Full Press Release Details
2021 Fourth Quarter and Full Year Earnings
February 24, 2022 -- Zynex, Inc. (Nasdaq: ZYXI) an innovative medical technology company specializing in the manufacture
and sale of non-invasive medical devices for pain management, rehabilitation, and patient monitoring, today reported financial results
for the fourth quarter and full year ended December 31, 2021.
| o | Revenue increased 63% year over year to $130.3 million | |
| o | Orders increased 89% | |
| o | Net income increased 88% to $17.1 million; Diluted EPS of $0.44 | |
| o | Adjusted EBITDA increased 95% to $26.7 million | |
| o | 6 th straight year of profitability | |
| o | $42.6 million cash balance |
| o | Revenue increased 58% year over year to $40.4 million | |
| o | Orders increased 18% | |
| o | Net income increased 398% to $8.9 million; Diluted EPS $0.23 | |
| o | Adjusted EBITDA increased 276% to $13.0 million |
Fourth Quarter Financial Results
For the fourth quarter, the Company
reported net revenue of $40.4 million, a 58% increase over fourth quarter of 2020. Gross margins were 82%, better than previous guidance
ranging between 75% and 80%. Net income was $8.9 million, a 398% increase from Q4 2020.
As of December 31, 2021, the Company
had working capital of $59.8 million, compared to $52.9 at the close of last fiscal year. Cash on hand was $42.6 million at the end of
the fourth quarter, up over $7.2 million, or 20%, from Q3.
President and CEO Commentary:
"We are thrilled to announce another
consecutive quarter of record growth. We recognized the highest quarterly revenues in the Company's history, and are poised for
further expansion supported by Zynex's financial health," said Thomas Sandgaard, President and CEO. "Adjusted EBITDA
margins continue to increase and represent our vigilance for growing top line revenue and managing operational efficiencies. Labor market
dynamics have made attracting qualified sales reps and employees for our corporate headquarters in Colorado difficult. Therefore, we
expect order growth to be fairly modest until the job market eventually normalizes and we are able to add additional reps to our sales
First Quarter and Full Year
Full year 2022 revenue is estimated
in the range of $150-$170 million and Adjusted EBITDA between $25 and $35 million. The revenue range is based on the current labor shortage
and growing the sales force at a slower cadence than previously anticipated. Adjusted EBITDA is impacted by increased operating expenses
to support the Monitoring Division (ZMS) as the Kestrel products are prepared for FDA submission and the fluid monitor is readied for
the market. These initiatives are currently estimated at an approximately $5M OPEX increase over 2021. Profitability is expected to grow
as sales reps become more efficient, further highlighting the expected EBITDA growth in 2022.
First quarter 2022 revenue is estimated
to range between $29 and $32 million, an increase of approximately 26% from 1Q21. Primarily affected by the resetting of health insurance
deductibles in the beginning of a calendar year, seasonably lower revenues in the first quarter are a historical trend for Zynex and
First quarter 2022 Adjusted EBITDA is
estimated to range between $3.0 and $4.5 million, an increase of approximately 1072% from 1Q21.
Sales and profit will ramp through the
remainder of 2022 and bolster expected growth for the full year.
Conference Call and Webcast
Thursday, February 24, 2022 at 2:15
p.m. MT / 4:15 p.m. ET
participate in the webcast, interested parties should click on the following link or dial in approximately 10-15 minutes prior to the
US Participant Dial In (TOLL FREE):
International Participant Dial In:
Canada Participant Dial In (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,
stock compensation, restructuring and non-cash lease charges). 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.
in 1996, develops, manufactures, markets and sells medical devices used for pain management and rehabilitation as well as non-invasive
fluid, sepsis and laser-based pulse oximetry monitoring systems for use in hospitals. 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, forecasts, 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, 2020 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.
650 Fifth Ave., Suite 2720
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 42,612 | $ | 39,173 | ||||
| Accounts receivable, net | 28,632 | 13,837 | ||||||
| Inventory, net | 10,756 | 8,635 | ||||||
| Prepaid expenses and other | 689 | 1,378 | ||||||
| Total current assets | 82,689 | 63,023 | ||||||
| Property and equipment, net | 2,186 | 1,925 | ||||||
| Operating lease asset | 16,338 | 5,993 | ||||||
| Finance lease asset | 389 | 321 | ||||||
| Deposits | 585 | 347 | ||||||
| Intangible assets, net of accumulated amortization | 9,975 | - | ||||||
| Goodwill | 20,401 | - | ||||||
| Deferred income taxes | 711 | 566 | ||||||
| Total assets | $ | 133,274 | $ | 72,175 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | 4,739 | 4,709 | ||||||
| Cash dividends payable | 3,629 | 8 | ||||||
| Operating lease liability | 2,859 | 2,051 | ||||||
| Finance lease liability | 118 | 77 | ||||||
| Income taxes payable | 2,296 | 280 | ||||||
| Current portion of debt | 5,333 | - | ||||||
| Accrued payroll and related taxes | 3,897 | 2,992 | ||||||
| Total current liabilities | 22,871 | 10,117 | ||||||
| Long-term liabilities: | ||||||||
| Long-term portion of debt, less issuance costs | 10,605 | - | ||||||
| Contingent consideration | 9,700 | - | ||||||
| Operating lease liability | 15,856 | 4,920 | ||||||
| Finance lease liability | 317 | 283 | ||||||
| Total liabilities | 59,349 | 15,320 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 41 | 36 | ||||||
| Additional paid-in capital | 80,397 | 37,235 | ||||||
| Treasury stock | (6,513 | ) | (3,846 | ) | ||||
| Retained earnings | - | 23,430 | ||||||
| Total stockholders' equity | 73,925 | 56,855 | ||||||
| Total liabilities and stockholders' equity | $ | 133,274 | $ | 72,175 |
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| NET REVENUE | ||||||||||||||||
| Devices | $ | 13,349 | $ | 8,243 | $ | 36,613 | $ | 21,269 | ||||||||
| Supplies | 27,017 | 17,362 | 93,688 | 58,853 | ||||||||||||
| Total net revenue | 40,366 | 25,605 | 130,301 | 80,122 | ||||||||||||
| COSTS OF REVENUE AND OPERATING EXPENSES | ||||||||||||||||
| Costs of revenue - devices and supplies | 7,331 | 5,659 | 27,321 | 17,417 | ||||||||||||
| Sales and marketing | 13,628 | 12,320 | 54,290 | 34,133 | ||||||||||||
| General and administrative expense | 7,821 | 5,328 | 26,324 | 18,323 | ||||||||||||
| Total costs of revenue and operating expenses | 28,780 | 23,307 | 107,935 | 69,873 | ||||||||||||
| Income from operations | 11,586 | 2,298 | 22,366 | 10,249 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Loss on disposal of non-controlling interest | - | (77 | ) | - | (77 | ) | ||||||||||
| Interest expense | (23 | ) | (5 | ) | (95 | ) | (19 | ) | ||||||||
| Other income (expense), net | (23 | ) | (82 | ) | (95 | ) | (96 | ) | ||||||||
| Income from operations before income taxes | 11,563 | 2,216 | 22,271 | 10,153 | ||||||||||||
| Income tax expense | 2,669 | 428 | 5,168 | 1,079 | ||||||||||||
| Net Income | $ | 8,894 | $ | 1,788 | $ | 17,103 | $ | 9,074 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.23 | $ | 0.05 | $ | 0.45 | $ | 0.24 | ||||||||
| Diluted | $ | 0.23 | $ | 0.05 | $ | 0.44 | $ | 0.24 | ||||||||
| Weighted average basic shares outstanding | 38,411 | 38,258 | 38,317 | 37,256 | ||||||||||||
| Weighted average diluted shares outstanding | 39,170 | 39,199 | 39,197 | 38,438 |
Reconciliation of GAAP to Non-GAAP Measures
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income | $ | 8,894 | $ | 1,788 | $ | 17,103 | $ | 9,074 | ||||||||
| Depreciation and Amortization* | 214 | 272 | 925 | 742 | ||||||||||||
| Stock-based compensation expense | 589 | 875 | 1,630 | 2,681 | ||||||||||||
| Restructuring/severance** | - | - | 318 | - | ||||||||||||
| Interest expense and other, net | 23 | 82 | 95 | 96 | ||||||||||||
| Non-cash lease expense *** | 572 | - | 1,428 | - | ||||||||||||
| Income tax expense | 2,669 | 428 | 5,168 | 1,079 | ||||||||||||
| Adjusted EBITDA | $ | 12,961 | $ | 3,445 | $ | 26,667 | $ | 13,672 | ||||||||
| % of Net Revenue | 32 | % | 13 | % | 20 | % | 17 | % |
* Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of goods sold.
** Severance of former COO Giusseppe Papandrea which was fully expensed in Q1-2021
*** Amount expensed on new company headquarters on which no payments are due until 2022