Earnings call transcript Q1 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Zynex First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to Louisa Smith from the Gilmartin Group.

Louisa Smith

good and Jason, you, afternoon, everyone. Thank Zynex ending March today, released financial quarter first the for XX, results Earlier XXXX. A copy website. company's available on of the press release is the

Joining Zynex Anna Lucsok, Chairman, Operating Officer; Thomas Officer; call Gregg, Moorhead, Chief me President Donald Chief of Dan Officer; and Solutions. Executive Sandgaard, Financial Chief and on today's Monitoring President are

to These factors events statements and limitation, limitation, we review may SEC, We product XX-Qs, the operating identify from company call, begin, this during conference strategies, events. and past include, development, in materially regarding I'd Before Form regulatory company's XXXX the or product resources including, future marketing make the like XX-K forward-looking cause performance. statements. projections actual future that encourage described the regarding and to that subsequent and to you the the remind environment, factors you differ with capital results Form statements sales or specific will without those filings which company's potential, forward-looking may without these

that, call Thomas. over now the With to turn I'll

Thomas Sandgaard

in of second, highest we good now the said quarters the everyone. records third last in once XX Thank another and XX call. and period had us and quarters. the quarter XXXX afternoon, the of in the Louisa, Thank earnings We joining XXXX. number the of you previously impressive And we prescriptions growth, again of today hit been you, profitable company's for beating we've fourth for history, first

the limits growth seasonal numbers beginning QX in the typical in increase reset deductibles order to able orders year. that of the were over we Additionally, of despite

a in and quarter in $X.XX we XXXX, same over share. the the increase for XX% revenue per was produced earnings $XX.X million, Total period

product significantly is force trends productivity market maintaining efficiency testament our both the expanding share quarter, sales a to the and efficacy. in each our Our and exceptional

and In the the growing XX% believe for year-over-year, the that common we in continue is into of considerable last a to worth we total series the million. latest $X.X completed bringing to increased $XX year orders the first stock us million future. in runway repurchased buybacks Orders repurchases stock, of quarter, and there of

before, we've in teams, to shareholders be both long growth the are divisions opportunities and incredibly our our we that signal believe in a to stated confident near As creating the remain to we and this value shareholder I management term. in committed that

and updates game-changing In development addition I'm in division our prepared results steps impressive to the with Don strides the taking laser-based will our provide Greg is further bring team Solutions those the monitor growing blood market. oximeter. management from making of to division, products the Monitoring remarks. excellent pain pulse our fluid pleased But our and to his is in

Kestrel XXXX, Monitoring after regulatory Zynex to acquired line Solutions continues even over And Labs significantly with maintain combined we've investments the for to and business our been the entity. division, at profitability able having monitoring data management the year. past diligently in pain in working the deliver grown December of and on bottom has reaching milestones. consistent clinical results been the has collections

date. thrilled while after year execute catalysts we've growth to growth announcing year. double-digit I'm I into compelling forward is operationally our future diversifying by with throughout strategically, performance the opportunities Our opportunities ability to market and seen and XXXX, the look evidenced business and to

Lucsok, a Operating pain for management will over to Anna Officer, more I on Chief the turn our detailed division. the business update that, With now call

Anna Lucsok

market penetration. is revenues. by expansion there we consistent impressive our room another a full pain team quarter increase significant The believe and year-over-year Thank order XX% over delivering you, continued had management that Thomas. sales marked division volumes in for and sequential in the and fourth is a Zynex's is quarter to growth profitable, reach increase

quarter sales with We organization. and basis our XX% Sales per of emphasis approximately the XXX on increase primary the rep in first remains area reps first of XXXX. ended $XXX,XXX, over approximately an annualized quarter was of revenue an reproductivity sales the

hires the across sales new quickly are organization more is optimizing we've structure implemented board. the and the incorporating Our into performance management

are approximately XXX to labor high-quality retaining team. these improving by There to market, believe to will and sales into time, to to but We'll related territories year-end and orders. we additional some capitalize be sales expand the recruiting lingering challenges reps corporate to XXX and over committed to we expect continue and hit a the remain growing sales

have insurance would the between differentiator providers. product market in we prescribe cohort insurance in payer Our practitioners some and as pain, collections this like We we we remained our and specific to quarter, reiterate continue just and with to to a key believe throughout will to that all work plan. and strong able Zynex the all small types competitors to not other under patients be are a

receive work updating all coverage patients with and look process and for and their each you I we to insurers We profitable case. to forward our on market another expansions pain in process calls. that division management directly all on year orders the future

Zynex I'll to related provide of division. Greg, that to Don Monitoring now updates Solutions, business ask President

Donald Gregg

address monitoring products Anna. you, market sepsis in oximetry. hemodynamic space, Monitoring monitoring pulse will patient laser-based is strategic and initial product cover a monitoring, our developing portfolio nearly Solutions $X Thank and a the to Zynex pipeline billion

year previously, clinical we mentioned our team as division were in milestones. Thomas has substantially grown and significantly progress make the in As and invested regulatory towards the last

blood the strategy its regulatory we've lines, CM-XXXX our and setting. product to device, hospital has the blood and as previous developing be hemodynamic first two fluid received CM to FDA, the in CM-XXXX a The wireless it's Of generation fluid the monitor to The monitor the going is from the added noninvasive in pathway. are actively capability used along is wireless in a monitor clearance the already a XXXX. furthest we go-to-market be and

interactive are further agency from anticipating review them. we we FDA, with and are the an was submitted details as CM-XXXX The in engaged to the currently

is the reminder, guidance any XXXX. revenue from and its Zynex for As not division contemplating monitoring a

the Additionally, that in as laser replace development pulse the oximeter technology devices legacy currently this both LED-based also less innovative pulse believe that HEMOX and oximeter, noninvasive used or We noninvasive are the are will NIKO known technologies. today. accurate the

to FDA We NIKO track actively XXXX in QX on running for the submission and are clinical trials.

encouraging addition across confident publishing efficacy to subjects also planning to the for disruptive on In include thus country. rolling are the engineering clinical development hundreds far We've technology. advancements division, and within and trials product market with we and involved of in the opportunity seen remain results the numerous

on excited to be press calls. advise to more part the monitoring I'm we further a future quarterly over we of and look data, market. community As publish and will point for quarter. in-depth leveraging will in now via should our inflection the at innovative months a be the Financial the I the what next XX division in Officer, technology the look investment call releases turn for Chief the Moorhead, to XX financial Dan a over forward to performance notable

Daniel Moorhead

Please year. increased results, million release $XX.X Device grew commenting compared financial $X.X Don. review today Orders million financial XX% in revenue for XX% to issued the refer press XX% and $XX.X to to year-over-year XXXX. first in million million quarter After to of $XX.X the a on from our Thanks, grew revenue net earlier our Thomas last XXXX. first for will quarter XXXX. our the guidance results summary for of

same compared million year-over-year increased the to XXXX new for quarter. XXXX in products. to our $XX.X from launch XX% division were million first was The in revenue of Sales is in to million in million related $X.X headcount XX% XXXX. expenses and $XX.X year. related million Solutions in headcount and and Approximately investments of in the remainder of XX% our expenses Supplies $XX.X first G&A the compared the G&A the is quarter period were margin order related $XX.X increase million growth. to gross marketing first $XX.X to primarily quarter back-office in last to Monitoring

Tax Cash the quarter million. $X.XX was income first to XXXX. $X.X income $X.X the $XX.X for XX% X% XX% million. produced as to We of in the million cash. flow ended from million of rate a grew due the and expense quarter in increased per Net other diluted operations percentage quarter $X.X a with year-over-year share in year-over-year to quarter effective

the I'll back now Tom. call over to turn

Thomas Sandgaard

year the terms year. our of We the in quarter orders grew already Dan. record quarter It of fourth and consecutive fifth the start to here year-over-year. a in post last XX% expect increased first in you, by of And quarter. beginning had Thank in of orders quarter, the strong XX% we've second to the

between $X.XX and With the continued and XX% quarter in of $X.XX. total expect approximately the see revenue million, we XXXX, is between of to we second which second greater XXXX, orders share the million per in expect earnings $XX.X than $XX.X quarter and growth

to for expect be growth our our XXXX $X.XX. per XX% initial we of share XXXX of and outlook, representing to over guidance revenue million, in $X.XX range reiterating the million earnings $XXX and As approximately approximately are of to $XXX total

please With open questions. operator, the up call that, for

Operator

comes will We question Cohen begin Thalmann. first session. from [Operator from Instructions] Jeffrey question-and-answer Our Ladenburg now the

Jeffrey Cohen

very it So congrats looks strong. on the quarter,

I time we Just approval. couple me. still or of the And to XXXX a line from feeling of firstly, questions guess, optimistic still year about Are and hopeful on closer? pretty half back are you

Donald Gregg

Don. is This

definitely are We confident. feeling

I with in the review FDA. mentioned, we're the interactive As

with -- in to had a the ensure forth. have a been feels We comfortable the of that opportunity the device technology. and it's So FDA bit back and those an discussions,

our And reiterate the this are at I'll so plans point same.

Jeffrey Cohen

strategies about standpoint how with from you're thinking hypothesize non-direct commercial direct year? into Maybe and us next commercial a

Donald Gregg

Yes.

we direct think would we sales I an mentioned a have So indirect before team. that and

the slowly some enter that grow market. in market will brand-new as We which development. This a essentially, we requires is market

some et prove we placement out certainly that technology need will the and to to So have clinicians, we devices do cetera. of

As co-oximeter a to -- get market. that's NIKO the defined closer we products non-invasive fairly on our

And slightly there so strategy our is different.

submitting later the and I device. actively FDA the the in now as trials clinical back that be between And here to we mentioned will so on the year. running year of we're had And half previously, in

Jeffrey Cohen

year. get filed that HEMOx, And will submitted this also

Donald Gregg

later on but we are That will technology. be not this year, the working submitted

and And total you'll other pulse HEMOX. with to like bring So the or laser technology applies will parameters and meaning that to to HEMOX. HEMOX have both that parameters the technology different and the market, oximeter hemoglobin

Jeffrey Cohen

on Anna year, with sales is the there guess and as earlier of far Or will coming par throughout QX? a like or linear later? it be the It kind question I for sounds orders as force through And growth.

Anna Lucsok

grow orders throughout growth in continue with line be We'll year. The our will QX. the to

Thomas Sandgaard

number And sales reps. of the

Donald Gregg

Jeff. Yes. This linear, will fairly be

Jeffrey Cohen

lastly, today? none XX.XX then is share I average. it And buybacks on -- on see buybacks at have Is And with concluded that congrats count open the now? $X.XX the What's currently? diluted the

Daniel Moorhead

-- the diluted for $XX.X million. while Diluted outstanding was

have currently press open a buyback be the and Q. number as the release yes, other do will in the well, shares actual in figure not is But now. that The right we of

Operator

The comes Adam Piper next from from Sandler. Maeder question

Adam Maeder

on target to correctly, Congrats nice year-end. I I with year. the the XXX update. a start XXX is the heard new to by sales force to If start wanted

think before were I XXX. closer you I XXX think you're exiting aiming at QX. And to

standpoint? So and environment there of in any just just curious, changed from then something Did delivering talk the is of quarter? the hiring seeing of you outlook a And in headcount maybe see you target. confidence line kind also about hitting any kind dependence are level against the top attrition

Anna Lucsok

Yes.

can't are is is the confidence in obviously, the go. the there The of how year on we're we changes But with not seeing going a as hiring it. to So improving hiring of lot remainder market. market speak

and exiting underperformers we'll the with lot of out We organization, continue focusing quicker throughout year. on the are that a

Adam Maeder

Okay.

it a guess, a a of I than it bit fair hired nothing, reps. with was -- there's more QX, no attrition that relates little slowly issue just wasn't maybe conclusion? expected. Is to So as It

Daniel Moorhead

to bit Adam. little a Timing

seen Some quarter misleading will end throughout But the obviously, after hiring a people times. cutoff, right April a good pretty it good be start well. group and year, at a had cadence coming in we've quarter. pretty a as And can of the the little

pretty So very to but achievable. comfortable gave that's XXX, the numbers. the range, I think with think a XXX we we're And we

Adam Maeder

submission, approval heard clinical or the of I correctly, about from guess or one studies how And And I point potential follow-up. the you've do I 'XX I And that FDA we clinical have ask run, for at anything performance in risk? the share QX think this likelihood you to of NIKO. learnings any guys then clinical can follow-up, then wanted terms if about

Donald Gregg

Don. is I'll that This question. Sure. take

time. running at been have are and internal those bench studies point a in We study, this

calibration certain trial a your and FDA here verification. May have human We in in clinical run market, clinical that's on hypoxia starting studies that outlined you there's site the guidance a that study pulse to pretty oximetry document clearly got an at

legacy And on point that expecting. accurate is what device we The the seeing higher than so you performance we're starting of all than of technology. this accuracy of on LED We're ranges more were those. market based the at see significantly today devices

our trying QX time, so QX. that but to submission on earlier time point it's in of And part hit for We're we to believe FDA that definitely frame. certainly this to going the -- the be guidance submitted QX in given is track the at

Adam Maeder

And to us I'll jump one looks me, to to for and the it in of of bottom back half the healthy you back ramp like little year implies EPS the I get the bit full range. year then bit queue. maybe It just could little of kind a guidance that or to the midpoint. a a last range, relates one was It the just bridge in just guidance. hoping

of can on any start the to I as well? cadence on top cadence So just Dan, line strokes, through just spend of again Congrats talk color the and broad kind the you guess year. the

Daniel Moorhead

I No, been have think, top we're tracking again, strong, Yes. line, orders XX%.

We to expect that continue.

continue the I the half territory and the last it that other going On there, the number managers the similar sales are is most year. pieces side. it spend, year. and based will we ramp line over And orders. will commissions -- year grow around DMS that was But obviously, G&A majority sales well on year, on things on variable was to to then and and the going be the majority this the that of the to of Last grow, continue marketing side, as other to second the in of be is what think

So there think gives QX there. QX, right with we QX $X.XX I for that are with and your out the and numbers have I in did think -- consensus you similar the QX, us guys

Operator

from comes Wainwright. from question next Our Chen H.C. Yi

Yi Chen

productivity comment of on team the sales you to proportionately the whether the Could in you observed increase that increase orders.

Thomas Sandgaard

sales and up increase in So productivity was XX% XX%. we up about said the orders were

X You recognize we just orders will be to lag revenue -- so always there. generally over there's months, to period got remember, of X to a going a say

into but pleased line. and order turning the top So increase, the obviously, we growing revenue that cash means revenue we're with obviously the were and increase, the

Yi Chen

Okay. monitor? And a you in the key ensure what discuss launch could opinion, factors are for that the fluid successful your would trajectory

Donald Gregg

is This Don again. Yes.

that would in in adoption important. other very I area opinion than by is somewhat, in think based space that our quite technology. market is more invasive, time. is and works point invasive technology on key at noninvasive certainly us, that that monitors different clinical for the or I leaders in The minimally call, way ours this products Significantly, are

been to have that and We many board we that them opinion leaders. of throughout doing technology. to the will effectively us We've with key the development understand communicate on ensure

device. also demonstrate We a run of to effectiveness trials clinical the number several the different of in ways exercise and

so And a is that entry. key

lot a adoption of that of technology important very a a requires from is As mentioned clinical call development on standpoint. market this market that I is this previously the new and

Operator

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

Thomas Sandgaard

you joining Thank Yes. us for today.

in the our and quarter at investor Zynex. We this are team forward throughout appreciate speaking that with year great to pleased events. time the We growth consistent a rest interest leveraging performance is upcoming you of your to delivering. look and We the day. our our momentum to and Have

Operator

attending Conference concluded. today's Thank presentation. has for now you

You may now disconnect.

Zynex (ZYXI) 27 Apr 232023 Q1 Earnings call transcript