Zynex Reports Fourth Quarter and Full Year 2023 Financial Results
FY 2023 Revenue Increased 17% to
Company Announces Additional
Key Fourth Quarter and FY 2023 Highlights and Business Update
- FY 2023 revenue increased 17% year-over-year to
$184.3 million ; Q4 2023 revenue decreased 3% year-over-year to$47.3 million due to a$6.2 million non-recurring write-off of slow collecting receivables from a prior period which are booked as a charge against revenue. - FY 2023 net income of
$9.7 million ; Diluted EPS$0.27 ; Q4 2023 net income of$1.2 million ; Diluted EPS$0.04 . - FY 2023 orders increased 43% year-over-year; Q4 orders increased 29% year-over-year, the highest number of orders in Company history for the seventh consecutive quarter.
- Company record FY 2023 cash flow from operations of
$17.8 million , a 29% year-over-year increase. - Repurchased
$38.4 million of the Company's common stock in 2023.
Management Commentary
"2023 was a year of continued execution for
"During the fourth quarter the pain management division submitted a 510(k) application to the
"Looking ahead into 2024, we continue to focus on new products and building on our holistic, non-invasive approach to pain management. We expect 2024 net revenue to increase approximately 23% compared to 2023. Part of our revenue growth will come from more aggressively promoting our bracing line of products as well as traction, cold/post-op and compression products. We are in a unique position to deliver solid revenue growth and profitability that allows us to invest in the business and return cash to shareholders at the same time," concluded Sandgaard.
Fourth Quarter 2023 Financial Results
Net revenue was
Gross profit in the quarter ended
Sales and marketing expenses were
General and administrative expenses for the three months ended
Net income for the three months ended
Adjusted EBITDA for the three months ended
FY 2023 Financial Results
Net revenue was
Gross profit in the year ended
Sales and marketing expenses were
General and administrative expenses for the year ended
Net income for the year ended
Adjusted EBITDA for the year ended
As of
The Company continued its latest stock buyback by repurchasing
The Board of Directors approved an additional
The Company may repurchase stock from time to time in open market and negotiated transactions, effective immediately through the next twelve months. These transactions will be made in compliance with the
The Company expects to finance the purchases with existing cash balances, which is not expected to have a material impact on capital levels.
First Quarter and Full Year 2024 Guidance
First quarter 2024 revenue is estimated to be at least
The Company expects 2024 net revenue of at least
Conference Call and Webcast Details
To register and participate in the webcast, interested parties should click on the following link or dial in approximately 10-15 minutes prior to the webcast: 4Q & Full Year 2023 Webcast Link
International number: 646-357-8785
Non-GAAP Financial Measures
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, as amended. our results of operations and the plans, strategies and objectives for future operations; the timing and scope of any potential stock repurchase; and other similar statements.
Words such as "anticipate," "believe," "continue," "could," "designed," "endeavor," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "preliminary," "will," "would" and similar expressions are intended to identify forward-looking statements. The express or implied forward-looking statements included in this press release are only predictions and are subject to a number of risks, uncertainties and assumptions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. The Company makes no express or implied representation or warranty as to the completeness of forward-looking statements or, in the case of projections, as to their attainability or the accuracy and completeness of the assumptions from which they are derived. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain 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 for our products from health insurance companies; our dependence on third party manufacturers to produce our products on time and to our specifications' implementation of our sales strategy including a strong direct sales force, the impact of COVID-19 on the global economy; market conditions; the timing, scope and possibility that the repurchase program may be suspended or discontinued; economic factors, such as interest rate fluctuations; and other risks described in our filings with the
These and other risks are described in our filings with the
About Zynex, Inc.
Investor Relations Contact:
ZYXI@mzgroup.us
+949 694 9594
CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS) (unaudited) |
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2023 |
|
2022 |
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ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
44,579 |
|
$ |
20,144 |
Accounts receivable, net |
|
|
26,838 |
|
|
35,063 |
Inventory, net |
|
|
13,106 |
|
|
13,484 |
Prepaid expenses and other |
|
|
3,332 |
|
|
868 |
Total current assets |
|
|
87,855 |
|
|
69,559 |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
3,114 |
|
|
2,175 |
Operating lease asset |
|
|
12,515 |
|
|
12,841 |
Finance lease asset |
|
|
587 |
|
|
270 |
Deposits |
|
|
409 |
|
|
591 |
Intangible assets, net of accumulated amortization |
|
|
8,158 |
|
|
9,067 |
|
|
|
20,401 |
|
|
20,401 |
Deferred income taxes |
|
|
3,865 |
|
|
1,562 |
Total assets |
|
$ |
136,904 |
|
$ |
116,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
|
8,433 |
|
|
5,617 |
Operating lease liability |
|
|
3,729 |
|
|
2,476 |
Finance lease liability |
|
|
196 |
|
|
128 |
Income taxes payable |
|
|
633 |
|
|
1,995 |
Current portion of debt |
|
|
— |
|
|
5,333 |
Accrued payroll and related taxes |
|
|
5,541 |
|
|
5,537 |
Total current liabilities |
|
|
18,532 |
|
|
21,086 |
Long-term liabilities: |
|
|
|
|
|
|
Long-term portion of debt, less issuance costs |
|
|
— |
|
|
5,293 |
Convertible senior notes, less issuance costs |
|
|
57,605 |
|
|
— |
Contingent consideration |
|
|
— |
|
|
10,000 |
Operating lease liability |
|
|
14,181 |
|
|
13,541 |
Finance lease liability |
|
|
457 |
|
|
188 |
Total liabilities |
|
|
90,775 |
|
|
50,108 |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Common stock |
|
|
33 |
|
|
39 |
Additional paid-in capital |
|
|
90,878 |
|
|
82,431 |
|
|
|
(71,562) |
|
|
(33,160) |
Retained earnings |
|
|
26,780 |
|
|
17,048 |
Total stockholders' equity |
|
|
46,129 |
|
|
66,358 |
Total liabilities and stockholders' equity |
|
$ |
136,904 |
|
$ |
116,466 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (unaudited) |
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For the Three Months Ended |
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For the Year Ended |
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|
2023 |
|
2022 |
|
2023 |
|
2022 |
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NET REVENUE |
|
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|
|
|
|
|
|
|
|
|
|
Devices |
|
$ |
16,279 |
|
$ |
15,918 |
|
$ |
58,822 |
|
$ |
43,497 |
Supplies |
|
|
31,005 |
|
|
32,887 |
|
|
125,500 |
|
|
114,670 |
Total net revenue |
|
|
47,284 |
|
|
48,805 |
|
|
184,322 |
|
|
158,167 |
|
|
|
|
|
|
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|
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COSTS OF REVENUE AND |
|
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|
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|
|
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Costs of revenue - devices and supplies |
|
|
10,271 |
|
|
9,388 |
|
|
38,366 |
|
|
32,005 |
Sales and marketing |
|
|
21,677 |
|
|
19,166 |
|
|
86,659 |
|
|
67,116 |
General and administrative |
|
|
13,038 |
|
|
10,141 |
|
|
48,517 |
|
|
36,108 |
Total costs of revenue and operating expenses |
|
|
44,986 |
|
|
38,695 |
|
|
173,542 |
|
|
135,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
2,298 |
|
|
10,110 |
|
|
10,780 |
|
|
22,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of fixed assets |
|
|
— |
|
|
— |
|
|
39 |
|
|
— |
Gain (loss) on change in fair value of |
|
|
(1) |
|
|
(300) |
|
|
2,854 |
|
|
(300) |
Interest expense, net |
|
|
(366) |
|
|
(95) |
|
|
(1,094) |
|
|
(440) |
Other income (expense), net |
|
|
(367) |
|
|
(395) |
|
|
1,799 |
|
|
(740) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations before income taxes |
|
|
1,931 |
|
|
9,715 |
|
|
12,579 |
|
|
22,198 |
Income tax expense |
|
|
716 |
|
|
2,263 |
|
|
2,847 |
|
|
5,150 |
Net income |
|
$ |
1,215 |
|
$ |
7,452 |
|
$ |
9,732 |
|
$ |
17,048 |
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
$ |
0.20 |
|
$ |
0.27 |
|
$ |
0.44 |
Diluted |
|
$ |
0.04 |
|
$ |
0.20 |
|
$ |
0.27 |
|
$ |
0.44 |
Weighted average basic shares outstanding |
|
|
33,595 |
|
|
37,236 |
|
|
35,555 |
|
|
38,467 |
Weighted average diluted shares outstanding |
|
|
34,013 |
|
|
37,960 |
|
|
36,142 |
|
|
39,127 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (AMOUNTS IN THOUSANDS) (unaudited) |
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For the Year Ended |
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2023 |
|
2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
$ |
9,732 |
|
$ |
17,048 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
2,684 |
|
|
2,197 |
Amortization |
|
|
1,536 |
|
|
930 |
Non-cash reserve charges |
|
|
(91) |
|
|
82 |
Stock-based compensation |
|
|
2,296 |
|
|
2,342 |
Non-cash lease expense |
|
|
904 |
|
|
800 |
Benefit for deferred income taxes |
|
|
(2,303) |
|
|
(851) |
Gain on change in fair value of contingent consideration |
|
|
(2,854) |
|
|
300 |
Gain on sale of fixed assets |
|
|
(39) |
|
|
— |
Change in operating assets and liabilities: |
|
|
|
|
|
|
Short-term investments |
|
|
(190) |
|
|
— |
Accounts receivable |
|
|
8,225 |
|
|
(6,430) |
Prepaid and other assets |
|
|
(1,150) |
|
|
(180) |
Accounts payable and other accrued expenses |
|
|
269 |
|
|
1,834 |
Inventory |
|
|
(1,445) |
|
|
(4,320) |
Deposits |
|
|
182 |
|
|
(6) |
Net cash provided by operating activities |
|
|
17,756 |
|
|
13,746 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(1,206) |
|
|
(418) |
Purchase of short-term investments |
|
|
(9,810) |
|
|
— |
Maturity of short-term investments |
|
|
10,000 |
|
|
— |
Proceeds on sale of fixed assets |
|
|
50 |
|
|
— |
Net cash used in investing activities |
|
|
(966) |
|
|
(418) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Payments on finance lease obligations |
|
|
(128) |
|
|
(118) |
Cash dividends paid |
|
|
(3) |
|
|
(3,613) |
Purchase of treasury stock |
|
|
(37,924) |
|
|
(26,426) |
Proceeds from issuance of convertible senior notes, net of issuance costs |
|
|
57,018 |
|
|
— |
Proceeds from the issuance of common stock on stock-based awards |
|
|
86 |
|
|
46 |
Principal payments on long-term debt |
|
|
(10,667) |
|
|
(5,333) |
Taxes withheld and paid on employees' equity awards |
|
|
(737) |
|
|
(352) |
Net cash provided by (used in) financing activities |
|
|
7,645 |
|
|
(35,796) |
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
24,435 |
|
|
(22,468) |
Cash at beginning of period |
|
|
20,144 |
|
|
42,612 |
Cash at end of period |
|
$ |
44,579 |
|
$ |
20,144 |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (AMOUNTS IN THOUSANDS) (unaudited) |
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For the Three Months Ended |
|
For the Year Ended |
|
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,215 |
|
$ |
7,452 |
|
$ |
9,732 |
|
$ |
17,048 |
|
Depreciation and Amortization* |
|
|
423 |
|
|
423 |
|
|
1,660 |
|
|
1,648 |
|
Stock-based compensation expense |
|
|
676 |
|
|
640 |
|
|
2,296 |
|
|
2,342 |
|
Interest expense and other, net |
|
|
366 |
|
|
95 |
|
|
1,055 |
|
|
440 |
|
Change in value of contingent consideration |
|
|
1 |
|
|
300 |
|
|
(2,854) |
|
|
300 |
|
Non-cash lease expense ** |
|
|
362 |
|
|
183 |
|
|
1,340 |
|
|
1,165 |
|
Non-cash receivables adjustment *** |
|
|
6,183 |
|
|
— |
|
|
6,183 |
|
|
— |
|
Income tax expense |
|
|
716 |
|
|
2,263 |
|
|
2,847 |
|
|
5,150 |
|
Adjusted EBITDA |
|
$ |
9,942 |
|
$ |
11,356 |
|
$ |
22,259 |
|
$ |
28,093 |
|
% of Net Revenue |
|
|
21 % |
|
|
23 % |
|
|
12 % |
|
|
18 % |
|
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|
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|
|
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* Depreciation does not include amounts related to units on lease to third parties which are depreciated and included in cost of goods sold. |
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** Amount expensed under building lease agreements in excess of cash payments due to abated rent. |
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*** Amount of non-recurring reduction in net revenue, related to slow collecting receivables. |
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