Zynex(US:ZYXI)2021-11-03 01:09Financial Data and Key Metrics Changes - The company reported record revenue of $34.8 million for Q3 2021, a 74% increase compared to the same quarter last year and a 12% sequential increase from Q2 2021 [5][17] - Net income increased 118% sequentially from Q2 2021, reaching $6.1 million, which represents a 358% year-over-year increase [5][18] - Gross margins improved to 80% in Q3 2021, up from 77% in Q2 2021, with expectations to maintain margins between 75% and 80% going forward [17][18] Business Line Data and Key Metrics Changes - Device revenue increased 71% year-over-year to $9.1 million, while supplies revenue rose 75% to $25.7 million [17] - Orders grew 70% year-over-year, indicating strong demand across both divisions [17] Market Data and Key Metrics Changes - The company is experiencing a competitive labor market, impacting the hiring of sales representatives, which decreased to approximately 430 by the end of Q3 2021 [6][7] - The average revenue per sales rep increased to approximately $325,000, up $50,000 from Q2 2021 and nearly $100,000 from Q3 2020 [7] Company Strategy and Development Direction - The company aims to grow its share in the prescription pain management market and is considering complementary acquisitions to enhance its product offerings [23][26] - The Monitoring Solutions Division is seeing increased staffing and clinical research activities, with plans to submit the wireless CM-1600 to the FDA by the end of 2021 [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, expecting Q4 2021 revenue between $40 million and $43 million, which would represent a 54% to 65% increase compared to Q4 2020 [22] - The company anticipates significant positive cash flow in Q4 due to seasonal factors and continued profitability [22] Other Important Information - The opioid epidemic remains a critical issue, and the company is focused on promoting its non-opioid pain management solutions [8] - The company has no reported supply chain issues and is returning inventory levels to normal [8] Q&A Session Summary Question: Can you discuss the CMS business and potential acquisitions? - The company is exploring opportunities that fit into both the pain management and monitoring solutions divisions, focusing on products with established reimbursement codes [26] Question: What are the expected sales rep numbers by the end of Q4? - The company expects to maintain around 430 sales reps by the end of the year, with minimal net change due to trimming less productive reps [32][33] Question: How do you anticipate the blood monitoring category will impact the business in 2022? - Management is optimistic about the potential revenue from the blood monitoring division, with commercialization plans for the CM-1600 expected in the second half of 2022 [41] Question: What is the current status of the patient monitoring division? - The patient monitoring division has expanded its team significantly, focusing on engineering and clinical trials, with plans for further growth in 2022 [64] Question: How is the company addressing labor constraints? - The company has around 80 to 100 unfilled positions across departments, impacting back-office operations but still managing to process orders effectively [49][50]