Rockwell Medical Announces Third Quarter 2023 Results
- Record net sales and concentrates product sales for the third quarter of 2023, indicating strong performance and market demand.
- Projected 2023 net sales and gross profit show a significant increase year-over-year, demonstrating positive growth prospects for the company.
- Anticipation of profitability on an adjusted EBITDA basis in the fourth quarter of 2023 is a positive indicator of financial health and operational efficiency.
- None.
-
Net sales for the third quarter of 2023 were
$23.8 million $21.6 million -
Gross profit for the third quarter of 2023 increased
183% over the same period in 2022. Gross margin for the third quarter of 2023 was9% , an increase from4% for the same period in 2022. -
Operating loss for the third quarter of 2023 was
$1.7 million 41% improvement over the second quarter of 2023 and a53% improvement over the same period in 2022. -
Rockwell Medical reiterates projected 2023 net sales to be between
$82.0 million $86.0 million 17% to18% year-over-year, and projected 2023 gross profit to between$8.0 million $10.0 million 95% to144% year-over-year. - Rockwell Medical expects to achieve profitability on an adjusted EBITDA basis in the fourth quarter of 2023.
"Since we started implementing our new focused business strategy a little over a year ago, we have successfully completed two acquisitions, aligned our cost structure, and are on track to meet our revenue and profitability expectations for this year," said Mark Strobeck, Ph.D., Rockwell Medical’s President and CEO. "During the third quarter of 2023, Rockwell Medical became the leading supplier of liquid bicarbonate hemodialysis concentrates in
Third Quarter 2023 Operating Highlights
-
Rockwell Medical completed its second acquisition during the third quarter of 2023, acquiring the hemodialysis concentrates assets from Evoqua Water Technologies. Evoqua's operations are fully automated and afford Rockwell Medical 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 Medical has further expanded its footprint in
the United States and assumed a larger share of the already growing hemodialysis concentrates market. Additionally, the Company is now the leading supplier of liquid bicarbonate products to dialysis centers inthe United States . - Rockwell Medical entered into an amended and restated products purchase agreement with its largest customer. Under the agreement, Rockwell Medical and the customer agreed to an increase in product pricing, effective September 1, 2023 and continuing until December 31, 2024, and a one-time payment to Rockwell Medical on or after December 1, 2023. The customer has the option to further extend the term through December 31, 2025. In the event of such an extension, product pricing will be increased for the extended term.
- Rockwell Medical entered into several three-year product purchase agreements with new and existing customers including Centers for Dialysis Care, Houston Methodist, and Sanderling Renal Services.
- Rockwell Medical appointed Joan Lau, Ph.D. to the Company's Board of Directors. Dr. Lau has more than 20 years’ experience in executive leadership of R&D focused biopharma as an entrepreneur scientist, CEO, operator, investor, and board member of public and private biopharmaceutical companies.
- Rockwell Medical named Jesse Neri as Senior Vice President, Finance. Mr. Neri has more than 20 years’ experience leading finance functions at both public and private companies.
Third Quarter 2023 Financial Highlights
-
Net sales for the three months ended September 30, 2023 were
$23.8 million 31% increase over the second quarter of 2023 and a27% increase over$18.7 million $21.6 million $61.5 million 15% increase over the same period in 2022. -
Gross profit for the three months ended September 30, 2023 was
$2.2 million $1.2 million 183% increase over the same period in 2022. Gross profit for the nine months ended September 30, 2023 was$5.8 million 236% increase over the same period in 2022. -
Gross margin for the three months ended September 30, 2023 was
9% , representing an increase from6% in the second quarter of 2023 and4% for the same period in 2022. Gross margin for the nine months ended September 30, 2023 was9% , compared with3% for the same period in 2022. -
Rockwell Medical undertook workforce and cost reductions as part of its continued business restructuring. Operating loss for the three months ended September 30, 2023 was
$1.7 million 53% decrease from an operating loss of$3.7 million $6.1 million 59% decrease from an operating loss of$14.8 million -
Cash and cash equivalents and investments available-for-sale at September 30, 2023 was
$11.7 million $14.9 million $0.5 million $4 million -
Rockwell Medical's outstanding debt at the end of the third quarter of 2023 was
$9.5 million $8.0 million
Financial Highlights |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended September 30, |
||||||||||||
(In Thousands, Except Per Share Amounts) |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net Sales |
$ |
23,771 |
|
|
$ |
18,691 |
|
|
$ |
61,519 |
|
|
$ |
53,497 |
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit |
|
2,202 |
|
|
|
777 |
|
|
|
5,834 |
|
|
|
1,737 |
|
|
|
|
|
|
|
|
|
||||||||
Net Loss |
|
(1,872 |
) |
|
|
(4,189 |
) |
|
|
(6,927 |
) |
|
|
(16,318 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA* |
|
(1,347 |
) |
|
|
(3,208 |
) |
|
|
(4,581 |
) |
|
|
(13,237 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted Net Loss per Share ** |
$ |
(0.07 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.32 |
) |
|
$ |
(1.26 |
) |
* See reconciliation to GAAP financial measures in the tables below. |
** See Note 3 for more details related to Basic and Diluted Weighted Average Shares Outstanding on Form 10-Q filed November 14, 2023. |
2023 GUIDANCE
The Company expects net sales for 2023 to be between
CONFERENCE CALL AND WEBCAST DETAILS
Date: Tuesday, November 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
- Jesse Neri — SVP, Finance.
Format: Discussion of third quarter 2023 operational and financial 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 EBITDA 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 as a tool for comparison. There are a number of limitations related to the use of these non-GAAP financial measures rather than net loss, which is the most directly comparable financial measure calculated in accordance with GAAP. When evaluating the Company’s performance, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and other GAAP results. Adjusted EBITDA is our best proxy for cash burn.
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 second largest supplier of acid and 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," “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 be profitable in the fourth quarter of 2023, will achieve its expected net sales or gross profit for the full year 2023, or that the hemodialysis concentrates market will continue to grow and that Rockwell Medical will grow its market share. 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.
| ROCKWELL MEDICAL, INC. AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Dollars In Thousands) | |||||
| September 30, | December 31, | ||||
2023 |
2022 |
||||
| (Unaudited) | |||||
| Cash, Cash Equivalents & Investments available-for-sale | $ |
11,730 |
$ |
21,492 |
|
| Total Assets | $ |
52,607 |
$ |
46,635 |
|
| Total Liabilities | $ |
31,088 |
$ |
32,529 |
|
| Total Stockholders’ Equity | $ |
21,519 |
$ |
14,106 |
|
| Common Stock Outstanding |
|
28,489,663 |
|
12,163,673 |
|
| Common stock and common stock equivalents* |
|
35,554,361 |
|
31,356,373 |
|
| *Common stock and common stock equivalents: | |||||
| Common stock |
|
28,489,663 |
|
12,163,673 |
|
| Common stock warrants (pre-funded) |
|
- |
|
6,300,000 |
|
| Common stock and pre-funded stock warrants |
|
28,489,663 |
|
18,463,673 |
|
| Preferred stock converted |
|
1,363,636 |
|
1,363,636 |
|
| Options to purchase common stock |
|
1,367,493 |
|
1,206,905 |
|
| Restricted stock awards |
|
891 |
|
891 |
|
| Restricted stock units |
|
287,400 |
|
125,000 |
|
| Common stock warrants |
|
4,045,278 |
|
10,196,268 |
|
| Total common stock and common stock equivalents |
|
35,554,361 |
|
31,356,373 |
|
| ROCKWELL MEDICAL, INC. AND SUBSIDIARIES | ||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||
| (In Thousands, Except Shares and Per Share Amounts) | ||||||||||||||||
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | |||||||||||||
| Net Sales | $ |
23,771 |
|
$ |
18,691 |
|
$ |
61,519 |
|
$ |
53,497 |
|
||||
| Cost of Sales |
|
21,569 |
|
|
17,914 |
|
|
55,685 |
|
|
51,760 |
|
||||
| Gross Profit (Loss) |
|
2,202 |
|
|
777 |
|
|
5,834 |
|
|
1,737 |
|
||||
| Research and Product Development |
|
495 |
|
|
469 |
|
|
939 |
|
|
2,963 |
|
||||
| Selling and Marketing |
|
556 |
|
|
762 |
|
|
1,584 |
|
|
1,743 |
|
||||
| General and Administrative |
|
2,889 |
|
|
3,253 |
|
|
9,434 |
|
|
11,845 |
|
||||
| Operating Loss |
|
(1,737 |
) |
|
(3,707 |
) |
|
(6,123 |
) |
|
(14,814 |
) |
||||
| Other (Expense) Income | ||||||||||||||||
| Realized Gain on Investments |
|
220 |
|
|
- |
|
|
220 |
|
|
4 |
|
||||
| Interest Expense |
|
(410 |
) |
|
(476 |
) |
|
(1,193 |
) |
|
(1,497 |
) |
||||
| Interest Income |
|
56 |
|
|
(6 |
) |
|
169 |
|
|
(10 |
) |
||||
| Total Other Expense |
|
(134 |
) |
|
(482 |
) |
|
(804 |
) |
|
(1,503 |
) |
||||
| Net Loss | $ |
(1,872 |
) |
$ |
(4,189 |
) |
$ |
(6,927 |
) |
$ |
(16,318 |
) |
||||
| Basic and Diluted Net Loss per Share | $ |
(0.07 |
) |
$ |
(0.23 |
) |
$ |
(0.32 |
) |
$ |
(1.26 |
) |
||||
| Basic and Diluted Weighted Average Shares Outstanding |
|
27,521,088 |
|
|
18,463,673 |
|
|
21,526,978 |
|
|
12,902,890 |
|
||||
| Reconciliation to GAAP Financial Measures | ||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
| Net Loss | $ |
(1,872 |
) |
$ |
(4,189 |
) |
$ |
(6,927 |
) |
$ |
(16,318 |
) |
||||
| Income taxes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
| Interest expense, net |
|
318 |
|
|
382 |
|
|
921 |
|
|
1,219 |
|
||||
| Depreciation and amortization |
|
518 |
|
|
234 |
|
|
1,030 |
|
|
696 |
|
||||
| EBITDA |
|
(1,036 |
) |
|
(3,573 |
) |
|
(4,976 |
) |
|
(14,403 |
) |
||||
| One time severance costs |
|
576 |
|
|
188 |
|
|
777 |
|
|
1,072 |
|
||||
| Stock-based compensation |
|
212 |
|
|
177 |
|
|
717 |
|
|
94 |
|
||||
| Wanbang deferred revenue |
|
(2,197 |
) |
|
- |
|
|
(2,197 |
) |
|
- |
|
||||
| Wanbang inventory reserve |
|
1,098 |
|
|
- |
|
|
1,098 |
|
|
- |
|
||||
| Adjusted EBITDA | $ |
(1,347 |
) |
$ |
(3,208 |
) |
$ |
(4,581 |
) |
$ |
(13,237 |
) |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20231114998036/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 the third quarter of 2023?
What is Rockwell Medical's projected net sales for 2023?
What is Rockwell Medical's expected gross profit for 2023?
When does Rockwell Medical expect to achieve profitability?
