Zynex, Inc. (OTCQB: ZYXI) is engaged within the marketing, distribution, and sale of electrotherapy medical devices for pain management. Shares of the medical device company are rallying 7%, through early trading on Monday, November 13, 2017. Over the past month, Zynex, Inc. has seen average daily volume of 34,859 shares. However, volume of 70,540 shares or dollar volume of $215,852, has already exchanged hands on the day.
Shares of Zynex, Inc. are rallying on Monday, after the company announced third quarter 2017 earnings results. During the quarter, the company saw revenues grow 88% to $6.8 million, compared to third quarter 2016. In addition, net income rose 314% to $2.2 million compared to last year. Management says the company continues to be on target for its growth initiatives. Here is the full press release detailing of the third quarter earnings results:
Zynex, Inc. Press Release:
LONE TREE, Colo., Nov. 13, 2017 /PRNewswire/ — Zynex, Inc. (OTCQB: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, cardiac monitoring and neurological diagnostics, today reported financial results for its third quarter ended September 30, 2017.
President and CEO Commentary:
Thomas Sandgaard, CEO commented: “I am very excited to report strong net income of $2.2 million in the third quarter which continues our trend of bottom line improvement. Our revenue grew to $6.8 million, an increase of 35% compared to the second quarter and 88% above the third quarter of last year. Our gross profit margin remained 80% versus 76% in Q3-2016. Our focus on processing orders more effectively to improve collections and cost controls to keep fixed expenses low is paying off in terms of positive cash flow and profitability.
We currently estimate our fourth quarter revenue to range between $7.0 and $7.5 million with Adjusted EBITDA between $3.0 and $3.5 million. Based on our fourth quarter estimate, our full year 2017 revenue is projected to range from $22.3 to $22.8 million compared to $13.3 million in 2016 and our Adjusted EBITDA for 2017 is projected to be range from $8.6 to $9.1 million compared to $1.3 million in 2016.
Our flagship product, the NexWave, is an important technology for physicians to prescribe in today’s opioid crisis, allowing patients with debilitating pain access to prescription strength pain relief without side effects. In many cases, our NexWave device should be prescribed as a first-line-of-defense before prescribing medications such as opioids. I am dedicated to promote our technology in order to minimize addiction and other side effects from prescription opioids.”
Third Quarter Financial Results Summary:
The Company reported net revenue of $6.8 million, an 88% increase over Q3-2016 and a 35% increase compared to Q2-2017. For the nine months ended September 30, 2017, total revenue increased 47% to $15.3 million from $10.4 million for the nine months ended September 30, 2016.
Cost of revenue increased to $1.3 million from $0.9, million which generated increased gross margins of 80% compared to 76% last year. Gross margins for the nine months ended September 30, 2017 increased to 78% from 73% in 2016.
Net income grew 314% to $2.2 million in the third quarter of 2017, compared to $0.5 million last year. For the nine months ended September 30, 2017, net income grew 3003% to $4.1 million from a loss of $0.1 million in 2016.
Adjusted EBITDA grew 319% to $3.1 million in the third quarter of 2017 compared to $0.7 million last year. For the nine months ended September 30, 2017, Adjusted EBITDA grew 854% to $5.6 million from $0.6 million in 2016.
The Company generated $4.7 million of cash from operations during the first nine months of 2017. As of September 30, 2017, the Company has working capital of $1.2 million compared to a deficit of $4.3 million at December 31, 2016.
Webcast Details: Monday, November 13, 2017 at 9:00 a.m. MT – 11:00 a.m. ET
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Non-GAAP Financial Measures
Zynex reports its financial results in accordance with accounting principles generally accepted in the U.S. (GAAP). In addition, the Company is providing in this news release financial information in the form of adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and stock compensation). Management believes these non-GAAP financial measures are useful to investors and lenders in evaluating the overall financial health of the Company in that they allow for greater transparency of additional financial data routinely used by management to evaluate performance. Adjusted EBITDA can be useful for investors or lenders as an indicator of earnings available to service debt. Non-GAAP financial measures should not be considered in isolation from or as an alternative to the financial information prepared in accordance with GAAP.
Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company’s proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. Zynex is also developing a new blood volume monitor for use in hospitals and surgery centers. For additional information, please visit: Zynex.com.
Safe Harbor Statement
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. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain additional capital or augment our liquidity in order to continue our business, the success of our international expansion efforts, our ability to engage additional sales representatives and their success, the need to obtain FDA clearance and CE marking of new products, the acceptance of new products as well as existing products by doctors and hospitals, larger competitors with greater financial resources, the need to keep pace with technological changes, our dependence on the reimbursement from insurance companies for products sold or rented to our customers, acceptance of our products by health insurance providers, our dependence on third party manufacturers to produce our goods on time and to our specifications, implementation of our sales strategy including a strong direct sales force, the uncertain outcome of pending material litigation, our ability to up-list to a larger exchange and other risks 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, 2016 as well as Forms 10-Q, 8-K and 8-K/A, press releases and the Company’s website.