Electromed at 15th Annual LD Micro Invitational: Strategic Growth and Innovation

On Thursday, 10 April 2025, Electromed Inc. (NYSE: ELMD) presented at the 15th Annual LD Micro Invitational 2025, highlighting its strategic initiatives and financial health. While the company showcased its growth and profitability, it also addressed challenges such as increasing prescription rates for its technology. Electromed operates debt-free, with a robust cash reserve, and is focused on expanding its market share through strategic investments and education.

Key Takeaways

• Electromed reported approximately $6 million in revenue, with 94% derived from home care.
• The company operates debt-free with $14 million in cash and has announced a new $5 million stock repurchase program.
• Electromed aims for consistent double-digit organic growth through strategic sales and market development.
• The Clearway device, launched two years ago, has seen significant market adoption.
• The company is enhancing its e-prescribing solution to streamline the prescription process.

Financial Results

• Revenue and Profitability:

- Generated around $6 million in revenue, primarily from home care.

- The company is profitable and targets double-digit organic growth.

• Cash and Debt:

- Holds $14 million in cash with no outstanding debt.

- Completed a $5 million stock repurchase in September last year and announced a new $5 million repurchase program.

• Gross Profit Margin:

- Described as "much more profitable," suggesting strong margins.

Operational Updates

• Product and Market Development:

- The Clearway device, introduced two years ago, has been well-received, enhancing home care solutions.

- Electromed is the sole provider of HFCWO with DMV, a unique advantage.

• Sales and Prescription Strategy:

- Plans to increase the sales force to drive revenue growth.

- Focus on educating providers and patients to improve diagnosis and prescription rates.

- Developing an e-prescribing solution to streamline documentation from clinics.

• Coverage and Patient Support:

- Coverage includes over 285 million lives in the US through Medicare and private payers.

- Engages telehealth services for patient follow-ups on days 5 and 30.

Future Outlook

• Growth Strategy:

- Continued investment in sales representatives and market development.

- Leverage the e-prescribing solution to capture more prescriptions efficiently.

• Long-Term Objectives:

- Aims for consistent double-digit organic growth.

- Focus on improving revenue and earnings to align with investor interests.

• Challenges:

- Increasing the prescription rate for bronchiectasis patients remains a challenge.

Q&A Highlights

• Patient Consultation Costs:

- Initial patient consultations are outsourced to 1099 respiratory therapists.

- Telehealth services are contracted for follow-ups, with costs considered nominal.

In conclusion, Electromed's presentation at the 15th Annual LD Micro Invitational 2025 emphasized its financial stability and strategic focus on growth and innovation. For more details, readers are encouraged to refer to the full transcript below.

Full transcript - 15th Annual LD Micro Invitational 2025:

Unidentified speaker: Minnesota, which is about an hour south west of the Twin Cities company, so we're down at Newby. We do about $6,000,000 in revenue, and all of our products are manufactured in Minnesota. And most of our fact that we're growing. We're profitable. We have no debt, and we've got about $14,000,000 in cash.

And then most recently, in September of this previous year, we did a $5,000,000 stock repurchase, and we just announced another $5,000,000 stock repurchase. So what is bronchiectasis? This is the primary disease state that we serve. It's really an irreversible lung condition, and it's characterized by a widening of one or more of the bronchioles. So that's basically your airways.

And there's a vicious cycle that occurs where a patient has an infection. They have inflammation. It gets filled up within their airways, and the patient really has a hard time breathing. This disease state that we serve is misdiagnosed, is underdiagnosed, and as a consequence, high frequency chest wall oscillation or HSCWM is underprescribed. But one of the questions we always get asked is, okay.

Well, this is a chronic irreversible condition. And once somebody gets on the device, how often do they have to use it? They typically have to use it two times per day. Sessions that they use, seven days a week. We did introduce one of the newest products in the marketplace about two years ago, which is our Clearway device.

And we're really excited about this device. We've had great market adoption for this product. We we feel like we've really cracked the code relative to the industrial design. This is something which is gonna be used in the patient's home, whether it's in their living room or in their bedroom. We also are the only HFCWO with the DMV.

And so as a consequence, gross profit margin is in. So we're much more profitable. Where's most of our revenue coming from? As you can see here, it's really home care based. So about 94% of our revenue is in in the home.

We do have a nascent hospital business, so we do sell our product as capital equipment in the hospital. We can get trailing disposables, the vest, the hose that So what's our growth strategy? We've got a great algorithm where if we add sales reps, we increase our revenues. We're gonna continue doing that. One of the big challenges that you saw in that iceberg slide is just how do we move these patients who have bronchiectasis to where they actually get a prescription for this technology.

And a lot of that has to do with where it's both with the pay provider, the physician themselves, as well as the patient. So we've invested quite a bit in direct questions from patients and speak with them directly. We don't give prescriptions, but we can actually share with the patient who they can go to to get access to this technology. Market development. As I've mentioned, not only are we doing a lot of market development work that's related to provider education, patient education, the good news is about providers.

And so in the past, probably two to three years ago, if we were at a respiratory care conference, no one would be talking about bronchiectasis, and now they are. And that's a really great sign. So we feel like there's terrific tailwinds for more patients to do this technology. We also have what we call smart advantage. So not only do we have a great product, not only do we have terrific patient paid.

And then we also have an e prescribe solution. Believe it or not, in the year 2025, most of our prescriptions come in through a fax. But we have a e prescribe solution, so we can get all the documentation from the clinics electronically. That's both a savings for the clinic and time, but it's also a savings for us in in processing these prescriptions. So what are our long term objectives?

We are a publicly traded company. We don't give guidance,

We've We have over 285,000,000 lives in The United States, and we have coverage from both Medicare as well as with private payers. We have consistent double digit organic get paid unless we improve our revenue performance and our earnings performance. We think that's aligned with investors. The last slide I'll leave you with is we think that we're an attractive valuation.

This is a bit dated. So this was the trailing twelve months as of 12/31. But And with that, we'll open it up for any questions folks might have. Yes, sir? Yeah.

So the question was, what's the cost impact of having to send somebody out to actually consult a patient is how they're progressing? Is that Yeah. So it's you know, basically, when we deliver the product to the patient, we actually contract with ten ninety nine respiratory therapists to do that. So on that aspect of our business, we actually outsource that. It's a pretty nominal expense for them to go out initially.

And then we also contract with the telehealth service to actually follow-up with that patient on day five and in day 30, and then they collect those smart notes for us. And so it's a pretty nominal expense. And, really, when you take a look at our p and l,

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