Zynex, Inc. CEO Interview: Thomas Sandgaard

• On 3:31 pm EDT, Tuesday September 22, 2009

67 WALL STREET, New York - September 22, 2009 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This 41 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Developments in the Industry -- New Devices -- Negative Price Pressure -- Inject Mix -- Hospital Capital Spending Behavior -- Growth -- Rate of Growth Reliability -- Execution of Management -- Clinical Trials -- The Next Big Thing -- Innovation -- Acquisition -- Loss -- Major Turnarounds -- Productive Work Force -- Medication Adherence -- Undervaluation -- Improvement in Earnings -- Price Sensitivity -- Weakening Dollar -- Winning Market Share -- Significant Share Gains -- Profitability -- Regulatory Standard -- Opportunities -- Licensing Opportunities -- Collective Experience -- Drug Approvals -- Growth in Revenue -- Measuring Success -- Profit Margins

Companies include: Medtronic (MDT); Boston Scientific (BSX); Greatbatch (GB); Vascular Solutions (VASC); AngioDynamics (ANGO); St. Jude Medical (STJ); Edwards Lifesciences (EW); Stryker (SYK); Zimmer Holdings (ZMH); Abbott Laboratories (ABT); Johnson and Johnson (JNJ); Baxter International (BAX); Thoratec (THOR); HeartWare (HTWR); Hill-Rom Holdings (HRC); Accuray (ARAY); Smith and Nephew (SN.L); Wright Medical (WMGI); NuVasive (NUVA); TranS1 (TSON); Becton, Dickinson (BDX); C.R. Bard (BCR); Covidien (COV); CareFusion (CFN);Edwards Lifesciences (EW); Zimmer (ZMH); Nanosphere (NSPH)

In the following brief excerpt from the 41 page report, Thomas Sandgaard, President and Chief Executive Officer of Zynex, Inc., discusses the outlook for the sector and for investors.

TWST: Would we please start with a brief overview of the history and evolution of Zynex Incorporated?

Mr. Sandgaard: Zynex started its business back in 1996 as a wholesaler of medical devices and has slowly grown its business to also manufacture its own line of products, and now employs its own sales force instead of selling through distributors. In 2002 we got to about $1 million in annual revenue. And being in the healthcare industry with typically very slow payments, there were a lot of a road bumps that were very difficult to get over. In late 2003, we finally found the solution in form of a reverse merger to go public and a subsequent investment to fuel the further growth of the company. So since early 2004, we've been publicly traded and we have grown from about $1 million in annual revenue back then to this point, where we have an annual run rate of $16 million or more this year, based on net revenue for the first half of the year. And we are highly profitable.

TWST: As you look at the market as a whole right now, what type of growth potential do you see? How do you perceive the position that Zynex holds right now?

Mr. Sandgaard: In the main market we are in - electrotherapy products for pain relief - we hold approximately 4% market share and obviously see that we have a huge potential for growth with only two major competitors. We also have other products, including the NeuroMove for stroke rehabilitation that long term could become one of our main products. We hope to gain a substantial market share in the market for pain relief in the near term, and that's where we expect most or all of our growth to come from. Again, that's short term. With our recent CE marking, we have started sales in Europe with distributors that already have a presence in this market.

TWST: What are your products? And as far your products go, what gives you the edge over the other players in electrotherapy?

Mr. Sandgaard: Our products in electrotherapy - TENS devices, interferential and muscle stim devices - are mostly used for pain relief and helping patients recover from surgery. Those products are modern digital technology, offer a lot of programming flexibility and, most importantly, they have a lot of safety features for patient comfort. So we believe we have some of the better-quality products in the industry. But I would say that the relationships between our sales reps and the physicians that are prescribing the units are probably equally as important in terms of gaining market share as the actual product itself.

TWST: Would you please talk about your proprietary technology platform?

Mr. Sandgaard: Our NeuroMove device that's used for stroke and spinal cord injury rehab is incredibly sensitive in its ability to pick up attempts from the patient's brain to try to move the muscles. And our product will use those attempts, even just thinking about it if - even if you are not a stroke survivor - just thinking about it, you can actually trigger a movement using this device. So it's a very unique technology that uses a very sensitive measuring technology to help a patient realize when he was putting in a good attempt to try to move, and that's a learning process also referred to as "neuroplasticity." Obviously, it is extremely powerful when you experience that you could actually see the movement as a result of your own attempt, and as a patient you couldn't do that before. So that relearning process is extremely important in the brain's ability to rewire itself.

TWST: Do any other companies take the same approach to electrotherapy? If so, how far along are they?

Mr. Sandgaard: Yes, there are a couple of other companies. And in terms of the stimulation technology that is used for pain relief, they are pretty well advanced just as we are, and some of them have even been in the industry for longer than Zynex. But in terms of the stroke rehab technology, we're pretty much alone at that.

TWST: Where do you see the biggest opportunities for Zynex as you look forward, as you look ahead?

Mr. Sandgaard: Short term, we expect to see an increased market share, and therefore increased revenues and profit in the pain management market. And we see stroke rehabilitation and spinal cord injury rehabilitation as some of the markets that are going to bring additional revenue to the company into maybe three, five or even 10 years out, and take Zynex to the next level. We could also consider acquiring other technologies or other companies not too far in the future. We continue to have a strong interest in getting listed on NYSE/AMEX.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 41 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!