Earnings call transcript Q3 2023

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Operator

Welcome to the Electromed Third Quarter Fiscal 2023 Financial Results Conference Call [Operator Instructions].

I will now turn the call over to your host, Mike Cavanaugh, Investor Relations. Mr. Cavanaugh, you may begin.

Mike Cavanaugh

Good afternoon, and thank you for joining the Electromed earnings call. Inc. Electromed, today, Earlier for March fiscal XX, results the of quarter ended XXXX. the financial quarter third XXXX, released The release is at www.smartvest.com. currently available on the company's website

and Joining Kathleen Brad call the Chief Chief President Nagel, me and Executive Officer. today Financial Officer; on Skarvan, is

I'd could make and we will about everyone that that this to projected. and performance the including today's cause financial statements call represent are plans. company's to some that are Before like remind and operating materially actual the those subject achievements results from risks of management's Such Any started, statements be statements, future get to on of management date. or considered forward-looking uncertainties statements statements expectations different as such

And or does to to filings new Please should guidance any obligation the forward-looking undertake revise information, the otherwise. SEC company a undue not future forward-looking You place result update not refer company's whether reliance on statements as on or of this matter. further events statements. for those

With that, of now to over Electromed. and call Skarvan, the President Kathleen CEO I turn will

Kathleen Skarvan

joining and everyone you to today. call you, Mike, Thank thank the

driven These XX% same As revenues were XX% quarter force. represents results sales from the were a results $XX.X even productivity more year-over-year record as achieved strong segment, the fiscal impressive, I'm fiscal from in and home increase strong year-over-year a XXXX. quarterly quarter key period expanded the period the generating revenue, which referral increase last $XX care our million same flow in a by care pleased year. strong to home we million, from third we very report report of results, In

every to this team's short, patients. results In due well. this reviews the tackling our next-generation successful the We also benefited from company the needs from do Clearway positive execution, to and to device were blocking quarter's earlier excellent of year introduction

to say, our the referral strong thus times component of growth. and Needless growth. I'm quarter, during delivering managed team excellent strong this team's line quarter, a received Clearway demonstrated Additionally, well by the longer the we of our top of to period revenue in execution one that reception experienced lead to the on short factors our growth. contributing top the but line proud device touch has I'd like far,

the and We is excellent interface, Clearway's and also who feedback appreciate the received Clearway have size to the from includes which on We've clinicians generator remote patient touchscreen of navigate. patients very the user monitoring state-of-the-art received device, And market. lightest easy intuitive data. which feedback positive of regarding is HFCWO

enhance tangible has competition. that And Our gives offset our to over patient design advances goal believe us high investments in Clearway, experience. advantage Overall, to the expansion with costs the margins therapy Electromed Operating other the initiatives. technology was strong our primary strong made higher the a and of demonstrates income able strong significant financially. growth operating we our HFCWO million, income a despite $X.X detail. This year $X.X was inflationary environment, during revenue year-over-year. review was leverage and in in achieved growth Net fiscal to shipping which expenses period increase compares macro the But an quarter was head a was at which and was XX% in will and same million, our ago. more component third Brad business. quarter a was in the level, for count this manifested higher in $XXX,XXX quarter an

to of in them of initiatives, the key impressed growth an our to ramp new end $XXX,XXX $XXX,XXX. by average among been annualized and personnel significant strategic pleased the field quarter, be them takes full productivity. the past It update rep productivity This on was our I've direct being extremely it of revenues sales performance, onboard across rep range to Turning team to expansion to is and to effort our includes of that strong. then new progress continues as the of XX continued group's Despite force, three. per growth this the extremely initiatives. to sales see $XXX,XXX, and gratifying which expected additions, all within quarter support strategic reps well

early way know, quality still a away, updated, when classy, we around. my to want received. my sleek recent life. achieved of you life milestone the testimonial Looks introduced key clean, the highlights Blown Clearway A I patient that could HFCWO everything easier compact, improving while As the strategic new we device. all we've great, excited, and make the feedback

growth. our help momentum. accelerate strong have Clearway expect We And clearly, we to

goals of for key treatment SmartVest bronchiectasis. data HFCWO other therapy of use the One supporting the strategic as a further our is generate to and

we XXXX International Conference mentioned later COPD call, study using share our quarterly are data outcome to our Society the we excited quality-of-life patients at As last from on month. American SmartVest with Thoracic this

Our and submissions for results. bronchiectasis is quality-of-life evaluating outcome study those we complete, are

huge SmartVest treat key for a bronchiectasis targeted these that leaders is patients information is gather day enrollment XX%, with every beginning the therapy as goal difference opinion and benefits work patients bronchiectasis with who an therapy fiscal to three additional site study and more patients. should regarding of quarter HFCWO target to in supporting patients. and XXX all we outcome at can this prospective of enrolled make welcome physicians data a The Our behind

as focused who is direct-to-consumer in as initiative well on at bronchiectasis. our treat growth efforts strong targeted push marketing final pulmonologists Our

pleased our on are on our with with this initiatives return and investment. We target

emergency expected a now which the to for to take implemented tied expiration address was the like minutes of COVID-XX. public during and waiver, CMS to I'd few the health

to we May devices being emergency XX. respiratory health expect the public the after expire waiver for over, declared With

be revert and for allowed for approval required HFCWO bypassed, termination, indication allowing for and easier documentation we faster As the for an waiver on Upon reminder, to HFCWO requirements typically Medicare. reimbursement. CMS a patients pre-COVID to will

the rules have It with our However, time referral-to-approval we and under requirements, for search plans revenue that the mute Executive the to I only benefited the waiver the our of worth waiver. will do a transition never by will that our as we frame in prepared in with meaning noted we physicians provide that reduce my remaining Chief that remarks, team the of being X. also operated with remain average subset growth my to working waiver place manage update All and commercial approvals. noting effect confident expect prior expiration, be to potential lengthen this the like it and the referrals plans successor to But Officer. XXXX, I'd effectively. physicians on Close Medicare documentation quarter the the calendar an are for patient proactively is should that the waived large said,

very we search executive identifying are and and with the enjoyed. We a and to capable the progress in the have candidates recommended highly continue have in engaged best step firm of process

With the over Brad that, call review hand to I'd a our of to for financials. like

Brad Nagel

quarters year. the portion care could decreased growth XX% in year-to-date Thank in that revenue or And the the interruption you, fiscal the benefit and period XXXX. positive the to from continues mentioned, quarter. Home Clearway distributor was in newest distributor period due was offset customers. XX% direct increased distributor of a and the This $XXX,XXX, increase the of by decrease same $XX,XXX our and revenue Medicare million, Kathleen. for operations in the same market $XX.X Home period sales care well in temporary chain supply basis. primarily to a of of the the year. purchases for Home generation XX% in as associated introduction was of over revenue. year prior significant momentum our our increased from to a prior revenue CMS $XXX,XXX the after quarter for revenue year. home Net care revenue Institutional of prior are the institutional quarter Kathleen year-over-year revenues a And remains the by sales the or partially in International fluctuations increase for the quarter in $XX increase was affected reported and representatives quarter same sales XX% on an year-over-year referral cause to SmartVest by for by from the primarily a as our was quarter. as quarter $XXX,XXX consumable quarterly XX% the growth at X% were due X care $XX,XXX timing million, was waiver

net of FY QX the $X.X to or for increased profit in $X.X million to of compared million revenues quarter revenues XX% 'XX. Gross of net XX.X% or

head and same $X.X primarily gross SG&A While reimbursement $XXX,XXX supply was to representing to in period general product. the $X.X to the percentage per for volume, the compared increased period as The a prior due to the the representing to an sales the due XX% increased material for QX due primarily increase to $X.X due the QX $XXX,XXX sales increased a investments count higher costs in for year. field costs a revenue ramp product. income ramp-up net broker to for of primarily period same year. or year per the the expenses our prior was for and 'XX or meals partially million QX, an to the incurred Clearway the direct same expenses material or sales incurred profit the for $X.XX the fees to profit gross in the in SG&A or Operating departments, development investments dollars of to of the compared was expenses was related $XXX,XXX income expenses fees or was operating 'XX increased costs and by X% in accelerate This electronic but were FY Travel, and well representing component same of research to year. to number administrative year and decrease quarter compared representatives. $X.XX sales offset compared million increase additional decrease period and and share $X.X by prior as for growth. Selling, Clearway and associated were share the compared diluted driven income $XX,XXX of entertainment in increase million in average prior period FY diluted million supply reimbursement our growth higher QX, for Net increase as same in our in prior broker up in revenues and in

of $XX $X.X March questions. the like million $XX that, the open equity in in As Electromed to $XX receivable a call. to and debt of accounts total million. for we'd XXXX, XX, the portion no had move of With call Operator, million Q&A cash, and shareholders' working capital million please to of

Operator

from Markets. [Operator Brooks comes our Lake question Instructions] Capital Street And O'Neil first with

Brooks O'Neil

off Congratulations next on anticipate quarters. in you, I'd a guess of start a few terrific SG&A quarter. your asking by on Kathleen, able couple I questions. to if the investment leverage generate being have you I over

Kathleen Skarvan

still we're looking timing for that cost and the when always cycle. in we're improving growth SG&A at cycle is a profitability. investment that right Certainly, would I an leverage to say

that have we we in so projection future, to point would And certainly at our see share the this don't investors. an with exact

now, is right take we that. to this It's that market. opportunity think growing a an that I advantage think of

And -- we're in forward again, on new investment so I see that here line some that leverage expect would in capture fiscal into that as the to growth. we But move year. cycle we'll a still an top

Brooks O'Neil

encountered to then completely were obvious whether supply and you heard kind check quarter in the I it to I resolved. make wasn't the wanted they sure. were, me think I you say but And chain of issues

Kathleen Skarvan

the supply around chain, question the appreciate Brooks. We

very for quarter, of been is that but successful that's didn't and us, has an And I certainly for say. area this we managing it's reason, focus. talk so don't area about certainly a some that. would how lingering it It's we a focus much why an in risk it, it. impact expect to still So We've that is

that have as what we and the to we our anticipate recently how that focused suppliers our is time partner for them a who expectations focus manage growth be be a with working leader And The our going other so there is more growth helping our that they experiencing, forward. and can thing have going it will could on be us with mention we're added strategy. to I'd was supply

Brooks O'Neil

guess, too much new it's product. to the of there just response your in And well-acclaimed you've competitive to one been guessing But others from a early I'll competitive dynamic the the to moves then field? have more. has made maybe I response any change in in, ask seen I'm

Kathleen Skarvan

on a in response based characterized anecdotally, we're that little experience that, expect physician Brooks. continuing reaction introduction. I noting. worth we're enjoy that's currently, device. Well, we're -- the would not well, come. patient our It's to it the that seeing hearing But and seeing say you've I think I early what I'm a that really with enhanced could they're the to patient

Operator

the turn remarks. closing any to back And Kathleen or I'd now conference like additional to Skarvan for

Kathleen Skarvan

and for As today your always, thank you in very interest us Electromed. for much joining

we against our are execute to and to XXXX beyond. excited growth look we plans, in and continue of as forward our calendar scaling strategic Clearway distribution up We

call, like If at very Investor to our would much. you ICR schedule Westwicke. partners Relations Thank please a follow-up you contact

Operator

this concludes attending. conference And today's you for call. Thank

Electromed (ELMD) 9 May 232023 Q3 Earnings call transcript