Full Press Release Details
2023 First Quarter Earnings
Englewood, CO, April 27, 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 first quarter ended March 31, 2023.
First Quarter 2023 Highlights:
First Quarter 2023 Financial Results Summary:
For the first quarter, the Company reported net revenue of $42.2 million,
a 36% increase over first quarter of 2022. Gross margins were 78% and net income was $1.6 million, a 14% increase year-over-year.
As of March 31, 2023, the Company had working capital of $44.1 million.
Cash on hand was $16.8 million at the end of the first quarter. The Company produced $1.9 million in cash from operations in the first
quarter of 2023, an increase of 10% compared to the same period in 2022. The Company completed the latest stock buyback by repurchasing
$3.4 million of its common stock during the first quarter and has repurchased $30 million over the past year.
President and CEO Commentary:
"We were pleased to begin 2023 with a strong performance and
post the fourth straight quarter of record-high order numbers," said Thomas Sandgaard, President and CEO. "Our revenue increased
36% year-over-year despite the cyclical slowdown in the first quarter when insurance deductibles reset, further evidence that our sales
team is more efficient than ever. We look forward to a productive year with consistent growth and intend to announce additional catalysts
in our monitoring division later in the year."
Second Quarter and Full Year 2023 Guidance
2023 estimates are unchanged with revenue ranging from $180 - $200
million and 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.
Second quarter 2023 revenue is estimated to range between $43.5 - $45.5
million, an increase of approximately 21% from Q2 2022. Second quarter Diluted EPS is estimated to range between $0.03- $0.07.
Conference Call and Webcast Details
Thursday, April 27, 2023 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: https://app.webinar.net/brLKVKJWPYk
US Participant Dial In (TOLL FREE): 1-844-825-9790
International Participant Dial In: 1-412-317-5170
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.
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, 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, 2022 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 16,792 | $ | 20,144 | ||||
| Accounts receivable, net | 32,060 | 35,063 | ||||||
| Inventory, net | 14,184 | 13,484 | ||||||
| Prepaid expenses and other | 2,130 | 868 | ||||||
| Total current assets | 65,166 | 69,559 | ||||||
| Property and equipment, net | 2,281 | 2,175 | ||||||
| Operating lease asset | 11,888 | 12,841 | ||||||
| Finance lease asset | 240 | 270 | ||||||
| Deposits | 683 | 591 | ||||||
| Intangible assets, net of accumulated amortization | 8,843 | 9,067 | ||||||
| Goodwill | 20,401 | 20,401 | ||||||
| Deferred income taxes | 1,554 | 1,562 | ||||||
| Total assets | $ | 111,056 | $ | 116,466 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | 5,650 | 5,601 | ||||||
| Cash dividends payable | 16 | 16 | ||||||
| Operating lease liability | 2,003 | 2,476 | ||||||
| Finance lease liability | 127 | 128 | ||||||
| Income taxes payable | 2,015 | 1,995 | ||||||
| Current portion of debt | 5,333 | 5,333 | ||||||
| Accrued payroll and related taxes | 5,915 | 5,537 | ||||||
| Total current liabilities | 21,059 | 21,086 | ||||||
| Long-term liabilities: | ||||||||
| Long-term portion of debt, less issuance costs | 3,964 | 5,293 | ||||||
| Contingent consideration | 8,600 | 10,000 | ||||||
| Operating lease liability | 12,788 | 13,541 | ||||||
| Finance lease liability | 159 | 188 | ||||||
| Total liabilities | 46,570 | 50,108 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 39 | 39 | ||||||
| Additional paid-in capital | 82,343 | 82,431 | ||||||
| Treasury stock | (36,513 | ) | (33,160 | ) | ||||
| Retained earnings | 18,617 | 17,048 | ||||||
| Total stockholders' equity | 64,486 | 66,358 | ||||||
| Total liabilities and stockholders' equity | $ | 111,056 | $ | 116,466 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
| For the Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| NET REVENUE | ||||||||
| Devices | $ | 11,944 | $ | 6,725 | ||||
| Supplies | 30,226 | 24,358 | ||||||
| Total net revenue | 42,170 | 31,083 | ||||||
| COSTS OF REVENUE AND OPERATING EXPENSES | ||||||||
| Costs of revenue - devices and supplies | 9,269 | 6,921 | ||||||
| Sales and marketing | 21,227 | 14,424 | ||||||
| General and administrative | 11,390 | 7,832 | ||||||
| Total costs of revenue and operating expenses | 41,886 | 29,177 | ||||||
| Income from operations | 284 | 1,906 | ||||||
| Other income (expense) | ||||||||
| Gain on sale of fixed assets | 2 | - | ||||||
| Change in fair value of contingent consideration | 1,400 | 200 | ||||||
| Interest expense | (84 | ) | (124 | ) | ||||
| Other income, net | 1,318 | 76 | ||||||
| Income from operations before income taxes | 1,602 | 1,982 | ||||||
| Income tax expense | 33 | 605 | ||||||
| Net income | $ | 1,569 | $ | 1,377 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.04 | $ | 0.03 | ||||
| Diluted | $ | 0.04 | $ | 0.03 | ||||
| Weighted average basic shares outstanding | 36,694 | 39,765 | ||||||
| Weighted average diluted shares outstanding | 37,442 | 41,188 |
Reconciliation of GAAP to Non-GAAP Measures
| For the Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Adjusted EBITDA: | ||||||||
| Net income | $ | 1,569 | $ | 1,377 | ||||
| Depreciation and Amortization* | 423 | 396 | ||||||
| Stock-based compensation expense | 307 | 589 | ||||||
| Interest expense and other (gain), net | (1,318 | ) | (76 | ) | ||||
| Non-cash lease expense ** | - | 183 | ||||||
| Income tax expense | 33 | 605 | ||||||
| Adjusted EBITDA | $ | 1,014 | $ | 3,074 | ||||
| % of Net Revenue | 2 | % | 10 | % |
* Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of goods sold.
** Amount expensed on new company headquarters in excess of cash payments due to abated rent