Rockwell Medical(RMTI) - 2025 Q2 - Quarterly Results

Company Overview and Q2 2025 Performance Summary Rockwell Medical, a hemodialysis product company, presents its Q2 2025 financial and operational results, emphasizing strategic achievements and future positioning 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] CEO Commentary 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] - Over 80% of customers are under long-term contracts[3] - Focusing on managing expenses and manufacturing more cost-effectively to improve gross margin and drive Adjusted EBITDA profitability[3] Financial Highlights 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 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] - Reported gross margin of 16% for Q2 2025, in line with 2025 guidance[6] - Increased cash position to $18.4 million at June 30, 2025[6] Detailed Financial Performance 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 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 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 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] Cash Position 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] Operating Highlights Rockwell Medical secured new multi-year customer agreements and maintained a high percentage of long-term contracts, reinforcing its market position New Customer Agreements 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][12] - Signed a two-year product purchase agreement with the largest rural health system in the United States, including utilization minimums[14] - Secured a two-year product purchase agreement with the largest provider of inpatient dialysis in South Florida, with purchase minimums[14] - Entered a three-year product purchase agreement with a provider of specialized home care services, including utilization commitments[14] Other Strategic Achievements 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] - Maintained membership on the Russell Microcap Index for the third consecutive year[14] 2025 Annual 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 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] - Speakers included Mark Strobeck, Ph.D. (President and CEO) and Jesse Neri (SVP, Chief Financial Officer)[15] Non-GAAP Financial Measures 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 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] - Adjusted EPS is defined as Adjusted EBITDA divided by the weighted average number of shares outstanding[16] - 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] - 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] About Rockwell Medical 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] - Mission is to provide dialysis clinics and patients with the highest quality products supported by the best customer service[19] - Certified as a Great Place to Work in 2023, 2024, and 2025, and named Fortune Best Workplaces in Manufacturing & Production in 2024[19][20] Forward-Looking Statements 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] - 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] - Rockwell Medical expressly disclaims any obligation to update forward-looking statements, except as required by law[20] Contact Information 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] Financial Tables 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 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 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 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 |