STEWARTVILLE, Minn., April 29 /PRNewswire-FirstCall/ -- Rochester
Medical Corporation (NASDAQ:ROCM) today announced operating results
for its second quarter ending March 31, 2008. The Company reported
record sales of $9,215,000 for the quarter compared to $8,347,000
for the second quarter of last year. Last year's revenues included
a one time recording of a $525,000 deferred asset related to a
marketing fee paid to Rochester Medical by Coloplast A/S. The
Company reported a Net Loss of $167,000 or $.01 per diluted share
compared to a Net Income of $1,044,000 or $.08 per diluted share
for the second quarter of last year. Rochester Medical Branded
Sales increased approximately 24% for the quarter. Excluding last
year's realization of the $525,000 deferred asset, Private Label
sales increased by 9% for the quarter resulting in an overall net
sales increase of 18% for the quarter. 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
$531,000 or $.04 per diluted share compared to Non-GAAP Net Income
of $1,041,000 or $.08 per diluted share for the second quarter of
last year. The decrease for the quarter is primarily attributable
to the Company's strategic decision to significantly increase its
investment in Sales and Marketing personnel and programs. This
increase has been carefully planned and implemented as a response
to several key factors. First there is greatly heightened interest
in infection control catheters as a result of scheduled Medicare
reimbursement changes that will no longer pay hospitals for costs
associated with treatment of Catheter Associated Infections. The
change becomes effective October 1, 2008. Rochester Medical has the
only Drug-Eluting Anti-Infection Foley Catheter in the marketplace.
The increased investment in Sales and Marketing is also designed to
allow the Company to better service the changing dynamics of the
Intermittent Catheter marketplace resulting from recent Medicare
reimbursement changes allowing for significantly increased sterile
one-time catheter usage in order to prevent infections. In
addition, the increased resources and programs are strongly focused
on promotion and sale of products in the United Kingdom. Regarding
the quarter, Anthony J. Conway, Rochester Medical's CEO and
President said, "Our Investment for Growth Strategy is off to an
excellent start. As a result of this increased investment for the
future we now have a well fortified Sales, Marketing, and Customer
Service Team in place. Going forward, I believe the Company is well
positioned to leverage our advanced proprietary products for strong
gains in our key markets." 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. Non-GAAP Net Income is not
a measure 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 is not
comparable to information provided by other companies. Non-GAAP Net
Income has limitations as an analytical tool 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 are presented at the end of this press release.
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 Daylight 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: 888.713.4213, password 19121219
International: 617.213.4865, password 19121219 Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=PNHDUFLFK
Replay will be available for seven days at http://www.rocm.com/ or
via telephone at: Domestic: 888-286-8010, password 73150129
International: 617-801-6888, password 73150129 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/). 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, 2007. 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/. ROCHESTER MEDICAL CORPORATION Reconciliation
of Reported GAAP Net Income to Non-GAAP Net Income For the Three
and Six months ended March 31, 2008 (unaudited) (unaudited) Three
months ended Six months ended March 31, March 31, 2008 2007 2008
2007 GAAP Net Income as Reported $(166,858) $1,043,518 $104,696
$32,510,134 Diluted EPS as Reported $(0.01) $0.08 $0.01 $2.64
Adjustments for non-recurring unusual items: Settlement income
after taxes (1) - - - (31,305,000) Deferred revenue (2) - (525,000)
- (564,286) Subtotal - (525,000) - (31,869,286) Adjustments for
recurring non-cash expenses: Intangible Amortization (3) 163,000
163,000 326,000 326,000 FAS 123R Compensation Expense (4) 535,000
359,000 786,000 1,461,000 Subtotal 698,000 522,000 1,112,000
1,787,000 Non-GAAP Net Income $531,142 $1,040,518 $1,216,696
$2,427,848 Non-GAAP Diluted EPS $0.04 $0.08 $0.10 $0.20 Weighted
Average Shares -- Diluted 11,822,435 12,475,859 12,557,214
12,331,312 (1) Settlement income received November 20, 2006 from
Premier, Inc. of $5,155,000 and December 14, 2006 from CR Bard,
Inc. of $33,450,000 after taxes of $7,300,000. 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, 2007. (2)
Deferred revenue from a $1,000,000 fee paid by Coloplast A/S in
June 2002 for marketing rights to our antibacterial Release NF
foley catheter. These rights with Coloplast A/S were cancelled by
mutual agreement in March 2007, thus accelerating the recognition
of the remaining amount as all conditions for revenue recognition
have now been met. Also includes a $200,000 fee paid by Hollister
for marketing rights to our hydorphilic intermittent catheter in
September 2003. The fee paid by Hollister was fully recognized in
December 2006. This adjustment reduces net income related to the
realization of certain one-time revenue from marketing rights. The
amounts were recorded in net sales in the Statement of Operations.
(3) 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 sixth months ended March 31,
2007 and 2006 related to certain intangibles. (4) Compensation
expense mandated by SFAS 123R. This adjustment adds back the
compensation expense recorded when stock options are granted to
employees and directors for the three and sixth months ended March
31, 2007 and 2006. Rochester Medical Corporation Press Release --
F08 Second Quarter Condensed Balance Sheets (unaudited) March 31,
September 30, 2008 2007 Assets Current Assets Cash and equivalents
$9,118,124 $6,671,356 Marketable securities 26,456,481 30,465,244
Accounts receivable 6,854,479 5,527,518 Inventories 7,809,858
7,698,889 Prepaid expenses and other assets 704,401 6,480 Deferred
income tax asset 1,105,255 876,032 Total current assets 52,048,598
51,245,519 Property and equipment, net 9,706,058 9,679,035 Deferred
income tax asset 787,753 571,721 Patents, net 238,342 257,353
Intangible assets, net 7,426,253 7,821,562 Goodwill 5,765,200
5,920,255 Total Assets $75,972,204 $75,495,445 Liabilities and
Stockholders' Equity Current liabilities: Accounts payable
$1,913,309 $1,091,874 Accrued expenses 860,760 1,978,937 Short-term
debt 1,859,770 1,849,463 Total current liabilities 4,633,839
4,920,274 Long-term liabilities Long-term debt 5,487,887 6,066,246
Total long term liabilities 5,487,887 6,066,246 Stockholders'
equity 65,850,478 64,508,925 Total Liabilities and Stockholder
Equity $75,972,204 $75,495,445 Rochester Medical Corporation Press
Release -- F08 Second Quarter Summary Statements Of Operations
(unaudited) (unaudited) Three months ended Six months ended March
31, March 31, 2008 2007 2008 2007 Sales $9,215,238 $8,346,603
$17,438,526 $15,858,569 Cost of sales 4,942,975 3,919,245 9,025,460
7,655,589 Gross profit 4,272,263 4,427,358 8,413,066 8,202,980
Gross profit % 46% 53% 48% 52% Costs and expense: Marketing and
selling 2,380,306 1,520,685 4,604,671 2,754,347 Research and
development 304,257 240,495 533,200 443,265 General and
administrative 2,016,767 1,709,553 3,631,885 3,758,699 Total
operating expenses 4,701,330 3,470,733 8,769,756 6,956,311 Income
from operations (429,067) 956,625 (356,690) 1,246,669 Other income
(expense) Interest income 355,646 439,503 808,986 514,353 Interest
expense (128,834) (153,184) (278,323) (312,822) Other income - - -
38,605,000 Net income (loss) before income taxes $(202,255)
$1,242,944 $173,973 $40,053,200 Income tax expense(benefit)
(35,397) 199,426 69,277 7,543,066 Net income (loss) (166,858)
1,043,518 104,696 32,510,134 Earnings (loss) per common share --
Basic $(0.01) $0.09 $0.01 $2.89 Earnings (loss) per common share --
Diluted $(0.01) $0.08 $0.01 $2.64 Weighted Average Shares: Basic
11,822,435 11,367,295 11,776,083 11,233,207 Weighted Average
Shares: Diluted 11,822,435 12,475,859 12,557,214 12,331,312
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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