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Zynex reports first quarter 2024 financial results

Zynex, Inc. reported its financial and operational results for the first quarter ended March 31, 2024.

Management commentary
“During the first quarter of 2024, we continued our focus on order growth, FDA approvals of next-generation devices, and new therapy products,” said Thomas Sandgaard, President and CEO of Zynex. “Approximately $1.0 million in revenue for the quarter was impacted by payments from a large number of insurers being delayed due to a cyber incident which impacted payers industry-wide. We expect to recognize that revenue over the remainder of the year and reaffirm 2024 guidance of at least $227 million. In the first quarter, increasing sales and profitable growth for our pain management division delivered a 23% improvement in orders year-over-year. We continued our share repurchase plan and repurchased $13.4 million of our common stock in Q1 2024 and $78.5 million over the last twenty-four months.

“During the quarter, the pain management division received clearance from to the U.S. Food and Drug Administration (“FDA”) for the next-generation M-Wave Neuromuscular Electrical Stimulation (“NMES”) device. NMES treatments have several uses, including aiding recovery from surgery, managing chronic conditions, and enhancing exercise performance in healthy individuals. The M-Wave introduces the next evolution in NMES devices, allowing for more customizable treatments within clinical and home settings.

“We continued to diversify our pain management revenue stream with the introduction of two new therapy products: the Zynex Pro Hybrid LSO, a versatile 3-in-1 spinal orthosis, and the Zynex DynaComp Cold Compression, which combines cold therapy and compression to accelerate recovery. These products allow our salespeople to compete effectively against other industry leaders in the cold compression and bracing markets and complement our other products in low-back support, bracing, cervical traction, cold/hot therapy equipment, and compression.

“We have four pre-revenue hospital monitoring products in the pipeline, including a laser-based pulse oximeter, NiCO™; a monitor for noninvasive detection of blood and fluid loss; a monitor for early detection of sepsis; and a noninvasive, laser-based monitor of total hemoglobin levels, HemeOx™. For NiCO, the FDA 510(k) submission is now tracking to the second half of 2024.

“We expect 2024 net revenue to increase approximately 23% compared to 2023. Innovative new products and aggressive promotion from an expanding direct salesforce are diversifying revenue streams and ensuring sustained growth. We look forward to additional updates in the months to come as we work to build long-term value for our shareholders,” concluded Sandgaard.

First quarter 2024 financial results
Net revenue was $46.5 million for the three months ended March 31, 2024, compared to $42.2 million in the prior year quarter. Net revenue was affected by payments from a number of insurers being delayed due to a cyber incident which impacted healthcare payers industry-wide.

Gross profit in the quarter ended March 31, 2024, was $37.2 million, or 80% of revenue, as compared to $32.9 million or 78% of revenue, in 2023.

Sales and marketing expenses were $23.4 million for the three months ended March 31, 2024, compared to $21.2 million in the prior year period.

General and administrative expenses for the three months ended March 31, 2024, were $13.3 million, versus $11.4 million in the prior year period.

Net income for the three months ended March 31, 2024, totaled $10,000, or $0.00 per basic and diluted share, as compared to net income of $1.6 million, or $0.04 per basic and diluted share, in the quarter ended March 31, 2023.

Adjusted EBITDA for the three months ended March 31, 2024, was $1.7 million, as compared to $1.0 million in the quarter ended March 31, 2023.

As of March 31, 2024, the Company had working capital of $56.2 million. Cash and cash equivalents were $32.9 million at March 31, 2024. Cash flow from operations for the three months ended March 31, 2024, was $2.1 million compared to $1.9 million in the three months ended March 31, 2023.

The Company continued its latest stock buyback by repurchasing $13.4 million of its common stock during the first quarter.

Second quarter and full year 2024 guidance
Second quarter 2024 revenue is estimated to be at least $52.0 million, an increase of approximately 16% from Q2 2023. Second quarter Diluted EPS is estimated to be at least $0.08.

The Company expects 2024 net revenue of at least $227 million, a 23% increase from 2023. Diluted EPS is expected to be at least $0.50 per share, an 85% increase compared to 2023.
MB Bureau

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