Revenue and Growth - Total revenue for fiscal 2019 was approximately $31.3 million, an increase of 10.6% from $28.3 million in fiscal 2018[130] - Home care revenue increased by 10.3%, or approximately $2.693 million, driven by a higher number of referrals and field sales employees[133] - Institutional revenue increased by 3.4%, or approximately $53,000, attributed to more single patient use garments sold[134] - International revenue grew by 49.4%, reaching approximately $747,000, although it is not a primary focus for the company[135] Profitability and Expenses - Gross profit for fiscal 2019 was approximately $23.848 million, representing 76.2% of net revenues, a slight decrease from 76.9% in fiscal 2018[136] - Selling, general and administrative expenses increased by approximately $1.637 million, or 8.7%, totaling approximately $20.446 million for fiscal 2019[139] - SG&A payroll and compensation-related expenses rose by approximately $1.369 million, or 11.6%, due to additional employees and higher sales incentives[140] - Professional and legal fees decreased by approximately $206,000 to approximately $1,524,000 in fiscal 2019, compared to approximately $1,730,000 in fiscal 2018, primarily due to reductions in shareowner services, legal, and IT costs[141] - Recruiting fees were approximately $256,000 in fiscal 2019, representing a decrease of approximately $376,000, or 59.5%, compared to the prior year, attributed to fewer new hires in sales[142] - Travel, meals, and entertainment expenses increased by approximately $160,000, or 7.3%, to approximately $2,341,000 in fiscal 2019, primarily due to higher average expenses per salesperson[144] Research and Development - R&D expenses were approximately $583,000 in fiscal 2019, representing 1.9% of net revenues, with expectations to maintain similar spending in fiscal 2020 for product enhancements and market opportunities[147] Net Income and Cash Flow - Net income for fiscal 2019 was approximately $1,969,000, an increase from approximately $1,831,000 in fiscal 2018, driven by higher gross profit and lower costs, partially offset by increased R&D and depreciation expenses[152] - Cash flows from operating activities for fiscal 2019 were approximately $2,590,000, consisting of net income of approximately $1,969,000 and non-cash expenses of approximately $1,602,000[154] Investment and Financing Activities - Cash used in investing activities was approximately $1,387,000 in fiscal 2019, primarily for property and equipment expenditures of approximately $1,331,000[155] - Cash used in financing activities was approximately $851,000 in fiscal 2019, including $1,103,000 in principal payments on long-term debt[156] - The company expects to finance planned equipment purchases and a building expansion project estimated to cost between $1,500,000 and $1,700,000, which will save over $130,000 in annual lease expenses[163] Tax and Accounting Adjustments - The effective tax rate for fiscal 2019 was 32.3%, slightly lower than 33.0% in fiscal 2018, influenced by state income taxes and R&D tax credits[151] - Net revenues for the twelve months ended June 30, 2018, were adjusted to $28,306,696 after a decrease of $390,926 due to the adoption of ASC 606[170] - Gross profit was adjusted to $21,772,612, reflecting a decrease of $1,083,409 from previously reported figures[170] - Net income for the same period was adjusted to $1,831,173, down by $71,223 from prior reporting[170] - Basic income per share was adjusted to $0.22, a decrease of $0.01, while diluted income per share was adjusted to $0.21, also down by $0.01[170] - Accounts receivable, net of allowances, increased to $11,811,308 after an adjustment of $248,100[170] - Contract assets were recognized at $776,338 following the adoption of ASC 606[170] - Inventories were adjusted to $2,486,848, reflecting an increase of $126,155[170] - Total operating expenses were adjusted to $19,060,310, a decrease of $787,186[170] - The company expects no material impact on financial statements from the adoption of ASU 2016-02 regarding lease accounting[173] - As a smaller reporting company, the company is not required to provide disclosures about market risk[174] Product and Market Strategy - The company aims to maintain gross margins slightly below 80% in the long term, despite short-term fluctuations[138] - The SmartVest SQL product has been sold in the domestic home care market since 2014, with enhancements made in 2017[111] - The company employs a direct-to-patient model, allowing for better management of insurance claims and patient referrals[113]
Electromed(ELMD) - 2019 Q4 - Annual Report