- Net sales for the six months ended June 30, 2023 was $37.7
million, an 8% increase over $34.8 million for the same period in
2022.
- Gross profit for the six months ended June 30, 2023 was $3.6
million, a 260% increase over $1.0 million for the same period in
2022. Gross margin for the six months ended June 30, 2023 was
approximately 10%, a 233% increase over 3% for the same
period in 2022.
- Subsequent to the second quarter of 2023, Rockwell Medical
acquired a profitable and fully automated hemodialysis concentrates
business from Evoqua Water Technologies. The acquisition
significantly expands Rockwell Medical's geographic footprint,
customer base, and product offerings. At the time of the
transaction, Evoqua generated annual revenue of $18 million and
$3.3 million in annual EBITDA. Along with synergies, Rockwell
Medical expects this business to deliver 20% to 22% EBITDA margin
to the Company.
- With the completion of the Evoqua hemodialysis concentrates
business acquisition, Rockwell Medical increased its 2023 net sales
guidance from between $78.0 million and $82.0 million to between
$82.0 million and $86.0 million; and is increasing 2023 gross
profit guidance from between $7.0 million and $9.0 million to
between $8.0 million and $10.0 million.
- Rockwell Medical expects to achieve profitability from
operations in the fourth quarter of 2023 and going
forward.
Rockwell Medical, Inc. (the "Company") (Nasdaq: RMTI), a
healthcare company that develops, manufactures, commercializes, and
distributes a portfolio of hemodialysis products to dialysis
providers worldwide, today announced financial results and business
updates for the three and six months ended June 30, 2023.
"In just over a year, we have made great strides in increasing
revenue, reducing expenses, and driving the Company towards
profitability," said Mark Strobeck, Ph.D., Rockwell Medical’s
President and CEO. "By acquiring Evoqua Water Technologies'
profitable, revenue-generating hemodialysis concentrates business,
we now expect to be profitable in the fourth quarter of 2023 and
going forward. This puts Rockwell Medical in a stronger, more
stable financial position to further enhance shareholder value and
pursue additional growth opportunities."
FINANCIAL HIGHLIGHTS
- Net sales for the six months ended June 30, 2023 were $37.7
million, which represents an 8% increase over $34.8 million for the
same period in 2022. Overall, product revenue for the six months
ended June 30, 2023 was $36.1 million compared to product revenue
of $33.1 million for the three months ended June 30, 2022, an
increase of $3.0 million. Net sales for the three months ended June
30, 2023 were $18.1 million compared to net sales of $19.7 million
for the three months ended March 31, 2023 and $18.7 million for the
second quarter in 2022. The difference between first quarter 2023
net sales and second quarter 2023 net sales is a result of product
revenue recognition timing.
- Gross profit for the six months ended June 30, 3023 was $3.6
million, a 278% increase over $1.0 million for the same period in
2022. Gross profit increased by $2.6 million primarily due to
restructuring of supply contracts, onboarding of new customers,
increased pricing to other customers, and recognition of the
remaining deferred revenue related to the termination of the Baxter
distribution agreement. Gross profit for the three months ended
June 30, 2023 was $1.0 million compared to gross profit of $2.6
million for the three months ended March 31, 2023 and $1.7 million
for the second quarter of 2022. The difference between first
quarter 2023 gross profit and second quarter 2023 gross profit is a
result of product revenue recognition timing.
- For the six months ended June 30, 2023, Rockwell's net loss was
$5.1 million compared to $12.1 million for the same period in 2022.
For the three months ended June 30, 2023, Rockwell's net loss was
$3.3 million, or $0.18** per share, compared with a net loss of
$5.0 million, or $0.43** per share for the same period in
2022.
- Cash and cash equivalents and investments available-for-sale at
June 30, 2023 was $14.9 million compared to cash and cash
equivalents and investments available-for-sale of $16.8 million at
March 31, 2023 and $21.5 million at December 31, 2022. On July 10,
2023, which was after the end of the second quarter of 2023,
Rockwell received gross proceeds of approximately $13.8 million
from the exercise of warrants, which the Company used to fund the
Evoqua hemodialysis concentrates business acquisition. Rockwell
acquired from Evoqua substantially all of the assets related to
Evoqua's business of manufacturing, marketing, distributing, and
selling hemodialysis concentrates products in powder and liquid
form for $11.0 million up front in cash plus approximately $1.2
million for the estimated inventory amount. Following the close of
the Evoqua transaction and taking into account the exercised
warrants, Rockwell had approximately $16.2 million in cash and cash
equivalents and investments available-for-sale on a pro forma
basis.
Financial Highlights
Three Months Ended June
30
Six Months Ended June
30
(In Thousands, Except Per Share
Amounts)
2023
2022
2023
2022
Net Sales
$
18,080
$
18,682
$
37,748
$
34,806
Gross Profit
1,033
1,745
3,632
960
Net Loss
(3,305
)
(4,967
)
(5,055
)
(12,128
)
Adjusted EBITDA*
(2,257
)
(3,363
)
(3,234
)
(10,028
)
Basic and Diluted Net Loss per Share
**
$
(0.18
)
$
(0.43
)
$
(0.27
)
$
(1.20
)
* See reconciliation to GAAP financial
measures in the tables below.
** See the "Loss Per Share" section in
Note 3 on Form 10-Q filed August 14, 2023 for more details on what
is included in the basic and diluted net loss per share
calculation.
BUSINESS HIGHLIGHTS
- Rockwell Medical entered into three-year co-promotion services
agreement with B. Braun Medical Inc. As part of the agreement,
Rockwell Medical designated B. Braun as an independent,
non-exclusive representative to promote the Company's hemodialysis
concentrates products to dialysis providers in the United States,
with a focus on the west coast. All terms of the sale of any
Rockwell Medical product, including price, delivery schedule, and
terms and conditions, are set by Rockwell Medical, in the Company's
sole discretion. All orders will be directed to, and processed by,
Rockwell Medical. B. Braun will receive a fee for any sales
generated by its promotional efforts.
- Rockwell Medical was added to the Russell Microcap Index.
- Rockwell Medical expanded its international footprint for its
hemodialysis concentrates products through several multi-year
distribution and user agreements. New geographies include the
United Arab Emirates, Chile, St. Lucia, Costa Rica, and Grenada.
Rockwell has a large and growing international business and
currently sells its hemodialysis concentrates products in 29
countries throughout North America, South America, Asia and
Africa.
- Rockwell Medical’s subsidiary, Rockwell Transportation (DOT
#685854) received the highest safety rating by the Federal Motor
Carrier Safety Administration ("FMCSA"), an Operating
Administration within the U.S. Department of Transportation. Safety
ratings are based on an evaluation of a motor carrier's compliance
with the safety fitness standard as described in 49 CFR 385,
Appendix B.
- During and subsequent to the second quarter of 2023, Rockwell
undertook workforce and cost reductions as part of its continued
business restructuring.
- On July 10, 2023, Rockwell Medical acquired the hemodialysis
concentrates business from Evoqua. Under the terms of the
agreement, Rockwell Medical acquired Evoqua's concentrates business
which includes all contracts, all intellectual property, all U.S.
Food and Drug Administration 510(k) clearances, and all assets
primarily associated with, and related to, Evoqua's concentrates
business nationwide, including liquid and powder bicarbonate and
liquid acid. Evoqua's operations are fully automated and afford
Rockwell the potential to manufacture its hemodialysis concentrates
products at a lower cost and add significant capacity to the
Company's production line. By assuming responsibility for Evoqua’s
concentrates customer contracts, Rockwell has further expanded its
footprint in the United States and assumed a larger market share of
the already growing hemodialysis concentrates market. Additionally,
the Company is now the leading supplier of liquid bicarbonate
products to dialysis centers in the United States.
2023 GUIDANCE
With the addition of Evoqua's hemodialysis concentrates
business, which closed on July 10, 2023, and after evaluating the
expected synergies between Rockwell Medical's and Evoqua's
hemodialysis concentrates businesses and product lines, the Company
updates its 2023 guidance as follows:
- Net Sales — The Company increased its 2023 net sales
guidance from between $78.0 million and $82.0 million to between
$82.0 million and $86.0 million. Rockwell Medical anticipates that
third quarter 2023 net sales will be between $21.0 million and
$23.0 million.
- Gross Profit — The Company is increasing its 2023 gross
profit guidance from between $7.0 million and $9.0 million to
between $8.0 million and $10.0 million.
- Profitability — Since Rockwell Medical announced its
updated business strategy in November 2022, the Company provided
guidance that it expected to achieve profitability in 2024.
Rockwell Medical is updating its guidance on profitability and now
expects the Company to be profitable in the fourth quarter 2023 and
going forward.
Initial 2023 Guidance
Updated 2023 Guidance
Net Sales
$78.0 Million to $82.0
Million
$82.0 Million to $86.0
Million
Gross Profit
$7.0 Million to $9.0 Million
$8.0 Million to $10.0 Million
CONFERENCE CALL AND WEBCAST DETAILS
Date: Monday, August 14, 2023
Time: 8:00am ET
Live Number: (888) 660-6347 //
(International) 1 (929) 201-6594
Conference Call ID: 4944610
Webcast and Replay:
www.RockwellMed.com/Results
Speakers:
- Mark Strobeck, Ph.D. — President and Chief
Executive Officer; and
- Paul McGarry, CPA — SVP, Finance and Chief
Accounting Officer.
Format: Discussion of second quarter
2023 operational and financial results followed by Q&A.
About Rockwell Medical
Rockwell Medical, Inc. (Nasdaq: RMTI) is a healthcare company
that develops, manufactures, commercializes, and distributes a
portfolio of hemodialysis products for dialysis providers
worldwide. Rockwell Medical's mission is to provide dialysis
clinics and the patients they serve with the highest quality
products supported by the best customer service in the industry.
Rockwell is focused on innovative, long-term growth strategies that
enhance its products, its processes, and its people, enabling the
Company to deliver exceptional value to the healthcare system and
provide a positive impact on the lives of hemodialysis patients.
Hemodialysis is the most common form of end-stage kidney disease
treatment and is typically performed at freestanding outpatient
dialysis centers, hospital-based outpatient centers, skilled
nursing facilities, or in a patient’s home. Rockwell Medical's
products are vital to vulnerable patients with end-stage kidney
disease, and the Company is relentless in providing unmatched
reliability and customer service. Rockwell Medical is the second
largest supplier of acid and bicarbonate concentrates for dialysis
patients in the United States and intends to become the leading
global supplier of hemodialysis concentrates. Certified as a Great
Place to Work® in 2023, Rockwell Medical is Driven to Deliver
Life-Sustaining Dialysis SolutionsTM. For more information, visit
www.RockwellMed.com.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the federal
securities laws. Words such as, "may," "might," "will," "should,"
"believe," "expect," "anticipate," "estimate," "continue," "could,"
"can," "would," "develop," "plan," "potential," "predict,"
"forecast," "project," "intend," "look forward to," "remain
confident," “guidance,” or the negative of these terms, and similar
expressions, or statements regarding intent, belief, or current
expectations, are forward looking statements. There can be no
assurance that: Rockwell Medical will grow its hemodialysis
concentrates business and further improve its performance; Rockwell
Medical will be able to enhance the economics in its current
customer agreements; Rockwell Medical will add new long-term supply
agreements with new customers and will transition Baxter customers;
Rockwell Medical will achieve its projected total net sales and
gross profit for 2023; Rockwell Medical will be able to achieve
planned cost savings to operate its concentrates business
profitability or achieve the other components of its strategy;
Rockwell Medical will achieve profitability in the fourth quarter
of 2023; Rockwell Medical will expand into new product categories
and markets; Rockwell Medical will be successful in evaluating
potential business development opportunities; that Rockwell Medical
will realize benefits from the Baxter transition; Rockwell Medical
will successfully integrate the Evoqua hemodialysis concentrates
business and realize synergies and cost savings from that
acquisition; or Rockwell Medical’s future cash balance will be
sufficient to fund operations going forward. While Rockwell Medical
believes these forward-looking statements are reasonable, undue
reliance should not be placed on any such forward-looking
statements, which are based on information available to us on the
date of this release. These forward-looking statements are based
upon current estimates and assumptions and are subject to various
risks and uncertainties (including, without limitation, those set
forth in Rockwell Medical's SEC filings), many of which are beyond
our control and subject to change. Actual results could be
materially different. Risks and uncertainties include but are not
limited to those risks more fully discussed in the "Risk Factors"
section of our Annual Report on Form 10-K for the year ended
December 31, 2022, as such description may be amended or updated in
any subsequent reports filed with the SEC. Rockwell Medical
expressly disclaims any obligation to update our forward-looking
statements, except as may be required by law.
Non-GAAP Financial Measures
To supplement the Company’s financial results presented on a
U.S. generally accepted accounting principles (“GAAP”) basis, the
Company has included information about non-GAAP measures of EBITDA
and adjusted EBITDA as useful operating metrics. The Company
believes that the presentation of these non-GAAP financial
measures, when viewed with results under GAAP and the accompanying
reconciliation, provides supplementary information to analysts,
investors, lenders, and the Company’s management in assessing the
Company’s performance and results from period to period. The
Company uses these non-GAAP measures internally to understand,
manage and evaluate the Company’s performance. These non-GAAP
financial measures should be considered in addition to, and not a
substitute for, or superior to, net income or other financial
measures calculated in accordance with GAAP. Non-GAAP financial
measures used by us may be calculated differently from, and
therefore may not be comparable to, non-GAAP measures used by other
companies.
Financial Tables Follow
ROCKWELL MEDICAL, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars In Thousands)
June 30,
December 31,
2023
2022
(Unaudited)
Cash and Cash Equivalents
$
14,865
$
21,492
Total Assets
$
38,037
$
46,635
Total Liabilities
$
28,509
$
32,529
Total Stockholders’ Equity
$
9,528
$
14,106
Common Stock Outstanding
16,795,673
12,163,673
Common stock and common stock
equivalents*
32,033,132
31,356,373
*Common stock and common stock
equivalents:
Common stock
16,795,673
12,163,673
Common stock warrants (pre-funded)
1,793,000
6,300,000
Common stock and pre-funded stock
warrants
18,588,673
18,463,673
Preferred stock converted
1,363,636
1,363,636
Options to purchase common stock
1,570,599
1,206,905
Restricted stock awards
891
891
Restricted stock units
313,065
125,000
Common stock warrants
10,196,268
10,196,268
Total common stock and common stock
equivalents
32,033,132
31,356,373
Our capital structure as of August 14, 2023, which includes the
Warrant Exercise and Reload Warrant transaction executed on July
10, 2023 is as follows:
Common Stock
Outstanding:
Total Outstanding Common Stock
28,489,663
Common Stock
Equivalents Outstanding:
Options and unvested RSU's
1,884,555
Preferred Stock - convertible to common at
$11 per share
1,363,636
Warrants
- Armistice Warrant Reload - strike $5.13
per share - exp. Dec 2027
3,750,000
- All other warrants
295,278
Total Common Stock equivalents
7,293,469
Total - Fully Diluted Shares
35,783,132
ROCKWELL MEDICAL, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Shares
and Per Share Amounts)
Three Months Ended June 30,
2023
Three Months Ended June 30,
2022
Six Months Ended June 30,
2023
Six Months Ended June 30,
2022
Net Sales
$
18,080
$
18,682
$
37,748
$
34,806
Cost of Sales
17,047
16,937
34,116
33,846
Gross Profit (Loss)
1,033
1,745
3,632
960
Research and Product Development
167
926
445
2,494
Selling and Marketing
530
526
1,028
981
General and Administrative
3,295
4,775
6,545
8,592
Operating Loss
(2,959
)
(4,482
)
(4,386
)
(11,107
)
Other (Expense) Income
Realized Gain on Investments
—
—
—
4
Interest Expense
(395
)
(485
)
(782
)
(1,025
)
Interest Income
49
—
113
—
Total Other Expense
(346
)
(485
)
(669
)
(1,021
)
Net Loss
$
(3,305
)
$
(4,967
)
$
(5,055
)
$
(12,128
)
Basic and Diluted Net Loss per
Share
$
(0.18
)
$
(0.43
)
$
(0.27
)
$
(1.20
)
Basic and Diluted Weighted Average
Shares Outstanding
18,496,640
11,591,768
18,480,248
10,076,415
Reconciliation to GAAP Financial
Measures
Adjusted EBITDA
Three Months Ended June
30
Six Months Ended June
30
(in thousands)
2023
2022
2023
2022
Net Loss
$
(3,305
)
$
(4,967
)
$
(5,055
)
$
(12,128
)
Income taxes
—
—
—
—
Interest expense, net
303
393
603
837
Depreciation and amortization
262
232
512
462
EBITDA
(2,740
)
(4,342
)
(3,940
)
(10,829
)
One time severance costs
171
884
201
884
Stock-based compensation
312
95
505
(83
)
Adjusted EBITDA
$
(2,257
)
$
(3,363
)
$
(3,234
)
$
(10,028
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230814958807/en/
Heather R. Hunter SVP, Chief Corporate Affairs Officer (248)
432-1362 IR@RockwellMed.com
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