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Zynex (ZYXI.OB) Research Update Released

4/4/2013 10:55:30 AM

New York, NY - On April 3, 2013, Taglich Brothers released an updated research report on Zynex, Inc. (ZYXI) and reiterated a Speculative Buy rating with a 12-month price target of $1.10 per share. The report noted the following key investment considerations:

• The rising prevalence of chronic pain associated with age-related illnesses should drive demand for Zynex’s noninvasive electrotherapy technology, which treats a broad range of pain conditions.

• The US electrotherapy market is projected to grow to $820 million by 2016, up from $600 million in 2012. By expanding its sales force, adding new products, and increasing the number of its electrotherapy systems in service, Zynex sales increased 38% annually from 2007 to 2012, a period in which sales of the US medical device market were largely flat.

• That growth rate will moderate as the company expands, but continued market penetration, new products, recent acquisitions, and overseas expansion should drive annual revenue gains of 9% to 15% during the next two years.

• Due partly to a large recurring high-margin revenue stream, Zynex’s gross margin of 80%+ is exceptionally high. As the company achieves better control of its operating expenses, leverage should significantly improve profitability.

• In 4Q12 (results released Mar. 14, 2013) Zynex earned $0.01 per share, on revenue of $10.6 million. We projected EPS of $0.02 per share on revenue of $11.4 million. In 2012 Zynex earned EPS of $0.05 on revenue of $40 million. In 2011 the company earned $0.05 per share on revenue of $34 million.

• For 2013 and 2014 we project 30%+ EPS gains on modest revenue growth as gross margins widen slightly and operating expenses are better leveraged.

The full report can be viewed at

Company Description:

Zynex, Inc. (ZYXI: OTCBB), based in Lone Tree, Colorado, manufactures a line of electrotherapy devices used for pain management and rehabilitation. Revenue has increased sharply, growing threefold in the last three years alone.

Zynex’s non-invasive transcutaneous electrical nerve stimulation (TENS) and interferential current (IF) systems have been used to treat pain ranging from mild persistent problems such as sore muscles to acute postoperative pain.

The company’s neuromuscular electrical stimulation (NMES) systems are used mainly by physical therapists to treat victims of trauma, stroke, or incidents that degrade muscle function, enabling stroke or spinal injury victims to regain lost mobility, functionality, speech, and memory.

In addition to its own products, Zynex distributes private labeled electrical stimulation devices, electrodes and batteries produced by other manufacturers. A substantial portion of revenue is recurring – rentals, and electrodes and batteries provided to patients using rental or purchased units.

In the US, which accounts for most of its sales, the company sells its medical devices through 200 sales representatives, two-thirds of which are independent contractors. Overseas, Zynex has distributors in Canada, Australia, Southeast Asia, the United Arab Emirates, the Netherlands, and Germany.

Taglich Brothers:

Taglich Brothers, Inc. is full-service broker dealer focused exclusively on microcap companies. The Company defines the microcap segment of the equity market as companies with less than $250 million in market capitalization. Taglich Brothers currently offers institutional and retail brokerage services, investment banking and comprehensive research coverage to the investment community.

The Taglich Brothers' Equity Research department is dedicated to providing research reports that are informative, insightful and illuminating. Reports are designed to distill volumes of investment information into a concise, straightforward format so that busy professional investors can make informed investment decisions.


The information and statistical data contained herein have been obtained from sources, which we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to changes in figures or our views. This is not a solicitation of any order to buy or sell. Taglich Brothers, Inc. is fully disclosed with its clearing firm, Pershing, LLC, is not a market maker and does not sell to or buy from customers on a principal basis. The above statements are the opinion of Taglich Brothers, Inc. and are not a guarantee that the target price for the stock will be met or that predicted business results for the company will occur. There may be instances when fundamental, technical and quantitative opinions contained in the reports are not in concert. We, our affiliates, any officer, director or stockholder or any member of their families may from time to time purchase or sell any of the above-mentioned or related securities. Analysts and members of the Research Department are prohibited from buying or selling securities issued by the companies that Taglich Brothers, Inc. has a research relationship with, except if ownership of such securities was prior to the start of such relationship, then an Analyst or member of the Research Department may sell such securities after obtaining expressed written permission from Compliance. All research issued by Taglich Brothers, Inc. is based on public information. Taglich Brothers, Inc. does not currently have an Investment Banking relationship with the company mentioned and was not a manager or co-manager of any offering for the company within the last three years. In September 2012 the company paid an initial monetary engagement fee of US$4,500 to Taglich Brothers, Inc. representing payment for the first three months of creation and dissemination of research reports, after which the company will pay Taglich Brothers, Inc. a monetary fee of US$1,500 per month for a minimum of three more months for such services.For further information and Taglich Brothers, Inc. ownership data please refer to each individual report.


Richard Oh


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