Rockwell Medical (RMTI) 14 May 242024 Q1 Earnings call transcript

Good morning, and welcome to Rockwell Medical's First Quarter 2024 Results Conference Call and Webcast. Please note, this event is being recorded. At this time, I would like to turn the conference call over to Heather Hunter, Senior Vice President, Chief Corporate Affairs Officer at Rockwell Medical. Heather, please go ahead.

Good morning, and thank you for joining us for this update on Rockwell Medical.

conference Dr. today's on me call are Joining Mark and Vice Jesse Medical's President President Executive Officer; and Chief Neri, Finance. Strobeck, Rockwell of Rockwell Medical's Senior

to specifically these or subsequent actual Before but that and in Medical the light SEC. These our within such these you from only meaning of or required to expressed Factors as report today. information in could as will would Securities on events. disclaim SEC. forward-looking discussed to, differ. future the statements we greater laws subject our or are cause forward-looking of to the forward-looking statements materially new Federal and conference of of including, differ contain the Rockwell we as any or this filed limited with call remind in outcomes update with about statements statements those to the annual begin, and could periodic our that I obligation periodic reports identified that forward-looking not that in like statements filed statements revise in opinions XX-K expectations reports by Except results law, uncertainties cause risks are Form actual note Please reflect to implied results forward-looking our by types detail

March with reconciliation a press months and XXXX with XX-Q as Rockwell filed website under in this well our XX-Q release, the our found Medical's provides first section. of release, Rockwell Investors measures be Medical's of quarter SEC Form conference a quarterly on strategy and XX, non-GAAP we of be and today's analysis replay Form can full presentation results. call and XXXX, webcast was found ended other the discussed the press investor on company's reports filed today's can along today's the X for to call company's the as The report prior business

over call and the Dr. like Now Executive Officer, I Strobeck. turn to Mark Chief President Rockwell would conference to Medical's

adjusted us Heather. Results and today with Good quarter, you, joining XXXX gross Medical's net you along Webcast. Rockwell improved growth for reporting another our value. optimizing Call of for last every X Thank Rockwell quarters. and drive improve, had profit sales good our net First and to morning, Quarter and quarter over business sixth in thank Conference cash of are as progress EBITDA continue and business our loss we flow fundamentals the we on focus The profitability, increased making day shareholder and meaningful to

the the hemodialysis our the Let's time, take now Evoqua, concentrates a in U.S. space the of happening consolidated With has acquisition market concentrates last player market. the minute hemodialysis the the year and at XX,XXX what's discuss from only sits Rockwell #X in X business the clinics. supplier concentrates dialysis the over players with this in-center hospital-based to of primary as to the and With now to clinics consolidation, and States. scale distribution United supply these in independent service

hemodialysis market. inherent a value we In for the reflect beginning are to addition, this to What able price liquid At in bring now mean adjust country. the new providers. the Rockwell does to this to bicarbonate pricing our products year, accurately is supplier of program Rockwell? our undertook our leading the product the First, we products in of

censuses patient pre-COVID seeing are providers dialysis leading Second, return to levels.

product again from previously Rockwell. while are growing now volumes already from volumes So who customers concentrates concentrate stagnated, purchased

the and medical market distributors, products nursing increasing for demand suppliers we and dialysis systems, from equipment inside with along States. outside our to continue facilities centers interest in Additionally, United see skilled and health

we a Third, customers over competitor. convert of our seen to number have from primary Rockwell

not to while always expand It's customers, agreements of important a always our announce our new publicity these within restrictions. permit permitted for note to are able continue we agreements continue variety not we -- existing with we reasons, addition, -- including existing new and In sales add base. that to to customers expand able customer to

paradigm take to will working are this We time. but change change

Bottom we are line, to the we market of prepared favorable full take are in advantage these and believe direction, underlying dynamics. this all Rockwell's moving fundamentals of

first During entered and we Rockwell's subsequently into within and several may the internationally. to agreement and both expanded able announce agreements sell, Republic. and quarter, distribute through We which the into Dominican products BioNuclear concentrates hemodialysis were import, entered X-year distribution a domestically promote BioNuclear new with

to and BioNuclear the will beyond agreement the X for The an in term. effect option extend for agreement has remain years, years original X the additional

in We we system of also with Under offer. West systems cleaning hemodialysis this of concentrates additional U.S. largest and terms X the supply entered acid into the the and the other health new with will health in of liquid quarter. bicarbonate region company's and concentrates, products agreement, agreement the dry Mountain purchase this mixers hemodialysis agents, the Rockwell product a first

leading entered time addition, an of In for which acute to care markets. products for option and XXXX, a extend signed has a equipment Bermuda's with been we existing into we customer, supplier International, medical AMI distribution distributor of products since the which agreement agreement. AMI with at expanded is X-year an that Atlantic and Medical Rockwell continuing distribution agreement

purchasing with X just for The their amended support in guidance commitments and profit U.S. agreement a is Rockwell new AMI generate clinics. existing Rockwell have the we supply AMI the consistent between and Medical's from margin margin which for expands of of customers us, and list includes distribution our hemodialysis expanded XXXX. AMI products will increased distribution to and is several that gross volumes purchasing

record hemodialysis $XX.X gross products. During $X.X we of the concentrates net exclusively XXXX, million, million our sales with of first quarter profit of generated and record

XX%, our and and margin was our upward through enhanced believe of trend We processes to margin the continue first will optimize the automated capabilities improved our to highest technology date. quarter gross solutions. gross modernization manufacturing distribution we the infrastructure through it's as further Additionally, for been business

we $XX results, sales for we As have adjusted now quarter and represents first XX% guidance expanded increases be million between contracts a a upward updated to result initial sales million. guidance XXXX over net product million, to of $XX.X to increase for our an $XX new million and our from XXXX. expect volume and our XXXX net guidance in as follows: projected considering for of XX% million sales $XX our This net $XX increase

for of be gross updated XXXX. XX% a expect gross million to $XX million guidance between This $XX represents profit our of now XXXX and million $XX guidance $XX increase to million. We over in XX% an million, profit $X.X increase initial from gross profit to

will to million. which on This our an guidance adjusted initial profitability a turn of $X.X to over XXXX. the Jesse we an basis and adjusted first EBITDA into over to profitable million and adjusted and between financial EBITDA call million a between increase on basis XXX% quarter XXXX. XXX% in $X that, updated our results the an EBITDA $X.X increase now loss Lastly, I represents million, basis from expect With an delve of $X represents for be $X.X of now on

to the sales termination financial our periods you and can debt I deferred the progress and accurately walk our concentrate our through distribution so deferred quarter Net date. you our XXXX that of to quarterly represents This for financials without and sales in with an $XX.X highlight solely Thank we've quarter increase were will for more more Good positions. XXXX of consisted hemodialysis concentrate related period same XX% review product concentrate first the now for revenue Baxter revenue sales of sales license period of agreement. I in the million $X.X same million, and results million you, XXXX. the the in XXXX product for provide segment. first product made detail for comparable Net cash current Mark. sales. highest quarter over in the everyone. you Net net the of of will $XX.X on concentrate revenue first consisted the XXXX a of and sales morning, with update

XXXX net QX revenue, sales XX% over quarter first the deferred for of XXXX. Excluding increased

Based XX% results the guidance million we between and have to projected our in $X.X and period in XXXX quarter first contracts XXXX. QX $XX million for and an increase and million, over now net volume million expanded our profit revised XXXX on achieve same representing Gross into for $X.X $XX increases, and taking was new sales. our consideration in the for expect

profit the to first same gross quarter of of the XXXX revenue, million tripled compared nearly $X.X for gross for profit deferred period Excluding in XXXX.

XX% million margin now $XX XXXX profit between of from and for versus We same of representing million increase in the our the XX%, period was for $XX to Gross previous guidance $XX quarter million. XXXX range expect gross to an $XX XXXX. first million

continue Gross between deferred for QX XXXX the for we XXXX, revenue, we XX% XXXX to margin within full expect of year for first gross Excluding fall was projected guidance, of XX%. margin and to quarter is X%. the

XX%. a to was XXXX. we be margin gross and same gross a QX loss Net expect for XXXX $X.X for over slight to improvement For margin of XX% XXXX, expect period representing million. XXXX in the we million loss for exceed net approximately beyond, and $X.X

first first quarter to payroll of XXXX net net in $X.X for period adjusted Excluding slightly EBITDA drove a loss the expenses audit quarter items taxes other XXXX. compared loss negative. for Seasonal fees, of of incurred revenue, XXXX million. related Adjusted $X.X and for our first million to improved in the company-related by typically public deferred EBITDA $X.X the same quarter the was million negative

XXXX. for the expect of We our expenses normalize to remainder

estimate we of Since The approximately cash the $X.X capital, that XX, result, equivalents in full to between working changes will driven XXXX. our sale of XXXX rebounded net a revised cash Cash, and XXXX. in now December consistent Rockwell end investments the $X.X was year. be to million XXXX, first year guidance with end at adjusted back by million March available has our of levels seen positive for on million the $XX.X upward the and quarter of XX, million $X compared million As for in the EBITDA was decrease have and XXXX. balance cash commonly QX, $X.X

X, our rate we our of under close extended the date our loan and of for At interest May sale to Thursday, investments from XXXX, January XXXX. Innovatus amended security cash, In XXXX we maturity million. business January available $XX.X and loan agreement of cash equivalents was last and which reduced May with

interest-only period if conditions certain Now extend XXXX met. may through are interest-only we are the XXXX March making through September and payments

and back us full optimize are fourth this our operations. Mark. we XXXX the we and call quarter As business opportunity now year into call, fourth as capital our this affords turn back our quarter full to to and the discussed our I'll over redeploy -- in year further discussing

Jesse. Thank you, lines Operator, the phone for any questions. please open

from [Operator question with H.C. Wainwright. Selvaraju first comes Ram Instructions] Our

quarter. Congrats on a very good

breakdown given particularly X the the business, the Firstly, fact could some as players. I dialysate there it main you currently now overall market into us give that was essentially Mark, insights stands in are hoping

market how this is of just sense currently distributed share in So give you can us a sector?

Thanks, Yes. for the question. Ram,

mentioned, market as of our Evoqua become So purchase business, the a X-player concentrates market. I with this really now has

we now handle that is to a given to As be are in because to the looking the are continuing I've a customers business, look of those you see concentrates. primary their the that purchase. how going right it, of of on that more competitor amounts. And we on or able mentioned, customers of their market. less to to come volumes that continue now, slightly supplier about Rockwell has at having number with purchase depending the are might our as number to of are changes XX% Rockwell remaining their only

on gross expect what Great. to margins at us Rockwell's respect That's anticipate give gross be kind that margin, of steady what you you how cadence sense and might you very state? optimal for a business can core With evolve, of to helpful.

Yes.

margin gross date. had of mentioned achieved we've the So we've as the quarter, first here gross XX%, highest margin to right, we in

of We of that believe manner the also making year. renegotiation driven be the to this goods not contracts, significantly reduction That of our through through our upward products a cost the continue and more only through We through now think automation of XX% we're, in margins will materials in trend then will largely but this efficient our our manufacturing continue guidance process. We've 'XX. to But is given those XX% in of of right gross achieving we 'XX more. the now, And or can 'XX goal and get on in given. XX% to we've XX% that higher. business drive for focused guidance to

kind to necessitate going are And as assuming just you corollary, evolution is pricing in any gross do pricing Or environment? in margin respect effectively anticipate unchanged change dynamics that an this a with that, to dynamics? ultimately of you

both 'XX, a our be a reduction be you combination focused now, products. it's to going own within and we're It's efficiencies that to driven going we both. goods. out cost and and Right combination efficiencies organization the optimizing look manufacture and 'XX of way of of But on through of our as price

capital debt lastly, repayment attitude Okay. versus your debt to prioritization relative priorities. of towards respect other with repayment and And allocation

give repayment thinking currently the the maybe things to course attitude involve of be us your where over the if structure continue should of Just about debt, in you the of how how XXXX a and stand, description we cap remainder of expect long-term towards debt company? at all, to

Yes.

renegotiation the we're in we the right within throughout in we completed the significantly quarter, going period the agreement an XXXX. with now, leverage that and and to to We've So are interest-only continue pay that within burden period organization. get of loan reduced our interest-only first

continued and to whether generate organization business our continuing through this this to within you innovative, going are And processes, that we next give as mean, business, the see free. to well through that as like think of as I investment development personal meaningful in over more at to debt I'd enhance flow ways continue I reduce products we're business are the to higher years, new start look that's begin whether couple different own to business, to opportunities cash is this we that's to I from look margin objective new our forward, which -- leverage. adding that, my as and

from Our Vendetti Maxim comes Anthony question next Group. with

Yes.

year, talk power, touched in margin. pricing in on contracts for of as the and wondering, your out then was for pricing one updates I just any up? current there structure West increasing components And that? coming the any you to about of wanted the XXXX? I Is terms on well place So efficiency as that's of gross the expansion are this and

Yes.

for on. of currently that the handful the So XXXX. of come the place current are that There pricing working agreements a will up year structure smaller in is middle largely in we're

a signing that on continue larger working health And focus us business fruition, also So Mountain of region things this to out driving Western to continues and that may is year. our independent clinics if set this are we some that's add that the in with to region. of have for largely for to impact more also the our more large we business. come on in the of they West West center meaningful

products We do. at more to establishing That we are will West us presence in a actively and a the manner allow there. cost-effective firmer looking manufacture than currently to distribute

as expand active an that's even we further. to So ongoing project us look for

as Okay. on follow-up Mark? a And just lastly, homedialysis, on us you can give then an that, update

Yes.

area So I think growth dialysis as everybody knows, homedialysis continues to within be an of exciting market. the

working with and announce relationship, actively new products with opportunities player here #X of that supply near to are in are organization in We the we actively to on that we around which and -- hope product currently currently the a working them. future are space in process the

There back I Dr. are call questions. no now turn Strobeck. further will the over to

Thank you.

our updates we supported not unwavering serve disease. look our the to therapeutic of above be able who the for highest quality time clinics patients all kidney on the our with with within leader that call. products team your do providing organization by very superior provide without in hemodialysis this beyond a more progress successfully We dedicated today, service. We a pleased and dialysis knowing and customer on products with we for area. this members by next Thank end-stage lives to our positive commitment make to customers the are to are you impact and you patients go forward transforming their We at into Rockwell, provide continue they would our

This and conference call concludes today's webcast.

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