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 Company'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 Company'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 Company'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: "We 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."
Mr. Sandgaard continued: "We 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."
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.
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