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 - 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]