Zynex Announces 2017 Fourth Quarter Earnings

Published: Feb 28, 2018

ENGLEWOOD, Colo., Feb. 28, 2018 /PRNewswire/ -- Zynex, Inc. (OTCQB: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, cardiac monitoring and neurological diagnostics, today reported financial results for its fourth quarter ended December 31, 2017.

President and CEO Commentary:

Thomas Sandgaard, CEO commented: "I am pleased to report net income of $3.3 million in the fourth quarter which continues our trend of bottom line improvement. Our revenue grew to $8.1 million, an increase of 19% compared to the third quarter and 178% above the fourth quarter of last year. Our gross profit margin increased to 81% versus 76% in Q4-2016. I am particularly satisfied with our Adjusted EBITDA for the full year of $9.5 million."

"We currently estimate our first quarter revenue to range between $6.5 and $7.0 million with Adjusted EBITDA between $2.0 and $2.5 million. First quarter revenue is historically affected by health insurance deductibles not being met in the beginning of the year. The revenue estimate is approximately 89% to 104% above last year's first quarter revenue of $3.4 million."

"Our flagship product, the NexWave, is an important technology for physicians to prescribe in today's opioid crisis, allowing patients with debilitating pain access to prescription strength pain relief without side effects. In many cases, our NexWave device should be prescribed as a first-line-of-defense before prescribing medications such as opioids. I am dedicated to promoting our technology in order to minimize addiction and other side effects from prescription opioids."

Fourth Quarter Financial Results Summary:

The Company reported net revenue of $8.1 million, a 178% increase over Q4-2016 and a 19% increase compared to Q3-2017. For the year ended December 31, 2017, total revenue increased 76% to $23.4 million from $13.3 million for the year ended December 31, 2016.

Gross margins were 81% in the fourth quarter of 2017 compared to 76% last year. Gross margins for the year ended December 31, 2017 increased to 79% from 74% in 2016.

Net income grew 1,482% to $3.3 million in the fourth quarter of 2017, compared to $0.2 million last year. For the year ended December 31, 2017, net income grew 10,521% to $7.4 million from $69,000 in 2016.

Adjusted EBITDA grew 481% to $3.9 million in the fourth quarter of 2017 compared to $0.7 million last year. For the year ended December 31, 2017, Adjusted EBITDA grew 657% to $9.5 million from $1.3 million in 2016.

The Company generated $8.3 million of cash from operations during 2017, an increase of 367% compared to $1.8 million in 2016. As of December 31, 2017, the Company had working capital of $4.4 million compared to a deficit of $4.3 million at December 31, 2016.

Webcast Details: Wednesday, February 28, 2018 at 9:00 a.m. MT - 11:00 a.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://www.webcaster4.com/Webcast/Page/1487/24778

    US PARTICIPANT DIAL IN (TOLL FREE):             1-844-825-9790

    INTERNATIONAL DIAL IN:                          1-412-317-5170

    Canada 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 and stock compensation). 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 earnings available to service debt. 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

Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company's proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. Zynex is also developing a new blood volume monitor for use in hospitals and surgery centers. For additional information, please visit: Zynex.com.

Safe Harbor Statement

Certain statements in this release are "forward-looking" and as such are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain FDA clearance and 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 from insurance companies for products sold or rented to our customers, acceptance of our products by health insurance providers, 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 our ability to up-list to a larger exchange and other risks described in our filings with the Securities and Exchange Commission including the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2017 as well as Forms 10-Q, 8-K and 8-K/A, press releases and the Company's website.

Contact: Zynex, Inc. (303) 703-4906

Investor Relations Contact:
Amato And Partners, LLC
Investor Relations Counsel
admin@amatoandpartners.com

 

                                                                                                     ZYNEX, INC.

                                                                                             CONSOLIDATED BALANCE SHEETS

                                                                                                   (in thousands)

                                                                                                     (unaudited)

                                                                                                                         December 31,           December 31,

                                                                                                                                 2017                    2016
                                                                                                                                 ----                    ----

                                                                               ASSETS

    Current assets:

    Cash                                                                                                                                 $5,565                         $247

    Accounts receivable, net                                                                                                            2,185                        3,028

    Inventory, net                                                                                                                        423                          107

    Prepaid expenses                                                                                                                      198                           40
                                                                                                                                          ---                          ---

                                                   Total current assets                                                                 8,371                        3,422


    Property and equipment, net                                                                                                           188                          580

    Deposits                                                                                                                              370                           55

    Amortizable intangible assets, net                                                                                              -                          34

                                                   Total assets                                                                          $8,929                       $4,091
                                                                                                                                         ======                       ======


                                                                LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Line of credit                                                                                                                  $         -                      $2,771

    Current portion of unsecured subordinated promissory notes                                                                            231                            -

    Current portion of capital leases                                                                                                     123                          118

    Accounts payable and accrued expenses                                                                                               2,243                        3,244

    Accrued payroll and related taxes                                                                                                     538                          732

    Deferred insurance reimbursement                                                                                                      880                          880
                                                                                                                                          ---                          ---

                                                  Total current liabilities                                                             4,015                        7,745

    Long-term liabilities:

    Capital leases, less current portion                                                                                            -                         136

    Warranty liability                                                                                                                     12                           12
                                                                                                                                          ---                          ---

                                                  Total liabilities                                                                     4,027                        7,893


    Stockholders' equity:

        Preferred stock                                                                                                             -                           -

        Common stock                                                                                                                       33                           31

    Additional paid-in capital                                                                                                          7,612                        6,032

    Treasury stock, at cost                                                                                                             (243)                           -

    Accumulated deficit                                                                                                               (2,411)                     (9,776)
                                                                                                                                       ------                       ------

                                                  Total Zynex, Inc. stockholders' equity (deficit)                                      4,991                      (3,713)

                                                  Non-controlling interest                                                               (89)                        (89)
                                                                                                                                          ---                          ---

                                                  Total stockholders' equity (deficit)                                                  4,902                      (3,802)

                                                  Total liabilities and stockholders' equity                                             $8,929                       $4,091
                                                                                                                                         ======                       ======

 

                                                                         ZYNEX, INC.

                                                              CONSOLIDATED STATEMENTS OF INCOME

                                                             (in thousands except per share data)

                                                                         (unaudited)


                                                                                                  For the Three Months Ended        For the Years Ended December 31,
                                                                                                       December 31,
                                                                                                       ------------

                                                                                                            2017               2016                    2017              2016
                                                                                                            ----               ----                    ----              ----

    NET REVENUE

    Product devices                                                                                        2,113              2,196                   8,755             9,032

    Product supplies                                                                                       6,021                726                  14,677             4,281
                                                                                                           -----                ---                  ------             -----

    Total revenue                                                                                          8,134              2,922                  23,432            13,313
                                                                                                           -----              -----                  ------            ------


    COSTS OF REVENUE AND OPERATING EXPENSES

    Costs of revenue - rental, product & supply                                                            1,529                712                   4,819             3,517

    Selling, general and administrative expense                                                            3,013              1,692                   9,669             9,156

    Total costs of revenue and operating expenses                                                          4,542              2,404                  14,488            12,673
                                                                                                           -----              -----                  ------            ------


    Income (loss) from operations                                                                          3,592                518                   8,944               640
                                                                                                           -----                ---                   -----               ---


    Other income (expense)

       Interest income                                                                                         -             (204)                      -            (204)

       Interest expense                                                                                    (244)              (91)                (1,450)            (352)

    Other income (expense), net                                                                            (244)             (295)                (1,450)            (556)
                                                                                                            ----               ----                  ------              ----


    Income from operations before income taxes                                                             3,348                223                   7,494                84

      Income tax expense                                                                                      40                 15                     129                15
                                                                                                             ---                ---                     ---               ---

    Net Income (loss)                                                                                      3,308                208                   7,365                69

    Plus: Net loss - noncontrolling interest                                                                   -                 -                      -                -

    Net income (loss) - attributable to Zynex, Inc.                                                        3,308                208                   7,365                69
                                                                                                           =====                ===                   =====               ===


    Net income (loss) per share attributable to Zynex, Inc.:

    Basic                                                                                                  $0.10              $0.01                   $0.23             $0.00


    Diluted                                                                                                $0.10              $0.01                   $0.22             $0.00


    Weighted average basic shares outstanding                                                             32,831             31,271                  32,156            31,271

    Weighted average diluted shares outstanding                                                           34,414             31,271                  33,196            31,271

 

                                                                 ZYNEX, INC.

                                                 Reconciliation of GAAP to Non-GAAP Measures

                                                                (in thousands)

                                                                 (unaudited)


                                                                     For the Three Months Ended December 31,        For the Years Ended December 31,
                                                                     ---------------------------------------      --------------------------------

                                                                                   2017                      2016                   2017               2016
                                                                                   ----                      ----                   ----               ----

    Adjusted EBITDA:

    Net income                                                                   $3,308                      $208                 $7,365                $69

    Depreciation and Amortization                                                    37                       135                    286                435

    Stock-based compensation expense                                                249                        14                    295                185

       Interest expense and other (benefit), net                                    244                       295                  1,450                556

       Income tax expense (benefit)                                                  40                        15                    129                 15
                                                                                    ---                       ---                    ---                ---

    Adjusted EBITDA                                                              $3,878                      $667                 $9,525             $1,260
                                                                                 ======                      ====                 ======             ======

                                                                                    48%                      23%                   41%                9%

 

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SOURCE Zynex, Inc.

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