NEW PRAGUE, Minn. - Electromed (NYSE:ELMD), Inc. (NYSE American: ELMD), known for its airway clearance technologies, has initiated a new stock repurchase program, authorizing the buyback of up to $5 million of its common stock. This announcement comes on Wednesday, following the completion of the company's previous repurchase plan in the fourth quarter of fiscal 2024.
The company's management will determine the timing and volume of the repurchases based on market conditions and other factors. The buybacks may occur on the open market at current prices, through private agreements, block trades, or other legal methods, as market conditions and regulatory rules permit. Electromed's board intends to periodically review this authorization and may modify its terms and scope.
Jim Cunniff, President and CEO of Electromed, expressed confidence in the company's growth trajectory and financial performance, citing strong free cash flow that enables the company to deliver value to shareholders while continuing to invest in its operations. He also mentioned the perception that Electromed's stock is undervalued, despite the company's robust financial results.
Electromed, headquartered in New Prague, Minnesota, specializes in manufacturing and selling products that assist in airway clearance for patients with impaired pulmonary function. Founded in 1992, the company's flagship product is the SmartVest® Airway Clearance System.
The press release includes forward-looking statements regarding potential future repurchases and the company's expectations, subject to various risks and uncertainties. These statements are based on management's current beliefs and are not guarantees of future performance. Factors that could influence actual results include market competition, changes in healthcare laws and insurance policies, regulatory compliance, and economic conditions, among others.
This news is based on a press release statement from Electromed, Inc. and does not include any additional commentary or speculation. The company's financial decisions are made with consideration for maintaining regulatory compliance and seeking to enhance shareholder value.
In other recent news, Electromed Incorporated reported a significant increase in revenue for the fourth quarter and the full fiscal year 2024. The company posted record quarterly revenue of $14.8 million, marking a 9% rise from the previous year, and record annual revenues of $54.7 million, a 14% increase from fiscal year 2023. Operating income also reached new highs at $2.3 million for the quarter and $6.6 million for the year.
Electromed has successfully improved its inventory management and plans to expand its sales force in the United States. The company's finished goods inventory is now below $4 million, reflecting improved inventory management. The company plans to increase its US sales team from 53 to 57 representatives by year-end.
In terms of future expectations, Electromed anticipates sustained double-digit growth and expanded operating leverage for fiscal year 2025. However, investors should note that selling, general, and administrative expenses rose by $2.9 million or 9.2% due to higher payroll and compensation-related costs. Lastly, the company's financial performance demonstrates robust growth and strategic management of resources, positioning it for potential continued success in the upcoming fiscal year.
InvestingPro Insights
Electromed's recent authorization to repurchase up to $5 million of its common stock is a sign of the company's confidence in its financial health and future prospects. This confidence is not unfounded, as Electromed's financial data reflects a positive growth trajectory. According to InvestingPro data, the company has seen a revenue growth of 13.83% over the last twelve months as of Q4 2024, with a notable quarterly revenue growth of 8.96% in Q4 2024. This consistent growth is supported by a robust gross profit margin of 76.26%, indicating efficient cost management and a strong market position for its airway clearance technologies.
InvestingPro Tips highlight Electromed's strong performance, with a high return over the last year and a significant year-to-date price total return of 54.9%. These figures underscore the company's solid market performance and may serve as a contributing factor to the management's perception of the stock being undervalued. Additionally, Electromed operates with a moderate level of debt and has liquid assets that exceed its short-term obligations, suggesting a stable financial footing for executing its stock repurchase program.
For investors seeking more detailed analytics and insights, InvestingPro offers additional tips on Electromed, including data on the company's profitability over the last twelve months and its strong returns over various periods, such as the last month, five years, and even the last decade. These insights, which can be found at https://www.investing.com/pro/ELMD, may provide valuable context for Electromed's strategic buyback initiative and its potential impact on shareholder value.
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