RMTI

Overall Financial & Strategic Progress

• The company delivered strong year-over-year revenue growth, expanded gross margins, generated positive operating cash flow, strengthened its balance sheet and customer portfolio, and advanced long-term strategic initiatives, remaining on track to hit full-year 2026 targets.
• Multi-year efforts to build a durable, profitable business with diversified revenue and efficient operations are delivering tangible, sustained results not driven by one-time events or single-customer concentration.

Customer Base & Geographic Expansion

• Rockwell currently serves ~300 customers (including all five major U.S. dialysis providers) and supplies products to over 30 international markets, having deliberately reduced historical customer concentration and increased revenue from longer-term contracts for greater visibility.
• Q2 2026 saw new progress in diversification: a new supply agreement with Heritage Dialysis and renewal of a long-term agreement with Aqua Dialysis, both including annual pricing provisions that align pricing with delivered product value.
• Meaningful growth is being achieved in the Western United States, as newly onboarded customers transition business to Rockwell, leveraging existing manufacturing and distribution infrastructure to compete successfully in a new geography.

Operational Efficiency & Margin Expansion

• Substantial investments in manufacturing footprint improvement, operational streamlining, distribution optimization, and automation are already delivering financial benefits after upfront investment.
• Two new automated liquid production lines have been successfully activated, increasing manufacturing capacity, improving efficiency, reducing labor intensity, and lowering per-unit production costs. Growing utilization of these lines will drive ongoing margin expansion.
• Management's long-term target of ~30% gross margins by 2029 is supported by multiple structural drivers: higher volume, pricing discipline, increased automation, improved manufacturing efficiency, distribution optimization, and operating leverage from business growth, not just a single initiative.

New Growth Initiatives

• Rockwell is pursuing a new complementary renal care medical device opportunity aligned with its existing renal care platform, leveraging existing commercial relationships, manufacturing expertise, and market knowledge.
• The new opportunity requires only modest measured investment funded within the existing operating plan, does not require external capital raising, and will not compromise the company's strong balance sheet or positive operating cash flow target. Additional updates will be provided as development progresses.

Long-Term Strategic Pillars

1. Grow the core hemodialysis concentrates business through customer acquisition, geographic expansion, improved retention, and disciplined pricing
2. Broaden the product portfolio with complementary renal care products that leverage existing infrastructure
3. Evaluate innovations that improve the patient experience and expand presence in the broader renal care ecosystem

• These pillars support the long-term target of annual net sales exceeding $100 million by 2029 alongside continued improvements in profitability and cash generation.

Reverse Stock Split Context

• The recently completed reverse stock split was undertaken solely to regain compliance with NASDAQ's minimum bid price requirement, boost institutional investor interest, and reinforce customer confidence.
• Unlike prior reverse splits in the company's history, this action was not driven by capital needs, operating performance deterioration, liquidity concerns, or a negative change in business outlook, and will not be followed by a capital raise. The company has already regained NASDAQ compliance.
• Management notes a meaningful disconnect between Rockwell's current market valuation and its operational progress, and intends to close this gap through continued disciplined strategy execution and transparent communication.

• Management reiterated the full-year 2026 guidance previously issued, with no upward or downward revision:
  • Full-year net sales are expected to be between $70 million and $75 million
  • Full-year gross margin is expected to be between 18% and 22%
  • Full-year adjusted EBITDA is expected to be between $1 million and $2 million
  • Full-year operating cash flow is expected to be positive
• The company remains on track to meet this guidance based on first half 2026 performance and current business trends, having met or exceeded stated guidance for three consecutive years.

Rockwell Medical's core business is hemodialysis concentrates, with no other separate product segments reported in the transcript. For the second quarter of 2026, total net sales were $17.8 million, an 11% year-over-year increase from $16.1 million in Q2 2025. Gross profit was $3.2 million, a 30% year-over-year improvement from $2.5 million in Q2 2025, with gross margin reaching 18% (up from 16% in the prior year period and 17% in Q1 2026). For the first half of 2026, total net sales were $35.1 million (flat year-over-year), with gross profit of $6.1 million and gross margin of 17% (up from 16% in H1 2025). Net loss for Q2 2026 was $1.2 million, narrowing from a $1.5 million net loss in Q2 2025. Adjusted EBITDA for Q2 2026 was negative $200,000, consistent with the prior year period. The company generated $2.1 million in operating cash flow during Q2 2026, ending the quarter with $24.8 million in total cash, cash equivalents, and available-for-sale investments. New Western U.S. growth is concentrated in higher-margin liquid bicarbonate concentrates, where Rockwell is the leading U.S. supplier, and incremental Western growth carries margins above the corporate average.

The transcript notes that all forward-looking statements are subject to general risks and uncertainties that could cause actual results to differ materially from management's current expectations, as detailed in Rockwell Medical's periodic SEC filings. No specific new, material operational risks or ongoing operational failures were discussed explicitly during the call.

Q: An analyst asks for an update on the company's strategic West Coast expansion, contract renewal structures, and details on the new medical device opportunity. / A: West Coast expansion is progressing well: Rockwell has integrated an acquired customer base onto its platform, is now consistently supplying customers in the region, and its local presence opens opportunities to acquire new regional customers, with positive early momentum. Standard supply contracts are 3 years in length with pre-set prices and annual price escalators, and renewal discussions typically begin 6 months before contract expiration. The new medical device opportunity targets a large U.S. market, fits directly into Rockwell's existing concentrate portfolio, and would make Rockwell one of only a few suppliers for the product; it is fully funded by the company's existing balance sheet with no need for external capital.

Q: An analyst asks if product mix contributes to West Coast growth and margin targets, and what the plan is for continued Western U.S. growth. / A: Western U.S. growth is skewed toward higher-margin liquid bicarbonate products, which aligns with the company's goal of reaching the upper end of its 18-22% full-year gross margin guidance. The growth plan focuses on educating Western dialysis clinics that Rockwell now has local manufacturing and distribution capabilities, positioning the company as a viable alternative to the region's dominant existing supplier, with word-of-mouth from current successful customer relationships supporting further expansion.

Q: An analyst asks if incremental Western volume has margins similar to the corporate average, or if freight and onboarding costs dilute margins as the business matures. / A: Incremental volume from Western U.S. growth in Q2 2026 has consistently higher margins than the company's overall corporate average.