8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,D.C. 20549

FORM 8-K

CURRENTREPORT

Pursuantto Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 25, 2020

ELECTROMED, INC.

(Exact Name of Registrant as Specified in Its Charter)

Minnesota	001-34839	41-1732920
(State or Other Jurisdiction of<br><br> <br>Incorporation)	(Commission File Number)	(I.R.S. Employer Identification<br><br> <br>Number)

500 Sixth Avenue NW

New Prague, MN 56071

(Address of Principal Executive Offices)(Zip Code)

(952) 758-9299

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant<br> to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12<br> under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to<br> Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to<br> Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value	ELMD	NYSE American LLC
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)
Indicate by check mark whether the registrant is an emerging<br>growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
---	---
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ☐

Item 2.02	Results of Operations and Financial Condition

On August 25, 2020, Electromed, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal year ended June 30, 2020. The full text of the press release is attached as Exhibit 99.1.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number	Description	Method of Filing
99.1	Press Release dated<br> August 25, 2020	Furnished Electronically

The information contained in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ELECTROMED, INC.
Date:  August 25, 2020	By: /s/ Michael J. MacCourt
	Name:	Michael J. MacCourt
	Title:	Chief Financial Officer

Exhibit99.1

---

FORIMMEDIATE RELEASE

Electromed,Inc. Announces Fiscal 2020 Fourth Quarter and Full Year Financial Results

-- Record profitability: diluted EPS of $0.47 in fiscal 2020 versus $0.23 in fiscal 2019 --

NewPrague, Minnesota – August 25, 2020 – Electromed, Inc. (“Electromed” or the “Company”) (NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced financial results for the three months ended June 30, 2020 (“Q4 FY 2020”).

Q4FY 2020 Highlights

●	Net<br> revenue decreased 20.1% to $6.9 million, from $8.6 million for the three months ended<br> June 30, 2019 (“Q4 FY 2019”), primarily due to industrywide disruption from the<br> COVID-19 pandemic.
●	Operating<br> income, which included $0.9 million of government stimulus income from the Provider Relief<br> Fund established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES<br> Act”), totaled $1.3 million, compared to $1.5 million in Q4 FY 2019.
---	---
●	Net<br> income was $1.3 million, or $0.15 per diluted share, compared to $1.1 million, or $0.13<br> per diluted share, in Q4 FY 2019.
---	---
●	Cash<br> as of June 30, 2020 was $10.5 million benefiting from $1.3 million in operating cash<br> flow in Q4 FY 2020.
---	---

FY2020 Highlights

●	Net<br> revenue increased 3.7% to $32.5 million from $31.3 million during the fiscal year ended<br> June 30, 2019 (“FY 2019”).
●	Operating<br> income grew 80.9% to $5.1 million, from $2.8 million in FY 2019.
---	---
●	Net<br> income rose 110.1% to $4.2 million, or $0.47 per diluted share, from $2.0 million, or<br> $0.23 per diluted share, in FY 2019.
---	---
●	Cash<br> increased by $2.7 million during fiscal 2020, benefitting from $4.2 million in operating<br> cash flow.
---	---

Kathleen Skarvan, President and Chief Executive Officer of Electromed, commented, “In fiscal 2020 we delivered revenue growth and record profitability, despite a challenging fourth quarter during which the COVID-19 pandemic significantly impacted our operating and financial results. Encouragingly, our home care referrals approached pre-COVID-19 levels as we exited the fourth quarter, in tandem with an uptick in the reopening of physician offices and related activities. I commend our entire Electromed team for their unwavering commitment to ensuring seamless manufacturing and delivery of SmartVest® Airway Clearance during these challenging times.”

Ms. Skarvan continued, “We expect continued uncertainty surrounding COVID-19 through fiscal 2021 that will continue to impact our financial and operational results. We believe we have a strong balance sheet and an extremely dedicated team, which will enable us to withstand this pandemic and pursue a greater share of the large, underpenetrated bronchiectasis market. Our priority continues to be the health, safety and wellbeing of our teammates, clinicians and patients, while executing on our organic growth strategy. With this in mind, we plan to continue investing in our business, serving patients by balancing virtual and in-person visits, and providing best-in-class customer service and delivering our differentiated SmartVest® Airway Clearance devices to drive long-term profitable growth.”

Q4FY 2020 Review

Net revenue in Q4 FY 2020 decreased 20.1% to $6.9 million, from $8.6 million in Q4 FY 2019, primarily driven by lower home care revenue. Home care revenue declined 21.3% to $6.3 million from $8.0 million in Q4 FY 2019, primarily due to lower referrals driven by the COVID-19 pandemic. Field sales employees totaled 44, of which 37 were direct sales, at the end of Q4 FY 2020, compared to 40 at the end of Q4 FY 2019, of which 34 were direct sales. Annualized home care revenue was $678,000 per direct field sales employee, below our target productivity range of $750,000 - $850,000 due to the revenue decline associated with the COVID-19 pandemic. Institutional revenue decreased 25.9% to $273,000 from $368,000 in Q4 FY 2019, primarily due to a decrease in volume of devices and garments sold.

Gross profit in Q4 FY 2020 decreased 16.2% to $5.6 million, or 81.3% of net revenue, from $6.7 million, or 77.5% of net revenue, in Q4 FY 2019. The decrease in gross profit dollars was primarily due to the decrease in home care revenue driven by the COVID-19 pandemic. The increase in gross profit percentage was due to a higher mix of Medicare patients, in-sourcing of patient training activity and reduced warranty costs.

Selling, general and administrative (“SG&A”) expenses in Q4 FY 2020 decreased by $277,000 to $4.8 million from $5.1 million in Q4 FY 2019. The decline in SG&A spending was primarily due to lower incentive payments driven by lower home care revenue and reductions in travel expenses related to the COVID-19 pandemic. As a percentage of revenue, SG&A expenses were 69.7% compared to 59.0% in the same period in the prior year. Research and development expenses increased to $415,000 from $107,000 in Q4 FY 2019, in connection with the development of a next generation device. As a partial offset to our core operating expenses, we received and recognized $0.9 million of government stimulus from the Provider Relief Fund established under the CARES Act which is intended to offset losses in revenue and expenses Medicare fee-for-service providers incurred due to the impacts of the COVID-19 pandemic.

Operating income totaled $1.3 million, compared to $1.5 million in Q4 FY 2019.

Net income before income taxes totaled $1.3 million compared to $1.5 million in Q4 FY 2019.

Net income was $1.3 million, or $0.15 per diluted share, compared to $1.1 million, or $0.13 per diluted share, in Q4 FY 2019. In Q4 FY 2020, income tax benefit totaled $9,000, compared to an income tax expense of $432,000 in the same period of the prior year. During Q4 FY 2020, a discrete tax benefit of $343,000 was recognized as a result of the exercise of outstanding stock options.

FY2020 Summary

For the fiscal year ended June 30, 2020, revenue grew 3.7% to $32.5 million, from $31.3 million in fiscal 2019, driven by $430,000 of incremental distributor revenue, a 24.7% increase in institutional revenue, and a 1.3% increase in home care revenue. Gross margins were 77.6%, compared to 76.2% in the prior fiscal year, while net income was $4.2 million, or $0.47 per diluted share, compared to $2.0 million, or $0.23 per diluted share, in fiscal 2019. The Company’s cash increased by $2.7 million, driven by $4.2 million of operating cash flow.

FinancialCondition

The Company’s balance sheet at June 30, 2020 included cash of $10.5 million, accounts receivable of $12.9 million, no debt, working capital of $25.0 million, and shareholders’ equity of $30.2 million.

ConferenceCall

Management will host a conference call on Tuesday, August 25, 2020 at 4:00 pm CT (5:00 pm ET) to discuss Q4 FY 2020 financial results and other matters.

Interested parties may participate in the call by dialing:

●	(877)<br> 407-9753 (Domestic)
●	(201)<br> 493-6739 (International)
---	---

The conference call also will be accessible via the following link:

https://78449.themediaframe.com/dataconf/productusers/elctr/mediaframe/40248/indexl.html

For those who cannot listen to the live broadcast, an online webcast replay will be available in the Investor Relations section of the Company’s web site at: http://investors.smartvest.com/

AboutElectromed, Inc.

Electromed, Inc. manufactures, makes, and sells products that provide airway clearance therapy, including the SmartVest^®^ Airway Clearance System, to patients with compromised pulmonary function. The Company is headquartered in New Prague, Minnesota and was founded in 1992. Further information about the Company can be found at www.smartvest.com.

CautionaryStatements

Certainstatements in this press release constitute forward-looking statements as defined in the U.S. Private Securities Litigation ReformAct of 1995. Forward-looking statements can generally be identified by words such as “anticipate,” “believe,”“estimate,” “expect,” “intend,” “may,” “plan” “potential,”“should,” “will,” and similar expressions, including the negative of these terms, but they are not theexclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materiallydue to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties forthe Company include, but are not limited to, the duration, extent and severity of the COVID-19 pandemic, including its effectson our business, operations and employees as well as its impact on our customers and distribution channels and on economies andmarkets more generally; the competitive nature of our market; changes to Medicare, Medicaid, or private insurance reimbursementpolicies; changes to state and federal health care laws; changes affecting the medical device industry; our ability to developnew sales channels for our products such as the homecare distributor channel; our need to maintain regulatory compliance and togain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions;our ability to renew our line of credit or obtain additional credit as necessary; our ability to protect and expand our intellectualproperty portfolio; the risks associated with expansion into international markets, as well as other factors we may describe fromtime to time in the Company’s reports filed with the Securities and Exchange Commission (including the Company’s mostrecent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reportson Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertaintiesor potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and otherreaders should not place undue reliance on “forward-looking statements,” as such statements speak only as of the dateof this press release. We undertake no obligation to update them in light of new information or future events.

Contacts:
Electromed, Inc.	The Equity Group Inc.
Mike<br> MacCourt, Chief Financial Officer	Kalle<br> Ahl, CFA
(952)<br> 758-9299	(212)<br> 836-9614
investorrelations@electromed.com	kahl@equityny.com
	Devin<br> Sullivan
	(212)<br> 836-9608
	dsullivan@equityny.com

Financial Tables Follow:

Electromed,Inc.

CondensedBalance Sheets

		June 30, 2019
Assets
Current Assets
Cash	10,479,150	$	7,807,928
Accounts receivable (net of allowances for doubtful accounts of 45,000)	12,940,677		12,760,042
Contract assets	902,619		995,847
Inventories, net	3,084,620		2,622,000
Prepaid expenses and other current assets	353,318		353,214
Income taxes receivable	262,155		—
Total current assets	28,022,539		24,539,031
Property and equipment, net	3,788,469		3,604,744
Finite-life intangible assets, net	598,389		581,413
Other assets	80,166		45,044
Deferred income taxes	755,000		629,000
Total assets	33,244,563	$	29,399,232
Liabilities and Shareholders’ Equity
Current Liabilities
Current maturities of other long-term liabilities	72,328	$	30,320
Accounts payable	555,510		586,575
Accrued compensation	1,404,497		1,404,662
Income taxes payable	—		288,511
Warranty reserve	740,000		810,000
Other accrued liabilities	214,045		530,453
Total current liabilities	2,986,380		3,650,521
Other long-term liabilities	8,868		14,737
Total liabilities	2,995,248		3,665,258
Commitments and Contingencies
Shareholders’ Equity
Common stock, 0.01 par value; authorized: 13,000,000 shares; 8,567,834 and 8,408,351 issued and outstanding at June 30, 2020 and June 30, 2019, respectively	85,678		84,084
Additional paid-in capital	16,480,134		16,127,826
Retained earnings	13,683,503		9,522,064
Total shareholders’ equity	30,249,315		25,733,974
Total liabilities and shareholders’ equity	33,244,563	$	29,399,232

All values are in US Dollars.

Electromed,Inc.

CondensedStatements of Operations

****	For the Three Months Ended June 30,					For the Twelve Months Ended June 30,
****	2020		****	2019		2020		****	2019
	(Unaudited)			(Unaudited)		(Unaudited)
Net revenues	$	6,877,351		$	8,603,602	$	32,470,688		$	31,299,750
Cost of revenues		1,288,711			1,935,289		7,270,642			7,451,806
Gross profit		5,588,640			6,668,313		25,200,046			23,847,944
Operating<br> expenses (income)
Selling, general and administrative		4,796,507			5,073,421		19,944,851			20,435,010
Research and development		415,236			106,526		1,049,612			583,311
Government stimulus income		(913,108	)		—		(913,108	)		—
Total operating expenses		4,298,635			5,179,947		20,081,355			21,018,321
Operating income		1,290,005			1,488,366		5,118,691			2,829,623
Interest income, net		9,547			33,359		120,748			90,707
Net income before income taxes		1,299,552			1,521,725		5,239,439			2,920,330
Income tax expense (benefit)		(9,000	)		432,000		1,078,000			940,000
Net income	$	1,308,552		$	1,089,725	$	4,161,439		$	1,980,330
Income per share:
Basic	$	0.15		$	0.13	$	0.50		$	0.24
Diluted	$	0.15		$	0.13	$	0.47		$	0.23
Weighted-average common shares outstanding:
Basic		8,443,954			8,341,684		8,403,220			8,306,338
Diluted		8,968,800			8,615,207		8,826,418			8,631,469

Electromed,Inc.

CondensedStatements of Cash Flows

****	Twelve Months Ended June 30,					****
****	2020		****	2019		****
	(Unaudited)
Cash Flows From Operating Activities
Net income	$	4,161,439		$	1,980,330
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		616,468			804,587
Amortization of finite-life intangible assets		121,762			120,640
Amortization of debt issuance costs		—			1,958
Share-based compensation expense		901,932			924,071
Deferred taxes		(126,000	)		(265,000	)
Loss on disposal of property and equipment		2,622			11,186
Loss on disposal of intangible assets		—			4,840
Changes in operating assets and liabilities:
Accounts receivable		(180,635	)		(948,734	)
Contract assets		93,228			(219,509	)
Inventories		(449,335	)		(106,174	)
Prepaid expenses and other assets		78,222			591,457
Income tax receivable		(262,155	)		—
Income tax payable		(288,511	)		(108,879	)
Accounts payable and accrued liabilities		(472,589	)		(200,899	)
Net cash provided by operating activities		4,196,448			2,589,874
Cash Flows From Investing Activities
Expenditures for property and equipment		(844,226	)		(1,330,598	)
Proceeds from sales of equipment		—			1,750
Expenditures for finite-life intangible assets		(132,970	)		(57,790	)
Net cash used in investing activities		(977,196	)		(1,386,638	)
Cash Flows From Financing Activities
Principal payments on long-term debt including capital lease obligations		—			(1,103,001	)
Issuance of common stock upon exercise of options		80,369			251,849
Taxes paid on stock options exercised on a net basis		(628,399	)		—
Net cash used in financing activities		(548,030	)		(851,152	)
Net increase in cash		2,671,222			352,084
Cash
Beginning of period		7,807,928			7,455,844
End of period	$	10,479,150		$	7,807,928