SIGNIFICANT MARKET SEGMENTS AND CUSTOMERS

12 Months Ended

Dec. 31, 2016

SIGNIFICANT MARKET SEGMENTS

SIGNIFICANT MARKET SEGMENTS AND CUSTOMERS

5. SIGNIFICANT MARKET SEGMENTS AND CUSTOMERS

We operate in one market segment, the hemodialysis market, which involves the manufacture, sale and distribution of hemodialysis products to hemodialysis clinics including pharmaceutical, dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process. In October 2014, we entered into the Distribution Agreement with Baxter pursuant to which Baxter received exclusive distribution rights for our concentrate products in the United States.  Rockwell domestic customer contracts for the supply of dialysis concentrate products that permitted assignment to Baxter without consent have been assigned to Baxter.  As a result, for the years ended December 31, 2016 and 2015, our direct sales to Baxter aggregated approximately 24% and 28% of sales, respectively and we had a receivable from Baxter of $2,430,159 and $2,088,000 as of December 31, 2016 and 2015, respectively. 

For the years ended December 31, 2016, 2015 and 2014, one customer, DaVita Healthcare Partners, Inc., accounted for 52% of our sales in 2016, 48% of our sales in 2015 and 49% of our sales in 2014.  Our accounts receivable from this customer were $2,224,046   and $2,156,000 as of December 31, 2016 and 2015, respectively.  DaVita and Baxter and the accounts administered by Baxter are important to our business, financial condition and results of operations.  The loss of any significant accounts could have a material adverse effect on our business, financial condition and results of operations.  No other customers accounted for more than 10% of our sales in any of the last three years. 

The majority of our international sales in each of the last three years were sales to domestic distributors that were resold to end users outside the United States.  Our sales to foreign customers and distributors were less than 5% of our total sales in 2016, 2015 and 2014.  Our total international sales, including sales to domestic distributors for resale outside the United States, aggregated 12%,  13% and 13%, of overall sales in 2016, 2015 and 2014, respectively.