{"id":317,"date":"2020-06-21T23:35:54","date_gmt":"2020-06-21T23:35:54","guid":{"rendered":"https:\/\/mikemcmahon.info\/coach\/?p=317"},"modified":"2020-06-21T23:35:54","modified_gmt":"2020-06-21T23:35:54","slug":"zynex","status":"publish","type":"post","link":"https:\/\/mikemcmahon.info\/coach\/zynex\/","title":{"rendered":"Zynex"},"content":{"rendered":"\n

One sentence pitch<\/strong>:\u00a0Zynex is a medical device delivering electrotherapy devices for use in pain management, physical rehabilitation, neurological diagnosis and cardiac monitoring.<\/p>\n\n\n\n

Zynex Ticker :\u00a0\u00a0\u00a0\u00a0ZYXI<\/p>\n\n\n\n

6\/19\/2020 Stock Price : $24.06<\/p>\n\n\n\n

6\/19\/2020 Market Cap : $798.6M<\/p>\n\n\n\n

Total Shares Outstanding Recent Quarterly Report :\u00a0 \u00a033.192 million shares<\/p>\n\n\n\n

<\/td>Jan 2020<\/strong><\/td>March Low<\/strong><\/td>6\/19\/2020<\/strong><\/td>YTD %<\/strong><\/td><\/tr>
Zynex<\/td>$7.92<\/td>$9.16<\/td>$24.16<\/td>205%<\/td><\/tr>
S&P 500<\/td>3231<\/td>2237<\/td>3098<\/td>-4%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Zynex Investor Relations Page<\/p>\n\n\n\n

https:\/\/zynexmed.investorroom.com\/<\/a><\/p>\n\n\n\n

Zynex SEC Page<\/p>\n\n\n\n

https:\/\/www.sec.gov\/cgi-bin\/browse-edgar?CIK=zyxi&Find=Search&owner=exclude&action=getcompany<\/a><\/p>\n\n\n\n

Zynex Glassdoor Ratings<\/p>\n\n\n\n

https:\/\/www.glassdoor.com\/Reviews\/Zynex-Medical-Reviews-E635432.htm<\/a><\/p>\n\n\n\n

Zynex Overview<\/strong><\/p>\n\n\n\n

Zynex Medical is a medical device manufacturer that produces and markets electrotherapy devices for use in pain management, physical rehabilitation, neurological diagnosis and cardiac monitoring. Thomas Sandgaard founded Zynex Medical in 1996. Listed NASDAQ 2019, included in Russell 2000 in 2019, included in S&P SmallCap 600 in 2020.<\/p>\n\n\n\n

Products<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

NexWave: Electrotherapy for Pain Management<\/strong><\/p>\n\n\n\n

Pain relief, augments healing, alleviates swelling through increased blood circulation, muscle re-education, prevention of muscle disuse atrophy, relaxation of muscle spasms.<\/p>\n\n\n\n

Requires a prescription & reimbursed by health insurance<\/p>\n\n\n\n

InWave: Electrotherapy for Incontinence<\/strong>\u00a0 \u00a0<\/p>\n\n\n\n

Delivers a nonsurgical, drug-free therapy that offers a conservative treatment to manage incontinence and is of relatively low cost to patients.<\/p>\n\n\n\n

NeuroMove: Electrotherapy for Stroke Rehab\u00a0<\/strong><\/p>\n\n\n\n

Augment healing, as well as assist in recovery for stroke, spinal cord injuries and traumatic brain injury, retrains muscles, increases range of motion.<\/p>\n\n\n\n

Financial Performance<\/strong><\/p>\n\n\n\n

\u00a0<\/td>FY 2018<\/strong><\/td>FY 2019<\/strong><\/td>Ist Qtr 2019<\/strong><\/td>Ist Qtr 2020<\/strong><\/td><\/tr>
Net Revenue<\/td>$31,917<\/td>$45,472<\/td>$9,196<\/td>$15,228<\/td><\/tr>
Cost of Revenue<\/td>6,038<\/td>8,814<\/td>1,784<\/td>3,401<\/td><\/tr>
Net Margin<\/td>$25,879<\/td>$36,658<\/td>$7,412<\/td>$11,827<\/td><\/tr>
\u00a0<\/td>81%<\/td>81%<\/td>81%<\/td>78%<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Income from Ops<\/td>10,370<\/td>11,066<\/td>2,256<\/td>2,458<\/td><\/tr>
<\/td>32%<\/td>24%<\/td>25%<\/td>16%<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Net Income<\/td>$9,552<\/td>$9,492<\/td>$2,350<\/td>$2,937<\/td><\/tr>
<\/td>30%<\/td>21%<\/td>26%<\/td>19%<\/td><\/tr>
Diluted EPS<\/td>$0.28<\/td>$0.28<\/td>$0.07<\/td>$0.09<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Cash<\/td>$10,128<\/td>$14,040<\/td>$9,419<\/td>$14,458<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Long-term liabilities<\/td><\/td><\/td><\/td><\/td><\/tr>
Operating Leases<\/td>$671<\/td>$2,133<\/td>$2,787<\/td>$3,282<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Cash Flow Operations<\/td>$9,408<\/td>$6,303<\/td>$1,764<\/td>$632<\/td><\/tr>
Cash Flow Investing<\/td>-1,082<\/td>-160<\/td>-46<\/td>-297<\/td><\/tr>
Cash Flow Financing<\/td>-3,763<\/td>-2,231<\/td>-709<\/td>$545<\/td><\/tr>
Net Increase in Cash<\/td>4,563<\/td>3,912<\/td>1,009<\/td>880<\/td><\/tr>
<\/td><\/td><\/td><\/td><\/td><\/tr>
Stock Based Compensation<\/td>$370<\/td>$820<\/td>$140<\/td>$497<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

\u2981 Revenue growth is up 66% in 1st quarter 2020
\u2981 Gross margin was 78% down from 81% for comparable 1st quarters
\u2981 Net income increased to $2.9M from $2.4M in 1st quarter 2020
\u2981 Cash is $14.M with no long-term debt<\/p>\n\n\n\n

Device revenue increased 74% to $3.4 million compared to $2 million last year. Supplies revenue increased 63% year-over-year to $11.8 million from $7.2 million. Sales and marketing expenses increased to 111% year-over-year as Zynex continues to aggressively grow their sales force. G&A expense grew 55% year-over-year, much of the increase was related to the increased headcount in our billing and patient support functions related to our order growth.<\/p>\n\n\n\n

Other Financial Highlights<\/strong><\/p>\n\n\n\n

\u2981 $3.8 million is stock buybacks in 2017-2019
\u2981 Issued special dividend of $.07 in 4th quarter 2018
\u2981 Full guidance for 2020 \u2013 revenue $78 to $83 million<\/p>\n\n\n\n

Zynex Management<\/strong><\/p>\n\n\n\n

Thomas Sandgaard \u2013 Founder, CEO and Chairman since 1996. Glassdoor approval rating of 94% with 63 reviews.<\/p>\n\n\n\n

Dan Moorhead \u2013 CFO Joined the company in June 2017. Mr. Moorhead has over 20 years of experience in a variety of finance roles serving both public and private companies.<\/p>\n\n\n\n

Joseph Papandrea \u2013 COO Joined the company in 2019 and leads operations including billing, patient support, sales and device production.<\/p>\n\n\n\n

Chelle Van Burkleo \u2013 VP Sales\u00a0 Joined the company in 2020 and brings more than 20 years of experience and an exceptional level of expertise in med-tech device sales.<\/p>\n\n\n\n

Future Outlook<\/strong><\/p>\n\n\n\n

Zynex has developed blood monitoring device (CM-1500). Zynex has received patents from the United States and the EU. Zynex has obtained FDA 510 (k<\/a>) clearance for marketing of the product.<\/p>\n\n\n\n

From Zynex June 2020 investor presentation: Increase national footprint with additional direct sales representatives (20-25 direct sales reps a month), grow recurring revenue streams and generate consistent net earnings and positive free cash flow.<\/p>\n\n\n\n

Risks<\/strong><\/p>\n\n\n\n

Zynex sourced approximately 57% of the components for its electrotherapy products from two significant vendors during the 1st<\/sup> quarter, 2020.<\/p>\n\n\n\n

The addition of sales force during the pandemic presents challenges for the sales force in being able to contact physicians. Zynex had provide the sales force with Zoom training.<\/p>\n\n\n\n

Disclaimer: I do not have any formal recommendation for or against this stock, so don\u2019t buy or sell stocks based solely on what you read.<\/em><\/p>\n\n\n\n

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