ZYXI - Earnings call transcript Q1 2019

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Operator

Good evening, and welcome to the Zynex First Quarter 2019 Earnings Conference Call. [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 factors that could cause actual results to materially differ from forward-looking statements are 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, 2018, as well as forms 10-Q, 8-K and 8-K/A, press releases and the company’s website. Please note, this event is being recorded. to and conference Chief like Sandgaard, to now Chairman Founder, Executive would turn over the Thomas I Officer. Please go ahead.

Thomas Sandgaard

Thank Thomas Sandgaard, XXth consecutive Welcome My that the name CEO to with was I’m afternoon. quarter Zynex. our quarter call. first to you. of our positive announce earnings pleased quarter first President Good and XXXX is net income.

fully quarter compared was $X.X reported income net year, $X.XX per a to we million income XX% increased same with revenue diluted and quarter positive Revenue first of last Our and $X.X the share. of net million.

the of where to defense reached has benefiting physicians issue abuse. get a technology fourth Due was at cash compared in die epidemic end Our $X.X opioid common a first of as cash stock stock pain. first be the which at through quarter XXXX. operating yearly able buyback effectively Currently, use thousands the $X.X of our end level was strong program, the was company and years quarter dividend cash due devastating position to $XX.X continues the tens and anti-dilutive during when serious our opioid million million buy The the prescription-strength our the to decrease all this opioids line for of off of increasingly significant working shareholders. X.X of patients impact we’re country the to our in treating created a to million. to last X.X due The to of million event, to payment flows, special

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

new grew the result four of the last for United reps per in force month, as quarter becoming footprint products. with we I’m end every across being XX% this us sales reps in remain new get should first not sales strong added approximately independent Orders year, and on XXX be added new mostly and XXXX, level, still at X% margin and reimbursement an continue being the our in and viable. As reps Last for of all year, our that reps and quarter are industry year, fourth and pre-XXXX XXXX to and our we be profit the XXXX. very States, we but the growing month. see to sales the sales we pleased year-over-year stable grew That reps the XXX sales quarter first healthy by between to very XX% gross direct keep XXX electrotherapy a adding to the indication track XX pace reps, approximately prescription-strength see is only reps productive. geographic of we

of The rehabilitation for and InWave products industry. rehabilitation the the for some out pain NeuroMove product in for products pain management that as markets. NexWave treatment, stand Our in the strong us stroke position in management, rehab the puts a incontinence our still and best for

Monitor. well of February get as daily since existing will both Index. stock We that mention volume well price. significant XXXX Russell hope continue I in this year also and in the we turn for the to area on the call Moorhead, over our noticed of as great our increase have product pain the NASDAQ CFO. Blood our included divisions: exchange And unmet management should in to for the We getting our see in in now huge potential a eventually I succeeded revenue-generating traded listed as Volume the Dan as to potential

Dan Moorhead

Thomas. Thanks,

up $X.X million which versus million. XXXX. XX% to XX% million million last $X.X in net Gross first to of million Device increased were XX% margins compared million to results. from revenue grew Orders Supplies year. year-over-year, the XXXX XX% drove quarter $X.X review XX% in revenue year-over-year last from $X First, I’ll our $X.X XXXX to first XX% year. increased quarter revenue $X.X

G&A was sales year-over-year QX. now aggressively we XX% our grew breakout and in greater compared XXXX related XXXX. You’ll marketing from statement overall breaking XXXX in sales financial expenses Much our Sales expenses. clarity and uplisting and This as the NASDAQ in XX% growth and related the to impact. expense X% of and notice comparable XX% G&A our compared the period continued to to and expense we are provides QX out sales year-over-year related increased grow increase and force. to QX the to marketing initiative

our includes was income statutes amount no income the which deferred reimbursement, determined longer presentation. therefore, Management XXXX. insurance and other books the other appropriate We based through as Our balance liability, we was valid that removed a recognized sheet. our this on most $XXX,XXX since state had the that the from been is liability amount on believe

calculation and our exclusion was or release, $X.X $X.X which of press non-cash diluted share income per quarter reconciled EBITDA, million was compared other stock-based million million in $X.XX to net quarter is the or year. EBITDA of $X and share $X.X a last in last diluted compared income in is per Adjusted First year. $X.XX first net plus standard million QX of compensation an income to expense

two taxable expense losses tax operating due We net the over to us utilized put profitability position. last and also our which in have years, year-over-year increased our income a

in XXXX. the to cash the special fourth On million XXXX, our due million, $X.X $X.X our The December quarter sheet, cash was compared year-over-year. was of XX, in XX, January. was as flows of $XX.X at dividend in which increased million XX% XXXX payment balance paid operating balance to March QX of cash QX decrease

QX to Our XX% to grew million December as XX, $X.X in million of compared capital working $X.X XXXX.

ASC During on caused sheet, QX, million us $X.X new we liabilities the which which current. record balance lease in are lease implemented guidelines, $XXX,XXX accounting to the approximately of XXX,

implementation. nature working so was there With over to negative I’ll non-current back We all Thomas. that, call on effect turn in the the also the related assets, related are to but recorded a those capital

Thomas Sandgaard

you, Thank Dan.

focus cover in of our to currently sales force which Our the void advantage previously market we left be to continues don’t two very by rate a rapid take in areas growing at competitors. large geographic the

due Our void of the This market our we well of obtained domestic technologies. includes increased between huge force, sales revenue last our to in another potential drive with profitability. estimate acquisitions next – after strong division, between for in yet share $X.XX. of and of disappearance announced the continues a million Monitor Blood two advertising, for pain revenue between and take the and our our larger to $X.X long-term earnings great staffing support as $XX cetera. management of orders, clinical products, summary, with In as the indicates beginning goal complementary electrotherapy increased for $X.X to our division to patent late and of rehab reimbursement The continue the million on phase business quarter prescription and revenue is strong to developing sales per main share be We advantage combined in around development, this our et up grow our market Volume year profit. million force and our huge orders quarter competitors. and to the with $X.X more growth million, EBITDA second My growing research

that including We’re internally. division, additional product also development looking at add to adding to more products

listeners. our take now will questions We from

Operator

Ladenburg The Cohen first question Jeffrey Instructions] comes [Operator Thalmann. of from

Destiny Buch

to for going Have you sales Is Destiny mentioned What actually start managers. Jeff. you And it changed? training is your that I’ll mentioned, comments I that adding six a be quarter, on your still Four maybe the implemented we Or force be just tiny you of enhancing maybe This you’ll last the is I cycle were know also quarters? regional efforts. by you I sales then questions. to has some had now? a looking come? from initial – on at bit, with couple quarters? are force. yet? remember training As restructuring

Thomas Sandgaard

That’s correct.

We’re the regional all level, actually it’s restructure now pretty sales the well. of and out right middle playing manager in the on

our at right accommodate with sales the long we We’re the we we – the that XXX we also have country – setup reps that can term, we’re the already that territories accommodate looking remapping that so across can now. all the so – anticipate

taking of obviously it on expect is the will long assuming speak. term, a as And average rep, that as that place to side annual get $X as now million should revenue a each, reimbursement that as we all out strong, So we that if generate sales right sizable well revenue. plays everything remaining us

Destiny Buch

accounts about what you it, then Got the from of left were your percentage leaving to it. date? do the Okay. kind captured that reps have competitor think of you that if think And

Thomas Sandgaard

yet. millions Not lot, not just a millions, of whole of few a tens maybe hundreds

as But of We’re making still doing reps terms reps, sales sales you training in now. productive, cetera. in new of early we’re our mentioned, stages great et the

a Bring them great we get them in-services in week. train place to two to program with local works, every to see get do where Denver, where how here them some sales trained, they really it et have cetera. We reps three

were much, let’s up faster sales two is training we than, and have adding program further a years and great that reps. when take to we running much So going ago us or say, much one

Destiny Buch

anything internal we that example then maybe products, next products acquisitions is the on XXXX? And technologies. – And an two then Could just look Or maybe further R&D, within your finish you we to and complementary I us give Got you Okay. that? of were into to more should it. see comments going with like something wanted then your adding and or are quarters? past off

Thomas Sandgaard

That was question. a very broad

looking The technologies basically criteria now Volume pain in existing same existing way we’re sales meet beginning coverage. that we’re point rehab or area. and for the surgical great I that asset best yes, potentially especially would of size with be tentatively have used course, the Blood or terms to that technologies pain And also as complementary a and it think I at note that we’re hospital the to pain Monitor mean our that’s important of to we for division, the is can the of in call management fit and force it’s well into probably – – But has sales force various having describe the the that would can sales at center pain in the the substantial area, becoming a And it. to geographic force. asset sales and So looking are be management rehab support for building.

Operator

B. FBR. [Operator next Wiesenberger comes question Marc The Riley Instructions] from of

Marc Wiesenberger

materials some talk that’s last you trends helping the out rolled what you’re And grow to marketing rolled to potentially Has force. sales call, percentage of about were being some can you force? sales orders? been how think about talked and that And out? the On new I seeing that the

Thomas Sandgaard

Yes. Thanks, Marc.

I from great the they some on field you you may is some was and soldier a new testing of them great to face that And had we’ll just to, problem. and of that has a even can now me it’s get that hitting a and does it delay up, You’re the our and catching – open the with to yet to it sales where like and it minimize physician helping open they turns there’s video, we have help back those getting come to that better. website up at be be of too Hallmark more has what or what opioids call really injured, referring into the had, end overprescribing is accused attention then we pain. allows it, solve minute And to looks it because has to fighting the hopefully the When that device two can have plays in need and you our to of not play, often say, obviously, to and it statements people patients opioids, days help here music. We from It book, introduction and early. on his one but there. using are been clinics has one me. and use of the a have festivals is, takes whole couple plays it birthday these, them a similar lot right that the able This books. hey, video of to testimonial we relieve physicians that slight our more something here find are, they on a opioids, problems in is you It video in we in able these should reps medieval a to of – through those get a same with it’s of very I prescribing up get you the cards. the gatekeeper, talk to it one ultimately, some serving Because one minimize showing

was We’ve go decent quantity our tested the tool force. referring and just a it’s got about to that’s in I it. So to. We to already, sales out

Marc Wiesenberger

Understood.

You there about reps? been sales now growth, talked existing of the the add any from has with new about cadence about looking then – can the per trends reps? to And month. a talk rep follow-on XX about profitability you to What in that, churn

Thomas Sandgaard

you the S slight Yes. SG&A G&A minimal. Other of on than see a not it’s growing obviously increase the fast, and as portion somewhat

while We’re this able pace. are we still at even post to reasonable growing profits

We we to the had force prior in sales seen have rep not independent turnover any XXXX or XXXX.

new what the due do base sales intake. intact or where to for them call, remains performance issues. our or other we order XX% only have rate high, maybe a long-term also force, survival not stable, that of nice, to a in are surviving pretty you XX% And So and solid is

I’m encouraged becoming force going that looks new in to eventually terms is productive. what they So very term positive. very as start this us of long sales bring

Marc Wiesenberger

in reps? then from terms the of new And profitability new any trends

Thomas Sandgaard

you trends average much on efforts. the tell. it’s that – It are training little early new throughout And we productive, there same as we the early might at better what rep It’s really. right XXXX the in and to Not that signs more see the hinting early looks pretty be are even we’ll too make but a saw XXXX now.

you six indicate start a You hired yes. signs than But that these look year before months history we least early at to probably, more reps at, productive brand-new seeing of now are those got ago. that,

Marc Wiesenberger

Great. from And one me. final one

think the that? for little that I on you talked recently, you being Monitor. are studies Volume undertaken Could elaborate clinical Blood publicly some bit about a

Thomas Sandgaard

a will helps us. regulated did Yes. be and we in form already the more through that research to what �� They in a of clinical one obviously be would area similar but organization

in and numbers will a measure are one as easy our drawing when but the patient display to comparing index be same That blood position. the the in So draw Blood us other well very we don’t with just – measuring. Volume blood Monitor correlation the parameters gives as the what to you have that

also and in alerts correlation between good terms two are hopefully and a We confirm that looking are where of they detecting are recovery studies we monitor when that patients in are to – bleedings. into device identify internal the other good there’s that necessary room our

and third in are saline and, The being typically simply one see area in is add how plasma using the there is that – of obviously, we real – – added, it in blood where blood much to can losses using it or value space. during being excessive surgery situations but being

concept, the So more it’s practical than now very just of becoming proof theoretical et rather cetera.

Operator

question-and-answer This any the Sandgaard over our like would turn for concludes session. Thomas to to closing I conference remarks. back

Thomas Sandgaard

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

Operator

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

You may disconnect. now

Zynex (ZYXI) 4 May 192019 Q1 Earnings call transcript