443,000 | ||||||||||||
| Research and development | 315,000 | 326,000 | 1,356,000 | 1,722,000 | ||||||||||||
| Total operating expenses | 7,624,000 | 6,279,000 | 28,470,000 | 24,165,000 | ||||||||||||
| Operating income | 492,000 | 652,000 | 2,972,000 | 3,140,000 | ||||||||||||
| Interest income (expense), net | 5,000 | (2,000 | ) | 25,000 | 27,000 | |||||||||||
| Net income before income taxes | 497,000 | 650,000 | 2,997,000 | 3,167,000 | ||||||||||||
| Income tax expense | 116,000 | 250,000 | 692,000 | 805,000 | ||||||||||||
| Net income | $ | 381,000 | $ | 400,000 | $ | 2,305,000 | $ | 2,362,000 | ||||||||
| Income per share: | ||||||||||||||||
| Basic | $ | 0.05 | $ | 0.05 | $ | 0.27 | $ | 0.28 | ||||||||
| Diluted | $ | 0.04 | $ | 0.04 | $ | 0.26 | $ | 0.27 | ||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 8,427,404 | 8,588,093 | 8,471,320 | 8,566,224 | ||||||||||||
| Diluted | 8,735,154 | 8,897,595 | 8,768,703 | 8,911,842 |
Statements of Cash Flows
| For the Years Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | 2,305,000 | $ | 2,362,000 | ||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation | 503,000 | 477,000 | ||||||
| Amortization of finite-life intangible assets | 125,000 | 133,000 | ||||||
| Share-based compensation expense | 976,000 | 1,024,000 | ||||||
| Deferred income taxes | (489,000 | ) | (294,000 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (4,020,000 | ) | (4,091,000 | ) | ||||
| Contract assets | 107,000 | 510,000 | ||||||
| Inventories | (1,072,000 | ) | 971,000 | |||||
| Prepaid expenses and other current assets | (1,322,000 | ) | 151,000 | |||||
| Income tax receivable | (237,000 | ) | 550,000 | |||||
| Accounts payable and accrued liabilities | 2,170,000 | 214,000 | ||||||
| Accrued compensation | 268,000 | 1,070,000 | ||||||
| Net cash (used in) provided by operating activities | (686,000 | ) | 3,077,000 | |||||
| Cash Flows From Investing Activities | ||||||||
| Investment in property and equipment | (1,425,000 | ) | (287,000 | ) | ||||
| Investment in finite-life intangible assets | (100,000 | ) | (161,000 | ) | ||||
| Net cash used in investing activities | (1,525,000 | ) | (448,000 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Issuance of common stock upon exercise of options | - | 46,000 | ||||||
| Taxes paid on stock options exercised on a net basis | (77,000 | ) | (141,000 | ) | ||||
| Repurchase of common stock | (1,448,000 | ) | (1,124,000 | ) | ||||
| Net cash used in financing activities | (1,525,000 | ) | (1,219,000 | ) | ||||
| Net (decrease) increase in cash | (3,736,000 | ) | 1,410,000 | |||||
| Cash And Cash Equivalents | ||||||||
| Beginning of period | 11,889,000 | 10,479,000 | ||||||
| End of period | $ | 8,153,000 | $ | 11,889,000 |