STEWARTVILLE, Minn.,
July 29 /PRNewswire-FirstCall/ --
Rochester Medical Corporation (Nasdaq: ROCM) today announced
operating results for its third quarter ended June 30, 2010.
The Company reported record sales of $10,244,000 for the current quarter compared to
$8,908,000 for the third quarter of
last year. The Company also reported net income of $95,000 or $.01 per
diluted share for the quarter compared to net loss of $77,000 or ($.01)
per diluted share for the same period of last year.
The 15% increase in sales (17% on a constant currency basis)
resulted from a 32% increase in Rochester Medical Branded Sales
(35% on a constant currency basis), partially offset by a 16%
decrease in Private Label Sales (16% decrease on a constant
currency basis).
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 $428,000 or
$.03 per diluted share compared to
Non-GAAP Net Income of $245,000 or
$.02 per diluted share for the third
quarter of last year. The increase for the current quarter is
primarily attributable to higher gross profit resulting from
increased sales and higher gross margin, partially offset by
increased investment in the Company's Sales and Marketing programs
as part of our ongoing strategy to increase branded sales.
"We believe our emphasis on strategic growth of Rochester
Medical® branded products is having a positive impact," said
Anthony J. Conway, Company President
and CEO. "Once again, the 32% overall branded growth is solid, and
we continue to be pleased by the strong growth in sales of our
MAGIC3™ Intermittent Catheters and StrataSI™ and StrataNF™ Foley
Catheters. Our branded sales now make up nearly 75% of total
sales."
Conway continued, "We have recently invested significantly in
pilot introductory activities for the FemSoft Insert in both
the United States and United Kingdom. This unique disposable device
offers immediate relief for women dealing with the difficulties of
urinary incontinence. While it is still too early to know the
ultimate potential of this product in the marketplace, we are
confident of its viability and believe it will become an integral
part of our offering in both countries as we move forward."
Conway then added, "The future looks bright for Rochester
Medical. We believe we will continue to show excellent growth going
forward."
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, 2009 and 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 www.rocm.com. To listen
live to the conference call via telephone, call:
Domestic:
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888.679.8040
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International:
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617.213.4851
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Pass code:
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97798974
|
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Pre Registration:
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https://www.theconferencingservice.com/prereg/key.process?key=PG3QT3L6T
|
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Replay will be available for
seven days at www.rocm.com or via
telephone at:
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Domestic:
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888-286-8010
|
|
International:
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617-801-6888
|
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Pass code:
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79705563
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|
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|
Individual investors can listen to the call at
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 (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 or David A. Jonas, Chief
Financial 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
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Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency
|
|
|
|
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For the Three and Nine months
ended
|
|
|
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|
|
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June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(unaudited)
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|
(unaudited)
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|
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|
Three months ended
|
|
Nine months ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
|
GAAP Sales as
Reported
|
|
$
10,244,158
|
$
8,908,416
|
|
$
30,321,451
|
$
25,789,530
|
|
Exchange rate as Reported
|
|
1.49
|
1.55
|
|
1.56
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency
Sales
|
|
$
10,244,158
|
$
8,796,578
|
|
$
30,321,451
|
$
26,001,407
|
|
(1) Exchange rate
used for Constant Currency Purposes
|
|
1.49
|
1.49
|
|
1.56
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
|
$
-
|
$
(111,838)
|
|
$
-
|
$
211,877
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
(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 British pounds to US
dollars. The rate represents the
|
|
average exchange rate for
the respective three or nine month period.
|
|
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
|
|
|
|
|
Reconciliation of Reported GAAP
Net Income to Non-GAAP Net Income
|
|
|
|
|
For the Three and Nine months
ended
|
|
|
|
|
|
|
June 30, 2010 and
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) as
Reported
|
$
95,000
|
$
(77,000)
|
|
$
(426,000)
|
$
338,000
|
|
|
|
|
|
|
|
|
Diluted EPS as
Reported
|
$
0.01
|
$
(0.01)
|
|
$
(0.03)
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
387,000
|
386,000
|
|
ASC 718 compensation
expense (3)
|
204,000
|
193,000
|
|
754,000
|
683,000
|
|
Subtotal
|
333,000
|
322,000
|
|
1,141,000
|
1,069,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
$
428,000
|
$
245,000
|
|
$
715,000
|
$
770,000
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
$
0.03
|
$
0.02
|
|
$
0.06
|
$
0.06
|
|
|
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
12,724,610
|
12,603,331
|
|
12,747,669
|
12,637,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
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|
|
(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
fiscal year 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 ninth months ended June 30, 2010 and 2009 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 ASC 718. This adjustment adds back the
compensation expense
|
|
recorded for
stock options granted to employees and directors that vested during
the three and ninth months ended
|
|
June 30,
2010 and 2009. The gross amount of compensation expense for
the three months ended June 30, 2010
|
|
and 2009 is
$314,000 and $293,000 net of taxes of $110,000 and $100,000 for net
amounts of $204,000 and
|
|
$193,000
respectively. The gross amount of compensation expense for
the nine months ended June 30, 2010
|
|
and 2009 is
$1,164,000 and $1,035,000 net of taxes of $410,000 and $352,000 for
net amounts of $754,000 and
|
|
$683,000
respectively.
|
|
|
|
|
|
|
|
Rochester Medical
Corporation
|
|
|
|
|
Press Release - F10 Third
Quarter
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
June 30,
|
|
September 30,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
4,568,223
|
|
$
6,365,584
|
|
|
|
Marketable securities
|
|
|
30,853,898
|
|
29,896,740
|
|
|
|
Accounts receivable
|
|
|
6,944,048
|
|
6,418,656
|
|
|
|
Inventories
|
|
|
8,839,536
|
|
9,710,234
|
|
|
|
Prepaid expenses and other
assets
|
|
|
975,763
|
|
1,076,183
|
|
|
|
Deferred income tax
|
|
|
1,119,902
|
|
1,153,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
53,301,370
|
|
54,621,361
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
10,003,912
|
|
9,683,808
|
|
|
Deferred income tax
|
|
|
1,094,759
|
|
768,874
|
|
|
Patents, net
|
|
|
212,376
|
|
224,815
|
|
|
Intangible assets,
net
|
|
|
5,430,522
|
|
6,017,944
|
|
|
Goodwill
|
|
|
|
4,338,316
|
|
4,648,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
$
74,381,255
|
|
$
75,964,967
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
1,961,962
|
|
$
1,755,472
|
|
|
|
Accrued expenses
|
|
|
1,379,406
|
|
1,527,352
|
|
|
|
Short-term debt
|
|
|
2,345,546
|
|
2,786,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
5,686,914
|
|
6,069,446
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
Other long-term
liabilities
|
|
|
62,424
|
|
55,889
|
|
|
|
Long-term debt
|
|
|
-
|
|
1,019,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
|
62,424
|
|
1,075,624
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
68,631,917
|
|
68,819,897
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
|
$
74,381,255
|
|
$
75,964,967
|
|
|
|
|
|
|
|
|
|
|
Rochester Medical
Corporation
Press Release - F10 Third
Quarter
|
|
|
|
|
|
|
|
Summary Statements Of
Operations
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
$ 10,244,158
|
|
$ 8,908,416
|
|
$ 30,321,451
|
|
$ 25,789,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
5,202,198
|
|
4,724,893
|
|
16,007,297
|
|
13,266,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
5,041,960
|
|
4,183,523
|
|
14,314,154
|
|
12,522,795
|
|
|
Gross profit %
|
|
|
49%
|
|
47%
|
|
47%
|
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
3,151,458
|
|
2,541,552
|
|
8,800,449
|
|
7,555,936
|
|
|
Research and
development
|
|
246,401
|
|
352,248
|
|
930,819
|
|
969,011
|
|
|
General and
administrative
|
|
1,369,406
|
|
1,451,041
|
|
4,807,757
|
|
4,574,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
4,767,265
|
|
4,344,841
|
|
14,539,025
|
|
13,099,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
274,695
|
|
(161,318)
|
|
(224,871)
|
|
(576,448)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
55,733
|
|
39,964
|
|
99,684
|
|
241,490
|
|
|
Interest expense
|
|
|
(36,434)
|
|
(54,586)
|
|
(116,987)
|
|
(218,714)
|
|
|
Other income
|
|
|
|
|
|
|
|
|
1,200,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income
taxes
|
293,994
|
|
(175,940)
|
|
(242,174)
|
|
646,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense(benefit)
|
|
198,974
|
|
(99,040)
|
|
183,379
|
|
308,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
95,020
|
|
$
(76,900)
|
|
$
(425,553)
|
|
$
337,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
- Basic
|
$
0.01
|
|
$
(0.01)
|
|
$
(0.03)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
- Diluted
|
$
0.01
|
|
$
(0.01)
|
|
$
(0.03)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
12,196,977
|
|
12,025,966
|
|
12,194,620
|
|
12,029,629
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
12,724,610
|
|
12,025,966
|
|
12,194,620
|
|
12,637,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Rochester Medical Corporation