Segment Reporting, Significant Market Segments and Customers

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Reporting, Significant Market Segments and Customers

Segment Reporting, Significant Market Segments and Customers

Operating segments are defined as components of an entity about which discrete financial information is evaluated regularly by the Company's Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assess performance. Rockwell operates 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. Accordingly, the Company has one reportable segment. The Company has a single management team that reports to the Chief Executive Officer, the Company's CODM, who comprehensively manages the entire Company. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the segment and decides how to allocate resources based on net loss that also is reported on the statements of operations and comprehensive loss as net loss. The CODM uses net loss to monitor budget and forecast versus actual results in assessing segment performance, as well as cash forecast models, in order to evaluate operating results and performance in deciding how to allocate resources. The measure of segment assets is reported on the balance sheets as total assets.

The Company’s significant segment expenses for its one segment for the year ended December 31, 2024, and 2023 consisted of the following (table in thousands):

	Years Ended December 31,
	2024		2023
Net Sales	$	101,489	$	83,612
Cost of Sales	84,005		74,908
Gross Profit	17,484		8,704
Employee Compensation	9,452		8,067
Administrative Costs	7,424		7,307
Operating Income (Loss)	608		(6,670)
Other Expense:
Realized Gain on Investments	74		321
Interest Expense	(1,254)		(2,301)
Interest Income	92		211
Total Other Expense, net	(1,088)		(1,769)
Net Loss	$	(480)	$	(8,439)

Significant Market Segments and Customers

Rockwell's customer mix is diverse, with most customer sales concentrations under 10%, however, one customer, DaVita, accounted for approximately 45% of Rockwell's total net product sales in 2024 and 47% of its total net product sales in 2023. Rockwell's accounts receivable from DaVita were approximately 20% and 19% of the total net consolidated accounts receivable balance as of December 31, 2024 and 2023, respectively. For additional information regarding the Company's contracts with DaVita, see Notes 3 and 10.

DaVita is important to Rockwell's business, financial condition and results of operations. The loss of any significant accounts could have a material adverse effect on the Company's business, financial condition and results of operations. No other current customer accounted for more than 10% of sales in any of the last two years.

The majority of Rockwell's international sales in each of the last two years were sales to domestic distributors that were resold to end users outside the United States. Rockwell's sales to foreign customers and distributors accounted for approximately 9% of its total sales in 2024 and 2023.