Q2 2022 Electromed Inc Earnings Call
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Speaker 1: 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 Westwick. You may begin.
Greetings and welcome to the electrical Med 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 Westwood you may begin.
Speaker 2: Good afternoon and thank you for joining us today. Earlier today, Electromat Incorporated released financial results for the quarter ended December 31, 2021. The release is currently available on the company's website at www.smartfest.com.
Good afternoon, and thank you for joining us today.
Earlier today Electromedics Corporation released financial results for the quarter ended December 31 2021.
Or at least is currently available on the company's website at Www Dot smart fast dot com.
Kathleen Sarvis, President and Chief Executive Officer.
Speaker 2: Kathleen Scarban, President and Chief Executive Officer, and Mike McCourt, Chief Financial Officer, will host this afternoon's call.
And Mike Mccourt, Chief Financial Officer.
After this call.
Speaker 2: As a reminder, 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.
As a reminder, 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 plan.
Speaker 2: 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.
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 expectation.
Today's date.
Speaker 2: We should not place undue reliance on these forward looking statements.
You should not place undue reliance on these forward looking statements.
Speaker 2: 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.
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.
Speaker 2: Please refer to the company's SEC filings for further guidance on this matter.
Please refer to the company's SEC filings for further guidance on this matter.
Speaker 2: I will now turn the call over to Kathleen Scarman, President and CEO of Electromed.
I will now turn the call over to Kathleen Garvin, President and CEO of electronics.
Thanks, Mike and thank you to everyone joining the call today.
Speaker 3: 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.
Always we appreciate your continued support of electro Mad.
<unk> second quarter of 2022 was a record breaking for electric.
We are incredibly proud of what we havent sheet to enhance electro meds position.
Leading provider of airway clearance devices.
Speaker 3: We achieved record revenue of $10.2 million in the quarter, our second sequential quarter of record revenue.
We achieved record revenue of $10.2 million in the quarter, our second sequential quarter of record revenues.
Speaker 3: 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.
We believe this indicates that our strategic growth initiatives are beginning to yield the high results. We anticipated and this display is our team's strong execution in the face of the continued pandemic and tight supply chain.
Speaker 3: The fact that we have significantly exceeded pre-pandemic revenues demonstrates the values patients place on our SmartBEST™ Airway Clearance Therapy to help them manage their chronic lung diseases.
The fact that we have significantly exceeded pre pandemic revenues demonstrates the value patients place on our smart best 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 five 6% year over year to a record $9 $4 million.
Speaker 3: 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.
Speaker 3: On a year-to-day basis through the first six months of our fiscal year, our home care revenue is up 14.2% compared to the prior year.
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.
Speaker 3: 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.
And sales rep productivity exceeding our goal.
Speaker 3: 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.
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.
Speaker 3: 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.
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 level.
Speaker 3: 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.
Speaker 3: 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.
I'm also pleased to note that our sales reps continue to impress with.
With home care direct annualized sales productivity of $951000 per rep.
And if I can lay above our targeted range of 800000 to $900000.
Speaker 3: If you recall, we revised productivity targets upward last quarter.
If you recall, we revised productivity targets upward last quarter.
Speaker 3: As I touched on earlier, this team has done an excellent job selling when their access to doctors has been limited.
As I touched on earlier this team has done an excellent job selling when their access to doctors has been limited.
Speaker 3: 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 SmartBEST airway clearance and its ability to provide positive outcomes for bronchiectasis patients.
Looking ahead, we will continue to focus on the four key areas of our strategic growth plan.
Salesforce growth correct.
Direct to consumer marketing infrastructure.
Infrastructure to support our anticipated sales growth.
And clinical studies to further problem the gate the body of evidence supporting smart best airway clearance.
And its ability to provide positive outcomes for bronchiectasis patients.
Speaker 3: 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.
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.
Speaker 3: Alongside our strategic growth initiatives, we are also looking to break new ground in airway clearance technology with the next-generation smart-fit.
Alongside our strategic growth initiatives. We are also looking to break new ground in airway clearance technology with the next generation Smart bet we.
Speaker 3: We will continue to allocate the necessary resources to complete the development and subsequent commercial launch of our next generation SmartBeth.
We will continue to allocate the necessary resources to complete the development.
And subsequent commercial launch of our next generation Smart bets.
Speaker 3: The new SmartBEST 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 smart best will have multiple value added innovation.
And promises to be smaller and lighter weight less expensive to make and.
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 of these benefits without sacrificing performance and should prove to be a compelling value proposition for an expanding patient population.
Speaker 3: 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.
Speaker 3: Importantly, we remain on track to launch the new Smart Best Airway clearance system in the first half of fiscal 2023.
Importantly, we remain on track to launch the new Smart best airway clearance system in the first half of fiscal 2023.
Speaker 3: Data indicates there are approximately 600,000 people diagnosed with bronchi ectocyst in the US 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.
Data indicates there are approximately 600000 people diagnosed with bronchiectasis and the U S and could potentially benefit from HFC W. O therapy.
This is based on recent company research and supported by published studies.
Telling we estimate that only 77000 of this group are currently being treated with HFC W. O therapy.
Speaker 3: This demonstrates a significant untapped market. And we are confident that the new and improved smart best will provide a competitive advantage as we seek to penetrate that patient group.
This demonstrates a significant untapped market and we are confident that the new and improved smart beds will provide a competitive advantage as we seek to penetrate that patient group.
Speaker 3: We also continue to focus on generating clinical evidence to support the use of SmartBest as a key treatment for bronchi actresses.
We also continue to focus on generating clinical evidence to support the use of smart beds as a key treatment for bronchiectasis.
Speaker 3: Evidence today has shown a clear reduction in both hospital visits and infection. And we see it is our job to ensure that pulmonologist grasp the true value of smart best.
Evidence to date has shown a clear reduction in both hospital visits and infection.
We see it it is our job to ensure that pulmonologists graph, the true value of smart beds.
Speaker 3: Before turning the call over to Mike to discuss financial results, I want to update you on our search for a Chief Commercial Officer.
Before turning the call over to Mike to discuss financial results I want to update you on our search for a chief commercial officer.
Speaker 3: 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 and support of revenue growth.
We have shared earlier, the chief commercial officer is a strategic and critical role for electromagnet.
That will further strengthen our marketing and sales strategy execution in support of revenue growth.
Speaker 3: This key role will provide direct oversight and additional energy to the initiatives that are starting to pay off.
This key role will provide direct oversight and additional energy each of the initiatives that are starting to pay off.
Speaker 3: 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.
We are confident that our new chief commercial officer.
Optimize the return on these investments.
And create value for our shareholders.
Currently we are in the final stages of our selection process.
Speaker 3: and have been extremely pleased with the qualification of the candidate.
And have been extremely pleased with the qualification of the candidate.
Speaker 3: 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?
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.
Speaker 2: Thank you, Kathleen, and good afternoon everyone. Arnett Revenue in the second quarter of fiscal 2022 increased 7.9% to 10.2 million, from 9.5 million in the second quarter of 2021. So from primarily by higher home care and...
Thank you Kathleen and good afternoon, everyone.
Our net revenue in the second quarter of fiscal 2022 increased seven 9% to $10 2 million from $9 5 million in the second quarter of 2021.
Primarily by higher home care and distributor revenue.
Speaker 2: Homecare revenue increased 5.6% to 9.4 million, primarily due to an increase in referrals and approvals.
Home care revenue increased five 6% to $9 4 million, primarily due to an increase in referrals and approvals.
Speaker 2: At Kathleen mentioned earlier, ElectroMed benefited from an increase in direct sales representative and an increase in overall sales representative productivity compared to the prior year period.
As Kathleen mentioned earlier electromagnet fitted from an increase in direct sales representatives and an increase in overall sales representative productivity compared to the prior year period.
Institutional revenue increased seven 8% to $333000.
Speaker 3: Institutional revenue increased 7.8% to $333,000.
Speaker 2: due to an increase in the volume of devices and garments sold, that hospitals returned its more normal purchasing activity compared to the prior year period, which is heavily impacted by COVID-19.
Due to an increase in the volume of devices and garments sold at hospitals returned to more normal normal purchasing activity compared to the prior year period, which was heavily impacted by COVID-19.
Distributor revenue increased 159, 7% to $387000.
Speaker 2: Distributor revenue increased 159.7% to $387,000.
Speaker 2: The growth in our distributor revenue this quarter was driven by increased selling focus from one of our key distributors.
The growth in our distributor revenue this quarter was driven by increased only focus from one of our key distributors.
Speaker 1: International Revenue, which is not a key strategic priority for ElectroMed, declined by 8.1% to $124,000 dollars this quarter.
International revenue, which is not a key strategic priority for electromagnetic declined by eight 1% to $124000 this quarter.
Speaker 2: Rose profit in the second quarter of fiscal 2022 increased to $7.9 million or 76.9% of net revenue and $7.5 million or $79.2% of net revenue in the second quarter of fiscal 2021.
Gross profit in the second quarter of fiscal 2022 increased to $7 9 million or 76, 9% of net revenue.
$7 5 million or 79, 2% of net revenue in the second quarter of fiscal 2021 .
The increase in gross profit dollars. This quarter was primarily due to stronger homecare and distributor revenue.
Speaker 2: The increase in gross profit dollars this quarter was primarily due to stronger home care and distributor revenue.
Speaker 2: The decrease in gross profit percentage this quarter would primarily do to increase raw material cost and increase shipping costs.
The decrease in gross profit percentage this quarter was primarily due to increased raw material cost and increased shipping costs.
We had noted rising costs during our last earnings call and expect this trend to continue for the balance of fiscal year 2022.
Speaker 2: We had noted rising costs during our last earnings call and expect this trend to continue for the balance of fiscal year 2022.
We expect our gross margin percentage to be in the mid 70% range for the remainder of fiscal year 2022.
Speaker 2: We expect our gross margin percentage to be in the mid 70% range for the remainder of fiscal year 2022, which is on the low end of our historical gross margin percent range.
Which is on the low end of our historical gross margin per cent range.
Speaker 2: We do expect an increase in growth profit percentage once our next generation device is fully launched in fiscal year 2023, due to a lower product cost structure compared to our current device.
We do expect an increase in gross profit percentage once our next generation device is fully launched in fiscal year 2023.
Due to a lower product cost structure compared to our current device.
Selling general and administrative expenses increased to $6 5 million in the second quarter of fiscal 2022 from $5 4 million in the prior year period, reflecting.
Speaker 2: Felling, general, and administrative expenses increased to 6.5 million in the second quarter of fiscal 2022 from 5.4 million in the prior year period. Reflecting increased investments in both commercial expansion and infrastructure projects to support future growth.
Increased investments in both commercial expansion and infrastructure projects to support future growth.
As a percentage of net revenue of G&A expenses were 63, 2% of revenue in the second quarter of fiscal 2022.
Speaker 2: As a percentage of net revenue, FGNA expenses were 63.2% of revenue in the second quarter of fiscal 2022 compared to 57.2% in the second quarter of fiscal 2021.
Compared to 57, 2% in the second quarter of fiscal 2021.
Speaker 4: We incurred higher FGNA costs compared to the prior year for payroll and compensation, travel, meals, and entertainment, and higher professional fees.
We incurred higher SG&A costs compared to the prior year for payroll and compensation.
Oh meals and entertainment and higher professional fees.
Speaker 4: Higher payroll and compensation-related expenses were primarily due to a higher average number of sales and marketing personnel, increased reimbursement team resources to process higher patient referrals.
Higher payroll and compensation related expenses were primarily due to a higher average number of sales and marketing personnel increased.
Increased reimbursement team resources to process higher patient referrals.
Speaker 4: Increase temporary resources to assist with system infrastructure investments, and increase incentive payments on higher home care revenues.
Kris temporary resources to assist with system infrastructure investments.
An increase in incentive payments on higher home care revenue.
Higher travel meals and entertainment expenses were primarily due to our sales representatives resuming closer to normal levels of travel compared to the COVID-19, driven travel restrictions and the prior year.
Speaker 4: Higher travel meals and entertainment expenses or primarily due to our sales representatives resuming closer to normal level of travel compared to the COVID-19 driven travel restrictions in the prior year.
Higher professional service fees, primarily related to key investments in our systems infrastructure.
Speaker 4: Higher professional services use primarily related to key investments in our systems infrastructure, including implementing a new ERP system, enhancing our customer relationship management system, and further optimization of the revenue cycle management system that was implemented in June 2021.
Including implementing a new ERP system.
Our customer relationship management system and further optimization of the revenue cycle management system that was implemented in June 2021.
We expect these system infrastructure investments will result in more efficient and scalable operational processes and provide enhanced analytics to drive business performance.
Speaker 4: We expect the system infrastructure investments will result in more efficient and scalable operational processes and provide enhanced analytics to drive business performance.
Speaker 4: Research and development expenses totaled $329,000 in the second quarter of fiscal 2022, or 3.2% of net revenue.
Research and development expenses totaled $329000 in the second quarter of fiscal 2022 or.
Or three 2% of net revenue.
Speaker 4: compared to $507,000 or 5.3% of net revenue in the comparable prior year period.
Compared to $507000 or five 3% of net revenue in the comparable prior year period.
Speaker 4: If Kathleen mentioned, we continue to invest in our next generation device this quarter and expect to launch the product in the first half of fiscal 2023 following the 510K clearance by the US Food and Drug Administration.
As Kathleen mentioned, we continued to invest in our next generation device this quarter.
We expect to launch the product in the first half of fiscal 2023.
The five 10-K clearance by the U S food and drug administration.
Speaker 4: Operating income total of 1.1 million in the second quarter of fiscal 2022, compared to 1.6 million in the second quarter of fiscal 2021. Reflecting our increase, strategic investment in S-GNA, partially offset by stronger revenue performance.
Operating income totaled $1 1 million in the second quarter of fiscal 2022.
<unk> to $1 6 million in the second quarter of fiscal 2021.
Reflecting our increased strategic investments in SG&A.
Actually offset by stronger revenue performance.
Income tax expense totaled $244000 in the second quarter of fiscal 2022.
Speaker 4: Income tax expense told of $244,000 in the second quarter of fiscal 2022 compared to $389,000 in the second quarter of fiscal 2021.
Compared to $389000 in the second quarter of fiscal 2021.
Speaker 4: The effective income tax rate is quarter with 22.6% and we expect our effective tax rate for the full fiscal year to be in line with recent historical tax rates.
The effective income tax rate this quarter was 22, 6% and we expect our effective tax rate for the full fiscal year to be in line with recent historical tax rates.
Speaker 4: Net income for the second quarter of fiscal 2022 with $838,000 or 10 cents per diluted share.
Net income for the second quarter of fiscal 2020 to $838000 or 10 cents per diluted share.
Speaker 4: compared to 1.2 million, or 13 cents per the litter chair in the second quarter of fiscal 2021. Now, moving to the back.
Compared to $1 2 million or 13 times per diluted share in the second quarter of fiscal 2021 .
Now moving to the balance sheet and statement of cash flows.
Our balance sheet as of December 'twenty 'twenty. One includes cash of $10 5 million accounts receivable of $19 1 million no debt.
Speaker 4: Our ballot sheet, as of December 2021, includes cash of 10.5 million, the count for receivable of 19.1 million, no debt, working capital of 27.8 million, and shareholders equity of 33.5 million.
Working capital of $27 8 million and shareholders' equity was $33 5 million.
Speaker 4: Netcash provided by operating activities told of $470,000 in the most recently completed quarter.
Net cash provided by operating activities totaled $470000 in the most recently completed quarter.
Speaker 4: During the quarter, we also repurchased 55,687 shares at a total cost of $663,000.
During the quarter, we also repurchased 55687 shares at a total cost of $663000.
Speaker 4: Finally, key priorities for future allocation of capital include continued reinvestment and our core strategic priorities and our shared repurchase plans.
Finally key priorities for future allocation of capital include continued reinvestment in our core strategic priorities and our share repurchase plan.
Speaker 4: We appreciate your continued support of Lecdramed and look forward to delivering on our four strategic pillars in the third and fourth quarters of our fiscal year. We will now open the call for questions.
We appreciate your continued support of electro men and look forward to delivering on our four strategic pillars, and the third and fourth quarters of our fiscal year.
We will now open the call for questions.
Speaker 1: At this time we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to move your question from the queue. For participants using speaker equipment it may be necessary to pick up your hand step before pressing the star keys. One moment please while we pull for questions.
At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we pull.
For questions.
Speaker 1: Our first question is from Kyle Bowser with Collier's. Please proceed with your question.
Our first question is from Karl Bowser with Colliers. Please proceed with your question.
Okay.
Speaker 4: I get after news, thanks for all the updates here. So it sounds like margins will be pressured to some extent for a couple quarters given that.
Good afternoon, and thanks for all the updates here.
So it sounds like the margins will be pressured to some extent for a couple of quarters given that.
Speaker 4: higher raw material and shipping costs and since reimbursement is of course thick.
Higher raw material and shipping costs and since reimbursement is of course fixed it.
Speaker 4: presumably is a major increase in price. So, but it sounds like the next gen system is cheaper to make given it smaller form faster. Did I understand that correctly? Could that kind of offset some of the higher costs? Any sort of thoughts here? Do great. Thanks.
Presumably it is meeting the increased price so.
But it sounds like the Nextgen system is cheaper to me.
Given its smaller form factor that did I understand that correctly, because that kind of offset some of the.
Higher costs.
Any sort of thoughts here would be great. Thank you.
Speaker 3: Hi, Kyle. It's Kathleen here. Good to hear from you. Thanks for the question. And yes, we mentioned that last quarter that the supply chain constraints are...
Hi, Kyle it's Kathleen here good to hear from Hugh Thanks for the question and yes, we mentioned that last quarter that the supply chain constraints.
Constraints are.
Speaker 3: providing higher cost components and there's expediting fees occasionally and also shipping costs.
Providing higher cost components, and there's expediting fees occasionally and also shipping costs. So.
Speaker 3: We will expect those margins to be in those mid 70s as we go forward. And-
We will expect those margins to be in those mid Seventy's as we go forward and your other question was was about the lower cost structure on the lower cost structure on the bill of materials for our next generation absolutely. We are still anticipating that that will be a low.
Speaker 3: Your other question was about the...
Speaker 3: lower cost structure. Yeah, the lower cost structure on the bill materials for our next generation. Absolutely. We are still anticipating that that will be a lower bill materials than our current.
Your bill of materials, and our current SQL smart burst and so that's where we would expect to regain some margins as we introduce that in the first half of fiscal 2023.
Speaker 3: SQL smart best and so that's where we would expect to regain some margins as we introduce that in the the first half of fiscal 2023.
Yes.
Gotcha.
Speaker 4: Gotcha. I mean, any sort of ballpark range of...
Any any sort of ballpark range of.
Speaker 4: of how much cheaper it will be to make the next gen version.
Oh, how much cheaper it will be to make that next gen version.
Speaker 3: Well, I think initially it's going to offset those component costs that we're dealing with because of the supply chain situation. And then we expect that it might improve beyond that as we gain more traction with a substantial amount of that being our volume that we'd be shipping. Gotcha. Appreciate that.
Well I think initially it's going to offset those those component costs that we're dealing with because of the supply chain situation and then we expect that it might improve beyond that as we gain more traction with with a substantial amount of that being our volume that we'd be shipping.
Got you I appreciate that.
And then.
Any thoughts on I mean, there certainly are a massive opportunity ahead of you for bronchiectasis, a big prevalence pool.
Speaker 4: Any thoughts on, I mean, there's certainly a massive opportunity ahead of you for bronchi actuses, a big prevalence pool, and you've got a best in class advice that you can take share with. And so maybe that will keep you plenty busy. I'm just kind of curious. Any thoughts on layering in additional products that you can utilize at the same call point Cool.
<unk> got a best in class advice, so you can take share with.
And so maybe that would keep you plenty busy again I'm just kind of curious of any thoughts on layering in additional products that you can utilize at the same call point.
Through Pulmonologists.
Speaker 4: It's kind of curious if that would make sense to be able to have multiple products in the bag, and maybe more specifically, in any way to monetize smart best through those new remote therapeutic monitoring, reimbursement codes that came out, just kind of curious on that too.
Just kind of curious if that would make sense to be able to have multiple products in the bag and maybe more specifically in any way to monetize smart pass through those new remote therapeutic monitoring reimbursement codes that came out.
Just kind of curious on that too.
We were always of.
Speaker 3: Of course, open if some opportunity might come up around an additional product Kyle, but you're absolutely right in mentioning that we do believe that this is an under penetrated market.
Of course open if some opportunity might come up around it and an additional product Kyle but youre absolutely right in mentioning that we do believe that this is an underpenetrated market. We're excited about the market share opportunities that we see in the immediate future and then a.
Speaker 3: We're excited about the market share opportunities that we see in the immediate future. And then of course with our next generation product, the additional innovative features that we're going to be providing, we think that that's going to be very helpful for us as well to continue penetrating the market and tap into.
Of course with our next generation product. The additional innovative features that we're going to be providing we think that that's going to be very helpful. For us as well to continue penetrating the market and tap into those patients that are still not benefiting from HFC W. O therapy. So I think that near term that will continue to be here.
Speaker 3: Those patients that are still not benefiting from HFCWO therapy.
Speaker 3: So I think that near term that will continue to be our focus and our opportunity. But again, if an opportunity dropped in or left, we wouldn't ignore it, of course.
For focus and our opportunity, but again, if if an opportunity dropped in our lap we wouldnt ignore it of course.
Speaker 3: As far as the remote monitoring codes, we're still doing some...
As far as the remote monitoring codes, where we're still doing some in depth research on those codes to understand could there be benefit for us as well as for physicians and for those that might be on the call that aren't aware there were new remote monitoring codes for.
Speaker 3: in-depth research on those codes to understand could there be benefit for us as well as for physicians?
Speaker 3: And for those that might be on the call that aren't aware, there were new remote monitoring codes for...
Speaker 3: physicians and for companies that have remote monitoring on some of their home-care devices.
Physicians and four for companies that have remote monitoring on some of their home care devices, and so there could be some opportunity to monetize that or better leverage our smart best connect for the for the physicians as a as a value add so we'll update you as new information comes it comes.
Speaker 3: And so there could be some opportunity to monetize that or better leverage our SmartFest Connect for the positions as a value add. So we'll update you as new information comes about for that at this time. We're still in the assessing. Everything else.
About four that at this time, we're still in that.
And assessing what the opportunity may be.
Speaker 4: God said, and I'll appreciate that. And then just lastly, kind of circling back to the opportunity here, I mean, it's a massive untapped opportunity for smart best.
Gotcha and I appreciate that and then just lastly.
Kind of circling back to the opportunity here I mean, it did a massive untapped.
<unk> for smart fast.
Speaker 4: But presumably there's a lot of patients sitting out there in the prevalence pool that have never been treated with HSCWL and maybe they're harder to acquire if you will, if the cost to acquire those patients is probably much higher than it is to prescribe a...
But presumably there's a lot of patients sitting out there in the prevalence pool that have never been treated with H F. CW all in and maybe they're harder to acquire if you will.
The cost to acquire those patients is probably much higher than it is to prescribe.
Speaker 4: smart best to sell them at entering the market through an initial diagnosis or the incident.
Smart pass to selling that's entering the market through an initial diagnosis or the incident.
I guess.
Speaker 4: I'm just kind of wondering what's the associate cost with acquiring someone that's been out there for a while in the prevalence pool or maybe asking it a different way. What's kind of your mix of a new patient had. You know, for looking at people who are just entering the market for the first time, just starting to have it, reservations versus those that have been dealing with this for a long time.
Hi, I'm, just kind of wondering what what's the associated cost with acquiring someone that's been out there for a while and the prevalence pool or maybe asking a different way what's kind of your mix.
All of the new patient adds.
You know if we're looking at people who are just entering the market for the first time, just starting to have exacerbations versus those that have been dealing with this for a long time.
Speaker 3: Thanks for that question, Collar. There's two ways that I typically will look at that pool of patients.
Thanks for that question call. It looks like there's two ways that I typically will look at that pool of patients. So for US based on research that we've done there. The majority of our patients that are prescribed HFC W will have been struggling with repeat exacerbations for.
Speaker 3: So for us, based on research that we've done, there are the majority of patients that are prescribed HFCWO have been struggling with repeat exacerbations for a period of time.
Period of time and that could be two years it could be five years, but they are often.
Speaker 3: and that could be two years, it could be five years. But they are often have experienced those, those lower respiratory infections have had a chronic cough and they've been visiting their physician, primary care physician or pulmonologist for...
Have experienced those those are lower respiratory infections have had a chronic cough and they've been visiting there their physician primary care physician or pulmonologists for.
Speaker 3: quite a bit of time. And so that's the opportunity. We believe that that's part of our selling process. The opportunity is to be working with physicians that diagnose bronchi-actasis.
Quite a quite a bit of time.
And it and so that's the opportunity we believe that that's part of our selling process. The opportunity is to be working with physicians that diagnosed bronchiectasis.
Speaker 3: and talking to them about these patients that have repeat exacerbations and asking, why haven't you prescribed HFCWO when it's been proven to reduce hospitalizations and improve outcomes for these patients? So that's part of our selling process, absolutely.
And talking to them about these patients that have repeat exacerbations and asking why haven't you prescribed HFC WL when when it's been proven to reduce hospitalizations and and improve outcomes for these patients. So that's part of our selling process absolutely.
Speaker 3: and there's that large pool of bronchi-ectasis patients that have not been using HFCWO, so that's who we're targeting and it's the physicians that are seeing those patients. The other opportunity, as I said, is through our direct-to-patient marketing.
When it and there's there's that large pool of bronchiectasis patients that have not been using HFC W. O. So that's who we're targeting and its the physicians that are seeing those patients. The other opportunity as I said is through our direct to patient marketing.
Speaker 3: So as we're out marketing SmartBests to patients who are sick of being sick and they're out researching on the internet as well as their caregivers.
So as we're out.
Marketing Smart first two patients who are sick of being sick and they're out researching on the internet as well as their caregivers why has my my mom My dad why am I continuing to have these lower respiratory infections have been hospitalized two or three times. They keep putting me on antibiotics what could help.
Speaker 3: Why has my mom, my dad, why am I continuing to have these lower respiratory infections that have been hospitalized two or three times? They keep putting me on antibiotics. What could help me? And that's where SmartFest comes in and pops up when you're searching some of those key words, takes them to our website. We then, when they sign up, we send them information and then we follow up with them directly with a phone call or a text.
Me and that's where smart best comes in and Pops up when you're searching some of those key words. It takes them to a website. We then when they sign up we send them information and then we follow up with them directly with a phone call or a text and talk to them about their chronic condition.
Speaker 3: and talk to them about their chronic condition. And through that conversation, we can direct them to a smart vest.
And through that.
<unk>, we can direct them to a smart first friendly physician, who understands how to die.
Speaker 3: friendly physician who understands how to diagnose bronchi exercises and the benefit of HFCWO or we can help them on how to talk to their physician about their situation and what might
A diagnosis bronchiectasis and the benefit of HFC W. O or we can help them on how to talk to their physician about their situation and what might be helpful.
Speaker 3: So I think that your question really is a great question, and that's how we're continuing to help bring new patients to SmartFast.
So so so I think that your question really is is a great question and that's how we're continuing to help bring new patients to smart bets.
Speaker 4: Excellent, thank you Kathleen, super helpful and congratulations on the record result. Hi, thank you.
Excellent. Thank you Kathleen Super helpful and congratulations on the record results.
Hey, Thank you so much great to hear from you.
Yeah.
Speaker 1: We have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
We have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
Speaker 3: Thank you all for joining our call this afternoon. Please reach out to our investor relations firm, ICR Westwick, if you are interested in scheduling on follow-up.
Thank you all for joining our call. This afternoon. Please reach out to our Investor relations firm ICR Westwick. If you are interested in scheduling a follow up call. We look forward to reporting back to you in may when we will release, our third quarter fiscal year 2022 results in the meantime, Thank you for your continued support of <unk>.
Speaker 3: We look forward to reporting back to you in May when we will release our third quarter fiscal year 2022 results. In the meantime, thank you for your continued support of ElectroMed and have a great evening.
Vectra med and have a great evening.
Speaker 1: This concludes today's conference and you may disconnect your lines at this time. Thank you for your part.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
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