Electromed, Inc. Announces Home Medical Equipment Distributor Partnerships

Electromed, Inc. (NYSE American: ELMD) today announced entry into agreement with two Home Medical Equipment ("HME”) distributors – one national and one regional – to distribute and sell the SmartVest^® Airway Clearance System in the United States home care market. The Company expects to continue its direct sales channel as its primary homecare revenue source. Sale of the SmartVest system through HME distributors has begun in targeted geographies in the first quarter of fiscal 2020.

"The homecare distribution channel expands physician and patient access to the SmartVest in certain areas of the United States and broadens exposure of the SmartVest brand,” said Kathleen Skarvan, President and Chief Executive Officer of Electromed. "The direct-to-patient and provider channel will continue to be our primary focus for homecare revenue. Expanding sales channels through homecare distribution will complement our direct sales efforts and support growth initiatives to expand the underserved bronchiectasis market and acceptance of high frequency chest wall oscillation therapy with SmartVest.”

Bronchiectasis is under recognized and underdiagnosed, representing the fastest growing diagnostic category and we believe it holds the greatest potential for high frequency chest wall oscillation ("HFCWO”) growth in the United States. Bronchiectasis is an irreversible, chronic lung condition characterized by enlarged and permanently damaged bronchi. The condition is associated with recurrent lower respiratory infections, inflammation, reduction in pulmonary function, impaired respiratory secretion clearance, increased hospitalizations and medication use, and increased morbidity and mortality.

Homecare distributor partners intend to sell the SmartVest system directly to patients, upon receipt of a physician prescription. Electromed currently anticipates minimal impact to fiscal 2020 revenues and expenses resulting from the new agreements.

The SmartVest uses HFCWO, a proven therapy that helps clear the lungs of excess secretions, reducing the risk of respiratory infections and hospitalizations. The SmartVest system is designed to make HFCWO treatments as effective, convenient, and comfortable as possible, so patients can breathe easier and live better with improved respiratory function. Electromed is the only HFCWO therapy company with multiple published clinical studies showing a significant reduction in exacerbation rates and improvement in quality of life in bronchiectasis patients using its SmartVest system^1-3.

About Electromed, Inc.

Electromed manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest^® Airway Clearance System, to patients with compromised pulmonary function. The Company is headquartered in New Prague, Minnesota and was founded in 1992. Further information about Electromed can be found at www.smartvest.com.

Cautionary Statements

Certain statements in this release constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "anticipate,” "believe,” "estimate,” "expect,” "may,” "plan” "potential,” "should,” "will,” and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for the Company include, but are not limited to: the competitive nature of our market; risks associated with regarding timing and extent of adoption of the SmartVest system by HME distributors; expansion into international markets; changes to Medicare, Medicaid, or private insurance reimbursement policies; new drug or pharmaceutical discoveries; changes to health care laws; changes affecting the medical device industry; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances; our ability to protect and expand our intellectual property portfolio; our ability to renew our line of credit or obtain additional credit as necessary; our ability to develop new sales channels for our product; and general economic and business conditions, as well as other factors described from time to time in our reports to the Securities and Exchange Commission (including the Company’s most recent Annual Report on Form 10-K, as amended from time to time, and subsequent reports on Form 10-Q and Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on "forward-looking statements,” as such statements speak only as of the date of this release.

References

[1] Sievert CE et al. Respiratory Therapy Journal. 2016;11(4): 34–38.
[2] Sievert CE et al. Respiratory Therapy Journal. 2018;13(2): 38–41.
[3] Powner J et al. BMC Pulmonary Medicine. 2019;19(82).

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