ELMD - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Electromed Third Quarter Fiscal 2024 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mike Cavanaugh, Investor Relations. Please go ahead.

Mike Cavanaugh

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

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

You Officer should as of new undertake statements, not any forward-looking not obligation information, to future a those result events revise place whether undue otherwise. Jim on update to the refer statements, does on reliance call matter. and With for company company's or turn President any I filings Cunniff, forward-looking over and Electromed. this SEC the Please or now Executive will of that, to further guidance the Chief

James Cunniff

that share thank record you another call. been thrilled row today's I'm to in is record joining to second everyone announce a of revenue and Electromed. able quarter quarter to the with for revenue you. Mike, This I've Thanks,

over in fiscal million, a proud and quarter of $X.X fiscal for the highlight of income in resulted per net XX% or year representing in better that the at or XXXX. $X.XX a diluted share. in fiscal is Total $XX.X mid-teens earnings to year. for the third period year This revenue Similarly, the I'm million sixth million, quarterly the revenue from XX% of of quarter period XXXX quarter straight $X.X was prior same same came growth year-over-year the growth growth operating

all Additionally, I Healthcare But in the Electromed. the the provide third and its want grew Brad other. a hospital on business care, quarter, detail over on and for address shortly. in first, update call more impact of discuss Changed quarter's I'll revenue financials hand straight categories: and X our to home we a to to cyberattack

are our best-in-class First, strategies and disciplined growth excellence. service, products, the operating commercial company's positive on consistent focus expansion results exemplary developing generating customer through

to which is and combination difficult revenue growth market continued we investors have small companies. generate believe in leverage, for a operating capture We for compelling and microcap double-digit a

our story are As last that our in prospects shares us fiscal reported discussed standout generation we earnings growth QX price no a makes highlighted call, microcap space. last which appreciated Electromed for substantially with also in results. profitability, which undervalued, on XXXX year reflected believe since shares resonating feedbacks balance tech as rock-solid Investor a we call, quarter's and sheet was cash debt, med the is since stock our given our have our

past stock invested double-digit the our the after to leverage. Even this namely stock in operating growth, Electromed results, because appreciated, the of ability of I quarter continue the optimism I generate positive with in to coupled revenue team have

return. And financial shareholder want helps on value equity that compensation aligns cash increasing and based solely shareholder us investors' management's our is on my I keep reward Additionally, as delivering largely top investors total incentive which priority. remind to focused is a goals incentive to results,

XX direct expanded QX. of QX update to an have This segues team to we initiatives. sales that in nicely at our sales into on end reps the commercial I'm XX happy report our from

the market represent We HFCWO today. technology sales continue to the to talent and attract newest, top in believe we flight best the

force sales pool to deliberate our drive and penetration further continue prescribers. expansion will plans physician of to larger support market We a

experiences sales successfully reps and process most is sale. execute a sales backgrounds our whose hiring our match can largely We what top clinical have also closely recruiting and revamped by performers

in having serving of are in and Care clinical the California sooner training sales more of serving recognition we drive awarded our Corporate growth. and upgraded Recently, revenue have the we our the Society and reps by were our of Partner teams sales Additionally, customers. customers Year effective our be Respiratory so the can impact

recently program, patients where Connect a report conducted XX% to respiratory follow-up in-home patients survey pleased to connected would support are utilization, and personalized from they recommend of our stay therapists others. support we we therapy Also, and with SmartVest training, provide SmartVest that telerespiratory the to stated

physician. roughly by last the with bronchiectasis. mentioned a that in earnings have market U.S. on been being managed that that confirmed patients equates remaining call, prescribed were are estimated it $XX,XXX care patient, our Of an to pulmonologist, a per total, XXX,XXX our at of and these are revenue as Also, billion by primary recent of all managed sales XXX,XXX study a there are diagnosed If opportunity. $X.X the patients HFCWO XXX,XXX roughly patients price

through in benefits HFCWO creating providers are continuum. However, Clearance with the more prescribed awareness done our fraction care work being only be the a We earlier patients treating with these SmartVest therapy. Airway in unlocking of patients technology believe opportunity the to market bronchiectasis in there's

we actively. sooner more they participants. and continuing by that therapists to attended bronchiectasis, In easier education the which of benefits program use to patients the regarding result live in well getting HFCWO can is or treatment designed in CEU This live respiratory objective, the April, launched was the clearance XXX airway of support a tailored units so over of breathe of in webinar

resources, vein, educational our a part is resource tailored In programs of have clinical studies. launched that our videos can needs The report of upcoming new the center resource clinical and credits, to latest where we events, center CME I'm same that as clinicians to clinical website. explore our prescriber for pleased they

the ], patients requirements technology. both with from Also Advantage resources sales our alleviated providers rolled our excellent. been that deal and patients have and navigating administrative of which ] clinic our how our providers of payer [ customer They regarding we and the and we in support in has ordering clinics appreciate support Smart serve. out in service programs Smart some challenges we QX, Feedback for [ Advantage showcase process exceptional seamless

for tripling efficient XX, house insurers, groups system health on the February works pharmacies hospitals, clinical, dropped cyberattack, and payers, providers Change that there across of clearing breach, for operations claims to processes Change the which financial is and simpler provider began consumers. Unfortunately, administrative Lastly, payers was more financial medical to Healthcare make against a a financial and nationwide. Healthcare, and because significantly.

an Reimbursement President the end quarter I resolved because our Healthcare. Fortunately, our clearinghouse happy Change to team, nearly Kristine excellent with of work her we of through of a successful Payer and the Relations Beyersdorf, report of by by to that am the XX% Vice claims delayed and alternative submission

a there in able providers still have submissions, delay claim experienced at X-week to that claims non-Medicare we today. Although submit all are been not

end allowed of providing us position of to crisis. the payment necessary develop to the delays, cash by the $XX.X endure Our to the contingency time QX million plans

to our we drive in the financials. and Lastly, to resolved operating our and continuing discuss look with XXX% the expect be XX% of Brad? I'll I'm have delayed QX. that, top-line leverage. excited growth about combined to Brad to call over forward claims to the expanding today, as of resolved trajectory of business turn With

Brad Nagel

XXXX, recent third I for fiscal for last representatives to the for increase the prior prior fiscal or over a by for amounts efficiencies All or QX to amounts the Home will XX, grew months XX% represent to months increased discussing March direct year year the ended revenue record as X March Jim. XXXX. quarter $X.XXX recognized the to and Net our be compared and care quarter XX, made in the X process. million. increase The amounts revenue our compared ended streamline QX XX% $XX.X an you, fiscal XXXX department revenue in claims for XXXX, sales investments Thank to reimbursement of within million result due year. a was

$XXX,XXX, primarily in prior QX The was an hospital of hospital $XXX,XXX compared representatives or demand. and the increase on to revenue market due disposable XX% and focused were capital to year. increases sales increased increase the an

As result on a large long, reminder, revenue quarterly sales in our is a hospital the changes can for which basis. cycle business

Home in quarterly X.X% affected Other was distributor or the compared revenue quarter purchases of revenue the to by by that care a prior distributor care fluctuations $XXX,XXX, reported can distributor timing increase are $XXX,XXX basis. or sales the the year. significant revenue XX.X% Home $XX,XXX to prior of an for compared on cause year. increased

was in associated or of percentage million net net $X.XXX The prior slight with from generator XX% revenues the model. affected the the to our revenues within timing as fall wind-down are in of markets a primarily can compared a previous gross not quarterly prior aforementioned the due increased profit, or decrease of purchases do of to that sales customers international net significant Other XX.X% by by fluctuations distributor profit basis. cause to and revenue million that on purchases $XX.XXX revenues of Gross costs the reported in year year.

patient million, held and increased referrals. Travel marketing general or were $X.XXX representing $X.XXX XX.X% to increased of Selling, sales expenses to sales, travel of year. higher administrative due higher compensation, expenses. due share-based salaries costs million, entertainment territories increase now a XX.X% representatives, a related to the of increase to $XXX,XXX, was reimbursement $XXX,XXX Turning X.X% Payroll the year. representing sales to $XXX,XXX an of or and prior to compared prior process sales meals or higher higher to our prior number the expenses average compared incentive meeting average increase and or personnel support, SG&A and and representing and of QX. in $XXX,XXX increase compensation-related increase The to an operating an number midyear were year. the direct an compared of was primarily sales The and compensation were expenses number

positions multiple well Professional an year, and in legal prior technology, for last information emergency R&D consulting due direct-to-physician prior increase Research increase the expenses costs to did that year an $XXX,XXX, primarily or to not marketing as X.X% the compared $XXX,XXX Professional or shareowner related XX.X% the of in to as of and XXXX. were support representing with year. to year. leadership services to health are discretionary related Total $XXX,XXX, technical research primarily was representing consulting requirements, were compared fiscal of and for or recur public decrease a marketing. and last market the associated investment decrease COVID-XX direct-to-consumer development recruiting of previous compared termination an expenses and increase fees costs, and senior was legal reporting services or fees costs $X,XXX for fees. The to The were primarily XX.X% $XXX,XXX, $XX,XXX year. representing

$X for EPS our pretax quarterly million we shareholders report earnings million, together, and $X.XX net increase increased cash to XXX% the primarily Net $XXX,XXX savings increased quarter. our rates is $XX,XXX greater The When QX with balances. for to interest putting income diluted income of with these than strong another of over are share. last results associated quarter of $X.X per year income happy to due

XX, million our like of to $XX.X the debt. the cash in accounts equity $XX.X portion Q&A move $XX.X of was to equivalents, As to XXXX, call. questions. company and cash March that, million shareholders' had receivable please million. and the Operator, open call no in we'd Total With

Operator

Instructions] [Operator

The first question comes Street Capital from Lake O'Neil Markets. with Brooks

Aaron Wukmir

to Brooks. Brad, for this line Aaron Are the is you and Jim okay? me on able hear

James Cunniff

Yes, Aaron.

Aaron Wukmir

record the Congrats you -- are on quarter, another really discipline shows record implementing. the guys

more well webinar bit the launch would helpful. Just think CEU bit a have those what on therapy on clinical in actions vest actual in remarks, I between actually you on to then different resource your space? But a of little and sort and as time just little prepared bronchiectasis awareness patients site. be to mentioned you more physician color maybe a developed? getting start, in the the how the diagnosis as a guess, to is things phrase I from that then your bringing X guess a way to is taken pulmonologist terms I of new

James Cunniff

for that Well, is part as have a seen this of I today. today, XXX,XXX with deck difficult in think the technology those first and off, our there's on only our thanks people there's question. the really that because one, are been It's diagnosed investor Aaron, challenge, you've XXX,XXX of but bronchiectasis, well, patients,

diagnosing But seeing these in is state. they're on work the previous a what that infection on the process. mentioned They is These today lower putting probably as clearance. call with to doing them putting combination a are physicians they're of the modality patient them I has. disease this them of patients. antibiotics as are in And this a well, quarterly address And they're airway then a

patient's disease until then that progresses them put not on the it's they state HFCWO. And really

and who reductions in value patients rates them on opportunity getting our state value and the that, unlocking so sooner disease the in And in showing these technology and in hospitals. really value of doing pulmonologists rather front later, these and have readmission than is this antibiotic of therapists respiratory into them getting use,

the on but happen in trajectory that. And great would that vacuum. so tell also a have about that overnight, I we we're operating you we doesn't not feel just that

of really treatment the for improves of companies Our space competitors need sooner these some different the rather the so are of drug life later. patients promoting than quality bronchiectasis and even active in that in their

Aaron Wukmir

definitely to still be front. helpful. I Clearway, been your that liking? recognizing just moving early the stages But maybe hospital definitely of tracking on sort that, That's that more little bit Understood. it's in towards on that has guess setting, a would infill great, Jim. I'm

James Cunniff

writing the really, on VA prescriptions fact, great only because really is are our resources of our pulmonologists market for market the hospital a the the are and -- It's the question. mainly technology the writing clinical for our primarily prescriptions that's No, us. hospitals. people in -- that's a for of focused are outside nascent who Most ones the sale,

in a a selling hospitals, sale us the for it's mind, into because these our patient, capital doing it type of and relationship facilities. you're one-to-one of different instead between The is you're basically, us, what being

so demand Aaron, to see there's our there, more as they that And the primary for focus home. focused, sales that us isn't gateway that a where is in really, really market team focus a have. We hospital the the it's but

have they admitted patient best-in-class We they need a believe want clearance to continue really, does Clearway. that to that marketplace. a available they go in get hospital, technology the we've need on hope got if that to they get do certainly technology, So we as with for and the discharged, But, technology, airway the those be home on that the that to patients.

with been. Our what results line this expectations our year have have in been really

in was over quarter up up business prior for hospital Our year. the over substantially. And XX% it's the year,

we few market that, hope traction and a we to only resources continue but on we're focused So getting there, good have that today. that

Aaron Wukmir

yes. there. like traction Understandable, you showing great And mentioned, you're obviously

conversations can jump this uses mean to guys one, sort cash? I'm you good specific too. cash. that's you Brad avenues you've of just that talking or see. Have specific of have about of for So any wondering ideas on just that Maybe in recently. explored been any on I uses had

Brad Nagel

Yes.

-- options. As we us generate about is said like in we I the past, to the business that Aaron, as cash more what a ability gives it

things the we with to to us. quarter foremost, risk. and for And and really, we allow cash reduce can any, cause material want able quickly move to First And our headwinds our this weather without be reserves impact like saw business. Change Healthcare, on us those storms

the balance forward, Looking the to our options and all ways make reinvesting to grow, to that into we use to cash, as we that of through value provide do continue can shareholders. and cash most business more thinking including any continues consider

Aaron Wukmir

then last understood. from And Completely Absolutely. one me.

at developed the all of it guys is just company guess last the guess so, growth the of today. are with incorporated sort X but to being vital currently you you're how things significant the you here? what Just I what profitability have are new I are doing improve forward and better within can looking leadership seeing do that can comment and maybe going year this, or that or or on you both of you sort or X accelerate guys into sort

James Cunniff

Yes.

Beyersdorf Kristine we're talent our on great great as as maybe reimbursement feel about that hiring talent I out can must of about that this I well. sales on team. relations. I But the the mentioned we think ranks payer echo into I previous and feel you, perhaps in not. to charge during tell I have say, a shout would gave who's this, the I well, and remarks prepared But the call, Brad I my and

joins that I really fired can Electromed, about shared is a that impact Aaron, you lives impact background Everybody we we're I businesses. serving in it's does company. good that know, up vision. as think our to bringing patients' talent think, is addition represent that commercial technology And and board on have leading my about on tell I also in mission. having to nice But roles you that the that really I in the the would the feel

the we insights the also functional productivity. strength. business. that I our facet tell improving But really our from we're are, into of would to you business, every literally We're strength improving just in And going

wouldn't really do our to as I us for what paying system that insights our to us improve as and point which team. different operationally back, would So we've well thing. productivity implementing is and both give one say to financially within Brad to specific his thanks I been while team, our ERP to reimbursement able our business, systems, to dividends a an

was X:X lot within office a where we finding our business support. of correlation leverage that of what level is that And more getting back rep hire almost sales we're providing an area an same was where Before we're it a that one-to-many ratio. between

same of leverage giving sales And P&L. sure So don't our not to we that. think our else there's add our the X:X I to reps want anything terrific and personnel. in reimbursement need us that's you if Brad, I'm between ratio

Brad Nagel

No. Jim. Well said,

think to with we team, functions to with And Electromed the the tell. story at those I as have so attract great we us the talent great easier excited ideas and the really great those makes the it bring part to allows lot here the talent -- the and continue financial great success, financial commercial, to And been even the new office it. blessed of culture into operational fuel business. a that success, have in back business combined come people to be that across of a of our

Aaron Wukmir

continued the on Congrats momentum commentary. and color great all here. that's No, Absolutely.

James Cunniff

Thanks, it. Aaron. We appreciate

Operator

session. Jim Cunniff any for turn conference back remarks. to question-and-answer the would concludes to like closing over This our I

James Cunniff

the for of everyone and very today you and Thank continued you joined very operator, your who much, call Electromed. for much thank support

As optimizing end I'm the continued of shareholder excited I our and of the growth about long-term really value. improved the with and mentioned, trajectory business goal profitability

you're that, partners in thank you, follow-up time appreciate interested at investment a today with your the everyone. If And in contact day. your great appreciate and Investor Relations call, our Have of Westwicke. ICR please I a rest Electromed.

Operator

The attending you now presentation. for Thank conference concluded. today's has

disconnect. now may You

Electromed (ELMD) 7 May 242024 Q3 Earnings call transcript