Q2 2024 Revenue Increased 11% to $49.9 Million
ENGLEWOOD, Colo., July 25,
2024 /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 its financial and operational results for the second
quarter ended June 30, 2024.
Key Second Quarter Highlights and Business Update
- Q2 2024 orders increased 20% year-over-year, the highest number
of orders in Company history for the ninth consecutive
quarter.
- Q2 2024 revenue increased 11% year-over-year to $49.9 million; Q2 2024 revenue was lower than
previous guidance of $52.0 million
primarily related to a reduction in sales representatives and
forgoing current sales to focus on profitable growth and rep
productivity, and a changing product mix.
- Q2 2024 net income of $1.2
million; Diluted EPS $0.04.
- Year-to-date cash flow from operations of $3.2 million, a 20% year-over-year increase.
- Repurchased $2.2 million of the
Company's common stock in Q2 2024.
Management Commentary
"The second quarter of 2024 was highlighted by a strong cadence
of order growth and revenue as we work toward FDA approvals of
next-generation devices and launch of new pain management
products," said Thomas Sandgaard,
President and CEO of Zynex. "As we have evolved from a small
company prior to 2017 to expected revenues of roughly $200 million in 2024, we have taken additional
steps during recent quarters to enable us to grow smoothly to a
$1 billion company in the longer
term. We also continued our share repurchase plan and repurchased
$2.2 million of our common stock in
Q2 2024 and $70.0 million over the
last twenty-four months.
"In the second quarter, increasing sales and profitable growth
for our pain management division delivered a 20% improvement in
orders year-over-year. Revenue during the quarter was impacted by a
continued change in product mix, with sales of our private labeled
pain management products growing more than anticipated. While this
growth diversifies revenue, these product sales are one-time and
lack the trailing revenue model present in our electrotherapy
products. In addition, as we emphasize profitable growth, we
continued our focus on sales rep productivity and separated more
underperforming reps than initially anticipated which decreases
near-term revenue but leaves us in a stronger position moving
forward.
"With the change in product mix and sales force reduction, we
are revising guidance down for the year. We now expect 2024 net
revenue to increase approximately 9% compared to 2023. Looking
ahead, we continue to focus on diversifying revenue streams with
innovative new products and ensuring sustained growth as we build
on our holistic, non-invasive approach to pain management. In 2025,
we should return to our normal top-line growth in our pain
management division of approximately 20%. We look forward to
additional updates in the months to come as we work to build
long-term value for our shareholders," concluded Sandgaard.
Second Quarter 2024 Financial Results
Net revenue was $49.9 million for
the three months ended June 30, 2024,
compared to $45.0 million in the
prior year quarter, an increase of 11%. The increase in net revenue
was primarily related to a 20% growth in device orders which
resulted from a larger customer base and led to increased sales of
consumable supplies, offset by a reduction in sales representatives
and forgoing current sales to focus on profitable growth and rep
productivity.
Gross profit in the quarter ended June
30, 2024, was $39.9 million,
or 80% of revenue, as compared to $35.7
million or 79% of revenue, in 2023.
Sales and marketing expenses were $23.2
million for the three months ended June 30, 2024, compared to $21.6 million in the prior year period.
General and administrative expenses for the three months ended
June 30, 2024, were $14.5 million, versus $11.4 million in the prior year period.
Net income for the three months ended June 30, 2024, totaled $1.2 million, or $0.04 per basic and diluted share, as compared to
net income of $3.4 million, or
$0.09 per basic and diluted share, in
the quarter ended June 30, 2023.
Adjusted EBITDA for the three months ended June 30, 2024, was $3.5
million, as compared to $4.0
million in the quarter ended June 30,
2023.
As of June 30, 2024, the Company
had working capital of $55.9 million.
Cash and cash equivalents were $30.9
million at June 30, 2024. Cash
flow from operations for the six months ended June 30, 2024, was $3.2
million compared to $2.7
million in the six months ended June
30, 2023.
The Company continued its latest stock buyback by repurchasing
$2.2 million of its common stock
during the second quarter.
Third Quarter and Full Year 2024 Guidance
Third quarter 2024 revenue is estimated to be at least
$50.0 million. Third quarter Diluted
EPS is estimated to be at least $0.05.
The Company expects 2024 net revenue of at least $200 million, a 9% increase from 2023. Diluted
EPS is expected to be at least $0.20
per share.
Conference Call and Webcast Details
Thursday, July 25, 2024, at
4:15 PM Eastern Time (2:15 PM Mountain Time)
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: Q2 2024 Webcast Link
U.S. & Canada dial-in
number: 800-836-8184
International number: 646-357-8785
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, receivables adjustment 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.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995, as amended. our results of operations and the plans,
strategies and objectives for future operations; the timing and
scope of any potential stock repurchase; and other similar
statements.
Words such as "anticipate," "believe," "continue," "could,"
"designed," "endeavor," "estimate," "expect," "intend," "may,"
"might," "plan," "potential," "predict," "project," "seek,"
"should," "target," "preliminary," "will," "would" and similar
expressions are intended to identify forward-looking statements.
The express or implied forward-looking statements included in this
press release are only predictions and are subject to a number of
risks, uncertainties and assumptions.
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 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 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; market conditions; the timing, scope and possibility that
the repurchase program may be suspended or discontinued; economic
factors, such as interest rate fluctuations; and other risks
described in our filings with the Securities and Exchange
Commission.
These and other risks are 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,
2023 as well as our quarterly reports on Form 10-Q and current
reports on Form 8-K. Any forward-looking statements contained in
this press release represent Zynex's views only as of today and
should not be relied upon as representing its views as of any
subsequent date. Zynex explicitly disclaims any obligation to
update any forward-looking statements, except to the extent
required by law.
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.
Investor Relations Contact:
Quinn Callanan, CFA or Brian Prenoveau, CFA
MZ Group – MZ North America
ZYXI@mzgroup.us
+949 694 9594
ZYNEX,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30, 2024
|
|
December 31, 2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
30,896
|
|
$
|
44,579
|
|
Accounts receivable,
net
|
|
|
23,594
|
|
|
26,838
|
|
Inventory,
net
|
|
|
15,390
|
|
|
13,106
|
|
Prepaid expenses and
other
|
|
|
4,235
|
|
|
3,332
|
|
Total current
assets
|
|
|
74,115
|
|
|
87,855
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
3,250
|
|
|
3,114
|
|
Operating lease
asset
|
|
|
11,189
|
|
|
12,515
|
|
Finance lease
asset
|
|
|
785
|
|
|
587
|
|
Deposits
|
|
|
409
|
|
|
409
|
|
Intangible assets, net
of accumulated amortization
|
|
|
7,705
|
|
|
8,158
|
|
Goodwill
|
|
|
20,401
|
|
|
20,401
|
|
Deferred income
taxes
|
|
|
4,061
|
|
|
3,865
|
|
Total
assets
|
|
$
|
121,915
|
|
$
|
136,904
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
7,882
|
|
|
8,433
|
|
Operating lease
liability
|
|
|
3,930
|
|
|
3,729
|
|
Finance lease
liability
|
|
|
182
|
|
|
196
|
|
Income taxes
payable
|
|
|
—
|
|
|
633
|
|
Accrued payroll and
related taxes
|
|
|
6,244
|
|
|
5,541
|
|
Total current
liabilities
|
|
|
18,238
|
|
|
18,532
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Convertible senior
notes, less issuance costs
|
|
|
58,078
|
|
|
57,605
|
|
Operating lease
liability
|
|
|
12,187
|
|
|
14,181
|
|
Finance lease
liability
|
|
|
596
|
|
|
457
|
|
Total
liabilities
|
|
|
89,099
|
|
|
90,775
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
|
Common stock
|
|
|
32
|
|
|
33
|
|
Additional paid-in
capital
|
|
|
91,963
|
|
|
90,878
|
|
Treasury stock, at
cost
|
|
|
(87,186)
|
|
|
(71,562)
|
|
Retained
earnings
|
|
|
28,007
|
|
|
26,780
|
|
Total stockholders'
equity
|
|
|
32,816
|
|
|
46,129
|
|
Total liabilities and
stockholders' equity
|
|
$
|
121,915
|
|
$
|
136,904
|
|
ZYNEX,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN
THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30,
|
|
For the Six Months
Ended June 30,
|
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
NET
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Devices
|
|
$
|
15,920
|
|
$
|
13,743
|
|
$
|
29,945
|
|
$
|
25,687
|
|
Supplies
|
|
|
33,963
|
|
|
31,209
|
|
|
66,469
|
|
|
61,435
|
|
Total net
revenue
|
|
|
49,883
|
|
|
44,952
|
|
|
96,414
|
|
|
87,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS OF REVENUE AND
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of revenue -
devices and supplies
|
|
|
9,971
|
|
|
9,272
|
|
|
19,269
|
|
|
18,541
|
|
Sales and
marketing
|
|
|
23,226
|
|
|
21,609
|
|
|
46,606
|
|
|
42,836
|
|
General and
administrative
|
|
|
14,460
|
|
|
11,358
|
|
|
27,788
|
|
|
22,748
|
|
Total costs of revenue
and operating expenses
|
|
|
47,657
|
|
|
42,239
|
|
|
93,663
|
|
|
84,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
2,226
|
|
|
2,713
|
|
|
2,751
|
|
|
2,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of
assets
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
2
|
|
Gain on change in fair
value of contingent
consideration
|
|
|
—
|
|
|
1,700
|
|
|
—
|
|
|
3,100
|
|
Interest expense,
net
|
|
|
(630)
|
|
|
(317)
|
|
|
(1,142)
|
|
|
(401)
|
|
Other income (expense),
net
|
|
|
(611)
|
|
|
1,383
|
|
|
(1,123)
|
|
|
2,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
before income taxes
|
|
|
1,615
|
|
|
4,096
|
|
|
1,628
|
|
|
5,698
|
|
Income tax
expense
|
|
|
398
|
|
|
742
|
|
|
401
|
|
|
775
|
|
Net income
|
|
$
|
1,217
|
|
$
|
3,354
|
|
$
|
1,227
|
|
$
|
4,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
$
|
0.09
|
|
$
|
0.04
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
0.04
|
|
$
|
0.09
|
|
$
|
0.04
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic
shares outstanding
|
|
|
31,762
|
|
|
36,435
|
|
|
32,053
|
|
|
36,564
|
|
Weighted average
diluted shares outstanding
|
|
|
32,204
|
|
|
37,061
|
|
|
32,516
|
|
|
37,249
|
|
ZYNEX,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2024
|
|
2023
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,227
|
|
$
|
4,923
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,329
|
|
|
1,311
|
|
Amortization
|
|
|
928
|
|
|
620
|
|
Non-cash reserve
charges
|
|
|
—
|
|
|
(91)
|
|
Stock-based
compensation
|
|
|
1,575
|
|
|
967
|
|
Non-cash lease
expense
|
|
|
(467)
|
|
|
(158)
|
|
Benefit for deferred
income taxes
|
|
|
(195)
|
|
|
(240)
|
|
Change in fair value
of contingent consideration
|
|
|
—
|
|
|
(3,100)
|
|
Gain on disposal of
fixed assets
|
|
|
(19)
|
|
|
(2)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
3,244
|
|
|
2,106
|
|
Prepaid and other
assets
|
|
|
(805)
|
|
|
(661)
|
|
Accounts payable and
other accrued expenses
|
|
|
(288)
|
|
|
(1,172)
|
|
Inventory
|
|
|
(3,327)
|
|
|
(1,736)
|
|
Deposits
|
|
|
—
|
|
|
(92)
|
|
Net cash provided by
operating activities
|
|
|
3,202
|
|
|
2,675
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(290)
|
|
|
(394)
|
|
Proceeds on sale of
fixed assets
|
|
|
—
|
|
|
10
|
|
Net cash used in
investing activities
|
|
|
(290)
|
|
|
(384)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Payments on finance
lease obligations
|
|
|
(148)
|
|
|
(62)
|
|
Cash dividends
paid
|
|
|
(3)
|
|
|
(1)
|
|
Purchase of treasury
stock
|
|
|
(15,625)
|
|
|
(9,468)
|
|
Excise tax payments on
net treasury stock purchases
|
|
|
(473)
|
|
|
—
|
|
Proceeds from issuance
of convertible senior notes, net of issuance costs
|
|
|
—
|
|
|
57,026
|
|
Proceeds from the
issuance of common stock on stock-based awards
|
|
|
13
|
|
|
32
|
|
Principal payments on
long-term debt
|
|
|
—
|
|
|
(10,667)
|
|
Taxes withheld and paid
on employees' equity awards
|
|
|
(359)
|
|
|
(546)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(16,595)
|
|
|
36,314
|
|
Net (decrease) increase
in cash
|
|
|
(13,683)
|
|
|
38,605
|
|
Cash and cash
equivalents at beginning of period
|
|
|
44,579
|
|
|
20,144
|
|
Cash and cash
equivalents at end of period
|
|
$
|
30,896
|
|
$
|
58,749
|
|
|
|
|
|
|
|
|
|
ZYNEX,
INC.
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
(AMOUNTS IN
THOUSANDS)
(unaudited)
|
|
|
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Net income
|
$
1,217
|
|
$ 3,354
|
|
$
1,227
|
|
$ 4,923
|
Depreciation and
Amortization*
|
465
|
|
412
|
|
891
|
|
835
|
Stock-based
compensation expense
|
841
|
|
660
|
|
1,575
|
|
967
|
Interest expense and
other, net
|
611
|
|
317
|
|
1,123
|
|
401
|
Change in value of
contingent consideration
|
—
|
|
(1,700)
|
|
—
|
|
(3,100)
|
Non-cash lease
expense**
|
—
|
|
227
|
|
—
|
|
227
|
Income tax
expense
|
398
|
|
742
|
|
401
|
|
775
|
Adjusted
EBITDA
|
$
3,532
|
|
$
4,012
|
|
$
5,217
|
|
$
5,028
|
% of Net
Revenue
|
7 %
|
|
9 %
|
|
5 %
|
|
6 %
|
* Depreciation does not
include amounts related to units on lease to third parties which
are depreciated and included in cost of goods sold.
|
** Amount expensed on
new company headquarters in excess of cash payments due to abated
rent.
|
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SOURCE Zynex