Rockwell Medical (RMTI) 12 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to Rockwell Medical's Third 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 Strobeck, Jesse President Neri, President and of Officer; and Chief Executive Rockwell Rockwell Medical's Finance. Medical's Senior Vice

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

non-GAAP a company's September ended as strategy financial we of the press found release. full that the on and discussed analysis The report in Factors implied the statements Rockwell with quarterly discuss also results forward-looking SEC. differ X XX-Q to months be [ of Form XXXX in such by in outcomes are from the well the or those and third reconciliation for as measures greater periodic materially company's quarter [indiscernible] reports business or detail Medical's our filed today's cause for ]. X operational can of provides on results in XXXX could actual

under conference along [indiscernible] Investors reports press section. filed Our investor our and found Medical's can today's Form with be today's webcast presentation website Rockwell release, and on XX-Q with the the updated other SEC is call and

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

XXXX Third Earnings Good Webcast. Conference for us and Rockwell you Call Quarter joining thank today Thank you, for and morning, Heather. Medical's

going we to our quarter review on and results of you third in what then fourth expect outlook I'm quarter provide preview our First, the XXXX. with a then

share EBITDA a second profitability adjusted that We consecutive basis. are and on you quarter, achieved cash a flow pleased to we for with

third highest quarter product gross the highest highest profit Additionally, the gross quarterly Rockwell's for concentrate we sales, XXXX, history. achieved quarterly the quarterly margin in the and

consistent during Revenue quarter. for products our current by the our as order premium impacted customer quarter well large customers sales third making the a positively was largest special as from of

the the The from customer to in largest increase margin into premium-priced in increase Our of special quarter with coupled flow make on was to due purchases expected current in XXXX. is EBITDA large gross on third our those turn, basis. fourth our quarter profit the of cash gross the and continue order to led business, our customer. profitability gross adjusted products and This, to for margin largest an higher

XXXX. As X, August of X, period extension. date quarter extend months, XXXX X, this cash agreement loan with has amortization intend are of of a date which positive second August We an of to result our amortization advantage an February take the has and our Innovatus of third eligible now consecutive quarter we the of being flow, security interest-only the which XXXX. months to XXXX, XX from XX of

which of includes additional increases and for purchasing year. subsequent incremental X-year to period the During product distribute supply outside Nipro year continue of with for terms minimums agreement entered acid the and $X X-year The States. Nipro third will ] bicarbonate and Medical for our liquid to the dollar we Nipro the concentrates of the distribution right option we quarter dry our to extend products multimillion United agreement the an each and million has hemodialysis a [ agreement, into XXXX, with of Under has Corporation. first an

Rockwell As Rockwell purchase of the liquid packaging settings per to help a supply presence with supply portfolio dialysis either in will agreement, that renewed bicarbonate, States. expand include we agreement last smaller a care acute leading liquid packaging convenience this assets in dialysis. or will our a noted agreement we Medical our manufacturer with and back our acute larger product announced both for Subsequently, in call, terms our Medical product we concentrates care case at-home Under will be earnings its X our at-home dialysis the per the customer of which and X Aqua we equipment with expanded case and packaged settings. in United at-home also market. or the

renewal, As Texas-based dry them our associated to concentrates and products. hemodialysis with part acid bicarbonate and our dialysis expanded we supplying liquid other distribution Aqua all the and of clinic, hemodialysis

turning of our million. and million $XX attention be the Now fourth We revenue XXXX. that our to quarter $XX between project will

Our basis. gross on and margin will be adjusted be an EBITDA in previous line we profitable with quarters, will

sales we guidance beginning and margin between and between These million. targets $XX initially and net of million result, profit improvement and million gross a gross $XX XX% increased and to XX% what EBITDA $X we at this million, between adjusted our $X XXXX million; between to have year. guided for represent As $XXX the to significant over $XX million to

Medical These we in over on to work of goals cash, firmer, priorities and instrumental and see assessing achieving business continually against end position footing. We on where debt capital at turning team's our Every reducing structure, quarter our for direct Rockwell's the a XXXX. Rockwell our placing had focusing history. our have this include our XX-plus our cash than doubling in and revised first which and growing we financial and revenue-generating to from more disease. significantly the addition, dedication patients best turn, has our cash it managing been in projections profitability more and of XXXX impacting of position has end-stage the helping business, stronger, accomplishments driving value profitability company XXXX. years with its stable the deliver around and, Medical result strategic shareholder ago organization X Rockwell reflect In in rebuild positively are was of kidney years more bolstered will overall hard performance objectives member

we we more encounter move growth look makeup towards XXXX, business on to profitable our in to customer expect focus from we away as a opportunities. As profitable shift less

The first these changes relationship of will the our largest come customer. from with

This the during received to of period they extend be to agreement has largest purchase volumes confirmation as pricing diversify through the quarter, will which During to base. third we product end it us customer their with this that supplier increased. will indicated extended XXXX, work Rockwell customer expects during decline product their

in effort to this volume their customer least are believe focus profitable are products Rockwell. that reduction on with We an actively we working for

and net million, believe final depending for we largest Currently, the our XX. XXXX, which by expect we customers on December $XX volume million that or in decline between forecast will to on XXXX $XX receive sales

revenue product Although we in new acquisitions short agreements, before basis negatively in impacted agreements, purchase And new we our the this [indiscernible] will line product will customer is EBITDA see top put place. term, are be opportunities potential any distribution contracts, believe in XXXX. or

a have downward significant with known single we disappointing, which revenue risk While presented to of have portion we certainly that is a Rockwell. our this a customer, revised forecast always

that our adding and have customers hard risk mitigate to new been beyond growing line We incredibly top customer. our by working largest

beyond. be line with profitable more and this top opportunities We will are we in believe working revenue that XXXX to Rockwell replace to

through Let we the me pursuing. activities walk you some currently of are

execution world's the We negotiating and agreement of multiyear large the announce provider able hope products this process supply to the are dialysis in later be of month. to of a leading agreement this with largest services and

add new XXXX. contract are in We complementary X portfolio the to to stages final our products hemodialysis negotiations of in

have expect announce shortly. new under that review We to contracts customer we

change and add to all that our made are the portfolio. Finally, strong over Because a we the currently foundation here capabilities short-term last doesn't forecast, at years, we while opportunities have products we've X-plus new our impact that built. in acquisition several customer's changes setback we largest the Rockwell have evaluating would the of

opportunities forward. will profitable support We on believe continue working business we we that have exciting of a going to are a growing number

to further go about into call Now I our detail turn third to will financial quarter the over results. Jesse

you, Mark, morning, and good Thank everyone.

will without and XXXX the in and to the recognition periods QX related in X XX, present September financials For and revenue XXXX months XXXX, I deferred the of comparable X the QX with Wanbang for the progress the present agreements, more respectively. the to we and continues distribution termination This segment. Baxter and make, concentrate to accurately have our continue opportunity to hemodialysis of made within the offer us ended specifically

product Net of from the for revenue to million, highest were quarter sales period over XX% represents $XX.X million concentrate net quarterly This increase date. XXXX. in the a $XX.X sales same of our XXXX third

special the third increase order $XX.X quarter large XX, third net Excluding of was ended customer. X quarter by the premium-priced a September driven sales $XX.X large sales for for deferred by XXXX million products revenue, months This million. Net XXXX. the a increased XX% of over XXXX, were for

revenue, increase Excluding XX% this deferred represents period same in XXXX. over a the

Gross profit for a was $X.X for in over XXXX. $X.X million, XXXX profit gross XXX% of represents increase same which the QX period million

largest revenue deferred special $X.X period for the recognition, increased for million. and our increased ended as September X price for profit well XXXX, was as profit the XXXX, gross large of million by special sales impact customer quarter -- the to customers. products $XX.X the Gross a driven order premium-priced over XX, of in Excluding increases third same order months XXX% by existing

of XXX% same period over this XXXX. revenue, increase Excluding deferred in represents the an

quarter was third and for or XX% XX, from XXXX. X% period revenue margin months ended significant Gross the Gross X% was September XX%. in for margin a XXXX excluding X same the for improvement deferred XXXX, the

the the in a XXXX in XXXX. million increase an compared for for for represents $X.X this loss same $X.X of net XX quarter from revenue, deferred third period percentage to Net same period was million XXXX. X% points Excluding income of of the

net Excluding period over deferred same represents net XXXX. the $X.X XXXX improvement a of the $X third million quarter revenue, of million income in for a loss for

loss income months was an improvement same Net over of of $XXX,XXX, in XX, for represents X million $X.X net XXXX, million which period XXXX. ended the a for September $X.X the

the net revenue, of million compared EBITDA Adjusted same XXXX. million same X Adjusted a ended EBITDA XXXX, period months by for XXXX, million September same almost period deferred the third the positive the income improved $X.X million period a compared loss in $X.X for for EBITDA positive a negative of $X.X XXXX. adjusted quarter in $X.X the in $XX $X.X for XX, ended for a X EBITDA was negative adjusted months XXXX. a million September of million with was XX, with Excluding the net over

adjusted XX, in the XX, Cash, by same revenue, the investments for September XXXX. EBITDA million gross flow third the period quarter. increased ended sales to of over $XX.X sale combination deferred again, at September X to compared cash greater from $X.X Excluding June million XXXX, for available $XX.X million cash months $X.X at operations for and of the led XXXX. XXXX, and equivalents increased Once was million XX, margins

turn now will to over I the Mark. call back

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

from Group. [Operator line Instructions]Our Vendetti the Anthony first of with will Maxim come question

to home of this And capabilities? where customers Mark, on else take At-home in up have dialysis base? you some Does orders just uptick made if was plenty this that obviously, I for opportunity? of additional process supply you for for identifying additional looking of your the diversify more indicating within core prepare time that. that more on up dialysis wondering in concentrate. at a to open have XXXX, that you decrease -- Or then now orders are customer be customer new with can are from to is an you

for Anthony, first To the Yes. address Thanks, absolutely. question. point, your

At-home continue tap market into that expanding with we see think working and providers, of are that emerging path. the the continue dialysis and sort I to essentially believe we is to treatment that of all

for putting like change And and machine, but small recently what think change, the there's market for to but to grow at-home opportunity may to process, I then to quite existing quite it's far like absolutely about seem they our into the listing so It as at patient actually meaningful carry materials out only us the continue meaningful within to small physically convenience dialysis which as with be introduced. a we've portfolio, meaningful do our store think to market. So have the products. it as what a seem manage it going and is that incredibly has pack has an may you to but that the materials to not expands when just a home been

So for think an absolutely, to I area us that's grow.

that something possibility. is us, As I for the this always said, we change what I think knew

so ourselves wanted And to we for prepare that.

support place, making in first the an The change. of to largest is on the relationship up obviously, dialysis revenue expansion with effort that the an provider planet

an think, gap stable of key to Product have product very continually that you going we margin-based to foundational XXXX, looking incredibly Secondly, don't us for help expand money very beyond supply business It are opportunity. a which to now build higher us I to for to with concentrate. in be us, that make we're opportunities, we on. essentially doesn't help continue a much large organization, just

I profitable basis, here. you And top when EBITDA it's on point I take the the to much that stays away even was contributing that that making gives we think that really business which not line, a this adjusted you sense an see was margin

things, through So core and And for business much XXXX. more developing that's us, to our where are more in our more goals it's profitable all about of adding going be objectives a fashion.

least at the able couple opportunities is line. we As on that we're have in here is announce recognize to weeks. that But the we about to top hope and excited to pursuing next the impact short-term I excited that be the this team said, we're of going a

And as new Have to look have to impact, new revenue then back Okay. be margin it an because EBITDA to as EBITDA. able then margin? of in component less your Or are Any footprint, the been you around your that that, obviously, of to you what able on just impact to? the the in or innovation still add line of hop product products impact follow-up out that? costs you're then terms quantified there a current lower or any of in mix? And that the it take EBITDA and either the to based lower will will revenue queue. the impact is And working of on you the either temporarily to I'll terms color on you've

Yes. No, thanks, Anthony.

of look as piece that. numbers any closing conservative put we've And that in So I Right the the new business. very that items or address taken incorporate all of forward of the process really me yes, let a now, each now. include we we're at said, right don't

for here continue positive look, two, margin. So we through that in the a percentage business the drag to conservative that into with we continuing on that We're we're forward 'XX. margin and are go removing the that obviously, as currently trend, creating efficiencies gross believe tick a, products upwards that will gross organization;

increase. percentage, margin that expect continue we So to from to gross

yet going is perspective of from business our year. working on of some the profitable from impact may final right profitable. sort we indicate be make cost as continuing are that the is our to of We our infrastructure. what We just and a be tweaks on next know underlying will EBITDA how all modeling don't to But come now, that for that in

forward. we can basis going clearly year, put obviously, that perspective, on We adjusted beginning past, the will EBITDA our very at a But will be as out XXXX done an the of we've guidance entity the that will indicate in what profitable you, I from is. tell

comes with Wainright. next Selvaraju the from Our H.C. Ram question line of

This earnings. Ram. on for And is Jade the congrats

how you territory? deploy when the and to fully tell in Western expansion is me the So you going could expect

Yes.

customers we to in a on increase practical the we've continued So our the of level, and presence enhance there. to continuing that are have West number

that in we We a are weeks. discussions And the say permanent right opportunity a position provide West. now more able the could in be in to to with about with hope us that coming potential

a Great. more to And locationally follow-up that based.

territories we but via as into really during there move you value-driving you that planning lot can't mention a regarding mentioned anything you've So can XXXX? you're say that is XXXX that anything, ex-U.S.

Yes.

is and release. of this enhancement from good an put the press you Nipro our our with into quarter that products helps as international We for Medical, which extension a area signed continues the too that an relationship opportunity So note be to us, market.

on international we the business. do addition, in stages tenders international our on based we to different like In locations final for are multiple bidding those which, position product, and also really existing a of in again, good contracts seeking in feel we're

And that hope weeks. the say have about to so here coming in more again, we to

the are no to call Strobeck. I'll There questions. further turn Dr. over back

Thank you.

a I'd day with in customer service highest our best quality patients members dialysis moment we like the the work do supported the products by industry. provide all to for their the thank clinics team serve hard every in close, to take they to Before they

organization our members level of nucleus at Our team success. every within the are our

We named Best Workplace have a and developed in and core and Medical production Rockwell expertise and of was continue concentrates. manufacturing to in hemodialysis upon delivering It's build a that because in dedication manufacturing XXXX. passion Fortune this

Rockwell outcomes on We have customer in can service. to and a turn critical, deliver. patient and customers quality reputation depend Medical for reliability, excellent When patients are

our to earnings your profitability next value. sharing Thank continue and today. streamlining more focus on to look our sustainable We shareholder on forward and you drive We you to optimization, for time automation operations with call.

conference webcast. call today's concludes This and

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