STEWARTVILLE, Minn., July 31 /PRNewswire-FirstCall/ -- Rochester
Medical Corporation (NASDAQ:ROCM) today announced operating results
for its third quarter ended June 30, 2008. The Company reported
sales of $8,241,000 for the current quarter compared to $8,367,000
for the third quarter of last year. The Company also reported net
income of $312,000 or $.02 per diluted share for the quarter
compared to a net income of $807,000 or $.06 per diluted share for
the same period of last year. The approximately 2% decrease in
sales resulted from a 23% increase in Rochester Medical Branded
Sales offset by a 36% decrease in Private Label Sales. Sales of the
Company's Branded products hit an all time quarterly high of
$6,019,000 and accounted for 73% of total sales. The Company
believes the decrease in Private Label Sales is attributable to the
timing of orders and ordering patterns of large private label
customers that can vary up and down in any given quarter; they are
expected to strengthen again in the fourth 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 $770,000 or $.06 per diluted share compared to
Non-GAAP Net Income of $1,315,000 or $0.10 per diluted share for
the third quarter of last year. The decrease for the current
quarter is primarily attributable to increased investment in Sales
and Marketing programs as part of our strategic plan for this
fiscal year, and increased cost of sales. Regarding today's
announcement, Rochester Medical's CEO and President Anthony J.
Conway said, "The 23% growth rate in our Rochester Medical Branded
Sales is very gratifying and reflects the continued excellent
acceptance of our branded products in the marketplace. All three of
our major branded product lines -- Foleys, Intermittents, and Male
External Catheters -- are showing very solid growth. Clearly our
focused investment in Sales and Marketing is having productive
results. As part of this Marketing Investment the Company has
created a new corporate website which went live today. We encourage
your visit to http://www.rocm.com/. Our Private Label Sales have
fluctuated over the last three quarters; those ups and downs are
reflective of the irregularity in ordering patterns of our large
Private Label customers. We expect fourth quarter Private Label
Sales levels to be considerably stronger. We also expect gross
margins to improve as sales volumes of Foleys and Intermittents
continue to rise. "We are seeing strong interest in our Infection
Control products, and we are beginning to see increased growth in
the Intermittent Catheter marketplace as a result of the new
Medicare reimbursement policy which reimburses patients for up to
200 catheters per month instead of four catheters per month under
the previous policy. We are looking forward to introducing new
advancements in our product lines during this calendar year, and I
believe these introductions will further establish Rochester
Medical's reputation as an industry leader and provide increased
sales opportunities for the Company." 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:
888.680.0860, password 56839487 International: 617.213.4852,
password 56839487 Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=PJ47TFMGM
Replay will be available for seven days at http://www.rocm.com/ or
via telephone at: Domestic: 888-286-8010, password 66511681
International: 617-801-6888, password 66511681 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 Nine months ended June 30, 2008 (unaudited) (unaudited) Three
months ended Nine months ended June 30, June 30, 2008 2007 2008
2007 GAAP Net Income as Reported $312,248 $806,563 $416,944
$33,316,697 Diluted EPS as Reported $0.02 $0.06 $0.03 $2.69
Adjustments for non- recurring unusual items: Settlement income
after taxes (1) - - - (31,305,000) Deferred revenue (2) - - -
(564,286) Subtotal - - - (31,869,286) Adjustments for recurring
non-cash expenses: Intangible Amortization (3) 163,000 163,000
489,000 489,000 FAS 123R Compensation Expense (4) 295,000 345,000
1,081,000 1,806,000 Subtotal 458,000 508,000 1,570,000 2,295,000
Non-GAAP Net Income $770,248 $1,314,563 $1,986,944 $3,742,411
Non-GAAP Diluted EPS $0.06 $0.10 $0.16 $0.30 Weighted Average
Shares -Diluted 12,550,317 12,565,278 12,561,535 12,400,531 (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 nine months ended June 30, 2008 and 2007 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 nine months ended June 30, 2008 and 2007. Condensed
Balance Sheets (unaudited) June 30, September 30, 2008 2007 Assets
Current Assets Cash and equivalents $7,723,694 $6,671,356
Marketable securities 28,743,696 30,465,244 Accounts receivable
5,279,510 5,527,518 Inventories 8,049,782 7,698,889 Prepaid
expenses and other assets 2,606,340 6,480 Deferred income tax asset
1,030,035 876,032 Total current assets 53,433,057 51,245,519
Property and equipment, net 9,871,693 9,679,035 Deferred income tax
asset 883,357 571,721 Patents, net 228,191 257,353 Intangible
assets, net 7,266,934 7,821,562 Goodwill 5,780,008 5,920,255 Total
Assets $77,463,240 $75,495,445 Liabilities and Stockholders' Equity
Current liabilities: Accounts payable $2,206,570 $1,091,874 Accrued
expenses 1,111,891 1,978,937 Short-term debt 1,940,987 1,849,463
Total current liabilities 5,259,448 4,920,274 Long-term liabilities
Other long-term liabilities 232,546 - Long-term debt 4,296,745
6,066,246 Total long term liabilities 4,529,291 6,066,246
Stockholders' equity 67,674,501 64,508,925 Total Liabilities and
Stockholder Equity $77,463,240 $75,495,445 Summary Statements Of
Operations (unaudited) (unaudited) Three months ended Nine months
ended June 30, June 30, 2008 2007 2008 2007 Sales $8,241,232
$8,367,140 $25,679,758 $24,225,709 Cost of sales 4,568,736
3,918,614 13,594,196 11,574,203 Gross profit 3,672,496 4,448,526
12,085,562 12,651,506 Gross profit % 45% 53% 47% 52% Costs and
expense: Marketing and selling 2,349,911 1,809,928 6,954,582
4,564,275 Research and development 202,092 267,235 735,292 710,500
General and administrative 1,578,410 1,443,932 5,210,295 5,202,631
Total operating expenses 4,130,413 3,521,095 12,900,169 10,477,406
Income (loss) from operations (457,917) 927,431 (814,607) 2,174,100
Other income (expense) Interest income 232,705 393,594 1,041,692
907,947 Interest expense (116,563) (89,626) (394,887) (402,448)
Other income - - - 38,605,000 Net income (loss) before income taxes
$(341,775) $1,231,399 $(167,802) $41,284,599 Income tax
expense(benefit) (654,023) 424,836 (584,746) 7,967,902 Net income
312,248 806,563 416,944 33,316,697 Earnings per common share -
Basic $0.03 $0.07 $0.04 $2.93 Earnings per common share - Diluted
$0.02 $0.06 $0.03 $2.69 Weighted Average Shares: 11,832,240
11,649,268 11,794,733 11,371,894 Basic Weighted Average Shares:
Diluted 12,550,317 12,565,278 12,561,535 12,400,531 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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