Electromed(US:ELMD)2020-05-13 16:37Financial Data and Key Metrics Changes - The company reported a net revenue increase of 18% to $8.7 million in Q3 2020 from $7.4 million in Q3 2019, driven by growth in home care revenue [18] - Net income for the third quarter was approximately $653,000, or $0.07 per diluted share, compared to $353,000, or $0.04 per diluted share in the prior year [24] - Operating income increased to $913,000 in Q3 2020 from $465,000 in the same period of the prior year [23] Business Line Data and Key Metrics Changes - Home care revenue increased by 14.3% to $7.8 million, primarily due to a higher average selling price per device and a greater percentage of referrals getting approved [18] - Institutional revenue surged by 46.9% to $609,000 from $414,000 in the prior year, driven by higher average selling prices and increased volume [18] - The company began selling into home medical equipment distributors, generating $165,000 in revenue during Q3 2020 [18] Market Data and Key Metrics Changes - International revenue, which is not a strategic growth area, totaled approximately $137,000 compared to $142,000 in the prior year [19] - The company noted that many clinics temporarily closed or restricted their operating hours due to COVID-19, impacting the home care referral pipeline [9] Company Strategy and Development Direction - The company aims for long-term double-digit revenue growth once the impact of COVID-19 subsides, emphasizing its essential business status and strong balance sheet [12] - The management highlighted the significant market opportunity in non-cystic fibrosis bronchiectasis, estimated at over 4 million individuals in the U.S. [16] - The company is focusing on building awareness of recent CMS waivers that modify rules for prescribing respiratory-related devices, which could enhance patient access [8] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the long-term impact of COVID-19 on business and financial performance but remains confident in the company's ability to weather the storm [11] - The company has implemented cost-saving measures, expecting approximately $450,000 in savings per quarter due to reduced discretionary spending [11] - Management is optimistic about returning to a strong cadence of profitable growth as the nation emerges from the COVID-19 crisis [16] Other Important Information - The company reported cash of $9.9 million, no debt, and working capital of $24.2 million as of March 31, 2020 [25] - A stimulus payment of $913,000 related to the CARES Act was received post-quarter end, which may help offset revenue losses due to COVID-19 [26] Q&A Session Summary Question: How is the relaxed CMS guidelines impacting the business? - Management indicated that the waiver primarily assists patients in the home care environment, particularly for those discharged from hospitals [29] Question: Have there been any changes in the conditions for which SmartVest is being prescribed? - Management noted an increase in prescriptions for COPD and COVID-19 patients, which were not typically qualified before [30] Question: What percentage of active accounts have reopened? - Management reported a gradual increase in the number of clinics reopening and conducting face-to-face visits, with a high single-digit percentage shift observed [32]