Rockwell Medical, Inc. (NASDAQ:RMTI) Q4 2024 Earnings Call Transcript

Rockwell Medical, Inc. (NASDAQ:RMTI) Q4 2024 Earnings Call Transcript March 20, 2025

Rockwell Medical, Inc. misses on earnings expectations. Reported EPS is $-0.02 EPS, expectations were $0.02.

Operator: Good morning, and welcome to Rockwell Medical’s Fourth Quarter and Full Year 2024 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, Senior Vice President, Chief Corporate Affairs Officer at Rockwell Medical. Heather, please go ahead.

Heather Hunter: 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; Tim Chole, Rockwell Medical’s Chief Commercial Officer; and Jesse Neri, Rockwell Medical’s Chief Financial 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 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 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, 2024 was filed prior to this call and provides a full analysis of the company’s business strategy as well as the company’s fourth quarter and full year 2024 financial and operational results.

The reconciliation of non-GAAP measures we discuss on today’s call can also be found in today’s press release. Our Form 10-K and other reports filed with the SEC, along with today’s press release, our 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 will turn the call over to Rockwell Medical’s President and CEO, Dr. Mark Strobeck.

Mark Strobeck: Thank you, Heather. Good morning, and thank you for joining us today for Rockwell Medical’s fourth quarter and full year 2024 earnings conference call and webcast. 2024 was an important year for Rockwell Medical. We successfully accomplished the objectives we set out to achieve two-plus years ago: to achieve over $100 million in net sales, to improve our gross margin and to achieve profitability for a full year on an adjusted EBITDA basis. This morning, we announced that for the full year of 2024, we generated net sales of $101.5 million, our gross margin was 17%, and we were profitable on an adjusted EBITDA basis for the 12 months ended December 31, 2024 for the first time in Rockwell’s history. To reiterate what I said on our last earnings call, the progress we have made over the past few years, coupled with the results we announced this morning, are a direct effect of our team’s hard work and dedication.

We have been purposeful in focusing on growing our revenue-generating business, driving sustained profitability, growing our cash position, reducing our debt and placing Rockwell on a firmer, stronger and more stable financial foundation. That solid foundation is critical to our ability to navigate what we expect to be a transition year for Rockwell in 2025. As we noted on our last call, our largest customer has begun transitioning its volume away from Rockwell. Subsequently, this customer indicated that it’ll now completely transition to another supplier by June 30th of this year. This transition away from Rockwell will result in the loss of approximately $34 million in revenue compared to 2024. As a result, we are making the appropriate expense reductions to address this decline.

We are still in discussions with this customer about terms for a potential contract extension and future volume commitments to Rockwell. While there can be no assurance that these discussions will yield a successful outcome, we are continuing to work closely with this customer to support its clinics and their patients. One of the areas where we have already reduced expenses is tied to the contract manufacturing agreement that we had in connection with the Evoqua asset acquisition. As part of that acquisition, we acquired Evoqua’s concentrates business, which included all contracts, intellectual property, 510(k) clearances and assets primarily associated with and related to Evoqua’s concentrates business nationwide. This also included a fully automated manufacturing line.

Effective December 31, 2024, we terminated our agreement with this third-party contract manufacturer in Minnesota, discontinued the 510(k)s for Centrisol and Renasol, transition those customers to Rockwell Medical branded concentrates and are in the process of integrating the Evoqua manufacturing line into our facilities. Terminating this agreement reduces our fixed overhead costs by well over $2 million annually. We believe this transition and consolidation of SKUs was necessary to reduce costs, streamline operations, improve efficiencies and further automate our manufacturing process. We are already a few months into 2025, and while we expect this year to be a year of transition for Rockwell, we remain focused on a few key objectives: we continue to shift away from less-profitable customers and focus on more profitable growth opportunities; we plan to further diversify our customer base; we plan to further diversify our product portfolio; and we continue to optimize our business.

For 2025, we project that net sales will be between $65 million and $70 million, gross margin will be between 16% and 18%, and adjusted EBITDA will be between negative $500,000 to a positive $500,000. While our top-line revenue will be negatively impacted in the short-term, our goal remains to be profitable on an adjusted EBITDA basis for the full year of 2025. As it pertains to revenue, we expect that net sales in the first half of 2025 will be slightly higher than in the second half given the timing of when our largest customer is expected to complete their transition from Rockwell. In a continued effort to replace the lost top-line revenue in 2025, we are working on in an active discussions with new business development opportunities, including partnerships, acquisitions and distribution agreements.

We always knew that having a significant portion of our revenue with a single customer presented a risk to us and we’ve been working hard over the past few years to mitigate that risk. Because of all the changes we have made over the last two-plus years, change in our largest customer’s supplier, while a setback, doesn’t impact the strong foundation that we’ve built. We have a number of exciting opportunities we are working on that we believe will continue to support a profitable growing business going forward. With that, I’ll now turn the call over to Tim to provide you with more detail about our commercial strategy as we work to diversify our customer base and product portfolio in 2025 and beyond. Tim?

Tim Chole: Thank you, Mark, and good morning, everyone. I’m Tim Chole, Chief Commercial Officer here at Rockwell Medical. Over the past several years, I’ve led Rockwell’s commercial organization and supported our vision to focus our commercial efforts on enhancing our revenue-generating hemodialysis concentrates business and driving Rockwell toward profitability. When we reacquired our product distribution rights from Baxter in 2022 and terminated the exclusive distribution agreement with them, we focused on two key areas: one, transitioning all of those customers to Rockwell to ensure that our life-sustaining products continue to get to the hospitals, medical centers, dialysis centers and health systems that serve dialysis patients; and two, growing our business by adding new customers and expanding into new geographies to access portions of the market that were previously unavailable to us under the Baxter arrangement.

Then, in 2023, we acquired the dialysis concentrates assets from Evoqua, which added a number of strategic elements to our organization, including significant top-line revenue and profitability, as well as an expanded market presence and customer base. Rockwell became known as the leading supplier of liquid bicarbonate concentrates, and the second largest supplier of dialysis concentrates overall in the US. That same year, we also entered into a three-year co-promotion agreement with B. Braun, through which B. Braun became an independent non-exclusive representative to generate new leads for us by promoting our acid concentrates along with their fully-integrated portfolio of renal care products. In 2024, we added a convenience pack to our portfolio that has helped us expand our presence in the at-home and acute care markets.

Our convenience pack supports a patient-centric movement to drive dialysis treatments into the home to reduce the cost and complexity of dialysis, all the while transforming the experience for patients. We developed this innovation primarily in response to increased demand by one of the leading manufacturers of cutting-edge dialysis equipment and supplies used in the acute and home setting. This market leader subsequently became a Rockwell customer and they signed a long-term product purchase agreement with us in the third quarter of last year. Our convenience pack includes two one-gallon premixed containers of either our liquid bicarbonate or liquid acid concentrate. There are a few other notable customer wins from last year. First, we entered into a product purchase agreement with the world’s leading provider of dialysis products and services.

The agreement will remain in effect for three years with the option to renew for two additional one-year periods and is expected to generate upwards of $10 million in net sales for the company in the first year with incremental annual price increases built in. Second, we executed a distribution agreement with Nipro Medical Corporation through which we will supply Nipro with our full range of concentrates and our dry acid concentrates mixer device. Nipro has non-exclusive rights to distribute our products globally outside of the US. Third, our international sales continue to grow. We currently sell our products in over 30 countries around the globe. During the fourth quarter of 2024, we announced that we expanded our distribution agreement with Nephro Group Dialysis Centers, the largest dialysis service provider in the Philippines.

Under the terms of the agreement, we became the exclusive supplier of all dry hemodialysis concentrate products to Nephro. As the dialysis market continues to shift towards single-use bicarbonate cartridge technology, there remains a growing need for suppliers to provide cartridges that are compatible with a range of dialysis machines. We believe that single-use bicarbonate disposables represent an approximate $100 million market opportunity, which is one of the fastest-growing segments within the dialysis products market. I’m pleased to share with you that last month, we entered into a distribution services agreement with a leading dialysis products manufacturer to distribute a single-use bicarbonate cartridge. This arrangement will leverage Rockwell’s existing reliable commercial infrastructure and distribution network to bring the high-quality bicarbonate cartridge option to our customers at dialysis centers, hospital-based outpatient centers, and skilled nursing facilities.

Under the terms of the agreement, the manufacturer will supply us with premium-grade single-use bicarbonate cartridges, which are 510(k) approved by the FDA. Our partner is responsible for maintaining all regulatory approvals required to market and sell these products throughout the US. We believe the addition of this product to our portfolio represents an exciting opportunity for us to diversify our offering and address the rapidly-growing market segment. Additionally, this now offers us the ability to be more competitive when bidding for a full range of concentrates business with new customers. Since we announced our new business strategy late in 2022, we have completed two acquisitions, expanded our product portfolio, right-sized our pricing, significantly improved our gross margin and achieved record net sales quarter-over-quarter and year-over-year.

We signed long-term contracts with a range of customers, including some of the largest dialysis providers, at-home dialysis equipment manufacturers, nursing home dialysis providers, acute care facilities, hospital systems, medical device manufacturers and distributors. In 2025, we plan to build on this momentum and grow our business by adding new customers and further diversifying our customer base. In order to achieve this, we plan to target additional customers that represent an estimated 14.5 million gallons of potential available business within our distribution footprint. Customers want to work with Rockwell because we are dedicated to providing the highest-quality products supported by the best customer service in the industry. This continues to be a key differentiator for us.

Rockwell remains a leading supplier that has the scalability to manufacture and deliver to the more than 12,000 individual purchasing facilities, including outpatient dialysis clinics and hospitals in the US, along with select international markets. While 2025 will be a year of transition, as Mark mentioned earlier, I’m excited about the tremendous progress that we’ve made and the opportunities that lie ahead for Rockwell. Now, I’ll turn the call over to Jesse to review our fourth quarter and full year 2024 financial results in further detail. Jesse?

Jesse Neri: Thank you, Tim. Good morning, everyone. I will now review our fourth quarter and full year 2024 financial results in greater detail. Net sales for the fourth quarter 2024 were $24.7 million, representing a 12% increase over net sales of $22.1 million for the same period in 2023. Both periods consisted solely of concentrate product sales. Net sales for the full year of 2024 were $101.5 million, representing a 21% increase over net sales of $83.6 million for the same period in 2023. Net product sales for the full year 2024 were $101.4 million, representing a 27% increase over net product sales in 2023. The increase was primarily driven by the addition of new customers through our Evoqua asset acquisition, a special large order of premium-priced products by our largest customer, as well as additional sales and standard price increases with our existing customers.

Net sales on non-product revenue was not material in 2024. 2023 net product sales included $3.8 million of deferred license revenue recognized as a result of terminating the Wanbang and Baxter agreements. Gross profit for Q4 2024 was $3.6 million, which represented a 27% increase over gross profit of $2.9 million for the same period in 2023. Gross profit for the full year 2024 was $17.5 million, which was more than double our gross profit of $8.7 million in 2023. The increase was due to improved gross margin associated with existing customers, driven by price increases, a large order of premium-priced products by our largest customer, all of which partially was offset by gross profit in 2023 associated with the deferred license revenue recognized in association with our termination of the Wanbang and Baxter agreements.

Gross margin for Q4 2024 was 15%, representing an increase from 13% for Q4 2023. Gross margin for the full year 2024 was 17%, representing an improvement over 10% gross margin for the same period in 2023. Gross margin in Q4 2024 was impacted by a one-time expense of approximately $900,000 associated with the transition from our third-party contract manufacturing facility in Minnesota. The agreement ended December 31, 2024, which will save Rockwell over $2 million annually in fixed overhead expenses. Net loss for the fourth quarter 2024 was $800,000, which represents a 50% improvement over a net loss of $1.5 million for the same period in 2023. Net loss for the full year 2024 was $500,000, which represents a nearly $8 million improvement over a net loss of $8.4 million in 2023.

Adjusted EBITDA for the fourth quarter of 2024 was $1.4 million, representing 156% improvement over $500,000 for the same period in 2023. Adjusted EBITDA was a positive $5.2 million for the full year of 2024, representing a $9 million improvement over a negative adjusted EBITDA of $3.9 million in 2023. As we noted earlier, we remain laser-focused on achieving profitability again on an adjusted EBITDA basis for the full year 2025. At December 31, 2024, we had $8.5 million remaining on our term loan with Innovatus. As a reminder, in January of 2024, we amended our loan agreement, which included an interest rate reduction and extended the loan maturity date from March 2025 to January 2029. Our payments will be interest-only for 36 months. Cash, cash equivalents and investments available for sale at December 31, 2024 was $21.6 million compared with $18.3 million at the end of September 2024 and $10.9 million at the end of 2023.

Strengthening our cash position was a priority in 2024. We have increased our cash balance by more than $10 million since the end of last year by improving our margins, renegotiating our loan agreement and making [pre-capital] (ph) raises under our ATM. Seeing a $21.6 million of cash and investments, we have put ourselves in position to manage changes in our business, make targeted investments in continued automation and pursue business development opportunities that support our strategic objectives. Now, I’ll turn the call back over to Mark.

Mark Strobeck: Thank you, Jesse. Operator, please open the phone lines for any questions.

Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Brandon Folkes from Rodman & Renshaw. Your line is open.

Brandon Folkes: Hi, thanks for taking my questions and congratulations on all the progress. Maybe just starting with sort of the largest customer, any color in terms of how much revenue that historical largest customer will generate in 2025 in terms of what’s in your guidance? In the 10-K, it seems they sort of generated around $45 million. So, if we’re kind of thinking of $45 million less $34 million that you mentioned, is that a good way to think about what’s in there from that largest customer in 2025? And then, maybe I’ll just carry on this if you don’t mind. Sorry to be long-winded here. But yeah, and I just want to confirm, you noted the customer expects to transition all of its business away. Can you just provide some color on those discussions with the customer on sort of the go-forward volumes you mentioned and sort of whether anything going forward is contemplated in your guidance, or is it just up to sort of the date you — I think it was July you mentioned that sort of wind down?

Mark Strobeck: Yeah. Brandon, thank you for the questions. To answer your first question, yes, that’s the right way to think about it. What we’ve described today is essentially the decline that we’ll see in 2025, but as you properly noted through your review of the K that approximately $45 million is the total volume that that largest customer does purchase from us. So, that’s, yes, I think that’s the right way to think about it. As far as your second question related to the discussions with the largest customer, as we’ve said previously, the shift by that largest customer is essentially to diversify its supplier base. It didn’t come through any issues that arose from their purchasing from us. They’re quite happy with us. They enjoy working with us, feel like we make a high-quality product and are able to successfully distribute it to them.

So, we’re still in discussions with them right now around what the future of that relationship looks like and the possibility of continuing to utilize us as a supplier. None of what we are contemplating in those discussions is incorporated into our guidance. So, anything that we are able to achieve as a result of those negotiations would go above and beyond the guidance that we provided today.

Brandon Folkes: Great. Thanks very much. And one follow-up, if I may. You’ve obviously done a lot of positive things this year in terms of adding — well, sorry, I beg your pardon, this year and last year, but do you view 2025 as a transition year and a return to growth in 2026 with all those positives, or is this potentially a multi-year transition here? And then, in line with that, you mentioned the expense reductions. How should we think about those dropping to the bottom-line versus sort of reinvesting in the business? You talked about sort of the expansion West, just sort of how much of those savings do you reinvest back into the business? That’s it for me. Thank you.

Mark Strobeck: Yeah. No, thank you, again. So, let me address the first one and then maybe I’ll have Jesse address the second question. So, given the fact that we’ve known about this transition and when — and the timing around this transition, we’ve been well underway in preparing for that to occur. As we talked about this morning already conducting expense reductions to mirror essentially the decline in volume that’s coming from the shift of this largest partner. Our description of 2025 as a transition year is in part a recognition of the fact that obviously there will be changes that are going on here as that volume declines and as we continue to reduce our expenses to mirror that. But we do not see that as being a long term or requiring a number of years to complete.

It is our goal and objective to get back to growth here within this organization within 2025. And so, that is our plan. And as I said, we are very, very active in the marketplace, not only Tim and his team working to sign additional customers to add additional volume, but similarly in the business development marketplace, looking at different businesses, both within dialysis and outside of dialysis, of which we can utilize our commercial organization, our distribution organization to amplify us and get us back to the road of growth. I think the important thing that I would say here is, the last two years have been incredibly successful for us in demonstrating that when we set out to do something as an organization that we are driven and have been able to achieve what we set out to do.

Although the situation with the largest customer is a temporary setback, we still fundamentally believe that we are going to continue to grow this organization and become a leading player in this space. As for the second part, Jesse?

Jesse Neri: Yeah. So, I think there’ll be like obviously you see from our gross margin guidance, we do expect as revenue comes down that costs will come down commensurate. I think that the big activities that will fall to the bottom-line is our overhead reductions. So, as Mark mentioned on the call, we reduced some fixed overhead costs with our local acquisition. There’ll be more of those in the future, probably around the same amount of money, going forward into 2026.

Brandon Folkes: Great. Thanks very much. And I appreciate you taking all my questions.

Mark Strobeck: Thanks, Brandon.

Operator: Your next question comes from the line of Ram Selvaraju from H.C. Wainwright. Your line is open.

Ram Selvaraju: Thanks very much for taking my questions. Just two very quick ones. Firstly, can you comment on any factors that led to this large customer pivoting away from Rockwell that might extend to other customers? In other words, are there any potential risk factors applicable to other customers in your customer base beyond this customer? And if possible, enumerate on what strategies you might have in place to prevent any of this from happening? And then, secondly, with respect to the bicarbonate cartridge business, can you just give us a sense of how you plan to grow that business over the course of 2025 specifically? And what expectations you have for how quickly the uptake of that product might proceed? Thank you.

Mark Strobeck: Great. Thanks, Ram, for those questions. I’ll take the first, and maybe I’ll have Tim take the second. So, as it relates to our largest customer, in our discussions recently with them, it has become clear that they had made this decision before I arrived here at Rockwell. They’ve been unclear as to why they’ve made that decision other than the diversification of their supplier base. We respect that choice. I think if they had given the choice to do it again today, I don’t think they would have made that choice given the progress that we’ve made at Rockwell, but that’s unfortunately not the case. So, we are working, as I said, very closely with them in an effort to continue to supply them our product and extend that arrangement.

And we hope to be able to share something around that in the coming months. As far as our other customers, again, we do not have any issues related to manufacturing our products, distributing our products. We continue to get cited for having a customer care division that provides a white glove service to our customers. And the majority of our customer base is signed up to long-term supply arrangements. And we believe we will continue to support them. It’s an — again, it’s an unfortunate situation, not one that we had expected given how well we had been working with that customer, but we’ve said in this call, we are well prepared by the changes that we’ve made, created a very strong foundational business that allows us now to weather these situations.

Two years ago, had this happened, it would have been game, set, match. Now, we’re able to weather it and get ourselves well positioned to begin to start to grow again. As I said, I feel confident we have a very strong relationship with that customer. And I’m hopeful for us to continue to work with them going forward. On the second piece, maybe I’ll just turn it to Tim to talk about the bicarbonate cartridge.

Tim Chole: Yeah, sure. Ram, this product fills the gap in our portfolio, where customers wanted to use a single-use bicarbonate disposable before we weren’t able to offer to them, now we are. So, our strategy really is to go to our existing customer base and introduce the product, which we believe in 2025 we’ll kind of kick start the program and get us some short-term sales. Longer-term, there’s some growth factor built in to that particular market segment as customers switch over slowly to more machines that are compatible with bicarbonate cartridges such as the one we’re going to distribute. So, that’s — it’s an important piece for the portfolio, and again, addressing our customer base with the product. Our existing customer base is our primary strategy.

Ram Selvaraju: Thank you.

Mark Strobeck: Thanks, Ram.

Operator: Your next question comes from the line of Anthony Vendetti from Maxim Group. Your line is open.

Anthony Vendetti: Thank you. Good morning. So, maybe just touching a little bit more on the guidance, Mark, I just want to make sure I understand this correctly. So, even though the customer has indicated that they’re going to transition away completely by June 30th of this year, that’s, I guess, what they’re saying, and what you’re saying is, yes, but we’re continuing to have discussions with them about potentially future agreements, but not in your guidance, right? So, your guidance of $65 million to $70 million in revenues for 2025 assumes they do transition completely away by 06/30. And if you were to sign additional agreements with them this year, that would be — would it be correct to assume that would be upside to the $65 million to $70 million in guidance? And then, I have a follow-up.

Mark Strobeck: Yeah, good morning, Anthony. Yes, that’s exactly right. I think as folks know who have followed Rockwell certainly over the last two-and-a-half years, not only we the first to initiate providing guidance to the Street, but I think as folks know, we’ve been very conservative in our estimates and what we’ve provided to the Street, and have been fortunately very successful in being able to meet those objectives. We’ve taken the same approach here. We’ve not assumed success in those discussions. We provided what we believe to be an achievable conservative set of guidance ranges, but we are going to pursue and have pursued very aggressively an extension to our relationship with our largest customer. And anything that we’re able to successfully complete this year will all be upside on that guidance range.

Anthony Vendetti: Okay, great. And then, just to follow-up just on overall revenue guidance, it seems like you’re offsetting some of the potential loss with the Nipro Medical distribution agreement as well as you touched on the call, growth internationally. Maybe, can talk a little bit also about the West Coast expansion, how that’s going and how that could also have a positive impact on sales? And then, just lastly, on gross margin, is the gross margin guidance based on the fact that you’re going to have a lower sales figure than you concluded ’24 with, and that the overall pricing remains the same, or is there any change in the competitive pricing landscape? Thank you.

Mark Strobeck: Sure. Yeah. So, let me address the first question. So, you’re right in the sense that what you’re seeing in part of that guidance is — involves a certain amount of commercial activity and really has baked into it some of the arrangements that Tim has talked about and ones that we’ve also recently completed. Within our current estimated footprint, as Tim notes, there’s approximately 14.5 million gallons of available sort of supply that we are now targeting to secure that business. There is a similarly large number of gallons or millions of gallons, I should say, that are out in the West that are serviced essentially by a single supplier. We continue to expand our own footprint in the West. I think we have significantly increased the size and number of customers that we now service to the West.

We’ve established now different distribution pilot programs in an effort to expand our ability to transport our materials out into the West. That’s still an area that we see as a growth opportunity. I think we’ve estimated that close to $100 million that we are also trying to actively explore. I think given some of the changes that we are transitioning through right now, until we get a larger critical base of customers out there, it probably doesn’t make sense to establish a single facility, but I can imagine that if we are able to continue to increase our sales in the West that will likely require to have a dedicated facility there to support those customers. I think it’s important to note, and to your second question — well maybe I’ll just finish one thought on your first question.

The other piece here, which you’ve noted is, that we continue to expand our business internationally. And that continues to be a — I think a very rich opportunity for us. And we service now 30 countries. I think there is more to be done there. The advantage always for us in our international business is we don’t actually have to distribute the product. The customer takes on the distribution piece. However, the price doesn’t change. So, the good news for us is that that’s an opportunity for additional margin, which has been attractive for us. So, we are continuing to look for ways in which to expand further internationally. On the second part of your question, as we’ve noted in previous calls, our largest customer did not produce much in the way of gross margin for us as a supplier.

So, when we remove that customer essentially from the P&L, what you see is it obviously decline in the top-line, but not much in the way of a significant change to the actual gross margin percentage. That again is a reflection of all the changes that we’ve made internally to make our products more efficiently. It’s also a reflection of the fact that we continue to adjust prices of our products to reflect the value that they bring in the dialysis community. So, nothing has changed from that perspective. We still have more we’re going to do from both perspectives to continue to keep that number progressing forward. So, that is our intent and objective here through ’25 and going beyond.

Anthony Vendetti: Okay. So just — I know I had a lot in there, so — and that’s great color, Mark. So, I appreciate that. But on the gross margin and the overall corporate gross margin, the reason that it’s — the guidance of 16% to 18% is not because there’s any concern or issue with pricing, it’s more — the ’25 revenue guidance is on a lower base than ’24 and there’s certain fixed costs. So, that’s why the overall corporate gross margin might be down from what it was at the beginning of ’24. It doesn’t have to do with pricing. It has to do with just the base of the revenue being lower — expected to be lower in ’25. Is that correct?

Jesse Neri: Yeah. That’s right, Anthony. I mean, I will say our gross margin at the beginning of 2024 was about 13%. So, we are still improving, but yes, we are spreading those fixed costs over a smaller base now.

Anthony Vendetti: Okay, great. Thanks very much. I’ll hop back in the queue. Appreciate it.

Mark Strobeck: Thanks, Anthony.

Operator: And there are no further questions. I will now turn the call back over to Dr. Strobeck.

Mark Strobeck: Thank you all for joining us for an update on Rockwell Medical’s achievements in 2024 and our outlook for 2025. While 2025 will be a year of transition, we remain committed to further diversifying our customer base and product portfolio and further optimizing our business. Our goal remains focused on maintaining and achieving profitability on an adjusted EBITDA basis for the full year of 2025, while we continue to identify and pursue business development opportunities that support our strategic objectives. We look forward to providing you with more updates on our next call.

Operator: This concludes today’s conference call and webcast. You may now disconnect.