Zynex Announces First Quarter 2016 Results

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May 25, 2016, 08:00 ET

LONE TREE, Colo., May 25, 2016 /PRNewswire/ -- Zynex (OTCQB: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, neuro diagnostics, cardiac and blood volume monitoring, announced today its first quarter 2016 financial results.

President and CEO Commentary:

Thomas Sandgaard, CEO commented: "We grew electrotherapy orders dramatically during the first quarter compared to last year by a factor 3 primarily due to the addition of many new, seasoned direct sales reps. Revenue came in at $3.5 million, nearly 10% above the first quarter last year, but short of the $4.5 million estimate earlier this year. The reason was the accounting treatment of $880,000 payments from a single insurance payer in March that we did not report as revenue yet but rather keep in the balance sheet with a reserve until further notice.

"Recently, our lack of liquidity has made it difficult to keep up with order volume in production and has slowed us down. While cash collections have begun to increase there is still very little flexibility under our current line of credit to support our increase in business.

"We expect to see orders being flat or slightly decline during May and June, then pick up again significantly during the remainder of 2016. Our revenue expectation for 2016 is currently around $16 million and with positive net income."

Sandgaard continued: "We recently published a clinical study online, where 8 subjects donated 470 ml of blood while being monitored by our non-invasive Blood Volume Monitor. The results show an excellent correlation between the blood drawn and the Blood Volume Index. You can read the full study on our web-site, www.zynex.com. We continue to have a dialog with the FDA and hope to have FDA's market clearance in a foreseeable future."

Summary of Financial Results:

The Company's net revenue was $3,477,000 for the first quarter of 2016, compared to $3,183,000 for the first quarter of 2015. Revenue in the first quarter was negatively impacted by significant inertia in getting the many new files billed due to lack of billing personnel. As well, a large payment from an insurance company was not recorded in revenue but rather reserved in the balance sheet's liabilities as a precaution in case the money would be taken back - an event that is common in our industry. Gross profit margin in the quarter was 72%.

The Company reported Selling, General and Administrative ("SG&A") expenses of $2,844,000 for the first quarter of 2016, compared to $2,710,000 for the quarter ended March 31, 2015, an increase of $134,000 primarily attributed to a significant increase in sales commissions.

For the first quarter 2016, the Company reported a net loss of $444,000, or $0.01 per share, compared to a net loss of $896,000, or $0.03 per share in the same period of 2015. For the nine months ended September 30, 2015, the Company reported a net loss of $1,711,000, or $0.05 per share, compared to a net loss of $6,724,000, or $0.22 per share in 2014.

Cash provided by operations in the first quarter 2016 was $666,000 versus $163,000 in the first quarter of 2015.

The Company's line of credit balance as of March 31, 2016 was $3,362,000, a reduction of $640,000 since December 31, 2015.

To register and participate in the webcast, interested parties should click on the following link approximately 10-15 minutes prior to the webcast:

https://www.webcaster4.com/Webcast/Page/1487/15422

Phone Access Details:

US Participant Toll Free Dial-In Number:	1-877-870-4263
International Dial-In Number:	1-412-317-0790

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

Statements made in this presentation include financial estimates and forward-looking statements that are not historical facts. Each of these estimates and forward-looking statements involves risk and uncertainties. These estimates are based on present circumstances, information currently available, and assumptions about future revenues, industry growth, and general economic conditions. Estimates are inherently uncertain as they are based on assumptions concerning future events. No representations can be made as to the accuracy of such information or the reliability of such assumptions. Accordingly, actual revenues and expenditures may vary significantly from the Company's estimates, and actual results or developments may differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ from the financial estimates and forward-looking statements in this presentation include those described in the Company' s filings with the Securities and Exchange Commission, including the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Therefore, neither the Company's estimates nor the assumptions upon which they are based are to be interpreted as a guarantee or promise of the Company or management. The Company has no obligation to modify, amend, update, alter, or change the estimates contained herein.

Contact: Zynex, Inc. 303-703-4906


ZYNEX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF SHARES)

	March 31,		December 31,
	2016		2015
	(UNAUDITED)
ASSETS
Current Assets:
Cash	$	24	$	8
Accounts receivable, net		3,157		2,426
Inventory, net		173		305
Prepaid expenses		20		27
Total current assets		3,374		2,766
Property and equipment, net		704		801
Deposits		55		55
Intangible assets, net		64		74
Total assets	$	4,197	$	3,696
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Line of credit	$	3,362	$	4,002
Current portion of capital leases		109		109
Accounts payable		2,750		2,477
Deferred revenue		366		89
Income taxes payable		79		79
Accrued payroll and payroll taxes		614		484
Deferred insurance reimbursement		880		-
Accrued expenses		186		299
Total current liabilities		8,346		7,539
Capitalized leases, less current portion		196		216
Warranty liability		12		12
Total liabilities		8,554		7,767
Stockholders' Deficit:
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, 31,271,234 shares issued and outstanding		31		31
Paid-in capital		5,990		5,832
Accumulated deficit		(10,289)		(9,845)
Total Zynex, Inc. stockholders' deficit		(4,268)		(3,982)
Non-controlling interest		(89)		(89)
Total stockholders' deficit		(4,357)		(4,071)
Total liabilities and stockholders' deficit	$	4,197	$	3,696

	Three months ended
	March 31,
	2016		2015
Net revenue:
Rental	$	1,079	$	327
Product and supply		2,371		2,320
Pharmacy and other		27		536
		3,477		3,183
Operating expenses:
Cost of revenue – rental, product and supply		983		1,245
Selling, general and administrative expense		2,844		2,710
Loss from operations		(350)		(772)
Other income (expense):
Interest expense		(94)		(132)
		(94)		(132)
Loss before income taxes		(444)		(904)
Income taxes		-		-
Net loss		(444)		(904)
Plus: Net loss – non-controlling interest		-		8
Net loss – attributable to Zynex, Inc.	$	(444)	$	(896)
Net loss per share – attributable to Zynex, Inc.:
Basic	$	(0.01)	$	(0.03)
Diluted	$	(0.01)	$	(0.03)
Weighted - average number of common shares outstanding:
Basic		31,271,234		31,271,234
Diluted		31,271,234		31,271,234

	Three months ended
	March 31,
	2016		2015
Cash flows from operating activities:
Net cash provided by operating activities	$	666	$	163
Cash flows from investing activities:
Change in inventory used for rental		10		40
Net cash provided by investing activities		10		40
Cash flows from financing activities:
Net borrowings (repayments) on line of credit		(640)		96
Payments on capital leases and other obligations		(20)		(14)
Net cash (used in) provided by financing activities		(660)		82
Net increase in cash		16		285
Cash at the beginning of the period		8		63
Cash at the end of the period	$	24	$	348
Supplemental cash flow information:
Interest paid	$	94	$	132
Income taxes paid (including interest and penalties)	$	-	$	-