Electromed, Inc.

Greetings and welcome to the Electromed Third Quarter Fiscal 2024 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mike Cavanaugh, Investor Relations. Please go ahead.

Good afternoon and thank you for joining the ElectroMed earnings call. Earlier today, ElectroMed Incorporated released financial results for the third quarter of fiscal year 2024. The quarter ended March 31, 2024. The release is currently available on the company's website at www.smartbest.com. Before we get started, I would like to remind everyone that some of the statements that management will make on this call are considered forward-looking statements, including statements 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 any undue reliance on those 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. With that, I will now turn the call over to Jim Kniff, President and Chief Executive Officer of ElectraMed.

Thanks, Mike, and thank you to everyone joining today's call. I'm thrilled to announce another record revenue quarter for ElectraMed. This is the second quarter in a row of record revenue that I've been able to share with you. Total net revenue for the third quarter of fiscal year 2024 came in at $13.9 million. representing a 15% year-over-year growth from the same period in fiscal year 2023. This is the sixth straight quarter of mid-teens or better revenue growth and resulted in quarterly earnings of $1.5 million, or 17 cents per diluted share. Similarly, I'm proud to highlight that operating income for the quarter was $1.8 million, a growth of 54% over the same period in the prior fiscal year. Additionally, for a third straight quarter, we grew revenue in all three of our categories, home care, hospital, and other. I'll hand the call over to Brad to discuss the quarter's financials in more detail shortly. But first, I want to provide a business update and address the cyber attack on change healthcare and its impact on Electromed. First, the company's consistent growth strategies are generating positive results through our focus on developing best-in-class products and exemplary customer service, disciplined commercial expansion, and operating excellence. We have continued to generate double-digit revenue growth and capture operating leverage, which we believe is a compelling combination for investors in a difficult market for small and micro-cap companies. As discussed on last quarter's call, we believe Electromed's shares are undervalued given our prospects for growth, profitability, cash generation, and a rock-solid balance sheet with no debt, which makes us a micro-cap standout in the MedTech space. Investor feedback highlighted that our story is resonating since our last earnings call, which was also reflected in our stock price, as our shares have appreciated substantially since we reported fiscal year 2024 Q2 results. Even after our stock appreciated, I invested in the stock this past quarter because of the optimism I have and the ability of the ElectraMed team to continue to generate positive results, namely double-digit revenue growth coupled with operating leverage. Additionally, I want to remind investors that my equity incentive reward is based largely on increasing total shareholder return, and management's cash incentive compensation is focused solely on delivering financial results, which aligns us to our investors' goals and helps keep shareholder value as a top priority. This segues nicely into an update on our commercial initiatives. I'm happy to report that we have expanded our sales team from 49 direct sales reps in Q2 to 51 at the end of Q3. We continue to attract top flight sales talent to represent the newest and we believe the best HFCWO technology in the market today. We will continue our deliberate Salesforce expansion plans to drive further market penetration and to support a larger pool of physician prescribers. We have also revamped our sales hiring process by recruiting sales reps whose backgrounds and experiences most closely match our top performers and can successfully execute what is largely a clinical sale. Additionally, we have upgraded our sales training so reps can be more effective sooner in serving our customers and drive revenue growth. Recently, we were awarded the Corporate Partner of the Year by the California Society of Respiratory Care in recognition of the impact our sales and clinical teams are having in serving our customers. Also, we recently conducted a survey from our SmartVest Connect program where respiratory therapists provide personalized in-home training, follow-up tele-respiratory support, and stay connected with patients to support therapy utilization, and we are pleased to report that 95% of the patients stated they would recommend SmartVest to others. Also, as mentioned on our last earnings call, our recent market study confirmed that there are roughly 824,000 patients in the U.S. that have been diagnosed with bronchiectasis. Of that total, roughly 230,000 are managed by a pulmonologist, and the remaining patients are being managed by a primary care physician. If all of these 230,000 patients were prescribed HFCWO at an estimated sales price of $10,000 per patient, it equates to a $2.3 billion revenue opportunity. However, only a fraction of these patients are being prescribed HFCWO therapy. We believe there's work to be done in unlocking the market opportunity through creating more awareness with providers of the benefits in treating bronchiectasis patients with our SmartVest airway clearance technology earlier in the care continuum. In support of that objective in April, we launched a live continuing education units or CEU webinar tailored to the respiratory therapists regarding the use of airway clearance in the treatment of bronchiectasis, which is designed to result in patients getting the benefits of HFCWO sooner so they can breathe easier and live more actively. This program was well attended by over 190 participants. In that same vein, I'm pleased to report that we have launched a new clinical resource center as part of our website. The clinical resource center is tailored to the needs of clinicians where they can explore our prescriber resources, upcoming events, programs for CME credits, educational videos, and our latest clinical studies. Also in Q3, we rolled out Smart Advantage, which are sales programs and clinic support resources that showcase our exceptional customer service and seamless ordering process in support of the clinics we serve. Feedback from our providers and patients regarding Smart Advantage has been excellent. They appreciate how we have alleviated some of the administrative challenges both providers and patients deal with in navigating payer requirements for our technology. Lastly, on February 21st, there was a cyber attack which began against Change Healthcare, crippling financial operations for hospitals, insurers, pharmacies, and medical groups nationwide. Change Healthcare is a financial clearinghouse that works across the health system to make clinical, administrative, and financial processes simpler and more efficient for payers, providers, and consumers. Unfortunately, because of the breach, provider claims to payers dropped significantly. Fortunately, because of the excellent work by Christine Beiersdorf, our Vice President of Reimbursement and Payer Relations, and her team, I am happy to report that we resolved nearly 75% of our delayed claims by the end of the quarter with a successful submission through an alternative clearinghouse to change healthcare. Although we experienced a three-week delay in non-Medicare claim submissions, there are still providers that have not been able to submit claims at all today. Our cash position of $11.7 million by the end of Q3 allowed us to endure the payment delays, providing the time necessary to develop contingency plans to the crisis. Lastly, as of today, we have resolved 98% of our delayed claims and expense expect to be 100% resolved in Q4. I'm excited about the trajectory of the business and look forward to continuing to drive top line growth combined with expanding operating leverage. With that, I'll turn the call over to Brad to discuss our financials. Brad?