Full Press Release Details
2022 Second Quarter Earnings
Englewood, CO, July 28, 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 second quarter ended June 30, 2022.
Second Quarter 2022 Financial
For the second quarter, the Company
reported net revenue of $36.8 million, an 18% increase over second quarter of 2021. Gross margins were 80% and net income was $3.3 million,
a 19% increase from Q2 2021.
As of June 30, 2022, the Company had
working capital of $51.8 million. Cash on hand was $26.9 million at the end of the second quarter.
President and CEO Commentary:
"In Q2, we posted another quarter
of top line growth and increased profitability. Our reps are becoming highly efficient and revenue projections reflect our confidence
in the sales force to produce exceptional results. The record orders we posted in second quarter will put us in a position to realize
strong results in the second half of 2022," said Thomas Sandgaard, President and CEO. "Additionally, we completed an initial
$10 million share buyback program and announced another $10 million program to signal our ability to drive shareholder value."
Third Quarter and Full Year
Zynex is reaffirming its full year 2022
revenue estimates in the range of $150-$170 million and Adjusted EBITDA between $25-$35 million.
The estimated range for third quarter
2022 revenue is between $40-$43 million, an increase of approximately 20% from Q3 2021. Adjusted EBITDA for the third quarter 2022 is
estimated to range between $7-$9 million.
Conference Call and Webcast
Thursday, July 28, 2022 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: https://app.webinar.net/mV4arKMJQLl
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.
Zynex, 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, 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, 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.
650 Fifth Ave., Suite 2720
| ZYNEX, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (AMOUNTS IN THOUSANDS) | ||||||||
| (unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 26,877 | $ | 42,612 | ||||
| Accounts receivable, net | 27,824 | 28,632 | ||||||
| Inventory, net | 14,572 | 10,756 | ||||||
| Prepaid expenses and other | 1,357 | 689 | ||||||
| Total current assets | 70,630 | 82,689 | ||||||
| Property and equipment, net | 2,277 | 2,186 | ||||||
| Operating lease asset | 14,719 | 16,338 | ||||||
| Finance lease asset | 329 | 389 | ||||||
| Deposits | 591 | 585 | ||||||
| Intangible assets, net of accumulated amortization | 9,525 | 9,975 | ||||||
| Goodwill | 20,401 | 20,401 | ||||||
| Deferred income taxes | 1,103 | 711 | ||||||
| Total assets | $ | 119,575 | $ | 133,274 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | 5,236 | 4,739 | ||||||
| Cash dividends payable | 16 | 3,629 | ||||||
| Operating lease liability | 3,391 | 2,859 | ||||||
| Finance lease liability | 123 | 118 | ||||||
| Income taxes payable | 160 | 2,296 | ||||||
| Current portion of debt | 5,333 | 5,333 | ||||||
| Accrued payroll and related taxes | 4,564 | 3,897 | ||||||
| Total current liabilities | 18,823 | 22,871 | ||||||
| Long-term liabilities: | ||||||||
| Long-term portion of debt, less issuance costs | 7,949 | 10,605 | ||||||
| Contingent consideration | 9,600 | 9,700 | ||||||
| Operating lease liability | 13,941 | 15,856 | ||||||
| Finance lease liability | 253 | 317 | ||||||
| Total liabilities | 50,566 | 59,349 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 40 | 41 | ||||||
| Additional paid-in capital | 81,412 | 80,397 | ||||||
| Treasury stock | (17,166 | ) | (6,513 | ) | ||||
| Retained earnings | 4,723 | - | ||||||
| Total stockholders' equity | 69,009 | 73,925 | ||||||
| Total liabilities and stockholders' equity | $ | 119,575 | $ | 133,274 |
| ZYNEX, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| NET REVENUE | ||||||||||||||||
| Devices | $ | 9,505 | $ | 7,828 | $ | 16,230 | $ | 14,193 | ||||||||
| Supplies | 27,254 | 23,194 | 51,612 | 40,956 | ||||||||||||
| Total net revenue | 36,759 | 31,022 | 67,842 | 55,149 | ||||||||||||
| COSTS OF REVENUE AND OPERATING EXPENSES | ||||||||||||||||
| Costs of revenue - devices and supplies | 7,305 | 7,267 | 14,226 | 13,153 | ||||||||||||
| Sales and marketing | 16,314 | 13,752 | 30,738 | 27,579 | ||||||||||||
| General and administrative | 8,776 | 6,188 | 16,608 | 11,683 | ||||||||||||
| Total costs of revenue and operating expenses | 32,395 | 27,207 | 61,572 | 52,415 | ||||||||||||
| Income from operations | 4,364 | 3,815 | 6,270 | 2,734 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Gain (loss) on change in fair value of contingent consideration | (100 | ) | - | 100 | - | |||||||||||
| Interest expense | (115 | ) | (45 | ) | (239 | ) | (54 | ) | ||||||||
| Other expense, net | (215 | ) | (45 | ) | (139 | ) | (54 | ) | ||||||||
| Income from operations before income taxes | 4,149 | 3,770 | 6,131 | 2,680 | ||||||||||||
| Income tax expense | 803 | 962 | 1,408 | 578 | ||||||||||||
| Net income | $ | 3,346 | $ | 2,808 | $ | 4,723 | $ | 2,102 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.09 | $ | 0.07 | $ | 0.12 | $ | 0.05 | ||||||||
| Diluted | $ | 0.08 | $ | 0.07 | $ | 0.12 | $ | 0.05 | ||||||||
| Weighted average basic shares outstanding | 38,851 | 38,291 | 39,305 | 38,306 | ||||||||||||
| Weighted average diluted shares outstanding | 39,893 | 39,141 | 40,367 | 39,192 |
| ZYNEX, INC. | ||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Adjusted EBITDA: | ||||||||||||||||
| Net income | $ | 3,346 | $ | 2,808 | $ | 4,723 | $ | 2,102 | ||||||||
| Depreciation and Amortization* | 411 | 242 | 807 | 510 | ||||||||||||
| Stock-based compensation expense | 535 | 401 | 1,124 | 509 | ||||||||||||
| Restructuring/severance** | - | - | - | 318 | ||||||||||||
| Interest expense and other, net | 215 | 45 | 139 | 54 | ||||||||||||
| Non-cash lease expense *** | 227 | 303 | 410 | 303 | ||||||||||||
| Income tax expense | 803 | 962 | 1,408 | 578 | ||||||||||||
| Adjusted EBITDA | $ | 5,537 | $ | 4,761 | $ | 8,611 | $ | 4,374 | ||||||||
| % of Net Revenue | 15 | % | 15 | % | 13 | % | 8 | % |
* 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
in excess of cash payments due to abated rent