Zynex, Inc. (NASDAQ:ZYXI) Q3 2023 Earnings Call Transcript

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Daniel Moorhead: And then Shagun, as far as on the profitability side, I think this year we’re kind of in the flattest range. I think next year we would expect to be up at least 10%, somewhere in that range on the EPS side as we leverage some of the investments we’ve made. But right now I think the ZMS contribution on the revenue side is probably immaterial.

Shagun Singh Chadha: Got it. Thank you for taking the questions.

Operator: Thank you. The next the next question comes from Yi Chen with H.C. Wainwright. Please go ahead.

Yi Chen: Thank you for taking my questions. Could you comment on the three new products for pain management in terms of the origin of the products and whether they are prescription products and how these products are used in connection with NexWave? Thank you.

Anna Lucsok: Yes, absolutely. So the three new products that we added the TLSO, Cryoheat, hot and cold therapy and the wrist brace are Zynex private labeled devices. They are all prescription only and they fall within our pain management line and complement our flagship NexWave device and are frequently prescribed together. So they fall within, essentially what we’re trying to accomplish has become a one-stop-shop for noninvasive, non-addictive pain management solutions for prescribers looking for that.

Yi Chen: Okay. So the reported 39% order growth for the third quarter, does that include all three products as well?

Anna Lucsok: Yes.

Yi Chen: So going forward, your reported order growth will include those three products, correct?

Anna Lucsok: Correct.

Daniel Moorhead: Correct, but they’ve always included — we distribute a number of products. These are three new products and those distributed products have always been included in order growth. So it’s pretty consistent with what we’ve done in the past.

Yi Chen: Okay.

Thomas Sandgaard: A prescription is a prescription and by the way it’s low back support or in some cases same patient gets two prescriptions and they get paid independently by insurance companies. Good example is the Cryoheat which the cold portion of that is really fantastic to use along with the NexWave right after and immediately after orthopedic surgery. So that would be an example, we get two prescriptions for the same patient it will be two billing lines that insurance companies pay separately for.

Yi Chen: Could you give us a rough estimate as to the percentage of revenue represented by these three new products as the percentage of the total revenue in the third quarter?

Daniel Moorhead: The distributed products are about 15% of our device revenue.

Yi Chen: Okay. And they have a similar gross margin compared to NexWave?

Daniel Moorhead: Yes, it’s the same as we wouldn’t take them on.

Yi Chen: Okay. Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Thomas Sandgaard for any closing remarks.

Thomas Sandgaard: Yes. Thank you for joining us today. We are pleased with our performance this quarter and the consistent growth our team is delivering. We look forward to leveraging that momentum throughout the rest of the year and speaking to you at upcoming investor events. We appreciate your time and interest in Zynex. Have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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