ROCM Rochester Medical Corp. (MM)

STEWARTVILLE, Minn., Oct. 31 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (NASDAQ:ROCM) today announced operating results for its fourth quarter and fiscal year ending September 30, 2006. The Company reported 58% sales growth with record sales of $6,826,000 for the current quarter compared to $4,314,000 for the fourth quarter of last year. It reported net income for the current quarter of $906,000 or 15 cents per diluted share compared to a net income of $611,000 or 11 cents per diluted share for the fourth quarter of last year. To aid in comparison between the quarters, the Company notes that fourth quarter 2006 results includes $283,000 of non-cash expenses comprised of $95,000 related to non-cash stock option compensation under FAS123R and $188,000 for amortization of intangibles related to the recently announced asset acquisition. The Company also notes that fourth quarter 2005 includes non-cash income of $454,000 as a result of booking a portion of the Company's deferred tax assets. The 58% increase in sales came from increases in both Rochester Medical Brand sales and Private Label sales and is mainly attributable to increased international sales of Rochester Medical Brand products resulting from the Company's previously announced acquisition of certain assets from Coloplast A/S in the United Kingdom. The increase in earnings resulted from higher contribution from increased sales and increased gross profit margins which were 51% this quarter compared to 32% in the fourth quarter of last year. For the fiscal year ending September 30, 2006 the Company reported record sales of $21,666,000 compared to sales of $15,942,000 for the previous fiscal year. It reported net income for the year of $1,959,000 or 34 cents per diluted share compared to net income of $934,000 or 16 cents per diluted share for the previous year. To aid in comparison between the periods, the Company notes that fiscal 2006 results includes $818,000 of non-cash expenses comprised of $600,000 related to non-cash stock option compensation under FAS123R and $218,000 for amortization of intangibles related to the recently announced asset acquisitions. The increases in sales and earnings for the year are primarily due to the same factors noted above for the quarter. The Company also announced today that its Board of Directors has declared a two-for-one stock split in the Company's common stock in the form of a 100 percent stock dividend. The per share data in this release does not reflect the split. The Company has approximately 5.5 million shares outstanding. Following the split there will be approximately 11 million shares outstanding. The stock split will apply to shareholders of record at the close of business on November 14, 2006, who will receive one additional share for each share then held. Distribution is expected to be made on November 17, 2006. Commenting on today's announcements, Rochester Medical CEO and President Anthony J. Conway said, "This has been a very good quarter and a very good year for the Company. Sales and earnings have strengthened nicely, and I think it is important to point out that the Company is generating cash well above the net income figure. I am particularly pleased that the integration of our newly acquired business assets has gone smoothly and that our new UK Team is well organized and moving ahead confidently. I think it is also important to note that close to two thirds of the Company's sales revenues now come from sale of Rochester Medical branded products. These brands are becoming well recognized around the globe, and we intend to continue our strategic emphasis on growing branded business. We expect continued good performance in the coming year and look forward to new opportunities." Regarding the stock split, Conway stated, "We are pleased to take this action which we believe will improve trading liquidity and foster broader ownership of Rochester Medical Corporation common shares." The Company will hold a quarterly conference call to discuss its earnings report. The call will begin at 4:00 p.m. central time (5:00 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: 1-866-203-3436, password 31516331 International: 617-213-8849, password 31516331 Replay will be available for seven days at: http://www.rocm.com/ or via telephone at 1-888-286-8010, password 51183499. International Replay: 617-801-6888, password 51183499. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. 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/ ). The immediately preceding statement contains forward-looking statements that involve risks and uncertainties, including the uncertainty of estimated revenues and profits, as well as the uncertainty of market acceptance of new product introductions, the uncertainty of gaining new strategic relationships, the uncertainty of timing of private label sales revenues (particularly international customers), FDA and other regulatory review and response times, the uncertainty of successfully integrating and growing the Company's new UK operations, 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, 2005. 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(R) 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/ . Condensed Balance Sheets (unaudited) September 30, September 30, 2006 2005 Assets Current Assets Cash and equivalents $2,906,698 $1,129,876 Marketable securities - 5,286,553 Accounts receivable 4,494,094 3,204,824 Inventories 4,642,578 3,936,243 Prepaid expenses and other assets 410,267 351,027 Deferred income tax asset 53,000 21,000 Total current assets 12,506,637 13,929,523 Property and equipment 8,239,246 7,561,303 Deferred income tax asset 1,177,999 433,000 Patents, net 271,172 285,194 Intangible assets, net 8,270,157 - Goodwill 5,487,141 - Total Assets $35,952,352 $22,209,020 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,278,450 $283,332 Accrued expenses 1,621,376 744,256 Short term debt 1,681,361 34,000 Current maturities of capital leases 42,084 39,785 Income taxes payable 105,559 - Deferred revenue 114,287 157,143 Total current liabilities 4,843,117 1,258,516 Long-term liabilities Long term debt 7,540,737 34,000 Capital leases, less current portion 21,946 64,030 Deferred revenue 449,999 564,286 Total long term liabilities 8,012,682 662,316 Stockholders' equity 23,096,553 20,288,188 Total Liabilities and Stockholder Equity $35,952,352 $22,209,020 Summary Statements Of Operations (unaudited) (unaudited) Three months ended Twelve months ended September 30, September 30, 2006 2005 2006 2005 Sales $6,826,473 $4,313,742 $21,665,837 $15,941,649 Cost of sales 3,374,888 2,917,301 13,057,090 10,330,113 Gross profit 3,451,585 1,396,441 8,608,747 5,611,536 Gross profit % 51% 32% 40% 35% Costs and expense: Marketing and selling 1,147,250 644,617 3,109,207 2,397,816 Research and development 189,982 166,010 759,639 730,105 General and administrative 989,277 467,635 3,344,662 2,126,813 Total operating expenses 2,326,509 1,278,262 7,213,508 5,254,734 Income from operations 1,125,076 118,179 1,395,239 356,802 Other income (expense) (Loss) on sale of investments - - (103,532) - Interest income 31,494 41,715 219,873 138,693 Interest expense (163,450) (2,741) (224,848) (15,068) Net income before income taxes 993,120 157,153 1,286,732 480,427 Income tax benefit(Expense) (86,823) 454,000 672,176 454,000 Net income $906,297 $611,153 $1,958,908 $934,427 Earnings per common share - Basic $0.16 $0.11 $0.35 $0.17 Earnings per common share - Diluted $0.15 $0.11 $0.34 $0.16 Weighted Average Shares: Basic 5,539,802 5,488,228 5,534,051 5,466,123 Weighted Average Shares: Diluted 5,927,105 5,698,173 5,832,996 5,714,615 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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