Electromed, Inc. (NYSE MKT: ELMD) today announced financial results for
the three-month period ended December 31, 2012. Net revenues for the
three months ended December 31, 2012, were approximately $3,856,000, a
19.5% decrease compared to net revenues of approximately $4,790,000 for
the same period last year. The Company also announced net loss of
approximately $411,000, or $0.05 per basic and diluted share, for the
three months ended December 31, 2012, compared to net income of
approximately $25,000, or $0.00 per basic and diluted share, for the
same period last year. Net revenues decreased as a result of downward
pressure on pricing and added administrative steps implemented by third
party payers in the insurance claims process which has lengthened the
approval process compared to the prior year. Net loss results were
attributable to lower net revenues, offset by decreased expenses and
operating efficiencies designed to better align expenses with demand.
Kathleen Skarvan, CEO, said, "While our results this quarter are
disappointing, we are gaining momentum and positioning ourselves for
sales growth going into fiscal year 2014. Our positive momentum is
attributable to our re-branding strategy, hiring a veteran International
sales manager focused on broadening our footprint in Latin America and
the Middle East, our U.S. sales force being fully staffed in all
strategic regions and realigning our reimbursement function to create a
stronger focus on payer contracts and greater efficiencies.
Additionally, it is important to highlight the strength of our balance
sheet, which is strong enough to support us while we work through our
Gross profit decreased to approximately $2,514,000, or 65.2% of net
revenues, for the three months ended December 31, 2012, compared to
approximately $3,481,000, or 72.7% for the same period in fiscal 2012.
The decrease in gross profit percentage was primarily the result of
reduced leverage of manufacturing costs on lower revenue levels. The
Company believes that as it grows sales, it will be able to leverage
manufacturing costs more effectively and the gross profit percentage
will return to more historical levels above 70%.
Operating expenses, which consist of selling, general, and
administrative expenses and research and development expenses, were
approximately $3,110,000 for the three months ended December 31, 2012, a
decrease of approximately 8.0% over operating expenses for the same
period last year. These decreases resulted from lower sales volume and
lower associated selling costs; decreased payroll as a result of lower
overall management compensation; and a reduction in marketing fees.
Total cash was approximately $1,006,000 as of December 31, 2012. For the
three months ended December 31, 2012, net cash provided by operating
activities was approximately $1,088,000, composed primarily of a
decrease in the Company's accounts receivables and inventory, which
decreased approximately $690,000 and $406,000, respectively. Prepaid
expenses and accounts payable and accrued liabilities increased
approximately $85,000 and $272,000, respectively, during the three
months ended December 31, 2012. An aggregate of $286,000 was used for
investing activities during the three months ended December 31, 2012,
for purchases of property and equipment. Cash used in financing
activities was approximately $1,279,000, consisting primarily of
$111,000 in payments of long-term debt and capital lease obligations, as
well as payments on our revolving line of credit of $1,168,000.
"During my first two months with the company, since joining Electromed
in December, I am even more confident we have the framework for growth,
and plan to accelerate our strategies through the remainder of fiscal
2013," added Skarvan. "The multi-pronged approach is on: increasing
revenues, advancing our technology and aggressively managing our cost
structure, while enhancing productivity by throughout the organization."
About Electromed, Inc.Electromed, Inc. 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 StatementsCertain 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 speaker'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. Forward-looking
statements can generally be identified by the words "believe," "expect,"
"anticipate" or "intend" or similar words. Forward-looking statements
made in this release include the Company's plans and expectations
regarding sales momentum, sales growth, gross profit percentage,
profitability, margins, and cost control. 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,
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
"forward-looking statements," as such statements speak only as of the
date of this release.
Common stock, $0.01 par value; authorized: 13,000,000; shares
issued and outstanding: 8,114,252 shares
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