Savvy Trades and Investments

[littlefish]

ZYXI How does any company have revs jump over $3 mill and yet have COGS go up $.4 mill when most of the revs jump is from selling stuff unless they suddenly started collecting on old billings (which is not stated anywhere that I could find, just that they're more efficient- hah I'll say)? Do they get their electrodes and batteries for free and just pay freight and packaging? From the 10Q:

"Product supplies revenue is related to the sale of supplies, typically electrodes and batteries, for our products. Product supplies revenue increased $3.0 million or 206% to $4.5 million for the three months ended September 30, 2017, from $1.5 million for the three months ended September 30, 2016. The increase in product supplies revenue is primarily related to an increased customer base from increased sales in 2016 and improvements in our billing and collection procedures."

"The Company frequently receives refund requests from insurance providers relating to specific patients and dates of service. Billing and reimbursement disputes are very common in the Company’s industry. These requests are sometimes related to a limited number of patients or products; at other times, they include a significant number of refund claims in a single request. The Company reviews and evaluates these requests and determines if any refund request is appropriate. The Company also reviews these refund claims when it is rebilling or pursuing reimbursement from insurance providers. The Company frequently has significant offsets against such refund requests, and sometimes amounts are due to the Company in excess of the amounts of refunds requested by the insurance providers. Therefore, at the time of receipt of such refund requests, the Company is generally unable to determine if a refund request is valid and should be accrued. Such refunds are accrued when the amount is fixed and determinable"

"A significant portion of the Company’s revenues are derived, and the related receivables are due, from Third-party Payors. The nature of these receivables within the medical industry has typically resulted in long collection cycles"

"Due to the nature of the medical industry and the reimbursement environment in which the Company operates, estimates are required to record net revenues and accounts receivable at their net realizable values (also known as net collectible value). Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of third-party billing arrangements and the uncertainty of reimbursement amounts for certain products or services from payors or unanticipated requirements to refund payments previously received may result in adjustments to amounts originally recorded"


So they sell $3 mill more in products supplies YOY and COGS goes up about $.4 mill? Can we explain this logically? Can we explain how their billings are suddenly collectible right away compared to their past historical norms and typical medical billing timeframes? What changed massively?

Anyway of course the growth looks great and their cash collection, although very solid last Q it looked like, went completely against normalcy in their segment IMO only.

Doesn't make common sense to me, to each their own.
Good luck. All IMO.