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| Statement |
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| As we look at 2024 and beyond, there are a number of factors that are favorably pointing in Rockwell's direction as we continue to focus on growing our business |
| Gross profit for the full year 2023 was $8.7 million, representing the second year in a row of record gross profit and a 114% increase over the same period in 2022 |
| We are extremely proud of all the progress we made in 2023 and we are excited for all that lays ahead for Rockwell |
| Additionally, we achieved record net sales, record net product sales and record gross profit for the second year in a row, meeting or exceeding guidance that we issued at the beginning of 2023, and our gross margin continued to improve |
| We continue to put Rockwell in a better position to drive growth and further improve our performance, so we can serve more patients, clinics and major medical centers around the world |
| Our ability to refinance our debt now offers us the opportunity to redeploy this capital back into our business to further optimize our operations through improved business processes and expanded automating manufacturing capabilities |
| So, the combination of all of those is what gives us the great -- give us the confidence to project our business going forward |
| Fast forward to today, we are successfully executing against that plan |
| We reported record net sales two years in a row, first generating over $70 million in net sales in 2022 and now over $80 million of net sales in 2023 |
| We reported record gross profit for the second year in a row, generating over $4 million in 2022 and now approximately $9 million in 2023 |
| Another key milestone for Rockwell was achieving profitability in the fourth quarter of 2023 on an adjusted EBITDA basis, the first time in our company's history and ahead of our previously issued guidance |
| We expanded our geographic footprint both domestically and internationally, and we significantly improved efficiencies in our manufacturing processes |
| These improvements are being realized through our improved gross margin, which was 10% in 2023, the highest in Rockwell's history and increased from 6% in 2022, and a significant improvement from a gross loss of minus 4% in 2021 |
| And so, that gives us, I think, also greater confidence around what the commercial opportunity that exists for Rockwell and the pricing that we're able to achieve |
| We are working purposely every day to fortify our market share and ensure our life-sustaining hemodialysis solutions continue to positively impact patients with end-stage kidney disease |
| Through purposeful execution of our strategy, we are unlocking the value of our improved processes and expanded automated manufacturing capabilities |
| We project gross margin will continue to improve by approximately 20% in 2025 and will reach 25% or higher in 2026 and beyond |
| We project that gross margin will continue to improve as a result of better pricing and reduced expenses, the latter of which will be driven by improved efficiencies in our manufacturing and delivery of our products |
| And most critically, we believe that we would drive our business to achieve profitability and put the company in a stronger, more financially stable position |
| As evidenced by the results we issued this morning, I am pleased to share that we accomplished all of these corporate milestones for 2023 and we believe we have set the stage for continued growth in 2024 and beyond |
| And so, with that, it has allowed us to not only improve our margins through adjusting the economics of our customer relationships, I think to reflect the value of our products, but then simultaneously to continue to drive efficiencies within our manufacturing process, some of which will come from the acquisition of Evoqua |
| This represented a 15% increase in net sales and a 22% increase in net product sales over the same period in 2022 |
| In 2023, we generated record net sales for the second year in a row of $83.6 million, a 15% increase year-over-year, of which net product sales was $79.8 million |
| You've already made significant improvements, and it's more than doubling of the gross margin that you have for the full year, and almost the doubling of what you have here in the fourth quarter as you go out into the future |
| It's really through the growth of the business that we've been successful at achieving that really allowed us to actually enter into that extension |
| Net sales for the fourth quarter of 2023 were comprised solely of concentrate product sales, representing the highest quarterly concentrate product sales generated to-date for Rockwell and a 22% increase over the net product sales for the same period in 2022 |
| So, we see that as an opportunity to free up some cash for us that would otherwise have gone to repaying that debt for us to reinvest in our manufacturing capabilities and efficiencies to continue to drive better improvements within our gross margin and subsequently sales |
| And then just in terms of the gross margin improvement, obviously, given guidance pretty far out into the future and it's a significant improvement |
| We achieved profitability on an adjusted EBITDA basis in the fourth quarter of 2023, ahead of guidance |
| During the fourth quarter of 2023, we generated record net sales of $22.1 million, which was comprised entirely of hemodialysis concentrates product sales |
| Statement |
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| When I joined Rockwell in the middle of 2022, the company's revenue was consistently stagnant, annually generating around $60 million |
| We were operating at a loss, generating a gross loss, were heavily levered and were at risk for being delisted from the NASDAQ |
| Prior to my joining Rockwell, we were losing money on our hemodialysis concentrates products business |
| As I noted before, in 2021, gross loss was minus 4% |
| This is significant for us |
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