STEWARTVILLE, Minn.,
Jan. 25, 2011 /PRNewswire/ --
Rochester Medical Corporation (Nasdaq: ROCM) today announced
operating results for its first quarter ended December 31, 2010.
The Company reported sales of $10,946,000 for the current quarter compared to
$10,232,000 for the first quarter of
last year. The Company also reported net loss of ($169,000) or ($.01) per diluted share for the quarter compared
to an identical net loss of ($169,000) or ($.01) per diluted share for the same period of
last year.
The approximate 7% increase in sales (8% on constant currency
basis) resulted from a 16% increase in Rochester Medical Branded
Sales (18% on a constant currency basis) partially offset by an 11%
decrease in Private Label Sales (11% decrease 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 first quarter of fiscal 2011, the
U.S. dollar was somewhat stronger versus the pound sterling thus
negatively affecting Rochester Medical Branded Sales growth levels
in actual U.S. dollars given the significant volume of our branded
products 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 $377,000 or
$.03 per diluted share compared to
Non-GAAP Net Income of $148,000 or
$.01 per diluted share for the first
quarter of last year. The increase for the current quarter is
primarily attributable to increased sales revenues and increased
margin partially offset by increased investment in sales and
marketing.
Commenting on the quarter results and other recent activities,
Rochester Medical's CEO and President Anthony J. Conway said, "The first quarter of
2011 was a period of significant activity for Rochester Medical.
Our branded sales continue to grow nicely, reflecting our
strategic focus on that area. As we have often discussed, the
quarterly fluctuations in Private Label Sales are related to the
timing of orders from our large Private Label Customers; we expect
year over year Private Label Sales to show modest growth.
Also, though Branded Sales showed a solid constant currency
growth of 18%, they too were softened in Q1 due to timing of orders
from several large International Distributors whose sales of
Rochester Medical Branded Products continue to grow nicely year
over year."
Conway continued, "I am pleased to announce we have concluded a
major nationwide recruitment and training project to significantly
expand our field sales representation in the U.S. During the
first quarter we added 34 full time sales professionals, more than
tripling our U.S. Sales Force. We believe this is a major
step for the Company and expect this will accelerate sales of
Rochester Medical Branded Products as we go forward."
He added, "Also in Q1, much dedicated time was spent on reaching
agreement with Fornix N.V. to purchase its subsidiary Laprolan B.V.
in The Netherlands. I commend
Rochester Medical's Corporate Vice President Martyn Sholtis and Chief Financial Officer
David Jonas for their dedicated and
tireless efforts on both sides of the Atlantic which made this
possible. Laprolan distributes wound care, ostomy care, and urology
products into the Dutch market. For calendar 2010 it reported
revenues of approximately $11.2
million and pre-tax profit of approximately $3.5 million. When finalized, the
transaction is expected to significantly strengthen Rochester
Medical's sales revenues, margins, and earnings going forward from
January 1, 2011 which will be the
retroactive effective date. We believe this acquisition will
allow us to grow sales of Rochester Medical Branded and other
Products in the Netherlands and
will also serve as a base for gaining new sales into other European
countries as well."
Conway concluded, "I am very pleased with these recent
accomplishments. I believe that the pending acquisition of
Laprolan B.V. and the expansion of our U.S. Sales Team have us well
positioned for meeting the objectives of our three year growth
plan."
Rochester Medical has provided Non-GAAP Net Income in addition
to net loss 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 Loss 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 the expected completion of the acquisition and
financial results of Laprolan and future financial and operating
results of Rochester Medical. 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, 2010
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:
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888.679.8040
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International:
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617.213.4851
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Pass code:
|
70488311
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Pre Registration:
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https://www.theconferencingservice.com/prereg/key.process?key=PGQ9HKPHX
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Replay will be available for
seven days at www.rocm.com or via
telephone at:
|
|
Domestic:
|
888-286-8010
|
|
International:
|
617-801-6888
|
|
Pass code:
|
98617625
|
|
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|
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
Net Income to Non-GAAP Net Income
|
|
For the Three months
ended
|
|
December 31, 2010
|
|
|
|
|
|
|
(unaudited)
|
|
|
Three months
ended
|
|
|
December
31,
|
|
|
2010
|
2009
|
|
|
|
|
|
GAAP Net Loss as
Reported
|
$
(169,000)
|
$
(169,000)
|
|
|
|
|
|
Loss Per Share as
Reported
|
$
(0.01)
|
$
(0.01)
|
|
|
|
|
|
Adjustments for non-recurring
unusual items:
|
|
|
|
Recruitment Costs
for Additional US Sales Force (1)
|
132,000
|
-
|
|
Merger and
Acquisition Costs for Laprolan B.V. (2)
|
90,000
|
-
|
|
Subtotal
|
222,000
|
-
|
|
|
|
|
|
Adjustments for recurring
non-cash expenses:
|
|
|
|
Intangible
Amortization (3)
|
129,000
|
129,000
|
|
Share-based
Compensation Expense (4)
|
195,000
|
188,000
|
|
Subtotal
|
324,000
|
317,000
|
|
|
|
|
|
Non-GAAP Net Income
|
$
377,000
|
$
148,000
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
$
0.03
|
$
0.01
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
12,605,122
|
12,669,675
|
|
|
|
|
|
(1) Costs associated with
recruitment firm to locate and hire 34 additional sales staff in
the US. The gross amount of recruiting costs are $200,500 net
of taxes of $68,500 for a net amount of $132,000.
|
|
(2) Merger and acquisition
related expenses net of taxes pertaining to the agreement to
purchase Laprolan B.V. The gross amount of acquisition costs are
$136,000 net of taxes of $46,000 for a net amount of
$90,000.
|
|
(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 months ended December 31, 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.
|
|
(4) This adjustment adds back
the share-based compensation expense for the three months ended
December 31, 2010 and 2009. The gross amount of compensation
expense for each of the three months ended December 31, 2010 and
2009 is $295,000 and $285,000 is shown net of taxes of $100,000 and
$97,000 for net amounts of $195,000 and $188,000,
respectively.
|
|
|
|
|
Rochester Medical
Corporation
|
|
Press Release - F11 First
Quarter
|
|
Condensed
Balance Sheets
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
|
|
|
2010
|
|
2010
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and equivalents
|
$ 4,829,288
|
|
$
4,545,907
|
|
|
Marketable securities
|
29,267,466
|
|
30,967,007
|
|
|
Accounts receivable
|
6,601,443
|
|
7,858,540
|
|
|
Inventories
|
9,528,427
|
|
9,240,291
|
|
|
Prepaid expenses and other
assets
|
1,434,309
|
|
846,899
|
|
|
Deferred income tax
asset
|
863,051
|
|
872,849
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
52,523,984
|
|
54,331,493
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
10,032,740
|
|
10,017,239
|
|
Deferred income tax
asset
|
1,093,280
|
|
1,175,052
|
|
Intangible assets,
net
|
5,426,546
|
|
5,580,726
|
|
Goodwill
|
4,533,151
|
|
4,561,781
|
|
|
|
|
|
|
|
|
Total Assets
|
$ 73,609,701
|
|
$ 75,666,291
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$ 1,993,978
|
|
$
2,016,058
|
|
|
Accrued expenses
|
1,230,089
|
|
2,069,222
|
|
|
Short-term debt
|
994,093
|
|
2,641,233
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
4,218,160
|
|
6,726,513
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
Other long term
liabilities
|
52,311
|
|
46,327
|
|
|
Long-term debt
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total long term
liabilities
|
52,311
|
|
46,327
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
69,339,230
|
|
68,893,451
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholder Equity
|
$ 73,609,701
|
|
$ 75,666,291
|
|
|
|
|
|
|
|
Rochester Medical
Corporation
|
|
Press Release - F11 First
Quarter
|
|
|
|
|
Summary
Statements Of Operations
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Three months
ended
|
|
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$ 10,946,405
|
|
$ 10,231,812
|
|
|
|
|
|
|
|
Cost of sales
|
5,542,274
|
|
5,618,704
|
|
|
|
|
|
|
|
Gross profit
|
5,404,131
|
|
4,613,108
|
|
|
Gross profit %
|
49.4%
|
|
45.1%
|
|
|
|
|
|
|
|
Costs and expense:
|
|
|
|
|
|
Marketing and selling
|
3,881,980
|
|
2,777,317
|
|
|
Research and
development
|
277,855
|
|
443,028
|
|
|
General and
administrative
|
1,709,093
|
|
1,690,747
|
|
|
|
|
|
|
|
Total operating
expenses
|
5,868,928
|
|
4,911,092
|
|
|
|
|
|
|
|
Loss from operations
|
(464,797)
|
|
(297,984)
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
Interest income
|
52,570
|
|
55,656
|
|
|
Interest expense
|
(31,259)
|
|
(41,118)
|
|
|
Other income
(expense)
|
(16,282)
|
|
(26,647)
|
|
|
|
|
|
|
|
Net loss before income
taxes
|
(459,768)
|
|
(310,093)
|
|
|
|
|
|
|
|
Income tax benefit
|
(290,686)
|
|
(140,935)
|
|
|
|
|
|
|
|
Net loss
|
$
(169,082)
|
|
$
(169,158)
|
|
|
|
|
|
|
|
Net loss per common share -
Basic
|
$
(0.01)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
Net loss per common share -
Diluted
|
$
(0.01)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
Basic
|
12,127,268
|
|
12,191,590
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
Diluted
|
12,127,268
|
|
12,191,590
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency
|
|
For the Three months
ended
|
|
December 31, 2010
|
|
|
|
|
|
|
(unaudited)
|
|
|
Three months
ended
|
|
|
December
31,
|
|
|
2010
|
2009
|
|
GAAP Sales as
Reported
|
$
10,946,405
|
$
10,231,812
|
|
Exchange rate as Reported
|
1.58
|
1.63
|
|
|
|
|
|
Constant Currency
Sales
|
$
10,946,405
|
$
10,109,731
|
|
(1) Exchange
rate used for Constant Currency Purposes
|
1.58
|
1.58
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
$
-
|
$
(122,081)
|
|
|
|
|
|
(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 pound sterling to US dollars. The rate
represents the average exchange rate for the respective three month
period.
|
|
|
|
|
SOURCE Rochester Medical Corporation