ZYXI - Earnings call transcript Q2 2018

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Operator

Good day, and welcome to the Zynex Second Quarter 2018 Earnings Conference Call. All participants will be in listen only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] 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. Risk cause described to the company's XX-K in Exchange and including releases could forward-looking differ Securities press for that our X-K/A, as Commission, are of forms December website. statements our the as the factors year actual on the XX, materially results from and annual ended Risk report section XXXX, Form well Factors and filings X-K with XX-Q, note event being Please recorded. this is to like Thomas Executive now turn to and conference over Founder, would Chief Sandgaard, I Officer. the Chairman Please go ahead.

Thomas Sandgaard

Good and great morning. call. to quarter Sandgaard, growth My I'm name is earnings. of earnings quarter CEO our Thomas President positive XXXX another Welcome of and Zynex. announce revenue excited to second

our compared per quarter increased share. net eighth earnings. Revenue Our reported the And million to positive or consecutive $X.XX fully X.X second quarter revenue had in with XX% came quarter of $X.X positive at we diluted last same income year. we million, and

to up And we're Our revenue be country. issue this in to the the compared continues in of epidemic die The a opioids the to the impact line quarter prescription-strength pain. to use opioid defense due was daily level reached devastating serious Currently, when to technology and increasingly first has second of XX% XXXX. opioid of patients the where off treating people get quarter working as our physicians for XXX first abuse.

aware make our has to We that develop side physicians of tools continue more to effects. no technology literally

see indication first profit industry increase the our healthy and XX%, we the XX% reimbursement that to year-over-year therapy grew not prescription-strength viable. in only be XX% while gross second posted to strong orders for margin to electrotherapy I'm very in pleased in products. quarter, the year continues XX% but quarter still the is to quarter, second the stable, from very equivalent Our for last our an

of the the position second X.X from million yearend quarter. end million X.X to at increased cash Our at

Our to the it in be operations program. our back continues half was strong, by buyback of from company year in offset buying very first stock million cash flow the and the $X

as and blood Our out some announce products volume as stroke patents, device position have InWave rehabilitation progress can one The pain surgery still for blood market may rehabilitation NexWave new monitor, loss of with management, Marking recovery and as well and pain rehabilitation products which of that additional for NeuroMove indicate our making on well. for noninvasive applications product the progress for hoping CE during of the industry. We're product the the and the all the FDA. soon for very management we a as treatment, European in bleedings incontinence strong us puts the markets. We're in best during getting our in first several can granted see internal being stand

update, safety by minor can a completed successfully FDA. testing that say the we recently I was requested and As biocompatibility that just additional

huge unmet our pain revenue-generating the for blood I'll our Moorhead, as We of potential great to now potential CFO. turn product both continue existing well over in monitor. area to the our our volume for management call divisions, Dan as see

Dan Moorhead

Thomas. Thanks,

XX% up Supplies $X.X to in year-over-year revenue XXXX revenue million margins to review million. XXXX. to Net in from million to our $X.X I'll results. $X million from revenue revenue from year. in gross $X.X increased last compared million to XX% quarter QX, The $X.X XX% growth $X.X First, second increased last XX% XX% million drove increased Device year.

million in $X.X reconciled Second the per increased EBITDA net year. quarter a $X.X is diluted or in last to QX, million to share in compensation quarter XX% of is $X.XX noncash, million up of share net year. $X.XX second XX% million Adjusted income diluted was and compared an per or $X.X income last exclusion standard stock-based $X from release, plus calculation which our EBITDA, press

EBITDA the was million revenue $X.X year. revenue from XXXX. growth to XXX% to which increased up XX% increase $X.X million, up compared gross share diluted $X.X an of to Net in income compared first XXXX in or X to X last year. increased compared to XXXX was million to months Now year. $X.X during million cash income revenue $X.X generated on supplies We net last million months last XX% last to increased million. in $X.X to $X.XX results. XX% million, Product from million $X.X in The the per of revenue, million again, Adjusted net XX% $XX.X XX% was $X.X device from year-over-year margins million $XX.X Product of year. XXXX. from operating flows million $X.X 'XX, $X.X million drove of XX%

balance On the sheet.

flows did we million during months, balance As stock. X strong the $X.X first XXXX, repurchasing XX, at was of XX, although June to million spend on our our compared common due to XXXX, cash $X.X cash December operating $X million

Our everyone to to progress working XXXX. as grew in the made we've take of December wanted XX XX% the capital XX, of second months. million a last million compared $X.X to I $X to remind

capital XXth, notable cash of June June We've report year. as that million. a to item a we pleased in are was long we're other is, negative One of of As XXXX, $XXX,XXX XX, and $X.X we way debt-free. our balance had come working

$X.X to outside we presently, placement to of With private the During And back that, line paid I'll last credit. related day-to-day operating debt the our million no and XX debt liabilities. turn have of in over service Thomas. months, call

Thomas Sandgaard

Dan. you, Thank

market currently rate developing to areas rapid take on the be where a the don't to previously new have two of sales competitors. continues advantage left by void focus large in we geographic coverage in reps at and very deploying Our

continue of between largest in $X.X come force estimate for Our profitability which our the give us EBITDA after potentially should stock should the million to $X.X again more grow will future. million continues improve increased $X.X a our for for is the liquidity see stock increased our our and market orders our huge void drive disappearance and strong to in is or million, we the in revenue $X.XX our around to effect goal for exposed of national our reimbursement in on to in prescription earnings the due long-term company ability revenue market the And take the competitors. people management and company. to currently our get ultimately rehab EBITDA will use of share. combined pain My huge to products. adjusted up-listing to to improve acquisitions It stock advantage sales the million; and currency a stock. as engage in quarter to a electrotherapy it share working also actively with and third exchange, We division to which between main our and We're $X.X

our As status of no today, earnings of terms we since last have call. the updates in

take listeners. our now from will We questions

Operator

first Our come Cohen question Instructions] Thalmann. [Operator will of Ladenburg Jeffrey from

Jeffrey Cohen

a at the about I'll supplies. there It So just like predictability or in estimates order. look can XXXX that it a a our least? spot percentages, Anything of number as as except and little questions, on, looked in to lighter like balance detect go talk were heavier of in through I recurring the for read far you devices specific in

Thomas Sandgaard

longer it's device, patients installed our more a and whether using companies to the I installed it's have and Obviously, the as add? because that of to detail, the cover using installed orders stopped gets therefore, bound grow. but base. that to the anything our added if gets devices, That There's you of is any, of our have no our supplies or base insurance don't decided you trading base know grow, to treatment. more obviously off same Dan, have might overall, continue they've still revenue down to more little and fewer patients to as continue increase portion have the business. patients

Dan Moorhead

Yes, no.

I mix we're I your don't I now we look numbers front think supply the guess, just from me, I what versus of think down if I should you close. what came, when you and think just be rates estimated, we, if growth we if pretty in lower reported get the have levels. those that but split would was predicting, the extrapolate I you there to device have what at

Jeffrey Cohen

any Has quarters? few there duration seeing are therapy patients you trends on of Or the and predictability that as far been there? getting is past And over Okay. current shorter any therapy? as longer or

Thomas Sandgaard

don't at have look the pretty is trend years, last any we couple those given the periods we've I seen significant in few I'd of If It's last to longer same. think say the to tend the past. changes. much of insurance the for companies treatment compared quarters approvals that

Jeffrey Cohen

in with the were feasibility Europe quarter? FDA progress when monitor And about it was talking the some Was it tested FDA? about? last in you're tested What the Was communication there, viability? blood specifically. past in this talking you it the question was And sounded or like in and

Thomas Sandgaard

X or for month asked a About ago, safety on Yes. testing. more they data

of One wrist the the biocompatibility on needed touching the have most the material skin, of the namely data. we more where patient

for Marked. the the So all with be the we're product safety there's also that, testing non-toxic file additional And also is, had hopefully, obviously and be part FDA will part the irritating of main forward. with undergone. of or of dealing we the product the we passed citational that new thing non-skin moving a we'll patients. And what and it's It's assured CE that a we, to sharing that on as some testing standard getting we

So similar those very things are there.

Jeffrey Cohen

Mark, a specific XXXX? more you to confident about And referring CE you a Is Okay. time are feel there line? in do

Thomas Sandgaard

somewhat exact I our But good tell, but control. they an working tried as ask an are far positive. great up obviously when not try time to estimated not we to these since We've provide us and of I'm to questions. Obviously, out line, answers moving provide it's, Products it's time Yes. as entities it's line can forward. provide to

Jeffrey Cohen

in this it approximately taxes a Dan, it. Got level you the looked like or that XX%. guide might specific to there Okay. Is way were us near-term? quarter

Dan Moorhead

Yes.

I expect we think, the effective rate later in and you'll this think be XXXX, we that in but see Q when XX% year. the today, about to file I

rate some those had to tax 'XX. of we tax recall, 'XX, going in effective We use we're in way the for but the up benefit rate in that majority and we bumping the the then removed NOLs huge used you XXXX, If it valuation on. one instead allowances because taking we of had quarter

to it a to that stock So a we deductions there down XX%. was about to due took stake should burned back get XX% generally, to was items there discrete rate QX to you around we little the of that that once the in large XX% QX. and 'XX. an rate we've kind that large number X% to bit quarters because Fed, had through you're But X% XX%, 'XX. then everything in And XX% be in going normalized 'XX, get some be the of benefit rest in effective should of comp in or range anomaly a XX% in

Jeffrey Cohen

it. can was that? reset you couple Got back, Perfect. said of $X you bought past will complete that? million you over just, you And the Okay. in you And So did stock quarters? it

Thomas Sandgaard

second And to million with round rules our still that are have XXbX/XXbXX the the there $X executing according Well, of for broker, certain effect. obviously, is that. buyback provided in we they're and

So stock we and day, have first every both necessarily quarter in we'll of but second this the buyback obviously year. the don't

Jeffrey Cohen

for more couple A me.

viable. margins range take to let's low over step You it, call quarters? means XX% That anticipate the a and healthy would coming this, talked about in being one

Thomas Sandgaard

Right.

it's changes for or otherwise, As future look long as or [indiscernible]. that trends see we uncertainty foreseeable going like indicate don't either a what's any to

Jeffrey Cohen

as And and as or goes any then as line far the far exchange? anticipated up-list the update time as Or... exchange lastly, a

Thomas Sandgaard

help process we've development, about requested a can with we if significant status add more about to forward, that's meet no but it it. NASDAQ them waiting a I eventually that the can and little learn information just flavor more are with provide and There meeting to we're the to move

Operator

Our next Please Howard from question ahead. come of will go Taglich Brothers. Halpern

Howard Halpern

care if number customers sort know on don't what would a I offer, base but you're installed to have of round you are? do you

Thomas Sandgaard

we XX,XXX. files, wrong are it's Hooyah, and be look with open we a have, opened have technically insurance It's our companies. the number at of will If very XX,XXX and we that with dealing them because with dealings primarily of somewhere number. because between

Howard Halpern

see And by want do about talked new in XXXX? reps, of expansion to what end of, of the geographic adding sales terms current you you occur the parts

Thomas Sandgaard

XX a and of in for little more force more detail grow my We little a reps or people provide we cities having we more that. it this out good the presence on And to by et track into a some that talent goal hiring that. active our XX, with the So we well reps yearend in addition where that it already are had beginning make like new we're XX a on to set to up to have net don't of Obviously, while. flavor means was And for producing going resume, attrition some what and haven't looks and year. year great in end because cetera. had despite sales or

May bit as that increasing that a So added back part beginning in terms we're our slowed sure and therefore, those we down level. and the the of force, in make to our sales we it to made of next survivors long-term a to year that, at in the rapid of little June had And now rate.

many hired. how are track terms We in we've on of

were a handful that people not it. we've hired over think have a off approximately XX. making over I We little dropped of that had a little

terms net-net plan of producing our in many that reps of And so reps on orders added. XX%. ahead we're original how how than more terms group are we by, track had are of in of many We're

excited very the our that. June. made seen that So of we've little in one of had. than July's what than has Yet, the best that were also ever about orders in expected. And that July I a had slower-than-anticipated we've can we lower June it's month for up more add

of that. quarter for the result and So terms the of I'm optimistic fourth growth order as very in third a

Howard Halpern

and question you connect last what just to One said. SG&A, on may then

why one G&A May came you took the in reasons just little little in that said Is bit pause June. You sequentially a of of down bit? a a hiring and

Thomas Sandgaard

Yes. One, Dan, more detail. maybe provide but can you

Dan Moorhead

QX. It's there's in. onetime There's pop items. during part it. But of we have, in kind that audits things QX, of other expense The

things that up. have You other pop

that things seasonal there's up. So pop

So QX. things expense in had timing that our slightly generally, same. made about stayed just it base drop some the We

Operator

of Our next question Williams come James Newbridge. from will

James Williams

normally, detail you minimum really you. into be it'd a that I know normally just is price stock to go I I had or there the $X is, a see that, can't whether have but guess, $X, question question. listing, much about what my like they was like

With last back possible anyway $X, that the under hinder, falling month requirement? the closing the over under a listing does stock and $X

Thomas Sandgaard

is But all crossed over qualify, really to threshold about. checkmarks not need not many care with confident application of the And will that's would be you're NASDAQ. it's the our to The $X and for is, place financial still we We're, not, very obviously, for we're active. t's the that dotted with required and take that an one, this in the to i's qualify will is itself. where worried category NASDAQ. correct all I'm be And considering $X the we one important days we of area too performance, many. but I'm

James Williams

for need to that does back a over it for few $X happen? So to get days

Thomas Sandgaard

Yes.

Operator

come Our from next Wainwright. will of question Yi Chen H.C.

Yi Chen

any there sales? question supply seasonality device is, involved is revenue first the and My stream from in

Thomas Sandgaard

reflection other of and that is, of goals in go terms really There those slowdown and insurance that, not of deductibles. vacation summer where those have period And period on to met, otherwise, and providers in terms then see some the is the doctor one is when is beginning year of at vacation. orders you typically very absorb doctor a of the doctor Thanksgiving on you orders. seasonality, are the in And seem both when some obviously, let much a of

to you first of that saw, that quarter for In year, fourth of insurance a little instance over of revenue terms with last wise deductibles. was it, that, quarter the the in the do side revenue again as has in

of than will payments by into some insurance build of that to out So be in rather the the year, we'll for deductibles us. the absorbed beginning data services

have the revenue we're reporting that. we Later lower will, little obviously, of revenue the result there. a So typically up year, a in pick as

on little there's So it more revenue the side a bit than though. It's side of the is order on seasonality.

Yi Chen

in as XXXX But for do revenue those the fiscal XXXX, observed year as rate high be to expect you over XXXX? growth

Thomas Sandgaard

was nearly a wise, growth. Percentage that XX%

expect lower years, a that be the saw We wise, obviously, same dollars between less was that obviously percentage. also two of in see we or more percentage will terms the to

look rather XX% people think, to I you somewhere close than estimate, if XX%. out that's between XX% and there at what

Yi Chen

do to expect, compared competitors more you nowadays two you a Do has years year market ago? see or the

Thomas Sandgaard

year one year ago X.X a compared to to Compared ago?

Yi Chen

year. Yes, one

Thomas Sandgaard

really closed model. be the served same. competitors the really the It's that into developed have or business to into is footprint But And have the We the have about rapidly. a and by the expanding couple used a don't with coming localized. well market. national business either any changed provider And market of competition that large see the very and well competitors we we're limited, very really very only

So really competitive. not it's

Operator

Wiesenberger Our next B. from Marc question of come will Riley FBR.

Marc Wiesenberger

seeing talk products traction Can into deployed ultimate and any about you prescriptions? in clinics conversion then with you're rehab

Thomas Sandgaard

is sides that two management there's the side. yes, question. Well, pain on to One

The business management our rehabilitation ago. changed We other product, one stroke three years the side four years on our ago, about the model on pain NeuroMove.

of have with can patients We we having efficient. have also the work. off subsequently So out. in the insurance. then in they in you the was drop where devices much inventory go the the what paper clinics where had health better to costly much now we like sitting information. get it's had over model accurate file the we us And we basis more, And here, point, consignment touch of that consignment patient's hardly, business be in just hardly rather with is the on to that information. very the $X more one ship in a, we At than see get prescription provided that. here for to That insurance any terms will get the industry million We've the inventory. some send build pharmaceutical having It's to that a inventory we from terms cost changed inventory closer patient when little will we then in we and we

the really and So making business more model effective. helped entire much has it the business

So your prescription very units to because now, now there. to converted business answer question gets little of we are out that have

based for NeuroMove unit, for are provide buy for, electrodes limited for they a pay have able just supply clinic treatment out otherwise, are stroke a the can clinics survivors, a what's and to clinic, demo and as recently there. we device used for We they see namely a that our Some introduced program long where the very prescriptions. to but choose is where it's as that device on

have of on one can yet. might We not way. that to much program traction And seen we some that make that more generate things those where if and see adjustments business we

Marc Wiesenberger

it's we rent, about forward? looked see been that we quarter, the kind going This should QX QX what's for that breakdown to expect And you forward? between, it XX%, 'XX? last XX% and kind of supplies of going between we the products, quarters, has supplies of Should been device product kind should that XX%, like X then and For between expect in of reallocated supplies. XXXX Is for for that expect and XX%.

Thomas Sandgaard

that reclasses. that's think again I about I yes, see think the, right. information. XX-Q that's better portion if I the you Yes, some will have got of in we was did two, the some going We between to a And

XXXX. So continue those between reclasses to we're, done categories, the we've some in revenue do and X just we'll

two a I is for we full way you'll reallocation your, split between see reasonable the finish project think XXXX. it. to the once that around So But XX-XX, 'XX,

Operator

Our Hamilton Global Alex Research. next of will question come Consilium from

Alexander Hamilton

is stock thought models. given very the terms we're this especially, in up-listing, to stock flexible about current you business next done, and allocation? if buyback what's concerned as of always capital terms When are price very guys in of You savvy, have

Thomas Sandgaard

the than quarter. added seeing $X to Well, well, million million do every being on that. we're high-level, better obviously, if $X Hopefully, bank a progress we can things account to even

can, would into with where that and can you information, year. going we you year-end of So next at kind project be

we would other millions would or that to only My in better several things funds would think some to needed to go run and dollars raise it that may were of self-sustaining we through would acquisitions are if to and the funds preference additional up-listing of to are, that engage are of And be exchange. we raise the we terms money. business. be additional require a engage after be in So an obviously I

the think all we So making some of to have until up-listing. to are we an interest which in in possibility more the acquisitions not of be the it'll liquidity the raise of be ignoring result now degree right best shareholders stock, I money as would

Operator

I'm Sandgaard time, to And for at Mr. over not any further conference back like the this any [Operator to closing turn remarks. Instructions] I as showing would questions,

Thomas Sandgaard

I Zynex all. Thank call. a for today's you. the earnings on this and hope I great appreciate you, informative day have in and in interest And call been listening to everyone. Thank have

Operator

now today's has conference Thank The you for presentation. concluded. attending your

may You disconnect lines. your now

Zynex (ZYXI) 4 Aug 182018 Q2 Earnings call transcript