Electromed, Inc. (ELMD) research, news, and more from GeoInvesting

Company description

Tue, 31 Dec 2013 05:00:00 GMT

Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest(R) Airway Clearance System and related products, to patients with compromised pulmonary function.

Research

Wed, 27 Aug 2025 04:00:00 GMT

Electromed, Inc. (NYSE:ELMD) ($20.66; $173.3M market cap) announced Q4 2025 results:

Q4 2025 sales of $17.4 million vs. $14.8 million in the prior year and ahead of analyst estimates of $16.6 million.
Q4 2025 EPS: $0.25 vs. $0.20 in the prior year and ahead of analyst estimates of $0.22
FY 2025 sales of $64.0 million vs. $54.7 million in the prior year, ahead of analyst estimates of $63.1 million
FY 2025 EPS: $0.85 vs. $0.58 in the prior year, ahead of analyst estimates of $0.81

“Fiscal year 2025 was a banner year for Electromed – posting record revenues and profitability as our diverse growth initiatives yielded strong results,” said Jim Cunniff, President, and Chief Executive Officer. “Our direct sales and fulfillment model continues to be a key differentiator for Electromed in the airway clearance space. During the year, we strengthened our operational infrastructure with key new hires, and we allocated meaningful resources to improve operational efficiencies. Specifically, we began a manufacturing optimization plan to increase capacity that we expect to complete in fiscal year 2026 and have begun deploying a new CRM system designed to enhance our sales team’s efficiency and productivity. As in previous years, we continued to strategically expand our direct sales team in geographies where we expect high returns, while executing various initiatives to raise awareness of bronchiectasis, which is a disease that is misdiagnosed and underdiagnosed. Our strong results clearly demonstrate the important role HFCWO therapy plays in treating this awful disease, and we will continue to advance Electromed’s vision of being the most trusted provider in the airway clearance space.”

Research

Wed, 28 Aug 2024 19:40:43 GMT

Electromed, Inc. (NYSEAMEX:ELMD) ($16.05; $138.9M market cap) announced Q4 2024 results:

Sales of $14.8 million vs $13.6 million in the prior year and below of analyst estimates of $15.0 million
EPS of $0.20 vs $0.12 in the prior year and ahead analyst estimates of $0.14

“I’m extremely pleased with the Electromed team’s performance in fiscal 2024, as we continued to drive double-digit top line growth coupled with strong operating leverage,” said Jim Cunniff, President, and Chief Executive Officer. “The end results were excellent, namely delivering record revenues, record operating income, and record earnings for the year, an impressive feat for any company. We again gained market share, driven largely by ongoing infrastructure investments across the commercial team, as well as ongoing market development initiatives to raise awareness of HFCWO therapy with physicians and clinics treating bronchiectasis patients. These results were achieved despite headwinds from the expiration of the CMS waiver that we benefited from in FY 2023. We will continue to make deliberate investments in our growth and believe Electromed is well-positioned to deliver similar outstanding results in fiscal 2025.”

Full year EPS of $0.58, shares trading at P/E of 27.5 on those earnings, value seems a bit stretched. We will keep on watch for any pullbacks.

Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest® Airway Clearance System, to patients with compromised pulmonary function.

Research

Tue, 13 Feb 2024 05:00:00 GMT

Electromed, Inc. (NYSEAMEX:ELMD) a leader in innovative airway clearance technologies, announced Q2 2024 results:

Sales of $13.7 million vs $11.7 million in the prior year and ahead of analyst estimates of $13.3 million
EPS of $0.19 vs $0.11 in the prior year and ahead analyst estimates of $0.10

“I am thrilled to announce another record revenue quarter for Electromed,” said Jim Cunniff, President and Chief Executive Officer. “The Company's consistent growth strategy focusing on developing best-in-class products, exemplary customer service and disciplined commercial expansion is generating positive results. We see these investments paying off through continued revenue growth and increased profitability. The Electromed team and I remain focused on serving our customers and promoting our state-of-the-art airway clearance technology, Smartvest Clearway, to drive continued market penetration. We are moving from strength to strength, and we look forward to continued success in the second half of fiscal year 2024.”

Research

Wed, 13 Nov 2019 15:57:44 GMT

Electromed, Inc. (NYSEAMEX:ELMD) ($7.10; $59.9M market cap), a leader in innovative airway clearance technologies, announced Q1 2020 results:

Sales of $8.3 million vs $7.3 million in the prior year and ahead of analyst estimates of $7.5 million
EPS of $0.12 vs $0.02 in the prior year and crushed analyst estimates of $0.01

“We delivered strong revenue and net income, driven by top-line growth of 14.1% and significant operating margin improvement compared to the prior year period. Home care revenue grew by 11.4% compared to our prior first quarter as we executed on our strategy to drive growth organically and achieved our second consecutive quarter of improved sales team productivity. This quarter we produced approximately $879,000 of annualized home care revenue per direct field sales employee, slightly exceeding our target productivity range of between $750,000 and $850,000. Our institutional sales also performed well, with first quarter revenue up 49.2% year-over-year. We believe the sales restructuring, new sales leadership appointments, enhanced sales training programs and targeting approaches we initiated in the prior fiscal year, combined with our focus on cost containment, contributed to improved financial results for what is typically a seasonally light first quarter for Electromed.

Research

Tue, 20 Aug 2019 14:46:40 GMT

Electromed, Inc. (NYSEAMEX:ELMD) ($5.22; $43.8M market cap), a leader in innovative airway clearance technologies, reported its Q3 2019 results in early May 2019, with top and bottom line results basically flat versus the prior year period. ELMD is slated to report its Q4 and year-end results next week.

We recently noticed some interesting verbiage in the “purpose of transaction” section of a 13D filed by Zenith Sterling Advisors in early June. Zenith disclosed a 5.8% stake, but it was the comments below that caught our eye:

"the Reporting Persons believe there are additional actions the Company should consider in order to realize greater value for shareholders, including (i) the institution of a regular cash dividend and/or share repurchase authorization, and (ii) the addition of one or more directors with professional investment management or private equity experience to the Corporation’s Board of Directors.

The Reporting Persons plan to continuously evaluate, among other factors, the financial condition, results of operations, business and prospects of the Corporation, the securities markets in general and the market for the Common Stock in particular, prevailing economic conditions and expected trends, all with a view to determining whether to hold, decrease or increase their investment in the Common Stock, through open market, privately negotiated or any other transactions.

The Reporting Persons have engaged in communications with the Corporation’s chief executive officer and chief financial officer. The Reporting Persons intend to continue engaging in communications with the Corporation’s management team as well as the Corporation’s board of directors regarding means to enhance shareholder value. The Reporting Persons may also, from time to time, engage in discussions with the Corporation’s management team and Board in order to (i) formulate and offer proposals regarding the Corporation’s capital allocation plans, dividend policy, and long-term strategy, and (ii) request a seat on the Board of the Corporation."

It seems that Zenith will be taking an activist role in trying to unlock shareholder value due to the inability of the company to consistently grow or explore shareholder-friendly actions. In fact, on August 15, 2019, the company added additional experienced individuals to its Board of Directors.

Research

Wed, 14 Nov 2018 15:26:41 GMT

Electromed, Inc. (NYSEAMEX:ELMD) ($6.46; $53.8M market cap), a leader in innovative airway clearance technologies, announced Q1 2019 results:

Sales of $7.3 million vs $6.3 million in the prior year
EPS of $0.02 vs $0.01 in the prior year

“Looking ahead, we believe Electromed can achieve double-digit revenue growth with our strategies of providing superior device features and benefits along with world-class service, leading in bronchiectasis clinical studies and improving education and awareness of bronchiectasis prevalence and the need for the SmartVest Airway Clearance System to effectively treat these patients. We believe earnings growth will improve over the next few years as we focus on sales force productivity improvements and tighter SG&A cost control.”

In late September 2018, we initiated a starter position in ELMD based off strong Q4 results and bullish commentary. Q1 is typically softer than Q4, which was the case once again this quarter. Management's comments regarding top and bottom line growth are encouraging, however a stronger bottom line performance this quarter would have added to our confidence in the story.

We will be on the conference call later this morning to see if management offers any additional intel regarding its growth opportunities. There are a number of untapped markets for which the company's products are ideal. However, holding ELMD could require some emotional patience due to possible price volatility in light of the likelihood for lumpy quarterly results, especially on the EPS front, as the company invests in future growth.

Research

Thu, 27 Sep 2018 04:00:00 GMT

Established a Starter Position In ELMD

Yesterday, via premium tweet, we mentioned that we initiated a long position in Electromed, Inc. (NYSEAMEX:ELMD) ($6.65; $55.3M market cap) based on strong Q4 results and bullish commentary in the release and conference call.

As a recap, the company reported its Q4 2018 results:

Sales of $8.2 million vs $7.3 million in the prior year
EPS of $0.13 vs $0.11 in the prior year

What really caught our attention was the following quote from management:

“The incremental investments initiated in fiscal 2018 position Electromed for double-digit revenue and earnings growth over the next few years. Looking ahead, we remain focused on improving sales force productivity, enhancing our reimbursement processes, increasing HFCWO awareness and education among physicians and patients, promulgating evidence-based studies that differentiate SmartVest, developing innovative device features, and expanding our covered lives."

We encourage you to read the Q4 conference call transcript for a more in depth look at the Company and the opportunities in front of it.

You can also look at our original reasons for tracking note from early 2016 and our summary of our first go around in the stock which enabled us to lock in nice gains as the stock ran from the high $3 level to surpassing our initial price target of $6 per share.

ELMD has been on our Mock Takeover Model Portfolio since August 7, 2017 due to an investment by Red Oak Partners. Red Oak remains an 8% holder in ELMD. (should be noted that they have decreased the position since 2017)

Research

Mon, 07 Aug 2017 04:00:00 GMT

Adding Electromed, Inc. (AMEX:ELMD) ($6.26) to our Mock Takeover Candidate screen due to an investment by Red Oak Partners and insider buying tends. We are impressed with their innovation and believe their addressable market is much larger than currently targeted.

Research

Fri, 21 Oct 2016 14:33:23 GMT

Closed out ELMD Position

We will also be looking to close out the remainder of our ELMD position ahead of its Q1 2017 results. In our February 19, 2016 email we offered our reasons for tracking the company and stated that we initiated a position in the stock when it was trading at $3.75. On May 9, 2016 and August 31, 2016 we stated we had reduced our position locking in gains of 25% and 45% respectively. We do not feel the company will be able to grow EPS in fiscal 2017. In its year end conference call they stated that expenses are expected to increase. Analyst estimates also indicate that 2017 is not expected to exhibit bottom line growth. 2017 analyst EPS estimates call for $0.18 vs $0.27 reported for fiscal 2016.

Research

Wed, 07 Sep 2016 04:00:00 GMT

ELMD ($5.00) - In our February 19, 2016 email we offered our reasons for tracking and stated we initiated a position in ELMD when the stock was trading at $3.75.

On May 9, 2016 and August 31, 2016 we stated we had reduced our position locking in gains of 25% and 45% respectively.

Yesterday after the close ELMD announced fourth quarter 2016 results:

Sales of $5.7 million vs $5.2 million in the prior year period
EPS of $0.04 vs $0.03 in the prior year period

Quotes from management:

“ We continued to upgrade our sales force in the fiscal fourth quarter and expect to be fully staffed before the end of the first quarter of fiscal 2017. As we invest in the long-term growth of our business and as a result of normal fluctuations caused by referral and payer mix, variability in our quarter to quarter financial results can be expected…

...We concluded fiscal 2016 with our underlying business fundamentals fully intact and expect continued revenue growth in fiscal 2017…

...We enter 2017 in one of the strongest positions of the Company’s history.”

ELMD offered bullish comments about revenue outlook but did not really address their bottom line in this outlook.

Research

Wed, 31 Aug 2016 15:35:51 GMT

Locked in More Gains In ELMD ($5.44)

In our February 19, 2016 email we offered our reasons for tracking and stated we initiated a position in ELMD when the stock was trading at $3.75.

On May 9, 2016, we stated we had reduced our position ahead of the Company’s Q3 2016 results as we were unclear if the momentum from Q2 financials will be the new baseline for the remainder of 2016.

Q3 2016 results while sequentially down from Q2, still showed strong growth. While shares pullback, Red Oak Partners (One of the largest shareholders) continued to support the stock as shares retreated under $4.

Shares have since recovered, recently hitting new 52 week highs of $6.26 on August 29, 2016. The $6 mark represented the initial low end price target we felt shares could reach in our initial reasons for tracking note.

We have continued to unwind our position.

Research

Tue, 21 Jun 2016 14:47:13 GMT

Watching ELMD Filings Closely

We are keeping a close eye on $ELMD ($3.91) filings to see if Red Oak Partners will aggressively add to its position as it did the last time shares dipped under $4.00. In mid May, when shares of ELMD dipped below $4, Red Oak filed several form 4’s showing they had added 154k shares at open market prices. Red Oak has an 11% stake in ELMD.

Research

Wed, 18 May 2016 18:18:33 GMT

ELMD ($3.93) - Red Oak Partners continues to add to their position. In the past week, the company filed two Form 4 filings showing they have added 145k shares at open market prices. Red Oak now has an 11% stake in ELMD.

Research

Wed, 11 May 2016 15:40:55 GMT

ELMD ($4.63) reported Q3 2016 results. While strong on a year over year basis, the results were sequentially down from Q2, which we stated was a concern in prior emails. The company reported:

Sales of $6.0 million vs $4.5 million
EPS of $0.06 vs $0.00

Quotes from management:

“In the third quarter, we again delivered improved gross margins which enabled us to drive higher overall profitability. Our net income was fully taxed, suggesting the potential earnings capability of the Company as we continue to grow revenues. We will be subject to normal seasonal and quarter-to-quarter fluctuations in revenue and profitability as we continue to upgrade our sales force, enter new regional markets in the U.S, and invest in product development and enhancements. However, I believe we have made sufficient progress on our strategic objectives to view the recent financial performance of the Company as marking a new level that we believe is generally sustainable moving forward.”

As we stated in our prior email, we love the potential growth catalysts that are increasing the acceptance and distribution of ELMD’s products which could make ELMD an interesting long term holding. But short-term investors may not stick around due to some concern over possible quarterly fluctuations in sales and earnings. We will continue to assess our position.

Research

Mon, 09 May 2016 14:52:02 GMT

ELMD ($4.71) reported a blowout Q1 2016. We love the potential growth catalysts that are increasing the acceptance and distribution of ELMD’s products. These factors could make ELMD an interesting long term holding. However, as we stated in previous emails, we are not confident that Q1 2016 will be a baseline for sales and earnings for the remaining quarters in 2016. We have reduced our position in ELMD since it is up 26% since our initial research alert. We may continue to reduce our position.

Research

Fri, 19 Feb 2016 16:47:45 GMT

Nibbled At Shares of $ELMD (3.73)

As we assess if recent business momentum can be maintained, we have nibbled at shares of ELMD, and have also interviewed management.

Long time GeoInvesting members already know that we like stories that capitalize on the favorable growth prospects of the home health care industry. This is what prompted us to publish our article on $REPR on October 7, 2014. The majority of REPR’s revenues and growth come from its FDA-regulated "FREEDOM60" mechanical infusion pump system, as well as related needle sets used to deliver medication to primary immune deficiency patients. REPR is primarily targeted to the outpatient/home care market. That is why we are also interested in following ELMD.

ELMD develops, manufactures, markets, and sells innovative products that provide airway clearance therapy, including the SmartVest® Airway Clearance System and related products, to patients with compromised pulmonary function.

The Smartvest product line is a medical device that delivers high frequency chest wall oscillation (HFCWO). Brief description from the company’s website:

HFCWO technology consists of a wearable vest surrounding an inflatable air bladder, a programmable air pulse generator and a hose connecting the two. The patient dons the vest and turns on the generator, which delivers a rapidly repeating pulse of air, alternately squeezing and releasing the upper body. Each squeeze simulates a “mini cough,” which acts to:

Loosen mucus from the walls of lung airways
Thin mucus stuck in the lungs
Propel mucus toward larger airways, where it can be easily coughed out

Suitable for patients of all ages, from full-term newborns to senior citizens, HFCWO (also known as high frequency chest compression, HFCC) typically becomes a vitally important part of a patient’s daily, long-term treatment routine. Patients usually self-administer two 15- to 30-minute HFCWO sessions daily, with the system programmed to deliver 5 to 20 compressions per second, as directed by their doctors’ prescriptions.

We have actually been following the story for a few years, and are waiting for the company’s growth objectives to gain consistent momentum.

ELMD Sales and EPS, 2011 to 2016

2016

2015

2014

2013

2012

2011

Sept.

Sales

EPS

$5.0

$0.04

$4.7

$0.5

$3.4

-$0.04

$4.0

-$0.01

$5.4

$0.03

$4.2

$0.02

Dec.

Sales

EPS

$6.2

$0.13

$4.8

$0.05

$3.5

-$0.03

$3.8

-$0.05

$4.8

$0.00

$4.7

$0.03

March

Sales

EPS

tba

$4.5

$0.00

$3.9

-$0.12

$3.2

-$0.05

$4.8

$0.01

$5.2

$0.07

June

Sales

EPS

tba

$5.2

$0.03

$4.6

$0.03

$4.0

-$0.05

$4.6

-$0.02

$4.9

$0.01

Totals

Sales

EPS

tba

$19.4

$0.13

$15.5

-$0.16

$15.1

-$0.16

$19.5

$0.02

$19.0

$0.13

Our reasons for tracking:

New management entered the picture between 2011 & 2012 to re-align company goals. (more efficient reimbursement processing and more aggressive sales training to increase referrals from physicians).
Sales are benefiting as a result of the company doing a better job of obtaining reimbursement for its product from Medicare, Medicaid and private insurers

“Home care sales continue to be positively affected by the combination of higher quality referrals generated by our sales force and strong performance by our reimbursement organization in obtaining reimbursement for both current and older referrals. Our strategy to build stronger synergy between our sales and reimbursement teams is resulting in higher levels of customer service, higher quality referrals and increased proficiency in processing referrals.”

The sales team is doing a better job of generating revenue from referrals from physicians.

”Our direct United States sales force works with physicians and clinicians in defined territories to help them understand our products and services and the value they provide to their respective patients. We expect to achieve future sales, earnings, and overall market share growth by increasing home care referrals through building awareness of the choice patients and clinicians have of HFCWO devices, particularly for patients diagnosed with bronchiectasis.”

We like that the company has high gross margins (78% as of Q2 2016).
The company crushed Q2 2016 analysts estimates.
- Sales of $6.3 million vs. $4.9 million in the prior year and well above analyst estimate of $5.0 million.
- EPS of $0.13 vs. $0.05 in the prior year and well above analyst estimate of $0.05.
Management commentary indicates the company may continue to exceed analyst estimates and reach a new level of quarterly revenue.

“We believe we have raised the range on the level of net revenues we can generate quarterly. This should, in turn, result in stronger operating income as we expect our revenues will grow more quickly than our expense base. We are increasingly confident that the market for our SmartVest will continue to grow, driven by an aging population, improved diagnostic procedures and growing confidence that HFCWO is an effective therapy for patients with compromised airway clearance.”

The company’s new version of its older product has gained acceptance due to its increased comfort and efficiency.
The company claims that its product is more user friendly than its competition’s products (for example: provides constant level of pressure, comfortability, less equipment needs)
If the company can maintain and improve upon Q2 2016 results, it appears it may be in a position to generate at least EPS of $0.60 over the next 12 months. We believe it is reasonable to assign a P/E of 10 to 15 on this number, provided that our interview with management supports some of our assumptions. (we need to dig into our assumptions a little more).

Caveats:

The company’s business prospects are highly reliant on reimbursement rates that it gets from insurers, which could change (increase/decrease)
Valuation could be constrained, since the size of the company’s served market appears to be only $155 million in the U.S. Thus, management needs to execute on its plans to increase its market reach through new product innovation, global expansion and expanded use to other medical conditions. (more on this in our next update).

“We estimate the current total served market for HFCWO in the United States is approximately $115 million based on independent market research.”

Product recall risk.
We still are not totally convinced that the company has attained a new level of quarterly revenue. The revenue and associated margin can be highly influenced by the insurance reimbursement share between Medicare, Medicaid and private insurers.

Reasons For Tracking

Fri, 19 Feb 2016 05:00:00 GMT

Nibbled At Shares of $ELMD (3.73)

As we assess if recent business momentum can be maintained, we have nibbled at shares of ELMD, and have also interviewed management.

The Smartvest product line is a medical device that delivers high frequency chest wall oscillation (HFCWO). Brief description from the company’s website:

Loosen mucus from the walls of lung airways
Thin mucus stuck in the lungs
Propel mucus toward larger airways, where it can be easily coughed out

We have actually been following the story for a few years, and are waiting for the company’s growth objectives to gain consistent momentum.

ELMD Sales and EPS, 2011 to 2016

2016

2015

2014

2013

2012

2011

Sept.

Sales

EPS

$5.0

$0.04

$4.7

$0.5

$3.4

-$0.04

$4.0

-$0.01

$5.4

$0.03

$4.2

$0.02

Dec.

Sales

EPS

$6.2

$0.13

$4.8

$0.05

$3.5

-$0.03

$3.8

-$0.05

$4.8

$0.00

$4.7

$0.03

March

Sales

EPS

tba

$4.5

$0.00

$3.9

-$0.12

$3.2

-$0.05

$4.8

$0.01

$5.2

$0.07

June

Sales

EPS

tba

$5.2

$0.03

$4.6

$0.03

$4.0

-$0.05

$4.6

-$0.02

$4.9

$0.01

Totals

Sales

EPS

tba

$19.4

$0.13

$15.5

-$0.16

$15.1

-$0.16

$19.5

$0.02

$19.0

$0.13

Our reasons for tracking:

New management entered the picture between 2011 & 2012 to re-align company goals. (more efficient reimbursement processing and more aggressive sales training to increase referrals from physicians).
Sales are benefiting as a result of the company doing a better job of obtaining reimbursement for its product from Medicare, Medicaid and private insurers

“Home care sales continue to be positively affected by the combination of higher quality referrals generated by our sales force and strong performance by our reimbursement organization in obtaining reimbursement for both current and older referrals. Our strategy to build stronger synergy between our sales and reimbursement teams is resulting in higher levels of customer service, higher quality referrals and increased proficiency in processing referrals.”

The sales team is doing a better job of generating revenue from referrals from physicians.

”Our direct United States sales force works with physicians and clinicians in defined territories to help them understand our products and services and the value they provide to their respective patients. We expect to achieve future sales, earnings, and overall market share growth by increasing home care referrals through building awareness of the choice patients and clinicians have of HFCWO devices, particularly for patients diagnosed with bronchiectasis.”

We like that the company has high gross margins (78% as of Q2 2016).
The company crushed Q2 2016 analysts estimates.
- Sales of $6.3 million vs. $4.9 million in the prior year and well above analyst estimate of $5.0 million.
- EPS of $0.13 vs. $0.05 in the prior year and well above analyst estimate of $0.05.
Management commentary indicates the company may continue to exceed analyst estimates and reach a new level of quarterly revenue.

“We believe we have raised the range on the level of net revenues we can generate quarterly. This should, in turn, result in stronger operating income as we expect our revenues will grow more quickly than our expense base. We are increasingly confident that the market for our SmartVest will continue to grow, driven by an aging population, improved diagnostic procedures and growing confidence that HFCWO is an effective therapy for patients with compromised airway clearance.”

The company’s new version of its older product has gained acceptance due to its increased comfort and efficiency.
The company claims that its product is more user friendly than its competition’s products (for example: provides constant level of pressure, comfortability, less equipment needs)
If the company can maintain and improve upon Q2 2016 results, it appears it may be in a position to generate at least EPS of $0.60 over the next 12 months. We believe it is reasonable to assign a P/E of 10 to 15 on this number, provided that our interview with management supports some of our assumptions. (we need to dig into our assumptions a little more).

Caveats:

The company’s business prospects are highly reliant on reimbursement rates that it gets from insurers, which could change (increase/decrease)
Valuation could be constrained, since the size of the company’s served market appears to be only $155 million in the U.S. Thus, management needs to execute on its plans to increase its market reach through new product innovation, global expansion and expanded use to other medical conditions. (more on this in our next update).

“We estimate the current total served market for HFCWO in the United States is approximately $115 million based on independent market research.”

Product recall risk.
We still are not totally convinced that the company has attained a new level of quarterly revenue. The revenue and associated margin can be highly influenced by the insurance reimbursement share between Medicare, Medicaid and private insurers.

Hot Bio-Tech News

Tue, 31 Dec 2013 05:00:00 GMT

NEW PRAGUE, Minn.--(BUSINESS WIRE)--Electromed, Inc. (NYSE MKT: ELMD), a global medical device company, today announced it has received notification from the U.S. Food and Drug Administration that its next generation SmartVest^� Airway Clearance System, the model SQL has been cleared to market.

SQL solidifies Electromed�s innovation leadership by offering a device that is smaller, quieter, and lighter than our previous versions,� said Kathleen Skarvan, Chief Executive Officer. �We designed the SQL to stand apart from the competition with features that our patients and clinicians were asking for. They talked, and we listened.� In addition to being significantly smaller, quieter, and lighter than our previous versions, some of the features include enhanced ramping, an enhanced pause feature and more user-friendly graphics.

The model SQL is an electrically powered precursor device designed to deliver high frequency chest wall oscillation (HFCWO) to promote airway clearance, improve bronchial drainage and enhance mucus transport under the order of a physician�s prescription. It is prescribed to patients with a wide range of pulmonary-related health conditions including bronchiectasis, chronic obstructive pulmonary disease (COPD), cystic fibrosis, muscular dystrophy, and cerebral palsy. HFCWO has been demonstrated to reduce lung infections and reduce health care costs associated with recurrent pneumonias, antibiotic use, and hospital stays. In addition to the innovative SQL generator, the system boasts a lightweight soft-fabric garment with several patented features.

�We believe we have the most comfortable and easy-to-use system among leading HFCWO devices, which leads to therapy adherence and better patient outcomes, Skarvan added.

Electromed anticipates that the model SQL will be available to the U.S. market within the next 60 days.

Comments & Business Outlook

Tue, 31 Dec 2013 05:00:00 GMT

First Quarter 2014 Financial Results

Net revenues in the first quarter of fiscal 2014 were approximately $3.4 million, a 15% decrease compared to the same period of fiscal 2013.
The Company reported a net loss of approximately $335,000, or $0.04 cents per basic and diluted share, for the first quarter of fiscal 2014, compared to a net loss of approximately $71,000, or one cent per basic and diluted share, for the same period last year.

The decline in total revenues in the first quarter of fiscal 2014 was attributable to lower prices received from health care insurers on the Company�s products due to an increased focus on controlling health care costs as well as more rigorous scrutiny by insurers of reimbursement requests for a wide range of medical devices and other health care products. The decline in homecare revenue of approximately $0.7 million in the first quarter was partially offset by an increase in international and government/institutional revenue of $100,000 compared to the same period of fiscal 2013.

The larger net loss in the first quarter was primarily due to the lower reported revenue. Gross margins in the first quarter declined slightly to 69% as compared to the same period in the prior year. Operating expenses were essentially flat but rose as a percentage of sales due to the lower revenues in the first quarter of fiscal 2014 as compared to the first quarter of the prior year. The Company had positive operating cash flow of approximately $740,000 and increased its cash by approximately $500,000 during the quarter.

Commenting on the Company�s first quarter results, Electromed's Chief Executive Officer, Kathleen Skarvan said, "The pressure on our revenue persisted in the first quarter of fiscal 2014. We believe uncertainty surrounding health care reform and the Affordable Care Act and ongoing efforts by health insurers to control costs reduced the adoption of therapy devices like ours during the quarter. However, I am pleased with our team's ability to manage expenses and generate significant cash flow via strong collections during a challenging period. We have developed and are committed to executing on our strategies to increase revenue from the homecare market while continuing to support growth in institutional and international markets."