Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $16.1 million, a 38% decrease from $25.8 million in Q2 2024 [13] - Gross profit for Q2 2025 was $2.5 million, a 45% decrease from $4.6 million in Q2 2024 [14] - Net loss for Q2 2025 was $1.5 million, compared to a net income of $0.3 million in Q2 2024 [14] - Cash and cash equivalents increased to $18.4 million from $17.3 million at the end of Q1 2025, driven by $1.8 million in cash flow from operations [15] Business Line Data and Key Metrics Changes - The company has signed several long-term contracts with new and existing customers, with over 80 customers now under long-term agreements [8] - A new product purchase agreement was established with Innovative Renal Care, representing a multimillion-dollar commitment over three years [9][10] Market Data and Key Metrics Changes - The company remains a leading supplier in the hemodialysis concentrates market, serving over 12,000 purchasing facilities in the U.S. and select international markets [7] - The transition of the largest customer to another supplier has significantly impacted sales, but the company is working to stabilize and grow its customer base [5][11] Company Strategy and Development Direction - The company aims to secure its base business with long-term contracts and fill revenue gaps caused by customer transitions [5] - Focus on capital investment in equipment to enhance manufacturing efficiency and reduce costs [26] Management's Comments on Operating Environment and Future Outlook - Management believes the company is well-positioned for growth in the latter half of the year despite current challenges [6] - Discussions with the largest customer, DaVita, are ongoing for a long-term supply agreement, which could positively impact future revenues [22][23] Other Important Information - The company has reduced customer concentration risk, with the largest customer now accounting for only 10% of revenue, down from 40-45% [37] - The company is focused on creating a reliable and reproducible business model to ensure consistent performance and cash flow [28][29] Q&A Session Summary Question: Expansion plans in the Western United States - Management sees significant opportunities in the West, with a potential market of approximately $100 million, and is working on acquiring larger customers [19][20] Question: Negotiations with the largest customer - Ongoing discussions with DaVita aim to establish a long-term supply arrangement, which could impact financials positively towards the end of the year [22][23] Question: Capital allocation priorities - Current focus is on investing in capital equipment to enhance manufacturing efficiency, while ensuring sufficient resources for debt obligations [26] Question: Gross margin stability despite revenue decline - The organization has been right-sized, and investments in new equipment have improved efficiency, helping to maintain gross margins [33][34] Question: Customer concentration risk mitigation - The company has successfully diversified its customer base, significantly reducing concentration risk [37][38] Question: Impact of competitor's product recall - The company is working closely with customers to supplement supply due to issues faced by a competitor, which has created opportunities for Rockwell [41][42]

Company Performance - Rockwell Medical reported a quarterly loss of $0.05 per share, aligning with the Zacks Consensus Estimate, compared to earnings of $0.01 per share a year ago [1] - The company posted revenues of $16.07 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.27%, but down from $25.83 million year-over-year [2] - Over the last four quarters, Rockwell Medical has surpassed consensus revenue estimates four times, but has only done so for EPS estimates once [2] Stock Movement and Outlook - Rockwell Medical shares have declined approximately 48.8% since the beginning of the year, contrasting with a 10% gain in the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.05 on revenues of $16.67 million, and -$0.18 on revenues of $69.62 million for the current fiscal year [7] Industry Context - The Medical - Products industry, to which Rockwell Medical belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Rockwell Medical's stock performance [5][6]

[Part I — Financial Information](index=3&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) [Unaudited Financial Statements](index=3&type=section&id=Item%201%20-%20Unaudited%20Financial%20Statements) This section presents Rockwell Medical's unaudited condensed consolidated financial statements for Q2 and H1 2025, detailing financial position, performance, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $52.6 million from $59.2 million, driven by lower cash and inventory, while total liabilities also fell to $22.2 million, resulting in a decline in stockholders' equity to $30.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $12,482 | $15,662 | | Total Current Assets | $31,609 | $37,030 | | Total Assets | $52,625 | $59,208 | | **Liabilities & Equity** | | | | Total Current Liabilities | $10,946 | $14,091 | | Total Liabilities | $22,216 | $26,622 | | Total Stockholders' Equity | $30,409 | $32,586 | | Total Liabilities and Stockholders' Equity | $52,625 | $59,208 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw a net loss of $1.5 million, a shift from Q2 2024 net income, driven by a **38% decrease in net sales to $16.1 million**, with the six-month net loss widening to **$3.0 million** Statements of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $16,071 | $25,832 | $34,985 | $48,508 | | Gross Profit | $2,503 | $4,550 | $5,545 | $7,614 | | Operating (Loss) Income | $(1,349) | $515 | $(2,709) | $(809) | | Net (Loss) Income | $(1,492) | $343 | $(3,007) | $(1,388) | | Basic Net (Loss) Income per Share | $(0.05) | $0.01 | $(0.09) | $(0.05) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$1.6 million** for H1 2025, while investing activities used **$0.1 million** and financing activities used **$1.4 million**, resulting in a **$3.2 million** net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | $(1,643) | $(938) | | Net Cash (Used In) Provided By Investing Activities | $(104) | $1,578 | | Net Cash (Used In) Provided By Financing Activities | $(1,433) | $2,243 | | **Net (Decrease) Increase in Cash** | **$(3,180)** | **$2,880** | | Cash and Cash Equivalents at End of Period | $12,482 | $11,863 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's hemodialysis business, liquidity, significant customer concentration, the impending termination of the DaVita contract, and key accounting policies and debt agreements - The company develops, manufactures, and distributes hemodialysis products and is a leading supplier of concentrates in the United States[29](index=29&type=chunk)[30](index=30&type=chunk) - Management believes the company has sufficient funds for at least the next twelve months, with **$18.4 million in cash, cash equivalents, and investments** as of June 30, 2025. The company may raise additional capital through its **$21.1 million available ATM facility**[33](index=33&type=chunk)[34](index=34&type=chunk) - The company has significant customer concentration. For the six months ended June 30, 2025, **DaVita, Fresenius, and Nipro accounted for 20%, 10%, and 9% of total revenues**, respectively[52](index=52&type=chunk) - The company's agreement with its major customer, DaVita, was extended through December 31, 2025. However, DaVita has indicated it will transition to another supplier by mid-2025. DaVita made **non-refundable payments of $1.3 million** in the first six months of 2025 to ensure supply continuity[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting significant revenue decline due to DaVita's transition, a new agreement with Innovative Renal Care, sufficient liquidity for 12 months, and the resolution of a debt covenant breach [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Q2 2025 net sales decreased by **38% to $16.1 million**, primarily due to reduced DaVita sales, leading to a **45% gross profit decrease**, with six-month net sales also falling **28% to $35.0 million** Results of Operations for the Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $16,071 | $25,832 | (38)% | | Gross Profit | $2,503 | $4,550 | (45)% | | Operating (Loss) Income | $(1,349) | $515 | (362)% | Results of Operations for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $34,985 | $48,508 | (28)% | | Gross Profit | $5,545 | $7,614 | (27)% | | Operating Loss | $(2,709) | $(809) | 235% | - The decrease in net sales for both the three and six-month periods was primarily driven by a significant reduction in sales to DaVita, which is transitioning to a new supplier[140](index=140&type=chunk)[146](index=146&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$18.4 million** in cash and investments, deemed sufficient for 12 months, with **$21.1 million** available via ATM, and a Q2 2025 revenue covenant breach was resolved - The company has approximately **$18.4 million** in cash, cash equivalents, and investments available-for-sale and believes it has sufficient funds for at least the next 12 months[152](index=152&type=chunk) - The company may raise additional capital if needed, with **$21.1 million** remaining available under its at-the-market (ATM) facility[153](index=153&type=chunk) - The company did not satisfy a revenue covenant in its loan agreement for Q2 2025 due to reduced business from DaVita, but subsequently resolved the noncompliance with the lender, Innovatus[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a Smaller Reporting Company, Rockwell Medical, Inc. is exempt from providing disclosures regarding market risk - The company is designated as a Smaller Reporting Company and is therefore not required to provide disclosure about market risk[170](index=170&type=chunk) [Controls and Procedures](index=21&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[172](index=172&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[173](index=173&type=chunk) [Part II — Other Information](index=21&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Legal Proceedings](index=21&type=section&id=Item%201%20-%20Legal%20Proceedings) The company does not anticipate any pending legal proceedings to materially affect its operations or financial statements - The company is not currently involved in any legal proceedings that are expected to have a material effect on its financial condition or operations[174](index=174&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A%20-%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have occurred to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[175](index=175&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202%20-%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[175](index=175&type=chunk) [Defaults Upon Senior Securities](index=22&type=section&id=Item%203%20-%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[176](index=176&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204%20-%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[177](index=177&type=chunk) [Other Information](index=22&type=section&id=Item%205%20-%20Other%20Information) The company reported no other information - None[178](index=178&type=chunk) [Exhibits](index=22&type=section&id=Item%206%20-%20Exhibits) This section provides an index of exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including incentive plans and officer certifications - The report includes an exhibit index listing documents filed or furnished, such as the Amended and Restated 2018 Long Term Incentive Plan, officer certifications (31.1, 31.2, 32.1, 32.2), and XBRL data files[179](index=179&type=chunk)[180](index=180&type=chunk)

[Company Overview and Q2 2025 Performance Summary](index=1&type=section&id=Company%20Overview%20and%20Q2%202025%20Performance%20Summary) Rockwell Medical, a hemodialysis product company, presents its Q2 2025 financial and operational results, emphasizing strategic achievements and future positioning [Introduction](index=1&type=section&id=Introduction) Rockwell Medical, a healthcare company specializing in hemodialysis products, announced its financial and operational results for the three and six months ended June 30, 2025 - Rockwell Medical develops, manufactures, commercializes, and distributes hemodialysis products globally[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted successful management of a major customer transition, achieving a steady state, and positioning for continued growth - Successfully managed the transition of the largest customer, now at a steady state and positioned for continued growth[3](index=3&type=chunk) - Over **80% of customers** are under long-term contracts[3](index=3&type=chunk) - Focusing on managing expenses and manufacturing more cost-effectively to improve gross margin and drive Adjusted EBITDA profitability[3](index=3&type=chunk) [Financial Highlights](index=1&type=section&id=FINANCIAL%20HIGHLIGHTS) Rockwell Medical's Q2 2025 financial performance is detailed, covering key metrics, sales, profit, and cash position, impacted by a major customer transition [Summary of Key Financials](index=1&type=section&id=Summary%20of%20Key%20Financials) Rockwell Medical generated $1.8 million in cash flow from operations, reported a 16% gross margin, and increased its cash position to $18.4 million for the second quarter of 2025 - Generated **$1.8 million** in cash flow from operations for Q2 2025[6](index=6&type=chunk) - Reported gross margin of **16%** for Q2 2025, in line with 2025 guidance[6](index=6&type=chunk) - Increased cash position to **$18.4 million** at June 30, 2025[6](index=6&type=chunk) [Detailed Financial Performance](index=1&type=section&id=Detailed%20Financial%20Performance) The company experienced significant decreases in net sales and gross profit for both the three and six months ended June 30, 2025, primarily due to its largest customer transitioning to another supplier [Net Sales](index=1&type=section&id=Net%20Sales) Net sales for Q2 2025 significantly decreased due to the largest customer's transition, impacting both quarterly and year-to-date figures Net Sales Performance | Period | 2025 (Millions) | 2024 (Millions) | Change (%) | Reason | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $16.1 | $25.8 | -38% | Largest customer transition | | Six Months Ended June 30 | $35.0 | $48.5 | -28% | | [Gross Profit and Margin](index=1&type=section&id=Gross%20Profit%20Gross%20Margin) Gross profit and margin saw declines in Q2 2025, primarily due to the largest customer transition, though the six-month margin remained consistent Gross Profit Performance | Period | 2025 (Millions) | 2024 (Millions) | Change (%) | Reason | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $2.5 | $4.6 | -45% | Largest customer transition | | Six Months Ended June 30 | $5.5 | $7.6 | -27% | | Gross Margin Performance | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | 16% | 18% | Slight decrease | | Six Months Ended June 30 | 16% | 16% | Consistent | [Net Income (Loss) and Adjusted EBITDA](index=2&type=section&id=Net%20Income%20(Loss)%20Adjusted%20EBITDA) Net income shifted to a loss, and Adjusted EBITDA significantly decreased year-over-year, though Q2 2025 showed sequential improvement Net Income (Loss) Performance | Period | 2025 (Millions) | 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | ($1.5) | $0.3 | From income to loss | | Six Months Ended June 30 | ($3.0) | ($1.4) | Increased loss | Adjusted EBITDA Performance | Period | 2025 (Millions) | 2024 (Millions) | Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | ($0.2) | $1.4 | Significant decrease | | Six Months Ended June 30 | ($0.7) | $0.9 | Significant decrease | - Adjusted EBITDA for Q2 2025 of **($0.2) million** represents a slight improvement over Q1 2025 Adjusted EBITDA of **($0.4) million**[11](index=11&type=chunk) [Cash Position](index=1&type=section&id=Cash,%20Cash%20Equivalents%20and%20Investments%20Available-for-Sale) Rockwell Medical's cash position increased to $18.4 million by June 30, 2025, driven by positive cash flow from operations Cash, Cash Equivalents and Investments Available-for-Sale | Date | Amount (Millions) | | :--- | :--- | | June 30, 2025 | $18.4 | | March 31, 2025 | $17.3 | - The increase in cash position was driven by **$1.8 million** in cash flow from operations[8](index=8&type=chunk) [Operating Highlights](index=2&type=section&id=OPERATING%20HIGHLIGHTS) Rockwell Medical secured new multi-year customer agreements and maintained a high percentage of long-term contracts, reinforcing its market position [New Customer Agreements](index=2&type=section&id=New%20Customer%20Agreements) Rockwell Medical secured several new multi-year product purchase agreements with significant healthcare providers, including Innovative Renal Care, the largest rural health system in the U.S., the largest inpatient dialysis provider in South Florida, and a specialized home care services provider - Entered a three-year, multi-million dollar product purchase agreement with Innovative Renal Care (IRC), one of the largest dialysis service providers in the U.S., to supply hemodialysis concentrates and the DAMX45 dry acid concentrate mix system[10](index=10&type=chunk)[12](index=12&type=chunk) - Signed a two-year product purchase agreement with the largest rural health system in the United States, including utilization minimums[14](index=14&type=chunk) - Secured a two-year product purchase agreement with the largest provider of inpatient dialysis in South Florida, with purchase minimums[14](index=14&type=chunk) - Entered a three-year product purchase agreement with a provider of specialized home care services, including utilization commitments[14](index=14&type=chunk) [Other Strategic Achievements](index=3&type=section&id=Other%20Strategic%20Achievements) As of June 30, 2025, over 80% of Rockwell Medical's customers are under long-term contracts, and the company maintained its membership on the Russell Microcap Index for the third consecutive year - More than **80% of Rockwell Medical's customers** are under long-term contracts as of June 30, 2025[14](index=14&type=chunk) - Maintained membership on the Russell Microcap Index for the third consecutive year[14](index=14&type=chunk) [2025 Annual Guidance](index=3&type=section&id=GUIDANCE) Rockwell Medical provides its 2025 annual guidance for net sales, gross margin, and Adjusted EBITDA, reflecting anticipated financial performance 2025 Annual Guidance | Metric | 2025 Annual Guidance | | :--- | :--- | | Net Sales | $65.0M to $70.0M | | Gross Margin | 16% to 18% | | Adjusted EBITDA | ($0.5)M to $0.5M | [Conference Call and Webcast Details](index=3&type=section&id=CONFERENCE%20CALL%20AND%20WEBCAST%20DETAILS) Details for Rockwell Medical's Q2 2025 earnings conference call and webcast, including date, time, and key speakers, are provided - Conference call held on Thursday, August 14, 2025, at **8:00 am ET**[13](index=13&type=chunk) - Speakers included Mark Strobeck, Ph.D. (President and CEO) and Jesse Neri (SVP, Chief Financial Officer)[15](index=15&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section defines Adjusted EBITDA and Adjusted EPS as non-GAAP financial measures, explaining their calculation by excluding specific items from GAAP net income (loss) [Definition and Rationale](index=4&type=section&id=Definition%20and%20Rationale) This section defines Adjusted EBITDA and Adjusted EPS as non-GAAP financial measures, explaining their calculation by excluding specific items from GAAP net income (loss) - Adjusted EBITDA is defined as net income (loss) before net interest income (expense), net other income (expense), income tax expenses (benefit), depreciation and amortization, impairment charges, stock-based compensation expense, and other unusual or non-representative items[16](index=16&type=chunk) - Adjusted EPS is defined as Adjusted EBITDA divided by the weighted average number of shares outstanding[16](index=16&type=chunk) - These non-GAAP measures are used to understand and evaluate operating performance and trends, prepare budgets, and develop operating plans, as they exclude items not indicative of core operating performance[17](index=17&type=chunk) - Non-GAAP measures should not be considered in isolation or as an alternative to GAAP measures, and comparability with other companies may be limited[18](index=18&type=chunk) [About Rockwell Medical](index=4&type=section&id=ABOUT%20ROCKWELL%20MEDICAL) Rockwell Medical is a healthcare company specializing in hemodialysis products, committed to quality and customer service, recognized as a Great Place to Work - Rockwell Medical is a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide[19](index=19&type=chunk) - Mission is to provide dialysis clinics and patients with the highest quality products supported by the best customer service[19](index=19&type=chunk) - Certified as a Great Place to Work in 2023, 2024, and 2025, and named Fortune Best Workplaces in Manufacturing & Production in 2024[19](index=19&type=chunk)[20](index=20&type=chunk) [Forward-Looking Statements](index=5&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section clarifies that statements regarding future expectations are forward-looking, subject to risks and uncertainties, and not guaranteed to be updated - Statements in the press release regarding future expectations (e.g., gross margin improvement, profitability, guidance) are forward-looking[20](index=20&type=chunk) - These statements are based on current estimates and assumptions and are subject to various risks and uncertainties, which may cause actual results to differ materially[20](index=20&type=chunk) - Rockwell Medical expressly disclaims any obligation to update forward-looking statements, except as required by law[20](index=20&type=chunk) [Contact Information](index=5&type=section&id=CONTACT) Contact details for Rockwell Medical's Chief Corporate Affairs Officer are provided for investor relations inquiries - Contact: Heather R. Hunter, SVP, Chief Corporate Affairs Officer, (248) 432-1362, IR@RockwellMed.com[21](index=21&type=chunk) [Financial Tables](index=6&type=section&id=Financial%20Tables) This section presents Rockwell Medical's detailed financial statements, including condensed consolidated balance sheets, statements of operations, and GAAP reconciliation tables [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The condensed consolidated balance sheets provide a snapshot of Rockwell Medical's financial position as of June 30, 2025, compared to June 30, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Dollars In Thousands) | | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash, Cash Equivalents & Investments available-for-sale | $18,422 | $11,863 | | Total Assets | $52,625 | $53,028 | | Total Liabilities | $22,216 | $29,529 | | Total Stockholders' Equity | $30,409 | $23,499 | | Common Stock Outstanding | 34,430,352 | 31,030,218 | | Common stock and common stock equivalents | 45,046,280 | 38,808,569 | [Unaudited Condensed Consolidated Statement of Operations](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) This statement presents Rockwell Medical's unaudited condensed consolidated results of operations for the three and six months ended June 30, 2025, and 2024, including net sales, cost of sales, gross profit, operating expenses, and net income (loss) Unaudited Condensed Consolidated Statement of Operations (In Thousands, Except Shares and Per Share Amounts) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $16,071 | $25,832 | $34,985 | $48,508 | | Cost of Sales | $13,568 | $21,282 | $29,440 | $40,894 | | Gross Profit | $2,503 | $4,550 | $5,545 | $7,614 | | Research and Product Development | — | — | — | $18 | | Selling and Marketing | $572 | $586 | $1,283 | $1,180 | | General and Administrative | $3,280 | $3,449 | $6,971 | $7,225 | | Operating Income (Loss) | ($1,349) | $515 | ($2,709) | ($809) | | Total Other Expense | ($143) | ($172) | ($298) | ($579) | | Net Income (Loss) | ($1,492) | $343 | ($3,007) | ($1,388) | | Basic Net Income (Loss) per Share | ($0.05) | $0.01 | ($0.09) | ($0.05) | | Basic Weighted Average Shares Outstanding | 34,311,306 | 30,451,622 | 34,204,487 | 29,889,413 | [Reconciliation to GAAP Financial Measures](index=8&type=section&id=Reconciliation%20to%20GAAP%20Financial%20Measures) This table provides a reconciliation of GAAP Net Income (Loss) to non-GAAP Adjusted EBITDA and Adjusted EPS for the three and six months ended June 30, 2025, and 2024, detailing the adjustments made for items such as income taxes, other expenses, depreciation, severance costs, and stock-based compensation Reconciliation to GAAP Financial Measures (In Thousands, Except Shares and Per Share Amounts) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | ($1,492) | $343 | ($3,007) | ($1,388) | | Income taxes | — | — | — | — | | Other Expense, net | $144 | $172 | $299 | $579 | | Depreciation and amortization | $561 | $548 | $1,098 | $1,092 | | EBITDA | ($787) | $1,064 | ($1,610) | $283 | | Severance costs | $163 | $9 | $210 | $9 | | Stock-based compensation | $383 | $338 | $828 | $589 | | Minnesota transition costs | — | — | $39 | — | | Deferred license revenue | — | — | ($325) | — | | Triferic inventory write-off | — | — | $178 | — | | Adjusted EBITDA | ($241) | $1,411 | ($680) | $881 | | Adjusted EPS | ($0.01) | $0.05 | ($0.02) | $0.03 | | Basic Weighted Average Shares Outstanding | 34,311,306 | 30,451,622 | 34,204,487 | 29,889,413 |

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $18.9 million, a 17% decrease from $22.7 million in Q1 2024, primarily due to the largest customer transitioning to another supplier [12] - Gross profit for Q1 2025 was $3 million, consistent with the same period in 2024, while gross margin increased to 16% from 14% in Q1 2024 [13] - Net loss for Q1 2025 was $1.5 million, an improvement from a net loss of $1.7 million in Q1 2024 [13] - Cash and cash equivalents decreased to $17.3 million from $21.6 million at the end of 2024, attributed to timing of payments and seasonal expenses [14] Business Line Data and Key Metrics Changes - The addition of a single-use bicarbonate cartridge technology to the product portfolio represents a growth opportunity in the dialysis products market [9] - The company continues to diversify its customer base with leading hemodialysis providers, signing several new contracts during the quarter [5] Market Data and Key Metrics Changes - Approximately 90% of revenue comes from U.S. dialysis providers, with only 10% generated internationally, and the impact of recent U.S. tariff actions is negligible [8] - The at-home dialysis market is growing, with increased sales expected from new product offerings that are higher margin [25] Company Strategy and Development Direction - The company aims to strengthen its position in the renal market through business development opportunities, including product acquisitions and international expansion [10] - Rockwell Medical is focused on maintaining a long-term arrangement with its largest customer while also pursuing new customer contracts to mitigate revenue loss [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing negotiations with the largest customer may result in a scaled-down commitment, but they are optimistic about maintaining some level of service [19] - The company is confident in its guidance for 2025, projecting net sales between $65 million and $70 million, with expectations of revenue growth in the latter half of the year [11][22] Other Important Information - The company is actively monitoring the impact of a recent cyber attack in the industry and has taken precautionary measures to protect its IT infrastructure [6][7] Q&A Session Summary Question: What scenarios could arise from negotiations with the largest customer? - Management indicated that discussions are ongoing to maintain some level of service, likely at a smaller scale than before [19] Question: What is the expected revenue cadence for the remainder of 2025? - Management suggested Q2 may be the low point for the year, with expectations of improvement thereafter [22] Question: What is the outlook for the at-home dialysis market? - The at-home market is progressing as expected, with increasing sales anticipated for the new product offerings [25] Question: What are the opportunities for international market expansion? - The company sees significant opportunities in Latin America and is exploring expansion into the West Coast of the U.S. [30][32] Question: How much revenue can be replaced from new customers after losing the largest customer? - Management believes there are enough opportunities among small independent dialysis providers to replace a significant portion of the lost revenue [34] Question: Is the revenue guidance based on the current customer base? - The guidance is based on the current customer base, with potential upside from new customers not yet included [36]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $18.9 million, a 17% decrease from $22.7 million in Q1 2024, primarily due to the largest customer transitioning to another supplier [12] - Gross profit for Q1 2025 was $3 million, consistent with Q1 2024, while gross margin increased to 16% from 14% in the same period last year [13] - Net loss for Q1 2025 was $1.5 million, an improvement from a net loss of $1.7 million in Q1 2024 [13] - Cash and cash equivalents decreased to $17.3 million from $21.6 million at the end of 2024, attributed to timing of payments and seasonal expenses [14] Business Line Data and Key Metrics Changes - The addition of a single-use bicarbonate cartridge technology to the product portfolio represents a growth opportunity in the dialysis products market [9] - The company continues to diversify its customer base, signing new contracts with leading hemodialysis providers [5] Market Data and Key Metrics Changes - Approximately 90% of revenue comes from U.S. dialysis providers, with only 10% generated internationally, and only one country is affected by recent U.S. tariff actions [8] - The company is actively pursuing business development opportunities to strengthen its position in the renal market and expand internationally [10] Company Strategy and Development Direction - The company aims to maintain a long-term arrangement with its largest customer, albeit at a smaller scale than previously [20] - Rockwell Medical is focused on expanding its customer base both domestically and internationally, particularly in Latin America and the West Coast of the U.S. [30][31] - The company is optimistic about the at-home dialysis market, which is expected to grow and provide higher margins [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the largest customer's transition but expressed confidence in the guidance provided for 2025 [21] - The second quarter is anticipated to be the low point for revenue, with expectations of improvement in subsequent quarters [22] Other Important Information - The company is monitoring the impact of a recent cyber attack in the industry but has not experienced direct implications on its systems [6] - The company has reiterated its projected guidance for 2025, with net sales expected between $65 million and $70 million [11] Q&A Session Summary Question: What are the scenarios arising from negotiations with the largest customer? - Management indicated that negotiations are ongoing to maintain some level of service, likely at a smaller scale than before [20] Question: What is the revenue cadence expected for the remainder of 2025? - Management stated it is difficult to predict but expressed confidence in the guidance provided, with Q2 likely being the low point [21][22] Question: What is the status of the at-home dialysis market? - The at-home market is progressing as expected, with increasing sales and higher margins anticipated [24] Question: What are the opportunities for international market expansion? - The company sees significant opportunities in Latin America and is exploring expansion into the West Coast of the U.S. [30][31] Question: How much revenue can be replaced from new customers? - Management believes there are enough opportunities among small independent dialysis providers to replace a significant portion of lost revenue [33] Question: Is the revenue guidance based on the current customer base? - Yes, the guidance is based on the current customer base, with potential upside from new customers [35]

Financial Performance - Net sales for the three months ended March 31, 2025, were $18.914 million, a decrease of 16.5% compared to $22.676 million for the same period in 2024[14]. - Gross profit for Q1 2025 was $3.042 million, slightly down from $3.064 million in Q1 2024, resulting in a gross margin of 16.1%[14]. - The net loss for the three months ended March 31, 2025, was $1.515 million, compared to a net loss of $1.731 million for the same period in 2024, reflecting a 12.5% improvement[14]. - Basic and diluted net loss per share improved to $0.04 in Q1 2025 from $0.06 in Q1 2024[14]. - Comprehensive loss for Q1 2025 was $1,509 million, slightly improved from $1,706 million in Q1 2024, showing a reduction of approximately 11.5%[16]. - For the three months ended March 31, 2025, Rockwell Medical reported a net loss of $1.515 million, an improvement from a net loss of $1.731 million in the same period of 2024, representing a decrease of approximately 12.5%[23]. Assets and Liabilities - Total assets decreased to $53.961 million as of March 31, 2025, down from $59.208 million as of December 31, 2024[10]. - Total liabilities decreased to $22.439 million as of March 31, 2025, compared to $26.622 million as of December 31, 2024, indicating a reduction of 15.8%[10]. - Stockholders' equity decreased to $31.522 million as of March 31, 2025, from $32.586 million as of December 31, 2024[11]. - Total current liabilities decreased from $14,091 million as of December 31, 2024, to $11,205 million as of March 31, 2025, a reduction of approximately 20.5%[10]. - Total accrued liabilities decreased to $4.6 million as of March 31, 2025, from $6.3 million as of December 31, 2024, representing a reduction of approximately 26.9%[80]. Cash Flow and Liquidity - Cash and cash equivalents were $11.391 million as of March 31, 2025, down from $15.662 million as of December 31, 2024[10]. - Net cash used in operating activities for the three months ended March 31, 2025 was approximately $3.487 million, an increase of 46.5% compared to $2.380 million for the same period in 2024[23]. - Rockwell's net decrease in cash and cash equivalents for the three months ended March 31, 2025 was $4.271 million, compared to a decrease of $2.341 million for the same period in 2024[23]. - As of March 31, 2025, Rockwell had approximately $17.3 million in cash, cash equivalents, and investments available-for-sale, with working capital of $21.8 million[30]. - The company continues to explore capital-raising options, with $21.1 million available under its at-the-market facility[31]. Revenue Sources - Revenue from DaVita accounted for approximately 27% of total revenues for the three months ended March 31, 2025, down from 44% in the same period of 2024[49]. - Revenue from drug products was $0.325 million, while concentrate product sales were $18.589 million, with U.S. sales accounting for $16.436 million and international sales $2.153 million[57]. - The company recognized $0.3 million of revenue from deferred license agreements during the three months ended March 31, 2025, as all remaining deferred revenue related to these agreements was recognized[54]. - A one-time, non-refundable payment of $0.9 million from DaVita was recorded as revenue during the three months ended March 31, 2025, to ensure supply continuity[55]. Expenses - The company incurred $711,000 in selling and marketing expenses for Q1 2025, up from $594,000 in Q1 2024, reflecting a 19.7% increase[14]. - Research and product development expenses were $0 for Q1 2025, down from $18 million in Q1 2024, indicating a strategic shift in R&D spending[14]. - Stock-based compensation expense for the three months ended March 31, 2025, was $0.445 million, compared to $0.251 million for the same period in 2024, reflecting an increase of 77%[92]. Stock and Equity - The weighted average number of shares of common stock outstanding increased to 34,107,640 for the three months ended March 31, 2025, compared to 29,327,204 for the same period in 2024, reflecting a 16.5% increase[40]. - The number of common stock equivalents increased to 41,902,125 as of March 31, 2025, compared to 37,222 in 2024[86]. - The Series X Preferred Stock accreted a total of $0.3 million as of March 31, 2025, reflecting ongoing financial obligations related to this equity[82]. - The company issued a warrant to purchase 191,096 shares of common stock at an exercise price of $1.83 per share, with a fair value of approximately $0.2 million at issuance[90]. Compliance and Agreements - The company is currently in compliance with all covenants under its Loan Agreement with Innovatus, which includes an interest-only payment period for 36 months[32]. - The Company is required to maintain consolidated revenue from hemodialysis products at not less than 85.0% of projections for the trailing six-month period[112]. - The company has a Technology License Agreement with Charak for TPN products, which continues until at least February 1, 2034, with royalties based on net sales[103]. Market and Operations - Rockwell Medical operates in the hemodialysis market, manufacturing and distributing a range of hemodialysis products[48]. - The company operates in a single segment focused on the hemodialysis market, providing a range of products for dialysis providers worldwide[25].

Financial Performance - Rockwell Medical reported net sales of $18.9 million for Q1 2025, a 17% decrease from $22.7 million in Q1 2024[5] - Gross profit for Q1 2025 was $3.0 million, consistent with the same period in 2024, resulting in a gross margin of 16%, up from 14% in Q1 2024[6] - The net loss for Q1 2025 was $1.5 million, representing a 12% improvement over the net loss of $1.7 million in Q1 2024[6] - Adjusted EBITDA for Q1 2025 was ($0.4) million, slightly negative due to seasonal payroll tax and public company expenses[6] - Cash and cash equivalents decreased to $17.3 million as of March 31, 2025, down from $21.6 million at the end of 2024[6] - Total stockholders' equity increased to $31.5 million as of March 31, 2025, compared to $20.6 million in the same period in 2024[22] Future Guidance - Rockwell Medical confirmed its 2025 annual guidance, projecting net sales between $65.0 million and $70.0 million, with a gross margin of 16% to 18%[11] Product Development - The company added a single-use bicarbonate cartridge to its product portfolio through a distribution agreement with a leading medical equipment manufacturer[12] Company Recognition - Rockwell Medical was recognized as a Great Place to Work for the third consecutive year, highlighting its commitment to fostering a supportive workplace[12] Customer Impact - The largest customer transition to another supplier contributed to the decrease in net sales, although a one-time payment of $0.9 million was received to ensure product supply continuity[6]

Financial Data and Key Metrics Changes - For the full year of 2024, the company generated net sales of $101.5 million, a 21% increase from $83.6 million in 2023 [34] - Gross margin for 2024 was 17%, up from 10% in 2023, with Q4 2024 gross margin at 15%, an increase from 13% in Q4 2023 [37][38] - Adjusted EBITDA for 2024 was positive $5.2 million, a significant improvement from a negative $3.9 million in 2023 [38] Business Line Data and Key Metrics Changes - The increase in net sales was primarily driven by new customers from the Evoqua acquisition and a large order from the largest customer [34][36] - The company plans to focus on diversifying its customer base and product portfolio in 2025, aiming to replace lost revenue from the largest customer [14][29] Market Data and Key Metrics Changes - The company is expanding its international sales, currently selling products in over 30 countries, and has entered into new distribution agreements to enhance market presence [24][88] - The single-use bicarbonate cartridge market represents a $100 million opportunity, which the company is targeting for growth [25] Company Strategy and Development Direction - The company aims to achieve profitability on an adjusted EBITDA basis for 2025 while navigating a transition year due to the loss of a major customer [10][15] - Strategic objectives include reducing expenses, diversifying the customer base, and optimizing operations to support growth [14][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the transition year in 2025 but remains optimistic about returning to growth, emphasizing a strong foundation built over the past two years [56][90] - Discussions with the largest customer are ongoing, with hopes of securing future agreements that could provide upside to revenue guidance [50][80] Other Important Information - The company terminated a contract manufacturing agreement, which is expected to save over $2 million annually [13][38] - Cash and investments at the end of 2024 were $21.6 million, an increase from $10.9 million at the end of 2023, indicating improved cash position [40][41] Q&A Session Summary Question: Revenue from the largest customer in 2025 - The largest customer historically generated around $45 million, and with a $34 million decline expected, the guidance reflects this loss [44][48] Question: Transition year and future growth - Management views 2025 as a transition year but aims for a return to growth within the same year, with ongoing efforts to secure new customers [52][56] Question: Factors leading to the largest customer's pivot - The decision to diversify suppliers was made prior to the current management's arrival, and there are no significant issues with other customers [64][68] Question: Growth strategy for bicarbonate cartridge business - The strategy involves introducing the product to the existing customer base, with expectations for short-term sales growth in 2025 [71] Question: Guidance on revenue and gross margin - The revenue guidance for 2025 assumes the largest customer will transition away completely, with any new agreements providing upside [77][80] - Gross margin guidance reflects a lower revenue base rather than pricing issues, as fixed costs will be spread over a smaller revenue figure [92][94]

Financial Data and Key Metrics Changes - For the full year of 2024, the company generated net sales of $101,500,000, representing a 21% increase over net sales of $83,600,000 for 2023 [5][22] - Gross margin for the full year 2024 was 17%, an improvement from 10% in 2023 [23] - Adjusted EBITDA for the full year 2024 was a positive $5,200,000, representing a $9,000,000 improvement over a negative adjusted EBITDA of $3,900,000 in 2023 [25] Business Line Data and Key Metrics Changes - Net product sales for the full year 2024 were $101,400,000, a 27% increase over 2023, driven by new customers from the Evoqua acquisition and a large order from the largest customer [22] - Gross profit for Q4 2024 was $3,600,000, a 27% increase over Q4 2023 [23] Market Data and Key Metrics Changes - The company has expanded its distribution agreement with Nephro Group Dialysis Centers in the Philippines, becoming the exclusive supplier of all dry hemodialysis concentrate products [16] - International sales continue to grow, with products sold in over 30 countries [16] Company Strategy and Development Direction - The company aims to diversify its customer base and product portfolio while optimizing its business operations [10][72] - Plans for 2025 include targeting additional customers representing an estimated 14,500,000 gallons of potential business [19] Management's Comments on Operating Environment and Future Outlook - Management views 2025 as a transition year but aims to return to growth within the same year [36] - The transition away from the largest customer is expected to result in a loss of approximately $34,000,000 in revenue compared to 2024 [8] Other Important Information - The company terminated its agreement with a third-party contract manufacturer, which will save over $2,000,000 annually in fixed overhead costs [9][24] - Cash, cash equivalents, and investments at the end of 2024 were $21,600,000, an increase from $10,900,000 at the end of 2023 [26] Q&A Session Summary Question: Revenue from the largest customer in 2025 - The largest customer historically generated around $45,000,000, and the expected decline of $34,000,000 is a good way to think about the revenue guidance for 2025 [30][31] Question: Transition year and expense reductions - Management views 2025 as a transition year but aims for growth within the same year, with expense reductions being implemented to mirror the decline in volume [34][36] Question: Factors leading to the largest customer's pivot - The decision by the largest customer to diversify its supplier base was made prior to the current management's arrival, and there are no current issues with other customers [44][46] Question: Growth of the bicarbonate cartridge business - The strategy is to introduce the new bicarbonate cartridge product to the existing customer base, with expectations for short-term sales growth in 2025 [49] Question: Guidance assumptions and international expansion - The revenue guidance for 2025 assumes the largest customer will transition away completely, and any agreements reached would be upside to the guidance [54][56]