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 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 quarterly report on Form 10-Q for the three months ended March 31st, 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 continued 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, the transition of the Baxter business back to Rockwell and optimized 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 continued 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…

Thank you, Mark. Revenue for the three months ended March 31st, 2023 was $19.7 million. This represents a 22% increase over the comparable period in 2022 and an increase over the fourth quarter of 2022. Gross profit for the three months ended March 31st, 2023 was $2.6 million compared with the gross loss of approximately 800,000 for the same period in 2022. During the first quarter of 2023, we continue to see to reduce our operating expenses by focusing on enhanced business performance and more efficient manufacturing processes. For the three months ended March 31st, 2023, operating loss was $1.4 million compared to $6.6 million for the same period of 2022. For the three months ended March 31st, 2023, Rockwell's net loss was $1.75 million or $0.10 per diluted common share, compared with the net loss of $7.2 million or $0.84 per share for the same period of 2022. Rockwell's cash and cash equivalents at March 31st, 2023 was $16.8 million compared to $21.5 million at December 31st, 2022. The reduction in our cash balance was largely driven by fees associated with the reacquisition of Rockwell's distribution rights from Baxter one-time severance payments and fees associated with terminating the supply agreement. Overall, we are pleased with our financial performance in the first quarter of 2023 and reiterate our revenue guidance of $78 million to $82 million and gross profit guidance of $7 million to $9 million. We remain focused on continuing to position us for future growth as we drive towards profitability in 2024. I will now turn the call back over to Mark.

Thank you, Paul. Operator, please open the phone lines for any questions.

[Operator Instructions] And our first question comes from the line of Brandon Folkes from Cantor Fitzgerald. Your line is open.

Hi. Thanks for taking my questions and congratulations on all the progress. Maybe just one from me. Can you just help us think about the gross margin sort of how you know sort of I guess how high could that gross margin get in a stable environment? And what I mean by a stable environment is sort of once you've kind of achieved all the -- everything you're putting in place. And then secondly, can you help us just think about gross profit for the rest of the year, just given the strong results in 1Q and the reiteration of guidance? Thank you very much.

Thanks, Brandon. So we haven't issued guidance as it relates to gross margin. However, I think as you can see in the first quarter, the gross margin that we've generated is attractive for us and puts us on a path towards profitability. I can say that certainly, you know, our business both in the US and outside the US, is really focused on driving towards higher gross margins. And in some cases, you know, we've been we've been fortunate enough to be able to achieve that. But I think it's, you know, where we are this quarter is a, you know, is a -- is a good sort of target for us as we continue to drive to improved gross margins. As far as gross profit goes, we had a very strong first quarter. From that perspective, we're continuing to work towards improving that. And I think it obviously clearly demonstrates where we're on path to achieve the guidance that we've given.

Great. Thank you very much.

[Operator Instructions] And there are no further questions at this time. I will now turn the call back over to Dr. Strobeck for some final closing remarks.

Thank you, everyone, for joining us on today's call. Before we conclude our call, I'd like to take a moment and say thank you to our incredible team at Rockwell Medical for accrediting us as a Great Place to Work. Being certified as a Great Place to Work spotlights our culture, our positive employee experience and the leadership behaviors proven to deliver improving revenue, employee retention and increased innovation. This recognition is a testament to our employees unwavering commitment to our mission to provide dialysis clinics and the patients they serve with the highest quality products supported by the best customer service in the industry. I'm incredibly proud of what we have achieved together and look forward to sharing our progress on future calls as we collectively work to continue to unlock the value of Rockwell.

This concludes today's conference call and webcast. You may now disconnect.