ROCM Rochester Medical Corp. (MM)

STEWARTVILLE, Minn., April 30 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (NASDAQ:ROCM) today announced operating results for its second quarter ending March 31, 2007. The Company reported record sales of $8,347,000 for the current quarter compared to $4,874,000 for the second quarter of last year. It also reported net income of $1,044,000 or $.08 per diluted share compared to a net loss of $(244,000) or $(.02) per diluted share for the second quarter of last year. To aid in analysis of the quarterly results, the Company notes the following: -- The results for the current quarter include $523,000 of non-cash expenses comprised of $359,000 related to non-cash stock option compensation expenses under FAS123R and $164,000 for amortization of intangibles related to the 2006 asset acquisitions. -- The current quarter revenues include realization of $508,000 which represents the remaining portion of the $1 million fee paid by Coloplast A/S to Rochester Medical in 2002 for marketing rights to Rochester Medical's antibacterial Foley Catheter. Those rights have now been cancelled by mutual agreement, thus triggering the immediate recognition of the remaining amount as all conditions of the revenue agreement have now been met. -- The results for the current quarter include an expense of approximately $200,000 related to enhancing IT systems and implementing procedures needed to become compliant with Section 404 of Sarbanes-Oxley, which the Company is required to complete by the end of this fiscal year. The Company expects these expenses will be non-recurring after third quarter 2007. -- The results for the quarter reflect a planned increased investment in marketing and sales in both the U.S. and U.K. The Company expects this investment will lead to increased sales and earnings in the future. The 71% increase in sales revenues for the current quarter compared to last year's second quarter resulted primarily from increased sales of Rochester Medical branded products and from increased Private Label sales. International sales resulting from the acquired U.K. business generated a significant portion of the increase. The increase in net income for the current quarter compared to last year's second quarter was primarily due to increased contribution from increased sales. "I am very pleased with our progress," said Company CEO and President Anthony J. Conway. "The recent asset acquisitions are contributing to the Company very nicely and, apart from that, our year to date organic growth is a healthy 13%. We are carefully investing in our marketing and sales activities to support our new contract with Premier Purchasing Partners, L.P., one of the largest group purchasing organizations in the U.S., and also to support the introduction of new products into the United Kingdom and mainland Europe. We expect these planned expenditures will generate increased sales and income over the long term. We are very focused on continuing the growth of Rochester Medical, both through internal growth and through additional strategic opportunities. I look forward to continued progress ahead." The Company will hold a quarterly conference call this afternoon 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 Financial 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: 1-800-901-5241, password 60913482 International: 1-617-786-2963, password 60913482 Replay will be available for seven days at: http://www.rocm.com/ or via telephone: Domestic Replay: 1-888-826-8010, password 43696339 International Replay: 1-617-801-6888, password 43696339 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 Financial 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/). This press release 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 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, 2006. 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) March 31, September 30, 2007 2006 Assets Current Assets Cash and equivalents $10,070,274 $2,906,698 Marketable securities 30,075,000 -- Accounts receivable 4,723,543 4,494,094 Inventories 6,331,134 4,642,578 Prepaid expenses and other assets 446,811 410,267 Deferred income tax asset 760,000 53,000 Total current assets 52,406,762 12,506,637 Property and equipment 8,797,199 8,239,246 Deferred income tax asset 336,000 1,178,000 Patents, net 270,155 271,171 Intangible assets, net 7,943,394 8,270,157 Goodwill 5,430,176 5,487,141 Total Assets $75,183,686 $35,952,352 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,983,960 $1,278,441 Accrued expenses 1,160,778 1,621,376 Short term debt 1,681,361 1,681,361 Current maturities of capital leases 43,081 42,084 Income taxes payable 1,850,089 105,559 Deferred revenue -- 114,287 Total current liabilities 6,719,269 4,843,108 Long-term liabilities Long term debt 7,108,292 7,540,737 Capital leases, less current portion 3,701 21,946 Deferred revenue -- 449,999 Total long term liabilities 7,111,993 8,012,682 Stockholders' equity 61,352,424 23,096,562 Total Liabilities and Stockholder Equity $75,183,686 $35,952,352 Summary Statements Of Operations Three months ended Six months ended March 31, March 31, 2007 2006 2007 2006 Sales $8,346,603 $4,874,079 $15,858,569 $9,481,279 Cost of sales 3,919,245 3,314,823 7,655,589 6,320,293 Gross profit 4,427,358 1,559,256 8,202,980 3,160,986 Gross profit % 53% 32% 52% 33% Costs and expense: Marketing and selling 1,520,685 576,374 2,754,347 1,175,367 Research and development 240,495 186,974 443,265 360,597 General and administrative 1,709,553 994,546 3,758,699 1,566,800 Total operating expenses 3,470,733 1,757,894 6,956,311 3,102,764 Income from operations 956,625 (198,638) 1,246,669 58,222 Other income (expense) (Loss) on Sale of Investments -- (103,532) -- (103,532) Interest income 439,503 60,322 514,353 117,447 Interest expense (153,184) (2,471) (312,822) (5,075) Other income -- -- 38,605,000 -- Net income before income taxes $1,242,944 $(244,319) $40,053,200 $67,062 Income tax expense 199,426 -- 7,543,066 -- Net income 1,043,518 (244,319) 32,510,134 67,062 Earnings per common share - Basic $0.09 $(0.02) $2.89 $0.01 Earnings per common share - Diluted $0.08 $(0.02) $2.64 $0.01 Weighted Average Shares: Basic 11,367,295 11,067,478 11,233,207 11,059,844 Weighted Average Shares: Diluted 12,475,859 11,067,478 12,331,312 11,564,226 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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