Rockwell Medical, Inc.

Good morning and welcome to Rockwell Medical's fourth quarter and full year 2025 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, Chief Operating 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 Rockwell Medical's President and Chief Executive Officer, Dr. Mark Strobeck, and Rockwell Medical's Chief Financial Officer, Jesse Neary. 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 our subsequent periodic reports filed with the SEC. 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 material, excuse me, 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 SEC. Rockwell Medical's annual report on Form 10-K for the year ended December 31, 2025 was filed prior to this call and provides a full analysis of the company's business strategy as well as the company's full year 2025 results. The reconciliation of non-GAAP measures we discussed on today's call can also be found in today's press release. Our Form 10-K and other reports filed with the FDC, along with today's press release, our updated investor presentation, and a webcast replay of today's call can be found on our website under the Investors section. Now, I will turn the call over to Rockwell Medical's President and CEO, Dr. Mark Strobeck.

Thank you, Heather, and good morning, everyone. Thank you for joining us today on Rockwell Medical's fourth quarter and full year 2025 earnings conference call and webcast. 2025 represented a defining year for Rockwell Medical. We successfully navigated changes in our customer base, changes in our customer purchasing volumes, and changes in our distribution footprint, all while maintaining profitability on an adjusted EBITDA basis for the second consecutive year. We made significant operational changes to further align our infrastructure to match demand the benefits of which began to be realized in the fourth quarter and delivered one of the highest quarterly gross margin in the company's history. Additionally, in the fourth quarter 2025, we generated positive cash flow from operations, resulting in a higher cash position at year end. We exited 2025 with a business that we expect to remain stable and well positioned to deliver sustainable profitability for years to come. Now let me delve into the details of our operational results. A central focus of our strategy over the past several years, and especially throughout 2025, has been building a more durable business to reduce volatility, support more consistent margin performance, and enable us to plan our operations with greater confidence. Reducing customer concentration risk and improving revenue stability have been essential priorities for Rockwell and we believe we have made significant progress on both fronts. Today, our customer mix is diverse. We serve approximately 300 customers throughout the United States, including all five of the leading dialysis providers in the U.S., along with university medical centers, community hospital systems, and other renal care organizations. In addition, we supply hemodialysis concentrates to more than 30 countries outside the United States. Let's start with Presenius, the largest provider of renal care solutions in the world. Based on the agreement we signed back in 2024, we consistently and reliably supplied them with our concentrate products throughout 2025, and based on their projections for 2026, we expect that business to grow. As for DaVita, the second largest provider of kidney care services in the world, while they originally intended to completely transition away from Rockwell, By the middle of 2025, they did not. Instead, for a variety of reasons, including our reliability, consistency, and quality, DaVita ended up extending our agreement to the end of 26, during which product pricing will be increased. We are excited to continue to supply and support DaVita and look forward to finding ways to reestablish a larger supply agreement with them. We expanded our relationship with Innovative Renal Care, the fourth largest dialysis service provider in the United States. We signed a multi-year agreement with IRC to support their goals to invest in high-quality hemodialysis products, streamline workflows, and help avoid potential supply chain disruptions. This multimillion-dollar purchase agreement has utilization commitments and will remain in effect for three years, with the option to an extent for an additional one-year period. Since announcing this transition in July of last year, our partnership with IRC continues to grow stronger, and we now reliably supply 70% of their clinics with our hemodialysis concentrates. Efficient processes, high-quality products, business continuity, and supply chain reliability were key drivers for IRC to expand their relationship with us. We are excited to be a part of their missions. Another customer to highlight is DCI, which is one of the top five dialysis providers in the US and the nation's largest not-for-profit dialysis provider. Rockwell is currently under a long-term agreement with DCI through which we supply and deliver to over 80% of their clinics. In 2025, we also signed a product purchase agreement with Concerto Renal Services, the largest provider of dialysis and skilled nursing facilities in the United States. This three-year agreement has an option to renew for one additional year and includes supply and purchasing minimums for our liquid and dry acid bicarbonate concentrates, including our bicarbonate cartridges. We currently supply 100% of their facilities where Concerto provides dialysis services. Last year, there was a major hemodialysis concentrate supply chain disruption Due to another concentrate supplier in the western part of the US winding down operations due to regulatory and compliance related concerns. To stabilize the market we move quickly to ensure product availability by rapidly scaling production and expanding our logistics infrastructure to address vital customer demand created by this disruption. As a result, we added 30 new customers in the West, increasing the clinics we serve and opening the possibility for further expansion. We also further diversified our hemodialysis concentrate product portfolio by adding a single-use bicarbonate cartridge that is 510K approved by the FDA and comes in two sizes, 720 and 900 grams. Interest in this disposable, which is compatible with a range of dialysis machines, continues to increase with our existing customer base as well as with prospective customers. In 2026, we expect to generate approximately one million in net sales from our bicarbonate cartridges. As we look ahead, our pipeline remains active and diversified across customer segments and geographies. We continue to see strong interest from customers who increasingly recognize the importance of quality and supply chain reliability for our hemodialysis products. While we remain disciplined, we believe our diverse customer mix positions us well for sustainable growth and expansion. As our customer mix evolved in 2025, we took a hard look at our operations. not just to reduce cost, but to strengthen the foundation of our business. Throughout the year, we executed a series of targeted actions across manufacturing, supply chain, logistics, and overhead. The objective was straightforward, operate more efficiently while continuing to meet the high expectations of our customers to ensure quality, safety, reliability, and top-tier customer service. As our business evolved, we took the opportunity to further standardize processes and optimize how we deploy resources across the organization. By reducing complexity, improving planning, and better aligning capacity with demand, we are able to operate more predictably and with greater discipline. These changes support our ability to respond more efficiently as volumes and customer needs shift, the impact of which is clearly being reflected in our gross margin. It's important to emphasize that our margin expansion, especially in the fourth quarter of 2025, is not the result of temporary actions or one-time benefits. Instead, these changes reflect structural improvements in how we run our business, from how we manage production to how we align resources with demand. Our margin improvement is being driven by several factors. First, we are improving our pricing discipline across a more diversified customer base, which is allowing us to better align contract economics with the value we provide. Second, operational efficiencies are reducing costs and improving throughput. Third, a more stable production and logistics environment is enabling better planning and execution. As volume shift and customer needs evolved, this disciplined operating model gives us flexibility to respond efficiently while maintaining high service levels. In the fourth quarter, we appointed a new head of manufacturing and operations, Rashad Brown, as Vice President of Manufacturing and Supply Chain. Rashad brings deep operational expertise and a strong track record in regulated manufacturing environments, specifically hemodialysis concentrates, having previously worked at Presenius and other leading medical device manufacturers. His leadership is already having a significant impact on our operations through improved execution, consistency, and discipline. We expect further improvements in our manufacturing efficiencies in 2026 and beyond. Our financial performance in 2025 reflected an organization that was in transition, but also laser-focused on maintaining profitability and stabilizing its business to ensure future growth. Revenue changes throughout the year reflected the combination of a change in our customer base and product mix, along with additional organic growth. Similarly, we made adjustments to our organizational and manufacturing infrastructure to match the changes in our customer base, which produced consistent improvements quarter over quarter. Gross margin expanded meaningfully, making the fourth quarter 2025 one of the strongest quarters of gross margin in Rockwell's history. Operating loss narrowed, the overall financial profile of our organization improved, and we delivered positive adjusted EBITDA for the full year 2025. We also generated cash in the fourth quarter, supported by margin expansion and better working capital management. That progress further reinforces the strength of our underlying business. In short, we are doing more with less and doing it better. The business is becoming more focused and more predictable, and we believe it is increasingly well positioned to generate sustainable returns over time. We initiated a strategic shift nearly four years ago to fundamentally revitalize Rockwell. Our main objective at the time was to reestablish credibility with all stakeholders, especially with the investment community. This is and remains incredibly important to our success. We are pleased to report for the third year in a row our annual performance was aligned with our annual guidance. We have strengthened the core fundamentals of this business and clarified the key drivers for its success, positioning it to become increasingly consistent, reliable, and repeatable over time. For our 2026 guidance, we believe we are well positioned to advance our strategy to drive sustainable revenue growth, expand our profitability, and further diversify our portfolio. As a result, we project our business operations in 2026 will generate adjusted EBITDA between $1 and $2 million, and operating cash flow to be positive. Because we are currently in negotiations with several large customers, the outcome of which has the potential to positively impact both net sales and gross margin in 2026, we expect to provide guidance on those financial metrics in the near future. Bottom line, in 2026, we believe that our business is projected to be profitable and generate cash. As new opportunities arise, we anticipate that these projections have the potential to strengthen, reflecting our business's ongoing adaptability and growth prospects. Looking ahead, we continue to focus on long-term value creation for our shareholders. Our strategy over the next three years is centered on three core elements. First, we are focused on growing our profitable leading hemodialysis concentrates business, serving dialysis centers in the United States and around the world. This remains our core foundation. Our ability to deliver reliable supply, consistent quality, and strong service supported by a more efficient operating model enables us to be a dependable partner to our customers while sustaining margin performance and supporting shareholder returns. Second, we are focused on building a broader portfolio of renal care products that integrate seamlessly into our existing commercial manufacturing and distribution infrastructure. We see meaningful opportunity to leverage that platform we have built, including our customer relationships, operational capabilities, and logistics network to support additional products that align with our expertise and enhance the overall offering we provide to customers. Third and longer term, we continue to seek the next advancement in renal care, innovations that can drive improved treatment options and outcomes for patients. While inherently deliberate and disciplined, this work reflects our commitment to remaining forward-looking and strategically positioned within an involving healthcare landscape. Beyond these core areas of focus and based on what we see today, we believe that over the next three years, we have a path to meaningfully grow our business. By 2029, we believe that we will be well-positioned to generate annual net sales above $100 million while continuing to broaden and diversify our portfolio so that a smaller share of revenue comes from our concentrates business as it exists today. Over that same period, we expect gross margins to trend upward, potentially approaching 30% range, and our business to move toward annual profitability in the range of $5 to $10 million. These are our goals, and we see a path to achieve these goals. Of course, I'd emphasize that these are longer-term directional views based on our current expectations, and they are subject to a range of risks and uncertainties, so actual results could differ. Now I will turn the call over to Jesse to review in further detail our fourth quarter and full year 2025 financial results.