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Zynex Announces Third Quarter 2013 Financial Results

ID: 1280574
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(businesspress24) - LONE TREE, CO -- (Marketwired) -- 11/07/13 -- Zynex, Inc. (OTCQB: ZYXI), a provider and developer of non-invasive medical devices for electrotherapy and stroke rehabilitation, neurological diagnosis and cardiac monitoring, announces its third quarter 2013 financial results.

The Company's total net revenue decreased 49% to $5,191,000 for the three months ended September 30, 2013 from $10,102,000 for the three months ended September 30, 2012. Year to date net revenue of $18,331,000 decreased 37% as compared to the prior year to date net revenue of $29,072,000. The decline in net revenue for the three and nine months ended September 30, 2013 as compared to the same periods in 2012 was a direct result of the decline in orders from the Company's Zynex Medical electrotherapy products.

The Company reported a gross profit of $3,645,000, or 70% of net revenue, for the third quarter of 2013, and $12,711,000, or 69% of net revenue, for the first nine months of 2013, as compared to a gross profit of $7,886,000, or 78% of net revenue, for the third quarter of 2012 and $23,257,000, or 80% of net revenue, for the first nine months of 2012. The decrease in the Company's third quarter and year to date 2013 gross profit percentage, as compared to the same periods in 2012, was primarily a result of the lower sales volume for the periods, as the Company had less net revenue to cover manufacturing costs and incremental expenses incurred because of an increase to the Company's allowance for obsolete inventory, due to excess quantities remaining in the field.

The Company reported Selling, General and Administrative (SG&A) expenses of $4,713,000 or 91% of net revenue, for the three months ended September 30, 2013, and $16,699,000, or 91% of net revenue, for the nine months ended September 30, 2013, as compared to $7,174,000, or 71% of net revenue, for the three months ended September 30, 2012 and $21,127,000, or 73% of net revenue for the nine months ended September 30, 2012. Decreases in the Company's SG&A expenses during the third quarter and year to date 2013 as compared to the same periods in 2012, were primarily attributable to lower sales commissions, based on the decrease in orders and net revenue, and a reduction in headcount.

The Company generated a third quarter 2013 loss from operations of $1,068,000, loss before income taxes of $1,204,000 and net loss of $738,000, or $0.02 per share, versus a third quarter of 2012 income from operations of $712,000, income before income taxes of $587,000 and net income of $358,000, or $0.01 per share. The Company generated a 2013 year to date loss from operations of $3,988,000, loss before income taxes of $4,396,000 and net loss of $2,758,000, or $0.09 per share, versus a 2012 year to date income from operations of $2,130,000, income before income taxes of $1,824,000 and net income of $1,151,000, or $0.04 per share.

Thomas Sandgaard, CEO stated: "Zynex has encountered industry challenges this year related to health care reform and reimbursement changes that negatively affected the demand for our electrotherapy products. These industry factors have had a negative impact on our financial results, causing us to report significantly less revenue than in the prior year comparable periods and a current year to date net loss. However, we have seen orders for our core Zynex Medical revenue base stabilize and have focused on capitalizing on new opportunities across all of our divisions. In our Zynex Medical sales channel, we added new products that are less impacted by insurance reimbursement. In Zynex NeuroDiagnostics, we expanded our sales force and are distributing electroencephalography (EEG) devices; sleep diagnostic products, mobile sleep diagnostic devices and a sleep apnea treatment device. In our Zynex Billing and Consulting division we expect increased service-based revenue going forward through the addition of medical practitioner billing contracts."

Mr. Sandgaard continued, "We also continued to make adjustments to our fixed expenses during the third quarter and have lowered them by approximately $4.2 million annually. During the second quarter, we successfully renegotiated our existing building lease, in which, our base rent has been lowered and we are now operating in an approximate twelve month free rent period, which results in approximately $1.5 million of cash savings over the next twelve months, which began May of 2013. Because of these expense reductions, we have begun to feel the cash impact, as our cash flow from operations for the third quarter was positive and the balance on our revolving line of credit decreased as compared to the second quarter of this year. We are closely monitoring the demand for our Zynex Medical products, which may result in additional cost cutting measures in future periods, as we are committed to returning this company to profitability."

Conference Call and Webcast Information:

Zynex, Inc. will host a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) today to discuss its third quarter 2013 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.

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(unaudited, amounts in thousands, except per share amounts)

Zynex (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 electrotherapy, used for pain management and rehabilitation. Zynex Medical's product lines are fully developed, FDA-cleared and commercially sold world-wide. Zynex NeuroDiagnostics, sells the company's proprietary NeuroMove device designed to help stroke and spinal cord injury patients and is currently expanding into markets for EMG, EEG, sleep pattern, auditory and nerve conductivity neurological diagnosis devices through product development and acquisitions. Zynex Monitoring Solutions, currently in the development stage, was established to develop and market medical devices for non-invasive cardiac monitoring.

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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 "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2012.

Zynex, Inc.
Anthony Scalese

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medical, medical-device, healthcare, drug, free-pain-control, non, invasive,

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published by: Marketwired
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Date: 11/07/2013 - 13:00
Language: English
News-ID 1280574
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Firma: Zynex, Inc.
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