Electromed, Inc.

Good afternoon and welcome to the Electro-Med Second Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. 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 second fiscal quarter of 2025. The quarter ended December 31, 2024. The press release is currently available on the company's website at www.smartvest.com. Before we get started, I'd 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. Joining me on the call today are Jim Kniff, Electromed's President and Chief Executive Officer, and Brad Nagel, Chief Financial Officer. As on previous calls, Jim will provide color around operational highlights from the quarter, and Brad will then review the financials, and we will close with a question and answer session. With that, I will now turn the call over to Jim Kniff, President and Chief Executive Officer of ElectroMed.

Thanks, Mike, and welcome everyone to ElectroMed's second quarter earnings call. It's a pleasure to begin a new calendar year by reporting on another excellent quarter for ElectroMed. Our entire team did a remarkable job executing on all facets of our business, most visibly in our sales, fulfillment, and manufacturing groups. These highly cohesive teams collaborated in delivering yet another quarter of record revenues, which came in at $16.3 million. This was also the ninth consecutive quarter that ElectroMed's revenue and net income grew on a year-over-year basis. Property income was a record $2.5 million in the quarter, and net income came in at $2 million, or $0.22 per fully diluted share. I would note that the strong record of operational performance has been rewarded by the market. Our stock has appreciated significantly over the past six and 12-month periods to the benefit of our shareholders. Many of you know a key goal of ours has been to enhance shareholder value, and I think it's safe to say we have succeeded in that regard. However, as an organization, we are focused on continued improvement to ensure our sustained operational momentum and the financial success that follows. With that, let's jump into some of the details of our quarter. An important aspect of our performance is to diversify our customer base beyond our core home care segment. Home care remains our most important segment by far, but we acknowledge that there are other market segments we can fruitfully tap into that are synergistic revenue streams for us. Of note, the hospital segment grew in the quarter by 17%. Also, our durable medical equipment, or DME, distributor relationships have resulted in year-over-year growth of 188% in the quarter, albeit from a relatively small base, reflecting strong demand from our carefully curated network of DME partners. Along with a singular focus on airway clearance and marketing what we believe is the most advanced and user-friendly HFCWO technology on the market, A key differentiator in ElectroMed's business is our direct patient model. We take great pride in handling the fulfillment process, beginning with the doctor's prescription, continuing through the payer reimbursement process, and culminating in delivery to a patient's home. In previous quarters, we have commented on the investments we have made in personnel, technology, and process improvements in this area of our business. For example, we improved our working capital by reducing inventory 35% compared to Q2 of fiscal 2024, while also continuing to consistently meet our patients' therapy needs. We continue to make investments in the sales team that drives the adoption of SmartVest Clearway into the market. We ended the quarter with 54 direct sales reps, which puts us on track to achieve our internal goal of 57 sales reps by the end of Q3 of fiscal 2025. Along with the additional headcount, we also initiated an investment in a new CRM system during the quarter, which will further enhance our commercial team's productivity, improve market insights, and enable better internal collaboration. There are also some other less obvious things we're doing around the edges to improve our processes and the customer experience. For example, we consolidated our various phone numbers so customers have one phone number to call, which then can route them to the department they need to reach. We also moved the printing of our marketing materials from stock printing to digital on-demand printing, which will enable us to make immediate changes to our marketing materials so they remain relevant while also reducing the cost and the size of our inventory of marketing collateral. During the last quarter, I announced that we had kicked off the Triple Down on Bronchiectasis campaign, focused on raising awareness of bronchiectasis as well as the critical and often overlooked role that SmartVest Clearway plays in a patient's treatment protocol. The campaign focuses on the needs for patients with bronchiectasis to reduce their inflammation, treat their infection, and use SmartVest Clearway technology to clear their airways of bucus to help break the vicious vortex by removing the fuel for future infections and inflammation. The campaign includes the launch of a landing page, digital advertisements, and sales tools. We've engaged with over 10,000 clinicians through this campaign since launch, and we believe these efforts will result in greater awareness and more prescriptions over time. Overall, I'm very happy with our performance across all facets of our business. Our team is executing at a high level, which generated strong, positive financial results, and those results are being rewarded by the market. We will continue to follow the blueprint that has worked so well, specifically to improve our execution and further penetrate new sources of revenue while investing in people, processes, and infrastructure to provide the tools and equipment our team needs to to achieve our goals. With that, I will now turn the call over to Brad for more detailed review of our financials. Brad?