Greetings. Welcome to the Electromed Fiscal Third Quarter Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Mike Cavanaugh. You may begin.

Good afternoon and thank you for joining us today. Earlier today, Electromed Incorporated released financial results for the quarter ended March 31, 2022. The release is currently available on the company’s website at www.smartvest.com. Kathleen Skarvan, President and Chief Executive Officer; and Mike MacCourt, Chief Financial Officer, will host this afternoon’s call. As a reminder, 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 undue reliance on these 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. We will now turn the call over to Kathleen Skarvan, President and CEO of Electromed.

Thank you, Mike and thank you, to everyone joining the call today. As always, we appreciate your continued support of Electromed and look forward to updating you on our progress on the four key pillars in our strategic growth plan, continued sales force growth, direct-to-consumer marketing, infrastructure to support our anticipated sales growth, and clinical studies to further promulgate the body of evidence supporting SmartVest airway clearance and its ability to provide positive outcomes for bronchiectasis patients. I am incredibly proud of our team’s hard work and results, positioning Electromed as a leading provider of airway clearance devices. In the third quarter of fiscal year 2022, we recorded 15.4% year-over-year growth, which is a testament to our team’s execution, managing through a highly challenging operating environment. During the months of January and February, we experienced a reduction in clinic access and patient flow due to COVID-19-related issues as the Omicron variant spiked across the United States. Additionally, we also observed longer approval timelines for our non-Medicare insurance payers, which resulted in fewer referrals being converted into approvals during the period, negatively impacting our home care revenue for the quarter. In March, we experienced a rapid pickup in referrals as Omicron cases declined, clinic access and patient flow improved, and we increased our number of direct sales representatives in the field. This culminated into March being the highest referral month in company history. We also maintained strong sales representative productivity in the quarter despite the headwinds from the ongoing pandemic. Home care direct annualized sales productivity during the quarter was $943,000 per sales representative, above our targeted range of $800,000 to $900,000. This is a direct testament not only to the hard work and dedication of the team, but also emphasizes the value that SmartVest offers to patients, providers and payers.…

Thank you, Kathleen. Net revenues were $10.1 million in the quarter, a 15.4% increase year-over-year from $8.8 million in the same period a year ago driven by higher home care, home care distributor and international revenue. Home care revenue for the 3 months ended March 31, 2022, was $9.0 million, representing a 10.7% increase compared to the same period in fiscal 2021. The home care revenue increase compared to the prior year period was primarily due to increases in referrals and approvals, and we also benefited from a Medicare allowable rate increase that took effect on January 1, 2022. The Institutional revenue for the 3 months ended March 31, 2022, was $392,000, representing a decrease of $51,000 or 11.5% compared to the same period in fiscal 2021. The revenue decline was driven by lower generator sales as compared to the prior year period. Home care distributor revenue for the 3 months ended March 31, 2022, was $520,000, representing an increase of $415,000 or 395.2% compared to the same period in fiscal 2021. The revenue increase in the period was due to increased demand from one of our key distribution partners. International revenue for the 3 months ended March 31, 2022 was $196,000, representing an increase of $120,000 or 157.9% compared to the same period in fiscal 2021. International sales are affected by the timing of international distributor purchases that can cause significant fluctuations in reported revenue on a quarterly basis. Gross profit increased to $7.7 million or 76.4% of net revenues for the 3 months ended March 31, 2022, from $6.7 million or 76.3% of net revenues in the same period in fiscal 2021. We have continued to experience increasing raw material and shipping costs, which were offset in the quarter by a Medicare allowable rate increase in January, increased…

Thank you all for joining our call this evening. We are proud of another strong quarter and appreciate your continued support of Electromed. We look forward to continuing the momentum from Q3 into our final quarter of fiscal year 2022. Should you like to schedule a follow-up call, please reach out to our Investor Relations firm, ICR Westwicke. Otherwise, have a great evening.

And this concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.