Zynex Announces 2020 First Quarter Earnings

ENGLEWOOD, Colo., April 28, 2020 /PRNewswire/ -- Zynex, Inc. (NASDAQ: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, cardiac monitoring and neurological diagnostics, today reported financial results for its first quarter ended March 31, 2020.

First Quarter Financial Results Summary:

For the first quarter, the Company reported net revenue of $15.2 million, a 66% increase over the first quarter of 2019. Gross margins were 78% in the first quarter of 2020 and net income was $2.9 million.

Adjusted EBITDA was $3.0 million in the first quarter of 2020.

The Company generated $0.6 million of cash from operations during the first quarter of 2020. As of March 31, 2020, the Company had working capital of $19.9 million compared to $17.4 million at December 31, 2019. Cash on hand was $14.6 million at the end of the first quarter.

President and CEO Commentary:

Thomas Sandgaard, CEO said: "I am excited to announce our fifteenth consecutive quarter of positive net income. In the first quarter, we posted revenue of $15.2 million, which is the highest quarterly revenue in the history of the Company and net income of $2.9 million. Orders grew 126% compared to the first quarter of 2019.

We were able to generate $0.6 million in cash from operations despite increasing our inventory by over $1.0 million. We are focused on ensuring our patients get pain relief from our device quickly and therefore we increased our inventory levels to protect against any supply chain slow-downs due to COVID-19. Our employees have demonstrated remarkable dedication and have been rock solid during this crisis making sure we continue to operate effectively. We can't thank them enough.

In the first quarter, we continued to focus on the execution of our growth strategy and the related growth of our sales force by adding 32 sales reps in March and 48 in April. We expect the addition of new sales reps to have an impact on order and revenue growth later this year and going forward. In addition, we continue to invest in our infrastructure to support the increase in order volume.

We continue to advocate for pain patients, and for physicians to prescribe our NexWave technology as the first line of defense in treating chronic and acute pain without side effects. We are dedicated to promoting our technology in an effort to remove patient addiction and other side effects from prescription opioids."

Second Quarter and Full Year 2020 Guidance:

The estimated range for second quarter revenue is between $17.5 and $18.0 million with Adjusted EBITDA between $3.2 and $3.7 million as we continue to invest in growing our sales force. The revenue estimate is approximately 70% to 75% above 2019 second quarter revenue of $10.3 million. We continue to see the impact of the COVID-19 pandemic, not only on the availability of physicians to prescribe our products but also on navigating employee and supply chain issues. Our order volumes have stabilized and remained steady during the last 3 weeks of March and through April.

Full year 2020 estimates are unchanged. Revenue is estimated between $78.0 and $83.0 million with Adjusted EBITDA between $15.0 and $18.0 million. The full year revenue estimate is approximately 72% to 83% above 2019 revenue of $45.5 million.

Conference Call and Webcast Details:

Tuesday, April 28, 2020 at 2:15 p.m. MT - 4:15 p.m. ET

To register and participate in the webcast, interested parties should click on the following link or dial in approximately 10-15 minutes prior to the webcast:


        US PARTICIPANT DIAL IN (TOLL FREE): 1-844-825-9790

     INTERNATIONAL DIAL IN:              1-412-317-5170

     Canada Toll Free:                   1-855-669-9657

Non-GAAP Financial Measures

Zynex reports its financial results in accordance with accounting principles generally accepted in the U.S. (GAAP). In addition, the Company is providing in this news release financial information in the form of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other income/expense and stock compensation). Management believes these non-GAAP financial measures are useful to investors and lenders in evaluating the overall financial health of the Company in that they allow for greater transparency of additional financial data routinely used by management to evaluate performance. Adjusted EBITDA can be useful for investors or lenders as an indicator of available earnings. Non-GAAP financial measures should not be considered in isolation from or as an alternative to the financial information prepared in accordance with GAAP.

About Zynex, Inc.

Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company's proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. Zynex also has a blood volume monitor for use in hospitals and surgery centers. For additional information, please visit: www.zynex.com.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore you should not rely on any of these forward looking statements. The Company makes no express or implied representation or warranty as to the completeness of forward looking statements or, in the case of projections, as to their attainability or the accuracy and completeness of the assumptions from which they are derived. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain CE marking of new products, the acceptance of new products as well as existing products by doctors and hospitals, larger competitors with greater financial resources, the need to keep pace with technological changes, our dependence on the reimbursement for our products from health insurance companies, our dependence on third party manufacturers to produce our goods on time and to our specifications, implementation of our sales strategy including a strong direct sales force, the impact of COVID-19 on the global economy and other risks described in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended December 31, 2019 as well as our quarterly reports on Form 10-Q and current reports on Form 8-K.

Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Contact: Zynex, Inc. (303) 703-4906

Investor Relations Contact:
Amato And Partners, LLC
Investor Relations Counsel

             ZYNEX, INC.


             (in thousands)


                                                                                                                                March 31,    
     December 31,

                                                                                                                                        2020                2019


     Current assets:

     Cash                                                                                                                           $14,585             $14,040

     Accounts receivable                                                                                                              6,549               5,833

     Inventory, net                                                                                                                   3,429               2,378

     Prepaid expenses and other                                                                                                       1,135                 315

                                            Total current assets                                                                     25,698              22,566

     Property and equipment, net                                                                                                      1,116                 858

     Operating lease asset                                                                                                            4,980               3,831

     Finance lease asset                                                                                                                168                 180

     Deposits                                                                                                                           275                 329

     Long term deferred income taxes                                                                                                    985                 513

                                            Total assets                                                                            $33,222             $28,277


     Current liabilities:

     Accounts payable and accrued expenses                                                                                            2,292               2,141

     Lease liability - operating leases                                                                                               1,678               1,211

     Lease liability - finance leases                                                                                                    53                  45

     Income taxes payable                                                                                                                39                  52

     Accrued payroll and related taxes                                                                                                1,772               1,748

                                           Total current liabilities                                                                  5,834               5,197

     Long-term liabilities:

     Lease liability - operating leases                                                                                               3,954               3,282

     Lease liability - finance leases                                                                                                   126                 145

                                           Total liabilities                                                                          9,914               8,624

     Stockholders' equity:

     Common stock                                                                                                                        34                  34

     Additional paid-in capital                                                                                                       9,916               9,198

     Treasury stock                                                                                                                 (3,846)            (3,846)

     Retained earnings                                                                                                               17,293              14,356

                                           Total Zynex, Inc. stockholders' equity                                                    23,397              19,742

                                           Non-controlling interest                                                                    (89)               (89)

                                           Total stockholders' equity                                                                23,308              19,653

                                           Total liabilities and stockholders' equity                                               $33,222             $28,277

                ZYNEX, INC.


        (in thousands, except per share data)


                                                                                                     For the Three Months Ended March 31,

                                                                                                                                     2020   2019

                NET REVENUE

     Devices                                                                                                                      $3,444 $1,975

     Supplies                                                                                                                     11,784  7,221

     Total net revenue                                                                                                            15,228  9,196


     Costs of revenue - devices and supplies                                                                                       3,401  1,784

     Sales and marketing                                                                                                           5,209  2,473

     General and administrative                                                                                                    4,160  2,683

     Total costs of revenue and operating expenses                                                                                12,770  6,940

     Income from operations                                                                                                        2,458  2,256

     Other income/(expense)

        Deferred insurance reimbursement                                                                                                   880

        Interest expense                                                                                                             (4)

     Other income/(expense), net                                                                                                     (4)   880

     Income from operations before income taxes                                                                                    2,454  3,136

       Income tax (benefit)/expense                                                                                                (483)   786

     Net Income                                                                                                                   $2,937 $2,350

     Net income per share:

     Basic                                                                                                                         $0.09  $0.07

     Diluted                                                                                                                       $0.09  $0.07

     Weighted average basic shares outstanding                                                                                    32,913 32,233

     Weighted average diluted shares outstanding                                                                                  34,204 33,721

                ZYNEX, INC.

                Reconciliation of GAAP to Non-GAAP Measures

                (in thousands)


                                                                                                   For the Three Months Ended March 31,

                                                                                              2020                                        2019


                Adjusted EBITDA:

     Net income                                                                            $2,937                                      $2,350

     Depreciation and Amortization                                                             68                                          66

     Stock-based compensation expense                                                         497                                         139

     Interest expense and other (benefit), net                                                  4                                       (880)

     Income tax expense (benefit)                                                           (483)                                        786

                Adjusted EBITDA                                                          $3,023                                      $2,461

                % of Net Revenue                                                            20%                                        27%

               * Depreciation does not include
                amounts related to units on
                lease to third parties which
                are depreciated and included
                in cost of goods sold.

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