Electromed, Inc. (NASDAQ:ELMD) today announced financial results for the three and nine months ended March 31, 2011. Net revenues for the three months ended March 31, 2011 were approximately $5,199,000, a 22.9% increase compared to net revenues of approximately $4,229,000 for the same period last year. Net revenues for the nine months ended March 31, 2011 were approximately $14,050,000, a 31.6% increase compared to net revenues of approximately $10,680,000 for the same period last year.
The Company also announced net income of approximately $487,000, or $0.06 per basic and diluted share, for the three months ended March 31, 2011, compared to net income of approximately $475,000, or $0.08 per basic and diluted share, for the same three-month period last year. For the nine-month period ended March 31, 2011, net income was $891,000, or $0.12 per basic and diluted share, compared to net income of approximately $846,000, or $0.14 per basic and diluted share, for the same nine-month period last year. Net revenues increased primarily due to an expansion of our 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 was 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 Company’s completion of its initial public offering in August 2010. Including the underwriter’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,
“Electromed, Inc. is a rapidly growing Company.
It is using a portion of the capital received from its IPO to grow its sales force and supporting infrastructure.
While these actions reduce the magnitude of net income growth in the short-term, they 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.”
Gross profit increased to approximately $3,703,000, or 71.2% of net revenues, for the three months ended March 31, 2011, and $10,177,000, or 72.4% of net revenues, for the nine months ended March 31, 2011. For the three and nine months ended March 31, 2010, gross profit was approximately $2,983,000, or 70.5% of net revenues, and $7,681,000 or 71.9% of net revenues, respectively. The increase in gross profit dollars resulted primarily from the increase in sales volume. The increase in gross profit percentage was primarily the result of higher reimbursement from the mix of referrals during the three- and nine-month periods. 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.