WIXOM, Mich.--(BUSINESS WIRE)--Rockwell Medical, Inc. (the "Company") (Nasdaq: RMTI), a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products to dialysis providers worldwide, today announced that the Amended and Restated Product Purchase Agreement (the "Amended Agreement") dated September 18, 2023 between the Company and one of the largest dialysis providers in the United States (the "Customer") has been extended through December 31, 2026. As pa ...

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Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $15.9 million, reflecting a 44% decrease from $28.3 million in Q3 2024, primarily due to the transition of the largest customer to another supplier [14] - Gross profit for Q3 2025 was $2.3 million, a 64% decrease from $6.2 million in Q3 2024, with a gross margin of 14%, down from 22% in Q3 2024 [14][15] - Adjusted EBITDA for Q3 2025 was $50,000, an improvement from negative $200,000 in Q2 2025 and negative $400,000 in Q1 2025 [16] - Cash and cash equivalents increased to $23.7 million from $18.4 million at the end of Q2 2025, driven by the issuance of common stock [16][17] Business Line Data and Key Metrics Changes - The company signed several new long-term product purchasing agreements, including a notable three-year commitment with a dialysis center in Southern Florida, potentially generating approximately $1 million in annualized net sales [8] - Expanded product purchase agreement with the largest provider of dialysis in skilled nursing facilities in the U.S., effective for three years [9] Market Data and Key Metrics Changes - The largest customer represented 12% of net sales in Q3 2025, indicating reduced dependence on any single customer due to successful diversification efforts [10] - The company is actively pursuing business development opportunities across various customer segments and geographic markets, reinforcing optimism about growth in 2026 and beyond [8] Company Strategy and Development Direction - The company is focused on right-sizing its organization to enhance operational efficiency while maintaining high-quality customer service [4][5] - Strategic decisions made earlier in the year are translating into tangible results, with over 80% of customers operating under long-term agreements, providing stability and revenue visibility [4][6] - The introduction of a new bicarbonate cartridge is expected to significantly grow the higher-margin product opportunity [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance targets and sustainable profitability moving forward [6][7] - The transition period with the largest customer is expected to resolve within the current quarter, with ongoing discussions regarding future commitments [21][24] - The company anticipates providing forward revenue guidance for 2026 early in the year, with plans for potential acquisitions to enhance growth [22][24] Other Important Information - The company is actively restructuring its operations to align with changes in the customer base, focusing on improving efficiency and reducing costs [12][30] - A facility closure was executed to consolidate manufacturing activities, which is expected to reduce operating expenses [32] Q&A Session Summary Question: When will the situation with the former largest customer be resolved? - Management expects resolution within the current quarter and is in contract discussions [21] Question: When will forward revenue guidance for 2026 be provided? - Guidance is typically provided early in the year, with visibility expected during the fourth quarter earnings release [24] Question: What are the key prospects for the bicarbonate disposables business? - The introduction of the bicarbonate cartridge is expected to significantly grow this higher-margin product opportunity [25] Question: How is the company balancing organizational restructuring with investments? - The company is reallocating resources to focus on growth opportunities while winding down unsupported operations [28] Question: Where is there room for improving gross margin? - Immediate focus is on labor costs, with long-term potential in reducing materials and distribution costs [30][31] Question: Update on West Coast expansion and home dialysis business? - The West Coast is seen as a growth area, with potential announcements on new customers expected soon; home dialysis remains a small but growing segment [38][40][41]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $15.9 million, reflecting a 44% decrease from $28.3 million in Q3 2024, primarily due to the transition of the largest customer to another supplier [14] - Gross profit for Q3 2025 was $2.3 million, a 64% decrease from $6.2 million in Q3 2024 [14] - Adjusted EBITDA for Q3 2025 was $50,000, an improvement from negative $200,000 in Q2 2025 and negative $400,000 in Q1 2025 [16] - Cash and cash equivalents increased to $23.7 million from $18.4 million at the end of Q2 2025 [17] Business Line Data and Key Metrics Changes - The company reported a gross margin of 14% for Q3 2025, down from 22% in Q3 2024, but excluding restructuring costs, gross margin was 18%, showing improvement over the first two quarters of 2025 [15] - The transition of the largest customer represented 12% of net sales in Q3 2025, indicating reduced dependence on any single customer [10] Market Data and Key Metrics Changes - The company signed several new long-term product purchasing agreements during Q3 2025, including a notable three-year commitment with a dialysis center in Southern Florida, potentially generating approximately $1 million in annualized net sales [8] - Discussions with the formerly largest customer are ongoing, with expectations to continue supplying them through the end of the year [9] Company Strategy and Development Direction - The company is focused on optimizing its organizational structure to align with current scale while enhancing operational efficiency and customer service [5] - Strategic decisions made earlier in the year are translating into tangible results, with over 80% of customers operating under long-term agreements, providing stability and revenue visibility [4] - The company is actively pursuing business development opportunities, including potential acquisitions, leveraging its strong cash position [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance targets and sustainable profitability moving forward [6] - The company anticipates providing forward revenue guidance for 2026 early in the year, with expectations to announce business development impacts shortly [24] Other Important Information - The company is expanding its customer base on the West Coast and is considering establishing a facility there due to growing customer demand [38] - The at-home dialysis market is seen as a significant growth opportunity, with expectations for continued growth in this segment [40] Q&A Session Summary Question: Resolution timeline with former largest customer - Management expects the situation to resolve within the current quarter and is in contract discussions [21] Question: Forward revenue guidance for 2026 - Guidance is typically provided early in the year, with visibility expected during the fourth quarter earnings release [24] Question: Key prospects for bicarbonate disposables business - The introduction of the bicarbonate cartridge is expected to significantly grow this higher margin product opportunity [25] Question: Balancing organizational restructuring with investments - The company is managing resource allocation carefully to focus on growth opportunities while winding down unsupported operations [28] Question: Areas for improving gross margin - Immediate focus is on labor costs, with long-term potential in materials and distribution efficiencies [30] Question: Background on facility closure - A facility was closed as part of consolidation efforts, with expenses being offloaded [32] Question: Update on West Coast expansion and home dialysis business - The West Coast is a focus area for customer acquisition, and the at-home market is expected to grow significantly [38][40]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $15.9 million, a 44% decrease from $28.3 million in Q3 2024, primarily due to the transition of the largest customer to another supplier [13] - Gross profit for Q3 2025 was $2.3 million, down 64% from $6.2 million in Q3 2024, with a gross margin of 14%, down from 22% in Q3 2024 [13][14] - Adjusted EBITDA for Q3 2025 was $50,000, an improvement from negative $200,000 in Q2 2025 and negative $400,000 in Q1 2025 [16] Business Line Data and Key Metrics Changes - The company reported a consistent adjusted gross margin performance within the guidance range of 16%-18%, despite the transition of the largest customer [6] - New long-term product purchasing agreements were signed with various medical centers, indicating growth potential in the customer base [8] Market Data and Key Metrics Changes - The largest customer represented 12% of net sales in Q3 2025, showing reduced dependence on any single customer due to diversification efforts [10] - The company is actively pursuing business development opportunities, including potential acquisitions, to strengthen its market position [22] Company Strategy and Development Direction - The company is focused on optimizing its organizational structure and enhancing operational efficiency while maintaining high-quality customer service [5] - Strategic decisions made earlier in the year are translating into tangible results, with over 80% of customers operating under long-term agreements [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance targets and sustainable profitability moving forward [6] - The company anticipates providing forward revenue guidance for 2026 early in the year, with expectations of growth driven by new customer relationships and product offerings [22] Other Important Information - Cash and cash equivalents increased to $23.7 million as of September 30, 2025, from $18.4 million at the end of Q2, providing opportunities for further investments [16][17] - The company is exploring expansion opportunities on the West Coast and in the home dialysis market, which is expected to grow significantly [38][40] Q&A Session Summary Question: Resolution timeline with former largest customer - Management expects the situation to resolve within the current quarter, with ongoing contract discussions [20] Question: Forward revenue guidance for 2026 - Guidance for 2026 is typically provided early in the year, with visibility expected during the fourth quarter earnings release [22] Question: Key prospects for bicarbonate disposables business - The introduction of the bicarbonate cartridge is expected to significantly grow sales, as it is a higher margin product [24] Question: Balancing restructuring and investments - The company is managing resource allocation carefully, focusing on growth opportunities while winding down less profitable operations [27] Question: Areas for improving gross margin - Immediate focus on labor costs for efficiency, with long-term goals to reduce material and distribution costs [29] Question: Facility closure background - A facility was closed as part of restructuring, consolidating manufacturing activities to reduce expenses [31]

Core Insights - Rockwell Medical reported a quarterly loss of $0.05 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.04, and a decline from earnings of $0.05 per share a year ago [1][2] - The company's revenues for the quarter ended September 2025 were $15.93 million, missing the Zacks Consensus Estimate by 5.2% and down from $28.32 million year-over-year [3] - Rockwell Medical shares have decreased by approximately 48.5% since the beginning of the year, contrasting with a 16.4% gain in the S&P 500 [4] Financial Performance - The earnings surprise for the quarter was -25.00%, and the company has not surpassed consensus EPS estimates in the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $18.13 million, and for the current fiscal year, it is -$0.17 on revenues of $69.91 million [8] Industry Context - Rockwell Medical operates within the Zacks Medical - Products industry, which is currently ranked in the bottom 33% of over 250 Zacks industries [9] - The performance of the stock may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [9] Future Outlook - The estimate revisions trend for Rockwell Medical was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] - The upcoming earnings call will be crucial for understanding management's commentary and future earnings expectations [4][5]

Financial Performance - For the three months ended September 30, 2025, net sales were $15,927,000, a decrease of 43.8% compared to $28,316,000 for the same period in 2024[13] - Gross profit for the nine months ended September 30, 2025, was $7,817,000, down 43.6% from $13,853,000 in the same period of 2024[13] - The company reported a net loss of $1,753,000 for the three months ended September 30, 2025, compared to a net income of $1,664,000 for the same period in 2024[16] - The company’s operating loss for the nine months ended September 30, 2025, was $4,293,000, compared to an operating income of $1,127,000 for the same period in 2024[13] - Basic net loss per share for the three months ended September 30, 2025, was $(0.05), compared to a basic net income per share of $0.05 for the same period in 2024[13] - For the nine months ended September 30, 2025, Rockwell Medical reported a net loss of $4,760,000 compared to a net income of $276,000 for the same period in 2024[22] - The comprehensive loss for the same period was $1,737,000, contrasting with a comprehensive income of $1,677,000 in the prior year, reflecting a negative shift in overall financial health[16] Assets and Liabilities - Total assets decreased to $57,486,000 as of September 30, 2025, from $59,208,000 as of December 31, 2024, reflecting a decline of 2.9%[10] - Total liabilities decreased significantly to $20,466,000 as of September 30, 2025, down 23% from $26,622,000 as of December 31, 2024[10] - Stockholders' equity increased to $37,020,000 as of September 30, 2025, up 13.9% from $32,586,000 as of December 31, 2024[11] - The accumulated deficit increased to $402,438,000 as of September 30, 2025, from $400,685,000 as of June 30, 2025[18] - As of September 30, 2025, total current assets were $37.5 million, slightly up from $37.0 million as of December 31, 2024[10] Cash Flow and Capital Raising - Cash flows from operating activities resulted in a net cash used of $2,950,000 for the nine months ended September 30, 2025, compared to a net cash provided of $3,337,000 in 2024[22] - The company had cash and cash equivalents of $13,610,000 as of September 30, 2025, down from $15,662,000 as of December 31, 2024[10] - The company issued 4,964,636 shares of common stock, raising $7,800,000 net of offering costs during the quarter[18] - The company may require additional capital to sustain operations and has $13.1 million available under its at-the-market facility for potential capital raising[30] Inventory and Expenses - Rockwell Medical's inventory increased by $1,875,000 in the nine months ended September 30, 2025, while it decreased by $331,000 in the same period of 2024[22] - The company reported a write-off of inventory amounting to $178,000 in 2025, while there was no such write-off in 2024[22] - The company incurred severance and closure-related costs of $0.5 million and $0.8 million during the three and nine months ended September 30, 2025, respectively[40] - The total lease expense for the nine months ended September 30, 2025, was $2.264 million, compared to $2.081 million for the same period in 2024, reflecting an increase of approximately 8.8%[110] Stock-Based Compensation - Stock-based compensation for the quarter was recorded at $532,000, contributing to the overall expenses[18] - The company recognized total stock-based compensation expense of $1,359,000 for the nine months ended September 30, 2025, an increase of 49.2% from $910,000 for the same period in 2024[90] - The company granted 717,000 restricted stock units with a market condition during the nine months ended September 30, 2025, with a grant date fair value of $0.6 million[93] Market and Customer Information - Revenue from sales to DaVita, Inc. represented approximately 12% of total revenues for the three months ended September 30, 2025, down from 52% in the same period of 2024[50] - The company has a diverse customer mix, with no single customer accounting for more than 10% of total revenues for the three months ended September 30, 2025[50] - The company operates in one market segment, the hemodialysis market, focusing on the manufacture and distribution of hemodialysis products[70] Debt and Financing - The Term Loans bore an initial interest rate of 8.75% per annum, with a maturity scheduled for March 16, 2025[114] - As of September 30, 2025, the outstanding balance of the Term Loans was $8.7 million, net of unamortized issuance costs and discount of $0.5 million, including $0.8 million of premium accretion and paid-in-kind interest of $0.3 million[119] - The Company is currently in compliance with all covenants under its Loan Agreement with Innovatus, which was amended to extend the maturity date to January 1, 2029[31] Economic and Operational Challenges - The company is unable to quantify the potential effects of global economic and political instability on its future operations[32] - The global macroeconomic environment remains uncertain, potentially affecting the company's future operations[32] - The company is assessing the impact of recent accounting pronouncements on its consolidated financial statements[43]

Financial Performance - Net sales for Q3 2025 were $15.9 million, a 44% decrease from $28.3 million in Q3 2024, primarily due to the largest customer transitioning to another supplier[7] - Gross profit for Q3 2025 was $2.3 million, representing a 64% decrease from $6.2 million in Q3 2024[7] - Net loss for Q3 2025 was $1.8 million, compared to net income of $1.7 million in Q3 2024[11] - Operating loss for the three months ended September 30, 2025, was $(1,584) million, compared to an operating income of $1,936 million in the same period of 2024[26] - Net loss for the three months ended September 30, 2025, was $(1,753) million, contrasting with a net income of $1,664 million in the same quarter of 2024[28] - Basic net income (loss) per share for the three months ended September 30, 2025, was $(0.05), compared to $0.05 in the same period of 2024[26] Adjusted Metrics - Adjusted EBITDA for Q3 2025 was $50,000, a significant decline from $2.8 million in Q3 2024, but an improvement from ($0.2) million in Q2 2025[11] - Adjusted EBITDA for the three months ended September 30, 2025, was $50 million, significantly lower than $2,798 million in the same period of 2024[28] - Adjusted gross profit for the three months ended September 30, 2025, was $2,832 million, while the adjusted gross margin was 18%, compared to 22% in the same period of 2024[29] Guidance and Future Outlook - The company confirmed its 2025 guidance for net sales to be between $65 million and $70 million, with a gross margin target of 16% to 18%[14] - The company signed new long-term purchasing agreements, including a three-year commitment with a dialysis center in Florida, potentially generating $1 million in annualized net sales[13] Cash and Assets - Cash position increased to $23.7 million at September 30, 2025, up from $18.4 million at June 30, 2025, driven by common stock issuance[10] - Total assets as of September 30, 2025, were $57.5 million, compared to $57.1 million in 2024[24] Expenses - Selling and marketing expenses for the three months ended September 30, 2025, were $531 million, down from $726 million in the same period of 2024[26] - General and administrative expenses for the three months ended September 30, 2025, were $3,325 million, slightly lower than $3,577 million in the same period of 2024[26] - Research and product development expenses were not reported for the three months ended September 30, 2025, compared to $18 million in the same period of 2024[26] Recognition - Rockwell Medical was recognized as a 2025 Fortune Best Workplace in Manufacturing and Production for the second consecutive year[13] Gross Margin - Gross margin for Q3 2025 was 14%, down from 22% in Q3 2024; excluding restructuring costs, it was 18%[11]

Core Insights - Mr. Brown has established a notable career in leading complex manufacturing and supply chain organizations [1] Company and Industry Summary - The focus is on Mr. Brown's leadership experience, which is relevant to the manufacturing and supply chain sectors [1]