ROCKWELL MEDICAL, INC. Q3 FY2024 earnings call

• Achieved profitability on cash flow and adjusted EBITDA basis for second consecutive quarter. Third quarter 2024 had highest quarterly concentrate product sales, gross profit, and gross margin in history. - Revenue positively impacted by consistent sales from current customers and large order from largest customer. - Eligible to extend interest-only period of loan with Innovatus due to second consecutive quarter of positive cash flow. - Entered multimillion dollar distribution agreement with Nipro Medical Corporation. - Expanded concentrates product portfolio with convenience back for at-home market. - Announced product purchase agreement with leading at-home and acute care dialysis equipment manufacturer. - Renewed supply agreement with Aqua dialysis and expanded distribution. - Projected fourth quarter 2024 revenue between $23 million and $25 million, with adjusted EBITDA profitability. - Revised 2024 guidance for net sales to $98 - $101 million, gross profit to $15 - $17 million, gross margin to 16 - 18%, and adjusted EBITDA to $4 - $5 million. - 2025 customer makeup shift expected, largest customer's 2025 net sales expected to decline $31 - $38 million, but expect EBITDA positive in 2025 before new contracts, etc. - Pursuing large multiyear supply agreement with world's largest dialysis products/services provider, finalizing contract negotiations for new products, reviewing new customer contracts, and evaluating acquisition opportunities.

For the third quarter of 2024, revenue was $28.3 million, the highest quarterly concentrate product sales in Rockwell's history. Net sales for the 9 months ended September 30, 2024, were $76.8 million. Gross profit for the third quarter was $6.2 million, with a gross margin of 22%. Gross profit for the 9 months ended September 30, 2024, was $13.9 million, with a gross margin of 18%. Adjusted EBITDA for the third quarter was a positive $2.8 million, and for the 9 months ended September 30, 2024, was a positive $3.8 million.

• Fourth quarter 2024 revenue projected between $23 million and $25 million, gross margin in line with previous quarters, adjusted EBITDA profitable. - 2024 guidance revised: net sales $98 - $101 million, gross profit $15 - $17 million, gross margin 16 - 18%, adjusted EBITDA $4 - $5 million. - 2025: largest customer's net sales expected to decline $31 - $38 million, but expect EBITDA positive in 2025 before new customer contracts, etc.

• Significant portion of revenue from single customer presents risk to Rockwell. Largest customer's 2025 revenue expected decline could negatively impact top line in short term.

Q: Anthony Vendetti asked about at-home dialysis opportunity and diversifying customer base.

A: Mark Strobeck said at-home market is expanding, working with providers, convenience pack is meaningful for at-home market; also pursuing large multiyear supply agreement, finalizing new product contracts, and evaluating new customers.

Q: Unidentified Analyst asked about Western expansion and ex-U.S. territories in 2025.

A: Mark Strobeck said continuing to increase Western customers, in discussions for permanent position; ex-U.S. territories: signed extension/enhancement of relationship with Nipro Medical, final stages of bidding on international contracts