New York, NY - April 1, 2014 (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 through changes in the sales mix and sharp cuts in costs and expenses could be a lengthy process.
The outlook through 2015 should remain difficult due to slowing demand and more restrictive insurance reimbursement. But we project some recovery in demand which should reverse the decline in revenue and narrow losses by 2015.
For 2014 we project a loss of ($0.10) per share on revenue of $13.3 million. Previously we projected a 2014 loss of ($0.09) per share loss on revenue of $15.6. We project a 2015 loss of ($0.07) per share on revenue of $15.1 million.
In 4Q13 (results released March 27, 2014) Zynex lost ($0.14) per share, on revenue of $3.4 million. We projected a 4Q loss of ($0.03) per share on revenue of $4.8 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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