Rockwell Medical Announces First Quarter 2024 Results, Raises 2024 Guidance
Rockwell Medical (Nasdaq: RMTI) reported record net sales of $22.7 million for Q1 2024, a 15% year-over-year increase. Gross profit rose 18% to $3.1 million, and gross margin improved to 14%. The net loss narrowed to $1.7 million, with adjusted EBITDA at ($0.5) million. The company raised its 2024 guidance, expecting net sales of $90-$94 million and gross profit of $13-$15 million. Rockwell Medical signed new distribution agreements and extended a loan maturity date, reducing interest rates. Cash reserves stood at $10.2 million at the end of Q1 2024.
- Net sales increased 15% year-over-year to $22.7 million.
- Gross profit rose 18% to $3.1 million.
- Gross margin improved to 14% from 13%.
- Net loss improved to $1.7 million from $1.8 million.
- Adjusted EBITDA improved to ($0.5) million from ($1.0) million.
- 2024 guidance for net sales raised to $90-$94 million.
- 2024 guidance for gross profit increased to $13-$15 million.
- New distribution agreements expected to generate $1M in annual revenue.
- Loan maturity extended with reduced interest rate, easing financial burden.
- Cash reserves stood at $10.2 million at the end of Q1 2024.
- Net loss of $1.7 million, though an improvement, still reflects a loss.
- Adjusted EBITDA remains negative at ($0.5) million.
- Cash and equivalents decreased by $2.3 million from December 2023 to March 2024.
- Seasonal expenses negatively impacted adjusted EBITDA.
Insights
The financial results show a strong performance by Rockwell Medical in the first quarter of 2024. Net sales reached $22.7 million, a
Gross profit also rose to $3.1 million, showing an
Notably, the company raised its guidance for 2024, expecting net sales between $90.0M and $94.0M and gross profit to rise to $13.0M - $15.0M. This optimistic outlook suggests confidence in continued growth and an improving financial trajectory, making the stock potentially attractive for investors looking for growth in the healthcare sector.
The updated financial guidance points to a positive market reception and confidence in product demand. Rockwell Medical’s focus on expanding distribution agreements and entering new markets aligns well with its growth strategy. For instance, agreements with BioNuclear and Atlantic Medical International (AMI) are expected to generate additional annual revenues, enhancing its market presence.
The product purchase agreement with a significant health system in the Mountain West region signals a strong strategic move to solidify its market in the U.S. and potentially opens doors for further market penetration. This strategic expansion underpins the company's raised financial guidance and positions it for sustainable growth.
-
Reports record net sales of
$22.7 million 25% over net product sales and a15% increase over net sales for the same period in 2023. -
Reports record gross profit of
$3.1 million 18% over the same period in 2023. - Raises guidance for net sales, gross profit, and profitability on an adjusted EBITDA basis for the full-year 2024.
"We continue to see increasing interest in, and market demand for, our hemodialysis portfolio of products from medical equipment suppliers and distributors, along with health systems, dialysis centers, and skilled nursing facilities, domestically and internationally, all of which advances our vision to expand our global footprint and become the leading global supplier of all hemodialysis concentrates," said Mark Strobeck, Ph.D., Rockwell Medical’s President and CEO. "Taking into account our first quarter 2024 financial and operating results, we are pleased to announce that we have revised our guidance for 2024 upward and believe we are well-positioned to deliver on that guidance."
FIRST QUARTER 2024 FINANCIAL HIGHLIGHTS
Net sales for the three months ended March 31, 2024 consisted solely of concentrates products sales. Net sales for the three months ended March 31, 2023 consisted of sales of concentrates products and the recognition of
-
Net sales for the three months ended March 31, 2024 were
$22.7 million 15% increase over net sales of$19.7 million 25% over the same period in 2023. -
Gross profit for the three months ended March 31, 2024 was
$3.1 million 18% increase over$2.6 million $3.1 million $1.1 million -
Gross margin for the three months ended March 31, 2024 was
14% , representing an increase from13% for the same period in 2023. Excluding deferred revenue, gross margin for the first quarter of 2024 approximately doubled from gross margin of6% for the same period in 2023. -
Net loss for the three months ended March 31, 2024 was
$1.7 million $1.8 million $1.5 million $3.2 million -
Adjusted EBITDA for the three months ended March 31, 2024 was
( . Seasonal items related to audit, payroll tax, and other public-company related expenses historically incurred in the first quarter drove the Company's Adjusted EBITDA to be slightly negative. The Company expects expenses to normalize for the remainder of 2024.$0.5) million -
Cash and cash equivalents and investments available-for-sale at March 31, 2023 was
$8.6 million $10.9 million $2.3 million $10.2 million -
During the first quarter of 2024, the Company amended its Loan and Security Agreement with Innovatus Life Sciences Lending Fund I, LP. Under the terms of the amendment, Rockwell Medical reduced the interest rate on the
$8.0 million
|
Three Months Ended
|
||||||
(In Millions, Except Per Share Amounts) |
|
2024 |
|
|
2023* |
||
Net Sales |
$ |
22.7 |
|
|
$ |
19.7 |
|
|
|
|
|
||||
Gross Profit |
|
3.1 |
|
|
|
2.6 |
|
|
|
|
|
||||
Operating Loss |
|
(1.3 |
) |
|
|
(1.4 |
) |
|
|
|
|
||||
Net Loss |
|
(1.7 |
) |
|
|
(1.8 |
) |
|
|
|
|
||||
Adjusted EBITDA* |
|
(0.5 |
) |
|
|
(1.0 |
) |
|
|
|
|
||||
Basic and Diluted Net Loss per Share ** |
$ |
(0.06 |
) |
|
$ |
(0.10 |
) |
Adjusted EPS *** |
$ |
(0.02 |
) |
|
$ |
(0.05 |
) |
* |
Includes |
** |
See Note 3 for more details related to Basic and Diluted Weighted Average Shares Outstanding on Form 10-Q filed May 14, 2024. |
*** |
See reconciliation to GAAP financial measures in the tables below. |
FIRST QUARTER 2024 OPERATING HIGHLIGHTS
- Rockwell Medical was certified as a Great Place to Work® for the second year in a row. This accreditation reflects the continued positive changes the Company has made over the last two years.
-
Rockwell Medical entered into new and expanded distribution agreements with BioNuclear and Atlantic Medical International ("AMI"), respectively. In the aggregate, these agreements are expected to generate approximately
$1 million Bermuda's leading supplier of medical products and equipment for the acute and continuing care markets. -
Rockwell Medical entered into a product purchase agreement with one of the largest health systems in the Mountain West region of
the United States . Under the terms of the agreement, Rockwell Medical will supply this health system with the Company's liquid and dry acid and bicarbonate hemodialysis concentrates, cleaning agents, hemodialysis concentrates mixers and any additional products offered by Rockwell Medical.
GUIDANCE
Rockwell updates its guidance as follows:
|
Initial 2024
|
Updated 2024
|
Updated Expected
|
Net Sales |
|
|
|
Gross Profit |
|
|
|
Gross Margin |
|
unchanged |
4 to 6 percentage point increase over |
Adjusted EBITDA |
nill to |
|
|
Rockwell Medical projects net sales to grow in the mid-to-high single digits in 2025 and beyond. Rockwell Medical projects gross margin in 2025 to be approximately
CONFERENCE CALL AND WEBCAST DETAILS
Date: Tuesday, May 14, 2024
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
- Jesse Neri — SVP, Finance.
Format: Discussion of first quarter 2024 financial and operational results followed by Q&A.
NON-GAAP FINANCIAL MEASURES
To supplement Rockwell Medical’s unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets, which are prepared in conformity with generally accepted accounting principles in
Adjusted EBITDA is a key measure used by Rockwell Medical to understand and evaluate operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operating plans. The Company provides Adjusted EBITDA because it believes the metric is helpful in highlighting trends in its operating results because it excludes items that are not indicative of Rockwell Medical’s core operating performance. In particular, the Company believes that the exclusion of the items eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of Rockwell Medical’s business. Adjusted net sales, gross profit, gross margin and net loss is used by Rockwell Medical to understand growth within its hemodialysis concentrates business by excluding a one-time item that is not indicative of its core operating performance.
Adjusted EBITDA and adjusted net sales, gross profit, gross margin and net loss should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. Other companies, including companies in the same industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA and adjusted net sales, gross profit, gross margin and net loss as tools for comparison. There are a number of limitations related to the use of these non-GAAP financial measures rather than the most directly comparable financial measures calculated in accordance with GAAP. When evaluating the Company’s performance, you should consider Adjusted EBITDA and adjusted net sales, gross profit, gross margin and net loss alongside other financial performance measures, including net loss and other GAAP results. Adjusted EBITDA is our best proxy for cash burn. Adjusted net sales, gross profit, gross margin and net loss enable us to understand growth within our hemodialysis concentrates business by excluding a one-time item that is not indicative of our core operating performance.
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 usually performed at freestanding outpatient dialysis centers, at hospital-based outpatient centers, at 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 largest supplier of liquid bicarbonate concentrates and the second largest supplier of acid and dry bicarbonate concentrates for dialysis patients in
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," “feel confident,” “guidance,” or the negative of these terms, and similar expressions, or statements regarding intent, belief, or current expectations, are forward looking statements. These statements include (without limitation) statements regarding: plans to expand our global footprint; our expectations regarding normalizing our expenses; the impact of our strategy on our top and bottom line; growth in the hemodialysis concentrates market; the growth of our business; guidance for expenses, net sales, gross profit, gross margin and adjusted EBITDA. 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, 2023, 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.
Financial Tables Follow
| ROCKWELL MEDICAL, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Dollars In Thousands) | ||||||
| March 31, | March 31, | |||||
2024 |
2023 |
|||||
| Cash, Cash Equivalents & Investments available-for-sale | $ |
8,619 |
$ |
16,833 |
||
| Total Assets | $ |
50,723 |
$ |
40,472 |
||
| Total Liabilities | $ |
30,080 |
$ |
27,930 |
||
| Total Stockholders’ Equity | $ |
20,643 |
$ |
12,542 |
||
| Common Stock Outstanding |
|
29,556,474 |
|
18,463,673 |
||
| Common stock and common stock equivalents* |
|
37,222,734 |
|
31,343,670 |
||
| *Common stock and common stock equivalents: | ||||||
| Common stock |
|
29,556,474 |
|
12,552,673 |
||
| Common stock warrants (pre-funded) |
|
- |
|
5,911,000 |
||
| Common stock and pre-funded stock warrants |
|
29,556,474 |
|
18,463,673 |
||
| Preferred stock converted |
|
1,363,636 |
|
1,363,636 |
||
| Options to purchase common stock |
|
1,876,031 |
|
1,194,202 |
||
| Restricted stock awards |
|
891 |
|
891 |
||
| Restricted stock units |
|
441,218 |
|
125,000 |
||
| Common stock warrants |
|
3,984,484 |
|
10,196,268 |
||
| Total common stock and common stock equivalents |
|
37,222,734 |
|
31,343,670 |
||
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES |
||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
| (In Thousands, Except Shares and Per Share Amounts) | ||||||||
| Three Months Ended March 31, 2024 |
Three Months Ended March 31, 2023 |
|||||||
| Net Sales | $ |
22,676 |
|
$ |
19,668 |
|
||
| Cost of Sales |
|
19,612 |
|
|
17,069 |
|
||
| Gross Profit |
|
3,064 |
|
|
2,599 |
|
||
| Research and Product Development |
|
18 |
|
|
278 |
|
||
| Selling and Marketing |
|
594 |
|
|
498 |
|
||
| General and Administrative |
|
3,776 |
|
|
3,250 |
|
||
| Operating Loss |
|
(1,325 |
) |
|
(1,427 |
) |
||
| Other (Expense) Income | ||||||||
| Interest Expense |
|
(431 |
) |
|
(387 |
) |
||
| Interest Income |
|
24 |
|
|
64 |
|
||
| Total Other Expense |
|
(406 |
) |
|
(323 |
) |
||
| Net Loss | $ |
(1,731 |
) |
$ |
(1,750 |
) |
||
| Basic and Diluted Net Loss per Share | $ |
(0.06 |
) |
$ |
(0.10 |
) |
||
| Basic and Diluted Weighted Average Shares Outstanding |
|
29,327,204 |
|
|
18,359,940 |
|
||
| Reconciliation to GAAP Financial Measures | ||||||||
| (In Thousands, Except Shares and Per Share Amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31 | ||||||||
|
2024 |
|
|
2023 |
|
|||
| Net Loss | $ |
(1,731 |
) |
$ |
(1,750 |
) |
||
| Income taxes | ||||||||
| Interest expense |
|
431 |
|
|
387 |
|
||
| Depreciation and amortization |
|
544 |
|
|
159 |
|
||
| EBITDA |
|
(757 |
) |
|
(1,205 |
) |
||
| Severance costs |
|
- |
|
|
29 |
|
||
| Stock-based compensation |
|
251 |
|
|
193 |
|
||
| Adjusted EBITDA | $ |
(506 |
) |
$ |
(982 |
) |
||
| Adjusted EPS | $ |
(0.02 |
) |
$ |
(0.05 |
) |
||
| Basic and Diluted Weighted Average Shares Outstanding |
|
29,327,204 |
|
|
18,359,940 |
|
||
| Reconciliation to GAAP Financial Measures | ||||||
| (Dollars in Thousands) | ||||||
| Three Months Ended | ||||||
| March 31 | ||||||
|
2024 |
|
|
2023 |
|
|
| Net Sales | $ |
22,676 |
|
$ |
19,668 |
|
| Deferred Revenue |
|
- |
|
|
(1,472 |
) |
| Net Sales excluding Deferred Revenue |
|
22,676 |
|
|
18,197 |
|
| Gross Profit |
|
3,064 |
|
|
2,599 |
|
| Deferred Revenue |
|
- |
|
|
(1,472 |
) |
| Gross Profit excluding Deferred Revenue | $ |
3,064 |
|
$ |
1,128 |
|
| Net Loss |
|
(1,731 |
) |
|
(1,750 |
) |
| Deferred Revenue |
|
0 |
|
|
(1,472 |
) |
| Net Loss excluding Deferred Revenue | $ |
(1,731 |
) |
$ |
(3,222 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514699838/en/
Heather R. Hunter
SVP, Chief Corporate Affairs Officer
(248) 432-1362
IR@RockwellMed.com
Source: Rockwell Medical, Inc.
FAQ
What were Rockwell Medical's net sales for Q1 2024?
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What new agreements did Rockwell Medical enter into in Q1 2024?
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