Good day, and welcome to the Zynex 2021 second quarter conference call. Certain statements in this release are forward-looking, and as such, are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements. Risk factors that can cause actual results to materially differ from forward-looking statements are described in our filings with the Securities and Exchange Commission, including the Risk Factors section of our annual report on Form 10-K for the year ended December 31st of 2020, as well as Forms 10-Q, 8-K, and 8-K/A, press releases, and the company's website. Please note this event is being recorded. I would now like to turn the conference over to Thomas Sandgaard, Founder, Chairman, and Chief Executive Officer. Please go ahead, sir. Good afternoon. My name is Thomas Sandgaard, President and Chief Executive Officer of Zynex. Welcome to our 2020 second quarter earnings call. I'm excited to announce yet another quarter of revenue growth and positive net income. Our second quarter revenue of $31 million is the highest quarterly revenue in this company's history and increased 61% compared to the same quarter last year. We continue to see good order flow as the economy returns to normal, and second quarter orders came in 247% higher than Q2 of last year, and 11% sequentially compared to the first quarter of this year. The continued strength in orders speaks volumes to the relationships that our sales force has with many prescribers and the need for them to prescribe non-opioid, non-addictive prescription strength solutions for their patients in pain. As a reminder, the majority of cash and revenue related to an order comes in over the year and following years following the receipt of the order as the patients use the device and related supplies, which should lead to expanding revenue and profitability further throughout 2021 and beyond. During the second quarter, we continued to focus on the productivity of our sales reps and trimmed our less productive reps. The trimming of sales reps and the high competitive job market resulted in not hiring as many reps as we said goodbye to, and therefore, saw a decrease in active sales reps now here throughout the second quarter to approximately 450 reps at the end of the second quarter. The decrease in sales reps will now slightly decrease the forecasted revenue, but also, in turn, which I think is very important, boost profitability here in the near term. It's obviously very difficult to grow as fast as we've been growing for a while, and invest in a sales force with a very high expense and post a significant profit. We now saw the beginning of here in Q2 and expect to see that throughout the rest of the year that we'll be slightly more profitable than we had originally expected. We still expect to have approximately 550 sales reps by year-end. The addition of a net of 50 sales reps compared to the beginning of this year compares to a net of over 300 that we added in 2020, most of those in the second half of 2020. The additional sales force growth is now happening at a much slower pace, which will directly help our bottom line. I also want to mention that our operations still continue without issues, and our supply chains remains uninterrupted. As we discussed previously, we've taken a very conservative position in response to COVID and any possible supply chain issues which resulted in an increase in inventory at the end of Q1 of approximately $3 million in excess of our normal levels. Here in Q2, our inventory levels started moving back to more normal levels, which will continue during the second half of 2021. As announced earlier this year, we moved into a new corporate headquarters during the quarter. The new building has additional square footage and expansion rights to support our continued growth. The opioid epidemic continues to be a serious issue in this country, and we are increasingly working to get patients off opioids and for physicians to use our prescription strength technology as the first line of defense when treating pain. Currently, the devastating impact has reached a level where tens of thousands die yearly due to opioid abuse. We continue to develop more tools to make physicians aware of our technology that literally has no side effects. Our product for pain management and rehabilitation still stand out as some of the best in the industry. The NexWave for pain management, our NeuroMove devices for stroke rehabilitation, and the InWave for incontinence treatments puts us in a very strong product position in the rehabilitation market. We continue to see great potential in both our product divisions, our existing revenue-generating area for pain management, as well as a huge unmet potential for our blood volume monitor. As most of you probably already know, we managed to get FDA clearance for our CM-1500 blood volume monitor a year ago. We recently also filed a patent on top of the three patents that have now been issued for the blood volume monitor, but also for a non-invasive method to early detection of sepsis. The CM-1500 is a non-invasive monitor intended to monitor patients' fluid balance in hospitals and surgical centers. We expect to initially target ORs and surgeries that typically display substantial blood loss, as well as recovery rooms and ICUs, where internal bleedings today are common and difficult to detect until serious complications occur. We believe this product will lead to safer surgeries, fewer complications, and less mortality. One of the biggest unmet needs in hospitals today. We continue to see solid preliminary results from a clinical study at Wake Forest. We've now had the device monitor more than 120 patients, and the device so far has been solid in terms of either not providing a false positive or when there has been bleeding and/or other fluid loss, showing a significant change. This is obviously very encouraging. We are gearing up to commence more studies on the device shortly. Our engineering team is also expanding pretty significantly and well underway with building prototypes of the next generation, the CM-1600, that'll be easier to use in surgical settings compared to the CM-1500. We are also adding personnel and other resources to conduct more clinical research. I will now turn the call over to Dan Moorhead, our CFO. Thanks, Thomas. First, I'll review our 2021 second quarter results. Orders grew 247% year-over-year, and net revenue grew 61% to $31 million from $19.3 million in 2020. It's also worth noting that Q2 revenue increased 29% sequentially compared to Q1. Device revenue increased 83% to $7.8 million, compared to $4.3 million last year. Supplies revenue increased 55% year-over-year to $23.2 million from $15 million. Gross margins were 77% in the quarter. As we've mentioned previously, we transitioned our production and warehouse to a new facility during Q1. This has greatly enhanced our efficiency, but in the short term, it has put some pressure on gross margins. Sales and marketing expenses increased 102% year-over-year due to our sales force growth. G&A expense grew 43% year-over-year. Much of the increase was related to increased headcount in our reimbursement and patient support functions related to our order growth. Second quarter net income was $2.8 million, or $0.08 per diluted share. Adjusted EBITDA, which is a standard EBITDA calculation, plus an exclusion of non-cash stock-based compensation, severance, non-cash lease expense, and other income expense, and is reconciled in our press release, was $4.8 million in the second quarter of 2021. I'll now review our 2021 six-month results. Orders grew 186% year-over-year, which increased net revenue 60% to $55.1 million from $34.5 million in 2020. Device revenue increased 84% to $14.2 million, compared to $7.7 million last year. Supplies revenue increased 53% year-over-year to $41 million from $26.8 million. Gross margins were 76% in the first half of 2021. Sales and marketing expenses increased 123% year-over-year, and G&A expense grew 44% year-over-year. 2021 six-month net income was $2.1 million or $0.06 per diluted share compared to net income of $6 million or $0.17 per diluted share last year. Adjusted EBITDA was $4.4 million in the first half of 2021. On the balance sheet, as of June 30th, cash was $32.3 million, which is down slightly from Q1, but mainly related to the $2 million in purchases in our stock buyback program. Our working capital was $52.9 million at June 30th. With that, I'll turn the call back over to Thomas. Perhaps you're muted. Pardon me, Mr. Sandgaard. Oh, sorry. I am sorry. I'll be right back. I'm pleased with the second quarter order growth of 247% and our revenue growth of 61%. It clearly justifies the investments in our sales personnel, sales management, and inside support functions. Our focus for 2021 is increasing sales rep productivity as selling resumes to a normal course. Continuing to leverage the investments we have made within sales and G&A to improve profitability, and most importantly, helping our patients in pain. We will continue our sales force growth in the second half of 2021, but at a slower pace than in 2020. We have made the investments in growing our sales force primarily in the second half of 2020. This investment is showing all the right signs as the first quarter orders grew 140% year-over-year, and again, in the second quarter, 247% year-over-year. These orders convert into revenue over the next several quarters, I should say, several years and further out, and therefore, we continue to build profitability in the second half of 2021 and 2022. We estimate our third quarter revenue to come in between $34.5 million-$36 million, with an adjusted EBITDA between $5 million-$6 million. The third quarter revenue range is now 72%-80% higher than 2020's third quarter revenue. We have narrowed our full year 2021 revenue estimate to now be between $130 million-$137.5 million, with adjusted EBITDA expected to come in between $16.5 million-$21.5 million. The full year 2021 revenue estimate is in the lower end of previously provided guidance due to the fewer than expected sales reps, which is partly due to how hard it is to hire sales reps now. The good part about it is that it's having a positive effect on our near-term profitability. The full-year revenue estimate is approximately 62%-72% of 2020 revenue of $80.1 million. My long-term goal for our electrotherapy and rehab division is to continue to grow our share of the huge market for prescription pain management and to take advantage of the huge void in the market after the disappearance of our main competitors. This includes growing our domestic sales force, as well as potential acquisitions of complementary technologies. Our long-term goal is to fill all 800 territories in the U.S. and eventually have our sales reps all become fully productive. We see that it takes up to two years to make a sales rep fully productive. In summary, we have announced strong growth in orders, and we see those will drive revenue growth and profitability growth in the second half of 2021. We'll now answer questions from all our listeners. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The 1st question will come from Matthew O'Brien with Piper Sandler. Hi, guys. This is Simran on for Matt. Thank you for taking the questions. I wanted to speak on the sales force. As you guys are looking to onboard more reps, I think you mentioned 550 was the target by year end. Right. What does that mean for the spend here in the back half of the year in order to hit that target? Can you also speak on the attrition you're seeing in the sales force, which seemed to impact this quarter's total rep number more so than in previous quarters? Yeah. I would say it impacts the bottom line more than anything. The relatively new reps that got added maybe at the very end of last year would not have provided a whole lot of orders that have contributed to revenue yet. The fact that we, in the first quarter, were very conservative about adding a whole lot of reps and were more focused on trimming those that were not so productive and continued that trend here through the second quarter has more contributed to a better bottom line than we originally estimated. Not really contributing so much to any change in revenue. We see as we ramp up the sales force again, although it will be at a much slower pace, we'll see that the rest of the year looks pretty solid in terms of the bottom line. We would be coming in at approximately the same revenue that we were expecting going into the year. Okay. Sorry. I think what I meant was, would you have to spend more in order to hit that target in order to onboard those reps, the 550 reps that you're trying to hit by year end? There's not a whole lot of additional expense. I think the fact that we'll end up at 550 reps, a while back, six months ago, seven months ago, we were thinking more like 600 reps at the end of the year. As a result of that, we'll end up spending less, and therefore, we're very optimistic about the EBITDA and the EBITDA margin If you look at it as a percent of revenue, Q2 sales expenses were about 44%. It should be similar to that in Q3 as a percentage as the revenue goes up, and then we'll continue to gain more leverage on it, so it should be approaching 40%, 41% of revenue by Q4. Okay. Thank you guys. Then just a follow-up, could you maybe provide some color as to what that means for the outlook in 2022? Yeah. Since we have seen here several quarters with order growth well over 100%, which is a doubling of revenue. Of course, it's yet to be seen how well our sales force will continue to ramp up and how well the new reps we're adding will be ramping up in their early days to see if we can get the same kind of order growth the next quarter too. Obviously, as our numbers, the top line, continue to go up and we fill more and more territories and they become more mature, the percentage growth will eventually start dropping. Revenue for next year compared to the revenue for this year could well be approaching 100%. Again, this early, there's a significant tolerance on that. It's always easier to predict when a company grows 5% or 6% a year. When we're talking about this kind of growth here, there's a pretty big tolerance on the revenue growth and order growth we'll see next year. Okay. Perfect. Thank you guys for taking the questions. Thank you. The next question will come from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead. Hi, Dan and Thomas. This is actually Destiny on for Jeffrey Cohen. Thank you for taking my question. I was just wondering if you could first maybe talk about some of the progress you've made around securing an additional supplier or additional supply sources. I know that you mentioned that you're taking precautions and being conservative, so I'm wondering if there's any additional information you could give us around that. No, not really any material significant information. It just shows quarter after quarter that the strategy we applied or started applying about two years ago is working really well. Having so many second sources in place and also being very conservative about placing orders far in the future has put us in a strong position. We're just obviously trimming the inventory levels a little bit just so that as we see that long term, the supply chains will be more stable, that we don't carry too much inventory. It's hurt our cash position a little bit. On the other hand, as we were able to afford it, I think that money was well spent. Understood. Thank you. Perhaps I'll transition over to some sales force questions. Could you remind me how many sales reps one call center or back-end individual support can typically manage in terms of patient volume? It changes all the time because in terms of the infrastructure, the back office supporting our sales reps. Here, the last couple of years, we probably restructured that over two years, probably four or five times, as we continue to grow, as the issues we're dealing with out in the sales force keep changing. Probably more importantly, as we, in the middle of last year, the second half of last year, expanded our regional sales managers from five up to 15 to manage how many sales reps we have now. As a result of that, we've actually been able to make it a little lighter on the inside and move people over to more processing orders, making sure that the prescriptions we get and the background information, the demographics, et cetera, that's all more complete. It can change. Typically, we've had one sales support person, if you want to put it that way, per region and a couple of support people per region as well that helps the reps with getting the paperwork in complete, et cetera. Depending on how you create the structure, it takes about three, maybe four people per region to support them. You multiply that by 15. That tells you about the support organization. Okay. That's fairly wide. Thank you. You-- Yes. Got it. All right. Thank you. You know I have to ask, your progress around the blood volume monitor. What kind of feedback are you getting internally from your VP of Sales and Ops as well as some of the initial customers and placements? Then you mentioned some clinical work, and I was wondering if you could provide a little more detail on that as well. Yeah, I don't have the list with me, but that's more than half a dozen of clinical sites, research hospitals, et cetera, that we're working on. I don't remember the names right here. There are more that are in the hopper that we're talking to. Obviously, he's very excited. I think we're all very excited about the kind of data we are getting from Wake Forest. I believe it's better than we would expect. We're also trying to, especially with new studies we'll be starting up, try to stress test it so that the more extreme situations we put the device in, and therefore, potentially learn more about how to trim and optimize some of the parameters we use to add into the index. So far, it looks like a very solid product. Okay. That's very interesting. Great. Thank you. I think I'll take the rest of my questions offline and let someone else jump in. Thank you. Okay. Thanks. The next question will come from Yi Chen with H.C. Wainwright & Co. Please go ahead. Thank you for taking my question. I think your original goal for the sales rep number by the end of this year was 600. Now that's a bit lower. Would you say the overall timeframe to reach your ultimate goal for the number of sales reps have shifted a little bit later due to the difficulty of finding experienced and productive sales reps? Yes. I would say, I'm not sure we have been specific about an endpoint for that, but we should be able to add a net from here on out of up to 100 reps a year. We could probably push it, because we saw what we could do last year. We could probably push it to get to 600 reps by year end. At this point, because it's not as easy as it was a year ago, I think it's better that we are also picky about who we hire, so we have a higher success rate with the additions to our sales force. I think that's important, too. A nice side effect, obviously, is that as we continue to grow over the next several years, it's going to give us a slightly better EBITDA margin or profitability by not growing as fast. Technically, you're right. Yeah. Okay. Got it. At this point, would you be able to provide some clarification regarding the potential launch of the blood volume monitor, potentially in 2022, and whether that's going to be the original model or the newest model? Yeah, that's a good question. Personally, I think the features, including being wireless instead of having a cable over to the patient, is one of those things that's going to make it a much easier sell. There's a few things from the user point of view. The safety concept, the algorithms and all that is still the same. That's something we're definitely looking at. I think it's probably more about having a little more substance in terms of the clinical support, so that when we do approach at a broader scale, hospitals in general, surgical centers, et cetera, that we make it an easy sell for the sales force and/or the medical device companies we might be working with here in the future to get it out. Yeah. We're definitely building the clinical evidence, and we are also debating internally where we should put the biggest push, whether it should be the existing model or one of the 2 next models that we have in the pipeline and are literally prototyping now. By the end of this year, we would have better clarity as to the launch plan? Yeah, probably. Okay. I think there's so much happening in that division now that there'll be a lot more to talk about in a couple of quarters. Definitely, yes. Okay. Thank you, Thomas. The next question will come from Marc Wiesenberger with B. Riley Securities. Please go ahead. Thanks. Good afternoon. Does the updated guide contemplate any potential disruptions from the Delta variant in the second half of the year, or is it based essentially on an unchanged environment from the second quarter? I would say no. To be more specific, unchanged environment, yes. Okay. That's what we estimate. Yeah. Got it. Then a little more commentary on the culling of the sales force. Was there a change in any quota levels, or what went into the decision to trim now? Was it that your tolerance for some wider performance was no longer acceptable, or maybe just help us understand your thought process on trimming now? I think it's a combination of things. One of the primary driving factors was obviously considering the 300 net additions last year, where the majority was towards the end of the year. We did have quite a few people that were not performing to, you used the term quota, to sort of the minimum requirements that tell us that we'll have a solid performer long term. That's been quite a bit of turnover in that. Deliberately, early in the year, we were hiring at a much lower rate, probably about a fifth of what we did in the second half of last year. That obviously netted out to be a deduction in the sales force. It's not something that I would look at as a negative. Of course, I'll take the increased bottom line any day while we're still growing the order significantly. As we're looking at it's now becoming easier to manage the sales force for our regional sales managers, because they have fewer and more, or I should say, less dysfunctional reps they need to attend to. There's a lot of benefits, as we didn't add that many into the sales force during that period. We have now tripled that effort, so that we will be adding probably a net of 20 every month throughout the rest of the year. Got it. Thank you. Can you talk about the top 10 reps and what percentage of sales they represent, as well as the top 50 sales reps, and how have those percentage changed since the end of last year? I don't have the numbers in front of me. I'd have to guess a little bit. Our top 10 reps would probably be producing something like 4% or 5% of all orders. Let me think. There's not necessarily a correlation between who are the top 10 order producers and who are the better revenue producers. We still have a few reps that produce maybe $2 million or close to $2 million a year, and quite a few, more than 12 that produce well over $1 million a year. A lot of reps that are slowly creeping up there. They obviously need to have been employed here for quite a while before the accumulated revenue as it comes in month after month, after the order comes in, before their revenue slowly starts moving the average revenue per sales rep number. To your question, there's top 50, about 10% of our sales force. We probably get something like 15% of all orders from those. It's very widespread, as you can hear. The orders, fortunately, are not just concentrated to a few reps, but definitely spread out through the entire country. Sure. Yep. Just two final questions from me. With regards to the NexWave, do you have any plans to kind of update it at all, maybe make it wireless or add additional functionality? If not, how long do you think the current iteration can sustain its reception in the market, as we do see some early entrants having maybe more kind of updated pain management devices? Currently, we don't have any plans. We got really great engineers, so that we relatively quickly can bring new versions of that technology or other products to the market if need be. We see new technologies come to the market all the time, we saw that 30 years ago, we saw that 20 years ago, 10 years ago, et cetera. It's still very strong in terms of market adaptability, holds a very strong position. We see is what's more important is obviously that pretty much all insurances cover it. We also see that obviously prescribers are familiar with it and becoming more and more familiar with it. One of the most important things that drives when prescriptions are written is, to a large extent, the relationship between the sales rep and the prescriber, as well as how well we, as an organization, not just the device, but how well we take care of the patients. We help them with insurance questions, we help them with technical questions, and we literally follow up with the patient same day or the day after. Worst case, we get the prescription, we follow up with the patient same day or the day after they've received the device. We have a very extensive customer service department that we try to keep as well-staffed, or I should say, in some cases, overstaffed, so that we can answer all calls that come in at well over 90% at a time. No one gets to leave voicemails or anything. It's part of the overall experience and also makes the prescriber want to continue to prescribe the device because we take good care of the patients. It's not just having a great device, it's the entire experience and having a strong sales force with strong relationships. That's important for generating the prescriptions and the future of revenue, as you're alluding to. There's less pressure on just having a fancy new technology. It's really the whole package. Being able to, with prescription strength electrotherapy, be able to help patients with the pain. I don't see a competitive, from a product point of view, competitive pressure at all. Understood. Thanks. Then just the final one for me. Have you added any sales reps in the monitoring division at all? We are about to add a few people we call business development people, that you can call them glorified sales reps. They will be spending a lot of their time on developing key opinion leaders, more than just knocking on doors and trying to move some boxes. That's literally the strategy here early on. It's about getting more clinical research, also building key opinion leaders and just part of the stairsteps that you have to take in this type of medical device sales. Understood. Thank you very much. The next question will come from James Terwilliger of Northland Capital Markets. Please go ahead. Hey, Thomas, can you hear me? Yeah, I can hear you. Excellent. Thank you. First of all, thanks for taking my question, and nice job on the quarter. Very quickly, I apologize, Thomas, I've been kind of flipping between different earnings calls, unfortunately. On the pain management side, I've heard this from some other companies, are you getting hit by any type of wage pressure? It's hard to find employees out there, let alone good employees. Are you seeing any type of increase in wage pressure or what you have to pay these particular sales reps that you're trying to hire? James, Go ahead, Thomas. Yeah, I don't know if we lost Thomas there or not, but we are seeing, it's just general hiring pressure. One, finding them, and then it becomes wage pressure because they may have offers from a lot of different places to work, and it's just very competitive in this industry, period. Sales, med device or med tech. I would say generally it's really competitive. Yeah, that ends up putting some pressure on wages and how that wage package is structured for sure. No, I'm hearing that from other companies as well. Again, I apologize, I've been jumping around on a couple calls. Moving on to the monitor division, how many people are in that? I know we talked about business development and working with KOLs. Is it a 5 to 10-person team in there? I know it's pretty lean and mean, I mean, how many people are in that monitoring division at this time? Yeah, it has been- We have- Oh, are you back? All right, there you go. Hey, yeah, I'm back on the call. Sorry. Yeah, just go ahead then. Great. Yeah, no, I think it's been a handful in that kind of five to 10 range, but we've definitely seen some new hires here, so we've bumped over 10. The hiring plan for the rest of the year, Thomas, you can comment more, but I think it's going to push us close to 15 to 20 by the end of the year. Yeah, absolutely. We are now investing heavily in it. We have a great guy, Donald Gregg, that's running that division. It's very encouraging to see how we now see a lot of activity in that division. I got two more questions there on the monitor. I thought I heard Wake Forest earlier in the call, and again, I apologize again. How many clinical test sites or how many beta sites are you in right now? I know it's early, and I know it's going to be a tough sell with a piece of capital equipment going into a hospital after the hospital shut down with COVID. How many different hospital clients are you kind of working through with this monitor at this time? We're talking to a lot and there's a lot that hopefully will get started very soon. Technically, we're just in that one right now. Lastly, Thomas, this is for you. If you look into 2022 and how you would launch this monitor, I don't want to get into the numbers because it's too early. Would your preference be to go with an internal sales force or a strategic partner or maybe monitor with your business development people, so maybe some independent distributors that could call on those hospitals? What is your thought on ideally, I know you may not have the answer yet, what you would want to do in terms of distribution for this monitor? I think, as a small medical device company, this is a fairly new area for us, relatively speaking, I think the best thing we can do is explore all options. Fortunately, we do have the financial ability to take the time to do it right and also to develop on all fronts, whether it's private labeling, whether it's strategic partnerships, whether it's licensing, whether it's a direct sales force. It could also, from a geographic perspective, be different, applying different distribution strategies depending on the part of the globe that we are addressing. Well, no, that makes complete sense. Once again, nice job on the quarter and I'll jump back in queue. Thanks for taking my question, guys. Take care of yourself. Thanks, James. This will conclude our question and answer session. I would like to turn the conference back over to Mr. Thomas Sandgaard for any closing remarks. Thank you. I hope today's earnings call has been informative for everyone. I appreciate the interest in Zynex and listening in on this call. Thank you, and a great day to all. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.