LONE TREE, CO--(Marketwire - Aug 3, 2011) - Zynex, Inc. (
The Company generated record net revenues of $8,395,000 for the three months ended June 30, 2011, which represents a 46% increase over second quarter 2010 net revenue and a 27% increase over the first quarter of 2011. Year to date net revenue of $15,028,000 increased 42% over the prior year to date net revenue. Thomas Sandgaard, CEO, stated "The aggressive expansion of our sales force has resulted in a significant increase in orders and respective revenue growth. We plan to add sales representatives throughout the remainder of 2011 in an effort to continue to drive our top-line growth."
The Company reported a second quarter 2011 gross profit of $6,668,000, which reflects a 79% gross profit percentage, unchanged from the second quarter 2010 gross profit percentage. Selling, general and administrative (SG&A) expenses in the second quarter of 2011 totaled $5,769,000 compared to $4,390,000 in the second quarter of 2010. The 31% increase in SG&A during the second quarter of 2011 as compared to the second quarter of 2010, was a direct result of specific investments made to expand the sales force and improve billing and reimbursement department efficiencies. The Company reported second quarter 2011 income from operations of $899,000, income before income tax of $822,000 and net income of $484,000, versus second quarter 2010 income from operations of $130,000, income before income tax of $82,000 and net income of $30,000.
Thomas Sandgaard, CEO stated: "Overall demand for our products remains robust, as we continued strong top-line growth for the quarter. Previous investments made in our infrastructure to accommodate our current and anticipated sales growth have begun to payoff, as our second quarter 2011 net income has increased significantly over the prior quarter in 2010 and increases in our net revenue for the respective periods have out paced that of our SGA expenses. SGA expenses increased 31% over the second quarter of 2010 and just 8% over the first quarter of 2011."
Mr. Sandgaard continued: "Our long term goal is to diversify our revenue base currently being driven by our Zynex Medical, electrotherapy subsidiary, through our additional subsidiaries, Zynex Monitoring Solutions and Zynex NeuroDiagnostics, which should provide us access to new markets. We continue to make progress on our blood volume monitor device, currently being developed in our Zynex Monitoring Solutions subsidiary, in which we have a working prototype preparing for clinical evaluations that will be used to provide substantiation for FDA submission and international regulatory clearance. This unique device will serve, what we believe, is a currently un-met need in the market for safer surgeries and safer monitoring of patients during recovery. We have also been studying the markets for both Zynex NeuroDiagnostics and Zynex Monitoring Solutions and have identified potential growth opportunities."
Outlook:
The Company has refined its prior guidance by raising anticipated annual net revenue guidance to between $32 million and $34 million and narrowing the range of its net income per diluted share guidance to between $0.08 and $0.10 for 2011.
Conference Call and Webcast Information:
Zynex, Inc. will host an earnings conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today to discuss its second quarter 2011 results. Please note questions can only be submitted via the webcast user interface. Parties without access to the internet may join the presentation in listen only mode by dialing the toll free number provided below.
Webcast Information- http://www.visualwebcaster.com/event.asp?id=81276
Conference Call Information - 888-208-1814, pass-code 3744529
Highlights from the second quarter ended 2011 condensed consolidated financial statements:
(unaudited, amounts in thousands, except per share amounts)
| Three months ended | Six months ended | ||||||||||||
| June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||
| Net revenue | $ | 8,395 | $ | 5,742 | $ | 15,028 | $ | 10,617 | |||||
| Gross profit | 6,668 | 4,520 | 11,857 | 8,399 | |||||||||
| Income from operations | 899 | 130 | 760 | 162 | |||||||||
| Income before income tax | 822 | 82 | 625 | 18 | |||||||||
| Net income (loss) | 484 | 30 | 374 | (37 | ) | ||||||||
| Adjusted EBITDA (1) | 1,148 | 783 | 1,253 | 1,324 | |||||||||
| Net income per share - diluted | $ | 0.02 | * | $ | 0.01 | $ | ** | ||||||
| Weighted-average number of common shares outstanding -diluted | 30,756,717 | 30,513,285 | 30,694,216 | 30,505,347 | |||||||||
| * Less than $0.01 per share |
| ** Less than $(0.01) per share |
(1) Reconciliation of unaudited U.S. Generally Accepted Accounting Principles (GAAP) Net income (loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted-EBITDA)
| Three months ended | Six months ended | ||||||||||||||
| June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||
| Net income (loss) | $ | 484 | $ | 30 | $ | 374 | $ | (37 | ) | ||||||
| Interest expense net and loss on extinguishment of debt | 79 | 50 | 137 | 128 | |||||||||||
| Income taxes | 338 | 52 | 251 | 55 | |||||||||||
| Depreciation and amortization | 209 | 210 | 412 | 422 | |||||||||||
| Deferred rent | (56 | ) | 282 | (111 | ) | 564 | |||||||||
| Loss on disposal of equipment | - | 46 | - | 18 | |||||||||||
| Stock-based expense | 94 | 113 | 190 | 174 | |||||||||||
| Adjusted EBITDA | $ | 1,148 | $ | 783 | $ | 1,253 | $ | 1,324 | |||||||
About Zynex
Zynex, Inc. (founded in 1996), operates under three primary business segments; Zynex Medical, Zynex NeuroDiagnostics and Zynex Monitoring Solutions. Zynex Medical engineers, manufactures, markets and sells its own design of electrotherapy medical devices for standard digital electrotherapy, used for pain relief, pain management and stroke and spinal cord injury rehabilitation. Zynex Medical's product lines are fully developed, FDA-cleared, commercially sold, and have been developed to uphold the Company's mission of improving the quality of life for patients suffering from impaired mobility due to stroke, spinal cord injury, or debilitating and chronic pain. Zynex NeuroDiagnostics, currently in the development stage, has been established to market EMG, EEG, sleep pattern, auditory and nerve conductivity neurological diagnosis devices through product development or acquisitions. Zynex Monitoring Solutions, currently in the development stage, has been established to develop and market medical devices for non-invasive cardiac monitoring.
For additional information please visit: http://www.ir-site.com/zynex/default.asp.
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 additional capital in order to grow our business, our ability to engage additional sales representatives, the success of such additional sales representatives, 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, the uncertain outcome of pending material litigation 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, 2010.
| ZYNEX, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF SHARES) | |||||||
| June 30, | December 31, | ||||||
| 2011 | 2010 | ||||||
| (UNAUDITED) | |||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash | $ | 783 | $ | 602 | |||
| Accounts receivable, net | 9,513 | 7,309 | |||||
| Inventory | 3,751 | 3,641 | |||||
| Prepaid expenses | 136 | 145 | |||||
| Deferred tax asset | 917 | 794 | |||||
| Other current assets | 63 | 41 | |||||
| Total current assets | 15,163 | 12,532 | |||||
| Property and equipment, net | 3,239 | 2,906 | |||||
| Deposits | 201 | 174 | |||||
| Deferred financing fees, net | 91 | 89 | |||||
| Total assets | $ | 18,694 | $ | 15,701 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current Liabilities: | |||||||
| Line of credit | $ | 3,204 | $ | 1,270 | |||
| Current portion of capital lease obligations | 100 | 93 | |||||
| Accounts payable | 1,458 | 1,313 | |||||
| Income taxes payable | 911 | 1,103 | |||||
| Accrued payroll and payroll taxes | 794 | 572 | |||||
| Deferred rent | 259 | 221 | |||||
| Other accrued liabilities | 1,367 | 980 | |||||
| Total current liabilities | 8,093 | 5,552 | |||||
| Capital lease obligations, less current portion | 274 | 327 | |||||
| Deferred rent | 1,303 | 1,452 | |||||
| Deferred tax liability | 230 | 188 | |||||
| Total liabilities | 9,900 | 7,519 | |||||
| Stockholders' Equity: | |||||||
| Preferred stock; $.001 par value, 10,000,000 shares authorized, no shares issued or outstanding | - | - | |||||
| Common stock, $.001 par value, 100,000,000 shares authorized, 30,775,034 (June 2011) and 30,604,167 (December 2010) shares issued and outstanding | 31 | 31 | |||||
| Paid-in capital | 4,940 | 4,702 | |||||
| Retained earnings | 3,823 | 3,449 | |||||
| Total stockholders' equity | 8,794 | 8,182 | |||||
| Total liabilities and stockholders' equity | $ | 18,694 | $ | 15,701 | |||
| ZYNEX, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net revenue: | ||||||||||||||||
| Rental | $ | 2,447 | $ | 2,335 | $ | 4,895 | $ | 4,606 | ||||||||
| Sales | 5,948 | 3,407 | 10,133 | 6,011 | ||||||||||||
| 8,395 | 5,742 | 15,028 | 10,617 | |||||||||||||
| Cost of revenue: | ||||||||||||||||
| Rental | 392 | 258 | 726 | 533 | ||||||||||||
| Sales | 1,335 | 964 | 2,445 | 1,685 | ||||||||||||
| 1,727 | 1,222 | 3,171 | 2,218 | |||||||||||||
| Gross profit | 6,668 | 4,520 | 11,857 | 8,399 | ||||||||||||
| Selling, general and administrative expense | 5,769 | 4,390 | 11,097 | 8,237 | ||||||||||||
| Income from operations | 899 | 130 | 760 | 162 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 1 | 3 | 1 | 4 | ||||||||||||
| Interest expense and loss on extinguishment of debt | (80 | ) | (53 | ) | (138 | ) | (132 | ) | ||||||||
| Other income (expense) | 2 | 2 | 2 | (16 | ) | |||||||||||
| (77 | ) | (48 | ) | (135 | ) | (144 | ) | |||||||||
| Income before income tax | 822 | 82 | 625 | 18 | ||||||||||||
| Income tax expense | (338 | ) | (52 | ) | (251 | ) | (55 | ) | ||||||||
| Net income (loss) | $ | 484 | $ | 30 | $ | 374 | $ | (37 | ) | |||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.02 | $ | * | $ | 0.01 | $ | ** | ||||||||
| Diluted | $ | 0.02 | $ | * | $ | 0.01 | $ | ** | ||||||||
| * Less than $0.01 per share | ||||||||||||||||
| ** Less than ($0.01) per share | ||||||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 30,756,717 | 30,513,285 | 30,694,216 | 30,505,347 | ||||||||||||
| Diluted | 31,025,478 | 30,702,944 | 30,957,206 | 30,716,349 | ||||||||||||
| ZYNEX, INC. | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (UNAUDITED - AMOUNTS IN THOUSANDS) | |||||||||
| Six Months Ended | |||||||||
| June 30, | |||||||||
| 2011 | 2010 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income (loss) | $ | 374 | $ | (37 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||
| Depreciation expense | 389 | 401 | |||||||
| Provision for losses on uncollectible accounts receivable | 630 | 102 | |||||||
| Amortization of financing fees | 23 | 21 | |||||||
| Issuance of common stock for services | 44 | 48 | |||||||
| Provision for obsolete inventory | - | (9 | ) | ||||||
| Deferred rent | (111 | ) | 564 | ||||||
| Net loss on disposal of equipment | - | 18 | |||||||
| Employee stock-based compensation expense | 146 | 126 | |||||||
| Deferred tax benefit | (81 | ) | (355 | ) | |||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (2,834 | ) | (1,257 | ) | |||||
| Inventory | (93 | ) | (868 | ) | |||||
| Prepaid expenses | 9 | 107 | |||||||
| Other current assets | (49 | ) | (19 | ) | |||||
| Accounts payable | 145 | (25 | ) | ||||||
| Accrued liabilities | 609 | 177 | |||||||
| Income taxes payable | (192 | ) | (545 | ) | |||||
| Net cash used in operating activities | (991 | ) | (1,551 | ) | |||||
| Cash flows from investing activities: | |||||||||
| Proceeds received in lease termination | - | 108 | |||||||
| Purchases of equipment and inventory used for rental | (739 | ) | (224 | ) | |||||
| Net cash used in investing activities | (739 | ) | (116 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Net borrowings from line of credit | 1,934 | 1,087 | |||||||
| Issuance of common stock | 48 | - | |||||||
| Deferred financing fees | (25 | ) | (90 | ) | |||||
| Payments on capital lease obligations | (46 | ) | (146 | ) | |||||
| Net cash provided by financing activities | 1,911 | 851 | |||||||
| Net increase (decrease) in cash | 181 | (816 | ) | ||||||
| Cash at beginning of period | 602 | 863 | |||||||
| Cash at end of period | $ | 783 | 47 | ||||||
| Supplemental cash flow information: | |||||||||
| Interest paid | $ | 102 | $ | 51 | |||||
| Income taxes paid | $ | 525 | $ | 955 | |||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||||
| Equipment acquired through capital lease | $ | - | $ | 334 | |||||
Contact Information:
Contact:
Zynex, Inc.
Anthony Scalese
CFO
303-703-4906