Electromed, Inc.

Electromed, Inc.

Overview

Electromed develops, manufactures, markets and sells the SmartVest Airway Clearance System (HFCWO) for patients with compromised pulmonary function. The company’s primary go-to-market approach is direct-to-patient and provider, using physician referrals, insurer claims handling and in-home training. Electromed also supplies devices for acute care settings, including post-surgical, ICU and lung infection applications. The company was incorporated in Minnesota in 1992 and its common stock trades on NYSE American (ELMD). The business model seeks to capture both manufacturer and distributor margins by disintermediating traditional home medical equipment (HME) channels.

Products

• SmartVest System: High Frequency Chest Wall Oscillation device consisting of a programmable air pulse generator, a therapy garment and a single-hose connection.
• Models:
  • SmartVest SQL (existing model)
  • SmartVest Clearway (introduced November 2022) — redesigned for improved patient experience with a touchscreen and updated ergonomics
• Other products:
  • Single Patient Use (SPU) SmartVest
  • SmartVest Wrap for acute care

Key design and user features:

• 360° oscillation coverage for simultaneous multi-lobe therapy
• Patented Soft Start technology for gentle garment inflation
• Open system design with “Breathing Room” allowing active inflate/deflate for deep breaths during therapy
• Programmable generator with touchscreen, multiple modes, save/lock capabilities and a pause feature for clinician-programmed timing
• Patented single-hose design
• Lightweight, soft fabric garment with quick-fit closures; suitable for pediatric and adult patients
• Generator under 14 pounds

Warranties:

• Homecare SmartVest: lifetime warranty for the individual patient in the U.S.
• Hospitals, HME distributors and international sales: 1–5 year warranty

Market, Indications and Evidence

Primary indications include bronchiectasis, cystic fibrosis and neuromuscular conditions (for example, cerebral palsy and ALS). Bronchiectasis is identified as a fast-growing diagnostic category with meaningful growth potential. Published studies and conference abstracts report improved quality of life, reduced exacerbations and hospitalizations, and decreased antibiotic use in bronchiectasis and COPD patients using SmartVest. The company continues clinical evidence development and dissemination, including a 2022 AJRCCM article and conference presentations/abstracts in 2023 and 2025.

Customers and Channels

• Primary customers: patients and clinicians (physicians and healthcare providers), plus hospitals and homecare partners.
• U.S. channel model: direct sales force engaging physician offices, clinics and hospitals; in-home training provided by a network of respiratory therapists; reimbursement support handled by an internal department.
• International distribution: independent distributors, often in exclusive territories, selling under fixed contract pricing rather than payer-based reimbursement in those markets.
• Contracted payer base: as of 6/30/2026, over 275 million contracted lives in the U.S. (about 87% of contracted lives in the U.S.).
• Revenue mix: primary revenue from domestic homecare; hospital sales are a smaller portion. Outside-U.S. sales accounted for 0.6% of net revenues in fiscal 2026 (0.4% in fiscal 2025).

Operations and Manufacturing

• Direct U.S. sales: average of 58 direct field sales employees in fiscal 2026.
• Training and clinical support: a network of approximately 167 respiratory therapists (independent contractors) across the U.S. to provide in-home training; a separate internal team provides reimbursement support.
• Headquarters and manufacturing facility: New Prague, Minnesota — approximately 37,000 square feet on ~2.3 acres. The facility is ISO 13485-certified and FDA-registered. Assembly, testing and final shipment are completed in New Prague, and many critical suppliers are located within 100 miles.

Intellectual Property and Regulatory Status

• Intellectual property: multiple U.S. and foreign-issued patents covering aspects of the SmartVest System; U.S. and foreign trademarks registered.
• Regulatory and quality: FDA clearance for the SmartVest System; maintained quality management and post-market surveillance obligations (ISO 13485, QMSR). SmartVest requires a physician prescription in the U.S. HCPCS code E0483 is used for reimbursement.

Financial and R&D Highlights

• U.S. revenue in fiscal 2026: $73.4 million (approximately 95.3% from homecare and 4.7% from hospital sales within the U.S.).
• Outside-U.S. revenue: 0.6% of net revenues in fiscal 2026; 0.4% in fiscal 2025.
• R&D expense:
  • Fiscal 2026: approximately $1,314,000 (about 1.8% of net revenues)
  • Fiscal 2025: approximately $996,000 (about 1.6% of net revenues)

Employees and Footprint

• Total employees: 197 (as of 6/30/2026), of which 195 are full-time.
• Geographic footprint: operations across 34 states.
• Clinical staff: 17 in-house licensed respiratory therapists and an independent contractor training network of approximately 167 respiratory therapists.
• No unionized workforce; no collective bargaining agreements.

Regulatory, Reimbursement and Other Considerations

• U.S. reimbursement: patients typically rely on Medicare, Medicaid, private payers and secondary coverage; HCPCS code E0483 supports claims for HFCWO therapy with SmartVest.
• Legal and compliance areas of focus: FDA clearances for marketed products and future modifications, Medicare/Medicaid and private payer reimbursement dynamics, healthcare fraud and abuse laws (False Claims Act, Anti-Kickback Statute, Stark Law), HIPAA/HITECH and Sunshine Act compliance, and data privacy and cybersecurity obligations.
• Pandemic exposure: public health emergencies such as COVID-19 could affect staffing, demand and supply chain operations.

Summary

Electromed markets the SmartVest System for airway clearance, primarily to U.S. homecare patients through a direct-to-patient/provider model, with additional hospital and acute care use. The company integrates product supply, patient education and reimbursement support through a U.S. direct sales force and an independent network of respiratory therapists, supported by ISO 13485 manufacturing and FDA regulatory compliance. Key growth focus areas include bronchiectasis and related pulmonary conditions, supported by clinical publications and ongoing evidence development.