Full Press Release Details
Zynex Announces 2022 Fourth Quarter and Full
Englewood, CO, March 13, 2023 --
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, 2022.
Fourth Quarter Financial Results Summary:
For the fourth quarter, the Company reported net revenue of $48.8 million,
a 21% increase over fourth quarter of 2021. Gross margins were 81% and net income was $7.5 million, a 53% increase from Q3 2022.
As of December 31, 2022, the Company had working capital of $48.5
million. Cash on hand was $20.1 million at the end of the fourth quarter. The Company produced $13.7 million in cash from operations in
2022, an increase of 98% compared to 2021.
President and CEO Commentary:
"We had a strong end to a record setting 2022, marked by increased
revenue and orders every single quarter," said Thomas Sandgaard, President and CEO. "Our operating cash flows allowed us to
buy back over $26 million of our common stock during 2022 which benefits all shareholders. Additionally, Zynex Monitoring Solutions (ZMS)
is making significant progress with clinical data collection, and we expect to hit several regulatory milestones in 2023. We look forward
to maintaining shareholder value through continued financial health and double-digit growth going forward."
First Quarter and Full Year 2023 Guidance
Full year 2023 revenue is estimated to range between $180 - $200 million
and with Diluted EPS of $0.40 - $0.50 per share. The revenue range is based on our best estimates of labor market conditions and sales
rep productivity. Diluted EPS is impacted by increased operating expenses to support ZMS as the Laser-based Pulse Oximetry products are
prepared for FDA submission and the fluid monitor is readied for the market.
First quarter 2023 revenue is estimated to range between $39.0 - $41.0
million, an increase of approximately 29% from Q1 2022. First quarter revenue is 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 an industry norm.
First quarter Diluted EPS is estimated to range between $0.00- $0.03.
Conference Call and Webcast Details
Monday, March 13, 2023 at 6:30 a.m. MT / 8:30
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: https://app.webinar.net/v2J4N7gNEw7
US Participant Dial In (TOLL FREE):
International Participant Dial In:
Canada Participant Dial In (TOLL FREE):
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.
founded 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, 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 C.E. 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 products 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,
2021 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. (800) 495-6670
Investor Relations Contact:
Investor Relations Counsel
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 20,144 | $ | 42,612 | ||||
| Accounts receivable, net | 35,063 | 28,632 | ||||||
| Inventory, net | 13,484 | 10,756 | ||||||
| Prepaid expenses and other | 868 | 689 | ||||||
| Total current assets | 69,559 | 82,689 | ||||||
| Property and equipment, net | 2,175 | 2,186 | ||||||
| Operating lease asset | 12,841 | 16,338 | ||||||
| Finance lease asset | 270 | 389 | ||||||
| Deposits | 591 | 585 | ||||||
| Intangible assets, net of accumulated amortization | 9,067 | 9,975 | ||||||
| Goodwill | 20,401 | 20,401 | ||||||
| Deferred income taxes | 1,562 | 711 | ||||||
| Total assets | $ | 116,466 | $ | 133,274 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 5,601 | $ | 4,739 | ||||
| Cash dividends payable | 16 | 3,629 | ||||||
| Operating lease liability | 2,476 | 2,859 | ||||||
| Finance lease liability | 128 | 118 | ||||||
| Income taxes payable | 1,995 | 2,296 | ||||||
| Current portion of debt | 5,333 | 5,333 | ||||||
| Accrued payroll and related taxes | 5,537 | 3,897 | ||||||
| Total current liabilities | 21,086 | 22,871 | ||||||
| Long-term liabilities: | ||||||||
| Long-term portion of debt, less issuance costs | 5,293 | 10,605 | ||||||
| Contingent consideration | 10,000 | 9,700 | ||||||
| Operating lease liability | 13,541 | 15,856 | ||||||
| Finance lease liability | 188 | 317 | ||||||
| Total liabilities | 50,108 | 59,349 | ||||||
| Common stock | 39 | 41 | ||||||
| Additional paid-in capital | 82,431 | 80,397 | ||||||
| Treasury stock | (33,160 | ) | (6,513 | ) | ||||
| Retained earnings | 17,048 | - | ||||||
| Total stockholders' equity | 66,358 | 73,925 | ||||||
| Total liabilities and stockholders' equity | $ | 116,466 | $ | 133,274 |
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| NET REVENUE | ||||||||||||||||
| Devices | $ | 15,918 | $ | 13,349 | $ | 43,497 | $ | 36,613 | ||||||||
| Supplies | 32,887 | 27,017 | 114,670 | 93,688 | ||||||||||||
| Total net revenue | 48,805 | 40,366 | 158,167 | 130,301 | ||||||||||||
| COSTS OF REVENUE AND OPERATING EXPENSES | ||||||||||||||||
| Costs of revenue - devices and supplies | 9,388 | 7,331 | 32,005 | 27,321 | ||||||||||||
| Sales and marketing | 19,166 | 13,628 | 67,116 | 54,290 | ||||||||||||
| General and administrative expense | 10,141 | 7,821 | 36,108 | 26,324 | ||||||||||||
| Total costs of revenue and operating expenses | 38,695 | 28,780 | 135,229 | 107,935 | ||||||||||||
| Income from operations | 10,110 | 11,586 | 22,938 | 22,366 | ||||||||||||
| Other expense | ||||||||||||||||
| Loss on change in fair value of contingent consideration | (300 | ) | - | (300 | ) | - | ||||||||||
| Interest expense | (95 | ) | (23 | ) | (440 | ) | (95 | ) | ||||||||
| Other expense | (395 | ) | (23 | ) | (740 | ) | (95 | ) | ||||||||
| Income from operations before income taxes | 9,715 | 11,563 | 22,198 | 22,271 | ||||||||||||
| Income tax expense | 2,263 | 2,669 | 5,150 | 5,168 | ||||||||||||
| Net Income | $ | 7,452 | $ | 8,894 | $ | 17,048 | $ | 17,103 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.20 | $ | 0.23 | $ | 0.44 | $ | 0.45 | ||||||||
| Diluted | $ | 0.20 | $ | 0.23 | $ | 0.44 | $ | 0.44 | ||||||||
| Weighted average basic shares outstanding | 37,236 | 38,411 | 38,467 | 38,317 | ||||||||||||
| Weighted average diluted shares outstanding | 37,960 | 39,170 | 39,127 | 39,197 |
Reconciliation of GAAP to Non-GAAP Measures
| For the Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income | $ | 7,452 | $ | 8,894 | $ | 17,048 | $ | 17,103 | ||||||||
| Depreciation and Amortization* | 423 | 214 | 1,648 | 925 | ||||||||||||
| Stock-based compensation expense | 640 | 589 | 2,342 | 1,630 | ||||||||||||
| Restructuring/severance** | - | - | - | 318 | ||||||||||||
| Interest expense and other, net | 395 | 23 | 740 | 95 | ||||||||||||
| Non-cash lease expense *** | 183 | 572 | 1,165 | 1,428 | ||||||||||||
| Income tax expense | 2,263 | 2,669 | 5,150 | 5,168 | ||||||||||||
| Adjusted EBITDA | $ | 11,356 | $ | 12,961 | $ | 28,093 | $ | 26,667 | ||||||||
| % of Net Revenue | 23 | % | 32 | % | 18 | % | 20 | % |
* 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
*** Amount expensed on new company headquarters in excess of cash payments