Zynex Announces 2018 First Quarter Earnings

ENGLEWOOD, Colo., May 8, 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 first quarter ended March 31, 2018.

President and CEO Commentary:

Thomas Sandgaard, CEO said: "I am pleased to report revenue of $6.9 million in the first quarter with net income of $1.9 million or $0.06 per share. Adjusted EBITDA was $2.0 million and the quarterly revenue was twice the revenue of the first quarter of 2017. Revenue was less than the $8.1 million recorded in the fourth quarter of 2017 due to insurance company deductibles not being met early in the year, a seasonal trend we see every year in this industry. The investment in growing our sales force has led to device order growth of 36% compared to the first quarter of 2017 and 8% growth compared to the fourth quarter of 2017.

We currently estimate our second quarter revenue to range between $7.5 million and $8.0 million with Adjusted EBITDA between $2.5 million and $3.0 million. The revenue estimate is approximately 49% to 59% above last year's second quarter and the Adjusted EBITDA estimate is 24% to 48% above last year.

We continue to advocate for pain patients not to become part of today's opioid epidemic and for physicians to prescribe our NexWave technology as a first-line-of-defense in treating chronic and acute pain without side effects. I am dedicated to promote our technology in order to minimize addiction and other side effects from prescription opioids."

First Quarter Financial Results Summary:

The Company reported net revenue of $6.9 million, a 100% increase over Q1-2017. First quarter revenue is historically our lowest of the year as it is affected by health insurance deductibles which have not been met.

Gross margins were 82% in the first quarter of 2018 compared to 73% last year. Net income grew 444% to $1.9 million in the first quarter of 2018, compared to $0.4 million last year.

Adjusted EBITDA grew 257% to $2.0 million in the first quarter of 2018 compared to $0.6 million last year.

The Company generated $1.0 million of cash from operations during the first quarter of 2018, an increase of 4,288% compared to $23,000 in 2017. As of March 31, 2018, the Company had working capital of $4.6 million compared to $4.4 million at December 31, 2017.

Webcast Details: Tuesday, May 8, 2018 at 9:00 a.m. MT - 11:00 a.m. ET

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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

                                                                                             ZYNEX, INC.

                                                                                CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                  (in thousands, except share data)


                                                                                                                      March 31,            December 31,

                                                                                                                            2018                    2017
                                                                                                                            ----                    ----


    Current assets:

    Cash                                                                                                                            $4,366                   $5,565

    Accounts receivable, net                                                                                                       2,668                    2,185

    Inventory, net                                                                                                                   710                      423

    Prepaid expenses                                                                                                                 615                      198
                                                                                                                                     ---                      ---

                                                   Total current assets                                                            8,359                    8,371

    Property and equipment, net                                                                                                      575                      188

    Deposits                                                                                                                         375                      370

                                                   Total assets                                                                     $9,309                   $8,929
                                                                                                                                    ======                   ======

                                                          LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Current portion of unsecured subordinated promissory notes                                                                          $7                     $231

    Current portion of capital leases                                                                                                 93                      123

    Accounts payable and accrued expenses                                                                                          2,112                    2,243

    Accrued payroll and related taxes                                                                                                661                      538

    Deferred insurance reimbursement                                                                                                 880                      880
                                                                                                                                     ---                      ---

                                                  Total current liabilities                                                        3,753                    4,015

    Long-term liabilities:

    Deferred rent                                                                                                                    329                        -

    Warranty liability                                                                                                                12                       12
                                                                                                                                     ---                      ---

                                                  Total liabilities                                                                4,094                    4,027

    Stockholders' equity:

    Common stock                                                                                                                      33                       33

    Additional paid-in capital                                                                                                     7,761                    7,612

    Treasury stock                                                                                                               (2,000)                   (243)

    Retained deficit                                                                                                               (490)                 (2,411)
                                                                                                                                    ----                   ------

                                                  Total Zynex, Inc. stockholders' equity                                           5,304                    4,991

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

                                                  Total stockholders' equity                                                       5,215                    4,902

                                                  Total liabilities and stockholders' equity                                        $9,309                   $8,929
                                                                                                                                    ======                   ======


                                                                        ZYNEX, INC.

                                                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           (in thousands, except per share data)


                                                                                                       For the Three Months Ended March 31,

                                                                                                              2018                       2017
                                                                                                              ----                       ----


    Devices                                                                                                               $1,588                  $1,384

    Supplies                                                                                                             5,288                   2,052
                                                                                                                         -----                   -----

    Total net revenue                                                                                                    6,876                   3,436
                                                                                                                         -----                   -----


    Costs of revenue - device & supply                                                                                   1,236                     923

    Selling, general and administrative expense                                                                          3,685                   2,030

    Total costs of revenue and operating expenses                                                                        4,921                   2,953
                                                                                                                         -----                   -----

    Income from operations                                                                                               1,955                     483
                                                                                                                         -----                     ---

    Other expense

       Interest expense                                                                                                  (115)                  (121)

    Other expense                                                                                                        (115)                  (121)
                                                                                                                          ----                    ----

    Income from operations before income taxes                                                                           1,840                     362

      Income tax expense (benefit)                                                                                        (81)                      9
                                                                                                                           ---                     ---

    Net Income                                                                                                           1,921                     353

    Plus: Net income (loss) - noncontrolling interest                                                            -                            -

    Net income - attributable to Zynex, Inc.                                                                              $1,921                    $353
                                                                                                                          ======                    ====

    Net income per share attributable to Zynex, Inc.:

    Basic                                                                                                                  $0.06                   $0.01
                                                                                                                           =====                   =====

    Diluted                                                                                                                $0.06                   $0.01
                                                                                                                           =====                   =====

    Weighted average basic shares outstanding                                                                           32,601                  31,418

    Weighted average diluted shares outstanding                                                                         34,414                  32,036


                                                       ZYNEX, INC.

                                       Reconciliation of GAAP to Non-GAAP Measures

                                                     (in thousands)


                                                                                   For the Three Months Ended March 31,

                                                                                                 2018                   2017
                                                                                                 ----                   ----

    Adjusted EBITDA:

    Net income                                                                                 $1,921                   $353

    Depreciation and Amortization                                                                  25                     64

    Stock-based compensation expense                                                               63                     24

       Interest expense and other, net                                                            115                    121

       Income tax expense (benefit)                                                              (81)                     9
                                                                                                  ---                    ---

    Adjusted EBITDA                                                                            $2,043                   $571
                                                                                               ======                   ====

                                                                                                  30%                   17%




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