Electromed, Inc. Announces Record Financial Performance in Fiscal 2025 Second Quarter
Company maintained strong momentum to deliver another quarter of record revenue and earnings, while continuing to invest in multiple strategic growth initiatives
NEW 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 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.
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Electromed, Inc. |
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Condensed Balance Sheets |
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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. |
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Condensed Statements of Operations |
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Three Months Ended |
Six Months Ended |
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|
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 |
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|
|
|
|
|
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Income per share: |
||||||||||||||
|
Basic |
$ |
0.23 |
$ |
0.20 |
$ |
0.41 |
$ |
0.21 |
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|
Diluted |
$ |
0.22 |
$ |
0.19 |
$ |
0.38 |
$ |
0.21 |
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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 |
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Electromed, Inc. |
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Condensed Statements of Cash Flows |
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Six Months Ended December 31, |
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|
2024 |
2023 |
|||||||||||
|
|
|
(Unaudited) |
|
(Unaudited) |
||||||||
|
Cash Flows From Operating Activities |
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|
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 |
|
||||||
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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 |
) |
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|
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 |
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20250211877373/en/
Brad Nagel, Chief Financial Officer
(952) 758-9299
[email protected]
Mike Cavanaugh, Investor Relations
ICR Healthcare
(617) 877-9641
[email protected]
KEYWORDS: Minnesota United States North America
INDUSTRY KEYWORDS: Medical Devices Health Health Technology Cardiology Medical Supplies
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