Full Press Release Details
Inc. Announces Record Financial Performance in Fiscal 2024 Second Quarter
initiatives drive record revenue, improve margins and enhance operational efficiency
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 ended December
31, 2023 ("Q2 FY 2024").
FY 2024 Financial Highlights
am thrilled to announce another record revenue quarter for Electromed," said Jim Cunniff, President and Chief Executive
Officer. "The Company's consistent growth strategy focusing on developing best-in-class products, exemplary customer
service and disciplined commercial expansion is generating positive results. We see these investments paying off through continued
revenue growth and increased profitability. The Electromed team and I remain focused on serving our customers and promoting our
state-of-the-art airway clearance technology, Smartvest Clearway, to drive continued market penetration. We are moving from strength
to strength, and we look forward to continued success in the second half of fiscal year 2024."
revenue for Q2 FY 2024 grew 17% to $13.7 million, from $11.7 million in Q2 FY 2023.
in our direct homecare business increased year-over-year by 18.0% to $12.7 million, from $10.7 million in the same period in fiscal
2023. The increase in revenue was due to an increase in sales territories and efficiencies recognized within our reimbursement
department as a result of recent investments made to streamline the claims process. Field sales force employees totaled 58 at
quarter end, 49 of which were direct sales representatives. The annualized homecare revenue per weighted average direct sales
representative in Q2 was $1,007,000, slightly higher than Electromed's annual target range of $850,000 to $950,000.
profit increased to $10,545,000, or 77.0% of net revenues for Q2 FY 2024, from $8,682,000 or 74.0% of net revenues, in the same
period in fiscal 2023. The increase in gross profit in fiscal 2024 was primarily due to increased revenue, lower material procurement
costs, and shipping costs this year.
general and administrative ("SG&A") expenses were $8,175,000 for Q2 FY 2024, representing an increase of $921,000
or 12.7%, compared to the same period in fiscal 2023. 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.
income for the quarter was a record $2,263,000 or 16.5% of total revenue, compared to $1,274,000 or 10.9% of total revenue for
the same period in the prior fiscal year. The increase in operating income was driven primarily by increased revenue and gross
profit rate improvement.
income for Q2 FY 2024 was a record $1,674,000, or $0.19 per diluted share, compared to $977,000, or $0.11 per diluted share, for
the same period in the prior fiscal year.
of December 31, 2023, Electromed had $10.4 million in cash, $23.0 million in accounts receivable and no debt, achieving a working
capital of $32.7 million and an increase in total shareholders' equity of $2.7 million to $40.3 million. The cash balance
reflects an increase of $3.1 million for the six months ended December 31, 2023, compared to a decrease in cash of $1.2 million
in the six months ended December 31, 2022. This increase in cash was driven by an increase in operating income as well as a benefit
from improved cash collections and management of working capital.
Call and Webcast Information
conference call with members of Electromed management will be held at 5:00 p.m. Eastern Time on Tuesday, February 13, 2024.
parties may participate in the call by dialing (877) 407-0789 (Domestic) or (201) 689-8562 (International).
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=1650986&tp_key=12e0064318
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 13743606.
Additionally, an online replay will be available in the Investor Relations section of Electromed's web site at: https://investors.smartvest.com/events-and-presentations/default.aspx
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
of this press release. We undertake no obligation to update them in light of new information or future events.
Nagel, Chief Financial Officer
Cavanaugh, Investor Relations
| December 31, 2023 | June 30, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 10,434,000 | $ | 7,372,000 | ||||
| Accounts receivable (net of allowances for doubtful accounts of $45,000) | 22,988,000 | 24,130,000 | ||||||
| Contract assets | 574,000 | 487,000 | ||||||
| Inventories | 4,760,000 | 4,221,000 | ||||||
| Prepaid expenses and other current assets | 509,000 | 1,577,000 | ||||||
| Total current assets | 39,265,000 | 37,787,000 | ||||||
| Property and equipment, net | 5,377,000 | 5,672,000 | ||||||
| Finite-life intangible assets, net | 616,000 | 605,000 | ||||||
| Other assets | 125,000 | 161,000 | ||||||
| Deferred income taxes | 1,581,000 | 1,581,000 | ||||||
| Total assets | $ | 46,964,000 | $ | 45,806,000 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | 1,041,000 | 1,372,000 | ||||||
| Accrued compensation | 2,806,000 | 3,018,000 | ||||||
| Income tax payable | 253,000 | 336,000 | ||||||
| Warranty reserve | 1,483,000 | 1,378,000 | ||||||
| Other accrued liabilities | 990,000 | 1,949,000 | ||||||
| Total current liabilities | 6,573,000 | 8,053,000 | ||||||
| Other long-term liabilities | 49,000 | 86,000 | ||||||
| Total liabilities | 6,622,000 | 8,139,000 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Common stock, $0.01 par value per share, 13,000,000 shares authorized; | ||||||||
| 8,602,677 and 8,555,238 shares issued and outstanding, as of December 31, 2023 and June 30, 2023, respectively | 86,000 | 86,000 | ||||||
| Additional paid-in capital | 19,634,000 | 18,788,000 | ||||||
| Retained earnings | 20,622,000 | 18,793,000 | ||||||
| Total shareholders' equity | 40,342,000 | 37,667,000 | ||||||
| Total liabilities and shareholders' equity | $ | 46,964,000 | $ | 45,806,000 |
Statements of Operations
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenues | $ | 13,689,000 | $ | 11,729,000 | $ | 26,013,000 | $ | 22,387,000 | ||||||||
| Cost of revenues | 3,144,000 | 3,047,000 | 5,970,000 | 5,374,000 | ||||||||||||
| Gross profit | 10,545,000 | 8,682,000 | 20,043,000 | 17,013,000 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 8,175,000 | 7,254,000 | 17,325,000 | 15,243,000 | ||||||||||||
| Research and development | 107,000 | 154,000 | 313,000 | 452,000 | ||||||||||||
| Total operating expenses | 8,282,000 | 7,408,000 | 17,638,000 | 15,695,000 | ||||||||||||
| Operating income | 2,263,000 | 1,274,000 | 2,405,000 | 1,318,000 | ||||||||||||
| Interest income, net | 96,000 | 7,000 | 173,000 | 11,000 | ||||||||||||
| Net income before income taxes | 2,359,000 | 1,281,000 | 2,578,000 | 1,329,000 | ||||||||||||
| Income tax expense | 685,000 | 304,000 | 749,000 | 271,000 | ||||||||||||
| Net income | $ | 1,674,000 | $ | 977,000 | $ | 1,829,000 | $ | 1,058,000 | ||||||||
| Income per share: | ||||||||||||||||
| Basic | $ | 0.20 | $ | 0.12 | $ | 0.21 | $ | 0.13 | ||||||||
| Diluted | $ | 0.19 | $ | 0.11 | $ | 0.21 | $ | 0.12 | ||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 8,545,120 | 8,442,939 | 8,541,254 | 8,442,684 | ||||||||||||
| Diluted | 8,800,172 | 8,684,352 | 8,791,519 | 8,685,184 |
Statements of Cash Flows
| Six Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | 1,829,000 | $ | 1,058,000 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 398,000 | 272,000 | ||||||
| Amortization of finite-life intangible assets | 25,000 | 47,000 | ||||||
| Share-based compensation expense | 791,000 | 316,000 | ||||||
| Deferred income taxes | - | 10,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,142,000 | (503,000 | ) | |||||
| Contract assets | (87,000 | ) | (221,000 | ) | ||||
| Inventories | (509,000 | ) | (321,000 | ) | ||||
| Prepaid expenses and other current assets | 1,104,000 | 176,000 | ||||||
| Income tax payable, net | (83,000 | ) | 79,000 | |||||
| Accounts payable and accrued liabilities | (1,171,000 | ) | (711,000 | ) | ||||
| Accrued compensation | (212,000 | ) | (532,000 | ) | ||||
| Net cash provided by (used in) operating activities | 3,227,000 | (330,000 | ) | |||||
| Cash Flows From Investing Activities | ||||||||
| Expenditures for property and equipment | (180,000 | ) | (687,000 | ) | ||||
| Expenditures for finite-life intangible assets | (40,000 | ) | (30,000 | ) | ||||
| Net cash used in investing activities | (220,000 | ) | (717,000 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Issuance of common stock upon exercise of options | 55,000 | 16,000 | ||||||
| Taxes paid on net share settlement of stock option exercises | - | (60,000 | ) | |||||
| Repurchase of common stock | - | (153,000 | ) | |||||
| Net cash provided by (used in) financing activities | 55,000 | (197,000 | ) | |||||
| Net decrease in cash | 3,062,000 | (1,244,000 | ) | |||||
| Cash And Cash Equivalents | ||||||||
| Beginning of period | 7,372,000 | 8,153,000 | ||||||
| End of period | $ | 10,434,000 | $ | 6,909,000 |