Zynex (ZYXI) 26 Oct 232023 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Zynex Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] 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 Quinn Callanan from MZ North America.

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

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

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

Thanks, third for call. quarter earnings you good everyone. joining our us XXXX afternoon, Quinn, for and today Thank

Zynex. to our earnings profitability numbers. We and revenue highlighted beating These previous consecutive was and third XXXX, the celebrated revenue diluted led in company's $X.XX the prescriptions period us the again over founded a the millionth produced The and of record records $XX.X same sensor of X history, we million, quarter increase highest share. our quarter momentum XX% our treated received patient for leading total per of in quarter X to once quarter by order ongoing tenth record-high number of

recognized grow is companies include The care good into help Orthosis holistic to great continue spine. increase the Pro increased a amongst a system drive the towards XX% a we example and quarter, Our therapy XXX productivity to for opioids community future. top each building growth, The communities dual in the or management. show Report. To or and impact third new great health syndrome there purpose on introduced results a work year-over-year, the XXrd lower and Zynex have our rehabilitation us considerable being Zynex Lumbar back the orders as the according reducing force localized growing Thoracic be doing X quarter, with for we we noninvasive sales Technology the pain believe including use. Healthcare Pro products. Orders hospital orders the continue Sacral sales Wrist by to home for force, broader runway management, pain are leadership new broad to Zynex to significantly and spectrum Brace TLSO, of continues ranking beginning and brace our to that testament hot-fluid latest mid- wrist-related approach the are products our The cold tunnel on to for we the the CryoHeat, products capital and

devices complementary pain way wave. focus adding combined our to our strength that by prescription continue profitable in a We to the on with products management growth industry-leading portfolio next

in second-generation and In our continue blood addition Solutions in pulse to Monitoring move our results or CMS settings. and in our profitable third announce Zynex improve the better fluid monitor hospital monitor to pain patient fluid and to FDA blood earlier for noninvasive management volume targeted oximeter the management clearance division, or CO-Oximeter. We impressive our outcomes quarter fluid forward and wireless development from laser-based to technology of the this of year with were excited

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

the division, believe the noninvasive in of Overall, are for making hemoglobin growth great pulse Patient for it, the oximeter, the potential we X of we laser-based progress sepsis trade name for monitoring division, levels, will in products which company. is HemeOx. a have a pipeline laser-based our total early Monitoring and We a monitor monitor hospital additional in detection a game-changing the have NiCO

are hospital holistic significant we which progress opportunity. execute making represents rapidly tandem, growing continue building recurring we new ahead, on a that with and up management noninvasive Looking devices as focused pain with to accelerating products. market and approach our are strategically. In high and operationally large monitoring on revenue We're division, direct ramping sales expanding our diversifying and we delivering at-home is

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

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

employee quarter Zynex' increase had is such increase the surpassed treating in our for were patients Thank have Reaching this and We teamwork a also the of to and a you, company. quarter. management by pain each the company another a million testament proud division impressive sequential in of order Thomas. landmark brings over efforts the a to revenues. tremendous that during XX% volumes marked X quarter tireless incredibly second year-over-year

and continued our line of with We in sales pain quarter TLSO, is sales The volumes of of in provide our volumes the initial products, including increase force. with more revenue ended pain distributed sales streams the quarter, force to XXX we We've key management growth the strong prescribers. Thomas continuous and seen our build-out risk management products opportunities CryoHeat. approximately third reps. into our new braces mentioned, to break As also our new added diversify X product helps us during expanding

And of previously, net continue reps. a reps be mentioned we sales who added as in underperforming. we've XX aggressive are to we've offboarding approximately XXXX, During

annualized normal. per XX% during rep a QX. Revenue on our is So approximately from up slower which growth little REV an basis QX, overall has was than $XXX,XXX been

a takes X in As to average our years sales. million on force metric. for is we're across track The meet approximately target sales under the months, tenure reminder, annual still with reps $X that so it currently XX

and reps, make to a large fill in rep do us continue revenue new numbers evaluating high to has and out we're reps processes of at ultimately territories allowed to to improve our XXX our level maintain evaluating so manner. despite of We adding. We're per reps improvements potential profitable sales working in productivity to which continue a the sales

to of division. another ask expect year, Pain reach We year that President sales look Gregg, calls. I'll roughly Solutions and that should in updates by of the related division the future to Management updating I the expansion all now for Zynex provide reps. profitable we Monitoring on Don you market end XXX business our forward to

you, Thank Anna.

Zynex division companies. Patient diversify largest long-term the one investment of into revenues for is Our our to Monitoring technology a world's medical

Our for anesthesia underlying presented key industry in to our the the amongst of business similar that ASA and Zynex the acquisition Society continue monitoring can profitability world-class the we profitability oximetry have customers. Zynex organic Pain sources potential hundred through we familiarity allow venues a conduct unforeseen the several science flow. growth physicians technologies be and monitoring to prepare Attendance group. Anesthesiologists us research our conference leaders. leverages transforming build critical active to market leaders build-out for self-fund indicated of needs opinion demand developing demand gathered this participated to the monitoring and allow development. We and Management several products. amongst this developed key in that in patient launch while met rebuild as critical monitoring and division Conference the American strong division's technologies laser noncore and maintaining of pulse to is our at with with From continue October, in to us our present products and cash benefits capabilities of many opinion conference, positive technologies others our technology will tremendous of future

to develop in NiCO our continue oximeter laser-based for commercialization We XXXX. pulse

to it USPTO continue and accordingly. The NiCO We've marketing submissions our clinicians launch in patients. patent and We several toward clinical work commercialization continued revising work plan benefit to and prepare trials. with have to the submission provide clinical to confidence FDA will and continued the reinforced has our

milestones Our CM CM-XXXX positively. is the fluid to noninvasive The advance will last quarter a for continues the clinical next-generation advisers, and market. CM now extensive entry for key CM next-generation Dan and technology smooth at likely our new nicely following clearance the blood elongated FDA addition to industry in-depth our entirely Moorhead, monitor a monitoring market to and an and Having R&D for the build look up audiences device meeting Financial for into momentum. I so quarter. sets with Officer; will over rooms, engagement call rely more leaders the Chief opinion medical to operating uptake turn on financial performance trajectory received

and in incentive last XXXX. our Thanks, Thomas for to the $X.X Don. third quarter increased flows year-over-year capital marketing the XX% third the investments quarter review cash $XX.X of XX% in third ended of diluted $XX.X to Solutions million months basic the division XX% the increased order financial $XX.X remainder issued quarter, results for is orders XX% were $XX.X last $X.X the September September sales our year. million was as launch In months, rate the same our last and were a to quarter compared in million a X quarter share the year-over-year will to XX% Supplies XXth, primarily we of on ended million. to compared count XX% in our quarter, and $XX.X XX, refer versus of related third Please in $X.X financial operations to or orders the quarter. stock, quarter compared revenue quarter commenting and force $XX.X primarily expense produced in quarter per was release or profit revenue revenue count of for $X.XX $XX.X million for from summary of share $X.X to stock expenses million was of in In our to $XX.X earlier due effective the per ended a for $X.XX Gross the of in to million $X.X Net consecutive XXXX, and buyback diluted quarter from revenue third to September the third million XXXX press $XX.X quarter from million. growth. cash EBITDA today and in months fourth head working Cash XXXX XXXX. We in third and million $XX.X increased Adjusted for the to common million related year-over-year XXXX. After back-office compared XX% XXXX, $XX.X was repurchased $X.X $XX.X for cash G&A months to grew in million our XXXX. Sales revenue guidance results, and company compared million record $XX.X XX% products. quarter. of the related the basic million head orders. Device number from period the in income million in $XX.X continued short-term history XXXX. the repurchases million and count for related as our third primarily sixth million, of third ended compensation million to million to of or the XXth, XXXX grew highest past increased is XXXX, $XX.X million increased G&A in The to to and XX the Monitoring expenses in of $XX operations Net head the to X bringing million. growth. Tax new of the XXXX, order to XX% in for quarter the X year. million total our investments related to increase with increased growth percentage year. device in Approximately and in the equivalents

both to the to shareholder team to be over confident committed that, turn the value a to creating that before, opportunities near incredibly this we and for shareholders we've are remain term. With back we divisions, in believe I'll our As in our and growth Thomas. long stated management the signal we call

growing It bottom Management our $XXX Thank increasingly to becoming million that over in current the division, $XXX we with below strong the million Dan. few have years from a a next runway evident you, is Pain just long revenues still line.

terms a have sheet. We've launching, Division our quarter. had backdrop X operate on just Monitoring QX the not to consecutive and Zynex We orders post balance strong product X game-changing but to the brink of a in strong of start continues lines on of expect to the and record seventh

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

XXXX As $X.XX. With of we call initial approximately for to that, and share open be outlook, diluted expect up our $XXX.X and of million to are total $XXX.X the to representing please guidance earnings XXXX our growth for per XX% operator, reiterating $X.XX over questions. revenue million

The [Operator question Cohen Thalmann. first Instructions] from with comes Jeffrey Ladenburg

Good is afternoon, everyone? how

Great. are pretty We're How you? doing good, Jeff.

Really good. Thanks for question. taking the

a just So few.

further we pull-through a So devices supplies effect, supply I the versus you will, you that could wondered of And if the devices the little bit seen on assume supplies. drill a side side. on if on you stronger historically? gets behind should Have devices lag

the lot tail obviously give when and is companies. growth that obviously more several a on of the very have those lot A on orders. initial for devices end paid sits in by you little months have orders. revenue that Dan can But that I we a of technical strong the of overall, insurance typically the detail. claims had think is A revenue is supplies

in So but have a thing there we little see numbers, percentage, know don't with to on current orders, typically not absolute technical say you . device less as and a I . if in a of see we lot more a uptick the But supplies. as than. revenue any percentage,

you. with agree I No,

as advice as the to goes look think stronger I compared do gets on. supplies if little year a you usually

And just Thomas, is trend that have. with kind would general a that's And the agree driving strong we order so of growth I number.

So instead the it's strong. XX% just XX%, more XX% order has because been well. of again, growing maybe forward, going of so a both growth But XX% are

percentage that supply up see for creep is you'll Long-term, again.

channels channels you could quarters the have the few they some distribution it. forward. may Okay. little what and going going next, therapy bit and those offerings may And then a physical changed of through over about that Got talk the you're how like look past

over There and last seen producing the channels It's are few is that no orders. significant prescriptions changes quarters. we've the same that our still

million Got lastly, $XX buyback you talked for I about it. us, over the think months. front, then And XX on

$XX So it now was million fifth sixth the the of on concluded versus and one last piece the you're one? to

actively stock the doing and how is in more how investing now, sheet well use We good how to we capital Not yet. It's buying the inexpensive right right obviously are primarily find Monitoring cash of we of balance sits something recently it the Division strong by also of to organically, how deploy have considering considering we are is. back our been our stock. now, because X debating buyback. areas, And

there's the -- So fifth in October. recently, been Jeff, X

but wasn't it $XX you October. September it, done last up finished million So quite when at look in XX at that

with The RBC. next from question comes Singh Shagun

history. the of the revenue you it what it company's Can So color reps the I is highest about was driving in bit regions? a adding it the was seeing, you indicated hoping sales Is level which more you in XX%. existing on growth the some little sales it Is on momentum was that? below orders grew on accounts? could growth, elaborate you're then than And the new higher or same, order of year-over-year, XX% more is provide which

predictor a should it the implications So are what that? how as of think about we sales? of And just future

adding Net-net, more is sales productive. reps. our force becoming We sales more keep

potential productivity better as as new continue letting have the However, hiring -- in see talent. and see a to may we so sales our better force like to that are sales overall, also doesn't as at we proactively seem term we to higher get produce long and get not not reps we'd to much a

order is in some So order therefore, relatively just X ago, when get we XX%. growth for number terms average very growth, than growth, in turns growth -- years that. in year. we strong to some little very if been of look we're -- from also, percentages. And obviously, compared X you the last X.X last when order months It's the at years here digits. And XX%, less speaking, comes our single the X a not more high more -- over into was to momentum it a of the the the in the order years,

look on revenue on pretty our bit you with well at annual an growth. basis, that If still annual correlate an little a there. come which There's to

We will in still the And full are now the in quarters getting revenue the revenue get for here terms battling at we expect expect, come, growth have and to that received. et recently to things in year we and growth. strong come the to to with next the the those companies orders many needs on landed that XX% generate executed orders pipeline revenue now paid, that's books we've that insurance cetera, that will build for prescriptions that many the of with over already quarters get we be

lag between and catches a that. So there's have always when growth in spot revenue to a when we up there orders

And on then some the Got NiCO. to if anything then as growth you're like on CM-XXXX case, factor we that's of Management side, base That's share in would year. relates outlook should be contribution seems great, is really given Pain from XX% and how it I was somewhat your could the patient business XXXX the this a tracking too. just plus OpEx And wondering And achievable helpful. monitoring any side year. color It next maybe it. for you for directional

tentatively XX%. little of Management or the we a Pain business, I in looking terms are lower think at growth

revenue we division growth probably to will the of in -- a how next XX% in to because going for year guess be XX% and of we're is -- also to be activity of somewhere that probably in of of NiCO good range first the and the order So additional that. terms further data half place generations in of take with the CM-XXXX lot dealing terms FDA XXXX for a the collecting and and in fare expect

be -- see that we'll to second in half so lucky of the expect We some next year. revenue

And in side, this of then Shagun, kind profitability the year, as I think range. we're far the flattish on

made. expect on we investments to would side we somewhere year, probably of now, is on next I be DMS think least EPS leverage I the right as the at contribution up we've revenue range some the side the XX%, that think in immaterial. But

The next Wainwright. question H.C. from Yi with comes Chen

for products Pain X NexWave? are whether the are you connection products products the how these and Could comment prescription used of terms in the on Management in ROG they products new of with

Yes, absolutely.

So CryoHeat, our the that and only, and new complement added, are Zynex device prescribed products private-labeled TLSO, and frequently they all are within X the and Pain line Management flagship we Wrist are therapy fall the and our Hot prescription Cold devices. Brace They NexWave together.

fall a is one-stop within trying essentially, what pay accomplish noninvasive, we're shop we they prescribers for for -- solutions to become for nonaddictive that. looking management So

third X the for include growth order products that does XX% quarter, as reported the well? So the

Yes.

will order those your So going forward, reported correct? products, include X growth

Correct.

we Correct but been growth. distributed they have products, of new products are order products. in X included always included those and have a always distribute number These --

the pretty in with we've what So consistent past. it's done

after prescription example which surgery. by in companies. a prescriptions A X way, is back after that cases, the orthopedic paid use of NexWave patient good is A insurance the portion independently or and cold immediately prescription. to CryoHeat get is And they gets support with fantastic right really by same the the along low some and

will example lines billing We same So that companies that would pay prescriptions, for. be it insurance X patient, separately get and for. X an be the

of to a quarter? total give in new the of us third these by estimate revenue represented the you percentage rough as revenue X percentage products Could as a the

of products are XX% The distributed device revenue. about our

similar gross a have margin to they compared NexWave? And

similar. it's Yes,

take Most them the same wouldn't else on. we

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

you us today. Thank joining for

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

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

disconnect. now may You