ZYXI - Earnings call 4 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Zynex Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Quinn Callanan from MZ North America. Please go ahead.

Quinn Callanan

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

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

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

Thomas Sandgaard

quarter are division aggressively open marked company. invest the to market. produced revenue high for another record to quarter operations full exceeding history, good XXXX the sales quarter announce number momentum, the prior XXth all-time positive our the monitoring cash you today Thank Xth afternoon, of fourth buying a XXXX, growth, and proud record fourth from received With record. I'm to the $XX.X record Earnings year highest to we our in was company leading XXXX also be and for Once us back for of on quarter we The our joining consecutive in straight again, $XXX Quinn, in profitability million, million stock continue that, prescriptions Thanks, in that the we highlighted everyone. by up revenue XX% and year Call. for also in order year. from of numbers. previous further able ongoing and of

quarter, of accounts [ net profitability. fourth receivables, our the we revenue ] During million $X.X and an which on played decreased allowance

collections and while during continue nonrecurring will adjustment receivables This earnings adjustment. producing to and of Net his analyze a our an on adjustment, share. we closed our anomaly payers. of portion CFO, is $X.XX from to a presentation. increased revenue. Dan Moorhead, this negative We million $XXX.X this to the adjustment per diluted [ Revenue expand of ]

per to business. our combat and deliver in to [ revenue team, goes drive cash sales our and signage ] credit the many business, who new significant our we others higher free able wage in flow invest were Significant force, earnings share as expand like monitoring inflation and

a to expand has by enabled force Our market continued team sales each and the strong great products. quarter,

products. has treatments NMES XX,XXX hand compared Orders has E-Wave, increased rehabilitation. the [ muscle-related replace helped growing XXX(k) year such a the for E-Wave, the year-over-year as is shoulder February The increase considerable manufacturing drop new patients over several we and new suppletion and is neuromuscular growing existing which clearance. XXX(k) been decades, M-Wave stimulation fourth this the of our and exciting help to there for continue XX% the for in product the an been and [ we growth, [indiscernible], fundamental which across its foot with electrical the since U.S. The issues have this ], To our future, fourth full quarter, for orders quarter. ] the in received the before, already is current to device. believe XX% in application portfolio predecessor, FDA pipeline year And to year, to a leveraging M-Wave drive new into XXXX. runway order of We us in set of submitted

and the lightweight interface of The regimen integration into custom a of when advanced and user-friendly design. M-Wave improve with home The easy conditions of neuromuscular design to to ensures setting and patient and routines. our manage adoption M-Wave elected The even portability the an use ease user-friendly designed therapeutic clinical in compact patients recovery with The a way ease. be M-Wave or treated their features a therapy encourage will designing and products. broader is allows patients

FDA And as expect paving month I we year, the next February way the for in X. And clearance for in product. the this we the or the product, that mentioned, of received launching be to

the spent territories, have sales with of nationwide we by these now. XXX of coverage building are know, populated just you past shy many XXX years As we and being

terms all territories on productive. years of only XXX typically reps our year half making X up takes new are focused X in rep And It a and fully has more is productive. before sales our than reps filling tenure. of We at point, fully this sales to

patients pipeline see pain rehab, Having effort we that an now revenue our in of strong this stream. need prescribers built diversifying are to extra putting in into

[ force years pain compression. is rather to XX% an actively. now product, from launched up more all other but was ] the this And orders XX%, XX% revenue received products our such products ago. traction, cervical It [ for proto-hot our month NexWave, therapy support, was revenue, not the in promote our do equipment of low products, incentives a division. be cannibalize sales We in addition only netting to all Our these pricing, also extra to expect we as ] to best-selling and couple management back initiative and with have this of

results management fluid were and wireless better management for with settings. our year fluid a quarter monitoring volume blood blood to improve clearance Zynex second-generation in forward monitoring to the our move division, hospital the solutions, profitable to with In the patient excited addition in FDA division -- pain of development fourth monitoring technology announce monitor, continued monitor our from oximeter. noninvasive laser-based our and We outcomes pulse our fluid last to further impressive and and targeted

collect his continue provide Don this clinical additional in We to trials, remarks. on product will prepared updates Gregg data and further in

pre-revenue, growth hospital products for great pipeline the laser-based we believe levels company. division, The monitoring division: and detection additional oximeter, our a HemeOx. midyear total we expect laser-based in pulse in a patient X to is called oximeter monitoring monitor laser-based submit a to in application noninvasive for for an our making the FDA a early the of division monitoring have have We the which Overall, will and of game-changing hemoglobin potential pulse monitor sepsis NICO, we're the XXXX. products progress

our are at-home diversifying with Looking products. ahead, building holistic with pain devices we and new management approach making significant noninvasive on progress,

execute and We are sales returning strategically. high are that high rapidly we distribution operationally revenue expanding -- as direct channels and delivering revenue continue to recurring accelerating

tandem, In division, monitoring are on a our focused which represents and large ramping we growing opportunity. hospital market

year in strong have following performance growth produced We expect and double-digit consistent the year. XXXX, growth we after financial

our division. We life our strong of our also and pain pipeline to shareholders. illnesses call new on regulatory business Anna and suffering more the the detailed the Lucsok, improve for during we of bring for Chief pain execute additional milestones as value sales over the look catalysts long-term and objectives updates execute as products. year Officer, quality update in turn forward on will force on expect management from additional We months for our growth our we build to the to now Operating and With come work debilitating that, to I a patients to

Anna Lucsok

Thank division for order XX% you, the Thomas. Management order year. growth with Pain Zynex's XX% full impressive quarter another had growth and

from the next for for is our evolution clearance FDA received and The also predecessor, replaces NMES several we devices, managing M-Wave performance customizable surgery, have healthy and even treatments NMES next-generation exercise in aiding mentioned, recovery Thomas the including enhancing its settings. As home in clinical NMES conditions treatments and device. within E-Wave, allowing more chronic and individuals. uses,

approximately near diligently sales ensuring ramp rep right $XXX,XXX, the sales to a XXXX. write-off in to an with as continue is receivables the year, right per revenue XX reps approximately X% basis, the the term per reps. growth decreases We during the up. of revenue reps which sales matched approximately target territory. And in was annualized filling We edit net not the increase the over those year-to-date, rep of We an quarter on individual including XXX fourth while ended XXX territories,

direct an of force with tenure XX relatively is average Our new months. sales

forward As look of division. profitable our Management division higher. on to team continues Solutions, our for future to Monitoring updates Zynex related Pain the Gregg, efficiency to mature, business President we I another expect market in drive ask to calls. to you Don updating sales all that I'll now provide expansion year and

Donald Gregg

you, Thank Anna.

the for division long-term Our Zynex truly technology Patient a companies. ground-up of largest and Monitoring toward to growth becoming effort a investment diversify our medical revenues is X

opportunity much strategies to at building success products management We a at are Zynex to line a the entrance to leverage new with line of necessary has a looking line market second comparable with and technologies of monitoring. team's into clearance past of is fluid profitability. successful somewhat this businesses grow precursor the make delays. product market. technology and for process lengthy our acquiring occasional CM But be product can sepsis monitors monitoring FDA via the The a larger

the entirely standard rooms, improve technologies alter and patients. that the new welfare Our of to could of introduced CM care capabilities operating ultimately

ensure opinion to potential key the continue maximum refine thought to and capabilities leaders leaders of products experts, space by We the consult and customers. in with our uptake

new other stand-alone products, fluid technology. value will market we provided monitoring in successful benefits the by believe a building that proposition the but experience expect patients longer than monitoring strongly take and the will We

NiCO positively. Our noninvasive laser pulse oximetry line, progressing HemeOx, continues and including

mid-XXXX. We FDA expect to the in to NiCO submit

societies We oximetry. laser are professional of working to the diligently opinion awareness to of key leaders, raise experts, engage science pulse

in performance Financial our turn Considering our recently for launch. at dynamics we with strategies. in to quarter. product refrain along go-to-market competitive the Officer, closer in-depth We a until will call detailing more will marketing space, for from look developing the space, the finalized this over Dan I Chief Moorhead, initial financial now to strategy the execution go-to-market

Daniel Moorhead

release After our for and will Thanks, issued commenting on our Please XXXX. press financial to summary full quarter Thomas XXXX. our earlier fourth year the Don. of for financial our today for results refer a review guidance results,

some the I adjustment. into wanted to provide get fourth color brief on we quarter financial Before the results,

adjusted, During recorded accounts revenue, expected collections not debt an on G&A million allowance expense. collecting $X.X QX, through placed we they of When receivables. are are slow or bad our

nonrecurring adjustment. As Thomas mentioned, is this a

to the important XX% with increased We It's consider relationships XXXX record company our payers. and this share our our unrelated how XXXX continue have to adjustment a the in adjustment, taxes adjustment, operations affected from both our to per The and despite are cash was DSO great strong indicators $X.XX. earnings which by during of of business is diluted performing. decreased of net

revenue $XXX.X been XX% net to in increased receivables XX% the a or for $XX.X XXXX, XX% XX% increase to increased million year for increased Supplies full XXXX year-over-year $XX.X from net to Orders million revenue million to in XXXX. revenue to revenue in the of in line revenue compared would $XXX.X million to the prior have compared the profit million prior with and X% or year XXXX million in revenue to increased Adjusting Device Gross $XXX.X our million, $XXX.X $XXX in For XXXX. $XXX.X increased by $XXX.X as XX% year. compared full from million of XXXX XXXX. XX% million the to compared allowance, year. estimates. of

were wage to $XX.X of in year. our our Sales remainder compared and to incentive order benefits due inflation. volume related and Monitoring force growth launch expense and is new $XX.X improved sales to million order volumes. Approximately compensation to associated the growth in of million to expenses is and company of headcount headcount commissions the with and products. expenses increase normal increased related in million related our primarily to $XX.X were increased Solutions The in to G&A investments XXXX, XX% driven compared due marketing G&A in and XXXX pay and higher XXXX increased by $XX.X than division headcount primarily last the million

have basic share per been or in $X.X was $XX.X tax diluted in line was the for income diluted $X.XX $XX.X ended in per million million Adjusting million to net our XX, was income year $XX net ended estimates. million with which XXXX. basic $X.XX produced XX, and $XX.X XXXX, EBITDA receivables $X.XX XXXX. or allowance, December diluted compared share compared per the and December Net would basic for year the and of share, and million Adjusted in XXXX to

Device Adjusting revenue number our of at the fourth year-over-year company for was In fourth year. $XX look revenue year. to $XX.X XX% compared of history consecutive quarter quarter last XXXX. XXXX. was million was $XX.X quarter. QX of million the compared highest to versus to XX% quarter fourth million, I'll results. the $XX net last Net $XX.X a fourth increased $XX.X orders would in $XX.X $XX.X profit in in the compared of the quarter allowance, receivables quarter revenue Now million seventh revenue the XX% million the quarter, in compared of million fourth million in $XX.X fourth revenue last million increase have of was the million revenue to or year. orders Supplies the XX% to in for as or Gross been

million per have receivables net diluted to basic diluted Sales to quarter expenses fourth income were share was $X.X with million fourth income net XXXX XXXX. $XX.X the share $X.X in and to been million the estimates. were Adjusting in compared in $X.XX $X.X in share and $XX of compared per million or year. compared and basic in marketing And XXXX quarter expenses of million quarter for XXXX. $X.XX produced in G&A or per fourth the and and the would our $XX.X Net of the tax in quarter million and same last line fourth the million in basic period $XX.X of $X.XX XXXX diluted allowance,

for to $XX.X and We XXXX. ended in Adjusted was working continued quarter ended the XX, million In a the with common XXXX, million the repurchased $XX.X $XX of last X stock to operations million Cash total repurchases from record million. bringing we on stock, capital and million. year the increased quarter, in flows compared months the in million million. December $XX $XX.X we've million. XX% XX, the EBITDA $X.X fourth buyback cash sheet of balance December ended XXXX $XX.X in XXXX our months, year-over-year And to $XX.X over the purchased XX

for attractive over generated We and profile. in buyback to to shareholders. The committed our shareholder believe long opportunities and return cash the growth belief turn to the divisions, We the balance business offer deploying both between value remain continue and we I'll cash reflects back team, that, investing our near continuing returning With management in both call to creating term. Thomas. the in

Thomas Sandgaard

to strong with quarter, growth start. We've in And year-over-year. tell to grew first per the continued quarter. at of in approximately XX% of the in you, the in and we is at higher start Thank Dan. $XX.X quarter, And XX% million, looking off in growth. we're had a can year-over-year which than good In first XX% terms the share of revenue orders first for February, revenue expect come you I And we to XXXX a we're quarter diluted earnings the January, $X.XX.

XXXX growth revenue total XXXX $XXX and share of over approximately for expect representing million, to outlook, per be $X.XX. XX% approximately earnings we of As approximately diluted

cash high The past have We consistently free which flow, line are launch to generate and stream us the revenue that ways. expand in our and incredibly allowed diversify and of to allows we force, to created to continue our of the business high line Top we're repurchasing proud the in has has demonstrated have flexibility profitability capital several revenue produced degree growth several allocate sales of years. us business profitability able new we a levels a our shares.

up shareholder the for the have believe and substantial both in to ability to these We open questions. produce our operator, will call investing continue that, avenues please shareholders With We simultaneously. value. return business cash

Operator

Ladenburg Thank Thalmann. Your first is Cohen from you. question Jeffrey [Operator Instructions] from

Jeffrey Cohen

ones. a I've got brief few, some are

[ from that X or know multiple I been is ] and accounts? account allowance, this that stems about So X I or account naysaying on devices account on the and the want some United receivable And effect to a there's firstly, it if from both more supplies? little the perhaps in commentary. stems at specifically past know

Daniel Moorhead

Yes.

to placed adjustment, the We receivables on an Jeff, So allowance them. we're is related that collecting slowly.

continue a not an As it, receivables anomaly we believe, a both DSO a related current thinking it's with have flow with. not said, is forward, And work that would it nonissue. was to about, of to to XXXX. detailed really but and don't that get cash specific a on account We're you're we going bit but too it payer accounts improving in going it's say I because improved I

Jeffrey Cohen

you plan you've bit? super G&A about little And public Okay. launching million been That's some the Got the blood far a currently? $X-ish like could So helpful. what's comment for CMS it monitor? any What's it. the that is of Maybe, operationally for data seems collecting? Don, the readouts as of volume plan as

Donald Gregg

pulse and to that a want is for we're on oximeter, us. getting we're this very and [ commercialization. to we noninvasive into the completing now right Jeff, on just And is We're this -- actually at about platform I $X take will point be Don. play the That our [indiscernible] will essentially we very to our million the organization that our long-term focused Yes, clarify, ] focused laser product that and market. oximeter, commercialize and first FDA the G&A.

blood in volume and for platform. sepsis platform clinical we trials, important on monitoring very continue that volume, run also to trials refine is has technology been That to our that technology. clinical Our fluid

And goes that right very so therefore, But your we're some oximeter the investment platform on Does largely, pulse question? now. focused answer that. into

Jeffrey Cohen

perfect. That's Yes.

you're to ox for on a pulse Just submittal the mid-XXXX? reiterate, planning

Donald Gregg

Yes. correct. That's

Daniel Moorhead

to for XXXX. $X had And $XX if they they about looking spent clarify, million, looking XXXX. just -- your We're million at Jeff, at you're I'd in closer forecast

Jeffrey Cohen

And lastly, then Got it. guess, some super That's M-Wave. on questions Dan. I helpful,

market, helpful. environment far audience and as payer the If channels you and the target could to be that as just remind the us would

Thomas Sandgaard

can This Thomas. is one. Yes, answer that maybe I

it And than a for all codes the terms as simulation for know Typically, code payers, for -- other the is market be products. other same electric the billing There's billing that's different can we we that it NMES reeducating injuries. muscles. often sports is surgery it's used is neuromuscular of or or have that So after a in used.

a the requires just versatile. when it much it. Would is better M-Wave specialty where that very patient code [ actually for It pretty billing all more and NexWave like settings, the it's And well. to here. internal But that much payers on. is pay Sometimes device for instance, be it's put plays on helping Butantan for ],

the to decides, conditions, codes then billing what and But therefore, for medical to what always, particular using. as that we product patient -- it's goes dedicated clinic the paperboard these on makes we on have are it depends it applications. product sense from get that indications So the what again, what a

Jeffrey Cohen

I does physicians the target far TAM got it. which physicians the out the as And Thomas, your Does as additional there, in geographies? additional as expand that on tack that far as is sales targeting? force audience

Thomas Sandgaard

we -- a older X a of very it's of we first the an selling couple were because No, product the of generation that E-Wave, manufactured, products decades also developed ago. actually

sell to it doesn't gives we much E-Wave. the next over sales versatile and a production as So phased it, but easier more supplying the months ramped start product easier-to-use and has the E-Wave. will up That of the expand rather force than here be and it couple out

Jeffrey Cohen

Got it.

Super. Okay.

Operator

from question is Shagun from RBC. next Your Singh

Shagun Singh Chadha

apologize for noise at background I And the airport.

So X from I questions guess of me. sort

you we front as that well your us with review trying XXXX as the with guidance, news and XXXX? growth I'm then expect can where with out that your order we adjusted the revenue any QX. how of XX% in respect on year just then in 'XX an think context you us the revenue to figure And that you are the saw help guidance XX% XX% on should for with exiting process? And you Firstly, about can strategic for respect on of if in margins? cadence provide to with And just just alternatives, update should to

Thomas Sandgaard

is firms the to transaction. to asking have but a that alternatives? talking alternatives? couple us decide Whether Strategic has so say, would a which or is you're deep I with any And We're I transaction if obviously a we didn't that in to go to it, private direction Sorry, large -- different still a of seen. a those diligence. get weeks strategic Strategic potential the still to in is of focusing are on degree we done, alternatives, the and private about due probably be pretty of going equity continuing. conclude most

move and will that regards have to valuation the depend to partner Some And on negotiating in we of with. forward right if that.

So it positive. is looking very

of have months. report affirmative However, nothing probably we to for another couple

Shagun Singh Chadha

on then XXXX. And just

Daniel Moorhead

in got the year, of I have the you're order but just growth I a And sales a growth, in again, to the would of lot numbers some 'XX, you're easier. we back there. the differences more revenue say, half say little effective half, Yes. always at say XX% looking did as larger comps would were when tougher. I the versus the a first force going would those got little are for

that that growth. revenue margins, of bit. a to XX% constant slightly we expand or the stay would So showing growth and kind say little is expect continued I

job Our pricing production done with here. group has good a really

So would to margins expect we and continue those beyond. to into strong see 'XX

Shagun Singh Chadha

Any through sales year the margins? Great. and on on cadence color

Daniel Moorhead

sales I year as again, growth, force going But of better. do far as mid-XX% we much. would think and the I around to across higher that to it's expect looking growth, I most think too as, I we're don't we the a jump order it. see at Obviously, think quarters. continues comps little had this

little to be been XX% growth. $X.XX, a EPS should increase drive was don't than forecast pro prior this revenue year-to-year. right the year in this it that EPS forget, so from year again, $X.XX should going So and kind And XX% is it now, of the would steadier over that, approximately a have in year, what forma

Operator

Thank you.

question from from is H.C. next Yi Your Wainwright. Chen

Yi Chen

in XXXX, much that, out expected be the NexWave? how Can XX% driven will that? primarily of comment Regarding by you on growth

Thomas Sandgaard

to the expect don't the slow on say NexWave. growth Yes. I would down that we

XX% So the in is that let's range. assume

is pushing see through we majority are our the from that it all revenue to And selling where growth hard probably force. that's sales to are of products from. We other the going come

order to than to double spilling to we XX% over hopefully orders -- and XX% be what in therefore, get to terms growth in other So expect a growth us will all revenue. up those of again products more and

Yi Chen

be XXXX, still main will -- is NexWave the growth driver for -- correct? So within

Thomas Sandgaard

XX% get grow the really Pain are we chances also in that are to Management it ideally, year. hoping division. as little below still And much more a exit while that But portfolio term, a be will Well, we diversified we have the over the we'll XX% long one product the orders.

Yi Chen

Got it. also it. versus And at using Got that the out I'm attractive on there the back potentially -- at fast-growing are could curious, more look opportunity may market to that acquire could buy company involve the Zynex products that any there the existing cash shares?

Thomas Sandgaard

a where We we of complement -- in are what those evaluating exactly sell either now or price could about to a would we and right products a it. that making handful range similar afford that also we be sell great

have our in we initiated there. We getting good research but any are negotiating, pretty not

Operator

hand are remarks. further will at this Thomas time. for There to no the call Sandgaard you. now Thank questions back I the closing

Thomas Sandgaard

the look our in quarter Well, time the and the delivering. leveraging of to your consistent thank a year growth upcoming our speaking interest appreciate you team with momentum We're this to throughout We you in day. great investor pleased We events. and is us performance for joining Zynex and rest forward have that today. and

Operator

conference for joining. all Thank and you. has Thank now ended. gentlemen, you Ladies the

You may all disconnect.

Zynex (ZYXI) 29 Feb 242023 Q4 Earnings call transcript