Full Press Release Details
Inc. Announces Fiscal 2023 Fourth Quarter and Full Year Financial Results
Fourth Quarter Revenue Increased 21% Year-Over-Year; Full Year Revenue Increased 15% --
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 2023")
and full year ("FY 2023") ended June 30, 2023.
FY 2023 Financial Highlights
2023 Financial Highlights
year 2023 was pivotal for Electromed," said Jim Cunniff, President and Chief Executive Officer. "The team delivered
exceptional results, including record revenues of $13.6 million in the fourth quarter, a 21% year-over-year growth rate and over
$48 million for the fiscal year, despite facing headwinds from the expiration of the CMS waiver and macro supply chain disruptions.
The team made strides on our key strategic milestones, most importantly launching the next generation SmartVest Clearway device,
a sleeker, lighter-weight, user-friendly device, and the first new HFCWO technology to be introduced to the market in years. We
continue to invest in our commercial organization and direct-to-consumer marketing efforts as we march toward greater market penetration
and adoption. The operating leverage generated by these investments is clear in our annual results."
2024 Strategic Priorities
Cunniff continued, "As I step into the role of President and Chief Executive Officer, I am grateful for the solid foundation
created by Kathleen Skarvan, former President and Chief Executive Officer, and current Board Chair. Looking into Fiscal Year 2024,
we will continue to execute against Electromed's four strategic pillars: continued thoughtful sales force expansion; direct
to consumer and direct to physician marketing; infrastructure to support anticipated sales growth which includes operational and
manufacturing excellence; and finally, we will continue to add to the body of clinical evidence to further support HFCWO therapy
as an efficacious therapy for bronchiectasis. We believe that bronchiectasis is under-recognized and under-diagnosed, but we believe
this is changing and we are poised to capture increased diagnoses and subsequent prescriptions. I am confident that our continued
attention to these strategic pillars will accelerate topline growth, improve our operating margin, and in turn increase shareholder
revenue in the fourth quarter of the Company's fiscal year ending June 30, 2023 ("fiscal 2023") increased 20.8%
to $13.6 million, from $11.3 million in the fourth quarter of the Company's fiscal year ended June 30, 2022 ("fiscal
2022"), primarily driven by 22.8% 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 and our sales team refining their
selling process and clinic targeting methodology. Field sales employees totaled 55, of which 46 were direct sales, at the end
of the fourth quarter of fiscal 2023, compared to 52 at the end of the fourth quarter of fiscal 2022, of which 43 were direct
sales. Sales force productivity continued to improve during the quarter allowing us to achieve home care revenue per direct sales
rep of $945,000 for FY 2023, on the high end of the target of $850,000 to $950,000.
revenue decreased 41.2% to $0.2 million in the fourth quarter of fiscal 2023 from $0.4 million in the same period in fiscal 2022,
primarily due to the timing of purchases of one of our key distribution partners. Institutional revenue increased 29.0% to $0.6
million in the fourth quarter of fiscal 2023, and international revenue increased 30.2% to $0.1 million in the fourth quarter
profit in the fourth quarter of fiscal 2023 increased to $10.5 million, or 76.8% of net revenues, from $8.1 million, or 72.0%
of net revenues, in the fourth quarter of fiscal 2022, as rising raw material and shipping costs were offset by higher Medicare
allowable pricing, increased operational efficiencies and fixed cost leverage on higher revenue.
income totaled $1.5 million in the fourth quarter of fiscal 2023, compared to $0.5 million in the fourth quarter of fiscal 2022.
The higher operating income was driven by increased revenue in the fourth quarter of fiscal 2023.
income for the fourth quarter of fiscal 2023 was $1.0 million, or $0.12 per diluted share, compared to $0.4 million, or $0.04
per diluted share, in the fourth quarter of fiscal 2022.
revenue for the full year was $48.1 million led by Homecare revenue which increased by $5.9 million or 15.6%, to $44.0 million
in fiscal 2023 compared to fiscal 2022. The revenue increase compared to fiscal 2022 was primarily due to increases in referrals
and approvals. The increase in referrals was primarily due to 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. Additionally, we
benefitted from a Medicare allowable rate increase that took effect on January 1, 2023. Annual Medicare rate increases for our
device are linked closely to changes in the Urban Consumer Price Index.
CMS waiver benefited the non-commercial Medicare portion of our home care revenue by increasing the number of referrals and the
approval percentage for previously non-covered diagnoses. We believe that our ongoing sales team execution, along with the expected
return to pre-COVID-19 levels of patient face-to-face engagement with physicians and clinic access for our sales team mitigated
the Q4 homecare revenue impact of the CMS waiver expiration on May 11, 2023.
Institutional revenue increased by $0.4 million, or 25.3%, in fiscal 2023 compared to fiscal 2022. Institutional revenue includes sales to hospitals and rental companies. The revenue increase was due to increased capital purchases and stronger consumable volumes compared to fiscal 2022, as hospitals resumed utilization of HFCWO protocols after reducing utilization early in the COVID-19 pandemic.
care distributor revenue increased by $0.1 million, or 9.8%, in fiscal 2023 compared to fiscal 2022. The revenue increase in fiscal
2023 was due to increased demand from one of our primary home care distribution partners. We began selling to a limited number
of home medical equipment distributors during our fiscal year ended June 30, 2020, who in turn sell our SmartVest System in the
U.S. home care market.
revenue decreased by $0.1 million, or 18.6%, in fiscal 2023 compared to fiscal 2022. International revenue growth is not currently
a primary focus for us, and our corporate resources are focused on supporting and maintaining our current distributors.
profit increased to $36.5 million in fiscal 2023, or 76.0% of net revenues, from $31.4 million or 75.5% of net revenues, in fiscal
2022. The increase in gross profit was primarily related to increases in domestic home care revenue including the Medicare allowable
rate increase that took effect in January 2022.
general and administrative ("SG&A") expenses were $31.6 million in fiscal 2023, representing an increase of $4.5
million or 16.5% from $27.1 million in fiscal 2022. The increase in SG&A expenses was primarily related to increased payroll
and other compensation related expenses as a result of increased headcount.
expenses decreased by $0.4 million, or 32.4%, to $0.9 million in fiscal 2023 compared to $1.3 million in fiscal 2022. The decrease
in the current year was primarily due to reduced professional consulting costs associated with our next generation platform development
income for fiscal 2023 was $3.2 million, or $0.36 per diluted share, compared to net income of $2.3 million, or $0.26 per diluted
share, in fiscal 2022. The increase in current year net income was primarily due to stronger home care and distributor revenue
of June 30, 2023 Electromed had $7.4 million in cash, $24.1 million in accounts receivable, and no debt, for a working capital
of $29.7 million, and shareholders' equity of $37.7 million.
management will host a conference call on August 22 at 5:00 p.m. Eastern Time to discuss the results.
parties may participate in the call by dialing (877) 407-0789 (Domestic) or (201) 689-8562 (International). The live conference
call webcast will be accessible in the Investor Relations section of Electromed's web site and directly via the following
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 13740145. Additionally, an online replay will be available in the Investor
Relations section of Electromed's web site 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 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