UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.02 | Results of Operations and Financial Condition. |
On February 13, 2024, Electromed, Inc., a Minnesota corporation (the “Company”), issued a press release announcing its financial results for the fiscal quarter ended December 31, 2023. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.02.
| Item 7.01 | Regulation FD Disclosure. |
The Company has updated its investor presentation, a copy of which is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference into this Item 7.01. The Company intends to use the presentation in whole or in part, in one or more meetings with investors and analysts.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| Exhibit Number | Description | |
| 99.1 | Press Release dated February 13, 2024 | |
| 99.2 | Company Investor Presentation dated February 13, 2024 | |
| 104 | Cover Page Interactive Data File (embedded in the cover page and formatted in inline XBRL) |
The information contained in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ELECTROMED, INC. | |||
| Date: February 13, 2024 | By: | /s/ Bradley M. Nagel | |
| Name: | Bradley M. Nagel | ||
| Title: | Chief Financial Officer | ||
Exhibit 99.1
Electromed, Inc. Announces Record Financial Performance in Fiscal 2024 Second Quarter
Growth initiatives drive record revenue, improve margins and enhance operational efficiency
NEW PRAGUE, Minn.--(BUSINESS WIRE)-- Electromed, Inc. (“Electromed” or the “Company”) (NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced financial results for the three months ended December 31, 2023 (“Q2 FY 2024”).
Q2 FY 2024 Financial Highlights
| ● | Net revenue increased 17% to a record $13.7 million in Q2 FY 2024, from $11.7 million in the second quarter of the prior fiscal year. |
| ● | Gross margins were 77% of revenue, compared to 74% in the second quarter of the prior fiscal year. |
| ● | Operating income was a record $2,263,000 or 16.5% of revenue, compared with $1,274,000 or 10.9% of revenue in the second quarter of the prior fiscal year. |
| ● | Net income was a record $1,674,000 for the quarter, or $0.19 per diluted share, compared to $977,000, or $0.11 per diluted share in the second quarter of the prior fiscal year. |
| ● | Cash as of December 31, 2023, was $10.4 million, an increase of $3.1 million compared to cash as of June 30, 2023. |
“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.”
Q2 FY 2024 Results
Net revenue for Q2 FY 2024 grew 17% to $13.7 million, from $11.7 million in Q2 FY 2023.
Revenue in our direct homecare business increased year-over-year by 18.0% to $12.7 million, from $10.7 million in the same period in fiscal 2023. The increase in revenue was due to an increase in sales territories and efficiencies recognized within our reimbursement department as a result of recent investments made to streamline the claims process. Field sales force employees totaled 58 at quarter end, 49 of which were direct sales representatives. The annualized homecare revenue per weighted average direct sales representative in Q2 was $1,007,000, slightly higher than Electromed’s annual target range of $850,000 to $950,000.
Gross profit increased to $10,545,000, or 77.0% of net revenues for Q2 FY 2024, from $8,682,000 or 74.0% of net revenues, in the same period in fiscal 2023. The increase in gross profit in fiscal 2024 was primarily due to increased revenue, lower material procurement costs, and shipping costs this year.
Selling, general and administrative (“SG&A”) expenses were $8,175,000 for Q2 FY 2024, representing an increase of $921,000 or 12.7%, compared to the same period in fiscal 2023. The increase in SG&A expense was primarily due to increased payroll and compensation expense related to the higher average number of sales, sales support, marketing, and reimbursement personnel to process higher patient referrals.
Operating income for the quarter was a record $2,263,000 or 16.5% of total revenue, compared to $1,274,000 or 10.9% of total revenue for the same period in the prior fiscal year. The increase in operating income was driven primarily by increased revenue and gross profit rate improvement.
Net income for Q2 FY 2024 was a record $1,674,000, or $0.19 per diluted share, compared to $977,000, or $0.11 per diluted share, for the same period in the prior fiscal year.
As of December 31, 2023, Electromed had $10.4 million in cash, $23.0 million in accounts receivable and no debt, achieving a working capital of $32.7 million and an increase in total shareholders’ equity of $2.7 million to $40.3 million. The cash balance reflects an increase of $3.1 million for the six months ended December 31, 2023, compared to a decrease in cash of $1.2 million in the six months ended December 31, 2022. This increase in cash was driven by an increase in operating income as well as a benefit from improved cash collections and management of working capital.
Conference Call and Webcast Information
The conference call with members of Electromed management will be held at 5:00 p.m. Eastern Time on Tuesday, February 13, 2024.
Interested parties may participate in the call by dialing (877) 407-0789 (Domestic) or (201) 689-8562 (International).
The live conference call webcast will be accessible in the Investor Relations section of Electromed’s website and directly via the following link: https://viavid.webcasts.com/starthere.jsp?ei=1650986&tp_key=12e0064318
For those who cannot listen to the live broadcast, a replay will be available by dialing (844) 512-2921 (Domestic) or (412) 317-6671 (International) and referencing the replay pin number 13743606. Additionally, an online replay will be available in the Investor Relations section of Electromed’s web site at: https://investors.smartvest.com/events-and-presentations/default.aspx
About Electromed, Inc.
Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest® Airway Clearance System, to patients with compromised pulmonary function. It is headquartered in New Prague, Minnesota, and was founded in 1992. Further information about Electromed can be found at www.smartvest.com.
Cautionary Statements
Certain statements in this press release constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan” “potential,” “should,” “will,” and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for the Company include, but are not limited to, the duration, extent and severity of the Covid-19 pandemic, including its effects on our business, operations and employees as well as its impact on our customers and distribution channels and on economies and markets more generally; the competitive nature of our market; changes to Medicare, Medicaid, or private insurance reimbursement policies; changes to state and federal health care laws; changes affecting the medical device industry; our ability to develop new sales channels for our products such as the homecare distributor channel; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions; our ability to renew our line of credit or obtain additional credit as necessary; our ability to protect and expand our intellectual property portfolio; the risks associated with expansion into international markets, as well as other factors we may describe from time to time in the Company’s reports filed with the Securities and Exchange Commission (including the Company’s most recent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all 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 “forward-looking statements,” as such statements speak only as of the date of this press release. We undertake no obligation to update them in light of new information or future events.
Brad
Nagel, Chief Financial Officer
(952) 758-9299
investorrelations@electromed.com
Mike
Cavanaugh, Investor Relations
ICR Westwicke
(617) 877-9641
mike.cavanaugh@westwicke.com
Source: Electromed, Inc.
Electromed, Inc.
Condensed Balance Sheets
| December
31, 2023 | June 30, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 10,434,000 | $ | 7,372,000 | ||||
| Accounts receivable (net of allowances for doubtful accounts of $45,000) | 22,988,000 | 24,130,000 | ||||||
| Contract assets | 574,000 | 487,000 | ||||||
| Inventories | 4,760,000 | 4,221,000 | ||||||
| Prepaid expenses and other current assets | 509,000 | 1,577,000 | ||||||
| Total current assets | 39,265,000 | 37,787,000 | ||||||
| Property and equipment, net | 5,377,000 | 5,672,000 | ||||||
| Finite-life intangible assets, net | 616,000 | 605,000 | ||||||
| Other assets | 125,000 | 161,000 | ||||||
| Deferred income taxes | 1,581,000 | 1,581,000 | ||||||
| Total assets | $ | 46,964,000 | $ | 45,806,000 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | 1,041,000 | 1,372,000 | ||||||
| Accrued compensation | 2,806,000 | 3,018,000 | ||||||
| Income tax payable | 253,000 | 336,000 | ||||||
| Warranty reserve | 1,483,000 | 1,378,000 | ||||||
| Other accrued liabilities | 990,000 | 1,949,000 | ||||||
| Total current liabilities | 6,573,000 | 8,053,000 | ||||||
| Other long-term liabilities | 49,000 | 86,000 | ||||||
| Total liabilities | 6,622,000 | 8,139,000 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock, $0.01 par value per share, 13,000,000 shares authorized; | ||||||||
| 8,602,677 and 8,555,238 shares issued and outstanding, as of December 31, 2023 and June 30, 2023, respectively | 86,000 | 86,000 | ||||||
| Additional paid-in capital | 19,634,000 | 18,788,000 | ||||||
| Retained earnings | 20,622,000 | 18,793,000 | ||||||
| Total shareholders’ equity | 40,342,000 | 37,667,000 | ||||||
| Total liabilities and shareholders’ equity | $ | 46,964,000 | $ | 45,806,000 | ||||
Electromed, Inc.
Condensed Statements of Operations
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net revenues | $ | 13,689,000 | $ | 11,729,000 | $ | 26,013,000 | $ | 22,387,000 | ||||||||
| Cost of revenues | 3,144,000 | 3,047,000 | 5,970,000 | 5,374,000 | ||||||||||||
| Gross profit | 10,545,000 | 8,682,000 | 20,043,000 | 17,013,000 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 8,175,000 | 7,254,000 | 17,325,000 | 15,243,000 | ||||||||||||
| Research and development | 107,000 | 154,000 | 313,000 | 452,000 | ||||||||||||
| Total operating expenses | 8,282,000 | 7,408,000 | 17,638,000 | 15,695,000 | ||||||||||||
| Operating income | 2,263,000 | 1,274,000 | 2,405,000 | 1,318,000 | ||||||||||||
| Interest income, net | 96,000 | 7,000 | 173,000 | 11,000 | ||||||||||||
| Net income before income taxes | 2,359,000 | 1,281,000 | 2,578,000 | 1,329,000 | ||||||||||||
| Income tax expense | 685,000 | 304,000 | 749,000 | 271,000 | ||||||||||||
| Net income | $ | 1,674,000 | $ | 977,000 | $ | 1,829,000 | $ | 1,058,000 | ||||||||
| Income per share: | ||||||||||||||||
| Basic | $ | 0.20 | $ | 0.12 | $ | 0.21 | $ | 0.13 | ||||||||
| Diluted | $ | 0.19 | $ | 0.11 | $ | 0.21 | $ | 0.12 | ||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 8,545,120 | 8,442,939 | 8,541,254 | 8,442,684 | ||||||||||||
| Diluted | 8,800,172 | 8,684,352 | 8,791,519 | 8,685,184 | ||||||||||||
Electromed, Inc.
Condensed Statements of Cash Flows
| Six Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income | $ | 1,829,000 | $ | 1,058,000 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 398,000 | 272,000 | ||||||
| Amortization of finite-life intangible assets | 25,000 | 47,000 | ||||||
| Share-based compensation expense | 791,000 | 316,000 | ||||||
| Deferred income taxes | - | 10,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,142,000 | (503,000 | ) | |||||
| Contract assets | (87,000 | ) | (221,000 | ) | ||||
| Inventories | (509,000 | ) | (321,000 | ) | ||||
| Prepaid expenses and other current assets | 1,104,000 | 176,000 | ||||||
| Income tax payable, net | (83,000 | ) | 79,000 | |||||
| Accounts payable and accrued liabilities | (1,171,000 | ) | (711,000 | ) | ||||
| Accrued compensation | (212,000 | ) | (532,000 | ) | ||||
| Net cash provided by (used in) operating activities | 3,227,000 | (330,000 | ) | |||||
| Cash Flows From Investing Activities | ||||||||
| Expenditures for property and equipment | (180,000 | ) | (687,000 | ) | ||||
| Expenditures for finite-life intangible assets | (40,000 | ) | (30,000 | ) | ||||
| Net cash used in investing activities | (220,000 | ) | (717,000 | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Issuance of common stock upon exercise of options | 55,000 | 16,000 | ||||||
| Taxes paid on net share settlement of stock option exercises | - | (60,000 | ) | |||||
| Repurchase of common stock | - | (153,000 | ) | |||||
| Net cash provided by (used in) financing activities | 55,000 | (197,000 | ) | |||||
| Net decrease in cash | 3,062,000 | (1,244,000 | ) | |||||
| Cash And Cash Equivalents | ||||||||
| Beginning of period | 7,372,000 | 8,153,000 | ||||||
| End of period | $ | 10,434,000 | $ | 6,909,000 | ||||
Exhibit 99.2
Electromed, Inc. Investor Presentation February 2024 NYSE American: ELMD INNOVATION LEADER IN AIRWAY CLEARANCE TECHNOLOGIES
Investor Presentation Forward Looking Statements Certain statements in this press release constitute forward - looking statements as defined in the US Private Securities Litigation Reform Act of 1995 . Forward - looking statements can generally be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements . Forward - looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements . Examples of risks and uncertainties for the Company include, but are not limited to the competitive nature of our market ; changes to Medicare, Medicaid, or private insurance reimbursement policies ; changes to state and federal health care laws ; changes affecting the medical device industry ; our ability to develop new sales channels for our products such as the homecare distributor channel ; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances ; new drug or pharmaceutical discoveries ; general economic and business conditions ; our ability to renew our line of credit or obtain additional credit as necessary ; our ability to protect and expand our intellectual property portfolio ; the risks associated with expansion into international markets, as well as other factors we may describe from time to time in the Company’s reports filed with the Securities and Exchange Commission (including the Company’s most recent Annual Report on Form 10 - K, as amended from time to time, and subsequent Quarterly Reports on Form 10 - Q and Current Reports on Form 8 - 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 “forward - looking statements,” as such statements speak only as of the date of this press release . We undertake no obligation to update them in light of new information or future events . | 2
Electromed, Inc. is a growing medical device company focused on airway management to help people around the world breathe better, stay healthier, and lead active and fulfilling lives. Who We Are As of 10 /31/2023 Key Stats: Headquarters: New Prague, MN Ticker: ELMD Established: 1992 Annual Revenue: $48.1M Market Cap: $90M Share Count: 8.6M #170 Employees Manufacturing in Minnesota HFCWO Market Focus | 3 Investor Presentation
Investor Presentation Electromed Overview » Growing and profitable medical technology company » A leader in the large and expanding airway clearance market » SmartVest® H igh F requency C hest W all O scillation (“HFCWO”) technology supported by clinical outcomes data with strong reimbursement » Attractive direct - to - patient and provider model » Strong financial profile with attractive historical gross margins and profitability, well capitalized balance sheet $28.3 $31.3 $32.5 $35.8 $41.7 $48.1 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 Net Revenue ($M) 1 $2.2 $1.8 $2.0 $4.2 $2.4 $2.3 $3.2 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 Net Income ($M) 1 | 4 1 Financials under ASC 606
Investor Presentation What is Bronchiectasis? » An irreversible lung condition characterized by abnormal widening of one or more of the bronchi (airways) » End result of repeated episodes of pulmonary inflammation and infection » Damaged airways allow excess mucus to accumulate, increasing risk of infection » Mean prevalence of bronchiectasis in patients with COPD is 54%¹ Disease Misdiagnosed Disease Underdiagnosed HFCWO Under - prescribed | 5 1 Chalmers J. and Sethi S. Raising awareness of bronchiectasis in primary care: overview of diagnosis and management strategies in adults. NPJ Prim Care Respir Med . 2017;27:18
Bronchiectasis HFCWO penetration ~15% 1 Diagnosed BE population growing at ~12% annually 1 Estimated Net Bronchiectasis prevalence, DIAGNOSED 1 Estimated bronchiectasis prevalence, UNDIAGNOSED 2 Estimated HFCWO bronchiectasis penetration, treated population 1 | 6 1 Internal company estimates derived from GUIDEHOUSE 2023 NASM claims database 2 Internal company estimates derived from GUIDEHOUSE 2023 literature review and 2023 CDC NHANES data US Market Large, Growing and Underpenetrated Market ~824K U.S. BE Diagnosed 1 4.1 million U.S. Undiagnosed 2 ~127K HFCWO ADOPTED 1
Investor Presentation | 7 How is Bronchiectasis Treated? Benefits of HFCWO Therapy
Investor Presentation 2000 2002 2004 2006 2008 2013 2016 Introduced Portable HFCWO Device Introduced Machine Washable Vest Garment Introduced Programmable HFCWO Device Introduced Reversible Wrap Garment Introduced Sm a rtVes t ® Colors Introduced SmartVest SQL ® Commenced Development of Wireless C onn e ct i vi ty Reporting Solution I n tr o du ced Multi - Positional HFCWO Device Introduced Expanded SmartVest ® Garment and SQL ® Generator Colors 201 0 20 08 20 07 20 03 20 01 20 00 20 22 Introduced Touch Screen User Interface HFCWO Device - Clearway® 201 7 | 8 History of Innovation
Investor Presentation An enhanced patient experience! » Smaller, lighter and intuitive user interface for better patient adherence » Patient remote monitoring enabled » More portable and easier for travel » Expect to contribute to both top line and gross margin growth | 9 SmartVest Clearway® Only New HFCWO Device on the Market SmartVest ® has a well - established reimbursement code from CMS – E0483; Electromed has over 275M contracted lives in the US
SmartNotes TM Patient Progress Report P roviding Patient Outcomes and Treatment Progress to Physicians SmartNotes combine patient Quality of Life and Therapy Utilization data to provide physicians with extended views into disease management » TeleRespiratory Services : A team of Respiratory Therapists stay connected with patients and support their therapy utilization. » Outcomes Management : Easy - to - read report provides physicians with a comprehensive view of disease progression and therapy impact. | 10
Investor Presentation Therapy with SmartVest® significantly decreased exacerbations requiring hospitalization, antibiotic use, and stabilizes lung function. Powner (2018) Therapy with HFCWO demonstrated key health outcomes improved in post - compared to pre - index period: cough, all - cause hospitalizations, pneumonia and pulmonary hospitalizations. DeKoven (2022) Therapy with SmartVest® demonstrated an improvement in symptom scores and quality of life. Chakravorty (2011) 59 % Fewer hospitalizations Exacerbations requiring hospitalizations reduced with SmartVest®. Sievert (2016) 75 % Reduction in ER visits Longitudinal outcome - based study showed ER visits significantly reduce with SmartVest®. Sievert (2018) | 11 Clinical Evidence Electromed has Published Studies Showing Effectiveness of HFCWO to Treat Bronchiectasis
Investor Presentation Homecare Hospitals International 95% Direct to physicians adult pulmonology clinics cystic fibrosis centers neuromuscular clinics HME distributors Third - party reimbursement (Medicare, Medicaid, Commercial) Contracted price with payments made directly from the distributor 4% Individual hospitals; member hospitals of group purchasing organizations (GPOs) Payments made directly from the institution for generator sales – capital purchase Single patient use garments – recurring sales 1% Distributors Contracted price with payments made directly from the distributor % of Net Revenue: Sales Points: Revenue Model: | 12 Markets We Serve Net Revenue Breakdown, Fiscal Year 2023
Investor Presentation ELMD expects gross margins in the mid - 70s and improving with the SmartVest® Clearway® Traditional Medical Equipment Channel D irect - to - Patient Distribution (Electromed) vs. Manufacturer DME Patient $ $ Electromed Patient $$ | 1 Direct - to - Patient Model Drives Attractive Margin Profile
Investor Presentation 1% 4% 95% Medicare Medicaid Homecare By Payer Home Care¹ Hospitals International By Setting Commercial / Other 2 Bronchiectasis Cystic Fibrosis Homecare By Referral Volume Neuromuscular Other 2 Includes Managed Medicare and Managed Medicaid 1 Includes $1.5 million from home care distributor revenue 64% 2% 14% 10% 10% COPD/COPD Related 54% 44% 2% | 2 Net Revenue Breakdown - $48.1M (FY’23)
| 3 Growth Strategy How Will Electromed Increase Market Share? • Continued sales force expansion along with complementary infrastructure investments • Direct - to - consumer and physician marketing to increase brand awareness and revenue • Best - in - class customer care and support • Develop and promulgate the body of bronchiectasis clinical evidence to increase physician adoption of the SmartVest® System for patients • Promote the best - in - class SmartVest Clearway® device
| 4 We are committed to delivering long - term profitable growth Mid - teens revenue growth • Increase market share; deeper penetration of current SmartVest® prescribers Operating margin improvement • Operating leverage as revenue increases Long - Term Objectives
Investor Presentation Higher incidence of chronic lung diseases Aging population Growing physician awareness of diseases such as bronchiectasis The Affordable Care Act penalizes for readmission Healthcare reform moving to fee - for - outcomes Treatment moving to lower cost settings (homecare) HFCWO Industry Drivers | 5 Why Invest?
Investor Presentation Unique Investment Opportunity | 6 • Large, expanding bronchiectasis market supported by industry tailwinds • Clinically proven therapy • Well established reimbursement code with broad payer coverage • Consistent double - digit organic revenue growth • History of high gross margins, robust operating cash flow and increased operating leverage • Attractive valuation at 1.8x EV/Revenue
Investor Presentation Mgmt. Incentives Aligned w/Investors • CEO incentive reward based on increasing total shareholder return . • Management’s incentive compensation focused solely on delivering financial results. | 7
Investor Presentation Metric ELMD RUS ME Sales Growth 15.4% > 3.7% EV / Revenue Gross Margin 1.8x 76.0% > > 4.6x 54.7% Operating Margin 8.3% > (9.1%) | 8 Why Invest? Attractive Valuation and Operating Metrics (FY2023 Results)
Investor Presentation Mike Cavanaugh ( 617) 877 - 8641 mike.cavanaugh@westwicke.com Callie Conway (332) 242 - 4336 Callie.Conway@Westwicke.com Jim Cunniff , President & CEO (952) 758 - 9299 jcunniff @Electromed.com Brad Nagel, CFO (952) 758 - 9299 bnagel@Electromed.com | 9
APPENDIX Investor Presentation | 10
Investor Presentation Financial Summary Fiscal Year Ended 3 Months Ended ( in $ millions, except shares amounts) June 30, 2021 June 30, 2022 June 30, 2023 Dec 31, 2022 Dec 31, 2023 Revenues 35.8 41.7 48.1 11.7 13.7 Gross Profit 27.3 31.4 36.5 8.7 10.5 Gross margin 76% 75% 76% 74% 77% Operating income 3.1 3.0 4.0 1.3 2.3 Operating margin 9% 7% 8% 11% 17% Net income 2.4 2.3 3.2 1.0 1.7 Diluted EPS $0.27 $0.26 $0.36 $0.11 $0.19 Diluted shares 8,911,842 8,768,703 8,700,833 8,684,352 8,802,780 Cash provided by operations $3.1 ($0.7) $1.3 1.1 1.8 Balance Sheet (in $ millions) Dec 31, 2023 Cash 10.4 Current assets 39.3 Total assets 47.0 Current liabilities 6.6 Other long - term liabilities 0.05 Total debt 0.0 Total shareholders’ equity 40.3 Cash Provided by Operations (in millions) $4.2 $3.1 ($0.7) $1.3 FY'20 FY'21 FY'22 FY'23 | 11 Financial Highlights and Balance Sheet
Senior Leadership | 12 Brad Nagel – Chief Financial Officer • Chief Financial Officer at Electromed since November 2022 • 15+ years of financial leadership and strategic planning experience with Fortune 500 companies • Former Divisional Chief Financial Officer of Global Lung Health and Visualization at Medtronic Diane Kaufman – Vice President of Human Resources • VP of Human Resources at Electromed since July 2021 • 30+ years of experience leading global human resource functions aligning them with global business strategy and a champion of cu lture transformation • Former Sr. VP of Global Human Resources at Ergotron resulting in 65% employee referral rate, 100% candidate acceptance and hi rin g in 30 days, and reduced turnover from 23% to 3% Jim Cunniff – President & Chief Executive Officer • CEO of Electromed since July 2023 • 30+ years of executive leadership in MedTech and the broader healthcare industry • Track record of consistently growing revenue through innovative go - to market strategies • Former President, CEO, and Board Director of Provista as well as Leiters Health • Former Senior Vice President of Americas for Kinetic Concepts, Inc. • Former President, Stryker Corporation for the following divisions: Medical, Asia/Pacific and Emerging Markets Kristine Owata – Vice President of Reimbursement & Payer Relations • VP of Reimbursement & Payer Relations at Electromed since October 2020 • 15+ years of diverse leadership experience in people management, client experience and process improvement • Former president and director of Intelligere, Inc., and former owner of W4P Revenue Cycle Solutions, where she implemented re ven ue cycle solutions for healthcare clients Amy Yanta – Vice President of Regulatory Affairs, Quality Assurance & Compliance • VP of Regulatory, Quality & Compliance since September 2023 • 15+ years of experience in the MedTech industry specializing in Regulatory Affairs and Quality Assurance • Former RAQA leader at IMRIS, and former regulatory affair roles at Boston Scientific and Surmodics.