Rockwell Medical, Inc. Q3 FY2025 earnings call

• Effectively managing transition from largest customer while securing base business via multiyear contracts.
• Rightsizing organization to enhance operational efficiency while maintaining customer service standards.
• Over 80% of customers on long-term agreements, providing stability and revenue visibility.
• Q3 2025 was profitable on adjusted EBITDA basis, tracking in line with full year guidance.
• Net sales impacted by largest customer transition but adjusted gross margin remained within guidance range.
• Signed new long-term product purchasing agreements with university medical centers, kidney centers, and hospital systems.
• Bicarbonate cartridge launched earlier in the year with growth potential as more customers start purchasing it.

For the third quarter of 2025, net sales were $15.9 million, a 44% decrease from the same period in 2024 ($28.3 million). Gross profit was $2.3 million, a 64% decrease from $6.2 million in 2024. Adjusted EBITDA for Q3 2025 was $50,000, an improvement from previous quarters. For the 9 months ended September 30, 2025, net sales were $50.9 million, a 34% decrease from $76.8 million in 2024. Gross profit was $7.8 million, a 44% decrease from $13.9 million in 2024. Gross margin for Q3 2025 was 14%, and for the 9 months was 15%. Adjusted EBITDA for the 9 months ended September 30, 2025, was a negative $600,000 compared to a positive $3.7 million in 2024.

• Remain confident in achieving full year guidance targets.
• Typically provide 2026 guidance early in the year, expect to do so when releasing fourth quarter earnings.
• Active in business development, including discussions with multiple companies about acquisitions of their business and customer base.
• Bicarbonate cartridge product is a higher-margin opportunity with growth potential as more customers adopt it.

• Transition with largest customer still ongoing, and concentration risk due to reduced dependence on any single customer being a work in progress.
• Class 1 recall by new supplier of largest customer caused the customer to continue relying on Rockwell Medical temporarily, posing operational challenges.

Q: Firstly, I was wondering if you could give us some additional color on when you expect the situation with your former largest customer to be fully resolved, if you anticipate a final decision to be taken before the end of this year or if you anticipate continuing to provide services to this customer into 2026?

A: Yes. We expect that to resolve this quarter. We are currently in a contract discussion with them, and we expect to be able to discuss that shortly.

Q: And then with respect to 2026, can you give us a sense of when you believe you might be in a position to provide forward revenue guidance for the full year 2026? And also, I wondered if you could elaborate on what types of business development activities you might look to undertake given your current balance sheet strength?

A: Yes. So typically, we provide 2026 guidance early in the year. So we expect to continue to do that. So our anticipation is that as we release our fourth quarter earnings, we'll be able to provide visibility into the company's performance in 2026. As far as business development activities, we continue to be very active in that. There are -- now that we have a strong cash balance that we are now employing as growth capital, we are currently in discussions with multiple companies around acquisitions of their business and customer base. And assuming those continue to progress, we'll be able to announce shortly what the impact of those will be.

Q: My first question is, how are you balancing some of this organizational restructuring while also ensuring you're making proper investments in the business? I mean you just mentioned potential acquisitions, but is there anything more internal that you're focusing on? Are you making new hires? Or is kind of a lot of that investment based on some of these potential acquisitions you mentioned?

A: Yes. So it's -- as you can imagine, it's been a sort of a tricky algorithm for us to work through, which is decreasing certain obviously, products and the single largest customer moving away from us while simultaneously adding new customers and making sure that we continue to supply product to our existing customer base with the quality standards and with the service that we've provided previously. What that has essentially amounted to is a titration of resources within our organization, shifting of priorities, shifting of some of those resources to focus more on growth opportunities in those areas and winding down some of the activities and sort of operations in areas that are no longer going to be supported by our organization. So it's been a balance, and the team has done an incredibly good job of managing that difficult sort of titration exercise. And as Jesse pointed out in his section, we're beginning to start to see the fruits of that. And we expect more -- to see more of that here in the fourth quarter coming up and through '26.

Q: Sure. So Mark, I was wondering if you could give us an update on 2 things, one is the West Coast expansion and then just an update on the home dialysis business.

A: Yes. Yes. So the West Coast continues to be an area of opportunity for us. We are expanding our customer base now into the West Coast. We expect to have -- we hope to have an announcement here shortly related to sort of further customers that we are acquiring in that area that's going to be an area of focus for us in '26, which will be how to maximize the opportunity there for Rockwell, whether that comes through continued customer acquisition or that comes through setting up a small facility in the West. I think we're now beginning to build a critical mass of customers out there that likely warrants that. As we've said previously, we've taken the approach of not building something hoping folks would come, but waiting until we have a significant customer base out there to warrant the presence of a facility. And I think based on our assessment now and certainly through the fourth quarter, we're likely in a position of where we will contemplate that. So we believe that's a significant area of growth for us. Your second question -- so at home, we continue to be a very large supplier to that market. As you know, we supply one of the largest at-home hemodialysis providers in the United States. Our new product configuration, which I think is more amenable for at-home use has begun to start to take off. Again, that is a higher-margin product opportunity for us. And we believe we'll continue to see that growth through the end of the year and into 2026 as more of the at-home users begin to convert to that product configuration. We think that there's a -- that will have a place within the overall hemodialysis market. And those organizations that are working in there and using our product, I think, are establishing that. So we continue to be excited about the prospects there, but are well positioned to support that market as it continues to develop.