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Zynex Announces First Quarter 2011 Financial Results

^{Published on 2011-05-06 05:05:42 - Market Wire}
 

LONE TREE, Colo.--([ BUSINESS WIRE ])--Zynex, Inc. (OTCBB: [ ZYXI ]), a provider of non-invasive medical devices for electrotherapy and stroke rehabilitation, neurological diagnosis and cardiac monitoring, announces its first quarter 2011 financial results.

The Companya™s net revenue increased 36% to $6,633,000 for the quarter ended March 31, 2011, as compared to $4,875,000 for the quarter ended March 31, 2010. During the first quarter of 2011, the Company continued to aggressively expand its geographic sales reach by adding 18 new domestic sales representatives. The Company anticipates that it will continue to add sales representatives throughout the remainder of 2011.

The Company reported a gross profit of $5,189,000 and SG&A expenses of $5,328,000 for the first quarter of 2011, as compared to a gross profit of $3,879,000 and SG&A expenses of $3,847,000 for the comparable period in 2010. The Companya™s 38% increase in SG&A during the first quarter of 2011 as compared to the first quarter of 2010 was a direct result of the Companya™s specific investments made, primarily during the later part of 2010, to expand its sales force and improve its billing and reimbursement departments in preparation for the increasing order intake. During the first quarter of 2011, SG&A also included charges for the retirement of the Vice President of Billing. The Company reported a first quarter 2011 loss from operations of $139,000, loss before income tax of $197,000 and net loss of $110,000, versus a first quarter 2010 income from operations of $32,000, loss before income tax of $64,000 and net loss of $67,000.

Thomas Sandgaard, CEO stated: aWe were pleased with the 36% increase in reported net revenue for the first quarter of 2011, compared to the first quarter of 2010, as the first few months of the calendar year is typically the slowest period for us. Since we primarily deal with health insurance companies, the beginning of each year represents a reset for most patient insurance deductibles, which lowers the amount of expected revenue we are able to report. Achieving a 36% increase in net revenue is representative of the strong demand for our products and volume of orders we continue to obtain quarter over quarter. During 2010, we built an infrastructure for our anticipated growth in 2011 and beyond, thus we expected more SG&A expenses for the first quarter of 2011. However, we continue to believe we are poised to execute on our strategy and still expect to hit our originally estimated net revenue number of between $30 million and $32 million and net income per diluted share of between $0.08 and $0.11 for 2011.a

Mr. Sandgaard continued: aWe have made further progress on our blood volume monitor device, currently being developed in our Zynex Monitoring Solutions subsidiary and have recently signed an agreement with OmniVincit, LLC to conduct the first clinical evaluation of our blood monitor device. We have also been actively evaluating our options within our Zynex NeuroDiagnostics subsidiary, in which we are studying the identified markets, evaluating our organic product development options and identifying possible acquisition targets. Our long term goal is to diversify our revenue base currently being driven by our Zynex Medical, electrotherapy subsidiary, in which we believe our two new subsidiaries, Zynex Monitoring Solutions and Zynex NeuroDiagnostics, will allow us to accomplish through access to additional large markets.a

Outlook:
The Company confirms its initial guidance of anticipated net revenues of between $30 million and $32 million for 2011 and net income per diluted share of between $0.08 and $0.11 for 2011.

Conference Call and Webcast Information:
Zynex, Inc. will host an earnings conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today to discuss its first quarter 2011 results. Please note questions can only be submitted via the webcast user interface. Parties without access to the internet may join the presentation in listen only mode by dialing the toll free number provided below.

Webcast Information- [ http://www.visualwebcaster.com/event.asp?id=79208 ]

Conference Call Information- 866-223-7781, pass-code ZYNEX

(1)Reconciliation of unaudited U.S. Generally Accepted Accounting Principles (GAAP) Net loss
to Adjusted Earnings Before Interest Taxes Depreciation Amortization (EBITDA)

About Zynex

Zynex, Inc. (founded in 1996), operates under three primary business segments; Zynex Medical, Zynex NeuroDiagnostics and Zynex Monitoring Solutions. Zynex Medical engineers, manufactures, markets and sells its own design of electrotherapy medical devices for standard digital electrotherapy, used for pain relief, pain management and stroke and spinal cord injury rehabilitation. Zynex Medicala™s product lines are fully developed, FDA-cleared, commercially sold, and have been developed to uphold the Company's [ mission ] of improving the quality of life for patients suffering from impaired mobility due to stroke, spinal cord injury, or debilitating and chronic pain. Zynex NeuroDiagnostics, currently in the development stage, has been established to market EMG, EEG, sleep pattern, auditory and nerve conductivity neurological diagnosis devices through product development or acquisitions. Zynex Monitoring Solutions, currently in the development stage, has been established to develop and market medical devices for non-invasive cardiac monitoring.

For additional information please visit: [ http://www.ir-site.com/zynex/default.asp ].

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 in order to grow our business, our ability to engage additional sales representatives, the success of such additional sales representatives, 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 and other risks described in our filings with the Securities and Exchange Commission including the aRisk Factorsa section of our Annual Report on Form 10-K for the year ended December 31, 2010.