• Net Sales (Full Year 2024): $101.5 million, a 21% increase over 2023.
• Net Sales (Q4 2024): $24.7 million, a 12% increase over Q4 2023.
• Gross Margin (Full Year 2024): 17%, up from 10% in 2023.
• Gross Margin (Q4 2024): 15%, up from 13% in Q4 2023.
• Gross Profit (Full Year 2024): $17.5 million, more than double from 2023.
• Gross Profit (Q4 2024): $3.6 million, a 27% increase over Q4 2023.
• Net Loss (Full Year 2024): $500,000, improved from a net loss of $8.4 million in 2023.
• Net Loss (Q4 2024): $800,000, a 50% improvement over Q4 2023.
• Adjusted EBITDA (Full Year 2024): $5.2 million, a $9 million improvement over 2023.
• Adjusted EBITDA (Q4 2024): $1.4 million, a 156% improvement over Q4 2023.
• Cash and Investments (End of 2024): $21.6 million, up from $10.9 million at the end of 2023.
• Projected Net Sales (2025): Between $65 million and $70 million.
• Projected Gross Margin (2025): Between 16% and 18%.
• Projected Adjusted EBITDA (2025): Between negative $500,000 to positive $500,000.

• Warning! GuruFocus has detected 4 Warning Signs with RMTI.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rockwell Medical Inc (NASDAQ:RMTI) achieved over $100 million in net sales for 2024, marking a significant milestone.
• The company improved its gross margin to 17% and achieved profitability on an adjusted EBITDA basis for the first time.
• Rockwell Medical Inc (NASDAQ:RMTI) successfully reduced fixed overhead costs by over $2 million annually through strategic contract terminations.
• The company expanded its product portfolio and customer base, including a significant distribution agreement with Nipro Medical Corporation.
• Rockwell Medical Inc (NASDAQ:RMTI) strengthened its cash position, increasing cash and investments to $21.6 million by the end of 2024.

Negative Points

• The largest customer of Rockwell Medical Inc (NASDAQ:RMTI) is transitioning to another supplier, resulting in an expected $34 million revenue loss in 2025.
• The company projects a decline in net sales for 2025, with guidance between $65 million and $70 million, down from 2024.
• Gross margin guidance for 2025 is slightly lower, between 16% and 18%, due to a reduced revenue base.
• The transition year of 2025 is expected to be challenging, with potential negative adjusted EBITDA.
• There is uncertainty regarding the outcome of ongoing discussions with the largest customer for future volume commitments.

Q & A Highlights

Q: Can you provide details on the revenue impact from your largest customer transitioning away and how it affects your 2025 guidance? A: (Mark Strobeck, CEO) The largest customer generated approximately $45 million in revenue, and we expect a $34 million decline in 2025 due to their transition. Our guidance does not include any potential future agreements with this customer, so any successful negotiations would be upside to our current projections.

Q: Do you view 2025 as a transition year, and what are your expectations for growth in 2026? A: (Mark Strobeck, CEO) We see 2025 as a transition year but aim to return to growth within the year. We are actively pursuing new customers and business development opportunities to offset the revenue loss and drive future growth.

Q: Are there any risks that other customers might also pivot away from Rockwell, and how do you plan to mitigate such risks? A: (Mark Strobeck, CEO) The decision by our largest customer was based on diversifying their supplier base, not due to any issues with our products or services. We maintain strong relationships and long-term contracts with other customers, and we are confident in our ability to continue serving them effectively.

Q: How do you plan to grow the bicarbonate cartridge business in 2025, and what are your expectations for its uptake? A: (Timothy Chole, CCO) We plan to introduce the bicarbonate cartridge to our existing customer base, which should drive short-term sales. The market is gradually shifting towards machines compatible with these cartridges, providing long-term growth potential.

Q: Can you elaborate on the factors affecting your gross margin guidance for 2025? A: (Jesse Neri, CFO) The gross margin guidance of 16% to 18% reflects the lower revenue base expected in 2025 compared to 2024. The removal of our largest customer, which contributed little to gross margin, should not significantly impact the overall percentage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.