Rockwell Medical(RMTI) - 2025 Q2 - Quarterly Report

Part I — Financial Information Unaudited Financial Statements 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 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 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 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 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][30] - 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][34] - 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] - 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] Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][146] Liquidity and Capital Resources 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] - The company may raise additional capital if needed, with $21.1 million remaining available under its at-the-market (ATM) facility[153] - 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] Quantitative and Qualitative Disclosures about Market Risk 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] Controls and Procedures 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] - 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] Part II — Other Information Legal Proceedings 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] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[175] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[176] Mine Safety Disclosures This item is not applicable to the company - Not applicable[177] Other Information The company reported no other information - None[178] Exhibits 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][180]