STEWARTVILLE, Minn.,
Nov. 4, 2010 /PRNewswire-FirstCall/
-- Rochester Medical Corporation (Nasdaq: ROCM) today announced
operating results for its fourth quarter and year ended
September 30, 2010.
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The Company reported record sales of $11,121,000 for the current quarter compared to
$9,009,000 for the fourth quarter of
last year. It also reported quarterly net income of
$172,000 or $.01 per diluted share compared to a net loss of
($229,000) or ($.02) per diluted share for the same quarter of
last year.
The approximate 23% increase in total sales (26% on a constant
currency basis) resulted from a 27% increase in Rochester Medical
Branded Sales (31% on a constant currency basis), and a 15%
increase in Private Label Sales (15% increase on a constant
currency basis). Constant currency basis assumes current exchange
rates for all periods in order to exclude the impact of foreign
exchange variations. In the fourth quarter of 2010 the U.S.
dollar was somewhat stronger versus the pound sterling, thus having
a negative effect on Rochester Medical Branded Sales levels in
translated U.S. dollars given the significant volume of branded
sales in the United Kingdom.
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 $506,000 or
$.04 per diluted share compared to
Non-GAAP Net Income of $95,000 or
$.01 per diluted share for the fourth
quarter of last year. The increase for the current quarter is
primarily attributable to increased gross profit from higher sales
volume partially offset by increased costs, primarily consisting of
increased investment in sales and marketing programs.
For the fiscal year ended September 30,
2010, the Company reported record sales of $41,443,000 compared to sales of $34,799,000 for the previous year. It
reported a net loss for the year of ($254,000) or ($.02) per diluted share compared to net income
of $109,000 or $.01 per diluted share for the previous year.
The approximate 19% increase in annual total sales (19%
increase on a constant currency basis) resulted from a 28% increase
in Rochester Medical Branded Sales (28% increase on a constant
currency basis) and a 1% increase in Private Label Sales (1%
increase on a constant currency basis). The decrease in net
profit was primarily due to increased investment in sales and
marketing.
Non-GAAP Net Income for the current year was $1,220,000 or $.09
per diluted share compared to Non-GAAP Net Income of $865,000 or $.07
per diluted share for the previous year. The increase for the
current year on a Non-GAAP basis is primarily due to increased
gross profit resulting from higher sales, partially offset by our
increased investment in sales and marketing programs.
Commenting on today's announcement, Rochester Medical CEO and
President Anthony Conway said,
"Rochester Medical continues to make solid progress. We are
particularly pleased that our ongoing strategic effort to grow our
branded sales through increased investment in sales and marketing
programs is producing positive results. Now, in order to further
enhance the sales and acceptance of Rochester Medical's branded
products, we are in the process of significantly expanding our U.S.
sales and marketing presence. By 2010 calendar year end, we
plan to complete the addition of over 30 new sales people to our
staff."
Conway continued, "This staffing increase and related investment
is part of our updated strategic business plan, which includes an
objective of doubling the Company's annual overall sales in the
next three fiscal years, while also producing net income in an
estimated range of $9 to $10 million
dollars in the third year.
"We expect most of the anticipated acceleration in our sales
growth rate to occur in fiscal years 2012 and 2013. Sales in
fiscal 2011 are expected to remain strong with an annual growth
rate in a range comparable to fiscal 2010. Some quarter to
quarter fluctuation in sales growth remains likely through the term
of the plan, primarily due to the timing of large private label
orders. Our expectations for net income exclude any unusual
charges or gains that might occur during any fiscal year, and only
reflect information available to the Company at this time."
He concluded, by saying "These are interesting and exciting
times for Rochester Medical Corporation."
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" with
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to,
statements about future financial and operating results. Such
statements are based on currently available information, operating
plans and management's expectations about future events and trends.
Such statements inherently involve significant 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, and
our level of success in marketing our Rochester Medical
branded products, 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 and its updated strategic business plan. 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:
|
888.680.0890
|
|
|
International:
|
617.213.4857
|
|
|
Pass code:
|
33912043
|
|
|
Pre Registration:
|
|
|
|
Replay will be available for
seven days at www.rocm.com or via
telephone at:
|
|
https://www.theconferencingservice.com/prereg/key.process?key=PBNCHWUKF
|
|
Domestic:
|
888-286-8010
|
|
|
International:
|
617-801-6888
|
|
|
Pass code:
|
45308247
|
|
|
|
|
|
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
|
|
Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency
|
|
For the Three and Twelve months
ended
|
|
September 30, 2010
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Twelve
months ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
GAAP Sales as
Reported
|
$
11,121,229
|
$
9,009,299
|
|
$
41,442,680
|
$
34,798,829
|
|
Exchange
rate as Reported
|
1.55
|
1.64
|
|
1.56
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency
Sales
|
$
11,121,229
|
$
8,815,388
|
|
$
41,442,680
|
$
34,795,716
|
|
(1) Exchange rate used for
Constant Currency Purposes
|
1.55
|
1.55
|
|
1.56
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
$
-
|
$
(193,911)
|
|
$
-
|
$
(3,113)
|
|
|
|
|
|
|
|
|
(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 twelve month
period.
|
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Net Income to Non-GAAP Net Income
|
|
For the Three and Twelve months
ended
|
|
September 30, 2010 and
2009
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Twelve
months ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) as
Reported
|
$
172,000
|
|
$ (229,000)
|
|
$ (254,000)
|
|
$
109,000
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS as
Reported
|
$
0.01
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
515,000
|
|
515,000
|
|
ASC 718 compensation
expense (3)
|
205,000
|
|
195,000
|
|
959,000
|
|
878,000
|
|
Subtotal
|
334,000
|
|
324,000
|
|
1,474,000
|
|
1,393,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
$
506,000
|
|
$
95,000
|
|
$ 1,220,000
|
|
$
865,000
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
$
0.04
|
|
$
0.01
|
|
$
0.09
|
|
$
0.07
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
12,785,996
|
|
12,702,241
|
|
12,888,394
|
|
12,639,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 twelfth months ended September 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 twelve
months ended September 30, 2010 and 2009. The gross amount of
compensation expense for the three months ended September 30, 2010
and 2009 is $317,000 and $295,000 net of taxes of $112,000 and
$100,000 for net amounts of $205,000 and $195,000 respectively.
The gross amount of compensation expense for the twelve
months ended September 30, 2010 and 2009 is $1,481,000 and
$1,330,000 net of taxes of $522,000 and $452,000 for net amounts of
$959,000 and $878,000 respectively.
|
|
|
|
|
|
|
|
|
|
Condensed
Balance Sheets
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and equivalents
|
$
4,545,907
|
|
$
6,365,584
|
|
|
Marketable securities
|
30,967,007
|
|
29,896,740
|
|
|
Accounts receivable
|
7,858,540
|
|
6,418,656
|
|
|
Inventories
|
9,240,291
|
|
9,710,234
|
|
|
Prepaid expenses and other
assets
|
846,899
|
|
1,076,183
|
|
|
Deferred income tax
|
872,849
|
|
1,153,964
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
54,331,493
|
|
54,621,361
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
10,017,239
|
|
9,683,808
|
|
Deferred income tax
|
1,175,052
|
|
768,874
|
|
Patents, net
|
229,106
|
|
224,815
|
|
Intangible assets,
net
|
5,351,620
|
|
6,017,944
|
|
Goodwill
|
|
4,561,781
|
|
4,648,165
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 75,666,291
|
|
$ 75,964,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
2,016,058
|
|
$
1,755,472
|
|
|
Accrued expenses
|
2,069,222
|
|
1,527,352
|
|
|
Short-term debt
|
2,641,233
|
|
2,786,622
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
6,726,513
|
|
6,069,446
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
Other long-term
liabilities
|
46,327
|
|
55,889
|
|
|
Long-term debt
|
-
|
|
1,019,735
|
|
|
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
46,327
|
|
1,075,624
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
68,893,451
|
|
68,819,897
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholder's Equity
|
$ 75,666,291
|
|
$ 75,964,967
|
|
|
|
|
|
|
|
Summary Statements
Of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
Three months
ended
|
|
Twelve
months ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$ 11,121,229
|
|
$ 9,009,299
|
|
$ 41,442,680
|
|
$ 34,798,829
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
5,731,716
|
|
4,706,579
|
|
21,739,014
|
|
17,973,314
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
5,389,513
|
|
4,302,720
|
|
19,703,666
|
|
16,825,515
|
|
|
Gross profit %
|
48%
|
|
48%
|
|
48%
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
3,068,288
|
|
2,771,460
|
|
11,868,737
|
|
10,327,396
|
|
|
Research and
development
|
304,548
|
|
272,084
|
|
1,235,367
|
|
1,241,095
|
|
|
General and
administrative
|
1,583,246
|
|
1,432,610
|
|
6,391,003
|
|
6,006,906
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
4,956,082
|
|
4,476,154
|
|
19,495,107
|
|
17,575,397
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
433,431
|
|
(173,434)
|
|
208,559
|
|
(749,882)
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
139,487
|
|
41,705
|
|
239,171
|
|
283,195
|
|
|
Interest expense
|
(60,414)
|
|
(40,627)
|
|
(177,401)
|
|
(259,341)
|
|
|
Other income
|
|
|
|
|
|
|
1,200,442
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income
taxes
|
512,504
|
|
(172,356)
|
|
270,329
|
|
474,414
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
340,485
|
|
56,899
|
|
523,864
|
|
365,742
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
172,019
|
|
$ (229,255)
|
|
$
(253,535)
|
|
$
108,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
- Basic
|
$
0.01
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share
- Diluted
|
$
0.01
|
|
$
(0.02)
|
|
$
(0.02)
|
|
$
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
12,142,764
|
|
12,091,856
|
|
12,181,549
|
|
12,045,313
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
12,785,996
|
|
12,091,856
|
|
12,181,549
|
|
12,639,853
|
|
|
Diluted
|
|
|
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SOURCE Rochester Medical Corporation