elmd20251231

elmd20251231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No.: 001-34839

Electromed, Inc.

(Exact Name of Registrant as Specified in its Charter)

Minnesota		41-1732920
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
500 Sixth Avenue NW New Prague, Minnesota		56071
(Address of principal executive offices)		(Zip Code)

(952) 758-9299

(Registrant’s telephone number, including area code)

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(s))		(Name of each exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☑	Smaller reporting company ☑

	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 8,275,313 shares of Electromed, Inc. common stock, par value $0.01 per share, outstanding as of the close of business on February 3, 2026.

	Page
PART I – FINANCIAL INFORMATION

Item 1. Financial Statements	1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures About Market Risk	16
Item 4. Controls and Procedures	16


PART II – OTHER INFORMATION

Item 1. Legal Proceedings	16
Item 1A. Risk Factors	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3. Defaults Upon Senior Securities	17
Item 4. Mine Safety Disclosures	17
Item 5. Other Information	17
Item 6. Exhibits	18

	*December 31, 2025*		*June 30, 2025*
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	13,791,000	$	15,287,000
Accounts receivable (net of allowances for credit losses of $45,000)		26,260,000		24,660,000
Contract assets		1,152,000		1,036,000
Inventories		3,458,000		3,299,000
Income tax receivable		-		408,000
Prepaid expenses and other current assets		906,000		392,000
Total current assets		45,567,000		45,082,000
Property and equipment, net		5,218,000		4,714,000
Finite-life intangible assets, net		387,000		371,000
Other assets		1,276,000		1,173,000
Deferred income taxes		2,462,000		2,462,000
Total assets	$	54,910,000	$	53,802,000

Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$	2,320,000	$	2,667,000
Accrued compensation		3,711,000		5,079,000
Income tax payable		382,000		-
Warranty reserve		1,813,000		1,645,000
Other accrued liabilities		1,149,000		1,077,000
Total current liabilities		9,375,000		10,468,000
Other long-term liabilities		96,000		125,000
Total liabilities		9,471,000		10,593,000


Shareholders' Equity
Common stock, $0.01 par value per share, 13,000,000 shares authorized; 8,279,631 and 8,349,176 shares issued and outstanding, as of December 31, 2025, and June 30, 2025, respectively		83,000		83,000
Additional paid-in capital		23,073,000		21,941,000
Retained earnings		22,283,000		21,185,000
Total shareholders' equity		45,439,000		43,209,000
Total liabilities and shareholders' equity	$	54,910,000	$	53,802,000

	*Three Months Ended*				*Six Months Ended*
	*December 31,*				*December 31,*
	2025		2024		2025		2024

Net revenues	$	18,897,000	$	16,255,000	$	35,784,000	$	30,923,000
Cost of revenues		4,078,000		3,628,000		7,768,000		6,805,000
Gross profit		14,819,000		12,627,000		28,016,000		24,118,000

Operating expenses
Selling, general and administrative		10,815,000		9,834,000		21,101,000		19,221,000
Research and development		384,000		251,000		625,000		417,000
Total operating expenses		11,199,000		10,085,000		21,726,000		19,638,000
Operating income		3,620,000		2,542,000		6,290,000		4,480,000
Interest income, net		109,000		152,000		243,000		347,000
Net income before income taxes		3,729,000		2,694,000		6,533,000		4,827,000

Income tax expense		968,000		726,000		1,636,000		1,385,000

Net income	$	2,761,000	$	1,968,000	$	4,897,000	$	3,442,000

Income per share:

Basic	$	0.33	$	0.23	$	0.59	$	0.41

Diluted	$	0.32	$	0.22	$	0.56	$	0.38

Weighted-average common shares outstanding:
Basic		8,270,565		8,424,534		8,296,674		8,494,511
Diluted		8,689,290		8,953,349		8,685,497		8,983,726

	*Six Months Ended December 31,*
	*2025*			*2024*
Cash Flows From Operating Activities
Net income	$	4,897,000		$	3,442,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		427,000			414,000
Amortization		90,000			78,000
Share-based compensation expense		1,114,000			1,652,000
Changes in operating assets and liabilities:
Accounts receivable		(1,600,000	)		558,000
Contract assets		(116,000	)		(278,000	)
Inventories		(260,000	)		500,000
Prepaid expenses and other assets		(691,000	)		(279,000	)
Income tax payable, net		790,000			(791,000	)
Accounts payable and accrued liabilities		(88,000	)		434,000
Accrued compensation		(1,368,000	)		(270,000	)
Net cash provided by operating activities		3,195,000			5,460,000

Cash Flows From Investing Activities
Expenditures for property and equipment		(886,000	)		(270,000	)
Expenditures for finite-life intangible assets		(37,000	)		(25,000	)
Net cash used for investing activities		(923,000	)		(295,000	)

Cash Flows From Financing Activities
Issuance of common stock upon exercise of options		232,000			346,000
Taxes paid on net share settlement of stock awards		(234,000	)		(820,000	)
Repurchase of common stock		(3,766,000	)		(4,536,000	)
Net cash used for financing activities		(3,768,000	)		(5,010,000	)
Net (decrease) increase in cash		(1,496,000	)		155,000
Cash and cash equivalents
Beginning of period		15,287,000			16,080,000
End of period	$	13,791,000		$	16,235,000

Supplemental Disclosures of Cash Flow Information
Cash paid for income taxes	$	846,000		$	2,180,000

Supplemental Disclosures of Noncash Investing and Financing Activities
Property and equipment and intangible asset acquisitions in accounts payable	$	44,000		$	73,000
Taxes owed on net share settlement of stock awards in accrued liabilities	$	6,000		$	1,026,000
Demonstration equipment transferred between inventory and property and equipment	$	101,000		$	131,000
Issuance of common stock upon the vesting of performance-based stock units	$	-		$	1,000

							*Additional*						*Total*
	*Common Stock*						*Paid-in*			*Retained*			*Shareholders’*
	*Shares*			*Amount*			*Capital*			*Earnings*			*Equity*
Balance at June 30, 2024		8,637,883		$	87,000		$	20,790,000		$	23,668,000		$	44,545,000
Net income		-			-			-			1,474,000			1,474,000
Exercise of common stock options, vesting of performance stock units and issuance of restricted stock, net of cancellations and tax withholdings		81,944			1,000			(671,000	)		-			(670,000	)
Share-based compensation expense		-			-			697,000			-			697,000
Repurchase of common stock		(262,756	)		(3,000	)		-			(4,555,000	)		(4,558,000	)
Balance at September 30, 2024		8,457,071		$	85,000		$	20,816,000		$	20,587,000		$	41,488,000
Net income		-			-			-			1,968,000			1,968,000
Exercise of common stock options, vesting of performance stock units and issuance of restricted stock, net of cancellations and tax withholdings		99,773			1,000			(831,000	)		-			(830,000	)
Share-based compensation expense		-			-			955,000			-			955,000
Repurchase of common stock		-			-			-			22,000			22,000
Balance at December 31, 2024		8,556,844		$	86,000		$	20,940,000		$	22,577,000		$	43,603,000

	*Three Months Ended December 31,*				*Six Months Ended December 31,*
	*2025*		*2024*		*2025*		*2024*
Homecare	$	17,274,000	$	14,593,000	$	32,163,000	$	27,804,000
Hospital		655,000		723,000		1,702,000		1,413,000
Homecare distributor		905,000		807,000		1,734,000		1,394,000
Other		63,000		132,000		185,000		312,000
Total	$	18,897,000	$	16,255,000	$	35,784,000	$	30,923,000

	*As of December 31, 2025*		*As of June 30, 2025*
Receivables, included in “Accounts receivable, net of allowances for credit losses”	$	26,260,000	$	24,660,000
Contract Assets	$	1,152,000	$	1,036,000

	*Six Months Ended*			*Fiscal Year Ended*
	*December 31, 2025*			*June 30, 2025*
Contract assets, beginning	$	1,036,000		$	719,000
Reclassification of contract assets to accounts receivable		(1,002,000	)		(2,577,000	)
Contract assets recognized		1,065,000			2,694,000
Increase as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period		53,000			200,000
Contract assets, ending	$	1,152,000		$	1,036,000

	*As of December 31, 2025*			*As of June 30, 2025*
Raw materials	$	2,200,000		$	2,075,000
Work in process		386,000			180,000
Finished goods		745,000			928,000
Estimated inventory to be returned		441,000			393,000
Less: Reserve for obsolescence		(314,000	)		(277,000	)
Total	$	3,458,000		$	3,299,000

	*As of December 31, 2025*		*As of June 30, 2025*
Capitalized software costs	$	1,095,000	$	952,000
Right of use assets		161,000		198,000
Other assets		20,000		23,000
Total	$	1,276,000	$	1,173,000

	*Three Months Ended December 31,*				*Six Months Ended December 31,*
	*2025*		*2024*		*2025*		*2024*
Commercial	$	7,985,000	$	7,327,000	$	15,156,000	$	14,178,000
Medicare		6,924,000		5,478,000		12,588,000		10,245,000
Medicare Supplemental		1,660,000		1,388,000		3,059,000		2,499,000
Medicaid		423,000		196,000		778,000		438,000
Other		282,000		204,000		582,000		444,000
Total	$	17,274,000	$	14,593,000	$	32,163,000	$	27,804,000

				*Weighted-Average*
				*Exercise Price*
	*Number of Shares*			*per Share*
Outstanding at June 30, 2025		605,379		$	9.75
Granted		58,500		$	23.95
Exercised		(21,396	)	$	10.83
Cancelled or Forfeited		(4,988	)	$	22.36
Outstanding at December 31, 2025		637,495		$	10.92

	*Six Months Ended*	*Fiscal Year Ended*
	*December 31, 2025*	*June 30, 2025*
Risk-free interest rate	3.80%	3.69 - 4.14%
Expected term (years)	6	6
Expected volatility	54%	53%

	Three Months Ended									Six Months Ended
	December 31,									December 31,
	2025		2024		Increase (Decrease)					2025		2024		Increase (Decrease)
Homecare	$	17,274,000	$	14,593,000	$	2,681,000		18.4	%	$	32,163,000	$	27,804,000	$	4,359,000		15.7	%
Hospital		655,000		723,000		(68,000	)	(9.4	)%		1,702,000		1,413,000		289,000		20.5	%
Homecare distributor		905,000		807,000		98,000		12.1	%		1,734,000		1,394,000		340,000		24.4	%
Other		63,000		132,000		(69,000	)	(52.3	)%		185,000		312,000		(127,000	)	(40.7	)%
Total	$	18,897,000	$	16,255,000	$	2,642,000		16.3	%	$	35,784,000	$	30,923,000	$	4,861,000		15.7	%

	*As of December 31, 2025*		*As of June 30, 2025*
Accrued insurance recoupments	$	788,000	$	602,000
Other accrued expenses		361,000		475,000
Total	$	1,149,000	$	1,077,000

					Total Number of		Approximate Dollar
					Shares Purchased		Value of Shares that
					as Part of Publicly		May Yet be Purchased
	Total Number of		Average Price		Announced Plans		Under the Plans
Period	Shares Purchased		Paid per Share		or Programs		or Programs
October 1 – October 31, 2025		13,625	$	24.01		13,625	$	8,670,000
November 1 – November 30, 2025		48,784	$	25.57		48,784	$	7,423,000
December 1 – December 31, 2025 (a)		43,391	$	27.51		43,184	$	6,235,000
Total		105,800				105,593

Exhibit Number	Description	Method of Filing
3.1	Composite Articles of Incorporation, as amended through November 8, 2010 (incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K for the fiscal year ended June 30, 2015)	Incorporated by Reference

3.2	Amended and Restated Bylaws, effective November 15, 2024 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed November 18, 2024)	Incorporated by Reference

10.1	Credit Agreement, dated as of December 16, 2025, between the Company, as borrower, and BMO Bank N.A., as lender (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed December 18, 2025)*	Incorporated by Reference

31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically

31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Electronically

32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished Electronically

32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished Electronically

101	Financial statements from the Quarterly Report on Form 10-Q for the period ended December 31, 2025, formatted in inline XBRL: (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Cash Flows, (iv) Condensed Statements of Shareholders’ Equity, (v) Notes to Condensed Financial Statements and (vi) the information set forth in Part II, Item 5	Filed Electronically

104	Cover Page Interactive Data File (embedded within the inline XBRL Document)	Filed Electronically

		ELECTROMED, INC.

Date:	February 10, 2026	/s/ James L. Cunniff
		James L. Cunniff, President and Chief Executive Officer
		(duly authorized officer)

Date:	February 10, 2026	/s/ Bradley M. Nagel
		Bradley M. Nagel, Chief Financial Officer
		(principal financial officer and principal accounting officer)

SEC Form 10-Q filed by Electromed Inc.