ENGLEWOOD, Colo., Nov. 6, 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 third quarter ended September 30, 2018 and a one-time special cash dividend to its shareholders.
President and CEO Commentary:
Thomas Sandgaard, CEO said: "I am pleased to report revenue of $8.1 million in the third quarter with net income of $2.6 million or $0.08 per diluted share. Adjusted EBITDA was $3.0 million and the quarterly revenue was 19% higher than the third quarter of 2017. Revenue was up 7% from the $7.6 million recorded in the second quarter of 2018. Orders grew 30% compared to the third quarter of 2017 and were 10% higher than the second quarter of 2018. Our cash on hand increased to $8.1 million at the end of the third quarter.
We currently estimate our fourth quarter revenue to range between $8.6 and $9.1 million with Adjusted EBITDA between $3.0 and $3.5 million. Based on our fourth quarter estimate, our full year 2018 revenue is projected to range from $31.2 to $31.7 million, approximately 33% to 35% growth compared to $23.4 million in 2017 and our Adjusted EBITDA for 2018 is projected to be range from $10.8 to $11.3 million compared to $9.5 million in 2017.
We recently obtained a patent on our Blood Volume Monitor. I am very excited for this important milestone for this product that is fully developed while we are awaiting FDA clearance for the US market and CE marking for the European markets.
I am also pleased to announce that our Board of Directors has declared a special cash dividend of $0.07 per share of the Company's common stock. The dividend is payable on January 18, 2019 to shareholders of record as of January 2, 2019. The total dividend is currently estimated to be approximately $2.3 million. With our continued strong financial performance, it is appropriate to reward our shareholders for their support and confidence in the Company.
We continue to advocate for pain patients and for physicians to prescribe our NexWave technology as the first line of defense in treating chronic acute pain without side effects. We are dedicated to marketing our technology in order to remove patient addiction and other side effects from prescription opioids."
Third Quarter Financial Results Summary:
The Company reported net revenue of $8.1 million, a 19% increase over Q3-2017. Gross margins were 80% in the third quarter of 2018 and 2017. Net income grew 18% to $2.6 million in the third quarter of 2018, compared to $2.2 million last year.
Adjusted EBITDA was $3.0 million in the third quarter of 2018 compared to $3.1 million last year. The decrease in adjusted EBITDA year over year is related to our investment in our sales force to drive current and future order growth and increased personnel in our headquarters primarily related to our billing, quality and regulatory departments.
The Company generated $6.8 million of cash from operations during the first nine months of 2018, an increase of 43% compared to $4.7 million in the first nine months of 2017. As of September 30, 2018, the Company had working capital of $8.6 million compared to $4.4 million at December 31, 2017.
Webcast Details: Tuesday, November 6, 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" or projections and as such are subject to numerous risks and uncertainties. The company makes no express or implied representation or warranty as to the completeness of this information or, in the case of projections, as to their attainability or the accuracy and completeness of the assumptions from which they are derived. 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. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(in thousands, except share data) | |||||
(unaudited) | |||||
September 30, | December 31, | ||||
2018 | 2017 | ||||
ASSETS | |||||
Current assets: | |||||
Cash | $ | 8,096 | $ | 5,565 | |
Accounts receivable, net | 2,898 | 2,185 | |||
Inventory, net | 796 | 423 | |||
Prepaid expenses and other | 364 | 198 | |||
Total current assets | 12,154 | 8,371 | |||
Property and equipment, net | 829 | 188 | |||
Deposits | 314 | 370 | |||
Total assets | $ | 13,297 | $ | 8,929 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Current portion of unsecured subordinated promissory notes | $ | - | $ | 231 | |
Current portion of capital leases | 34 | 123 | |||
Accounts payable and accrued expenses | 1,842 | 2,243 | |||
Accrued payroll and related taxes | 766 | 538 | |||
Deferred insurance reimbursement | 880 | 880 | |||
Total current liabilities | 3,522 | 4,015 | |||
Long-term liabilities: | |||||
Deferred rent | 559 | - | |||
Warranty liability | 12 | 12 | |||
Deferred income taxes | 51 | - | |||
Total liabilities | 4,144 | 4,027 | |||
Commitments and contingencies | |||||
Stockholders' equity: | |||||
Common stock | 34 | 33 | |||
Additional paid-in capital | 7,978 | 7,612 | |||
Treasury stock | (3,289) | (243) | |||
Accumulated earnings (deficit) | 4,519 | (2,411) | |||
Total Zynex, Inc. stockholders' equity | 9,242 | 4,991 | |||
Non-controlling interest | (89) | (89) | |||
Total stockholders' equity | 9,153 | 4,902 | |||
Total liabilities and stockholders' equity | $ | 13,297 | $ | 8,929 | |
ZYNEX, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
NET REVENUE | |||||||||||
Devices | $ | 1,811 | $ | 1,145 | $ | 5,072 | $ | 3,760 | |||
Supplies | 6,320 | 5,675 | 17,508 | 11,538 | |||||||
Total revenue | 8,131 | 6,820 | 22,580 | 15,298 | |||||||
COSTS OF REVENUE AND OPERATING EXPENSES | |||||||||||
Costs of revenue - rental, product & supply | 1,641 | 1,347 | 4,207 | 3,289 | |||||||
Selling, general and administrative expense | 3,670 | 2,538 | 10,883 | 6,656 | |||||||
Total costs of revenue and operating expenses | 5,311 | 3,885 | 15,090 | 9,945 | |||||||
Income from operations | 2,820 | 2,935 | 7,490 | 5,353 | |||||||
Other expense | |||||||||||
Interest expense | (1) | (691) | (153) | (1,206) | |||||||
Other expense | (1) | (691) | (153) | (1,206) | |||||||
Income from operations before income taxes | 2,819 | 2,244 | 7,337 | 4,147 | |||||||
Income tax expense | 228 | 44 | 407 | 89 | |||||||
Net income | $ | 2,591 | $ | 2,200 | $ | 6,930 | $ | 4,058 | |||
Net income per share: | |||||||||||
Basic | $ | 0.08 | $ | 0.07 | $ | 0.21 | $ | 0.13 | |||
Diluted | $ | 0.08 | $ | 0.07 | $ | 0.20 | $ | 0.12 | |||
Weighted average basic shares outstanding | 32,521 | 32,327 | 32,580 | 31,931 | |||||||
Weighted average diluted shares outstanding | 33,931 | 33,545 | 34,171 | 32,790 | |||||||
ZYNEX, INC. | |||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
For the Three Months Ended September | For the Nine Months Ended September 30, | ||||||
2018 | 2017 | 2018 | 2017 | ||||
Adjusted EBITDA: | |||||||
Net income | $ 2,591 | $ 2,200 | $ 6,930 | $ 4,058 | |||
Depreciation and Amortization | 59 | 111 | 127 | 249 | |||
Stock-based compensation expense | 76 | 9 | 192 | 46 | |||
Interest expense and other | 1 | 691 | 154 | 1,206 | |||
Income tax expense (benefit) | 228 | 44 | 407 | 89 | |||
Adjusted EBITDA | $ 2,955 | $ 3,055 | $ 7,810 | $ 5,648 | |||
% of Net Revenue | 36% | 45% | 35% | 37% | |||
* Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of goods sold. | |||||||
SOURCE Zynex, Inc.
