Rockwell Medical Technologies Inc. (RMTI, Financial) filed Quarterly Report for the period ended 2009-03-31.
Rockwell Medical Technologies Inc. manufactures hemodialysis concentrates and dialysis kits and sells distributes and delivers such concentrates and dialysis kits as well as other ancillary hemodialysis products to hemodialysis providers in the United States. Hemodialysis is a process which is able to duplicate kidney function in patients whose kidneys have failed to function properly. Rockwell Medical Technologies Inc. has a market cap of $78.7 million; its shares were traded at around $5.57 with and P/S ratio of 1.5.
Gross profit in the first quarter of 2009 was $1.2 million compared to $0.7 million in the first quarter of 2008. Gross profit margins increased to 9.3% from 5.8% in the first quarter of 2008. The increase in gross profit was due to reductions in material costs, fuel costs and operating expenses coupled with price increases. In early 2009, we entered into new supply contracts and made certain vendor changes, and also benefitted from reductions in costs for certain chemicals and fuel, which were the primary reasons for the improvement in gross profit margins in the first quarter of 2009. We reclassified certain quality assurance and operations management expenses totaling $140,000 to cost of sales from selling, general and administrative expense for the first quarter of 2008 to maintain comparability of prior year results with the current year presentation.
Selling, general and administrative expense, or SG&A, during the first quarter of 2009 was $1.6 million compared to $1.3 million in the first quarter of 2008, an increase of $0.3 million or 21.0%. Non-cash charges for equity compensation were $0.5 million in the first quarter of 2009 compared to $0.3 million in the first quarter of 2008. Other cost increases included additional information technology costs and personnel expenses in support of our business growth over the last two years.
Research and development costs were $1.3 million in the first quarter of 2009 compared to $0.8 million in the first quarter of 2008. Spending in both periods was primarily devoted to development and approval of SFP, our proprietary anemia drug used to treat iron deficiency in dialysis patients. We are conducting a Phase IIb clinical trial and we anticipate spending approximately $4 million in 2009 for SFP related development spending.
In November 2007, we raised approximately $12.8 million in equity capital (net of related expenses) primarily for the purpose of funding the clinical development and FDA approval of SFP. We expect to spend approximately $4 million on SFP development and testing in 2009.
Our cash resources include cash generated from our business operations and the remaining proceeds from our November 2007 equity offering. Our current assets exceed our current liabilities by over $6.1 million as of March 31, 2009 and included $3.4 million in cash. In the first quarter of 2009, we used $2.2 million in cash, including $2.0 million in operating activities and $0.2 million for capital expenditures. Our cash used in operations was primarily used to fund our research and development expenditures of $1.3 million, and the remainder was used to fund working capital requirements in our core business operations, including a reduction in accounts payable of $1.4 million partly attributable to a $0.4 million reduction in raw material inventory. Non-cash charges against operating results were $0.8 million in the first quarter of 2009.
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Rockwell Medical Technologies Inc. manufactures hemodialysis concentrates and dialysis kits and sells distributes and delivers such concentrates and dialysis kits as well as other ancillary hemodialysis products to hemodialysis providers in the United States. Hemodialysis is a process which is able to duplicate kidney function in patients whose kidneys have failed to function properly. Rockwell Medical Technologies Inc. has a market cap of $78.7 million; its shares were traded at around $5.57 with and P/S ratio of 1.5.
Highlight of Business Operations:
We are continuing the FDA approval process for our iron supplemented dialysate product, SFP. We believe our SFP product, which has a unique method of action and other substantive benefits compared to current treatment options, has the potential to compete successfully in the iron maintenance therapy market. However, the cost to obtain regulatory approval for a drug in the United States is expensive and can take several years. We currently expect to spend approximately $4 million in 2009 to complete our Phase IIb clinical trials and other related development costs. Once we complete the Phase II clinical study, we will seek FDA approval to commence a Phase III clinical trial. We anticipate that costs to complete clinical trials and to obtain FDA approval to market SFP from 2010 until such approval may total approximately $15 million depending on the duration and size of the studies required.Gross profit in the first quarter of 2009 was $1.2 million compared to $0.7 million in the first quarter of 2008. Gross profit margins increased to 9.3% from 5.8% in the first quarter of 2008. The increase in gross profit was due to reductions in material costs, fuel costs and operating expenses coupled with price increases. In early 2009, we entered into new supply contracts and made certain vendor changes, and also benefitted from reductions in costs for certain chemicals and fuel, which were the primary reasons for the improvement in gross profit margins in the first quarter of 2009. We reclassified certain quality assurance and operations management expenses totaling $140,000 to cost of sales from selling, general and administrative expense for the first quarter of 2008 to maintain comparability of prior year results with the current year presentation.
Selling, general and administrative expense, or SG&A, during the first quarter of 2009 was $1.6 million compared to $1.3 million in the first quarter of 2008, an increase of $0.3 million or 21.0%. Non-cash charges for equity compensation were $0.5 million in the first quarter of 2009 compared to $0.3 million in the first quarter of 2008. Other cost increases included additional information technology costs and personnel expenses in support of our business growth over the last two years.
Research and development costs were $1.3 million in the first quarter of 2009 compared to $0.8 million in the first quarter of 2008. Spending in both periods was primarily devoted to development and approval of SFP, our proprietary anemia drug used to treat iron deficiency in dialysis patients. We are conducting a Phase IIb clinical trial and we anticipate spending approximately $4 million in 2009 for SFP related development spending.
In November 2007, we raised approximately $12.8 million in equity capital (net of related expenses) primarily for the purpose of funding the clinical development and FDA approval of SFP. We expect to spend approximately $4 million on SFP development and testing in 2009.
Our cash resources include cash generated from our business operations and the remaining proceeds from our November 2007 equity offering. Our current assets exceed our current liabilities by over $6.1 million as of March 31, 2009 and included $3.4 million in cash. In the first quarter of 2009, we used $2.2 million in cash, including $2.0 million in operating activities and $0.2 million for capital expenditures. Our cash used in operations was primarily used to fund our research and development expenditures of $1.3 million, and the remainder was used to fund working capital requirements in our core business operations, including a reduction in accounts payable of $1.4 million partly attributable to a $0.4 million reduction in raw material inventory. Non-cash charges against operating results were $0.8 million in the first quarter of 2009.
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