Zynex, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Zynex Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. The 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 Callanan from MZ North America.

Thank you, Operator, and good afternoon, everyone. Earlier today, Zynex released financial results for the third quarter, and it's September 30th, 2024. 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, and Donald 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.

Thank you, Gwyn, and good afternoon, everyone. Thank you for joining us today for the third quarter 2024 earnings call. We are pleased to report on our continued progress as the leading provider of non-opioid pain management solutions and building out cutting-edge patient monitoring solutions. We've been successful in diversifying our revenue stream and building a sustainable, profitable company that delivers better pain management and monitoring solutions for patients and doctors as well as hospitals. Our continued revenue growth and sustained profitability that has allowed us to reinvest in our business and return capital to shareholders. I think it's worth reminding the investor community that our 2024 revenue expectation of $200 million is more than 50% higher than we were just three years ago. Our continued growth and evolution has afforded us the opportunity to implement greater institutional controls across the company to improve operations, collections, and new products introductions as we continue to grow as a business. As part of this evolution, we have used 2024 to take a deeper analytical look at the sales force. While we have identified 800 sales regions across the United States, we are working to ensure that we have the best people and processes to take advantage of the overall opportunity. Such throughout the year, we have turned to Salesforce to ensure we have the right reps in place to put us in the best position moving forward. We're already seeing the benefits of this approach, and while revenue was essentially flat in the quarter, order growth in the quarter was up 13% year-over-year, and revenue per sales rep On an annualized basis in Q3 was $530,000, an increase of 25% of the third quarter in 2023. We're currently sitting at approximately a 17% in terms of higher orders in October this year versus October of last year. As our team continues to mature, we expect to drive sales efficiency even higher. We're proud of the plane management group's ability to incorporate new products while increasing orders and revenues. We're confident that we can expedite onboarding new salespeople so we can see increased order growth while maintaining a high standard for productivity. Turning to new products, we received a clearance from the FCA for our new TensWave during the quarter, a device that aims to provide effective pain relief through transcutaneous electrical nerve stimulation, which has been clinically proven to reduce chronic and acute pain without needing medication. CMS, or Cynics Monitoring Solutions, continues to move forward in the third quarter with major milestones to commercialize NICO, our laser-based pulse oximeter. We're now undergoing the final phase of a manufacturing transfer, FDA clinical trials, and cumulization readiness prior to FDA submittal and clearance. And Don Gregg will provide further updates on these products in his prepared remarks. I find it important to remind everyone of the importance of this one product, as we will soon be competing for market share in the world's biggest medical device market, pulse oximetry, with a significantly better mousetrap, a real game-changer. We're excited to announce FDA clearance last year for our second-generation blood and fluid monitor, a non-invasive and wireless technology targeted to improve patient outcomes with blood fluid management in hospital settings. Overall, we are making great progress in the patient monitoring division, which we believe will have significant growth potential for the company. Looking ahead, we are making significant progress building on our non-invasive approach with at-home pain management devices and diversifying the new products. In tandem, we focus on ramping our hospital monitoring division, which represents a large and growing market opportunity. We also expect additional catalysts and regulatory milestones during the year as we work to execute on our strong pipeline on new products. As I mentioned, we continue to add additional rehabilitation products to our offering, and the volume of those products as a percentage of all sales continue to increase. In the first quarter, we reported our non-Next Wave private label rehab products made up 25% of our orders up from low double digits in 2022. We've seen this grown even more in Q3 to just over 31% of total orders, and we believe this diversification is important to our future growth as it provides additional tools for our sales team to engage new prescribers and serves to add complementary revenue sources. These efforts to add complementary products to diversify revenue streams and evolve our sales team are part of our effort to institutionalize growth at a higher scale. At this time, Cynics has a strong sales core that we can build upon. With this in mind, we continue to expect 2024 net revenue to increase approximately 9% compared to last year to $200 million and diluted earnings per share of at least $0.20 per share. We produced $10 million in cash from operations during the first nine months of the year and had a cash balance of $37 million at the end of the third quarter, up from $31 million earlier in the year. We believe that with a diversified product portfolio, multiple sales channels, institutional quality policies and procedures, and a lean and efficient sales team, Cynics is poised to capitalize on the long-term opportunity presented by the 800 potential or defined soil territories that we have discussed in the past. We've reached some important milestones and see significant progress in our monitoring division. I now ask Don Greig, president of Xynex Monitoring Solutions, to provide updates on that business division.