President and CEO Commentary:
Thomas Sandgaard, CEO commented: “We made good progress in the electrotherapy segment during the year slightly increasing our order production and in the third quarter we significantly increased how much we collect per file compared to earlier periods.
The electrotherapy industry experienced a significant development earlier this month when our largest competitor DJO/Empi announced the closure of their Empi electrotherapy division effective November 2015. Empi previously held a large share of the electrotherapy market with approximately $250 million in annual revenue. We believe this presents a significant opportunity for our existing sales team to capture accounts previously serviced by Empi and an opportunity for recruiting former Empi reps in new areas where we do not have representation currently.
Sandgaard continued: We received feedback from the FDA on our Blood Volume Monitor application and are now preparing a response for submittal on the clearance process. We continue to collect data from hospitals around the world in preparation for the market launch.”
Summary of Financial Results:
The Company’s net revenue was $2,667,000 for the third quarter of 2015, compared to $4,404,000 for the third quarter of 2014. For the nine month period of 2015, net revenue was $8,923,000 compared to $8,921,000 in the same 2014 period indicating that revenue has been flat the past nearly two years. In the previous year third quarter 2014 period, revenue was positively impacted by a backlog of consumable supplies which shifted the revenue from the second quarter into the third quarter 2014 period.
The Company reported Selling, General and Administrative expenses of $1,943,000 for the third quarter of 2015, compared to $2,609,000 for the quarter ended September 30, 2014, a 26% reduction. For the nine months ended September 30, 2015, SG&A expenses were $6,923,000 compared to $9,012,000 in the 2014 period. Decreases in the Company’s SG&A expenses are primarily attributable to reduced operating expenses, headcount reductions, and lower building rent.
For the third quarter 2015, the Company reported a net loss of $322,000, or $0.01 per share, compared to net income of $258,000, or $0.01 per share in 2014. For the nine months ended September 30, 2015, the Company reported a net loss of $1,711,000, or $0.05 per share, compared to a net loss of $6,724,000, or $0.22 per share in 2014.
The Company’s line of credit balance as of September 30, 2015 was $4,322,000, a reduction of nearly $300,000 since June 30 2015.
Webcast Details: Tuesday, November 17, 2015 at 9:00 a.m. MT – 11:00 a.m. ET
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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
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 or augment our liquidity in order to continue our business, the success of our compound pharmacy and international expansion efforts, 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, 2014.