Zynex Announces 2022 Fourth Quarter and Full Year Earnings

ENGLEWOOD, Colo., March 13, 2023 /PRNewswire/ -- Zynex, Inc. (Nasdaq: ZYXI) an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, rehabilitation, and patient monitoring, today reported financial results for the fourth quarter and full year ended December 31, 2022.

2022 Fourth Quarter Highlights:

  •  
    • Orders increased 48%; highest number of orders in Company history for the 3rd consecutive quarter
    • Revenue increased 21% year over year to $48.8 million
    • Net income of $7.5 million; Diluted EPS $0.20
    • Adjusted EBITDA of $11.4 million

2022 Full Year Highlights:

  •  
    • Orders increased 23%
    • Revenue increased 21% year over year to $158.2 million
    • Net income of $17.0 million; Diluted EPS of $0.44
    • Adjusted EBITDA increased 5% to $28.1 million
    • 7th straight year of profitability

Fourth Quarter Financial Results Summary:

For the fourth quarter, the Company reported net revenue of $48.8 million, a 21% increase over fourth quarter of 2021. Gross margins were 81% and net income was $7.5 million, a 53% increase from Q3 2022.

As of December 31, 2022, the Company had working capital of $48.5 million. Cash on hand was $20.1 million at the end of the fourth quarter. The Company produced $13.7 million in cash from operations in 2022, an increase of 98% compared to 2021.

President and CEO Commentary:

"We had a strong end to a record setting 2022, marked by increased revenue and orders every single quarter," said Thomas Sandgaard, President and CEO. "Our operating cash flows allowed us to buy back over $26 million of our common stock during 2022 which benefits all shareholders. Additionally, Zynex Monitoring Solutions (ZMS) is making significant progress with clinical data collection, and we expect to hit several regulatory milestones in 2023. We look forward to maintaining shareholder value through continued financial health and double-digit growth going forward."

First Quarter and Full Year 2023 Guidance

Full year 2023 revenue is estimated to range between $180 - $200 million and with Diluted EPS of $0.40 - $0.50 per share. The revenue range is based on our best estimates of labor market conditions and sales rep productivity. Diluted EPS is impacted by increased operating expenses to support ZMS as the Laser-based Pulse Oximetry products are prepared for FDA submission and the fluid monitor is readied for the market.

First quarter 2023 revenue is estimated to range between $39.0 - $41.0 million, an increase of approximately 29% from Q1 2022. First quarter revenue is affected by the resetting of health insurance deductibles in the beginning of a calendar year, seasonably lower revenues in the first quarter are a historical trend for Zynex and an industry norm. First quarter Diluted EPS is estimated to range between $0.00- $0.03.

Conference Call and Webcast Details

Monday, March 13, 2023 at 6:30 a.m. MT / 8:30 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://app.webinar.net/v2J4N7gNEw7

US Participant Dial In (TOLL FREE): 1-844-825-9790
International Participant Dial In: 1-412-317-5170
Canada Participant Dial In (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, other income/expense, stock compensation, restructuring and non-cash lease charges). 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 available earnings. 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, Inc.
Zynex, founded in 1996, develops, manufactures, markets, and sells medical devices used for pain management and rehabilitation as well as non-invasive fluid, sepsis, and laser-based pulse oximetry monitoring systems for use in hospitals. For additional information, please visit: www.zynex.com.

Safe Harbor Statement
This release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward looking statements. The Company makes no express or implied representation or warranty as to the completeness of forward-looking statements or, in the case of projections, as to their attainability or the accuracy and completeness of the assumptions from which they are derived. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain C.E. 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 for our products from health insurance companies, our dependence on third party manufacturers to produce our products on time and to our specifications, implementation of our sales strategy including a strong direct sales force, the impact of COVID-19 on the global economy and other risks described in our filings with the Securities and Exchange Commission including but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2021 as well as our quarterly reports on Form 10-Q and current reports on Form 8-K.

Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Contact: Zynex, Inc. (800) 495-6670
Investor Relations Contact:
Gilmartin Group
Investor Relations Counsel
ir@zynex.com

ZYNEX, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

  (unaudited) 


December 31,


December 31,


2022


2021

ASSETS





Current assets:





Cash


$             20,144


$              42,612

Accounts receivable, net


35,063


28,632

Inventory, net


13,484


10,756

Prepaid expenses and other


868


689

                                               Total current assets


69,559


82,689






Property and equipment, net


2,175


2,186

Operating lease asset


12,841


16,338

Finance lease asset


270


389

Deposits


591


585

Intangible assets, net of accumulated amortization


9,067


9,975

Goodwill


20,401


20,401

Deferred income taxes


1,562


711

                                               Total assets


$           116,466


$            133,274






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable and accrued expenses


$                5,601


$                   4,739

Cash dividends payable


16


3,629

Operating lease liability


2,476


2,859

Finance lease liability


128


118

Income taxes payable


1,995


2,296

Current portion of debt


5,333


5,333

Accrued payroll and related taxes


5,537


3,897

                                              Total current liabilities


21,086


22,871

Long-term liabilities:





Long-term portion of debt, less issuance costs


5,293


10,605

Contingent consideration


10,000


9,700

Operating lease liability


13,541


15,856

Finance lease liability


188


317

                                              Total liabilities


50,108


59,349






Common stock


39


41

Additional paid-in capital


82,431


80,397

Treasury stock


(33,160)


(6,513)

Retained earnings


17,048


-

                                              Total stockholders' equity


66,358


73,925

                                              Total liabilities and stockholders' equity


$           116,466


$            133,274

 

ZYNEX, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share data)

(unaudited) 






For the Three Months Ended December 31,


For the Years Ended December 31,


2022


2021


2022


2021

NET REVENUE








Devices

$        15,918


$        13,349


$        43,497


$       36,613

Supplies

32,887


27,017


114,670


93,688

Total net revenue

48,805


40,366


158,167


130,301









COSTS OF REVENUE AND OPERATING EXPENSES








Costs of revenue - devices and supplies

9,388


7,331


32,005


27,321

Sales and marketing

19,166


13,628


67,116


54,290

General and administrative expense

10,141


7,821


36,108


26,324

Total costs of revenue and operating expenses

38,695


28,780


135,229


107,935









Income from operations

10,110


11,586


22,938


22,366









Other expense








Loss on change in fair value of contingent consideration

(300)


-


(300)


-

   Interest expense

(95)


(23)


(440)


(95)

Other expense

(395)


(23)


(740)


(95)









Income from operations before income taxes

9,715


11,563


22,198


22,271

  Income tax expense

2,263


2,669


5,150


5,168

Net Income

$         7,452


$        8,894


$        17,048


$        17,103









Net income per share:








Basic

$           0.20


$          0.23


$            0.44


$            0.45

Diluted

$           0.20


$          0.23


$            0.44


$            0.44









Weighted average basic shares outstanding

37,236


38,411


38,467


38,317

Weighted average diluted shares outstanding

37,960


39,170


39,127


39,197

 

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,


2022


2021


2022


2021

Adjusted EBITDA:








Net income

$        7,452


$        8,894


$       17,048


$       17,103

Depreciation and Amortization*

423


214


1,648


925

Stock-based compensation expense

640


589


2,342


1,630

Restructuring/severance**

-


-


-


318

   Interest expense and other, net

395


23


740


95

   Non-cash lease expense ***

183


572


1,165


1,428

   Income tax expense

2,263


2,669


5,150


5,168

Adjusted EBITDA

$       11,356


$       12,961


$       28,093


$       26,667

% of Net Revenue

23 %


32 %


18 %


20 %









* Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of goods sold.

** Severance of former COO Giusseppe Papandrea which was fully expensed in Q1-2021

*** Amount expensed on new company headquarters in excess of cash payments due to abated rent

 

SOURCE Zynex