Zynex (ZYXI) 25 Feb 222021 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen. And welcome to the Zynex Fourth Quarter 2021 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. to Martin conference ahead. Group like Kadoche to now Bill from [ph] would turn over the Greg I Please go

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

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

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

good everyone. Thanks, Greg. And joining for afternoon, Thank us today. you

CMS, reviewing Monitoring Solutions both will the Zynex and in Pain activities Management, our We division division. be business divisions. for ZMI,

million a income will another diversified and The million, profitable come. net in Over the of ultimately represented years growth with last topline we of income, we quarter revenue yet XX our $X.X many company months, fourth build and to $XX.X net revenue drive and pathways continued strategies of respectively. have that record believe to

a million approximately is very million company quarter. $X.X and just size cash to $XX.X increased XX% or during Our fourth sequentially by of the relative substantial our position

$XX quarter year for million see an adjusted to continue orders quarter of last X% EBITDA financial consistent quarter. cemented health. XXXX and the numbers than in same figures our fourth in coming the We higher

of Looking forward, Anna, will we operations expect turn now to our year call division. and to speak our Management experience the seventh to to COO, profitability. I straight revenue-generating Pain a over

Thank you, pain home of devices, clinician's and the primary than [ph] and electrotherapy Thomas. even post-operative the convenience. company's comparable division driver both with using the electrotherapy in specifically These management NexWave the prescription remains results financial growth, with pain technology enterprise-level with relief provide The and for superior a those obtained rehabilitation patients office, strength

throughout U.S. in and lower productive traction, We knee hot device, are territories the populating distribute such highly promote only braces. cold and with support, back not direct products sales sales a force but the cervical XXX to as NexWave process of also we therapy our

productivity in on market. the We have filled half well of territories highly addition of and are more, those adding the existing despite developing sales to reps focused over tight labor

training the sales is focused growth [Technical to designed enable sales program company. Our Difficulty] for

hope we wave As and high, for mentioned quarterly an have incoming the sales as and reps, our challenge in subsides. markets employment the a remained increase quantity the quality for applicant during call, recruiting Omicron while earnings labor last effective is

Our to and rep. improve is sales XXX to our revenue annual all long-term territories goal continue per populate

and insurance through revenue durability through to of process and to changes of insurance providers. of widespread products. competitive been developed portion Zynex's is reiterate we insurance having many status. [Technical in of in majority provider claims Zynex's the out-of-network this opportunity one, sales low is no of to still We insurance the the commercial The with all in/or to like is would and regardless stages large model a acceptance our out-of-network reimbursement, coverage the While market coverage, unique physician team address early up, Difficulty] a over take business ramping decades

all this from out-of-network on with negatively status. coverage. prescription change increasingly We've or access epidemic care of the we'll managing prescriptions, have We're despite The impact care its tens dying pain. drug and with continuum opioid status technology dedicated to all all have that of in the prescribing can become for of continues benefits the to educated ravage incoming abuse not to specifically thousands and providing year. and UnitedHealthcare physicians network to out-of-network about throughout revenue country play Zynex UnitedHealthcare Our role of patients, every NexWave as and plans aware doctors of XX% continue will process the

acute rehabilitation as Our technology chronic is is mitigation free other in pain demonstrate combating and it that options. effective and side from as studies effects and

for continue to We medication of process, in prescriptions treatment. on of this the thus from our a force to outset tenet avoiding the consumables earlier proud offer as and management plan dependence use. to NexWave training are prescription central see physicians We to alternative make program opioid writing solution and pain sales an

have we three of do chain in supply issues increased of business during call we to purchasing of experienced will during foresee sources materializing not and COVID, As our any We've XXXX. turn components, anticipation preemptively the to and diversified we to our not mentioned up Thomas. previous up include back any levels. quarters, manufacturing list I now in suppliers ramped

bill not. prescriptions business Management that and I for or our to Anna. division accept you, important network all patients, plan are has it's everyone for been to in believe model all in whether [ph] we therefore decades, insurance Pain Thank the remind

repeatedly we than in a plans, network show. as third collect with In for consistently insurance less yet we all of financial products, and only commercial our revenue fact, are our results

throughout increased acquisition of based excited our we've Gregg, the to the patient Monitoring revenue and of further our long-term driver Monitoring division, Kestrel division welcome primary on XXXX. even the to with recent While I'd realize Solutions, like market in potential the Solution in division. We're focus monitoring Pain Dan Management strategy of currently vision is Labs. this to speak to VP company's

Thank you, Thomas.

patient technology Ultimately, pulse second a most the content that continuous [ph] is patient the The of sign market. sepsis and replacement SvOX, efficient patient diagnosis draws capture skin on system Pulse for fail growing alone product central and deliver to old, hospitals laser-based our and $X.X sales of venous oximetry virtually of hemodynamic of care primarily monitoring, the oximetry clinics $XXX providers Kestrel being for CAGR. we market pose health. crucial is which for of a over which monitoring, billion about outdated pulse a oxygen The HemeOx a saturation. a device, believe over market a monitoring glaring insurance acquisition to vital and today that that products for direct which hematocrit, ripe XX serviceable solves include X.X% accurate measure alone of conventional that NICO total incorporates hospitals care used provides is monitoring and monitors the available. blood a regardless for hemoglobin Our every accuracy of and patient condition. co-oximeter, level species LED lead will replaces physicians represent monitoring standard oximeter, fingerstick, high monitors measure platform Zynex monitor, settings monitoring device, of a hemoglobin a they millions line technology U.S., annually. pigmentation. oxygen invasive Labs laser over unmet non-invasive all disruption. The at of it in that years reflections leading-edge, market NICO dollars Kestrel's pulse and cost year, growing in hospital and of the that four antiquated is clinical with uses million is challenges risk technology accounts to oximetry demand. inaccurate to The with laser-based facilities can is approximately science

from players. the monitoring clinical and is of XXXX, ultimately received submission expect Zynex's XXXX. the [Technical FDA collected trials working settings happen this The FDA relative While patient Difficulty] use of technology our help for Zynex ease We of inherent for wireless trials. to don't compete market Additionally, balance. sees in that this the by to position Difficulty] shift physicians are was and from anticipate This we looking informative and be proprietary technology CM-XXXX, incumbent allows fluid at end towards CM-XXXX. index which multiple laser-based perioperative use submitted supported completed on with FDA monitor Armed first recent data, will value the forward generation overnight, clearance won't share with hospital clinical a The and next-generation algorithm. in we CM-XXXX [Technical to revenues was in our monitor, in of device the data

commercializing We to expect the look typical XXX-day clearance the cycle and year. product this forward later

mobilize bleeding targets and largely will initial are difficult substantial loss centers hospitals die hemodynamic More complications until than intra-operatively, internal and add manufacturing patients marketing and detect present. into clearance provides non-invasive conditions. to The patient instability. CM-XXXX is quarter, due of serious be where prepared Our soon to post-operatively blood surgery include and comprehensive to monitoring In the insight ahead as the division achieved. to sales FDA we'll the as more second

enrolling the Moorhead, a to strategy clinical the Financial now for We have over research plan to turn wireless and with and pursuing multiple are studies patients Chief wired I throughout device over will upcoming results. the commercialize With discuss go-to-market to CM-XXXX the that, CM-XXXX. call year Dan planned our Officer, operating

order in results million for XX% in the XX% refer our quarter to Difficulty] a Please be compared $XX.X million XX% million million. compared commenting expenses outperform the and fourth earlier between the mind QX net XX% periods XXXX. was headcount the to in G&A $XX to increased expense that adjusted from share million were were to fourth year and QX. grew in earnings ended sequentially prior million XX% issued was increased dividend, fourth all And of in to all stated, fourth XX% and in per revenue million in and margins XX% financial quarter growth due $XX.X XX%, XX% Don. period during grew million to from to QX. quarter XXXX. XXX% by year-over-year per in million the in press quarter QX. million of expectations. revenue for Keep expected which Thanks, our diluted $X.X share $XX.X our Supplies to in XX% XXXX and distributed income the After to of year-over-year and XXXX periods. XXXX was Device monitoring. and of grew we compared $X.X period full $XX.X and quarter XX% release to We've in $X.X of to previously our $X.X year-over-year Zynex for produced and to $XX.X same to We growth million summary to the finally, and quarter retrospectively with revenue in we're accounted today end to grew XXXX million. for last $XX.X January year. Sales same increase our stock pleased decreased million net for to mainly and from XXXX XXX% $X.X related fourth margins marketing those up $XX [Technical XXXX, cash, compared EBITDA increased prior facilities, Gross the $X.XX million compared The in XXXX. $XX.X increased XX% revenue QX. the to

from increased and for to XX%. increased $XX.X G&A million. in or per for adjusted revenue but amount results, million million share reported full XX% income revenue million at up XX, XX% grew year $XX.X diluted of net share year-over-year, million, December last to increased $X.XX was expenses income cash from expense or $X.X sheet, EBITDA the on increased million XX% was by $XX.X to balance balance year. were our $XX.X per orders million Device net We compared $X.XX full diluted million dividend. $XXX.X $XX.X XX% million the stock increased to grew the For XXXX, in XX% XX% and year $XX.X year-over-year $X.XX year-over-year, year-over-year. Sales Adjusted net of in XXXX, end XXXX margins revenue to XXXX. which XXXX. XXXX of XX% and the the XX% marketing XXXX. compared from as million $XX.X million $XX.X Gross previously to was Supplies $XX.X

of dividend related to XX the we over December our December, With Our completed Bank Kestrel to and million, That Thomas. through XX, $XX at million X the debt In Labs cash $XX as Labs over stock working $XX Kestrel America was call growth million X.X% I'll $XX.X to capital was of in transaction. XXXX. XX% stock of added acquisition million turn years. compared which $XX.X to that, of at back net for and included December million grew the buyback, financed

Thanks, Dan.

for XXXX. outlook So to now the turning

between We expect $XX million, XXXX the of $XX Adjusted range total $XXX in revenue to over and million. to million the be expected to of growth XX% $XXX representing is previous come in XX% EBITDA million to year. for

We to revenue $X.X an labor to estimate our anticipate now million our the peers, growth the we and between other to of and upcoming the million. XXXX, quarters. look in of current $XX of a EBITDA evolving reflects quarter With assessment our for in This impact among as maintaining can come and COVID-XX with between first uncertainty forward continued differentiator million the most related pandemic. high the For financial and key recent and micro-cap health $X environment $XX questions. million we that, up open we adjusted profitability

Thank first Our Matthew you. go Piper Instructions] comes [Operator Sandler. O'Brien question from Please with ahead.

that's taking question. Thanks here kind just Afternoon. start since in for of let's room. gorilla the the my guess £XXX with I UNH

then sorry, And and is why how both to So - why in-network would EBITDA? then sales that UNH percentage would of - from to out-of-network? Or move of percentage they UNH to want what sales you happen? want is

this of definitely it Matt, is first all, a mutual Well, decision. was Hi, Yes. Thomas.

gorilla a happens the certainly, non-event it in with is impact that called of all you you revenues, and an in percentage do this relationships Second, have well, won't Dan, And a companies on the something have... time, that and terms our of changes revenue. insurance big

have and because the during we - the it supply you we I are estimating collections, change at talked did some at it looked it's it, Anna looked and We've year. but they of middle varies about have know -

towards stay forward. of revenue, XX% think so I were And somewhere of going our the expect percentage the that And in range. to would year, flat between that they and we fairly XX% end overall

on too? is side, Or amount the to... levered about EBITDA is Dan, disproportionately it the same it

everything Of course, else. its

in general. So in they're types always middle. those talk of We not the again, mix and things, but more less about commercial the profitable or are payer of guys kind

all same end it's file. the in same, - much average its smaller for Aetna collecting much the some average pretty insurance, the the They're know, you on whether or pretty up the of

you out you guys? to would them network? to want why And What benefit go Okay. provide that of does

that, for toolbox, less have less forth headache. terms and case-by-case year forget average - There's of amount year, entire in the a We Certainly, of review really. is basis. prepayment have There's - of them that have maybe some generally we more with whether believe dealing file, provide - insurance year half an more or we Aetna, date much to some we that XX% pay with. a number and additional sometimes see - and to and a network documentation each insurance that out the in a we are But and work of slightly for it general for cetera. It's big the network. cumbersome. on typically the remember years file. going certainly from we companies but going Aetna pay of supplies everything following it, I they a device, for of opted long lot a remember, network the It's increased next the et when period of suddenly in that. off, collections the service, date back They like out influx so often, on as actually housekeeping we means in to they straightforward on it's service to goes out Certainly, sometimes all back health one more then call be - tools of the the of our money, commercial

if least wouldn't So the the similar see same from be United. at value I something surprised but we [ph] collections, average or

sales million you're wondering about sales of exit I have really helpful. real else you I'll and maybe just are there's $XX of really did rate. plans question of in just that force if And the I $XXX I QX, for million, that. about what of off so kind number, then total, no to on? this eye don't year? a the guiding of end that. an Thanks if kind related to or force growth it's Okay. around wrap that And last Very heard something keep I'm think year then And for sales your

that very of sales and I reps reps we impacts on the rate slacking hire market new it's this wishful gone of point, start related. will the into on quality the the be thinking force. higher the without we might it's COVID - much at be can add Yes, sales And tomorrow, force a at labor

we market, up of range a it's the lot range. why in fairly part in supply for the for trying we and way. then to then do catch now, It's terms parts is hard XXXX - have little in So have worst quality worth realistically [ph] see job case, we for only that's of applying relates in of to scenario. potentially a But be that. going got about trying sales later also credit rate $XXX in and to expect we million. be force of than job saw the we that market revenue open not whole – estimate the It's as low a to I we If be that it between more hire the to candidate limited. could the that the a push of the year the and at we better later more end further. any it $XXX worst-case of year, a right We million might labor up real it grow that we positions, rate that this to to situation If

year year sales with? did how last end many you reps, Okay. this with? And are you many numbers how And of end to actual hoping

we'd Tom just that. said, like of of as XXX tough net. number We now, the the us to market, labor end about so that's a forecast. like XXX, shows to do forecast right the obviously, the around year, But about than and better current at And had XXX adding

so Thank much. you Got it.

from Thalmann. Cohen comes question go next with ahead. Jeffrey The Please Ladenburg

Hi, you. for is afternoon. on This actually thank this Destiny Jeff

of a reps labor this the market. given at or even has focusing underserved? areas? specifically focused Anna, the the on if for current in no? filled changed really qualified Following Has more you are question how labor your all theme curious on maybe strategy are somewhat on areas and Are that that similar Or you geographic market I'm is changed? they're or

necessarily Well, our strategy changed. hasn't

that of attracting to the and areas, in We candidates. candidates get to is pushing of focusing reps we're that country. a filters that overall, initiatives ensure place number the to we're But XXX implemented throughout some sales all candidates increased candidates goal have our to are and through put quality on we're number additional recruiting quality still,

Got of it. potential timing Okay. talk then in Thank terms flow bit And little maybe commercial you. some could cash a regulatory then just of submissions the launches? the about and you products of

This is to Don speak I Gregg. Yes. those. can

Kestrel, about the acquisition. we the integrated working on of currently and productization in the XX we're and So acquired We're submission we've months. planning products the

that So about product. that's for mid-XXXX. NICO will that's co-oximeter, And the the non-invasive be

Okay, And expected. in Dan, if a function back thank just this jump call it wanted of to or you anything then, strictly out than you so specific curious or was quarter? Thanks you. I'll if out call could I'm better that there's margins much. higher revenues queue.

of higher I'd a it work - was No, and continued revenues. of to those say, of vendor things. types function it our relationships Yes. We've the was some

So the still we year, XX%. were for at

good in result going for So were range is with to that XX% happy we XX% a but QX, we forward, the still think sure.

Thank you. right. All

Securities. B. Wiesenberger with Marc next ahead. Please comes question go Our Riley from

prior bit on reimbursements on impact actually consumables? out-of-network? Aman a from customers payer in-network per taking to little quantity as can for for and wanted the to quantify well provide you prescription, in I revenue the jumping Maybe is Mark. went ask, maybe for question. color more that This as Thanks

is Thomas. this Yes,

of the we've of - out that In a and Aetna, Plus go - between case all have insurance often go all we of We marginally quite positively [indiscernible] them. the was fluctuate network time and in XX% companies, on increase. seen many positive. numbers

get where to a a paid to hard get for insurance Sometimes little time. that find in-network, very of in period out company some then We cases it's of it's squeeze better beneficial way. long an anything ways

goes in on that when not - it on insurance department on it's it's out a something constant But commercial we're really pretty basis. numbers, whether we plans, think billing So especially not a about or comes our really it's in of daily something And the constant. network basis net to are work.

just Anna, these bit a benefits little for what if I year. of have plans out-of-network of - for So explanation benefits the to... anything most slow you don't the know

out allowables with we're network I the would contracted we network, also are payer. not our when price. we're typically add because see to It's you that restricted of lower in typically, when the higher

allowables So the United. of we're anticipating with to to go out that once up we're network

helpful. That's it. Got

on have has about Can consumables? basis. to any shipped factors the particles in And of activity? an some consumables to provide a number place patients patient? number outside what have talk Can you reports consumable of unusual Zynex indicated monthly And average determining quantity shift safeguard you against you to monthly of the into go

everything well point have to is as nearly quantities, by allowable the obviously, of dollar amounts. Well, companies. the allowable insurance dictated as being They

by Let's patient but for sometimes that's by companies, we something - with it the that. dictated even it's comply obviously, insurance the to try varies say, and most patient,

Sometimes it we about or learn new a quantities. takes two certainly allowable before month

company. to level, on the That's dictated not insurance really it's you So speak high more Anna, - by - that's a detail.

quantities, able less, there's needs to as [ph] frequently more also they're or insurance of reach different and get is out to go then as and We if mentioned, what if the reach into, adjust out can supplies up treating, company patient confirmation, at us Thomas that need But of number them decrease would patient and they're and treatment driven areas also treating look is by follow or the and needed. we quantities the the as the to of allowing. to no variable for they it increase the the or most -

Thank in queue. right. jump All the I'll you.

comes ahead. from question next Our go Chen with Yi Please H.C. Wainwright.

network the out covered percentage of commercial also the the questions. give my a rough taking that's you Thank coverage? by insurance of percentage covered you revenue estimate Could for and us

third we on we are less between of or a less in network - commercial our than we - were through more plans. And insurance revenue-wise, average plans. - overall, the insurance collect the commercial it's all Well, the same

[Technical It East this hemorrhagic process the we And Coast, to on simulates trial that and make large Yale. currently device. in analyzing of at of that's Difficulty] our institution we of completed coming data index through So all in a characterizations these here and relative and the shock, are trials algorithm our changes

these, very are And so results there's promising overall. growing highly well coming and they're out that of

Do you expect all the trials to report year? [ph] results by the end of this

completed We have be will year. trials this that mostly end of by the

large year, a were have that early these complete next will others other end few Similar but into we're university are by working most and We they of year. this all with next on may - the institutions. - trials, go

Okay. reporting timing reporting the affect the the of [indiscernible] timing your trials commercial - - launch of Is of does CM-XXXX? your timing the

doesn't. It

are of trials to the We using ensure the the of performance course. device,

is of a December waiting really expecting of will end the dictate end response commercialization. at We and we're the are that and a XXXX, FDA. for submitted response from what March We our

plan trials with the along the We the our the data have will date. all of commercialization, with for been part that's - and commercialization and the trial clinical

you. Thank Okay.

You're welcome.

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

activity continue New announcement, and leveraging very and that ended we'll Thank We optimistic keep We're our momentum and very growth progress we'll into you. Okay, Year. initiatives. yes. quarter generate remain year strategic from of our about the XXXX that this with a to full excited

our for see has the appreciate company earnings evening. great and milestones a XXXX in some and today's Zynex. interest inflection call to We significant a hope been your Have informative, I period expansion. expect We for of

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

disconnect. You may now