Electromed(US:ELMD)2020-11-11 04:00Financial Data and Key Metrics Changes - In Q1 fiscal 2021, overall net revenue was $8 million, a decrease of 3.6% compared to the same period last year [7][21] - Net income was approximately $535,000, or $0.06 per diluted share, down from $1 million, or $0.12 per diluted share in the prior year [13][29] - Gross profit dollars decreased by 3.1% to $6.1 million, representing 76.8% of net revenue [24] Business Line Data and Key Metrics Changes - Home care revenue was approximately $7.5 million, remaining flat year-over-year, but increased by 17.9% compared to the previous quarter [21] - Institutional revenue decreased by 55.5% year-over-year to $278,000 due to reduced hospital purchases related to COVID-19 [22] - Distributor revenue increased by 48.3% to $178,000 from $120,000 in the first quarter of fiscal 2020 [23] Market Data and Key Metrics Changes - International revenue totaled $84,000, up from $66,000 in the prior year period, although it is not a strategic growth area for the company [23] - The home care business benefited from the CMS waiver, which has been extended, aiding revenue growth [9] Company Strategy and Development Direction - The company aims to strengthen its institutional strategy by fortifying hospital call points and partnerships with integrated delivery networks [11] - There is a focus on expanding the sales organization and investing in direct-to-consumer marketing to increase awareness of bronchiectasis and SmartVest [14][54] - The long-term growth thesis remains intact, targeting a significant market opportunity in non-cystic fibrosis bronchiectasis [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about resuming long-term low double-digit revenue growth as the impact of COVID-19 abates [19] - The company remains committed to maintaining profitability and has not experienced significant disruptions in manufacturing or supply chain [15][30] Other Important Information - The company appointed Kristine Owata as Vice President of Reimbursement and Payer Relations, bringing 15 years of experience [16][17] - R&D expenses increased significantly to $481,000, primarily for next-generation product development [27] Q&A Session Summary Question: Will the CMS waiver be extended beyond January? - Management indicated there is a good chance the waiver may be extended based on COVID-19 case trends [32][33] Question: What are the plans for capital allocation? - Management stated that all options, including acquisitions and dividends, are on the table, but priority will be given to strategies for accelerating growth [34][36] Question: What is the status of the multicenter study? - The study is underway with enrollment ongoing, and it aims to include quality of life surveys, which are recognized by the FDA as important outcomes [38][40] Question: How will R&D spending be managed going forward? - R&D spending is expected to remain at similar levels for the duration of fiscal 2021 [45] Question: What is the outlook for SG&A expenses? - Management plans to expand the sales organization and invest in infrastructure to support future growth [54]