Zynex Announces Second Quarter 2016 Results

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Aug 22, 2016, 09:45 ET

LONE TREE, Colo., Aug. 22, 2016 /PRNewswire/ -- Zynex (OTCQB: ZYXI), an innovative medical technology company specializing in the manufacture and sale of non-invasive medical devices for pain management, stroke rehabilitation, neuro diagnostics, cardiac and blood volume monitoring, announced today its second quarter 2016 financial results.

President and CEO Commentary:

Thomas Sandgaard, CEO commented: "Revenue came in at $3.3 million, 7% above the second quarter last year. We came closer to a breakeven result with a net loss of $227,000, a significant improvement compared with the second quarter 2015 loss of $501,000.

"Our orders are currently running at a level twice of the same time last year and since our revenue is mostly recurring from monthly rentals and monthly supplies sent to our patients we expect to see higher revenues later this year as more patients continue to use our electrotherapy products, primarily the NexWave device. It is also worth noting that our lack of liquidity has made it difficult to keep up with order volume in production and has slowed down sales growth. We have paid down the balance on our line of credit from the beginning of the year from $4,002,000 to $3,284,000 by the close of second quarter 2016. Our revenue expectation for 2016 remains around $16 million and with positive net income."

Summary of Financial Results:

The Company's net revenue was $3,286,000 for the second quarter of 2016, compared to $3,073,000 for the second quarter of 2015. Gross profit margin in the quarter was 71%.

The Company reported Selling, General and Administrative ("SG&A") expenses of $2,495,000 for the second quarter of 2016, compared to $2,270,000 for the quarter ended June 30, 2015, an increase of $225,000 primarily attributed to an increase in sales commissions.

For the second quarter 2016, the Company reported a net loss of $227,000, or $0.01 per share, compared to a net loss of $501,000, or $0.02 per share in the same period of 2015. For the six months ended June 30, 2016, the Company reported a net loss of $672,000, or $0.02 per share, compared to a net loss of $1,389,000, or $0.04 per share in the first half of 2015.

Cash provided by operations in the first half 2016 was $953,000 versus uses of negative $194,000 in the first half of 2015.

The Company's line of credit balance as of June 30, 2016 was $3,284,000, a reduction of $718,000 since December 31, 2015.

The company holds it second quarter 2016 on Monday, August 22 at 9:00am MT (11:00am ET).

To register and participate in the webcast, interested parties should click on the following link approximately 10-15 minutes prior to the webcast:

https://www.webcaster4.com/Webcast/Page/1487/16775

Phone Access Details:

US Participant Toll Free Dial-In Number:	1-877-870-4263
International Dial-In Number:	1-412-317-0790

About Zynex
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
Statements made in this presentation include financial estimates and forward-looking statements that are not historical facts. Each of these estimates and forward-looking statements involves risk and uncertainties. These estimates are based on present circumstances, information currently available, and assumptions about future revenues, industry growth, and general economic conditions. Estimates are inherently uncertain as they are based on assumptions concerning future events. No representations can be made as to the accuracy of such information or the reliability of such assumptions. Accordingly, actual revenues and expenditures may vary significantly from the Company's estimates, and actual results or developments may differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ from the financial estimates and forward-looking statements in this presentation include those described in the Company' s filings with the Securities and Exchange Commission, including the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Therefore, neither the Company's estimates nor the assumptions upon which they are based are to be interpreted as a guarantee or promise of the Company or management. The Company has no obligation to modify, amend, update, alter, or change the estimates contained herein.

Contact: Zynex, Inc. 303-703-4906

ZYNEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF SHARES)

	June 30,		December 31,
	2016		2015
	(UNAUDITED)
ASSETS
Current Assets:
Cash	$	29	$	8
Accounts receivable, net		3,237		2,426
Inventory, net		164		305
Prepaid expenses		123		27
Total current assets		3,553		2,766
Property and equipment, net		611		801
Deposits		55		55
Intangible assets, net		54		74
Total assets	$	4,273	$	3,696
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Line of credit	$	3,284	$	4,002
Current portion of capital leases		109		109
Accounts payable		2,947		2,477
Deferred revenue		370		89
Income taxes payable		79		79
Accrued payroll and payroll taxes		765		484
Deferred insurance reimbursement		880		-
Accrued expenses		214		299
Total current liabilities		8,648		7,539
Capitalized leases, less current portion		181		216
Warranty liability		12		12
Total liabilities		8,841		7,767
Stockholders' Deficit:
Preferred stock; $.001 par value, 10,000,000 shares authorized, no shares issued or outstanding				-
Common stock, $.001 par value, 100,000,000 shares authorized, 31,271,234 shares issued and outstanding		31		31
Paid-in capital		6,006		5,832
Accumulated deficit		(10,516)		(9,845)
Total Zynex, Inc. stockholders' deficit		(4,479)		(3,982)
Non-controlling interest		(89)		(89)
Total stockholders' deficit		(4,568)		(4,071)
Total liabilities and stockholders' deficit	$	4,273	$	3,696

ZYNEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Net revenue:
Rental	$	823	$	517	$	1,902	$	844
Sales		2,463		2,556		4,861		5,412
		3,286		3,073		6,763		6,256
Operating expenses:
Cost of revenue – rental, product & supply		941		1,166		1,924		2,411


Selling, general and administrative expense		2,495		2,270		5,340		4,980
Income (loss) from operations		(150)		(363)		(500)		(1,135)
Other income (expense):
Interest expense		(77)		(138)		(172)		(270)
Other income:		—		—		—		—
Total other income (expense)		(77)		(138)		(172)		(270)
Loss before income taxes		(227)		(501)		(672)		(1,405)
Income tax benefit		—		—		—		—
Net loss		(227)		(501)		(672)		(1,405)
Plus: Net loss – noncontrolling interest				8				16
Net loss – attributable to Zynex, Inc.	$	(227)	$	(493)	$	(672)	$	(1,389)
Net loss per share – attributable to Zynex, Inc.:
Basic	$	(0.01)	$	(0.02)	$	(0.02)	$	(0.04)
Diluted	$	(0.01)	$	(0.02)	$	(0.02)	$	(0.04)
Weighted - average number of common shares outstanding:
Basic		31,271,234		31,271,234		31,271,234		31,271,234
Diluted		31,271,234		31,271,234		31,271,234		31,271,234

ZYNEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, AMOUNTS IN THOUSANDS)

	Six months ended
	June 30,
	2016		2015
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	953	$	(194)
Cash flows from investing activities:
Change in inventory used for rental		(178)		73
Net cash (used in) provided by investing activities		(178)		73
Cash flows from financing activities:
Net (repayments) borrowings on line of credit		(718)		178
Payments on capital leases and other obligations		(36)		(33)
Net cash (used in) provided by financing activities		(754)		145
Net increase in cash		21		24
Cash at the beginning of the period		8		63
Cash at the end of the period	$	29	$	87
Supplemental cash flow information:
Interest paid	$	172	$	258
Income taxes paid (including interest and penalties)	$	-	$	-