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]

Financial Data and Key Metrics Changes - Electromed reported record revenues of $16.3 million for Q2 FY 2025, an increase of 18.7% from $13.7 million in Q2 FY 2024 [7][18] - Operating income reached a record $2.5 million, compared to $2.3 million in Q2 FY 2024, driven by increased revenue and gross profit [7][23] - Net income was $2 million, or $0.22 per fully diluted share, marking a significant improvement in earnings per share [7][24] Business Line Data and Key Metrics Changes - Revenue from the direct homecare business increased by 15.2% to $14.6 million from $12.7 million, attributed to more referrals and improved efficiencies [19] - Hospital segment revenue grew by 16.8% to $723,000, driven by increased demand for capital and disposable products [20] - Homecare distributor revenue surged by 188% year-over-year to $807,000, reflecting strong demand from DME partners [20] Market Data and Key Metrics Changes - The company improved working capital by reducing inventory by 35% compared to Q2 FY 2024 while meeting patient therapy needs [12] - The annualized homecare revenue per weighted average direct sales representative was $1,077,000, slightly above the target range of $900,000 to $1 million [19] Company Strategy and Development Direction - The company aims to diversify its customer base beyond the core homecare segment, with a focus on the hospital segment and DME distributor relationships [9][10] - Investments in personnel, technology, and process improvements are ongoing to enhance operational efficiency and customer experience [11][12] - The "Triple Down on Bronchiectasis" campaign aims to raise awareness and increase prescriptions for SmartVest Clearway technology [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the operational performance and market response, indicating a strong trajectory for continued growth [16] - The company remains focused on delivering double-digit top-line growth and expanded operating leverage for the full year [25] Other Important Information - Electromed had $16.2 million in cash, $22.8 million in accounts receivable, and no debt, achieving a working capital of $35.5 million [24] - The company is investing in a new CRM system to enhance productivity and market insights [12] Q&A Session Summary Question: Competitive response to SmartVest marketing - Management noted that while competitors have upgraded their technology, it has not significantly impacted Electromed's business, which continues to show strong results [30][33] Question: Developments in drugs for bronchiectasis - Management indicated that a new drug for bronchiectasis is under FDA review, expected to be complementary to airway clearance rather than a replacement [35][38] Question: Revenue per sales representative outlook - Management expressed optimism about maintaining or improving revenue per sales representative, citing better performance management and onboarding processes [40][41]

Financial Data and Key Metrics Changes - The company reported record revenues of $16.3 million for Q2 FY 2025, an increase of 18.7% from $13.7 million in Q2 FY 2024 [5][13] - Net income reached $2 million, or $0.22 per fully diluted share, compared to $1.8 million in the same quarter last year [5][15] - Gross profit increased to $12.6 million, representing 77.7% of net revenues, up from 77% in the previous year [14] Business Line Data and Key Metrics Changes - Direct Home Care revenue grew by 15.2% to $14.6 million from $12.7 million year over year [13] - Hospital segment revenue increased by 16.8% to $723,000, driven by higher demand for capital and disposable products [13] - Durable Medical Equipment (DME) distributor revenue surged by 188% to $807,000, reflecting strong demand from DME partners [13][7] Market Data and Key Metrics Changes - The company is diversifying its customer base beyond the core Home Care segment, with significant growth in the hospital and DME segments [7] - The annualized home care revenue per weighted average direct sales representative was $1,077,000, slightly above the target range of $900,000 to $1,000,000 [13] Company Strategy and Development Direction - The company aims to enhance shareholder value through operational improvements and revenue diversification [6][12] - Investments in personnel, technology, and process improvements are ongoing to support growth and efficiency [9][10] - The "Triple Down on Bronchiectasis" campaign is focused on raising awareness and increasing prescriptions for SmartVest Clearway technology [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining operational momentum and achieving double-digit top-line growth for the full year [16] - The company remains focused on improving execution and penetrating new revenue sources while investing in infrastructure [12] Other Important Information - As of December 31, 2024, the company had $16.2 million in cash and no debt, achieving a working capital of $35.5 million [16] - The company has seen a significant appreciation in stock value over the past six and twelve months [6] Q&A Session Summary Question: Competitive response to SmartVest marketing - Management noted that while competitors have upgraded their products, it has not significantly impacted their business [20][21] Question: Developments in drugs for bronchiectasis - Management indicated that new drugs are being developed but emphasized that airway clearance remains essential for patient care [24][23] Question: Revenue per sales representative outlook - Management expressed optimism about maintaining or improving revenue per sales rep, attributing recent success to better performance management and onboarding processes [25][26]

Financial Performance - Net revenues for the three months ended December 31, 2024, increased by 18.7% to $16,255,000 compared to $13,689,000 for the same period in the prior year[60]. - Homecare revenue increased by $1,925,000 or 15.2% for the three months ended December 31, 2024, driven by increased referrals and approvals[61]. - Gross profit for the three months ended December 31, 2024, increased to $12,627,000, representing 77.7% of net revenues, up from 77.0% in the same period last year[66]. - Operating income increased by $279,000 or 12.3% to $2,542,000 for the three months ended December 31, 2024, compared to the same period in the prior year[74]. - Net income for the three and six months ended December 31, 2024, was $1,968,000 and $3,442,000, respectively, compared to $1,674,000 and $1,829,000 for the same periods in the prior year[79]. Expenses - Research and development expenses increased by $144,000 or 134.6% for the three months ended December 31, 2024, primarily due to increased headcount and external spend[73]. - Selling, general and administrative expenses increased by $1,659,000 or 20.3% for the three months ended December 31, 2024, compared to the same period in the prior year[67]. Cash Flow and Financing - Cash flows from operating activities for the six months ended December 31, 2024, were $5,460,000, consisting of net income and adjustments for non-cash expenses[80]. - The company reported cash used for financing activities of $5,010,000 for the six months ended December 31, 2024, primarily for share repurchase[82]. - The company believes its working capital of approximately $35,522,000 will provide sufficient liquidity for the next twelve months[83]. - 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[84]. - As of December 31, 2024, there was no outstanding principal balance on the line of credit, and the interest rate on borrowings is set at 6.5% (prime rate of 7.5% less 1.0%)[84]. - For the six months ended December 31, 2024, the company spent approximately $270,000 on property and equipment, compared to $180,000 for the same period in 2023, indicating a 50% increase in capital expenditures[87]. - 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[87]. - 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[88]. - The company has a minimum tangible net worth covenant of not less than $10,125,000 as part of its credit facility agreements[85]. - Failure to comply with financial covenants could result in an event of default, potentially leading to accelerated debt maturity or restricted access to additional funds[86]. Regulatory and Compliance - The company is focused on maintaining regulatory compliance and gaining future regulatory approvals, which are critical for its operations[90]. - The company anticipates ongoing availability of credit and the ability to renew its line of credit, which is essential for its liquidity[89]. - The company is evaluating financing alternatives to satisfy its working capital and other cash requirements amid macroeconomic uncertainties[88].

Financial Performance - Net revenues increased by 18.7% to a record $16.3 million in Q2 FY 2025, compared to $13.7 million in Q2 FY 2024[4] - Operating income reached a record $2.5 million, representing 15.6% of net revenues, with a year-over-year increase of 12.3%[7] - 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[9] - Gross profit increased to $12.6 million, or 77.7% of net revenues, up from $10.5 million, or 77.0% of net revenues[6] - Revenue in the direct homecare business grew by 15.2% to $14.6 million, driven by increased referrals and approvals[5] Expenses and Investments - Selling, general and administrative expenses rose by 20.3% to $9.8 million, primarily due to increased salaries and share-based compensation[8] - The company initiated an investment in a new CRM system to enhance the productivity of its commercial team[3] - Share-based compensation expense increased significantly to $1,652,000 from $791,000, marking a rise of 108.5%[21] - Expenditures for property and equipment were $270,000, up from $180,000, indicating ongoing investment in operational capacity[21] - The net cash used for investing activities was $295,000, compared to $220,000 in the prior year, showing an increase in investment outflows[21] Cash Flow and Liquidity - Cash balance as of December 31, 2024, was $16.2 million, reflecting a $0.2 million increase compared to the previous six months[10] - Net cash provided by operating activities increased to $5,460,000 from $3,227,000, reflecting a growth of 69.2% year-over-year[21] - Cash and cash equivalents at the end of the period rose to $16,235,000, up from $10,434,000, indicating a year-over-year increase of 55.0%[21] - The beginning cash balance was $16,080,000, which demonstrates a solid liquidity position for the company[21] Shareholder Equity and Stock Activity - Electromed's total shareholders' equity was $43.6 million as of December 31, 2024[10] - The company repurchased common stock amounting to $4,536,000 during the period, indicating a strong commitment to returning value to shareholders[21] - The company issued common stock upon exercise of options totaling $346,000, compared to $55,000 in the previous year, reflecting increased employee stock option activity[21] Inventory and Receivables Management - Accounts receivable decreased by $558,000, while inventories increased by $500,000, suggesting changes in sales and inventory management strategies[21] Workforce - The company ended the quarter with 60 field sales force employees, including 54 direct sales representatives[5]