Electromed(ELMD) - 2026 Q1 - Quarterly Report

Financial Performance - Net revenues for the three months ended September 30, 2025, were $16,887,000, an increase of 15.1% compared to $14,668,000 for the same period in 2024[60] - Homecare revenue increased by $1,678,000 or 12.7%, primarily due to an increase in direct sales representatives and higher net revenues per sales representative[61] - Hospital revenue was $1,047,000, an increase of 51.7%, reflecting an increase in sales representatives focused on the hospital market[62] - Gross profit increased to $13,197,000, or 78.1% of net revenues, compared to $11,491,000, or 78.3% of net revenues in the prior year[65] - Operating income increased by $732,000 or 37.8% to $2,670,000 for the three months ended September 30, 2025[72] - Net income for the three months ended September 30, 2025, was $2,136,000, an increase of 44.9% compared to $1,474,000 for the same period in 2024[76] Expenses and Cash Flow - Research and development expenses were $241,000, an increase of 45.2% compared to the same period in the prior year, primarily due to increased headcount and external spend[71] - Cash flows from operating activities were $169,000, consisting of net income of $2,136,000 and non-cash expenses of $717,000[77] Liquidity and Financial Resources - The company maintains a credit facility with a maximum borrowing limit of $2,500,000, which was fully available as of September 30, 2025[81] - The company expects its working capital of approximately $35,800,000 to be sufficient to meet anticipated liquidity needs for the next twelve months[80] Regulatory and Market Risks - The company emphasizes the importance of maintaining reimbursement from Medicare, Medicaid, and private insurance payers for its products[88] - The company faces risks related to component or raw material shortages, significant price increases, and changes to trade regulations[88] - The company acknowledges the potential impact of adverse economic conditions and intense competition on its operations[88] - The company recognizes the potential entry of new competitors and adverse changes in healthcare regulations as significant risks[88] Strategic Focus and Development - The company is focused on developing new sales channels, including hospital and homecare distributor channels[88] - The company anticipates ongoing compliance with regulatory requirements and aims to gain future regulatory approvals[88] - The company is committed to protecting and expanding its intellectual property portfolio[88] Cybersecurity and Operational Challenges - The company highlights the risks associated with cyberattacks and data breaches that could affect its operations[88] - The company is aware of the challenges posed by wage inflation and technical problems with its research and products[88] Forward-Looking Statements - The company does not undertake any obligation to update forward-looking statements unless required by law[87]