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Electromed,;; Inc. Reports 2011 Fourth Quarter and Year-End Results

^{Published on 2011-09-12 13:40:52 - Market Wire}
 

NEW PRAGUE, Minn.--([ BUSINESS WIRE ])--Electromed, Inc. (NASDAQ: ELMD) today announced financial results for the three months and fiscal year ended June 30, 2011. Net revenues for the three months ended June 30, 2011 were approximately $4,954,000, a 36.7% increase compared to net revenues of approximately $3,624,000 for the same period last year. Net revenues for the fiscal year ended June 30, 2011 were approximately $19,004,000, a 32.9% increase compared to net revenues of approximately $14,304,000 for the same period last year.

The Company also announced net income of approximately $165,000, or $0.02 per basic and diluted share, for the three months ended June 30, 2011, compared to net income of approximately $71,000, or $0.01 per basic and diluted share, for the same three-month period last year. For the fiscal year ended June 30, 2011, net income was $1,056,000, or $0.14 per basic and $0.13 per diluted share, compared to net income of approximately $916,000, or $0.15 per basic and diluted share, for the same period last year. Net revenues increased primarily due to an expansion of the sales force. Net income results were attributable to higher net revenues, offset by expenses related to increases in sales force, support and production personnel, and an expansion of marketing and research and development activities. In addition, earnings per share were affected by an increase to the number of outstanding shares of Company common stock as compared to the prior-year periods, which was attributable to the Companya™s completion of its initial public offering in August 2010. Including the underwritera™s over-allotment option, a total of 1,900,000 shares of Company common stock were registered and sold in the initial public offering.

Robert Hansen, Chairman and CEO, commented on the Company, saying,

aElectromed, Inc. is a rapidly growing company.It is using a portion of the capital received from its IPO to grow its sales force and support its infrastructure.We believe these actions are essential investments in driving longer-term profitable results.We have also continued to make important investments in research and development.We believe that new innovations are the surest path to sustainable growth and higher profits.We have pursued these investments while maintaining solid profitability and a strong balance sheet.a

Gross profit increased to approximately $3,600,000, or 72.7% of net revenues, for the three months ended June 30, 2011, and $13,778,000, or 72.5% of net revenues, for the fiscal year ended June 30, 2011. For the three months and fiscal year ended June 30, 2010, gross profit was approximately $2,698,000, or 74.4% of net revenues, and $10,378,000, or 72.6% of net revenues, respectively. The increase in gross profit dollars resulted primarily from the increase in sales volume. Gross profit percentage was consistent for the year ended 2011 from 2010. The slight decrease in gross profit percentage for the three-month period ended June 30, 2011 primarily resulted from lower reimbursement from the mix of referrals as compared to the three-month period ended June 30, 2010. Factors such as diagnoses that are not assured of reimbursement, along with insurance programs which present lower allowable reimbursement amounts (for example, state Medicaid programs) affect average reimbursement received on a short-term basis and tend to fluctuate margins slightly on a quarterly basis.

Operating expenses, which consist of selling, general, and administrative expenses and research and development expenses, were approximately $3,192,000 and $11,908,000, respectively, for the three months and fiscal year ended June 30, 2011, an increase of approximately 29.9% over total operating expenses for the three-month period last year and an increase of approximately 38.8% over total operating expenses for the 2010 fiscal year. These planned increases resulted from higher payroll and marketing expenses related to increasing the size of the sales team, patient training costs related to a higher sales volume, increased expenses relating to being a newly public company, and increased research and development expenses.

Total cash was approximately $4,092,000 as of June 30, 2011. For the fiscal year ended June 30, 2011, cash provided by financing activities was approximately $6,007,000, consisting of approximately $6,364,000 net proceeds received in August and September 2010 in connection with the Companya™s initial public offering, $26,000 from exercise of warrants, and $60,000 in proceeds from subscription notes receivable. This was offset by principal payments on long-term debt of approximately $436,000. An aggregate of $1,111,000 was used for investing activities during the 2011 fiscal year, including $659,000 in payments for patent and trademark costs, primarily relating to defense of the SmartVest^® trademark, and $452,000 in net expenditures for property and equipment. The Companya™s receivable position increased 45.9% to approximately $9,593,000, reflecting the significant sales growth over the past fiscal year.

About Electromed, Inc.
Electromed, Inc., founded in 1992 and headquartered in New Prague, Minnesota, manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest^® Airway Clearance System and related products, to patients with compromised pulmonary function. Further information about the Company can be found at [ www.Electromed.com ].

Cautionary Statements
Certain statements found in this release may constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the speakera™s current views with respect to future events and financial performance and include any statement that does not directly relate to a current or historical fact. The forward-looking statements in this release include those relating to the Companya™s business strategy and intent to maximize long-term growth and profits.Forward-looking statements and the Companya™s expectations regarding gross margins, and can generally otherwise be identified by the words abelieve,a aexpect,a aanticipatea or aintenda or similar words. Forward-looking statements cannot be guaranteed and actual results may vary materially due to the uncertainties and risks, known and unknown, associated with such statements. Examples of risks and uncertainties for Electromed include, but are not limited to, the impact of emerging and existing competitors, the effectiveness of our sales and marketing initiatives, the success of our research and development activities, changes to reimbursement programs, as well as other factors described from time to time in our reports to the Securities and Exchange Commission (including our Annual Report on Form 10-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on aforward-looking statements,a as such statements speak only as of the date of this release.