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. To ask a question, you may press star then one on your telephone keypad, and to withdraw from the queue, please press star then two. As a reminder, this conference is being recorded. I would now like to turn the call 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 first fiscal quarter of 2025. The quarter ended September 30, 2024. The press release is currently available on the company's website at www.smartvest.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. Joining me on the call today are Jim Cunniff, Electromed's President and Chief Executive Officer, and Brad Nagel, Chief Financial Officer. Jim will provide some 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 Cunniff, President and Chief Executive Officer of Electromed. Thanks, Mike, and welcome everyone to Electromed's first quarter earnings call. Continuing our momentum from a record-setting fiscal year 2024, I'm pleased to report another strong quarter for Electromed to kick off fiscal year 2025. It was our eighth consecutive quarter of year-over-year revenue and profit growth. In the quarter, we generated net revenue of $14.7 million, representing year-over-year growth of 19%, albeit against a lower prior-year revenue comparison. For the fifth consecutive quarter, all of our revenue categories increased, demonstrating that our strategic growth initiatives have continued to yield impressive results. Notably, home care revenue grew 18.5% year-over-year, while revenue from our hospital business, where we see a market expansion opportunity for Electromed, grew 36.1%. As is our normal practice, Brad will provide an in-depth review of our financials, so I will only touch on some of the high points in the quarter. In addition to the strong net revenue growth in the quarter, operating income came in at $1.9 million compared to $0.1 million in the same quarter of fiscal year 2024. Earnings before taxes was $2.1 million, and we generated diluted earnings per share of $0.16. Overall, very robust results. I want to thank the entire Electromed team for delivering on our company's operational and financial initiatives in the quarter. As I mentioned, fiscal 2024 was record-setting on many levels, and we are continuing our quest to improve our operational and financial results. The management team's incentive compensation is largely based on our ability to grow profitably, and it's noteworthy that our share price has more than doubled in the past 12 months. With that in mind, we spent a lot of time developing our goals for the year and have entered fiscal 2025 with a focus on growing, raising awareness of our airway clearance technology, and improving operational efficiencies, thereby building further shareholder value. Among other things, we took steps towards our goals of a continued but thoughtful expansion of the sales team, investments in our direct-to-consumer business, and our plan to overhaul our manufacturing process that is designed to reduce waste, improve productivity, and result in increased product supply to meet our accelerating growth trajectory. Let's review our commercial initiatives in more detail, starting with the sales team. During the quarter, we continued to add direct sales reps and ended the quarter with 53 in total. We have a near-term target of 57 sales reps, which we intend to achieve by the end of the second fiscal quarter. Our approach to the sales team is to hire reps who have the skills and experience to be successful in what is largely a clinical sale and who can make a positive impact to our growth in the near term. We're not simply hiring reps for the sake of a larger team, and our hiring will continue to be measured. For our reps to be more successful, we invested in route-optimizing software in the quarter so they can better plan their call schedules and be more productive. In a related move, we also invested in optical character recognition software for our reimbursement team. This investment has already improved their ability to help ensure patients meet insurance criteria for our technology so they get our life-changing technology sooner. Our direct sales and fulfillment model has been a real differentiator for Electromed, and we're always striving to make the fulfillment process more streamlined, which directly benefits patients getting our therapy sooner and ultimately improves our revenue. In another move designed to improve efficiency, reduce the time to delivery, and support future growth, we plan to make investments to increase our manufacturing capacity by optimizing our production floor, which we believe will improve flow and reduce product movements during the manufacturing process. We expect this initiative to reduce the time to manufacture product, reduce operating expenses, and ensure we have the adequate supply of product to feed our accelerating growth. In addition to improving operational efficiencies, we continue to work hard to raise awareness of bronchiectasis, which, despite being widespread, is often underdiagnosed. Bronchiectasis is a chronic, irreversible condition. To help improve physician and patient awareness of the disease, we successfully launched our Triple Down on Bronchiectasis campaign. The campaign focuses on the recommended three-pronged bronchiectasis treatment protocol to manage a patient's vicious vortex of repeat infection, inflammation, and mucus buildup, which often leads to irreversible lung damage. Specifically, our campaign highlights the need for a comprehensive treatment approach for patients with bronchiectasis to treat their infections, to reduce their inflammation, and to use our SmartVest Clearway technology to clear their airways of mucus. Antibiotics are prescribed to control infections, and there are promising new drugs coming to the market to help those suffering from bronchiectasis, which target inflammation. SmartVest Clearway is the third component of the three-pronged treatment protocol to clear mucus. Removing mucus from a patient's airway via SmartVest Clearway technology is a critical treatment step as it removes the fuel for future cycles of inflammation and infections. The awareness campaign has included the launch of a landing page, digital advertisements, and sales tools. The campaign is off to a tremendous start with over 6,000 clinicians engaging with the content on our landing page in the first three weeks post-launch. I'd also like to mention that we recently completed our annual ISO 13485 Notified Body Surveillance audit. These audits are important because they verify that an organization continues to meet the quality management system standards and regulatory requirements for medical devices. Our audit was focused on production, record control, complaints, CAPAs, and internal audits. The audit was very thorough, and we were very pleased with the positive results. Lastly, before I turn the call over to Brad to review our financials, I want to welcome Peter Horwich as the new VP of Marketing. His hiring was announced in late October, and we are excited to have him join our dynamic team. He is an experienced marketing executive, and his expertise in medical technology market development is perfectly suited to help lead Electromed through its next stage of growth. Peter's position is a strategic role for Electromed that will strengthen our marketing team and provide leadership in driving therapy adoption for SmartVest Clearway in support of our revenue growth goals. We look forward to leveraging Peter's talent for further market expansion and to strengthen our commercial efforts. Overall, I'm very pleased with our results this quarter. We are off to an excellent start to fiscal 2025, and I look forward to future updates on our continued positive operational momentum over the remainder of the year. Lastly, I would once again like to thank the entire Electromed team for their contributions and hard work that culminated in another successful quarter. With that, I'd like to hand the call over to Brad to discuss our financials in more detail. Brad? Thank you, Jim. All amounts I am about to review are for the three months ended September 30, 2024, or Q1 fiscal 2025, and compared to the three months ended September 30, 2023, or Q1 FY 2024. Net revenues grew 19.0% to $14.7 million from $12.3 million in Q1 FY 2024. Revenue in our direct home care business increased year-over-year by 18.5% to $13.2 million from $11.2 million in the year prior. The increase in revenue was driven by an increase in referrals due to a higher number of direct sales representatives and efficiencies within our reimbursement department. Field sales force employees totaled 60 at quarter end, 53 of which were direct sales representatives. The annualized home care revenue per weighted average direct sales representative in Q1 was $985,000 at the higher end of Electromed's increased annual target range of $900,000 to $1 million per rep. For comparison, in Q1 of last year, our average revenue per rep was $876,000. Q1 hospital revenue was $690,000, an increase of $183,000 or 36.1%, driven by stronger demand for both capital devices sold in the hospitals and the disposable products used to provide care for each hospital patient. Home care distributor revenue for the quarter increased by $14,000 or 2.4% to $587,000. Home care distributor sales are affected by the timing of distributor purchases that can cause significant fluctuations in reported revenue on a quarterly basis. Other revenue increased year-over-year by $89,000 or 97.8% to $180,000. The increase in other revenue was primarily due to increased demand of international distributor purchases and purchases by customers that do not fall within the other markets previously described. Gross profit increased to $11.5 million or 78.3% of net revenues from $9.5 million or 77.1% of net revenues in Q1 FY 2024. The increase in gross profit dollars for the quarter was primarily due to higher revenue, and the gross margin rate increased year-over-year primarily because of higher average net revenue per device. Turning now to operating expenses. Selling general and administrative, or SG&A, expenses were $9.4 million, representing an increase of $0.2 million or 2.6% compared to Q1 FY 2024. Payroll and compensation-related expenses increased by $691,000 or 12.0% to $6.5 million. The increase in the current period was primarily due to increases in share-based compensation associated with the vesting of performance-based equity awards, as well as salaries and incentive compensation related to the higher average number of sales, sales support, marketing, and reimbursement personnel to process higher patient referrals. Travel, meals, and entertainment expenses increased $47,000 or 5.1% to $964,000. The increase in the current year was primarily due to a higher average number of direct sales representatives and higher travel costs. Total discretionary marketing expenses decreased $263,000 or 49.9% to $264,000. The decrease was primarily due to a one-time investment in market research in the prior year. Professional fees decreased $171,000 or 13.0% to $1,140,000. Professional fees are primarily for services related to legal costs, shareholder services and reporting requirements, IT support, and consulting fees. The decrease was primarily due to clinical fees in the prior year related to the finalization of a clinical study. Research and development, or R&D, expenses decreased $40,000 or 19.4% to $166,000. The decrease was primarily due to reduced costs associated with our SmartVest Clearway platform development in the prior year, which has now been launched into the home care and hospital markets. Operating income was $1.9 million or 13.2% of revenue compared to $0.1 million or 1.2% of revenue in the first quarter last year. The increase in operating income was driven primarily by increased revenue and gross profit. Also, our slower SG&A growth, which was less than 3% in the quarter and well below our revenue growth rate of 19%, played a meaningful role. This leveraged growth was possible even with the ongoing investments into our sales force and the investments in the people, processes, and technology across the business to enable sustainable and efficient growth. Looking below our operating income line, interest income increased $118,000 to $195,000 for the quarter. The 150% plus increase over Q1 of last year is due to increased savings rates on our higher cash balances. When putting all these Q1 results together, we are happy to report another strong earnings quarter with pre-tax income of $2.1 million, net income of $1.5 million, and quarterly EPS for our shareholders of $0.16 per diluted share. In addition to these results, we announced on September 11, 2024, that the Electromed Board of Directors authorized a share repurchase of up to $5 million of Electromed stock. As of September 30, 2024, a total of 262,756 shares were repurchased under this authorization for a total cost of $4,536,000 or $17.26 per share. Net of other activity, the number of shares issued and outstanding at the end of the period on our balance sheet decreased from 8,637,883 at FY 2024 year-end to 8,457,071 shares. As of September 30, 2024, Electromed had $13.9 million in cash, $22.4 million in accounts receivable, and no debt, achieving a working capital of $33.6 million and total shareholders' equity of $41.5 million. We are excited about our 19% revenue growth and our significant improvement in earnings per share over Q1 last year. Our focus and expectation for the full year remains on delivering double-digit top-line growth and expanded operating leverage. With that, we'd like to move to the Q&A portion of the call. Operator, please open the call to questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star and one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. At this time, we will pause momentarily to assemble our roster. Well, hey. Today's first question comes from Brooks O'Neil with Lake Street Capital Markets. Please go ahead. Hey, good afternoon, guys. This is Aaron on the line for Brooks. Are you able to hear me okay? Yeah. Hi, Aaron. How are you? I'm doing well. Thanks, Jim. Congrats, you guys, on the strong start to the year. Just a couple from me. So with the efforts that you're making in terms of bringing awareness about the underdiagnosis of the disease, are you seeing any momentum in specific diagnosis? And I guess, furthermore, are the patients being prescribed the SmartVest earlier in that process? I think there's a couple of things, as you know, and we talked about it on the last earnings call. We feel like, especially with some of the drugs that are going to be potentially hitting the market in 2025, that there's been an incredible amount of investment from the pharmaceutical industry in this space to address inflammation. I think that's really helping everybody. All boats are rising from that, not only Electromed, but I think other purveyors of HFCWO in the market. Relative to your question, Aaron, about other diagnosis, obviously, our primary one still remains to be bronchiectasis. As we've talked about many times on these calls, there's 824,000 patients that have been diagnosed with bronchiectasis, but they're not using HFCWO. Of that remaining 700,000 patients, there's about 230,000 that are seeing pulmonologists. We really feel like that's the sweet spot for us. We do believe we just recently had an advisory board about two weeks ago. One of the things that they did convey to us is that they're really excited because there is a lot more visibility to bronchiectasis as a disease state, and pulmonologists really starting to identify some of the patients that they see that could benefit from our technology. It's a long answer in saying that we do believe some of the patients are getting on the technology sooner. Still, one of the hurdles is the patient has to have had a productive cough for the last six months. They have to have had a CT scan that recognizes that they have bronchiectasis. Those are things from an insurance standpoint that they still need to get over. But that being said, we're seeing that bronchiectasis is the primary, but we're also seeing that some of the patients are being diagnosed with disorders of the diaphragm. And so that's another diagnosis that we're seeing come up more and more. Absolutely. I appreciate all that color. And then I'm sort of curious if you have any longer-term targets in terms of revenue distribution, recognizing the hospital setting is small right now. I think you mentioned it grew 36%, albeit from a small base. But just kind of curious if you have any sort of integral targets there, maybe how you're just thinking about that moving forward. Yeah. I think it's still going to remain a smaller percentage of our total revenue, Aaron, for a couple of reasons, one of which is the hospital sales cycle is a lot longer. There's a lot of constituents within the hospital that you need to convince to buy our technology. They have to have had a budget for the technology. And the sales cycle can be sometimes over a year, even if they've budgeted to replace their HFCWO equipment. We do believe we've got best-in-class technology, which has resonated with hospitals that we've sold to. Most recently, we received an order from Cleveland Clinic, which we're really excited about. And that's the first time that they've ordered product from Electromed. And they're obviously a key bronchiectasis center in the United States. So that's encouraging, and that's exciting. But our primary focus still continues to be on the home market. We feel like our technology, our clinically focused sales team, the service component that we provide to the clinics, and the time to therapy, quite candidly, when you're calling out a pulmonologist who's seeing upwards of 50 patients per day, is a better use of our sales reps' time, but certainly, as we add reps, as territories become smaller, we do think, and we get more traction in the hospital market, we feel like that is another investment vehicle where we can grow. Oh, yeah. That makes total sense. Thanks for that, Jim. I guess, let's see, so there's been some consolidation in the vest market in recent years. Would you say your status as the industry's only pure play an advantage or disadvantage in the current competitive environment? I think when you talk about the consolidation, I think really what's happened is you've had pure plays that have been gobbled up by larger players in the market. There's really four, as you know, primary competitors in this marketplace today. All of us have roughly around the same market share position. I think we're uniquely positioned because even though there is more awareness of bronchiectasis and the benefits of SmartVest technology, the reality is it's still a nascent market, and there's still a lot of education that needs to happen. We feel like we're really well positioned because as a single-product company, our sales reps wake up every day, and they're the experts in this technology and can be a great asset to the pulmonologist as well as the clinical staff that's prescribing this technology. We feel like we've got a lot of runway. We feel like there's great tailwinds, as we discussed before with other people entering the market to address the other elements of bronchiectasis, whether it's infection or inflammation. In the case of Electromed, it's clearing the airways, and we think that our prospects are really pretty rosy going forward. I appreciate all that, Jim. Thank you. And then maybe last one for me. If you could just summarize maybe one or two just overarching growth drivers that you can sort of point to that will be able to continue to drive this incremental growth and continued leverage in the next year and sort of beyond that? Thanks, guys. No, I think that's great. I think we've got kind of a beating drum on the expanding sales team. So I would say that that's certainly a catalyst for our growth. Some of the things that we're doing to help support them to become more efficient, which I talked about in the pre-recorded comments, I think is another one. Our direct-to-consumer, which I really didn't spend a lot of time on, our direct-to-consumer efforts have really started to pay dividends for us. As patients are becoming more aware of this disease state and not just believing that they have COPD, but they may have another underlying condition, they're starting to go out and seek alternatives to what their current treatment plan is, and our direct-to-consumer outreach has been really positive. As I mentioned on the call, with our ad campaign that we just put out, we've had 6,000 unique views from clinicians. But that translates into them having dialogue with their patients. And then those patients get in contact with us. We have RTs that are on staff. Those RTs can then help answer any questions which the potential patients have. And then those patients can go back to their pulmonologist to seek more information about SmartVest and how they might be able to get on that therapy. So sales force expansion, D to C. We talked about the hospital market. Again, I don't see that becoming a huge portion of our total revenue, but I do think it is a growth driver for us in an area where we have seen that if we add additional resources, additional focus, we can get a return on that investment. So those are just a few of the things. The last thing I would mention, and it's something that we really haven't invested a lot of resources on, is just in payer relations. And obviously, we've got a very robust ASP on our product. And annually, thankfully, we typically will get a bump to our reimbursement rate from CMS that's predicated on the Urban CPI. But we haven't invested enough time, in my mind, in cultivating relationships with private payers. And we feel like the benefits that the private payer patients get justifies the price that we're charging for our product and really should be something that those payers take a look at to get their patients on the product line sooner to help prevent those patients from getting either hospitalized or having to make a visit to an emergency department, which is very expensive. That is an area that we are focusing on this fiscal year. Absolutely. No, all that makes perfect sense. Yeah. Congrats, you guys. Again, we commend your efforts, and I'll look forward to continue following. Super. Thanks so much for the time today. And I want to thank really everybody for joining the call and for your continued support of Electromed. I'm really pleased with our Q1 results and feel good about our future growth prospects. Though not an issue in Q1, we continue to monitor the potential impact of natural disasters such as hurricanes, which may have an impact on providers and their patients getting access to our product. We're always happy to speak with investors. And if you're interested in a follow-up call, please contact our investor relations partners at ICR Healthcare. Thanks again for your time today. And operator, please close the call. Thank you. The conference has now concluded. Thank you again for your participation. You may now disconnect your lines.