Electromed, Inc.

Greetings. Welcome to the ElectroMed Fiscal Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mike Cavanaugh, ICR of Westbrook. You may begin.

Good afternoon and thank you for joining us today. Earlier today, ElectroMed Incorporated released financial results for the quarter-ended December 31, 2021. The release is currently available on the company's website at www.smartbest.com. Kathleen Scarvin, President and Chief Executive Officer, and Mike McCourt, Chief Financial Officer, will host this afternoon's call. As a reminder, some of the about the company's future operating and financial results and plans. Such statements are subject to risks and uncertainties that could cause actual performance or achievements to be materially different from those projected. Any such statements represent management's expectations as of today's date. You should not place undue reliance on these forward-looking statements. And the company does not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to the company's SEC filings for further guidance on this matter. I will now turn the call over to Kathleen Scarvin, President and CEO of Electromed.

Thanks, Mike, and thank you to everyone joining the call today. As always, we appreciate your continued support of Electromed. The fiscal second quarter of 2022 was record-breaking for Electromed. We are incredibly proud of what we have achieved to enhance Electromed's position as a leading provider of airway clearance devices. We achieved a record revenue of $10.2 million in the quarter, our second sequential quarter of record revenues. We believe this indicates that our strategic growth initiatives are beginning to yield the high results we anticipated, and this displays our team's strong execution in the face of the continued pandemic and tight supply chain. The fact that we have significantly exceeded pre-pandemic revenues demonstrates the values patients place on our SmartVest airway clearance therapy to help them manage their chronic lung diseases. Our revenue growth in the second quarter of fiscal 2022 was driven by our core home care segment, which grew 5.6% year-over-year to a record $9.4 million. On a year-to-date basis through the first six months of our fiscal year, our home care revenue is up 14.2% compared to the prior year. Our home care revenue growth in fiscal 2022 has been driven by an increase in referrals from the ongoing expansion of our sales footprint and sales rep productivity exceeding our goal. We did experience some turnover, having 39 direct home care sales reps at the end of the current quarter compared with 41 at the end of the prior quarter. As I mentioned in our previous earnings call, our goal is to staff 43 sales territories directly. While we work to hire top talent to fill these positions, we are leveraging our entire team, including support staff, to ensure we are selling in all 43 territories. Since our last call, we have internalized the recruiting function and strengthened our training and onboarding process, which has helped us achieve strong productivity levels. I am also pleased to note that our sales reps continue to impress with Home Care Direct annualized sales productivity of $951,000 per rep, significantly above our targeted range of $800,000 to $900,000. If you recall, we revised productivity targets upward last quarter. As I touched on earlier, this team has done an excellent job selling when their access to doctors has been limited. Looking ahead, we will continue to focus on the four key areas of our strategic growth plan. Continued sales force growth, direct to consumer marketing, infrastructure to support our anticipated sales growth, and clinical studies to further promulgate the body of evidence supporting SmartVest airway clearance and its ability to provide positive outcomes for bronchiectasis patients. As evidenced by our second consecutive quarter of record revenues in a challenging environment, we believe these initiatives are beginning to pay off, and we will continue ahead on this path. Alongside our strategic growth initiatives, we are also looking to break new ground in airway clearance technology with the next generation SmartVest. We will continue to allocate the necessary resources to complete the development and subsequent commercial launch of our next generation SmartVest. The new SmartVest will have multiple value-added innovation and promises to be smaller and lighter weight, less expensive to make. and with the same differentiation as our current SQL model, allowing patients to take deep breaths more easily than the competition during therapy. The new product will deliver all these benefits without sacrificing performance and should prove to be a compelling value proposition for an expanding patient population. Importantly, we remain on track to launch the new SmartVest airway clearance system in the first half of fiscal 2023. Data indicates there are approximately 600,000 people diagnosed with bronchiectasis in the U.S. and could potentially benefit from HFCWO therapy. This is based on recent company research and supported by published studies. More telling, we estimate that only 77,000 of this group are currently being treated with HFCWO therapy. This demonstrates a significant untapped market and we are confident that the new and improved SmartVest will provide a competitive advantage as we seek to penetrate that patient group. We also continue to focus on generating clinical evidence to support the use of SmartVest as a key treatment for bronchiectasis. Evidence to date has shown a clear reduction in both hospital visits and infections. And we see it is our job to ensure that pulmonologists grasp the true value of SmartVest. Before turning the call over to Mike to discuss financial results, I want to update you on our search for a chief commercial officer. As we have shared earlier, the chief commercial officer is a strategic and critical role for Electromed that will further strengthen our marketing and sales strategy execution in support of revenue growth. This key role will provide direct oversight and additional energy to the initiatives that are starting to pay off. We are confident that our new Chief Commercial Officer will help optimize the return on these investments and create value for our shareholders. Currently, we are in the final stages of our selection process and have been extremely pleased with the qualification of the candidates. We look forward to updating you on our progress. With that, I will turn the call over to Mike, our Chief Financial Officer, to discuss our financial results. Mike?