STEWARTVILLE, Minn., Nov. 5 /PRNewswire-FirstCall/ -- Rochester
Medical Corporation (NASDAQ:ROCM) today announced operating results
for its fourth quarter and year ended September 30, 2009. The
Company reported sales of $9,009,000 for the current quarter
compared to $9,512,000 for the fourth quarter of last year. The
Company reported a quarterly net loss of $229,000 or ($.02) per
diluted share compared to net income of $342,000 or $.03 per
diluted share for the fourth quarter of last year. The approximate
5% decrease in sales (.6% decrease on a constant currency basis)
resulted from a 2% increase in Rochester Medical Branded Sales (10%
increase on a constant currency basis), offset by a 20% decrease in
Private Label Sales (20% decrease on a constant currency basis).
Constant currency basis assumes current exchange rates for all
periods in order to exclude the impact of foreign exchange
variations. In the fourth quarter of 2009 the U.S. dollar was
significantly stronger versus the pound sterling, thus negatively
affecting Rochester Medical Branded Sales levels in translated U.S.
dollars given the significant volume of branded product sales in
the United Kingdom. Net income adjusted for certain non-recurring
unusual items and certain recurring non-cash expenses, or "Non-GAAP
Net Income" for the current quarter was $95,000 or $.01 per diluted
share compared to Non-GAAP Net Income of $658,000 or $.05 per
diluted share for the fourth quarter of last year. The decrease for
the current quarter on a Non-GAAP basis is primarily attributable
to the impact of exchange rate variation and increased investment
in Sales and Marketing programs. For the fiscal year ended
September 30, 2009, the Company reported sales of $34,799,000
compared to sales of $35,192,000 for the previous year. It reported
net income for the year of $109,000 or $.01 per diluted share
compared to net income of $759,000 or $.06 per diluted share for
the previous year. The approximate 1% decrease in annual sales (7%
increase on a constancy currency basis) resulted from a 2% decrease
in Rochester Medical Branded Sales (10% increase on a constant
currency basis) partially offset by a 2% increase in Private Label
Sales (2% increase on a constant currency basis). Non-GAAP Net
Income for the current year was $865,000 or $.07 per diluted share
compared to Non-GAAP Net Income of $2,174,000 or $.17 per diluted
share for the previous year. The decrease for the current year on a
Non-GAAP basis is primarily due to the impact of exchange rate
variation and increased investment in Sales and Marketing. It is
also due to a tax benefit of $654,000 taken in the third quarter of
last year and higher interest income in the prior year. Rochester
Medical also announced that a device reimbursement code has been
issued this week by Medicare covering the Company's FemSoft Insert,
which is a soft disposable device used to manage female stress
urinary incontinence. The Company believes the availability of
Medicare reimbursement, which commences in 2010, will help this
unique device become an economically accessible and often preferred
solution for incontinent women in the U.S. Commenting on today's
announcements, Rochester Medical's CEO and President Anthony Conway
said, "First I must say that I am delighted with the Medicare
reimbursement approval for the FemSoft Insert. This unique
technology has the potential to help millions of women deal with
the difficulties of incontinence with comfort, dignity, and grace.
Rochester Medical is putting the appropriate plans in place to
ensure that clinicians and women throughout the country have access
to this excellent choice. "Regarding the quarterly results, I think
it is particularly important to highlight our progress in the U.S.
and U.K., the areas of our direct sales and marketing focus.
Combined fourth quarter sales of all Rochester Medical Branded
products in those markets were up a solid 15% on a constant
currency basis compared to the same period of the prior year. In
those same combined markets on a constant currency basis, sales of
Intermittent Catheters rose an impressive 46%, and Foley Catheter
sales were up strongly with a 68% increase. These two product lines
are our current growth drivers and, along with the FemSoft Insert,
are expected to be the primary growth drivers in 2010 and beyond.
The 20% drop in Private Label Sales is strictly due to timing of
orders which causes the quarterly up and down fluctuations." To
that point Conway noted Private Label Sales were up 42% in the
third quarter and for the year were up 2%. Conway continued, "We
introduced the StrataSI(TM) and StrataNF(TM) Foley Catheters this
quarter and we are extremely pleased with the initial reception. I
believe that the comfortable softness and gentle feel of these all
silicone catheters along with the infection prevention
characteristics provide a clearly superior choice over latex
catheters for all patients. Latex catheters currently make up 90%
of the U.S. Foley catheter market. "Looking ahead, given the new
Strata product line, the recently introduced MAGIC3(TM)
Intermittent Catheter line, the just announced National Healthcare
System reimbursement for the FemSoft female incontinence insert in
the U.K., and the Medicare final reimbursement approval announced
today for FemSoft in the U.S., 2010 promises to be a very
interesting and active year for Rochester Medical." Rochester
Medical has provided Non-GAAP Net Income in addition to earnings
calculated in accordance with generally accepted accounting
principles (GAAP) because management believes Non-GAAP Net Income
provides a more consistent basis for comparisons that are not
influenced by certain charges and non-cash expenses and are
therefore helpful in understanding Rochester Medical's underlying
operating results. Similarly, constant currency represents reported
sales with the cost/benefit of currency movements removed.
Management uses the measure to understand the growth of the
business on a constant dollar basis, as fluctuations in exchange
rates can distort the underlying growth of the business both
positively and negatively. While we recognize that foreign exchange
volatility is a reality for a global company, we routinely review
our company performance on a constant dollar basis, and we believe
this also allows our shareholders to understand better our
Company's growth trends. Non-GAAP Net Income and constant currency
are not measures of financial performance under GAAP, and should
not be considered an alternative to net income or any other measure
of performance or liquidity under GAAP. Non-GAAP Net Income and
constant currency are not comparable to information provided by
other companies. Non-GAAP Net Income and constant currency have
limitations as analytical tools and should not be considered in
isolation or as a substitution for analysis of our results as
reported under GAAP. Reconciliations of Net Income and Non-GAAP Net
Income, and reconciliations of sales under GAAP and sales on a
constant currency basis, are presented at the end of this press
release. This press release contains "forward-looking statements"
that are based on currently available information, operating plans
and management's expectations about future events and trends. They
inherently involve risks and uncertainties that could cause actual
results to differ materially from those predicted in such
forward-looking statements, including the uncertainty of estimated
revenues and profits, the uncertainty of current domestic and
international economic conditions that could adversely affect the
level of demand for the Company's products and increased volatility
in foreign exchange rates, the uncertainty of market acceptance of
new product introductions, the uncertainty of gaining new strategic
relationships or locating and capitalizing on strategic
opportunities, the uncertainty of timing of private label sales
revenues (particularly international customers), FDA and other
regulatory review and response times, and other risk factors listed
from time to time in the Company's SEC reports and filings,
including, without limitation, the section entitled "Risk Factors"
in the Company's Annual Report on Form 10-K for the year ended
September 30, 2008 and subsequent reports on Forms 10-Q and 8-K.
Readers are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. The Company will hold a quarterly
conference call to discuss its earnings report. The call will begin
at 3:30 p.m. central time (4:30 p.m. eastern time). This call is
being webcast by Thomson/CCBN and can be accessed at Rochester
Medical's website at http://www.rocm.com/. To listen live to the
conference call via telephone, call: Domestic: 888.680.0893
International: 617.213.4859 Pass code: 64235793 Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=PD8MG6W7Q
Replay will be available for seven days at http://www.rocm.com/ or
via telephone at: Domestic: 888-286-8010 International:
617-801-6888 Pass code: 31548516 Individual investors can listen to
the call at http://www.fulldisclosure.com/, Thomson/CCBN's
individual investor portal, powered by StreetEvents. Institutional
investors can access the call via Thomson's password-protected
event management site, StreetEvents (http://www.streetevents.com/).
Rochester Medical Corporation develops, manufactures, and markets
disposable medical catheters and devices for urological and
continence care applications. The Company markets under its own
Rochester Medical® brand and under existing private label
arrangements. For further information, please contact Anthony J.
Conway, President and Chief Executive Officer of Rochester Medical
Corporation at (507) 533-9600. More information about Rochester
Medical is available on its website at http://www.rocm.com/.
ROCHESTER MEDICAL CORPORATION Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency For the Three and
Twelve months ended September 30, 2009 (unaudited) (unaudited)
Three months ended Twelve months ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
GAAP Sales as Reported $9,009,299 $9,512,191 $34,798,829
$35,191,949 ========== ========== =========== =========== Exchange
rate as Reported 1.64 1.89 1.55 1.97 ==== ==== ==== ==== Constant
Currency Sales $9,009,299 $9,062,879 $34,798,829 $32,440,497
========== ========== =========== =========== (1) Exchange rate
used for Constant Currency Purposes 1.64 1.64 1.55 1.55 ==== ====
==== ==== Net Effect of Constant Currency Illustration $-
$(449,312) $- $(2,751,452) == ========= == =========== (1) For
illustrative purposes constant currency translates prior period
foreign sales at current exchange rates. For Rochester Medical
Corporation this is the conversion rate of pound sterling to US
dollars. The rate represents the average exchange rate for the
respective three or twelve month period. ROCHESTER MEDICAL
CORPORATION Reconciliation of Reported GAAP Net Income to Non-GAAP
Net Income For the Three and Twelve months ended September 30, 2009
and 2008 (unaudited) (unaudited) Three months ended Twelve months
ended September 30, September 30, ------------- ------------- 2009
2008 2009 2008 ---- ---- ---- ---- GAAP Net Income (Loss) as
Reported $(229,000) $342,000 $109,000 $759,000 ========= ========
======== ======== Diluted Earnings (Loss) Per Share as Reported
$(0.02) $0.03 $0.01 $0.06 ====== ===== ===== ===== Adjustments for
non- recurring unusual items: Settlement income after taxes (1) - -
(637,000) - --- --- -------- --- Subtotal - - (637,000) -
Adjustments for recurring non-cash expenses: Intangible
amortization (2) 129,000 129,000 515,000 515,000 FAS 123R
compensation expense (3) 195,000 187,000 878,000 900,000 -------
------- ------- ------- Subtotal 324,000 316,000 1,393,000
1,415,000 ------- ------- --------- --------- Non-GAAP Net Income
$95,000 $658,000 $865,000 $2,174,000 ======= ======== ========
========== Non-GAAP Diluted EPS $0.01 $0.05 $0.07 $0.17 ===== =====
===== ===== Weighted Average Shares - Diluted 12,702,241 12,587,427
12,639,853 12,577,337 (1) Settlement income received January 15,
2009 from Covidien Ltd. of $1,000,000, $637,000 after taxes of
$363,000. This adjustment reduces net income for amounts received
net of taxes paid in connection with one-time settlement of certain
litigation. These amounts were recorded in Other Income in the
Statement of Operations for the twelve months ended September 30,
2009. (2) Amortization of the intangibles acquired in June 2006
asset acquisition from Coloplast AS and Mentor Corporation.
Management believes these assets are appreciating. This adjustment
adds back amortization expense for the three and twelve months
ended September 30, 2009 and 2008 related to certain intangibles.
The gross amount of amortization is $163,000 per quarter after
taxes of $34,000 for a net amount of $129,000. (3) Compensation
expense mandated by SFAS 123R. This adjustment adds back the
compensation expense recorded for stock options granted to
employees and directors that vested during the three and twelve
months ended September 30, 2009 and 2008. The gross amount of
compensation expense for the three months ended September 30, 2009
and 2008 is $295,000 and $283,000 net of taxes of $100,000 and
$96,000 for net amounts of $195,000 and $187,000, respectively. The
gross amount of compensation expense for the twelve months ended
September 30, 2009 and 2008 is $1,330,000 and $1,364,000 net of
taxes of $452,000 and $464,000 for net amounts of $878,000 and
$900,000, respectively. Rochester Medical Corporation Press Release
- F09 Fourth Quarter Condensed Balance Sheets (unaudited) September
30, September 30, 2009 2008 ---- ---- Assets Current Assets Cash
and equivalents $6,365,584 $8,508,000 Marketable securities
29,896,740 28,493,648 Accounts receivable 6,418,656 6,009,023
Inventories 9,710,234 8,745,873 Prepaid expenses and other assets
1,076,183 1,110,291 Deferred income tax 1,153,964 1,143,931
--------- --------- Total current assets 54,621,361 54,010,766
Property and equipment, net 9,683,808 9,883,329 Deferred income tax
768,874 831,299 Patents, net 224,815 227,358 Intangible assets, net
6,017,944 6,860,213 Goodwill 4,648,165 5,169,661 ---------
--------- Total Assets $75,964,967 $76,982,626 ===========
=========== Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $1,755,472 $2,127,470 Accrued
expenses 1,527,352 1,170,654 Short-term debt 2,786,622 1,940,292
--------- --------- Total current liabilities 6,069,446 5,238,416
Long-term liabilities Other long-term liabilities 55,889 239,496
Long-term debt 1,019,735 3,806,185 --------- --------- Total
long-term liabilities 1,075,624 4,045,681 Stockholders' equity
68,819,897 67,698,529 ---------- ---------- Total Liabilities and
Stockholders' Equity $75,964,967 $76,982,626 ===========
=========== Rochester Medical Corporation Press Release - F09
Fourth Quarter Summary Statements Of Operations (unaudited)
(unaudited) Three months ended Twelve months ended September 30,
September 30, ------------- ------------- 2009 2008 2009 2008 ----
---- ---- ---- Sales $9,009,299 $9,512,191 $34,798,829 $35,191,949
Cost of sales 4,706,579 4,889,789 17,973,314 18,483,985 ---------
--------- ---------- ---------- Gross profit 4,302,720 4,622,402
16,825,515 16,707,964 Gross profit % 48% 49% 48% 47% Costs and
expense: Marketing and selling 2,771,460 2,544,014 10,327,396
9,498,596 Research and development 272,084 308,913 1,241,095
1,044,205 General and administrative 1,432,610 1,447,707 6,006,906
6,658,002 --------- --------- --------- --------- Total operating
expenses 4,476,154 4,300,634 17,575,397 17,200,803 ---------
--------- ---------- ---------- (Loss) Income from operations
(173,434) 321,768 (749,882) (492,839) Other income (expense)
Interest income 41,705 197,997 283,195 1,239,689 Interest expense
(40,627) (82,674) (259,341) (477,560) Other income (expense) -
(88,642) 1,200,442 (88,642) --- ------- --------- ------- Net
income (loss) before income taxes (172,356) 348,449 474,414 180,648
Income tax expense (benefit) 56,899 6,291 365,742 (578,455) ------
----- ------- -------- Net income (loss) $(229,255) $342,158
$108,672 $759,103 ========= ======== ======== ======== Earnings
(loss) per common share - Basic $(0.02) $0.03 $0.01 $0.06 ======
===== ===== ===== Earnings (loss) per common share - Diluted
$(0.02) $0.03 $0.01 $0.06 ====== ===== ===== ===== Weighted Average
Shares: Basic 12,091,856 11,878,956 12,045,313 11,815,904
========== ========== ========== ========== Weighted Average
Shares: Diluted 12,091,856 12,587,427 12,639,853 12,577,337
========== ========== ========== ========== DATASOURCE: Rochester
Medical Corporation CONTACT: Anthony J. Conway, President and Chief
Executive Officer of Rochester Medical Corporation, +1-507-533-9600
Web Site: http://www.rocm.com/
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