Zynex, Inc. (ZYXI) on Q1 2023 Results - Earnings Call Transcript
Operator: Good afternoon, ladies and gentlemen, and welcome to the Zynex First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Louisa Smith: Thank you, Jason, and good afternoon, everyone. Earlier today, Zynex released financial results for the first quarter ending March 31, 2023. A copy of the press release is available on the company's website. Joining me on today's call are Thomas Sandgaard, Chairman, President and Chief Executive Officer; Dan Moorhead, Chief Financial Officer; Anna Lucsok, Chief Operating Officer; and Donald Gregg, President of Zynex Monitoring Solutions. Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's 2022 Form 10-K and subsequent Form 10-Qs, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development, product potential, the regulatory environment, sales and marketing strategies, capital resources or operating performance. With that, I'll now turn the call over to Thomas. Thomas: Thank you, Louisa, and good afternoon, everyone. Thank you for joining us today for the first quarter 2023 earnings call. We had another impressive period of growth, and we've now been profitable in 26 of the last 27 quarters. And we once again hit the highest number of prescriptions in the company's history, beating the records we previously said in the second, third and fourth quarters of 2022. Additionally, we were able to increase order numbers over Q4 despite the seasonal reset in deductibles that typical limits growth of orders in the beginning of the year. Total revenue for the quarter was $42.2 million, a 36% increase over the same period in 2022, and we produced in earnings $0.04 per share. Our sales force is maintaining the exceptional trends in productivity and expanding our market share significantly each quarter, a testament to both the efficiency and our product efficacy. Orders increased 61% year-over-year, and we believe that there is considerable runway for us to continue growing orders into the future. In the first quarter, we completed the latest in a series of stock buybacks and repurchased $3.4 million worth of common stock, bringing the total of repurchases in the last year to $30 million. As we've stated before, I believe this to be a signal to our shareholders that we are incredibly confident in our management teams, the growth opportunities in both divisions and that we remain committed to creating shareholder value in the near and long term. In addition to the impressive results from our pain management division, our Monitoring Solutions division is making excellent strides in the development of our blood and fluid monitor and our laser-based pulse oximeter. Don Greg will provide further updates in his prepared remarks. But I'm pleased with the steps the growing team is taking to bring those game-changing products to market. Monitoring Solutions has grown significantly over the past year. And after having acquired Kestrel Labs in December of 2021, we've been working diligently on clinical data collections and reaching regulatory milestones. Zynex continues to deliver consistent results and even with the investments in the monitoring division, our pain management business has been able to maintain profitability at the bottom line for the combined entity. Our ability to execute operationally and strategically, while diversifying the business into compelling market opportunities is evidenced by the double-digit growth we've seen year after year. I look forward to announcing future catalysts and growth opportunities throughout 2023, and I'm thrilled with our performance to date. With that, I will now turn the call over to Anna Lucsok, our Chief Operating Officer, for a more detailed business update on the pain management division. Anna Lucsok : Thank you, Thomas. Zynex's pain management division had another impressive quarter marked by a sequential increase in order volumes over the fourth quarter and a 36% year-over-year increase in revenues. The growth that our sales team is delivering is consistent and profitable, and we believe there is significant room for continued expansion to reach full market penetration. We ended the first quarter with approximately 460 sales reps and revenue per rep on an annualized basis was approximately $380,000, an increase of 24% over the first quarter of 2022. Sales reproductivity remains the primary area of emphasis in our sales organization. Our new hires are incorporating into the organization more quickly and the sales management structure we've implemented is optimizing performance across the board. There are some lingering challenges related to the labor market, but we believe these to be improving over time, and we will remain committed to recruiting and retaining a high-quality sales and corporate team. We'll continue to expand into additional sales territories and expect to hit approximately 525 to 550 sales reps by year-end to capitalize the growing orders. Our collections remained strong throughout the quarter, and we would like to reiterate that we have and we will continue to work with all payer types and insurance providers. We believe this to be a key differentiator between Zynex and some other competitors in the market as practitioners are able to prescribe our product to all patients in pain, not just a small cohort under specific insurance plan. We process all orders that we receive and work directly with patients and their insurers to process coverage in each case. I look forward to another profitable year for the pain management division and updating you all on our market expansions on future calls. I'll now ask Don Greg, President of Zynex Monitoring Solutions, to provide updates related to that business division. Donald Gregg : Thank you, Anna. Zynex Monitoring Solutions is developing a strategic product portfolio and pipeline to address a nearly $4 billion market in the patient monitoring space, our initial products will cover hemodynamic monitoring, sepsis monitoring and laser-based pulse oximetry. As Thomas mentioned previously, our team has grown significantly in the last year and were invested substantially in the division as we make progress towards clinical and regulatory milestones. Of the two product lines, we are actively developing the CM-1600 blood and fluid monitor is going to be the first in our go-to-market strategy as it's the furthest along in its regulatory pathway. The hemodynamic monitor is a noninvasive wireless blood and fluid monitor to be used in a hospital setting. The previous generation device, the CM-1500 has already received clearance from the FDA, and we've added a wireless capability to the CM 1600. The CM-1600 was submitted to the FDA, and we are anticipating further details from the agency as we are currently engaged in an interactive review with them. As a reminder, Zynex is not contemplating any revenue from the monitoring division and its guidance for 2023. Additionally, in development are the NIKO or also known as the noninvasive pulse oximeter and the HEMOX pulse oximeter, both noninvasive laser technologies. We believe that this innovative technology will replace the less accurate LED-based legacy devices that are currently used today. We are on track for NIKO submission to the FDA in Q4 2023 and actively running clinical trials. In addition to engineering and development advancements within the division, we are also involved in planning and rolling publishing numerous clinical trials to include hundreds of subjects across the country. We've seen encouraging results on product efficacy thus far and remain confident with the market opportunity for the disruptive technology. As we publish further data, we will advise the investment community via press releases and on future quarterly calls. I'm excited to be a part of what should be a notable inflection point in the monitoring division over the next 18 to 24 months and look forward to leveraging our innovative technology in the market. I will now turn the call over to Dan Moorhead, Chief Financial Officer, for a more in-depth look at the financial performance for the quarter. Daniel Moorhead : Thanks, Don. Please refer to our press release issued earlier today for a summary of our financial results for the first quarter of 2023. After commenting on the financial results, Thomas will review our guidance for 2023. Orders grew 61% year-over-year and net revenue grew 36% to $42.2 million from $31.1 million in 2022. Device revenue increased 78% to $11.9 million compared to $6.7 million in the first quarter last year. Supplies revenue increased 24% year-over-year to $30.2 million from $24.4 million and gross margin was 78% in the first quarter. Sales and marketing expenses were $21.2 million in the first quarter of 2023 compared to $14.4 million in the same period in 2022. G&A expenses were $11.4 million in the first quarter of 2023 compared to $7.8 million last year. Approximately 20% of the increase in G&A is related to investments in our Monitoring Solutions division and related headcount to launch our new products. The remainder is primarily for back-office headcount related to order growth. Tax expense as a percentage was a 2% effective rate for the quarter due to other income of $1.4 million. Net income grew 14% year-over-year to $1.6 million and produced $0.04 per diluted share in the first quarter of 2023. We ended the quarter with $16.8 million in cash. Cash flow from operations in the quarter increased 10% year-over-year to $1.9 million. I'll now turn the call back over to Tom. Thomas Sandgaard : Thank you, Dan. We grew orders in the fourth quarter of last year by 48% year-over-year. It increased to 61% in the first quarter of the year. And here in the beginning of the second quarter, we've already had a strong start in terms of orders and expect to post our fifth consecutive record quarter. With the continued growth in orders in the second quarter of 2023, we expect total revenue between $43.5 million and $45.5 million, which is approximately 21% greater than the second quarter of 2022, and we expect to see earnings per share between $0.03 and $0.07. As for our 2023 outlook, we are reiterating our initial guidance and expect total revenue to be in the range of $180 million to $200 million, representing growth of approximately 21% over 2022 and earnings per share of approximately $0.40 to $0.50. With that, operator, please open the call up for questions. Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Jeffrey Cohen from Ladenburg Thalmann. Operator: The next question comes from Adam Maeder from Piper Sandler. Operator: Our next question comes from Yi Chen from H.C. Wainwright. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Thomas Sandgaard for any closing remarks. Thomas Sandgaard : Yes. Thank you for joining us today. We are pleased with our performance this quarter and the consistent growth our team is delivering. We look forward to leveraging that momentum throughout the rest of the year and to speaking to you at our upcoming investor events. We appreciate your time and interest in Zynex. Have a great day. Operator: Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Zynex, Inc. (NASDAQ: ZYXI) Faces Legal and Financial Challenges Ahead of Earnings Release
- Zynex, Inc. (NASDAQ:ZYXI) is under investigation by law firms, impacting its stock outlook.
- The company's financial metrics such as P/E ratio of 25.67 and current ratio of 4.46 present a mixed financial health picture.
- Legal issues and the suspension of payments by Tricare pose significant challenges to Zynex's financial stability.
Zynex, Inc. (NASDAQ: ZYXI), a Denver-based medical technology company known for its innovative medical devices, is gearing up for its quarterly earnings release on April 28, 2025. Analysts have set the earnings per share (EPS) forecast at -$0.24, with projected revenue of $30.83 million. Despite these forecasts, Zynex is navigating through significant challenges, including legal and financial hurdles.
The company finds itself under scrutiny from Faruqi & Faruqi, LLP, and Rosen Law Firm, both investigating potential claims against Zynex. These investigations are part of a securities class action lawsuit, with a lead plaintiff deadline of May 19, 2025. Investors who have incurred losses exceeding $75,000 between March 13, 2023, and March 11, 2025, are encouraged to seek legal counsel.
Zynex's financial metrics reveal a mixed picture. The company's price-to-earnings (P/E) ratio is approximately 25.67, indicating the market's valuation of its earnings. Its price-to-sales ratio of about 0.38 suggests a relatively low market valuation compared to its sales. The enterprise value to sales ratio stands at approximately 0.56, reflecting the company's valuation, including debt.
The company's financial leverage is highlighted by a debt-to-equity ratio of about 2.07. However, Zynex maintains a strong current ratio of approximately 4.46, indicating its ability to cover short-term liabilities with short-term assets. Despite these figures, the company is under pressure due to allegations of false statements about its revenue recognition practices and its relationship with Tricare.
RBC Capital Markets has reduced its outlook on Zynex's stock, adding to the company's challenges. The ongoing legal issues, including the suspension of payments by Tricare, a major payer, have further complicated Zynex's financial landscape. Investors are urged to consider these factors as the company navigates its current situation.
Zynex, Inc. (NASDAQ: ZYXI) Faces Legal and Financial Challenges Ahead of Earnings Release
- Zynex, Inc. (NASDAQ:ZYXI) is under investigation by law firms, impacting its stock outlook.
- The company's financial metrics such as P/E ratio of 25.67 and current ratio of 4.46 present a mixed financial health picture.
- Legal issues and the suspension of payments by Tricare pose significant challenges to Zynex's financial stability.
Zynex, Inc. (NASDAQ: ZYXI), a Denver-based medical technology company known for its innovative medical devices, is gearing up for its quarterly earnings release on April 28, 2025. Analysts have set the earnings per share (EPS) forecast at -$0.24, with projected revenue of $30.83 million. Despite these forecasts, Zynex is navigating through significant challenges, including legal and financial hurdles.
The company finds itself under scrutiny from Faruqi & Faruqi, LLP, and Rosen Law Firm, both investigating potential claims against Zynex. These investigations are part of a securities class action lawsuit, with a lead plaintiff deadline of May 19, 2025. Investors who have incurred losses exceeding $75,000 between March 13, 2023, and March 11, 2025, are encouraged to seek legal counsel.
Zynex's financial metrics reveal a mixed picture. The company's price-to-earnings (P/E) ratio is approximately 25.67, indicating the market's valuation of its earnings. Its price-to-sales ratio of about 0.38 suggests a relatively low market valuation compared to its sales. The enterprise value to sales ratio stands at approximately 0.56, reflecting the company's valuation, including debt.
The company's financial leverage is highlighted by a debt-to-equity ratio of about 2.07. However, Zynex maintains a strong current ratio of approximately 4.46, indicating its ability to cover short-term liabilities with short-term assets. Despite these figures, the company is under pressure due to allegations of false statements about its revenue recognition practices and its relationship with Tricare.
RBC Capital Markets has reduced its outlook on Zynex's stock, adding to the company's challenges. The ongoing legal issues, including the suspension of payments by Tricare, a major payer, have further complicated Zynex's financial landscape. Investors are urged to consider these factors as the company navigates its current situation.
Zynex, Inc. (NASDAQ:ZYXI) Financial Performance and Strategic Initiatives
- Zynex, Inc. (NASDAQ:ZYXI) reported earnings per share of $0.07, surpassing estimates and highlighting its financial resilience.
- The company's revenue of $49.97 million fell short of expectations, but a 13% increase in orders in its Pain Management division signals strategic growth.
- Zynex's valuation metrics, including a P/E ratio of 56.58 and a debt-to-equity ratio of 2.09, offer insights into its market position and financial health.
Zynex, Inc. (NASDAQ:ZYXI) is a medical technology company specializing in non-invasive devices for pain management, rehabilitation, and patient monitoring. The company competes in a growing market, focusing on innovative solutions to improve patient care. Zynex's recent earnings report highlights its financial performance and strategic initiatives, providing insights into its market position.
On October 24, 2024, Zynex reported earnings per share of $0.07, exceeding the estimated $0.06. This performance also surpassed the Zacks Consensus Estimate of $0.05 per share. However, it marks a decline from the $0.10 per share reported in the same quarter last year. Despite this, the company maintained strong positive cash flow, aligning with its quarterly guidance.
Zynex generated revenue of approximately $49.97 million, falling short of the estimated $53.29 million. The company is focusing on diversifying its revenue streams, with a notable 13% increase in orders in its Pain Management division compared to the previous year. This strategic move aims to position Zynex for long-term profitable growth, as highlighted by CEO Thomas Sandgaard.
The company's financial metrics provide further insights into its valuation. Zynex has a price-to-earnings (P/E) ratio of 56.58, indicating that investors are willing to pay over 56 times the company's earnings over the past twelve months. The price-to-sales ratio is 1.41, suggesting the market values the company at 1.41 times its annual sales. The enterprise value to sales ratio stands at 1.60.
Zynex's enterprise value to operating cash flow ratio is 18.73, offering a perspective on how its valuation compares to cash flow from operations. The company has an earnings yield of 1.77%, reflecting the percentage of each dollar invested in the stock earned by the company. With a debt-to-equity ratio of 2.09, Zynex uses more than twice as much debt as equity to finance its assets. The current ratio of 3.94 indicates a strong ability to cover short-term liabilities with short-term assets.
Zynex, Inc. (NASDAQ:ZYXI) Financial Performance and Strategic Initiatives
- Zynex, Inc. (NASDAQ:ZYXI) reported earnings per share of $0.07, surpassing estimates and highlighting its financial resilience.
- The company's revenue of $49.97 million fell short of expectations, but a 13% increase in orders in its Pain Management division signals strategic growth.
- Zynex's valuation metrics, including a P/E ratio of 56.58 and a debt-to-equity ratio of 2.09, offer insights into its market position and financial health.
Zynex, Inc. (NASDAQ:ZYXI) is a medical technology company specializing in non-invasive devices for pain management, rehabilitation, and patient monitoring. The company competes in a growing market, focusing on innovative solutions to improve patient care. Zynex's recent earnings report highlights its financial performance and strategic initiatives, providing insights into its market position.
On October 24, 2024, Zynex reported earnings per share of $0.07, exceeding the estimated $0.06. This performance also surpassed the Zacks Consensus Estimate of $0.05 per share. However, it marks a decline from the $0.10 per share reported in the same quarter last year. Despite this, the company maintained strong positive cash flow, aligning with its quarterly guidance.
Zynex generated revenue of approximately $49.97 million, falling short of the estimated $53.29 million. The company is focusing on diversifying its revenue streams, with a notable 13% increase in orders in its Pain Management division compared to the previous year. This strategic move aims to position Zynex for long-term profitable growth, as highlighted by CEO Thomas Sandgaard.
The company's financial metrics provide further insights into its valuation. Zynex has a price-to-earnings (P/E) ratio of 56.58, indicating that investors are willing to pay over 56 times the company's earnings over the past twelve months. The price-to-sales ratio is 1.41, suggesting the market values the company at 1.41 times its annual sales. The enterprise value to sales ratio stands at 1.60.
Zynex's enterprise value to operating cash flow ratio is 18.73, offering a perspective on how its valuation compares to cash flow from operations. The company has an earnings yield of 1.77%, reflecting the percentage of each dollar invested in the stock earned by the company. With a debt-to-equity ratio of 2.09, Zynex uses more than twice as much debt as equity to finance its assets. The current ratio of 3.94 indicates a strong ability to cover short-term liabilities with short-term assets.
