Zynex, Inc. (ZYXI) Q2 2019 Earnings Call Transcript

Zynex, Inc. (ZYXI -2.58%)
Q2 2019 Earnings Call
Jul. 31, 2019, 3:15 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Zynex's Second Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing *0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press *1 on your telephone keypad. To withdraw your question, please press *2.

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 could 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 ending December 31, 2018, as well as forms 10-Q, 8-K and 8-K&A, press releases, and the company's website. Please know that 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.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Good afternoon. My name is Thomas Sandgaard, President and CEO of Zynex. Welcome to our second quarter 2019 earnings call.

I'm pleased to announce that the second quarter was our 12th consecutive quarter with positive net income. Our second quarter revenue was $10.3, with a net income of $0.06 per fully diluted share. Revenue increased 36% compared to the same quarter last year, and we reported positive net income of $2.2 million. Adjusted EBITDA in the quarter was just over $2.8 million, slightly above our estimate for the quarter.

Many of you may have seen our press release earlier this month. We were named the fastest growing company in Colorado from a net income perspective during the last two years. This speaks not only to our growth but also cost controls as well. We are very proud to have received this honor.

Our cash position was $10.1 million at the end of the second quarter. We had some significant cash payments in the first half of 2019, including the payment of our first quarter special dividend of $2.3 million and a significant amount of income taxes. As we keep growing our sales force and geographic footprint across the U.S., we've grown over 65% year-over-year, comparing the second quarter, and we continue to see strong reimbursement for our products.

Orders grew 29% between the first and the second quarters, as we saw more new sales reps becoming productive. This order growth is the result of aggressively adding new sales reps to the sales force every month, and to see all the growth is an early sign of order growth momentum and the subsequent revenue growth that we expect to see over future periods. As you may know already, the revenue of an order is typically recognized over many months as patients continue to use our device and the related supplies for continued pain relief.

In the second quarter, we sustained our aggressive sales force growth. We continue to add 10 new reps every month. That pace should get us through around 200 sales reps by the end of 2019 with reduction in our independent sales reps down to approximately 60 reps stemming from before 2018 and approximately 140 direct new sales reps, all added in 2018 and 2019. I'm also very pleased to see our gross profit margin remain at a level of 81%, an indication that the industry for prescription strength electrotherapies still is not only stable but very healthy and viable.

The opioid epidemic continues to be a serious issue in this country, and we are increasingly working to get patients off opioids and propositioned to use our prescription strength technology as a first line of defense with treating pain. Currently, the devastating impact has reached the 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 products for pain management and rehabilitation still stand out as some of the best products in the industry. The NexWave for pain management, our NeuroMove device for stroke rehabilitation, and the InWave for incontinence treatment puts us in a very strong product position in the rehabilitation markets. We also continue to see great potential in both of our product divisions, our existing revenue-generating area for pain management, as well as the huge, unmet potential for our blood volume monitor.

2019 has been a transformational year from an investor perspective. In February, we succeeded in getting listed on Nasdaq, and in June, we were added to the Russell 2000 Index. The combination of these events increased our daily traded volume over 10 times from approximately 30,000 shares traded per day to over 350,000 shares traded per day presently.

We also continue to add talent to our organization to help facilitate our continued growth. In February, we added Chris Brown as our new VP of Sales, and last week, we added a new Chief Operating Officer, Joseph Papandrea. Both Joseph and Chris will help us accelerate and streamline our growth as we finish 2019 and head into 2020.

I will now turn the call over to Dan Moorhead, our CFO.

Dan Moorhead -- Chief Financial Officer

Thanks, Thomas. First, I'll review our 2019 second quarter results. Orders grew 65% year-over-year, which drove net revenue up 36% to $10.3 million from $7.6 million in 2018. Device revenue increased 37% to $2.3 million, compared to $1.7 million last year. Supplies revenue increased 36% year-over-year to $8 million from $5.9 million. Gross margins were 81% in the second quarter.

Beginning in 2019, we began breaking out sales and marketing expense from G&A. This breakout provides greater clarity related to our sales growth initiative and the overall financial statement impact. Sales and marketing expenses increased 111% year-over-year, as we continue to grow our sales force. G&A expense grew 30% year-over-year. Much of the increase was related to increased headcount in our billing and patient support functions related to our order growth. G&A was flat compared to Q1 of 2019.

Second quarter net income was $2.2 million, or $0.06 per diluted share, compared to net income of $2.4 million, or $0.07 per diluted share, in the second quarter last year. Adjusted EBITDA, which is a standard EBITDA calculation, plus an exclusion of non-cash stock-based compensation and other income expense and as reconciled in our press release was $2.8 million in the second quarter of 2019 and 2018. We've increased income tax expense year-over-year due to our profitability over the last two years, which utilized our net operating losses and puts us in a taxable position.

Now, on to our six-month results. Orders grew 48% year-over-year, which drove net revenue up 35% to $19.5 million from $14.5 million in 2018. Device revenue increased 31% to $4.3 million, compared to $3.3 million last year. Supplies revenue increased 36% year-over-year to $15.2 million from $11.2 million. Gross margins were 81% in the first half of 2019. 2019 net income increased 4% to $4.5 million, or $0.13 per diluted share, compared to net income of $4.3 million last year. Adjusted EBITDA was $5.3 million, up 9% from $4.9 million last year.

We generated operating cash flows during the first six months of 2019 of $2.4 million, compared to $3.6 million in 2018. Cash flows were affected by increased tax expense in 2019 and the timing of 2018 tax payments, both of which were related to our NOLs, which were 100% utilized in 2018. On the balance sheet, as of June 30, 2019, our cash balance was $10.1 million and was affected by the tax expense that I've already mentioned and the fourth quarter special dividend of $2.3 million, which was paid in January. Working capital grew 62% to $11.9 million in Q2, compared to $7.3 million as of December 31st, 2018.

During Q2, we entered into a new lease for additional office space, which caused us to record approximately $1.6 million in lease liabilities on the balance sheet, of which approximately 300,000 are current. We recorded the related assets, but those are all non-current in nature, so there was a negative effect on working capital related to the new lease.

With that, I'll turn the call back over to Thomas.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Thank you, Dan. I'm especially excited about our year-over-year growth in orders of 65% compared to our revenue growth of 36%. It's a huge testament to our efforts to grow our sales force and clearly justifies the investments in our sales personnel, sales management, and inside support functions. Our focus continues to be growing our sales force at a rapid rate in geographic areas which we don't currently cover to take advantage of the void left in the market by two previously very large competitors.

Our increased orders due to a larger sales force combined with strong reimbursement for our products continue to drive increased revenue and profitability. We estimate our third quarter revenue to be between $10.7 and $11.2 million with an adjusted EBITDA in the third quarter between $2.4 million and $2.9 million. My long-term goal for our electrotherapy and rehabilitation 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.

On the product side, the patent obtained last year on our blood volume monitor indicates the beginning of the next phase of developing this division with more clinical research to support our advertising, staffing, and our business development, etc. We're also looking at adding more products to add to this division, including additional product development internally.

In summary, we announced yet another great quarter with strong growth in orders and revenue, plus we added some great talent, including the addition of a COO to the organization, which sets us up for seamless growth and strong financial performance going forward.

...

We will now answer questions from our listeners.

Questions and Answers:

Operator

We will now begin the question and answer session. To ask a question, you may press *1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press *2. At this time, we will pause momentarily to assemble our roster.

The first question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Hi, Thomas and Dan. How are you?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Good. How are you doing, Jeff?

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Just fine. So, again, nice quarter. Seem to be saying that fairly frequently these days. So, talk a little bit about the sales channel. You were talking about 60 previous independent reps plus 140 now direct that you have, total 200 growing at 10 a month. Is that a good way to envision that for the rest of this year?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Yeah, that's sort of a round-number target for where we should be at at the end of the year.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Got it. And talk to me a little bit about the facility that you took on, Floor No. 4, correct? Fourth floor?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

That's the third floor. So, we have the first floor where we have production, and quality, and IT, and engineering, and many other functions. We have the fourth floor in the building, which was basically all the other functions, and our billing group has now grown so much that we have moved them to the third floor. So, we have a total of 64,000 square feet in this building now.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

And what's the FT count in Colorado in total? Or corporate total?

Dan Moorhead -- Chief Financial Officer

It's about 120, give or take.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Got it. Perfect. And then, Thomas, talk to me a little bit about your commentary regarding getting more favorable therapy into first-line as opposed to beyond. How does one kind of grapple with getting earlier among physicians, and clinicians, and prescribers of the technology?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

There's really two parameters, and they all spin around our sales force. One is obviously to have the geographical footprint, so we have sales reps that can meet with these physicians as well as physical therapists face-to-face and discuss our treatment option as an alternative. And second, the quality of those sales reps are obviously very important, as the better the quality of the sales reps and the message we can deliver, the more efficient they should be in terms of convincing the physician to write prescriptions for our device before they start heading into prescribing a whole lot of opioids for patients in pain.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Got it. And then, how do you think about if you successfully leapfrog drugs, what's the differential in the CAM as you get closer to the first-line or at first-line versus where you currently stand predominantly currently?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Could you rephrase that question?

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

If you're able to successfully leapfrog into first-line versus where you are today, that addressable market is how many times the size?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

That's obviously in the tens of millions of patients that are in so much pain that they seek some level of treatment for it. So, we're talking tens of billions when you multiply that by the revenue we typically see on an average prescription. So, it's in the tens of billions.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

So, it's upwards of 5-10-15 times greater market if you're able to get more writing in first-line?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

That's right. That's right. That's obviously the very long-term scenario, assuming that we are successful in, first of all, picking up the low-hanging fruit in that this market is well-developed, well-established in terms of reimbursement as well. And once we get past the point where the number of prescriptions that were traditionally written in this market and we capture all that, developing it further from that and possibly getting into the billions of revenue on the very long term. That will also require different strategy on our part that it'll be more educational rather than just asking physicians that used to prescribe this technology and send the orders our way instead, which is a very simple sales process, the more educational our sales process that may come into play in the future. It is obviously more complex, but I certainly look forward to hopefully getting there and really make lives better for people that are in pain in terms of providing pain relief, and yet at the same time, avoiding or limiting the amount of opioids that they need to take.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

And are you seeing prescribing trends currently that lead you to believe that you're jumping in front of drug therapy?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Not necessarily. We are very focused on hiring 10 reps every month, getting them trained, getting them deployed. We just restructured our sales management with a new VP of Sales and added five regional sales managers that are now holding the hands of the sales reps in these regions and making sure that we develop the sales force we have right now and that we keep adding, develop that into a good quality sales force. And also, compared to how the sales force looked in the past, which was comprised of primarily independent sales reps carrying many, many different product line, now having a much more unified sales force that are aligned more with the company rather than many different scenarios.

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Perfect. Thank you. That does it for me.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Thanks, Jeff.

Operator

The next question comes from Yi Chen of HC Wainwright. Please go ahead.

Yi Chen -- HC Wainwright -- Managing Director

Thank you for taking my questions. First question is how many more sales reps you plan to add each quarter going forward? And have the top-line revenue grows in proportion to the number of sales reps you've added in the past quarters?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

To answer your last question first, yes, we've been positively surprised as to how well new reps have been performing. We've also seen that directly hired in 2019, if we compare the first 90-day performance to the performance in the first 90 days of those reps that got hired last year, we've introduced better training and now see the first 90 days of orders from these new reps approximately 50% better than those that were not trained as efficiently last year, so we're very encouraged by that. And something that really stands out when we look at the second quarter is that we were able to grow year-over-year 65% on the orders by adding all these sales reps. It's a significant investment, but we saw that obviously in the increase of orders. So, compared to the revenue growth we've seen for a while being in the 35%-36% range, I'm very encouraged because that would indicate that we'll continue to grow as a company.

In terms of how we expect to add sales reps, we mapped that so we ultimately will have sales reps in 400 territories across the United States with a little less than a million citizens in each territory, and we expect to get there in approximately 23-24 months from today. So, we still need to add approximately 200 over the next eight quarters, so I guess you can do the math in terms of the pace we'll be hiring at. So, that's approximately 25 a quarter that needs to be added. So, a little less than 10 a month that we're currently running at, but we should also expect a little bit of attrition, so it should all come together that way.

Yi Chen -- HC Wainwright -- Managing Director

Thank you. My second question is of all the patients who received a NexWave device in the second quarter, what percentage of them are newly diagnosed patients receiving each treatment and what percentage were patients who have switched from opioid product treatments to NexWave?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Sometimes we have that information in the form of very expensive medical records. These days they're not always just handwritten but printouts from hospitals or doctors offices, and in some cases, we barely have a prescription and a photocopy of an insurance card, and we may obtain some information as we contact the patient the same day as we receive the prescription and get the patient involved. So, we don't exactly have that information, so that would just be a qualified guess, but I would expect it to be, at this point, probably well below 50% showing that scenario that you're asking about there. But it's not something that we're exactly able to measure.

Yi Chen -- HC Wainwright -- Managing Director

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Thank you.

Operator

The next question comes from Marc Wiesenberger with B. Riley FBR. Please go ahead.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Thank you. Good afternoon. Can you talk about any changes to the types of physicians the sales staff is targeting and some impacts on the business?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

There's not a whole lot of change in who we are targeting. A significant group that we're targeting is obviously orthopedic surgeons. It's a great, great technology for getting pain management introduced, in some cases even before the surgery so the patient is used to the device and how to operate it but increasing blood circulation and getting some pain management right after orthopedic surgery. We see quite a bit of prescriptions also from pain management doctors, physical medicine and rehabilitation doctors, and we also see quite a bit prescribed by anesthesiologists, and you can probably expect doctors of physical therapy also account for a significant amount of orders.

And then, it's literally spread out over all kinds of specialties, family physicians, podiatrists, chiropractors, etc., but our primary target for a long time has been orthopedic surgeons. That is about 20-something percent of all orders coming in with a couple of the other groups I just mentioned are nearly up there in the 20% range. But nothing has really changed in terms of our focus. That's still the same, but it's a very, very broad spectrum of physicians that we see.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Understood. Thank you. On previous calls and even earlier, you alluded to the realignment of sales territories and adding the five sales regional managers. Can you talk about how that's impacted the sales reps and their business?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

It's gone really well. Obviously, there has been some -- we call them legacy reps that's been with us for many, many years that not necessarily fit into the territories we defined that was very computer-based and based on population. And we have to obviously carve out a few exceptions so that they could keep seeing the clinics that historically have produced a very high volume, but for the most, it's gone really well. I can kind of tell from your question that that's something that you -- we can always expect that when we're talking about that many sales reps and then some of them being impacted, that created a lot of noise.

That's actually gone over really well. We've been very structured about it and approached it very delicately, so I really applaud our sales management team for having implemented that in a very professional manner, and that really sets us up for the future, so it's very easy to just take one territory at a time -- or I should say 10 territories per month -- and plug in new reps with the whole interviewing, the qualifying and getting them hired and trained. It's working like a well-oiled machine at this point.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

That's really good to hear, and that kinda goes along with my next question. Are you having any difficulty at this point finding qualified sales reps? And as you kind of ramp that process, do you anticipate having trouble with the tight labor market?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

No. I can see the logic here that as we add more sales reps, that it should maybe be a little harder to keep finding good sales reps, but the fact that we have mapped out the territories the way we have, and every time we add a sales rep in a new territory after having interviewed a number of applicants, the number of applicants is always the same because the population we're putting them into, whether it's a rural area or high-density area, the amount of square miles might be different, but the size of the population, and therefore also the percentage of that population that has a sales background or are interested in selling medical devices, is about the same every time. So, that's why we can keep that cadence and that pace, and there doesn't seem to be any slowing down because the pool of talent is sustained for every new territory we interview for. So, that's actually good news.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

That is good to hear. Have you noticed in any changes in reimbursements in terms of dollar value or maybe timing of payments? And what are your expectations for the near and medium term?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

It's what we've seen for several years now. It's pretty constant. The thing that keeps changing is, as I believe I mentioned before, the name of the insurance company that is the most difficult this month. But other than that, across the board, it's still the same as it was 20 years ago, 25 years ago, 10 years ago. As I also have mentioned or talked about in previous earnings calls, over the past three years, we've gotten a lot better at just processing the files and not making so many mistakes internally, and that seems to be at a fairly constant level. We keep getting high and great talent into all parts of the company, including the billing department as the orders grow, and I expect we can keep being as efficient as we've been in the past.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Sure. With the success you've been having, are you seeing any changes in the competitive landscape with new insurance?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Not yet. I know that question comes up on every earnings call, and it's another one where we haven't really seen anything. I'm sure we would hear about it pretty quickly through the grapevine and the sales force, so that is still the same. So, we are obviously in a very unique position here with a well-developed market, well-established reimbursement, and with basically no significant competition, and we just keep adding sales reps to expand our geographic coverage.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Got it. And one final one from me, gotta have an obligatory blood volume question on the call. Any updates on FDA or CE Marking approval, and I guess how are the clinical studies progressing as well?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Clinical studies are progressing well. There were some technicalities at the site where we had an initial test through our clinical research organization, and so we're doing that here in a few weeks. That should be fairly easy. And then, all the studies we have lined up there should follow shortly after that. And in terms of the FDA and CE Marking, I would say we are probably closer today than we were three months ago.

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Understood. Thank you very much.

Operator

The next question comes from Shawn Boyd with Next Mark Capital. Please go ahead.

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

Good afternoon. Can you hear me OK?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Yeah. Good afternoon.

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

Great. I just wanna clarify one thing. The sales force expansion, which is of course near and dear to all of our hearts here, if I understood it correctly, you indicated you were at about 200 reps right now, going to 400 about two years now --

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

By year end. So, right now, we're more in the 175-180 range, and by year end, maybe we can be over 200, but that's kind of a round number target.

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

So, 200 or so by year end, and then with intention to expand that to 400 another two years out, 24 months out, and so that's what got you to that cadence of 25 per quarter?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Yeah. Exactly.

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

And perhaps I just misunderstood this, but I originally thought that 2020 might involve a little bit of a slowdown on adding reps are you kinda refined territories. So, either I just got that wrong, or you kinda changed the plan a little bit and you accelerated your hiring possibly because you're seeing the good payback on the hires. Can you just --

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

So, what that does is it buys us a little bit of cushion to maybe aggressively trim some of the independent sales reps that are not as productive, and it also has some cushion built in if we have a higher than expected attrition, but else, you're right. We could slow down a little bit, but I'd say since we don't really have any resistance, or bottlenecks, or barriers to adding 10 reps a month, I'd like to continue to do that as fast as possible. So, if we can get to the 400 in 22 or 23 months instead of 24 months, that'll obviously be even better.

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

Got it. Thank you very much for the clarification.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Okay.

Operator

Again, if you have a question, please press *1. The next question comes from Kevin Mackey with Analyst. Please go ahead.

Kevin Mackey -- Unknown -- Analyst

Hi. Thank you for taking my questions, and also, thank you for the responses that you've given me previously, privately. I appreciate your help. I'm wondering if you could give us a more exact number on how many orders you had this quarter?

Dan Moorhead -- Chief Financial Officer

The disclosure we give, we don't get to the exact order. We give growth percentages, and from the materials in the decks that we have, you can semi-extrapolate those, but what we give is the numbers we're comfortable with.

Kevin Mackey -- Unknown -- Analyst

All right. If my understanding is correct, last year in December, the competitive bidding program ended for Medicare, and that had previously excluded you guys from nine metropolitan markets, I believe your 10-K had said. Are you working to push into those markets you were previously excluded from? And do you plan on bidding in the next round that is due for 2021?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

No. We don't plan on bidding, and we don't see that we are really excluded from any markets.

Kevin Mackey -- Unknown -- Analyst

And in terms of the NeuroMove, it sounds like an amazing device. I personally know people that have had a stroke and could really benefit from that, but through the years, you've continued to report that you have a negligible amount of sales from the NeuroMove. I'm just curious what might be hampering you from getting that product to stick. Is it patient acceptance? Is it physician acceptance? Is it a hurdle in the marketing environment? If you could speak to that, please?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Yeah, it is. You're right. The NeuroMove is a very exciting device. It can literally detect attempts from the brain when you're attempting to move muscles. It could be trying to extend your fingers and hands, so it's a very unique device and designed so it can also be used in the home. And more than 10 years ago, when it was introduced, we actually had a decent amount of revenue when our total revenue was only a few million dollars annually. Nearly half of the revenue came from the NeuroMove device.

What has happened since is we've, until recently, had fairly limited resources. We saw a bigger opportunity in terms of growing revenue, and therefore also creating profits for the company in growing the pain management market, so it's been a very deliberate decision to focus on that. Unfortunately, therefore, we've decreased the efforts on promoting the NeuroMove device. It's something that we see to really get significant revenue on will require quite a bit of heavy lifting, and that translates into a significant financial investment in the marketing of it.

We occasionally sell some to clinics as a clinical sale, and we have patient-friendly programs with a relatively low self-pay option, so it's obviously something we could do much more of in terms of promoting it to stroke survivors. There are 600,000 or more new strokes every year in this country, so there's a lot of potential here. However, in order to not spread ourselves too thin, we're still focusing on the pain management market, but as you're alluding to, it could be one of the things we do more of going forward to diversify our revenue a little bit, and fortunately, it's somewhat of the same call point for our sales force. I hope that answers --

Kevin Mackey -- Unknown -- Analyst

Thank you. Yeah, yeah, that helps a lot. And finally, also on the blood volume monitor, you guys mention in your reports that you're kind of fielding questions from the FDA, responding to questions that they have. Could you give us an idea of what those questions might be and what your responses have been just so we can get a better feel for how that progress is coming?

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

The nature of those questions have changed over time. In the beginning, it was very much pointed at our inability to literally write up the application so that it fit their framework. We spent some time on that. There's been questions a little while back as to getting additional safety testing done to a new standard that had been introduced in the meantime, so that took some time to get that done and have our device pass those additional tests. And here more recently, they have had specific questions as to the specific six parameters we used to combine into an index, and basically getting the wording right so it fits into the framework of the five 10-K clearances that we are trying to get it through.

So, recently, we have submitted a response that should be aligned nearly word-for-word with their suggestions as to how we should phrase things, so with a bit of luck, the next response, they don't have any further questions or suggestions to us, and else, we'll just keep answering the questions. So, in summary, there hasn't really been any very heavy, very difficult questions. It's just getting the technicalities right. And unfortunately, every time we get a round of questions, it takes some times -- several months -- before we are able to get back to them, and then they have that time to respond back to us. So, unfortunately, it's taking some time. And it's somewhat similar, all the different kind of questions, in terms of moving forward on the CE Marking process.

Kevin Mackey -- Unknown -- Analyst

Thank you. And the last one from me, I just kinda ran some rough numbers based on your orders growth and how many sales reps you have, and it looks like your revenue per rep went up for the last quarter, but your revenue per order went down slightly. I'm just wondering if you could speak to that, maybe in particular what your billing department, be it efficiency that you're trying to create there because I understand that they're the ones that are responsible for collecting the revenue after the order's placed. So, with that number going down slightly, just wondering if there's anything we should be aware of there.

Dan Moorhead -- Chief Financial Officer

There aren't any changes in reimbursement or productivity. It's really you have to take into account the sales headcount number still aren't huge numbers, so when you bring in a large number of people at the end of the quarter, beginning of the quarter, it can skew that revenue per order or dollars per submission. So, I think I would say your numbers aren't correct.

Kevin Mackey -- Unknown -- Analyst

All right. Thank you for that. Appreciate it. That's it for me.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Thanks again.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Thomas Sandgaard for any closing remarks.

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Thank you. I hope today's earnings call has been informative for everyone, and I appreciate the interest in Zynex and listening in on this call. Thank you and a great day to all.

...

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 43 minutes

Call participants:

Thomas Sandgaard -- Founder, Chairman, and Chief Executive Officer

Dan Moorhead -- Chief Financial Officer

Jeffrey Cohen -- Ladenburg Thalmann -- Managing Director

Yi Chen -- HC Wainwright -- Managing Director

Marc Wiesenberger -- B. Riley FBR -- Equity Research Analyst

Shawn Boyd -- Next Mark Capital -- Founder and Portfolio Manager

Kevin Mackey -- Unknown -- Analyst

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