Full Press Release Details
Zynex Announces 2020 Fourth Quarter and
CO - February 25, 2021 - 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 fourth quarter and full year ended December 31, 2020.
Fourth Quarter Financial Results Summary:
For the fourth quarter, the Company reported net revenue of
$25.6 million, an 81% increase over the fourth quarter of 2019. Gross margins were 78% in the fourth quarter of 2020 and net income
Adjusted EBITDA was $3.4 million in the fourth quarter of 2020.
As of December 31, 2020, the Company had working capital of
$52.9 million compared to $17.4 million at December 31, 2019. Cash on hand was $39.2 million at the end of the fourth quarter.
Cash decreased slightly during the quarter due to the Company maintaining higher than normal inventory levels to protect against
any supplier delays related to COVID-19. There have not been any issues with supplier deliveries to date.
President and CEO Commentary:
Thomas Sandgaard, CEO said: "I am excited to announce
our eighteenth consecutive quarter of positive net income. In the fourth quarter, we posted revenue of $25.6 million, which is
the highest quarterly revenue in the history of the Company and net income of $1.8 million. Orders grew 117% compared to the fourth
We are pleased with our accomplishments in 2020 despite the
pandemic and reiterate the potential of our business as we move into 2021. Our continued order growth during this pandemic shows
the strength of relationships our sales force has with many prescribers and the need for them to prescribe non-opioid, non-addictive
prescription strength solutions for their patients in pain.
In the fourth quarter, we continued to focus on the execution
of our growth strategy and the related growth of our sales force as we eclipsed 500 sales reps and expect to have over 600 by the
end of 2021.We expect the new sales reps primarily added in the second half of 2020 to add significantly to our order growth in
the first half of 2021 and therefore positively impact revenue growth in the second half of 2021 and forward.
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."
First Quarter and Full Year 2021
Full year 2021 revenue is estimated between $135.0 and $150.0
million with Adjusted EBITDA between $15.0 and $25.0 million. The full year revenue estimate is approximately 68% to 87% above
2020 revenue of $80.1 million.
The estimated range for first quarter revenue is between $23.0
and $24.5 million with an Adjusted EBITDA loss of between $0.5 and $1.5 million. First quarter revenue is historically affected
by health insurance deductibles not being met in the beginning of the year. The combination of seasonality of deductibles along
with the sales force investments we've added during 2020 and slower ramping of sales orders due to COVID-19 restrictions
are factors which will produce a small loss in Q1. We expect profitability to ramp quickly throughout the year to meet our Adjusted
EBITDA forecast of $15 to $25 million for 2021.
The revenue estimate for Q1 is approximately 51% to 61% above
2020 first quarter revenue of $15.2 million.
Conference Call and Webcast Details:
Thursday, February 25, 2021 at 2:15 p.m. MT / 4:15
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 |
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.
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:
Safe Harbor Statement
contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation
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 but not limited to,
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.
Amato And Partners, LLC
Investor Relations Counsel
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
| December 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 39,173 | $ | 14,040 | ||||
| Accounts receivable, net | 13,837 | 5,833 | ||||||
| Inventory, net | 8,635 | 2,378 | ||||||
| Prepaid expenses and other | 1,378 | 315 | ||||||
| Total current assets | 63,023 | 22,566 | ||||||
| Property and equipment, net | 1,925 | 858 | ||||||
| Operating lease asset | 5,993 | 3,831 | ||||||
| Finance lease asset | 321 | 180 | ||||||
| Deposits | 347 | 329 | ||||||
| Deferred income taxes | 566 | 513 | ||||||
| Total assets | $ | 72,175 | $ | 28,277 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | 4,717 | 2,141 | ||||||
| Operating lease liability | 2,051 | 1,211 | ||||||
| Finance lease liability | 77 | 45 | ||||||
| Income taxes payable | 280 | 52 | ||||||
| Accrued payroll and related taxes | 2,992 | 1,748 | ||||||
| Total current liabilities | 10,117 | 5,197 | ||||||
| Long-term liabilities: | ||||||||
| Operating lease liability | 4,920 | 3,282 | ||||||
| Finance lease liability | 283 | 145 | ||||||
| Total liabilities | 15,320 | 8,624 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 36 | 34 | ||||||
| Additional paid-in capital | 37,235 | 9,198 | ||||||
| Treasury stock | (3,846 | ) | (3,846 | ) | ||||
| Retained earnings | 23,430 | 14,356 | ||||||
| Total Zynex, Inc. stockholders' equity | 56,855 | 19,742 | ||||||
| Non-controlling interest | - | (89 | ) | |||||
| Total stockholders' equity | 56,855 | 19,653 | ||||||
| Total liabilities and stockholders' equity | $ | 72,175 | $ | 28,277 |
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| NET REVENUE | ||||||||||||||||
| Devices | $ | 8,243 | $ | 3,789 | $ | 21,269 | $ | 10,713 | ||||||||
| Supplies | 17,362 | 10,373 | 58,853 | 34,759 | ||||||||||||
| Total net revenue | 25,605 | 14,162 | 80,122 | 45,472 | ||||||||||||
| COSTS OF REVENUE AND OPERATING EXPENSES | ||||||||||||||||
| Costs of revenue - devices and supplies | 5,659 | 2,821 | 17,417 | 8,814 | ||||||||||||
| Sales and marketing | 12,320 | 4,820 | 34,133 | 14,855 | ||||||||||||
| General and administrative | 5,328 | 2,790 | 18,323 | 10,737 | ||||||||||||
| Total costs of revenue and operating expenses | 23,307 | 10,431 | 69,873 | 34,406 | ||||||||||||
| Income from operations | 2,298 | 3,731 | 10,249 | 11,066 | ||||||||||||
| Other income/(expense) | ||||||||||||||||
| Deferred insurance reimbursement | - | - | - | 880 | ||||||||||||
| Loss on disposal of non-controlling interest | (77 | ) | - | (77 | ) | - | ||||||||||
| Interest expense | (5 | ) | (6 | ) | (19 | ) | (5 | ) | ||||||||
| Other income/(expense), net | (82 | ) | (6 | ) | (96 | ) | 875 | |||||||||
| Income from operations before income taxes | 2,216 | 3,725 | 10,153 | 11,941 | ||||||||||||
| Income tax expense | 428 | 778 | 1,079 | 2,449 | ||||||||||||
| Net Income | $ | 1,788 | $ | 2,947 | $ | 9,074 | $ | 9,492 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.05 | $ | 0.09 | $ | 0.27 | $ | 0.29 | ||||||||
| Diluted | $ | 0.05 | $ | 0.09 | $ | 0.26 | $ | 0.28 | ||||||||
| Weighted average basic shares outstanding | 34,780 | 32,709 | 33,869 | 32,439 | ||||||||||||
| Weighted average diluted shares outstanding | 35,635 | 34,101 | 34,943 | 33,963 |
Reconciliation of GAAP to Non-GAAP Measures
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income | $ | 1,788 | $ | 2,947 | $ | 9,074 | $ | 9,492 | ||||||||
| Depreciation and Amortization | 272 | 60 | 742 | 253 | ||||||||||||
| Stock-based compensation expense | 875 | 264 | 2,681 | 820 | ||||||||||||
| Interest expense and other, net | 82 | 6 | 96 | (875 | ) | |||||||||||
| Income tax expense | 428 | 778 | 1,079 | 2,449 | ||||||||||||
| Adjusted EBITDA | $ | 3,445 | $ | 4,055 | $ | 13,672 | $ | 12,139 | ||||||||
| % of Net Revenue | 13 | % | 29 | % | 17 | % | 27 | % |
Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of