Electromed(ELMD) - 2025 Q4 - Annual Results

Executive Summary & Company Highlights 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 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] Q4 FY2025 Company Highlights 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] FY2025 Company Highlights 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] CEO Commentary 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] - The direct sales and fulfillment model remains a key differentiator in the airway clearance space[4] - 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] Q4 FY2025 Financial Performance Electromed, Inc. achieved strong financial growth in Q4 FY2025, with significant increases across key revenue and income metrics 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] 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] Operating Expenses (SG&A) 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] 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] Full Year FY2025 Financial Performance Electromed, Inc. achieved record full-year financial results in FY2025, with substantial growth in key financial metrics and a robust cash position 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 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] - 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] 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] 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] Operating Expenses (SG&A) 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] 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] 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] Financial Statements This section presents Electromed, Inc.'s condensed financial statements, including balance sheets, income statements, and cash flows 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 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 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 This section provides corporate details, including conference call, company overview, cautionary statements, and investor relations Conference Call and 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] - 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] 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] - The company is headquartered in New Prague, Minnesota, and was founded in 1992[20] 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] - Risks include obtaining reimbursement, component shortages, regulatory changes, competition, economic conditions, cyberattacks, and intellectual property protection[21] 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]