Enters into Cooperation Agreement with Summers
Value Partners and Announces Formation of Finance and Strategy
Committee to Review Value Creation Opportunities
Directors Steve Craney and George Winn to
Retire from the Board at Upcoming Annual Meeting
Electromed, Inc. (“Electromed” or the “Company”) (NYSE American:
ELMD), a leader in innovative airway clearance technologies, today
announced that it will nominate two new independent directors,
Kathy Tune and Joe Galatowitsch, for election to its Board of
Directors at the Company’s Fiscal 2022 Annual Meeting of
Shareholders (the “Annual Meeting”), to be held in November. In
connection with these nominations, Electromed has entered into a
cooperation agreement with Summers Value Partners LLC (“Summers
Value Partners”), an investment firm that beneficially owns
approximately 5.9% of Electromed’s outstanding common stock.
As part of the agreement, Electromed will form a Finance and
Strategy Committee of the Board that will be responsible for, among
other things, making recommendations to the Board with respect to
the Company’s strategy and value creation opportunities, including
strategic growth and long-term business plans, research and
development, capital allocation and M&A. The new Finance and
Strategy Committee of the Board will be formed immediately
following the Annual Meeting and will be chaired by Ms. Tune.
Steve Craney and George Winn, both current directors, have
informed the Company of their intention to retire from the Board
and their respective terms will expire as of the Annual Meeting.
With these changes, the Electromed Board will continue to have
seven directors following the Annual Meeting, four of whom will
have joined in the past three years and a majority of whom will be
women. The Board will elect a new independent Chair of the Board
immediately following the Annual Meeting.
“The Electromed Board is committed to ongoing refreshment and
ensuring that its directors possess the qualifications and
experience needed to drive Electromed’s growth and strategic
execution well into the future,” said Mr. Craney, Chairman of the
Board. “Both Kathy and Joe possess unique insights and expertise in
the healthcare and medical technology markets, and we are confident
they will add valuable perspectives as Electromed continues its
work to capitalize on the significant untapped market opportunity.
On behalf of George and I, it has been a pleasure to have worked
with so many talented colleagues and we are proud of all that the
Company has accomplished over the past decade.”
“Together, Kathy and Joe bring proven track records of growing
businesses and highly relevant experience in areas that are of
strategic importance to Electromed, including corporate board
service, medical technology management, commercial execution,
global market development, investment and capital markets, and
investor relations,” said Greg Fluet, director and Chair of the
Board’s Nominating and Governance Committee. “At Electromed, we are
committed to adding directors with complementary skills and
capabilities that contribute toward Electromed’s continued growth
and generation of shareholder value. These appointments further
advance our Board refreshment efforts and reflect valuable feedback
from our shareholders, and we appreciate Summers Value Partners’
input during this thoughtful process.”
“On behalf of the entire Board and management team, I would like
to thank Steve and George for their decades of service as directors
of Electromed,” said Kathleen Skarvan, President and Chief
Executive Officer of Electromed. “They each made many valuable
contributions during their tenures, helping to oversee the
Company’s efforts to deliver revenue growth, profitability and
product innovation. Today, Electromed has a proven growth strategy,
which is driving double-digit revenue growth, profitability and
strong cash flows. I look forward to working alongside Kathy, Joe
and my other fellow Board members as well as management to build on
this momentum.”
Andrew Summers, Founder and Managing Member of Summers Value
Partners, said, “We appreciate the constructive dialogue we have
had with the Electromed Board and management team and are confident
that the changes announced today will help Electromed focus on the
goal of enhancing value for all shareholders. With a refreshed
Board and newly formed Finance and Strategy Committee, we believe
that Electromed is poised for continued growth and value
creation.”
Pursuant to the cooperation agreement, Summers Value Partners
agreed to withdraw its director nominations previously submitted to
the Company and support the Board’s full slate of directors at the
Annual Meeting. Summers Value Partners has also agreed to customary
standstill and voting commitments, among other provisions. The full
agreement between Summers Value Partners and Electromed will be
filed on a Form 8-K with the U.S. Securities and Exchange
Commission.
About Kathleen A. Tune
Kathleen Tune has over 25 years of investing and business
experience. Her background includes venture capital and growth
equity investing, corporate strategy, business development,
investment and capital markets, investor relations and finance,
sales, marketing and reimbursement strategies. Ms. Tune currently
serves as the Chief Financial Officer, Chief Operating Officer and
Board Chair of Marani Health, Inc., a leading development stage
maternal and fetal health company. Ms. Tune is also a Managing
Partner with Capita3, an early stage venture capital fund focused
on women led healthcare startup founders. In addition, Ms. Tune
founded and manages the healthcare investment firm Fourth Element
Capital, investing in healthcare technology companies.
Ms. Tune is a former partner at Thomas, McNerney & Partners
where she led and managed an investment portfolio with a primary
focus in healthcare technologies. Before that, Ms. Tune was a
healthcare equity analyst with Piper Sandler and served as a
product development manager with Solvay, S.A. leading high-profile
projects developing vaccines for the prevention of viral
infections.
Ms. Tune currently serves on the corporate boards of Marani
Health, Inc., Visura Technologies, Inc. and Agitated Solutions,
Inc. She has previously served on the boards of a number of
healthcare technology companies, including VertiFlex, Inc., CAS
Medical Systems, Inc. (Nasdaq: CASM), Galil Medical Ltd Endogenex,
Inc. and Softscope Medical Technologies, Inc.
Ms. Tune holds an M.S. degree in Veterinary Microbiology from
the University of Minnesota and an MBA from the University of
Minnesota’s Carlson School of Management, where she was a Robert
and Gail Buuck Scholar. She also holds a B.S. in Biochemistry and
Microbiology from Minnesota State University, where she graduated
with honors.
About Joseph L. Galatowitsch
Joseph Galatowitsch has four decades of experience in medical
technology management, commercial execution, global market
development, marketing and business strategy, management, strategic
planning, consulting and sales. Mr. Galatowitsch most recently
served as a Partner and Medtech practice leader at Guidehouse
Consulting, previously known as Navigant, from September 2016
through September 2020.
Prior to Guidehouse, Mr. Galatowitsch co-founded and served as
President of Dymedex Consulting, LLC from 2008 to 2016. Mr.
Galatowitsch grew Dymedex to become the leading medical technology
consulting firm in the field of market assessment and market
development strategy and planning. Prior to Dymedex’s acquisition
by Guidehouse Consulting in 2016, Mr. Galatowitsch had pioneered
and provided new-to-the-world conceptual frameworks for assessing
opportunities and driving clinical adoption of disruptive new
medical technologies. He was also responsible for developing a
best-in-class market model that was proven to be highly effective
in predicting market response to market development investments and
strategies.
Mr. Galatowitsch also held various senior positions at Medtronic
PLC and 3M Company. At Medtronic, he led and coordinated global
market development efforts in Medtronic’s cardiac rhythm management
division, contributing to a dramatic increase in penetration of
implantable defibrillators and pacemakers in the U.S. and most
international markets. Notably, Mr. Galatowitsch organized a team
and developed the first successful company-wide organizational
change initiative to establish Patient Access Acceleration (PAA) as
the global standard market development process across Medtronic. He
previously served on the Board of Medical Alley, formerly known as
LiveScience Alley, which is the Global Epicenter of Health
Innovation and Care® and is the birthplace of implantable medical
technology, collaborative care delivery and innovative health plan
models.
Mr. Galatowitsch holds a B.S. in Biomedical Engineering from
Marquette University, where he graduated with honors, and an MBA in
Marketing from University of St. Thomas’s Opus College of
Business.
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.
Forward Looking Statements
Certain statements in this press release constitute
forward-looking statements for purposes of the Safe Harbor
provisions under the U.S. Private Securities Litigation Reform Act
of 1995. Forward-looking statements can generally be identified by
words such as “will,” and similar expressions, 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
duration, extent and severity of the COVID-19 pandemic, including
its effects on our business, operations and employees as well as
its impact on our customers and distribution channels and on
economies and markets more generally; the competitive nature of our
market; changes to Medicare, Medicaid, or private insurance
reimbursement policies; changes to state and federal health care
laws; changes affecting the medical device industry; our ability to
develop new sales channels for our products such as the homecare
distributor channel; our need to maintain regulatory compliance and
to gain future regulatory approvals and clearances; new drug or
pharmaceutical discoveries; general economic and business
conditions; our ability to renew our line of credit or obtain
additional credit as necessary; our ability to protect and expand
our intellectual property portfolio; the risks associated with
expansion into international markets, as well as other factors we
may describe from time to time in the Company’s reports filed with
the Securities and Exchange Commission. 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 press release. We
undertake no obligation to update such statements in light of new
information or future events.
Additional Information and Where to Find It
Electromed will file a proxy statement and associated WHITE
proxy card in connection with the solicitation of proxies for the
Annual Meeting. The proxy statement, any other relevant documents,
and other materials filed with the SEC concerning Electromed are
(or will be, when filed) available free of charge at
http://www.sec.gov and http://investors.smartvest.com. Shareholders
should read carefully the proxy statement and any other relevant
documents that Electromed files with the SEC when they become
available before making any voting decision because they contain
important information.
Participants in the Solicitation
Electromed, its directors, and certain of its executive officers
are or may become participants in the solicitation of proxies from
Electromed shareholders in connection with the Annual Meeting.
Information regarding the names of our directors and executive
officers and their respective interests in Electromed, by security
holdings or otherwise, is set forth in the proxy statement for
Electromed’s Fiscal 2021 Annual Meeting of Shareholders, filed with
the SEC on September 29, 2020. To the extent our directors and
executive officers or their holdings of Electromed securities have
changed from the amounts disclosed in that proxy statement, to the
Company’s knowledge, such changes have been reflected on subsequent
reports filed with the SEC pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended.
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version on businesswire.com: https://www.businesswire.com/news/home/20210927005419/en/
Electromed, Inc. Mike MacCourt, Chief Financial Officer (952)
758-9299 investorrelations@electromed.com The Equity Group Inc.
Kalle Ahl, CFA (212) 836-9614 kahl@equityny.com Devin Sullivan
(212) 836-9608 dsullivan@equityny.com
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