Electromed(ELMD) - 2020 Q4 - Annual Report

Revenue Performance - Revenue for the fiscal year ended June 30, 2020, is summarized in thousands of dollars, indicating a comparison with the previous fiscal year[142]. - Total revenue for fiscal 2020 was approximately $32,471,000, an increase of 3.7% compared to $31,300,000 in fiscal 2019[143]. - Home care revenue increased by 1.3%, or approximately $374,000, for fiscal 2020, driven by a higher percentage of approved referrals[143]. - Institutional revenue rose by 24.7%, or approximately $396,000, in fiscal 2020, primarily due to higher selling prices and an increase in the number of devices sold[144]. Profitability and Expenses - Gross profit for fiscal 2020 was approximately $25,200,000, representing 77.6% of net revenues, up from 76.2% in fiscal 2019[148]. - Selling, general and administrative expenses decreased by approximately $490,000, or 2.4%, to approximately $19,945,000 in fiscal 2020[150]. - Research and development expenses were approximately $1,050,000, or 3.2% of net revenues, for fiscal 2020, with expectations for a slight increase in spending for fiscal 2021[156]. - Net income for fiscal 2020 was approximately $4,161,000, compared to $1,980,000 in fiscal 2019, driven by increased gross profit and government stimulus income[163]. Government Assistance and Impact of COVID-19 - The company received a stimulus payment of approximately $913,000 under the CARES Act to offset revenue losses due to the COVID-19 pandemic[129]. - The COVID-19 pandemic has negatively impacted institutional revenue as hospitals adjusted their operating protocols, affecting procurement management[123]. - The company initiated cost-containment measures in response to the COVID-19 pandemic, including reducing discretionary spending and employee furloughs[126]. - The company recorded $913,000 of government stimulus income related to the COVID-19 pandemic in fiscal 2020[158]. Product Information and Market Strategy - The SmartVest SQL product has been sold in the domestic home care market since 2014, with enhancements in programmability and ease of use compared to the previous model[116]. - The company employs a direct-to-patient and provider model, allowing it to capture both manufacturer and distributor margins[118]. - The SmartVest System is often eligible for reimbursement from major private insurance providers, which is crucial for patient access to therapy[117]. - The company aims to expand its clinical evidence base to increase utilization of the SmartVest for patients with bronchiectasis[119]. - Key growth strategies for fiscal 2021 include increasing referrals in adult pulmonology/bronchiectasis and enhancing patient and provider support[119]. Financial Metrics and Adjustments - Cash flows from operating activities for fiscal 2020 were approximately $4,196,000, consisting of net income and non-cash expenses[164]. - The effective tax rate for fiscal 2020 was 20.6%, down from 32.3% in fiscal 2019, influenced by various tax credits and deductions[162]. - Net revenues for the twelve months ended June 30, 2019, were reported at $31,299,750, with no adjustments made[176]. - Gross profit for the same period was $23,847,944, indicating a strong revenue generation capability[176]. - Operating income adjusted to $2,829,623 after accounting for the adoption of ASC 842, reflecting an increase of $11,112[176]. - The net income for the twelve months ended June 30, 2019, was reported at $1,980,330, after adjustments[176]. - Basic earnings per share remained at $0.24, with diluted earnings per share also unchanged at $0.23[176]. - Total operating expenses were adjusted to $21,018,321, with selling, general, and administrative expenses slightly reduced to $20,435,010[176].