Zynex, Inc.

Good afternoon, ladies and gentlemen, and welcome to DesignX fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Quinn Callinan from MZ North America. Please go ahead.

Thank you, operator, and good afternoon, everyone. Earlier today, Zynex released financial results for the fourth quarter and year ending December 31st, 2023. A copy of the press release is available on the company's website. Joining me on today's call are Thomas Sangard, Chairman, President, and Chief Executive Officer, Dan Moorhead, Chief Financial Officer, Anna Lusak, Chief Operating Officer, and Don Gregg, President of Zynex Monitoring Solutions. Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's 2023 Form 10-K and subsequent Form 10-Qs, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include without limitation statements regarding product development, product potential, the regulatory environment, sales and marketing strategies, capital resources, or operating performance. With that, I'll now turn the call over to Thomas.

Thanks, Quinn, and good afternoon, everyone. Thank you for joining us today for the fourth quarter and full year 2023 earnings call. 2023 was highlighted by ongoing revenue momentum, leading to a record revenue for the year of $184 million, up 17% from the prior year. The fourth quarter marked our 11th consecutive quarter of profitability and seventh straight quarter of record high order numbers. Once again, we received the highest number of prescriptions in company history, exceeding our previous record. I'm proud to announce that we also produced $17.8 million in positive cash from operations in 2023, another all-time record for the company. With that, we are able to continue to invest in further sales growth, also in our monitoring division, and aggressively be buying back stock on the open market. During the first quarter, we played an allowance of $6.2 million on accounts receivables, which decreased our net revenue and profitability. We continue to analyze our receivables and collections from payers. This adjustment is an anomaly and a non-recurring adjustment. Net of this adjustment flows through as negative revenue. Revenue increased to 184.3 million while producing 17 cents of earnings per diluted share. Dan Moorhead, our CFO, will expand on this adjustment during his portion of the presentation. Significant credit goes to our team who were able to drive revenue higher and deliver significant earnings per share and cash flow as we expand our sales force, invest in our new business, Cynics Monitoring, and combat wage inflation like many others in the business. Our sales force has continued to expand the market each quarter, enabled by a strong team and great products. Orders increased 43% for the full year compared to the year before and increased 29% year-over-year in the fourth quarter. We believe there is considerable runway for us to continue growing orders into the future, leveraging our current portfolio and growing pipeline of existing and exciting new products. To help drive this order growth, in the fourth quarter, we submitted a 510K application to the FDA for our new M-Way neuromuscular electrical stimulation device, and already in February of this year received the 510K clearance. The M-Wave is set to replace its predecessor, the E-Wave, which has been fundamental in NMES treatments across the US since 1998. The E-Wave, which is a product we have been manufacturing for several decades, has helped over 17,500 patients with muscle-related issues such as drop foot, quad rehab, shoulder subluxation, and hand rehabilitation. The M-Way is designed to improve the way patients manage their neuromuscular conditions. And with advanced features and a user-friendly design, the M-Way allows patients to be treated in a clinical or home sitting with ease. The compact and lightweight design of the M-Way ensures portability and easy integration into patient recovery routines. The user-friendly interface and ease of use when designing a custom electotherapy regimen will encourage an even broader adoption of our therapeutic products. And as I mentioned, in February of this year, we received the FDA clearance for the product. And paving the way for launching the product, we expect that to be in the next month or two. As you know, we have spent the past many years building nationwide sales coverage with 800 territories, and we are just shy of 500 of these being populated by now. We are focused on filling all 800 territories and making our sales reps fully productive. It takes up to three years before a new rep is typically fully productive, and at this point, only half of our sales reps has more than one year in terms of tenure. Having built this strong pipeline to prescribers that see patients in pain and in need of rehab, we are now putting an extra effort into diversifying our revenue stream. Our best-selling product, the NexWave, was made in 85% of all orders received a couple of years ago, and only 50% was from all other products, such as low back support, bracing products, cervical traction, cold or hot therapy equipment, and compressions. It is now up to 25%, and we have launched an initiative this month with incentives for our sales force to also promote these products more actively. We do not expect this to cannibalize our next wave revenue, but rather be an addition to our revenue in the pain management division. In addition to the impressive results from our profitable pain management division, our monitoring, Sinex monitoring solutions, the monitoring division, continue to move forward in the fourth quarter with further development of our blood and fluid monitor and our laser-based pulse oximeter. We were excited to announce FDA clearance last year for our second-generation blood and fluid volume monitor, a non-invasive and wireless technology targeted to improve patient outcomes with better fluid management in hospital settings. We continue to collect additional data in clinical trials and Don Gregg will provide further updates on this product in his prepared remarks. We have three additional products in the pipeline in our hospital monitoring products division, a laser-based pulse oximeter, NICO, a monitor for early detection of sepsis, and a non-invasive laser-based monitor of total hemoglobin levels called the HEMOX. The monitoring division is pre-revenue, and we expect to submit an application to the FDA for our laser-based Pulse Oximeter mid-year 2024. Overall, we're making great progress in the patient monitoring division, which we believe will have a game-changing growth potential for the company. Looking ahead, we're making significant progress building on our holistic, non-invasive approach with at-home pain management devices and diversifying the new products. We're rapidly expanding direct sales distribution channels that are delivering accelerating and high recurring revenue as we continue to execute operationally and strategically. In tandem, we focused on ramping our hospital monitoring division, which represents a large and growing market opportunity. We expect consistent growth and strong financial performance in 2024, following the double-digit growth we've produced year after year. We also expect additional catalyst and regulatory milestones during the year as we work to execute on our strong pipeline of new products. We look forward to additional updates in the months to come as we build our sales force and execute on our growth objectives to improve the quality of life for patients suffering from debilitating pain and illnesses and bring long-term value for our shareholders. With that, I will now turn the call over to Anna Luxorg, Chief Operating Officer, for a more detailed business update on the Pain Management Division.