Rockwell Medical Technologies Inc. (RMTI, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $88.4 million; its shares were traded at around $6.22 with and P/S ratio of 1.8.
Gross profit in the third quarter and first nine months of 2009 was $2.4 million and $5.5 million, respectively, compared to $0.6 million and $2.3 million in the third quarter and first nine months of 2008, respectively. Gross profit margins increased to 17.0% in the third quarter of 2009 from 4.7% in 2008 and to 13.7% in the first nine months of 2009 compared to 6.1% in 2008. Substantial changes in product and customer mix in the third quarter and first nine months of 2009 compared to the comparable periods of 2008 were the primary contributors to improved gross profit margins. Domestic sales migrated toward our Dri-Sate dry acid concentrate products, which provide a cost effective alternative to higher cost per treatment liquid products and cost us less to deliver than liquid products. Our Dri-Sate unit volumes increased by 44.9% and 35.9% compared to the third quarter and first nine months of
Selling, general and administrative expense, or SG&A, during the third quarter of 2009 was $1.9 million compared to $2.1 million in the third quarter of 2008, a decrease of $0.2 million or 10.6%. The decrease in third quarter 2009 SG&A expenses was due to a third quarter 2008 litigation settlement of $0.75 million which did not recur in 2009. The effect of the 2008 settlement was partially offset by an increase in non-cash charges for equity compensation to $0.7 million in the third quarter of 2009 compared to $0.4 million in the third quarter of 2008. In addition, personnel costs increased approximately $0.1 million as a result of increased headcount in support of our business growth and routine wage increases.
SG&A during the first nine months of 2009 was $5.1 million compared to $4.8 million in the first nine months of 2008, an increase of $0.3 million or 6%. The increase was primarily due to a $0.6 million increase in non-cash charges for equity compensation, $0.4 million in higher personnel costs, and $0.1 million in information technology related expenses. The increases were partially offset by a $0.15 million reduction in legal expenses and the effect of the aforementioned $0.75 million legal settlement in the third quarter of 2008.
Research and development costs were $2.0 million and $5.3 million in the third quarter and first nine months of 2009, respectively, compared to $1.0 million and $2.6 million in the comparable periods of 2008, respectively. While spending in both years was primarily devoted to development and approval of SFP, the increases in research and development costs in 2009 were primarily due to significantly increased activity relating to the conduct of the Phase IIb clinical trial, which was completed in the fourth quarter of 2009. We anticipate fourth quarter 2009 research and development costs to be approximately $1.5 to $2.0 million.
In the first nine months of 2009, we used $2.8 million in cash, compared to $3.6 million in the first nine months of 2008 largely due to a reduction in cash used in operations to $1.8 million in the first nine months of 2009 from $2.5 million in the first nine months of 2008. The decrease in cash used in operations during 2009 was primarily the result of a decrease in the loss from business operations before research and development expenses of $2.1 million offset by a $2.75 million increase in research and development expenditures compared to 2008. Included in the improved business operations cash flow was a reduction in working capital of $0.55 million. Non-cash charges against operating results were $2.6 million in the first nine months 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 $88.4 million; its shares were traded at around $6.22 with and P/S ratio of 1.8.
Highlight of Business Operations:
Sales in the third quarter of 2009 were $14.2 million, an increase of $0.6 million or 4.6% over the third quarter of 2008. For the third quarter of 2009, our international sales increased by $0.2 million and our domestic sales increased by $0.4 million compared to the third quarter of 2008. Sales in the first nine months of 2009 increased $1.8 million or 4.8% compared to the first nine months of 2008 with domestic sales increasing $1.6 million and international sales accounting for the remainder of the increase. Price increases on maturing contracts accounted for most of the sales increases, with the remainder attributable to increased unit volumes primarily in our Dri-Sate dry acid concentrate.Gross profit in the third quarter and first nine months of 2009 was $2.4 million and $5.5 million, respectively, compared to $0.6 million and $2.3 million in the third quarter and first nine months of 2008, respectively. Gross profit margins increased to 17.0% in the third quarter of 2009 from 4.7% in 2008 and to 13.7% in the first nine months of 2009 compared to 6.1% in 2008. Substantial changes in product and customer mix in the third quarter and first nine months of 2009 compared to the comparable periods of 2008 were the primary contributors to improved gross profit margins. Domestic sales migrated toward our Dri-Sate dry acid concentrate products, which provide a cost effective alternative to higher cost per treatment liquid products and cost us less to deliver than liquid products. Our Dri-Sate unit volumes increased by 44.9% and 35.9% compared to the third quarter and first nine months of
Selling, general and administrative expense, or SG&A, during the third quarter of 2009 was $1.9 million compared to $2.1 million in the third quarter of 2008, a decrease of $0.2 million or 10.6%. The decrease in third quarter 2009 SG&A expenses was due to a third quarter 2008 litigation settlement of $0.75 million which did not recur in 2009. The effect of the 2008 settlement was partially offset by an increase in non-cash charges for equity compensation to $0.7 million in the third quarter of 2009 compared to $0.4 million in the third quarter of 2008. In addition, personnel costs increased approximately $0.1 million as a result of increased headcount in support of our business growth and routine wage increases.
SG&A during the first nine months of 2009 was $5.1 million compared to $4.8 million in the first nine months of 2008, an increase of $0.3 million or 6%. The increase was primarily due to a $0.6 million increase in non-cash charges for equity compensation, $0.4 million in higher personnel costs, and $0.1 million in information technology related expenses. The increases were partially offset by a $0.15 million reduction in legal expenses and the effect of the aforementioned $0.75 million legal settlement in the third quarter of 2008.
Research and development costs were $2.0 million and $5.3 million in the third quarter and first nine months of 2009, respectively, compared to $1.0 million and $2.6 million in the comparable periods of 2008, respectively. While spending in both years was primarily devoted to development and approval of SFP, the increases in research and development costs in 2009 were primarily due to significantly increased activity relating to the conduct of the Phase IIb clinical trial, which was completed in the fourth quarter of 2009. We anticipate fourth quarter 2009 research and development costs to be approximately $1.5 to $2.0 million.
In the first nine months of 2009, we used $2.8 million in cash, compared to $3.6 million in the first nine months of 2008 largely due to a reduction in cash used in operations to $1.8 million in the first nine months of 2009 from $2.5 million in the first nine months of 2008. The decrease in cash used in operations during 2009 was primarily the result of a decrease in the loss from business operations before research and development expenses of $2.1 million offset by a $2.75 million increase in research and development expenditures compared to 2008. Included in the improved business operations cash flow was a reduction in working capital of $0.55 million. Non-cash charges against operating results were $2.6 million in the first nine months of 2009.
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