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Electromed, Inc. Reports FY2013 Second Quarter Results

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 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 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.

 
 
Electromed, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
 
    December 31,     June 30,
2012 2012
Assets (Unaudited)
Current Assets
Cash and cash equivalents $ 1,005,616 $ 1,702,435
Accounts receivable (net of allowances for doubtful accounts of $45,000) 9,725,142 10,850,859
Inventories 1,899,028 2,392,416
Prepaid expenses and other current assets 358,935 359,583
Income taxes receivable 605,744 340,744
Deferred income taxes   656,000   656,000
Total current assets 14,250,465 16,302,037
Property and equipment, net 3,481,373 3,170,014
Finite-life intangible assets, net 1,135,891 1,174,033
Other assets   276,582   274,940
Total assets $ 19,144,311 $ 20,921,024
 
Liabilities and Equity
Current Liabilities
Revolving line of credit $ 600,000 $ 1,768,128
Current maturities of long-term debt 66,191 254,020
Accounts payable 753,098 749,985
Accrued compensation 615,566 636,995
Warranty reserve 661,000 610,000
Other accrued liabilities   127,077   151,558
Total current liabilities 2,822,932 4,170,686
Long-term debt, less current maturities 1,356,961 1,390,003
Deferred income taxes   280,000   280,000
Total liabilities   4,459,893   5,840,689
 
Commitments and Contingencies
 
Equity

Common stock, $0.01 par value; authorized: 13,000,000; shares issued and outstanding: 8,114,252 shares

81,143 81,143
Additional paid-in capital 13,045,518 12,959,136
Retained earnings   1,557,757   2,040,056
Total equity   14,684,418   15,080,335
Total liabilities and equity $ 19,144,311 $ 20,921,024
 
 
Electromed, Inc. and Subsidiary
Condensed Consolidated Statements of Income

(Unaudited)

       

 

For the Three Months Ended For the Six Months Ended
December 31, December 31,
2012     2011 2012     2011
 
Net revenues $ 3,856,370 $ 4,790,344 $ 7,887,656 $ 10,169,262
Cost of revenues   1,342,002     1,309,064     2,552,455     2,618,631  
Gross profit   2,514,368     3,481,280     5,335,201     7,550,631  
 
Operating expenses
Selling, general and administrative 3,000,532 3,130,799 5,816,544 6,530,602
Research and development   109,250     250,339     210,440     467,425  
Total operating expenses   3,109,782     3,381,138     6,026,984     6,998,027  
Operating income (loss) (595,414 ) 100,142 (691,783 ) 552,604
Interest expense, net of interest income of $10,975, $1,634, $15,322, and $3,662 respectively   25,777     43,588     62,516     87,511  
Net income (loss) before income taxes (621,191 ) 56,554 (754,299 ) 465,093
 
Income tax benefit (expense)   210,000     (32,000 )   272,000     (195,000 )
 
Net income (loss) $ (411,191 ) $ 24,554   $ (482,299 ) $ 270,093  
 
Earnings (loss) per share:
 
Basic and diluted $ (0.05 ) $ 0.00   $ (0.06 ) $ 0.03  
 
Weighted-average common shares outstanding:
Basic   8,114,252     8,101,745     8,114,252     8,101,330  
Diluted   8,114,252     8,125,458     8,114,252     8,121,971  
 
 
Electromed, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows

(Unaudited)

   
For the Six Months Ended
December 31,
2012     2011
Cash Flows From Operating Activities
Net income (loss) $ (482,299 ) $ 270,093
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation 231,918 193,790
Amortization of finite-life intangible assets 66,234 60,199
Amortization of debt issuance costs 6,377 6,066
Share-based compensation expense 86,382 62,108
Loss on disposal of property and equipment 22,020 9,865
Changes in operating assets and liabilities:
Accounts receivable 1,125,717 (1,111,600 )
Inventories 493,388 (541,677 )
Prepaid expenses and other assets (272,371 ) (138,627 )
Accounts payable and accrued liabilities   (74,972 )   (343,091 )
Net cash provided by (used in) operating activities   1,202,394     (1,532,874 )
 
Cash Flows From Investing Activities
Expenditures for property and equipment (482,122 ) (618,966 )
Expenditures for finite-life intangible assets   (28,092 )   (22,650 )
Net cash used in investing activities   (510,214 )   (641,616 )
 
Cash Flows From Financing Activities
Net payments on revolving line of credit (1,168,128 ) -
Principal payments on long-term debt including capital lease obligations (220,871 ) (189,056 )
Payments of deferred financing fees - (10,526 )
Proceeds from warrant exercises - 5,301
Proceeds from subscription notes receivable   -     22,500  
Net cash used in financing activities   (1,388,999 )   (171,781 )
Net decrease in cash and cash equivalents (696,819 ) (2,346,271 )
Cash and cash equivalents
Beginning of period   1,702,435     4,091,739  
End of period $ 1,005,616   $ 1,745,468  
 




Stock quotes in this article: ELMD 

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