New York, NY - August 23, 2013 (www.investorideas.com newswire) Taglich Brothers released an updated research report on Zynex, Inc. (ZYXI) and reiterated a Neutral rating. The report noted the following key investment considerations:
Revenue gains have slowed, reflecting a drop in demand stemming from broad reductions in Medicare reimbursements for medical devices, Medicare's curtailment of reimbursement for TENS use to alleviate chronic lower back pain, and physician uncertainty over the impact of the Patient Protection and Affordable Care Act (PPACA).
ZYXI aims to drive its growth with newer products that are less affected by reduced reimbursement but restoring growth and profitability changes through changes in the sales mix could be a lengthy process.
Due to slowing demand and we have further reduced our revenue and earnings estimates for 2013 and 2014.
For 2013 we project a loss of ($0.14) per share on revenue of $22.9 million, down from our earlier projections of $0.02 EPS on revenue of $32 million. For 2014 we project a loss of ($0.11) per share on revenue of $14 million, down from $0.04 EPS and revenue of $35.3 million projected earlier.
In 2Q13 (results released Aug. 8, 2013) Zynex lost $1.7 million, or ($0.06) per share, on revenue of $5.5 million. We projected 2Q EPS of $0.01 on revenue of $7.5 million. In the year-earlier quarter, the company earned $0.02 per share on revenue of $10 million.
Zynex, Inc. (ZYXI: OTCBB), based in Lone Tree, Colorado , manufactures a line of electrotherapy devices used for pain management and rehabilitation. Revenue has increased sharply, growing threefold in the last three years alone.
Zynex's non-invasive transcutaneous electrical nerve stimulation (TENS) and interferential current (IF) systems have been used to treat pain ranging from mild persistent problems such as sore muscles to acute postoperative pain.
The company's neuromuscular electrical stimulation (NMES) systems are used mainly by physical therapists to treat victims of trauma, stroke, or incidents that degrade muscle function, enabling stroke or spinal injury victims to regain lost mobility, functionality, speech, and memory.
In addition to its own products, Zynex distributes private labeled electrical stimulation devices, electrodes and batteries produced by other manufacturers. A substantial portion of revenue is recurring - rentals, and electrodes and batteries provided to patients using rental or purchased units.
In the US , which accounts for most of its sales, the company sells its medical devices through 200 sales representatives, two-thirds of which are independent contractors. Overseas, Zynex has distributors in Canada, Australia, Southeast Asia, the United Arab Emirates , the Netherlands , and Germany.
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