Q3 2023 Revenue Increased 20% to $49.9 Million; EPS $0.10
ENGLEWOOD, Colo., Oct. 26,
2023 /PRNewswire/ -- 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, has reported
its financial and operational results for the third quarter ended
September 30, 2023.
Key Third Quarter and 2023 Highlights and Business
Update
- Q3 2023 revenue increased 20% year-over-year to $49.9 million.
- Net income of $3.6 million;
Diluted EPS $0.10.
- Orders increased 39% year-over-year; highest number of orders
in Company history for the 6th consecutive quarter.
- Cash from operations of $8.9
million in the third quarter; highest in Company
history.
- Added three new therapy products centered around pain
management: Zynex Pro Thoracic Lumbar Sacral Orthosis ("TLSO"),
Zynex Pro Wrist, and Zynex Cryoheat.
Management Commentary
"The third quarter was highlighted by increasing revenue and
cash flow momentum driven by our sixth straight quarter of
record-high order numbers," said Thomas
Sandgaard, President and CEO of Zynex. "As we continue to
develop the next generation of patient monitoring equipment, our
pain management division delivered a 39% improvement in orders
year-over-year and celebrated our 1 millionth patient treated since
founding the company. Our continued profitability and record
positive cash flow allowed us to announce an additional
$10 million share repurchase
plan.
"The pain management division also introduced three new therapy
products in the third quarter, building on our holistic,
non-invasive approach to pain management. The new products include
Zynex Pro Thoracic Lumbar Sacral Orthosis ("TLSO"), a dual-purpose
back brace for the mid and lower spine; Zynex Pro Wrist, a wrist
brace for a broad spectrum of wrist-related pain management
including carpal tunnel syndrome; and Zynex Cryoheat, a localized
cold or hot fluid therapy system for home or hospital use. We
continue to focus on profitable growth by adding products to our
suite in complementary ways that combine with our industry-leading
prescription strength pain management device, the NexWave.
"For our pre-revenue hospital monitoring products division, we
have three additional products in the pipeline including a
laser-based pulse oximeter, NiCO™; a monitor for early detection of
sepsis; and a non-invasive, laser-based monitor of total hemoglobin
levels, HemeOx™.
"We continue to expand our direct salesforce and continue to
improve sales rep productivity which delivers accelerating and
recurring revenue. In tandem we focused on ramping our hospital
monitoring division which represents a large and growing market
opportunity. We look forward to additional updates in the months to
come as we work to build long term value for our shareholders,"
concluded Sandgaard.
Third Quarter 2023 Financial Results
Net revenue was $49.9 million for
the three months ended September 30,
2023, an increase of 20% from $41.5
million in the prior year quarter. The growth in net revenue
is primarily related to a 39% growth in device orders, which
resulted from an increased customer base.
Gross profit in the quarter ended September 30, 2023, increased to $40.4 million, or 81% of revenue, as compared to
$33.1 million or 80% of revenue, in
2022.
Sales and marketing expenses were $22.1
million for the three months ended September 30, 2023, compared to $17.2 million in the prior year period.
General and administrative expenses for the three months ended
September 30, 2023 were $12.7 million, versus $9.4
million in the prior year period.
Net income for the three months ended September 30, 2023, totaled $3.6 million, or $0.10 per basic and diluted share, as compared to
net income of $4.9 million, or
$0.13 per basic and diluted share, in
the quarter ended September 30,
2022.
Adjusted EBITDA for the three months ended September 30, 2023 was $7.3 million, as compared to $8.1 million in the quarter ended September 30, 2022.
As of September 30, 2023, the
Company had working capital of $83.1
million. Cash and cash equivalents and short-term
investments were $52.4 million at the
end of the third quarter. Cash provided by operations for the three
months ended September 30, 2023 was a
record high $8.9 million. Cash
provided by operations for the nine months ended September 30, 2023 was $11.6 million compared to $9.0 million in the nine months ended
September 30, 2022.
The Company continued its latest stock buyback by repurchasing
$14.9 million of its common stock
during the third quarter and has repurchased $51.0 million during the last eighteen
months.
Fourth Quarter and Full Year 2023 Guidance
Fourth quarter 2023 revenue is estimated to be $52.5-$57.5
million, an increase of approximately 13% from Q4 2022.
Fourth quarter Diluted EPS is estimated to be $0.17-$0.22.
2023 estimates are revenue of $189.5-$194.5
million and Diluted EPS of $0.40-$0.45 per
share. The revenue range is based on 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.
Conference Call and Webcast Details
Thursday, October 26, 2023, at
4:15 PM Eastern Time (1:15 PM Pacific Time)
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: Q3 2023 Webcast Link
US Participant Dial In (TOLL FREE): 1-844-825-9790
International Participant Dial In: 1-412-317-5170
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.
About Zynex, Inc.
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 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 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.
Investor Relations Contact:
Quinn Callanan, CFA or Brian Prenoveau, CFA
MZ Group – MZ North America
ZYXI@mzgroup.us
+949 694 9594
|
ZYNEX, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
September
30,
|
|
December
31,
|
|
2023
|
|
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
42,517
|
|
$
20,144
|
|
Short term
investments, net
|
9,924
|
|
-
|
|
Accounts receivable,
net
|
33,288
|
|
35,063
|
|
Inventory,
net
|
14,186
|
|
13,484
|
|
Prepaid expenses and
other
|
3,008
|
|
868
|
|
Total current assets
|
102,923
|
|
69,559
|
|
|
|
|
|
Property and equipment,
net
|
2,468
|
|
2,175
|
|
Operating lease
asset
|
13,168
|
|
12,841
|
|
Finance lease
asset
|
637
|
|
270
|
|
Deposits
|
409
|
|
591
|
|
Intangible assets, net
of accumulated amortization
|
8,387
|
|
9,067
|
|
Goodwill
|
20,401
|
|
20,401
|
|
Deferred income
taxes
|
3,036
|
|
1,562
|
|
Total assets
|
$
151,429
|
|
$
116,466
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
8,050
|
|
5,617
|
|
Operating lease
liability
|
3,072
|
|
2,476
|
|
Finance lease
liability
|
210
|
|
128
|
|
Income taxes
payable
|
1,996
|
|
1,995
|
|
Current portion of
debt
|
-
|
|
5,333
|
|
Accrued payroll and
related taxes
|
6,515
|
|
5,537
|
|
Total current liabilities
|
19,843
|
|
21,086
|
|
Long-term
liabilities:
|
|
|
|
|
Long-term portion of
debt, less issuance costs
|
-
|
|
5,293
|
|
Convertible senior
notes, less issuance costs
|
57,375
|
|
-
|
|
Contingent
consideration
|
-
|
|
10,000
|
|
Operating lease
liability
|
15,154
|
|
13,541
|
|
Finance lease
liability
|
475
|
|
188
|
|
Total liabilities
|
92,847
|
|
50,108
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
34
|
|
39
|
|
Additional paid-in
capital
|
90,543
|
|
82,431
|
|
Treasury stock, at cost
|
(57,560)
|
|
(33,160)
|
|
Retained
earnings
|
25,565
|
|
17,048
|
|
Total stockholders' equity
|
58,582
|
|
66,358
|
|
Total liabilities and stockholders' equity
|
$
151,429
|
|
$
116,466
|
|
ZYNEX, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
NET
REVENUE
|
|
|
|
|
|
|
|
|
Devices
|
$
16,855
|
|
$
11,349
|
|
$ 42,542
|
|
$
27,579
|
|
Supplies
|
33,060
|
|
30,171
|
|
94,495
|
|
81,783
|
|
Total net
revenue
|
49,915
|
|
41,520
|
|
137,037
|
|
109,362
|
|
|
|
|
|
|
|
|
|
COSTS OF REVENUE AND
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Costs of revenue -
devices and supplies
|
9,553
|
|
8,391
|
|
28,094
|
|
22,617
|
|
Sales and
marketing
|
22,146
|
|
17,212
|
|
64,982
|
|
47,950
|
|
General and
administrative
|
12,731
|
|
9,359
|
|
35,479
|
|
25,967
|
|
Total costs of revenue
and operating expenses
|
44,430
|
|
34,962
|
|
128,555
|
|
96,534
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
5,485
|
|
6,558
|
|
8,482
|
|
12,828
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Gain on
sale of fixed assets
|
37
|
|
-
|
|
39
|
|
-
|
|
Gain
(loss) on change in fair value of contingent
consideration
|
(245)
|
|
(100)
|
|
2,855
|
|
-
|
|
Interest
expense, net
|
(327)
|
|
(106)
|
|
(728)
|
|
(345)
|
|
Other income (expense),
net
|
(535)
|
|
(206)
|
|
2,166
|
|
(345)
|
|
|
|
|
|
|
|
|
|
Income from operations
before income taxes
|
4,950
|
|
6,352
|
|
10,648
|
|
12,483
|
|
Income tax
expense
|
1,356
|
|
1,479
|
|
2,131
|
|
2,887
|
|
Net income
|
$
3,594
|
|
$
4,873
|
|
$
8,517
|
|
$
9,596
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.10
|
|
$
0.13
|
|
$
0.24
|
|
$
0.25
|
|
Diluted
|
$
0.10
|
|
$
0.13
|
|
$
0.23
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares outstanding
|
35,531
|
|
38,046
|
|
36,216
|
|
38,881
|
|
Weighted average
diluted shares outstanding
|
36,103
|
|
38,865
|
|
36,866
|
|
39,729
|
|
ZYNEX, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
For the Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
$
8,517
|
|
$
9,596
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
1,984
|
|
1,590
|
|
Amortization
|
1,078
|
|
695
|
|
Non-cash reserve
charges
|
(91)
|
|
65
|
|
Stock-based
compensation
|
1,621
|
|
1,702
|
|
Non-cash lease
expense
|
568
|
|
720
|
|
Benefit for deferred
income taxes
|
(1,473)
|
|
(772)
|
|
Change in fair value
of contingent consideration
|
(2,855)
|
|
-
|
|
Gain on sale of fixed
assets
|
(39)
|
|
-
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
Short-term investments
|
(114)
|
|
-
|
|
Accounts
receivable
|
1,775
|
|
282
|
|
Prepaid
and other assets
|
(826)
|
|
(446)
|
|
Accounts
payable and other accrued expenses
|
3,312
|
|
364
|
|
Inventory
|
(2,071)
|
|
(4,801)
|
|
Deposits
|
182
|
|
(6)
|
|
Net cash provided by operating activities
|
11,568
|
|
8,989
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Purchase of property
and equipment
|
(630)
|
|
(332)
|
|
Purchase of short-term
investments
|
(9,810)
|
|
-
|
|
Proceeds on sale of
fixed assets
|
50
|
|
-
|
|
Net cash used in investing activities
|
(10,390)
|
|
(332)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Payments on finance
lease obligations
|
(95)
|
|
(87)
|
|
Cash dividends
paid
|
(1)
|
|
(3,613)
|
|
Purchase of treasury
stock
|
(24,402)
|
|
(19,811)
|
|
Proceeds from issuance
of convertible senior notes, net of issuance costs
|
57,018
|
|
-
|
|
Proceeds from the
issuance of common stock on stock-based awards
|
33
|
|
27
|
|
Principal payments on
long-term debt
|
(10,667)
|
|
(4,000)
|
|
Taxes withheld and
paid on employees' equity awards
|
(691)
|
|
(253)
|
|
Net cash provided by (used in) financing activities
|
21,195
|
|
(27,737)
|
|
|
|
|
|
Net increase (decrease)
in cash
|
22,373
|
|
(19,080)
|
|
Cash and cash
equivalents at beginning of period
|
20,144
|
|
42,612
|
|
Cash and cash
equivalents at end of period
|
$
42,517
|
|
$
23,532
|
|
ZYNEX,
INC.
RECONCILIATION
OF GAAP TO NON-GAAP MEASURES
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net
income
|
$
3,594
|
|
$ 4,873
|
|
$
8,517
|
|
$
9,596
|
|
Depreciation and
Amortization*
|
401
|
|
418
|
|
1,237
|
|
1,225
|
|
Stock-based
compensation expense
|
654
|
|
578
|
|
1,620
|
|
1,702
|
|
Interest expense and other, net
|
290
|
|
106
|
|
689
|
|
345
|
|
Change in value of contingent consideration
|
245
|
|
100
|
|
(2,855)
|
|
-
|
|
Non-cash lease expense **
|
751
|
|
572
|
|
978
|
|
982
|
|
Income tax expense
|
1,356
|
|
1,479
|
|
2,131
|
|
2,887
|
|
Adjusted
EBITDA
|
$7,291
|
|
$8,126
|
|
$12,317
|
|
$
16,737
|
|
% of Net
Revenue
|
15 %
|
|
20 %
|
|
9 %
|
|
15 %
|
|
|
* 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 in excess of cash payments due to abated rent
|
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SOURCE Zynex
