Revenue Growth - Total revenue for fiscal year 2025 was $64,000,000, an increase of $9,284,000 or 17.0% compared to $54,716,000 in fiscal year 2024[123] - Homecare revenue increased by $7,784,000 or 15.7% to $57,287,000 in fiscal 2025, driven by an increase in direct sales representatives and higher net revenues per approval[123] - Hospital revenue rose by $605,000 or 23.9% to $3,140,000 in fiscal 2025, attributed to increased sales representatives focused on the hospital market[124] - Homecare distributor revenue surged by $1,076,000 or 58.1% to $2,928,000 in fiscal 2025, due to a higher number of homecare distribution partners[125] Profitability - Gross profit increased to $49,971,000 in fiscal 2025, representing 78.1% of net revenues, up from $41,726,000 or 76.3% in fiscal 2024[128] - Operating income rose by $3,079,000 or 46.8% to $9,660,000 in fiscal 2025, primarily due to increases in net revenues and gross profit[135] - Net income for fiscal 2025 was $7,537,000, an increase of $2,387,000 or 46.3% compared to fiscal 2024's net income of $5,150,000[140] Expenses - Research and development expenses increased by $340,000 or 51.8% to $996,000 in fiscal 2025, mainly due to higher headcount and external spending on product enhancements[134] - Selling, general and administrative expenses were $39,315,000 in fiscal 2025, an increase of $4,826,000 or 14.0% from $34,489,000 in fiscal 2024[129] Cash Flow and Investments - Cash flows from operating activities in fiscal 2025 were $11,393,000, driven by net income and non-cash expenses, despite increases in accounts receivable and other assets[141] - Net cash used for investing activities in fiscal 2025 was approximately $306,000, primarily for property and equipment expenditures of $262,000[142] - Net cash used for financing activities in fiscal 2025 was approximately $11,880,000, including $10,000,000 for stock repurchase[143] Taxation - Income tax expense for fiscal 2025 was $2,747,000, including a current tax expense of $3,057,000 and a deferred benefit of $310,000[137] - The effective tax rates were 26.7% for fiscal 2025 and 26.8% for fiscal 2024, influenced by state income taxes and non-deductible items[139] Financial Position - The company has approximately $34,614,000 in working capital, which is expected to meet liquidity needs for at least the next twelve months[145] - The line of credit provides a maximum borrowing capacity of $2,500,000, with no outstanding principal balance as of June 30, 2025[146] - The company maintains certain financial covenants under its line of credit, including a minimum tangible net worth of $10,125,000[147] - The company anticipates that cash flows from operations will be sufficient to meet working capital and capital expenditure requirements for at least the next twelve months[150]

[Executive Summary & Company Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Highlights) Electromed, Inc. achieved record financial performance in FY2025, marked by significant revenue and operating income growth, strategic market index inclusions, and strong operational cash flow [Overall Performance Overview](index=1&type=section&id=Overall%20Performance%20Overview) Electromed, Inc. announced record financial results for both the fourth quarter and full fiscal year 2025, marking its eleventh consecutive quarter of year-over-year revenue and operating income growth - Electromed, Inc. achieved **record quarterly and annual revenues and operating income** for FY2025, marking the **eleventh consecutive quarter of year-over-year growth**[1](index=1&type=chunk) [Q4 FY2025 Company Highlights](index=1&type=section&id=Q4%20FY2025%20Company%20Highlights) Key financial achievements for the fourth quarter of fiscal year 2025 include significant revenue and operating income growth, alongside the company's inclusion in the Russell 2000® and 3000® indexes Q4 FY2025 Key Financial Highlights | Metric | Q4 FY2025 | Q4 FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Net Revenue | $17.4 million | $14.8 million | +17.3% | | Operating Income | $3.0 million | $2.3 million | +30.2% | | Net Income | $2.2 million | $1.8 million | +22.2% | | Diluted EPS | $0.25 | $0.20 | +25.0% | - Electromed was added to the **Russell 2000® and 3000® indexes** in June 2025[8](index=8&type=chunk) [FY2025 Company Highlights](index=1&type=section&id=FY2025%20Company%20Highlights) For the full fiscal year 2025, Electromed achieved record net revenues, operating income, and net income, demonstrating strong operational cash generation and a significant share repurchase program FY2025 Key Financial Highlights | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Net Revenue | $64.0 million | $54.7 million | +17.0% | | Operating Income | $9.7 million | $6.6 million | +46.8% | | Operating Margin | 15.1% | 12.0% | +3.1 pp | | Net Income | $7.5 million | $5.2 million | +44.2% | | Diluted EPS | $0.85 | $0.58 | +46.6% | | Cash from Operations | $11.4 million | $9.1 million | +25.3% | - Electromed repurchased **$10.0 million of its common stock** throughout FY2025[8](index=8&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jim Cunniff highlighted FY2025 as a banner year with record revenues and profitability, attributing success to the direct sales and fulfillment model, strengthened operational infrastructure, and strategic initiatives - Fiscal year 2025 was a "banner year" with **record revenues and profitability**, driven by diverse growth initiatives[4](index=4&type=chunk) - The **direct sales and fulfillment model** remains a key differentiator in the airway clearance space[4](index=4&type=chunk) - Operational improvements include a **manufacturing optimization plan** (expected completion FY2026) and deployment of a **new CRM system** to enhance sales efficiency. **Strategic expansion of the direct sales team** in high-return geographies and **initiatives to raise bronchiectasis awareness** were also key[4](index=4&type=chunk) [Q4 FY2025 Financial Performance](index=1&type=section&id=Q4%20FY2025%20Financial%20Performance) Electromed, Inc. achieved strong financial growth in Q4 FY2025, with significant increases across key revenue and income metrics [Net Revenues](index=1&type=section&id=q4-net-revenues) Net revenues for Q4 FY2025 increased significantly, primarily driven by growth in the direct homecare business due to increased referrals, approvals, and higher net revenues per approval Q4 FY2025 Net Revenues | Metric | Q4 FY2025 | Q4 FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Total Net Revenues | $17.4 million | $14.8 million | +17.3% | | Direct Homecare Revenue | $15.4 million | $13.4 million | +14.8% | - The increase in direct homecare revenue was primarily due to **incremental referrals and approvals** driven by an **increase in direct sales representatives**, as well as **higher net revenues per approval**[6](index=6&type=chunk) [Gross Profit](index=1&type=section&id=q4-gross-profit) Gross profit and gross margin improved in Q4 FY2025, mainly due to increased revenue and higher net revenue per device Q4 FY2025 Gross Profit | Metric | Q4 FY2025 | Q4 FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Gross Profit | $13.6 million | $11.3 million | +20.4% | | Gross Margin | 78.3% | 76.2% | +2.1 pp | - The increase in gross profit and gross margin was primarily due to **increased revenue** and **higher net revenue per device**[7](index=7&type=chunk) [Operating Expenses (SG&A)](index=2&type=section&id=q4-operating-expenses-sga) Selling, general and administrative (SG&A) expenses increased in Q4 FY2025, primarily due to higher salaries and incentive compensation for an increased number of personnel in sales, sales support, marketing, and reimbursement teams Q4 FY2025 SG&A Expenses | Metric | Q4 FY2025 | Q4 FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | SG&A Expenses | $10.3 million | $8.8 million | +17.0% | - The increase in SG&A was primarily due to **increased salaries and incentive compensation** related to a **higher average number of personnel** in sales, sales support, marketing, and reimbursement teams to process higher patient referrals[9](index=9&type=chunk) [Operating Income & Net Income](index=2&type=section&id=q4-operating-income-net-income) Electromed reported strong growth in operating income and net income for Q4 FY2025, driven by increased revenue and gross profit Q4 FY2025 Operating & Net Income | Metric | Q4 FY2025 | Q4 FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Operating Income | $3.0 million | $2.3 million | +30.2% | | Operating Margin | 17.5% | 15.7% | +1.8 pp | | Net Income | $2.2 million | $1.8 million | +20.6% | | Diluted EPS | $0.25 | $0.20 | +25.0% | - The increase in operating income was primarily due to an **increase in revenue and gross profit**[10](index=10&type=chunk) [Full Year FY2025 Financial Performance](index=2&type=section&id=Full%20Year%20FY2025%20Financial%20Performance) Electromed, Inc. achieved record full-year financial results in FY2025, with substantial growth in key financial metrics and a robust cash position [Net Revenues](index=2&type=section&id=fy2025-net-revenues) Electromed achieved record net revenues for fiscal year 2025, demonstrating robust growth across its business segments FY2025 Net Revenues | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Total Net Revenues | $64.0 million | $54.7 million | +17.0% | [Direct Homecare Business Performance](index=2&type=section&id=fy2025-direct-homecare-business-performance) The direct homecare market segment was a primary driver of revenue growth in FY2025, supported by an expanded sales force and increased revenue per approval FY2025 Direct Homecare Revenue | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Direct Homecare Revenue | $57.3 million | $49.5 million | +15.7% | - Revenue increase was due to an **increase in direct sales representatives** (62 total, 55 direct sales reps at year-end) and **higher net revenues per approval**[12](index=12&type=chunk) - Annualized homecare revenue per weighted average direct sales representative in FY2025 was **$1,058,000**, **exceeding the target range of $900,000 to $1,000,000**[12](index=12&type=chunk) [Non-Homecare Business Performance](index=2&type=section&id=fy2025-non-homecare-business-performance) Electromed's non-homecare business also experienced substantial growth in FY2025, primarily fueled by increased distributor and hospital revenue FY2025 Non-Homecare Revenue | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Non-Homecare Revenue | $6.7 million | $5.2 million | +28.8% | - The increase was primarily due to **increased distributor and hospital revenue**[13](index=13&type=chunk) [Gross Profit](index=2&type=section&id=fy2025-gross-profit) Gross profit and gross margin for FY2025 improved significantly, driven by higher overall revenue and increased net revenue per device FY2025 Gross Profit | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Gross Profit | $50.0 million | $41.7 million | +19.9% | | Gross Margin | 78.1% | 76.3% | +1.8 pp | - The increase in gross profit and gross margin was primarily due to **increased revenue** and **higher net revenue per device**[13](index=13&type=chunk) [Operating Expenses (SG&A)](index=2&type=section&id=fy2025-operating-expenses-sga) Selling, general and administrative (SG&A) expenses increased in FY2025, mainly due to higher compensation costs associated with an expanded workforce supporting increased patient referrals FY2025 SG&A Expenses | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | SG&A Expenses | $39.3 million | $34.5 million | +14.0% | - The increase was primarily due to **increased salaries and incentive compensation** related to the **higher average number of personnel** in sales, sales support, marketing, and reimbursement teams to process higher patient referrals[14](index=14&type=chunk) [Operating Income & Net Income](index=2&type=section&id=fy2025-operating-income-net-income) Electromed achieved substantial growth in operating income and net income for FY2025, reflecting strong revenue and gross profit performance FY2025 Operating & Net Income | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :-------- | :-------- | :----------- | | Operating Income | $9.7 million | $6.6 million | +46.8% | | Operating Margin | 15.1% | 12.0% | +3.1 pp | | Net Income | $7.5 million | $5.2 million | +44.2% | | Diluted EPS | $0.85 | $0.58 | +46.6% | - The increase in operating income was primarily due to **increases in net revenues and gross profit**[15](index=15&type=chunk) [Financial Position & Cash Flow](index=2&type=section&id=fy2025-financial-position-cash-flow) As of June 30, 2025, Electromed maintained a strong financial position with significant working capital and no debt, despite a decrease in cash primarily due to substantial share repurchases FY2025 Key Financial Position Metrics (as of June 30, 2025) | Metric | Amount | | :----- | :----- | | Cash | $15.3 million | | Accounts Receivable | $24.7 million | | Debt | $0 | | Working Capital | $34.6 million | | Total Shareholders' Equity | $43.2 million | FY2025 Cash Flow from Operations | Metric | FY2025 | FY2024 | Change (YoY) | | :----- | :----- | :----- | :----------- | | Cash Provided by Operations | $11.4 million | $9.1 million | +25.3% | - The decrease in cash for FY2025 (**$0.8 million decrease** vs. **$8.7 million increase** in FY2024) was driven by **$10.0 million in share repurchases** and **$2.3 million in taxes paid on equity awards**, offset by **$11.4 million cash generated from operating activities**[16](index=16&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Electromed, Inc.'s condensed financial statements, including balance sheets, income statements, and cash flows [Condensed Balance Sheets](index=5&type=section&id=condensed-balance-sheets) The condensed balance sheets provide a snapshot of Electromed, Inc.'s financial position as of June 30, 2025, and 2024, detailing assets, liabilities, and shareholders' equity Condensed Balance Sheets (as of June 30) | | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,287,000 | $16,080,000 | | Accounts receivable (net) | 24,660,000 | 23,333,000 | | Contract assets | 1,036,000 | 719,000 | | Inventories | 3,299,000 | 3,712,000 | | Prepaid expenses and other current assets | 392,000 | 329,000 | | Income tax receivable | 408,000 | — | | **Total current assets** | **45,082,000** | **44,173,000** | | Property and equipment, net | 4,714,000 | 5,165,000 | | Finite-life intangible assets, net | 371,000 | 657,000 | | Other assets | 1,173,000 | 87,000 | | Deferred income taxes | 2,462,000 | 2,152,000 | | **Total assets** | **$53,802,000** | **$52,234,000** | | **Liabilities and Shareholders' Equity** | | | | **Current Liabilities** | | | | Accounts payable | $2,667,000 | $1,010,000 | | Accrued compensation | 5,079,000 | 3,893,000 | | Income tax payable | — | 277,000 | | Warranty reserve | 1,645,000 | 1,567,000 | | Other accrued liabilities | 1,077,000 | 930,000 | | **Total current liabilities** | **10,468,000** | **7,677,000** | | Other long-term liabilities | 125,000 | 12,000 | | **Total liabilities** | **10,593,000** | **7,689,000** | | **Shareholders' Equity** | | | | Common stock | 83,000 | 87,000 | | Additional paid-in capital | 21,941,000 | 20,790,000 | | Retained earnings | 21,185,000 | 23,668,000 | | **Total shareholders' equity** | **43,209,000** | **44,545,000** | | **Total liabilities and shareholders' equity** | **$53,802,000** | **$52,234,000** | [Condensed Statements of Operations](index=6&type=section&id=condensed-statements-of-operations) The condensed statements of operations present Electromed, Inc.'s financial performance for the three months and full years ended June 30, 2025, and 2024, detailing revenues, cost of revenues, operating expenses, and net income Condensed Statements of Operations | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Year Ended June 30, 2025 | Year Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $17,393,000 | $14,832,000 | $64,000,000 | $54,716,000 | | Cost of revenues | 3,769,000 | 3,531,000 | 14,029,000 | 12,990,000 | | **Gross profit** | **13,624,000** | **11,301,000** | **49,971,000** | **41,726,000** | | Operating expenses: | | | | | | Selling, general and administrative | 10,282,000 | 8,790,000 | 39,315,000 | 34,489,000 | | Research and development | 302,000 | 176,000 | 996,000 | 656,000 | | **Total operating expenses** | **10,584,000** | **8,966,000** | **40,311,000** | **35,145,000** | | **Operating income** | **3,040,000** | **2,335,000** | **9,660,000** | **6,581,000** | | Interest income, net | 135,000 | 162,000 | 624,000 | 455,000 | | **Net income before income taxes** | **3,175,000** | **2,497,000** | **10,284,000** | **7,036,000** | | Income tax expense | 971,000 | 669,000 | 2,747,000 | 1,886,000 | | **Net income** | **$2,204,000** | **$1,828,000** | **$7,537,000** | **$5,150,000** | | Income per share: | | | | | | Basic | $0.26 | $0.21 | $0.89 | $0.60 | | Diluted | $0.25 | $0.20 | $0.85 | $0.58 | | Weighted-average common shares outstanding: | | | | | | Basic | 8,334,821 | 8,601,206 | 8,454,100 | 8,562,245 | | Diluted | 8,718,900 | 8,997,310 | 8,914,421 | 8,864,585 | [Condensed Statements of Cash Flows](index=7&type=section&id=condensed-statements-of-cash-flows) The condensed statements of cash flows illustrate Electromed, Inc.'s cash generation and utilization for the years ended June 30, 2025, and 2024, categorized into operating, investing, and financing activities Condensed Statements of Cash Flows (Years Ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | **Cash Flows from Operating Activities** | | | | Net income | $7,537,000 | $5,150,000 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation | 1,039,000 | 789,000 | | Impairment of intangible assets | 212,000 | — | | Amortization of finite-life intangible assets | 133,000 | 52,000 | | Share-based compensation expense | 3,059,000 | 1,692,000 | | Deferred income taxes | (310,000) | (571,000) | | Changes in operating assets and liabilities: | | | | Accounts receivable | (1,327,000) | 797,000 | | Contract assets | (317,000) | (232,000) | | Inventories | 175,000 | 459,000 | | Prepaid expenses and other assets | (959,000) | 1,321,000 | | Income tax receivable, net | (685,000) | (59,000) | | Accounts payable and accrued liabilities | 1,650,000 | (1,206,000) | | Accrued compensation | 1,186,000 | 875,000 | | **Net cash provided by operating activities** | **11,393,000** | **9,067,000** | | **Cash Flows from Investing Activities** | | | | Expenditures for property and equipment | (262,000) | (287,000) | | Expenditures for finite-life intangible assets | (44,000) | (108,000) | | **Net cash used for investing activities** | **(306,000)** | **(395,000)** | | **Cash Flows from Financing Activities** | | | | Issuance of common stock upon exercise of options | 398,000 | 311,000 | | Taxes paid on net share settlement of stock awards | (2,278,000) | — | | Repurchase of common stock | (10,000,000) | (275,000) | | **Net cash (used for) provided by financing activities** | **(11,880,000)** | **36,000** | | **Net (decrease) increase in cash** | **(793,000)** | **8,708,000** | | Cash and cash equivalents, Beginning of period | 16,080,000 | 7,372,000 | | **Cash and cash equivalents, End of period** | **$15,287,000** | **$16,080,000** | [Corporate Information & Disclosures](index=2&type=section&id=Corporate%20Information%20%26%20Disclosures) This section provides corporate details, including conference call, company overview, cautionary statements, and investor relations [Conference Call and Webcast Information](index=2&type=section&id=conference-call-webcast-information) Details for the upcoming conference call and webcast to discuss the financial results, including participation instructions and replay options - A conference call with management will be held on **Tuesday, August 26, 2025, at 5:00 p.m. Eastern Time**[17](index=17&type=chunk) - Participants can dial **(844) 826-3033 (Domestic)** or **(412) 317-5185 (International)**, or access the **live webcast** via Electromed's Investor Relations section or a direct link. A **replay** will also be available[18](index=18&type=chunk) [About Electromed, Inc.](index=2&type=section&id=about-electromed-inc) Electromed, Inc. is a Minnesota-based company founded in 1992, specializing in the manufacture, marketing, and sale of airway clearance therapy products, notably the SmartVest® Airway Clearance System - Electromed, Inc. manufactures, markets, and sells products for airway clearance therapy, including the **SmartVest® Airway Clearance System**[20](index=20&type=chunk) - The company is headquartered in **New Prague, Minnesota**, and was founded in **1992**[20](index=20&type=chunk) [Cautionary Statements](index=4&type=section&id=cautionary-statements) This section outlines the forward-looking nature of certain statements in the press release and details various risks and uncertainties that could cause actual results to differ materially from those projected - The press release contains **forward-looking statements**, which are subject to **uncertainties and risks** that may cause actual results to vary materially[21](index=21&type=chunk) - Risks include obtaining **reimbursement**, **component shortages**, **regulatory changes**, **competition**, **economic conditions**, **cyberattacks**, and **intellectual property protection**[21](index=21&type=chunk) [Investor Relations Contact](index=4&type=section&id=investor-relations-contact) Provides contact information for investor relations, including key personnel and their contact details - Contact information for investor relations is provided for **Brad Nagel (CFO)** and **Mike Cavanaugh (ICR Healthcare)**[22](index=22&type=chunk)

Summary of Electromed (ELMD) FY Conference Call - August 12, 2025 Company Overview - **Company Name**: Electromed (ELMD) - **Industry**: Airway management and medical devices - **Headquarters**: New Prague, Minnesota - **Market Position**: Approximately $62 million company, single product focus on SmartVest system - **Financial Health**: Growing, profitable, generating cash, and has no debt [5][6][28] Core Product and Market - **Product**: SmartVest, a high-frequency chest wall oscillation (HFCWO) device designed for patients with bronchiectasis and other respiratory diseases [7][8] - **Primary Disease Target**: Bronchiectasis, a chronic and irreversible respiratory condition affecting approximately 824,000 patients in the U.S. [8][9] - **Market Opportunity**: Only 127,000 patients have been prescribed the technology, indicating a significant untapped market of 700,000 patients [9] - **Revenue Potential**: If all identified patients were prescribed the technology, it could represent a $2.3 billion revenue opportunity [9] Competitive Landscape - **Market Competitors**: Electromed is one of four companies offering HFCWO devices, with a focus on ergonomic design and patient compliance [14][15] - **Unique Selling Proposition**: Lightest weight vest on the market, single hose design, and direct-to-patient delivery model [14][20] Clinical Evidence and Patient Impact - **Patient Outcomes**: 97% of patients report feeling better or the same after using SmartVest; 98% report increased sputum production [18] - **Clinical Goals**: Aim to reduce hospitalizations and minimize antibiotic use by improving airway clearance [19] Business Model and Revenue Streams - **Revenue Sources**: Primarily from home care, with about half from Medicare and the other half from commercial payers [22][23] - **Direct-to-Patient Model**: Electromed delivers products directly to patients, maintaining higher margins compared to traditional distribution models [20][21] - **Growth Strategy**: Focus on increasing awareness among pulmonologists and expanding direct-to-consumer outreach [24][31] Financial Performance and Growth Strategy - **Profitability**: Historically profitable, with recent improvements in operating income due to better efficiency in back-office functions and sales processes [41][42] - **Shareholder Value**: Engaged in share repurchase programs to return value to shareholders [44] - **Future Outlook**: Anticipates continued double-digit revenue growth and plans to invest in expanding sales channels and operational efficiencies [26][43] Regulatory and Market Environment - **Impact of Legislation**: Current healthcare legislation has not significantly impacted Electromed's business, with stable Medicare reimbursement expected [45][46] - **Market Positioning**: Positioned well within the home care space, with a focus on chronic disease management and patient quality of life [28][46] Conclusion Electromed is strategically positioned in a growing market with a unique product that addresses significant unmet medical needs. The company’s focus on direct patient engagement, strong clinical outcomes, and efficient operational practices supports its growth trajectory and profitability.

Summary of Electromed's Conference Call Company Overview - **Company Name**: Electromed - **Industry**: Respiratory Care - **Focus**: Airway clearance technology using high frequency chest wall oscillation (HFCWO) [2][3] Financial Performance - **Revenue**: Approximately $62 million [3] - **Market Capitalization**: Not specified but noted as outdated [3] - **Profitability**: Growing and profitable with no debt [5][27] - **Gross Profit Margin**: Mid-seventies percentage, significantly higher than the industry average of around 50% [22][27] Market Dynamics - **Target Disease**: Bronchiectasis, a chronic and irreversible condition affecting airway passages [6][12] - **Market Growth**: Bronchiectasis population growing at approximately 12% per year [8][26] - **Patient Statistics**: - 824,000 diagnosed with bronchiectasis in the U.S. - Only 127,000 currently using Electromed's technology or competitors' [8] - 230,000 patients treated by pulmonologists, representing a significant market opportunity [9] Product and Technology - **Product**: SmartVest, a single-hose device for airway clearance [13] - **Usage**: Patients typically use the device twice daily for 30 minutes [12] - **Unique Selling Proposition**: - Lightweight and portable design - Intuitive touch screen interface - Lifetime warranty [15][18] Patient Outcomes - **Patient Satisfaction**: - 95% of patients would recommend SmartVest - 97% report feeling better [18] - **Health Impact**: - 57% reduction in antibiotic use - 59% reduction in hospitalizations - 75% fewer emergency department visits [19][20] Business Model - **Direct-to-Patient Model**: Electromed operates both as a manufacturer and a durable medical equipment (DME) distributor, allowing for higher profit margins [21][22] - **Revenue Sources**: 50% from Medicare and 50% from commercial payers [23] Growth Strategy - **Sales Expansion**: Plans to add more sales representatives to increase market penetration [24] - **Marketing Efforts**: Investment in direct-to-consumer and physician marketing to raise awareness of bronchiectasis [24] - **Technology Adoption**: Transitioning to e-prescribing to streamline prescription processes [25] Long-term Objectives - **Revenue Growth**: Consistent double-digit revenue growth expected [26] - **Market Position**: Positioned in a growing market with increasing visibility and prevalence [27] - **Management Alignment**: Management incentives tied to shareholder returns, focusing on revenue and operating income growth [29][30] Competitive Advantage - **Performance Metrics**: Outperforming Russell Medical Index averages in sales growth, gross profit margin, and operating margin [30][31] - **Financial Health**: No debt, strong cash generation, and high gross profit margins [31]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Electromed, Inc. (ELMD) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Earnings Growth - Electromed has a historical EPS growth rate of 16.8%, with projected EPS growth of 39.7% for the current year, significantly outperforming the industry average of 15% [5]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 58.5%, which is substantially higher than the industry average of -0.4%. Additionally, its annualized cash flow growth rate over the past 3-5 years stands at 15.6%, compared to the industry average of 6.5% [6][7]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Electromed, with the Zacks Consensus Estimate for the current year increasing by 1.3% over the past month [8]. Overall Positioning - Electromed holds a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [9][10].

Financial Data and Key Metrics Changes - Revenue for the third quarter increased by 13.1% to $15,700,000 compared to $13,900,000 in the same period last year [6][16] - Operating income rose by 16.2% to $2,100,000, while net income increased by 26.7% to $1,900,000, equating to $0.21 per diluted share [7][18] - Gross profit increased to $12,200,000, representing 78% of net revenues, up from 74.8% in the previous year [16][17] Business Line Data and Key Metrics Changes - Revenue in the direct home care business grew by 14.8% to $14,100,000, driven by increased referrals and approvals [16] - Home care distributor revenue increased by 32.8% to $696,000, while hospital revenue declined by 7.5% to $724,000 [16] - Non-home care revenue remained consistent year over year at $1,600,000, with a year-to-date growth of 24.5% [16] Market Data and Key Metrics Changes - The company reported a healthy cash position of $15,200,000 and total shareholders' equity of $43,900,000 as of March 31, 2025 [18] - The company has seen over 1,300,000 visits to its website this fiscal year, indicating strong interest in its SmartVest technology [13] Company Strategy and Development Direction - The company is focused on expanding its team of direct sales representatives, increasing from 51 to 55 reps [8] - A new Veterans Administration outreach program was launched to raise awareness of airway clearance therapy among veterans [9] - The "Triple Down on Bronchiectasis Campaign" aims to increase awareness of bronchiectasis and the benefits of SmartVest therapy [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong delivery performance and gross margins due to the company's U.S.-based operations [15] - The reimbursement environment is currently viewed as stable, with efforts to enhance payer relations yielding positive results [25][26] Other Important Information - The company repurchased approximately $1,400,000 worth of stock in Q3, totaling $6,400,000 for the fiscal year to date [14] - The company is preparing to launch a new CRM system at the beginning of the next fiscal year [31][32] Q&A Session Summary Question: What is the appetite for adding additional salespeople? - Management indicated a deliberate approach to adding sales reps, with plans to continue hiring while ensuring existing reps are supported [22][23] Question: Is the revenue per rep target still suitable? - The company has exceeded the target of $900,000 to $1,000,000 per rep in two out of three quarters this year and aims for a million plus in the future [24] Question: What is the outlook on the reimbursement environment? - Management feels insulated from reimbursement volatility and has made investments to improve payer relations, resulting in more coverage opportunities [25][26] Question: Update on the new CRM system implementation? - The CRM system is on track to launch at the beginning of the next fiscal year, with user training planned in advance [31][32] Question: Impact of the "Triple Down on Bronchiectasis" campaign? - The campaign has generated over 27,000 views, contributing to increased awareness and revenue growth, although direct correlation to prescriptions is challenging to quantify [33]

Financial Data and Key Metrics Changes - Revenue for the third quarter increased by 13.1% to $15,700,000 from $13,900,000 in the same period last year [5][15] - Operating income rose by 16.2% to $2,100,000, while net income increased by 26.7% to $1,900,000, equating to $0.21 per diluted share [6][18] - Gross profit increased to $12,200,000, representing 78% of net revenues, up from 74.8% in the previous year [16][17] Business Line Data and Key Metrics Changes - Revenue in the direct home care business grew by 14.8% to $14,100,000, driven by increased referrals and approvals [15] - Non-home care revenue remained consistent at $1,600,000, with home care distributor revenue growing by 32.8% to $696,000 [16] - Hospital revenue declined by 7.5% to $724,000, and other revenue decreased by 41.5% to $162,000 [16] Market Data and Key Metrics Changes - The company reported a healthy cash position of $15,200,000 and total shareholders' equity of $43,900,000 as of March 31, 2025 [18] - The annualized home care revenue per weighted average direct sales representative was $1,028,000, slightly above the target range of $900,000 to $1,000,000 [15][24] Company Strategy and Development Direction - The company is focused on the airway clearance space, aiming to be the most trusted solution for patients with bronchiectasis [6] - Initiatives include expanding the sales team and launching a Veterans Administration outreach program to raise awareness [7][9] - The "Triple Down on Bronchiectasis Campaign" aims to increase awareness of bronchiectasis and the benefits of SmartVest therapy [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong delivery performance and gross margins despite tariff concerns, as operations are primarily U.S.-based [14] - The reimbursement environment is currently viewed as stable, with efforts to enhance payer relations yielding positive results [25][26] Other Important Information - The company repurchased approximately $1,400,000 worth of stock in Q3, totaling $6,400,000 for the fiscal year to date [13][18] - A new CRM system is set to launch at the beginning of the next fiscal year, aimed at improving sales team efficiency [30][31] Q&A Session Summary Question: Comment on the environment and appetite for adding salespeople - Management is taking a deliberate approach to adding sales reps, ensuring existing reps are prepared and territories are managed effectively [20][21] Question: Suitability of the $900,000 to $1,000,000 revenue per rep target - The company has exceeded this target in two out of three quarters and aims to maintain or improve this figure [24] Question: Outlook on the reimbursement environment - The company has been insulated from volatility and is actively working to improve payer coverage [25][26] Question: Update on the new CRM system implementation - The CRM system is on track to launch at the beginning of the next fiscal year, with user training planned in advance [30][31] Question: Impact of the "Triple Down on Bronchiectasis" campaign - The campaign has generated over 27,000 views, contributing to increased awareness and revenue growth, although direct correlation to prescriptions is challenging [32][33]

Financial Performance - Net revenues for the three months ended March 31, 2025, increased by $1,813,000 or 13.1% to $15,684,000 compared to the same period in the prior year, while for the nine months, revenues increased by $6,723,000 or 16.9% to $46,607,000[60]. - Homecare revenue for the three months ended March 31, 2025, increased by $1,815,000 or 14.8%, and for the nine months, it increased by $5,798,000 or 16.1%[61]. - Gross profit for the three months ended March 31, 2025, increased to $12,229,000, or 78.0% of net revenues, compared to $10,382,000, or 74.8% in the same period last year[65]. - Operating income for the three months ended March 31, 2025, increased by $299,000 or 16.2% to $2,140,000, while for the nine months, it increased by $2,374,000 or 55.9% to $6,620,000[72]. - Net income for the three months ended March 31, 2025, was $1,891,000, an increase from $1,493,000 in the same period last year, and for the nine months, it was $5,333,000 compared to $3,322,000[76]. Expenses - Research and development expenses for the three months ended March 31, 2025, increased by $110,000 or 65.9%, and for the nine months, they increased by $214,000 or 44.6%[71]. - Selling, general and administrative expenses for the three months ended March 31, 2025, were $9,812,000, an increase of $1,438,000 or 17.2% compared to the same period last year[66]. Cash Flow and Financing - Cash flows from operating activities for the nine months ended March 31, 2025, were $7,534,000, consisting of net income of $5,333,000 and non-cash expenses of $3,184,000[77]. - Cash used for financing activities for the nine months ended March 31, 2025, was $8,228,000, primarily for share repurchase and taxes on stock awards[79]. - The company believes its working capital of approximately $35,684,000 will provide sufficient liquidity for the next twelve months[80]. - The company maintains a credit facility with a maximum borrowing limit of $2,500,000, which is secured by a security interest in substantially all tangible and intangible assets[81]. - As of March 31, 2025, there was no outstanding principal balance on the line of credit, and the interest rate on borrowings is set at 6.50% (prime rate of 7.50% less 1.0%)[81]. - For the nine months ended March 31, 2025, the company spent approximately $117,000 on property and equipment, a decrease from $265,000 in the same period of 2024[84]. - The company expects to finance planned equipment purchases through cash flows from operations or borrowings under the credit facility, with potential additional debt if unforeseen capital needs arise[84]. - The company believes its cash, cash equivalents, and cash flows from operations will be sufficient to meet working capital and capital expenditure requirements for fiscal 2025 and the foreseeable future[85]. - The company has a minimum tangible net worth covenant of not less than $10,125,000 as part of its credit facility agreements[82]. - Failure to comply with covenants could lead to an event of default, potentially resulting in accelerated debt maturity or refusal to renew the line of credit[83]. Regulatory and Market Risks - The company is focused on maintaining regulatory compliance and gaining future regulatory approvals for its products[88]. - The company anticipates ongoing availability of credit and intends to evaluate financing alternatives to meet cash requirements[85]. - The company faces risks including component shortages, adverse changes in healthcare regulations, and competition from new entrants in the market[88].

Financial Performance - Net revenues increased by 13.1% to $15.7 million in Q3 FY 2025, compared to $13.9 million in Q3 FY 2024[5] - Direct homecare business revenue grew by 14.8% to $14.1 million, driven by increased referrals and sales efficiencies[6] - Gross profit rose to $12.2 million, representing 78.0% of net revenues, up from 74.8% in the prior year[8] - Operating income increased by 16.2% to $2.1 million, or 13.6% of net revenues, compared to 13.3% in Q3 FY 2024[11] - Net income grew by 26.7% to $1.9 million, or $0.21 per diluted share, compared to $1.5 million, or $0.17 per diluted share in the prior year[9] Cash Flow and Balance Sheet - Operating cash flow for the nine months ended Q3 FY 2025 was $7.5 million, an increase of $3.0 million year-over-year[9] - Cash balance as of March 31, 2025, was $15.2 million, with total shareholders' equity at $43.9 million[12] - Net cash provided by operating activities increased to $7,534,000 from $4,578,000, representing a growth of 64% year-over-year[23] - Cash and cash equivalents at the end of the period were $15,237,000, up from $11,712,000, indicating a year-over-year increase of 30.5%[23] - The beginning cash balance was $16,080,000, which decreased to $15,237,000 by the end of the period, resulting in a net decrease of $843,000[23] Expenses and Investments - Selling, general and administrative expenses rose by 17.2% to $9.8 million, primarily due to increased personnel costs[10] - Research and development expenses increased to $277,000 from $167,000 in Q3 FY 2024, reflecting ongoing investment in new product development[20] - Share-based compensation expense rose to $2,409,000, compared to $1,250,000, reflecting a 92.5% increase[23] Stock and Equity - The board approved a stock repurchase authorization of $5 million in Q3 FY 2025[9] - The company repurchased common stock amounting to $6,331,000 during the period[23] - The company issued common stock upon exercise of options totaling $381,000, up from $111,000 in the previous year[23] Inventory and Receivables - Accounts receivable showed a negative change of $109,000, contrasting with a positive change of $223,000 in the previous year[23] - Inventories increased by $564,000, compared to an increase of $78,000 in the prior year[23] Year-to-Date Performance - Net income for the nine months ended March 31, 2025, was $5,333,000, an increase of 60.5% compared to $3,322,000 in 2024[23]

Company Overview - Electromed, Inc. is a profitable and growing medical device company that develops, manufactures, markets, and sells innovative High Frequency Chest Wall Oscillation (HFCWO) airway clearance products, primarily for home use [4] - The flagship product, SmartVest® Airway Clearance System, is designed for patient comfort and ease of use [4] - The domestic market for HFCWO devices is largely untapped, with fewer than 15% of the approximately 824,000 patients diagnosed with bronchiectasis in the US currently using this non-invasive therapy [4] Business Model - The company employs an efficient direct-to-patient and provider model, obtaining patient referrals directly from clinicians [5] - Electromed manages the entire insurance claim, product delivery, and training processes on behalf of patients and providers, thereby improving the quality of life for patients with compromised pulmonary function [5] - This model reduces healthcare utilization and enhances value for shareholders [5] Event Participation - Electromed, Inc. will participate in the 15th Annual LD Micro Invitational on April 9th and 10th, 2025, at the Westin Grand Central in New York [1][2] - Jim Cunniff, President and CEO, will represent the company during the presentation scheduled for April 10, 2025, at 02:30 PM ET [2] - The event will feature over 50 companies presenting in half-hour increments and attending private meetings with investors [3]