In the latest earnings call, Electromed, Inc. presented a record-breaking quarter for the fourth fiscal quarter of 2024, with total net revenue coming in at $14.8 million, marking a 9% year-over-year growth from the same period in fiscal year 2023. The company achieved this impressive feat despite the expiration of the CMS waiver, which had benefited the company in the previous fiscal year. For the full year, Electromed recorded a revenue of $54.7 million, representing a 14% increase from fiscal year 2023.
Operating income for both the quarter and the full fiscal year were also record-breaking, coming in at $2.3 million and $6.6 million, respectively. This growth demonstrates Electromed's ability to deliver compelling top line growth coupled with improved operating leverage, which is driving shareholder value.
Strategic Initiatives and Operational Achievements
Electromed has been focused on improving its finished goods inventory while simultaneously lowering its overall inventory. The company has successfully achieved this, with inventory now below $4 million for the year. This strategic move is aimed at improving working capital while also enhancing service and fulfillment rates. Notably, Electromed had no back orders as of June 30, indicating a strong service infrastructure and seamless order fulfillment.
Looking ahead, Electromed plans to expand its U.S. sales team to 57 sales reps by the end of fiscal year 2025. This expansion is part of the company's growth strategy, which includes investing in market development to raise awareness of bronchiectasis, a disease often overlooked and underdiagnosed. Electromed's clinical team spoke on podium in 4 regional conferences during the fourth quarter, educating KOLs and other care providers on bronchiectasis patient identification and treatment with SmartVest. These initiatives aim to empower clinicians to better identify bronchiectasis patients and treat them effectively with Electromed's SmartVest Clearway.
Electromed also launched several operational achievements in fiscal year 2024, including SmartVest Clearway in the hospital market, which grew 22% in fiscal year 2024. This departure from the core homecare business is expected to capture patients being discharged from the hospital, providing Electromed with a significant opportunity to expand its patient base. The company also introduced SmartAdvantage, a program that highlights exceptional customer service and seamless ordering processes, improving prescriber loyalty and reducing time from prescription to payer approval to product delivery to patients. Additionally, Electromed launched SmartNotes, a disease management tool for physicians, and a web-based clinical resource center, tailored to the needs of clinicians to introduce airway clearance therapy earlier in the treatment cycle for patients.
Financial Highlights
The financial highlights of the call were equally impressive, with net revenue for Q4 growing 9.0% over Q4 of the previous year to $14.8 million. This was due in part to increased revenue in fiscal 2024 and decreased shipping expenses. The company's gross profit also increased by 76.3% of net revenues, reaching $41.7 million in fiscal 2024. This increase was primarily due to the revenue growth, decreased shipping expenses, and higher material costs in the prior year. Selling, general and administrative expenses increased by 9.2%, primarily due to increased payroll and compensation-related expenses, salaries, and incentive compensation.
Looking Ahead
Electromed is optimistic about its future prospects, with plans to continue investing in teams and processes to support future growth and profitability targets. The company has been recognized as one of the fastest-growing public companies in Minnesota, a testament to its operational execution and unique focus. Electromed's stock has appreciated over 40% since the beginning of fiscal year 2024, and the company aims to continue driving further price appreciation by delivering top line growth and robust operating leverage to accelerate earnings.
In conclusion, Electromed's record-breaking performance in the fourth quarter of fiscal year 2024 underscores its commitment to operational excellence, strategic growth, and financial success. The company's focus on operational improvements, market development, and product innovation positions it well for continued growth and success in the coming fiscal year.