Zynex Announces First Quarter 2016 Results

LONE TREE, Colo., May 25, 2016 /PRNewswire/ -- Zynex (OTCQB: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, neuro diagnostics, cardiac and blood volume monitoring, announced today its first quarter 2016 financial results.

President and CEO Commentary:

Thomas Sandgaard, CEO commented: "We grew electrotherapy orders dramatically during the first quarter compared to last year by a factor 3 primarily due to the addition of many new, seasoned direct sales reps. Revenue came in at $3.5 million, nearly 10% above the first quarter last year, but short of the $4.5 million estimate earlier this year. The reason was the accounting treatment of $880,000 payments from a single insurance payer in March that we did not report as revenue yet but rather keep in the balance sheet with a reserve until further notice.

"Recently, our lack of liquidity has made it difficult to keep up with order volume in production and has slowed us down. While cash collections have begun to increase there is still very little flexibility under our current line of credit to support our increase in business.

"We expect to see orders being flat or slightly decline during May and June, then pick up again significantly during the remainder of 2016. Our revenue expectation for 2016 is currently around $16 million and with positive net income."

Sandgaard continued: "We recently published a clinical study online, where 8 subjects donated 470 ml of blood while being monitored by our non-invasive Blood Volume Monitor. The results show an excellent correlation between the blood drawn and the Blood Volume Index. You can read the full study on our web-site, www.zynex.com. We continue to have a dialog with the FDA and hope to have FDA's market clearance in a foreseeable future."

Summary of Financial Results:

The Company's net revenue was $3,477,000 for the first quarter of 2016, compared to $3,183,000 for the first quarter of 2015. Revenue in the first quarter was negatively impacted by significant inertia in getting the many new files billed due to lack of billing personnel. As well, a large payment from an insurance company was not recorded in revenue but rather reserved in the balance sheet's liabilities as a precaution in case the money would be taken back - an event that is common in our industry. Gross profit margin in the quarter was 72%.

The Company reported Selling, General and Administrative ("SG&A") expenses of $2,844,000 for the first quarter of 2016, compared to $2,710,000 for the quarter ended March 31, 2015, an increase of $134,000 primarily attributed to a significant increase in sales commissions.

For the first quarter 2016, the Company reported a net loss of $444,000, or $0.01 per share, compared to a net loss of $896,000, or $0.03 per share in the same period of 2015. For the nine months ended September 30, 2015, the Company reported a net loss of $1,711,000, or $0.05 per share, compared to a net loss of $6,724,000, or $0.22 per share in 2014.

Cash provided by operations in the first quarter 2016 was $666,000 versus $163,000 in the first quarter of 2015.

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