Rockwell Medical, Inc.

Good morning and welcome to Rockwell Medical's first quarter 2023 results conference call and webcast. Please note this event is being recorded. At this time, I would like to turn the 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. Joining me on today's conference call are Dr. Mark Strobeck, Rockwell Medical's President and Chief Executive Officer, and Paul McGarry, Rockwell Medical's Senior Vice President, Finance, and Chief Accounting Officer. Before we begin, I would like to remind you that this conference call will contain forward-looking statements about Rockwell Medical within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our annual report on Form 10-K, and are subsequent periodic reports filed with the FCC. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions and expectations only as of today. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our periodic reports filed with the FCC. Rockwell Medical's quarterly report on Form 10-Q for the three months ended March 31, 2023, was filed prior to this call and provides a full analysis of the company's business strategy, as well as the company's first quarter 2023 results. Our Form 10-Q and other reports filed with the SEC, along with today's press release, our updated investor presentation, and a replay of today's conference call and webcast can be found on Rockwell Medical's website under the Investors section. Now, I would like to turn the conference call over to Rockwell Medical's President and CEO, Dr. Mark Strobeck.

Thank you, Heather. Good morning and thank you for joining us today for Rockwell Medical's first quarter 2023 results conference call and webcast. I am pleased to report that during the first quarter of 2023, we made significant progress on the plan we announced last year to optimize Rockwell and our concentrates business with the goal to achieve profitability in 2024. In the first quarter, Rockwell's revenue continued to grow, our gross profit continued to improve, and our operating expenses continue to go down. Let me walk you through our results. Rockwell achieved its highest quarterly revenue to date in the first quarter of 2023. Our commercial team has been working diligently to execute on three key growth strategies, which we believe will enable us to continue to achieve commercial success. First, transition of the Baxter business back to Rockwell and optimize purchase arrangements. Second, and for the first time in a long time, grow our concentrates business in the United States and internationally. Third, and finally, expand our geographic presence. We are making progress on each of these commercial initiatives. In late 2022, we announced that we acquired the distribution rights back from Baxter to regain control of our hemodialysis concentrates business in the United States and internationally. On January 1st of this year, we assumed 100% control of this business, which we have been heavily focused on transitioning and optimizing for Rockwell. The first step in this transition was to ensure that we continue to supply Baxter customers based on their existing purchase agreements. Our commercial team prepared for this transition months in advance of this date, has been communicating with customers along the way, and was well prepared to assume the control of this business at the start of the year. If you recall, many of the Baxter customers already were ordering directly from Rockwell and had products delivered by our subsidiary, Rockwell Transportation. Therefore, this transition in many instances has simply been about removing Baxter from the payment process. I am pleased to report that the transition has been a success and we are currently selling and delivering product to customers through Rockwell's platform. Our commercial team is now systematically working with each customer to establish new agreements directly with Rockwell with preferred economics. We are making significant progress in this effort and are already realizing the revenue benefits from these changes. We anticipate we will realize more in the second quarter of 2023 and beyond. In addition to the Baxter transition, we have been focused on commercially growing our hemodialysis concentrates business by adding new customers as we work to achieve profitability in 2024 and drive towards becoming the leading global supplier of hemodialysis concentrates. During the first quarter, we announced that we signed two long-term supply agreements. The first agreement is a three-year multi-million dollar product purchase agreement with Concerto Renal Services, the largest provider of dialysis in skilled nursing facilities in the United States. And the second agreement is a three-year multimillion-dollar supply agreement with the largest nonprofit dialysis provider in the United States. Each of these arrangements include multi-year annual minimum purchase commitments and has the potential to increase as our customers' business grows. During the first quarter of 2023, we also established new non-exclusive agreements with two of the largest distributors in the United States, The first agreement was with Cardinal Health, the second with Medline Industries. They are the first of many distribution agreements that we anticipate establishing this year. Geographic expansion both domestically and internationally is also a major focus for Rockwell. We continue to look at cost-effective ways to expand our distribution capabilities in the western portion of the United States. We are making great progress and are now distributing our products on a limited basis to California, Arizona, and Utah. However, we continue to pursue a more consistent and concentrated approach in the West that would allow us to sell and distribute our products directly to West Coast dialysis clinics. Additionally, Rockwell has a large and growing international business and currently sells a team of dialysis concentrate products in various countries throughout North America, South America, Asia, and Africa. Our international business accounts for approximately 10% of Rockwell's revenue, produces favorable economics, and diversifies our revenue base. Subsequent to the first quarter, we announced an expansion of our international business with an agreement to supply for the first time the UAE. Our commercial team is working hard to enhance our efforts internationally as we look to identify regions where our products would have a meaningful impact on patients. Another key component of our strategy is focused on reducing expenses. We continue to make changes to our business that have reduced expenses across all functional areas. This includes selective reduction in headcount, better pricing on raw materials, continued optimization of our distribution networks, and reduced reliance on third-party carriers for delivering our products. We are continuing to examine route optimization strategies as well as automation in our manufacturing processes as additional ways we can lower the cost to manufacture our products. These efforts translated into lower operating expenses and a reduced net loss for the quarter, which were significantly improved from the fourth quarter of last year. Additional growth opportunities, as we've spoken about previously, will come from business development, Rockwell continues to look aggressively at opportunities for consolidation within the concentrate space as well as opportunities to add new products to our portfolio that take advantage of our manufacturing expertise and capabilities. These opportunities need to be accretive and consistent with our goals to achieve profitability. We hope to be able to say more about these efforts on future calls. Before I turn the call over to Paul, I wanted to provide you with a brief update on the international development of Triferic. As we've discussed previously, Rockwell has several international partnerships with companies looking to develop and commercialize Triferic in their respective countries. As a reminder, these international partnerships require no capital expenditure and very little operational resources from Rockwell. While they have the potential to generate near and long-term revenue for the company, There can be no assurance that they will, and we have not factored this into our revenue forecast. Subsequent to the first quarter, we announced that our partner in Turkey, Dragsan Pharmaceuticals, submitted a marketing authorization application and GMP application for Triferic Avenue to the Turkish Medicines and Medical Devices Agency for which Dragsan received priority status and a high priority status respectively. Taking into consideration that Droxen was granted an accelerated review for Trifaric Avenue with the Turkish regulatory authority, we anticipate approval for Trifaric Avenue in Turkey in 2024. The decisions we have made and continue to make are consistent with our strategy going forward to drive our business to achieve profitability in 2024 and to put the company in a stronger, more stable financial position. We are well on our way. With that, I will turn the call over to Paul to provide you with our financial updates for the quarter. Paul?