ZYXI - Earnings call transcript Q4 2020

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Operator

Good afternoon and welcome to the Zynex Fourth Quarter and Full-Year 2020 Earnings Call. All participants will be in a listen-only mode. [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-Ka, 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 in filings X-K with XX-Q, note event being Please recorded. this is Thomas to Sandgaard, Officer. like the turn Chief over to Chairman, would Executive Founder, I conference and Please go ahead.

Thomas Sandgaard

afternoon. Sandgaard, growth Good revenue XXXX President CEO of announce earnings My and call. to of quarter quarter and our to positive and yet name is another excited I'm net Thomas Zynex. income. fourth full-year Welcome

straight the highest year. was quarter It we quarter Our fourth was salesforce. income quarter EBITDA revenue share revenue quarterly net growing in Adjusted was for fully of $X.X per earnings $XX.X of quarter to our our also It was same and the the diluted with million the to compared invest in positive history the increased company. million XXth last fourth XX% $X.XX. continue as

XXX% pandemic. flow quarter continue to QX. to see related push orders quarter COVID-XX last the than We through XX% to came obstacles we as sequentially compared fourth order good in of higher and Fourth year,

solutions speaks for in middle strength non-addictive orders a and the The those continued prescribers pandemic. For prescribe the orders them for salesforce to full pain. result growth the has year, to non-opioid, orders that grew our of XX% of many solid in strength compared to the need patients XXXX, prescription the with a and relationships in volumes

the in growth been the able COVID later reps the back we clinics of in gets net due see in to during as an to haven't sales upside XXX XXXX, access restrictions. get many They added we As to territories sales XXXX. normal, order over to selling

revenue comes and supplies, in an over and the majority the device the to the of a reps receipt quarter. to and of should half revenue of second as the XXX reps by aggressively the of order and related expanding In the related the following we lead fourth which cash the beyond. profitability continue add total reminder, sales year end order to and As uses QX, in exceeded patient XXXX

supported unemployment Our COVID-XX. increased rates recruiting to surge efforts to continue a candidates be related in to due by

expect these to We significant hires and productivity new in beyond. increases provide XXXX

XXX It's supply of our finished months without sales our should products orders We on year-end. our the reps uninterrupted. months the XX that continued in-house mention shelf on XX of expect also to top with for of to components assembly and hand vendors of chains operations remain keep practice months and over our materials. and issues, to four have on several I by any internal placed

where impacts this our use of country abuse. QX tens and due physicians even took normal for the when our first supply more back yearly prescription increasingly issues, die devastating we approach inventory get conservative resulted strength to in a QX. than response levels. which be and higher when XXXX, as opioids of off an thousands to to reached chain we opioid to serious line and pain. increased have level in patients continues the $X During to and million in COVID opioid of approximately are treating be get should inventory a more to to any We epidemic the Currently, normal The possible issue technology working we defense an level

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

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

area revenue see existing great management, in division, for product as unmet monitor. to continue our our both potential We as pain for volume huge well potential generating blood a

probably the you and monitor we FDA CM-XXXX know, of our monitor most a intended CM-XXXX a ago. blood surgical to for get managed and centers. clearance nearly year in balance is non-invasive already fluid As fluid patients' The to monitor hospitals

biggest difficult and to We recovery where expect in this display ORs needs this are division. and ICUs rooms believe as mortality, common substantial until still blood bleeding typically point more to of occur. study the are will preparing I good at well over We Dan from and we're use We're patent the where studies Morehead, initially somewhat clinical team turn engineering prototypes on a We're be our unmet product today. demo more purchasing be lead have recruiting but in less hospitals one the with nature another CM-XXXX to a serious for settings. sepsis, to commence results will target unmet CFO. add now and surgeries device to as the will had a for Wake solid seeing device safer today complications in device our to that filed in in used surgeries, to problem shortly. detect application Recently, Forest, the internal interest fewer We're complications loss early personnel will huge well non-invasively, similar surgical is call next that hospitals today. and technology from now seeing detecting the to that of easier I building our on hospitals that generation in device underway preliminary

Dan Moorhead

Thanks, Thomas.

non-cash, $XX.X Device was increased year-over-year, last quarter margins from Gross Sales XXX% share stock-based year-over-year. XXXX. revenue year year-over-year the XXX% of to $X.X the per million and XX%. in $XX.X increased grew XX% XX% which grew support diluted an $XX.X is year-over-year expenses Adjusted EBITDA and XXXX. Much I'll was diluted related expense full year-over-year million and fourth in now million marketing $X.XX increased year. to per was to the marketing compensation quarter. million revenue net XX% as expense and $XX.X Fourth grew Device grow review fourth quarter to to press at and XXXX. EBITDA revenue reimbursement million Sales growth. increased our year-over-year. revenue our sales million million increased of $XX.X net compared million. income EBITDA, income to $.XX to Gross net Adjusted from to from increased share income were to our release, million is XXXX XX% or $X.X the order $XX.X I'll First Orders to XX% fourth or last year. increased year-over-year XXXX revenue million in to million $X.XX review revenue related XXXX. and G&A million a grew $XX.X Orders to from net per quarter and diluted our of $X.X XXX% reconciled increased results. XX% standard which Supplies increase compared exclusion in in compared in million. continued Supplies results. XX% expense to million functions XXXX other G&A million or was margins $X.X year-over-year in and million $XX.X patient $X.X XX% $XX.X $XX.X headcount $XX.X and million XX% XXX% $X.X plus share. XX% grew calculation, were we aggressively force our increased expenses net income of XXXX.

of $XX.X balance up as XX the balance at $XX year-end. cash from million, December million sheet, XXXX, was On our

to against As we know, which protect July an we equity increased QX many down Cash inventory issues. the transaction to of million any completed sheet. our added you as was during balance from $XX chain supply slightly

$XX.X to I'll Our Tom. to XX as XX, turn working December With $XX.X back capital grew at compared XXXX. XXX% call over million to December of the million that,

Thomas Sandgaard

year-over-year the orders of force XX% revenue Thank a to growth our and of our in in you, justifies inside the efforts a testament personnel, and Dan. COVID-XX to growth I'm XX% our functions. grow pleased with sales support our sales midst It's and sales investments pandemic. management, clearly our of huge in full

Our to normal investments and, improve help to as selling within its in for course, patients importantly, profitability made sales to have increasing most and sales resumes productivity focus is XXXX G&A also pain. continuing for leverage we our on

it'll year. than We continue during be grow a salesforce slower will XXXX, last except pace at to our much

or looks into XXX% a fourth growth a two, these Eventually, the this of over expect the between therefore, second revenue turn and return we investments above growing year is quarters to sales We orders and January year all we of of signs expenses have next will and, revenue over the XXXX. as orders line showing as currently top healthier XXX% right in into March XX% XXX%, made this in last trending half investment and QX January This our year. is the primarily grew salesforce year-over-year. grew point. like the relationship to last an impressive over get February while third at well

the beginning the of with insurance deductibles year, see impacting always, we As revenue.

million every lower between previous $XX.X That's EBITDA flat revenue million our year a So, $X.X of $X.X or million. first come first and the the been this the seasonality loss means we that $XX case We slightly quarter quarter estimate revenue adjusted the compared many million year. between quarter fourth to years. for to in in see with and an

very in and complementary to leverage With million, causing EBITDA potential financials the and therapy The in domestic salesforce, to revenue is in market to with second therefore revenue XXXX, $XXX approximately we XXXX to of profitability This healthy revenue current million order our our deliberate come met is goal acquisitions than the the of year. ramp in the as loss is our revenue grow competitors. in continue technologies. year. to long-term the The growth, market is division share. range above grow and line historically effort the our QX expect earnings quarter $XX void $XXX margins is of being between estimate in is to long revenue in to health adjusted after and, to investments as the line seasonality, and My revenue XX% $XX million. up prescription XX% part XX% XX% pain elective well our includes term take full-year first beginning main small reminder, maximize very salesforce a expense and industry a therefore, huge share full-year of profitability revenue XXXX the of deductibles higher advantage throughout QX. large and disappearance in management the along our our by not rehab As million million. our revenue The This for is per huge for XXXX the of affected a we estimated with growing made top insurance and significantly half of to of $XX.X between

by impacted that last in the slowdown effects going quarter the year, this XXX the sales in COVID see by to net our our during of is the the In third adding of and due a forward. year will during and primarily still reps orders second meantime, last in bottom impacted We QX revenue half. of year line

Our is to up another revenue great in fully about XXX years quarter to long-term productive. goal all that with we yet profit. fully see sales US territories orders, in and takes the a In still productive. growth announced rep and We make growth sales reps in it two to get fill summary, strong

We listeners. answer from questions will now our

Operator

[Operator Chen with Instructions]. take Yi today first our H.C. from question We'll Wainwright.

Yi Chen

question first guidance? incorporated you how COVID-XX into from have revenue is, XXXX impact the My much

Thomas Sandgaard

last biggest significant of to year. some the first in orders The impact little. Relatively and May, of in a half April degree dip from June came

orders of So, last we fourth That significant second in dip revenue in impacted third that saw year. quarter and the a in quarter.

first came dip So, be still we else a There'll of what could second. little quarter. in in orders definitely We impact a that than out the here little see the this in less we bit have.

get from I think quarter once the is we year, to of very this that dip third the little. impact

or access those for our so have received individual the before more sales the marginal having of they to added rep. have than we've that fact are, reps not of used obviously, access reps, we difficulties mitigated many that full COVID. But type All the has same that

over double eventually, still we'll we the growth in that year. that least And of catching of therefore, see growth. order for So, year, order kind last range second except last revenue quarter up of to growth see at

Yi Chen

later revenue potential can question, monitor? any to year? commercialized if And sometime device still this the be blood expect not, Second does projection volume your revenue include we from

Thomas Sandgaard

in People Well, hospitals. it's it, at that already it are It's indicated definitely interested few testing have certainly at looking commercialized. and a it. sitting they're acquiring

not in of have forecast put the We year. for this any those numbers

We have wasn't in that so pain that alone division to growth much the in. management it put necessary

that'll in terms pressure, of the this should little us of be some come more of the year. do pressure might So, Most and of certainly we But there data, the the of sales some a clinical perception much or the trickle is markets of have puts that year. the the take obviously getting activity buys little before off end some but on in efforts. revenue a how public

Yi Chen

the Currently, you correct? sales team do blood Is not have volume that monitor for a dedicated yet.

Thomas Sandgaard

have one a than more The But undertake people do is of We development business expand Director person. Development. effort with we might person. sales just – title to basically one Business

Yi Chen

you can the Finally, the an monitor? provide development sepsis update on of

Thomas Sandgaard

are stages in still early of the that We prototyping the device. very out figuring of

We at just lot the other has there, engineering more patent can has application is concept we yet, been prototype we're whole one filed. the the a – team. not how well, the than a engineer there's and to added patent develop And been it. looking So, for filed

that we So, he as as starts. resources on take have soon to should the

Operator

from Thalmann, our with Cohen take We'll Ladenburg next question Jeffrey

Jeffrey Cohen

questions. Few

can you monitor, remind the input on the sepsis us, anticipate you what Firstly, is?

Thomas Sandgaard

two is then a principle it the with becomes onset a you same, Well, put them of monitor. like alarm. into don't that very but heart at case, or Individually, parameters index when an the the indication, us looking correlation In we're is have an more blood could index, which rate, temperature, that that much, mean and in together rate, add just sepsis. multiple the give strong eventually, respiratory that parameters volume to, this one

see you a you result actually earlier end probably situation that than to analyze blood to medical sepsis a professional it's has that be is so of onset. – a sepsis the that into serious you And when coming if can have obvious on. should that sample, So, that gets it would take where alert very more

medical now we have treatment can with yeah, say, later. able of rather we start take then on be that probability, if degree sample a So, we'll professionals early to can than decent

save reduce able lives be lot and, complications. will to some of obviously, We a

Jeffrey Cohen

you forearm And similar as applying be far to the the would this to clip? as hand, monitor, the a blood volume or

Thomas Sandgaard

more the here applied product be there. have is to the sensors the the similar. where they This flexibility option blood it sensors will But monitor. And have definitely place as most volume for to somewhat have that be an can to ability than applied – they the

Jeffrey Cohen

or that you It's the far I've patient the hospital as in first any? or products. population pain/opioid really in mention complementary about the in time talk thinking thinking about acquisitions you or as heard you arena, or about Are are that analysis

Thomas Sandgaard

looking close both. We've somewhat close, cases, for We're or very at some actually come in both divisions.

more what's be on are right things potential table As We would other of we the pain now, now, from had those distribute If products the companies. they that space. always in – acquisitions, leverage imminent, point. looking an have only more have products have it be would sales that we that at space, immediate that products in And we're able to channel. management call same that would the would

It's at. the we're pull got us what to looking right that's the to So, opportunity trigger. for be

Jeffrey Cohen

speaking, orderly the ramp XX% we okay midpoint thinking the XX% say, XX% And and the sides to the, methodical both in marketing as orderly to of EBITDA is you're another looked the line like about, to the a sounds line and XX% up generally the XXXX by and it, with in to in fairly numbers, revenues. it and QX similar or increasing with call the up guidance in was to QX, the, as driven range the It far throughout what of XX%. that then saying get little being are like on a a bit as with G&A range, year XX% reset midpoint. well probably equal ramp Lastly, as sales

Dan Moorhead

in going next sales that's be XX%. year, decrease the for say, the course side of And the over at sales to it's would going the but comes year, full similar over year, a little – I this significantly year. to

should and gave the we line marketing flatness revenue in every QX XX% With down of see that sales then the the because by year the end is the we you and decrease towards guidance of in XX% QX, it in year. see over

Jeffrey Cohen

year? sales XX%, on the for be growth XX% the And then, margin. It's range could and side the marketing

Dan Moorhead

typically it in by definitely down the of as revenue, you're front end that XX% don't as percent towards revenue – of you'll me. go calculation and to look at that way. But a I it of I'd right. have and at if trending again, a year, have I back of the about about percent look that's

Thomas Sandgaard

talking about are our We're profit sales gross we margin or line? talking expense about

Jeffrey Cohen

expense get the thinking better was a just of to lines. on trying I handle

Thomas Sandgaard

Okay.

Jeffrey Cohen

I general that guidance, our, at marketing midpoint that and and in we're the call it, for [indiscernible] With range. think XX sales in year, XX

Dan Moorhead

that's Yeah, close. pretty

Jeffrey Cohen

I think it. I got

year so sales year, or you over getting last going? another been Any this XXX qualification or added. like, and by the on retention perhaps front, that's sounds XXX-ish how commentary reps, of dramatically get or note increased XXX, selection Lastly, training plus on

Thomas Sandgaard

we've It's about before. the same seen as

better like new to We a maybe was be obviously get then us. training board. easier them were year little big because that. task much, And last on something or year, reps. continue that already not XXX that XXX new with to this and of XXX reps above a on better reps It still training top at the It's of are going

better productivity hold regional their to only few during this attention, sure much us hands in we probably even and training, net, we results initial a terms the not early-on in on training. but and It'd to be they hiring the their enable retention only rate. could field easier task by pay So, of after sales it's out year, get more achieve going managers days make XXX when our first

Operator

next take B. Securities. with Riley Marc from question Wiesenberger We'll our

Aman Gulani

This is actually Marc. Aman for jumping in

about rehabbing quarters? the trended relative associated last to and talk demand you And where wanted levels with to and has of couple – normalized procedures? surgical you over So, how that from can the I are ask prescriptions

Thomas Sandgaard

means demand we pain professional the $X way range term. illustrating the in reps the describe to our an and mapped average amount got any than for the top amount during that million lower produce a there people day of being It or few if work that filled And revenue. that of our in a we'll XXX previously. of that in theory. they they year per the we've rep But of in that many neighborhood top get and or of in are $X see for they revenue. because rep of send should reps it year US. below million a eventually currently long We be out the the up possibly beginning the that, have But pretty have equating $X it's how surface reps Then because the you are the patients during order have revenue a is That's revenue territories, something be right can our times XXX be $XXX whether – are model. their even long-term that way annual half producing few or and XX million producing of it's billion first exists just that for demand of than now, in a average sales we their already to new territories of $X the that good are that Some to annual rep in that of million won't many that potential, management barely time the maybe We obviously orders, to in to the obviously, that us. of be scratch worldwide over there $XXX term medical territories, average XX that reps That's even of revenue productivity. productivity. a to the of long per you've covered in is to kind takes revenue most say business see years couple comes later million average the here clinics

just so up working to reps have attainable, slowly that are So, it's that. absolutely many we but

we generated here. So, built it's moving lot the a get of there's we couple for a after years is to slow have that those orders. a sustainability revenue very it of machine But because also

the the we'll So, those eventually, on it's books. slowly the quarters, of future And revenue. getting in accumulated effect into orders see turning

Aman Gulani

chain. on I there? inflation any to you ask any that ability input pass Are do to your seeing about supply wanted have you customers? to your And

Thomas Sandgaard

growing negotiating that sauces us much to second fortunate be do. on position. fast, now very We're And everything pretty enough strong so in also we a and puts having

raw So, our see simply as if creating have see good the worldwide decreasing that. second components, competition at trend been a sources, much. And so we pricing to volumes increased prices, we is material of increasing our still so and on prices are we've result of because

trend. but the So, not we But obviously a see that's doing something that's self-inflicted, macro that's just that the better. opposite we're trend, fact

Aman Gulani

you queue. make aggressive about me; getting back have do besides products from NeuroMove InWave? efforts NexWave? with And and the plans question like traction Last more products the I'll Can jump you're you to in any other talk these any monetize to

Thomas Sandgaard

can focus the primarily for most say providing material with most the get you the increase better Right reps, the is. them promotional more to you support. revenue is is adding buck now, better better bang sales by And of and where obvious training, NexWave. demand our That where

focus that that companies you're sales we from investment Long and managers. investment our managers, And been that So, space. added X That's Also, XX we the went also got the is to regional made other term, primarily XX so other last potentially is. from from salesforce acquire year, force. right, – great sales more fit distribute we where more will we we added regional products. going sales we've products fits some into that has an in that

really for InWave incontinence as well. treatment a product, reimbursement Our and great for is it there's good

to something that's force. better, That's the potentially the things markets probably more securing probably – up term require now at can we on more drive That take better that. right So, reimbursement-wise end and the longer – necessarily long reimbursement certainly way NeuroMove physicians term. educating of more. The our utilize are effort, we will more in as is item we than an more sales parts revenue more users do investment could of penetrate and/or those an least

We and expansion that our in revenue internationally terms base expanding consider also to way. need of diversifying

effort So, at is pain we put that look management so we one of expanding those in big that put the off as probably in areas. years in we're a will right obvious and into well. in area at short mix be – of again, out couple demand before part But be The looking that an of so on most pays any our to quickly now term that. it's energy

Operator

Our next with Sandler. question comes O'Brien from Matt Piper

Korinne Wolfmeyer

This for is Korinne on Matt.

First, years? could you shift you a going the about are seeing with And talk that? revenue the the mix bit where And see what of supplies over decreasing bit? a coming little we're mix also, drivers do

Thomas Sandgaard

uptick technicalities. I that long orders, an But give can the obviously, technical explanation the comes would thing supplies looks But patient in The has there that, meaningless a it that Dan would it's that up it's it. in and then pretty the be say, very a it. of we only total how to makes more It's uptick is versus constant. flat. device overall, revenue initially, stream term, That flows when huge because have catch revenue is device overall, Maybe supplies. Every like fluctuations. revenue from supplies.

Dan Moorhead

a of in bump always QX little end it's the a usually pretty device. typically because around bit flat. he at Like supplies. anomaly is always – we see see said, of XX% the year, an we We're

customer year. is the it the this as but a last base year, much have thing did quite this as It year. quantify same lot didn't We bigger

agree I with again, So Thomas.

as it's typically flat, of you're think a be going device/supplies to I and percentage XX/XX in revenue. that pretty

Korinne Wolfmeyer

and pressures can just on going you that seeing? where Second, XXXX XXXX? little you see the color margin provide gross And more a throughout we're

Dan Moorhead

that been than for 'XX, the areas. years, range didn't 'XX, when in might We've we last little coming lot of a prior we have of lacking a huge several the a XX% 'XX, been We've staff, In company were constant. pretty that. But quarters. out really in been have higher

and make sacrifice to a margin we those to bit. where had the so, needed, little And investments it staffing get

production Prior, XXXX, of into a floor it is on we know, did facility. first corporate new people open Going standalone. headquarters. our our the as many That was up facilities

into we investment, took little that that grow bit. obviously, to So needed a a we space

So, a XXXX. I think pressure little that'll in margin put

And into XX% to maybe so, pretty year. XX% have XX%, the next been XX% we're that margins going themselves maybe product instead of to But constant.

Korinne Wolfmeyer

you the hearing your me. just I bit on have trending new know expand levels. retention more a so for on you're this historical those can reps? been and one of quickly, you've we'd a turnover since folks touched little versus in you bunch interested metrics And But seeing how Last of earlier. be onboard

Thomas Sandgaard

of cleanup. at extra sell, give had came little a We to most year-end, a a we of with little And the been Those that can right hired still of them that during XX just they bit last year, days, prove them sometimes have onboard typically in And us than actually them more a second than lot the half. therefore, less we interviewing. quarter. initial

probably attrition maybe we're XX% XX%, still So, rate.

hold when only to did follow is what the pickier regional ability last and I managers we we than in hands in at to than be medical So, than year. last much a companies, at of recruit. second you to expect attention individuals more sales going us the the able doing can training be of to a We sales up that better our half able we're medical even if And device and quarter here year you other to will be year. gives rate third what reps less of even that probably last device of hiring other new better during the we pay a the And see they were better look because did little be we'd year, this and a less, companies. probably

So expect in the a significant forward. salesforce going see I in improvement retention to

Operator

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

Thomas Sandgaard

Yes, you. thank

call. wanted in all. in been and the I you Thank everyone. other all, call today's I First informative to the this in that today. listening for than has dialing for And to hope just Zynex earnings difficulties day I into technical great a apologize appreciate of interest and But that,

Operator

The now for again you concluded. thank presentation. today's conference attending We has

have may You great disconnect day. and a now

Zynex (ZYXI) 26 Feb 212020 Q4 Earnings call transcript