STEWARTVILLE, Minn.,
July 28, 2011 /PRNewswire/ --
Rochester Medical Corporation (NASDAQ: ROCM) today announced
operating results for its third quarter ended June 30, 2011.
The Company reported record sales of $14,281,000 for the current quarter compared to
$10,244,000 for the third quarter of
last year. It also reported net loss of $294,000 or ($.02)
per diluted share compared to net income of $95,000 or $.01 per
diluted share for the same quarter of last year.
The 39% increase in sales (35% on constant currency basis)
resulted from a 53% increase in Rochester Medical Direct Sales (46%
on a constant currency basis) and a 1% increase in Private Label
Sales (1% 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 third
quarter of fiscal 2011, the U.S. dollar was weaker versus the pound
sterling thus positively affecting Rochester Medical Direct Sales
growth levels in actual U.S. dollars given the significant volume
of direct 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 $398,000 or
$.03 per diluted share compared to
Non-GAAP Net Income of $428,000 or
$.03 per diluted share for the third
quarter of last year. The decrease for the current quarter is
primarily attributable to significantly increased gross profits
from higher sales, offset by the Company's recently increased
investment in sales and marketing programs.
Direct Sales to the Home Care market which are approximately 87%
of the total Global Direct Sales grew approximately 53% from
$6.6 million dollars last quarter to
$10.1 million dollars this quarter.
The increase resulted from a 64% increase in International Direct
Home Care Sales (53% constant currency growth) and a 19% increase
in U.S. Direct Home Care Sales. Direct sales to the Acute Care
market which are approximately 13% of the total Global Direct Sales
grew approximately 54% from just under $1
million dollars in the third quarter of last year to just
over $1.5 million this quarter.
The increase came from a 205% increase in International
Direct Acute Care Sales (195% constant currency growth) partially
offset by a 12% decrease in U.S. Direct Acute Care Sales.
Commenting on the quarterly results, Rochester Medical's CEO and
President Anthony J. Conway, said,
"Overall we are pleased with our progress this quarter. The
strong 46% constant currency growth in Direct Sales is a result of
the Laprolan acquisition coupled with solid organic growth in
Direct Sales from the rest of the Company, particularly in our U.S.
and U.K. Home Care business.
Though we fell short of our growth goals in U.S. Acute Care
sales this quarter, we fully expect that we will resume growth in
this business in Q4 given the increased sales and marketing efforts
that we have recently put in place."
He concluded, "Excepting the final Laprolan acquisition costs,
our bottom line this quarter is approaching the break even level as
we had expected. As we have previously stated, we expect to
be operating profitably by fiscal year end. Looking ahead, we are
strongly focused on growing the top line, flattening costs, and
generating increasing profits."
3M Infection Prevention Leadership Summit Partner
Rochester Medical has been chosen as one of three companies to
partner with 3M in an upcoming Infection Prevention Leadership
Summit on Oct 2-4, 2011. The Summit
is a collaborative effort with the participation of the leading
professional associations in infection prevention, SHEA, APIC, AORN
and IAHCSMM. As a best in class customer education event, it
will feature strategic thinkers with proven leadership skills,
expertise and experience in the field of infection prevention, and
serve to increase awareness of the infection prevention solutions
provided by the collaborative partners, including Rochester
Medical.
Conference Call and Webcast
The Company will hold a quarterly conference call today to
discuss its earnings report. 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
0878
|
|
International:
|
617 213
4855
|
|
Pass code:
|
31130211
|
|
Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=P3YUKW9DQ
|
|
Replay will be available for
seven days at www.rocm.com or via
telephone at:
|
|
Domestic:
|
1 888 286
8010
|
|
International:
|
+1 617 801 6888
|
|
Pass code:
|
95783386
|
|
|
|
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).
Use of Non-GAAP Financial Measures
Rochester Medical has provided Non-GAAP Net Income in addition
to net income (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 (Loss) 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.
About Rochester Medical Corporation
Rochester Medical Corporation develops, manufactures, and
markets disposable medical catheters and devices for urological and
continence care applications. The Company also sells certain
ostomy and wound and scar care products and other brands of
urological products into the European marketplace.
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 or Parice Halbert, CFA, at
Westwicke Partners (443) 213-0500. More information about
Rochester Medical is available on its website at
http://www.rocm.com.
Forward-Looking Statements
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 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 increasing Rochester Medical Direct Sales revenue, 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.
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency
|
|
For the Three and Nine months
ended
|
|
June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
GAAP Sales as
Reported
|
$
14,280,558
|
$
10,244,158
|
|
$
38,079,563
|
$
30,321,451
|
|
Exchange rate as Reported
|
1.63
|
1.49
|
|
1.60
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency
Sales
|
$
14,280,558
|
$
10,597,993
|
|
$
38,079,563
|
$
30,654,893
|
|
(1) Exchange rate
used for Constant Currency Purposes
|
1.63
|
1.63
|
|
1.60
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
$
-
|
$
353,835
|
|
$
-
|
$
333,442
|
|
|
|
|
|
|
|
|
(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 and the Euro to US Dollars.
|
|
The rate represents the
average exchange rate for the respective three or nine month
period. For fiscal 2011 there
|
|
will be no rate
variance from the Euro to the US dollar.
|
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Net Income (Loss) to Non-GAAP Net Income
|
|
For the Three and Nine months
ended
|
|
June 30, 2011 and
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) as
Reported
|
$
(294,000)
|
$
95,000
|
|
$
(1,722,000)
|
$
(426,000)
|
|
|
|
|
|
|
|
|
Diluted EPS as
Reported
|
$
(0.02)
|
$
0.01
|
|
$
(0.14)
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for non-recurring
unusual items:
|
|
|
|
|
|
|
Merger and acquisition
costs for Laprolan (1)
|
304,000
|
-
|
|
695,000
|
-
|
|
Subtotal
|
304,000
|
-
|
|
695,000
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for recurring
non-cash expenses:
|
|
|
|
|
|
|
Intangible amortization
(2)
|
195,000
|
129,000
|
|
518,000
|
387,000
|
|
ASC 718 compensation
expense (3)
|
193,000
|
204,000
|
|
760,000
|
754,000
|
|
Subtotal
|
388,000
|
333,000
|
|
1,278,000
|
1,141,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
$
398,000
|
$
428,000
|
|
$
251,000
|
$
715,000
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
$
0.03
|
$
0.03
|
|
$
0.02
|
$
0.06
|
|
|
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
12,587,175
|
12,724,610
|
|
12,616,838
|
12,747,669
|
|
|
|
|
|
|
|
|
(1) Merger and acquisition costs
related to the purchase of Laprolan B.V. from Fornix
N.V.
|
|
|
|
(2) Amortization of the
intangibles acquired in June 2006 asset acquisition from Coloplast
AS and Mentor Corporation and the intangibles acquired in the
January 2011 acquisition of Laprolan from Fornix N.V.
Management believes these assets are appreciating. This
adjustment adds back amortization expense for the three and nine
months ended June 30, 2011 and 2010 related to certain intangibles.
The gross amount of amortization expense for the three months
ended June 30, 2011 and 2010 is $251,000 and $163,000 net of
taxes of $56,000 and $34,000 for net amounts of $195,000 and
$129,000 respectively. The gross amount of amortization
expense for the nine months ended June 30, 2011 and 2010 is
$665,000 and $489,000 net of taxes of $147,000 and $102,000 for net
amounts of $518,000 and $387,000 respectively.
|
|
|
|
(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 nine
months ended June 30, 2011 and 2010. The gross amount of
compensation expense for the three months ended June 30, 2011 and
2010 is $302,000 and $314,000 net of taxes of $109,000 and $110,000
for net amounts of $193,000 and $204,000 respectively. The
gross amount of compensation expense for the nine months ended June
30, 2011 and 2010 is $1,179,000 and $1,164,000 net of taxes of
$419,000 and $410,000 for net amounts of $760,000 and $754,000
respectively.
|
|
|
|
|
|
|
|
Rochester Medical
Corporation
|
|
Press Release - F11 Third
Quarter
|
|
|
|
Condensed
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
June
30,
|
|
September
30,
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$ 8,654,064
|
|
$
4,545,907
|
|
|
Marketable securities
|
|
|
25,109,521
|
|
30,967,007
|
|
|
Accounts receivable
|
|
|
9,825,371
|
|
7,858,540
|
|
|
Inventories
|
|
|
11,677,284
|
|
9,240,291
|
|
|
Prepaid expenses and other
assets
|
|
|
2,144,508
|
|
846,899
|
|
|
Deferred income tax
|
|
|
837,073
|
|
872,849
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
58,247,821
|
|
54,331,493
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
12,257,797
|
|
10,017,239
|
|
Deferred income tax
|
|
|
1,300,739
|
|
1,175,052
|
|
Intangible assets,
net
|
|
|
11,057,185
|
|
5,580,726
|
|
Goodwill
|
|
|
|
10,428,630
|
|
4,561,781
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
$ 93,292,172
|
|
$ 75,666,291
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$ 3,215,743
|
|
$
2,016,058
|
|
|
Accrued expenses
|
|
|
2,349,911
|
|
2,069,222
|
|
|
Short-term debt
|
|
|
17,862,185
|
|
2,641,233
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
23,427,839
|
|
6,726,513
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
1,670,516
|
|
46,327
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
68,193,817
|
|
68,893,451
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholder's Equity
|
|
|
$ 93,292,172
|
|
$ 75,666,291
|
|
|
|
|
|
|
|
|
|
Rochester Medical
Corporation
|
|
Press Release - F11 Third
Quarter
|
|
|
|
|
Summary
Statements Of Operations
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$ 14,280,558
|
|
$ 10,244,158
|
|
$ 38,079,563
|
|
$ 30,321,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
7,280,930
|
|
5,202,198
|
|
19,316,610
|
|
16,007,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
6,999,628
|
|
5,041,960
|
|
18,762,953
|
|
14,314,154
|
|
|
Gross profit %
|
|
49.0%
|
|
49.2%
|
|
49.3%
|
|
47.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
5,237,739
|
|
3,151,458
|
|
14,132,466
|
|
8,800,449
|
|
|
Research and
development
|
222,974
|
|
246,401
|
|
752,500
|
|
930,819
|
|
|
General and
administrative
|
2,030,382
|
|
1,369,406
|
|
6,143,173
|
|
4,807,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
7,491,095
|
|
4,767,265
|
|
21,028,139
|
|
14,539,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(491,467)
|
|
274,695
|
|
(2,265,186)
|
|
(224,871)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
49,601
|
|
51,514
|
|
154,148
|
|
156,889
|
|
|
Interest expense
|
|
(70,239)
|
|
(36,540)
|
|
(225,094)
|
|
(117,128)
|
|
|
Other income
(expense)
|
(22,603)
|
|
4,325
|
|
(51,750)
|
|
(57,064)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income
taxes
|
(534,708)
|
|
293,994
|
|
(2,387,882)
|
|
(242,174)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
(240,744)
|
|
198,974
|
|
(665,439)
|
|
183,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
(293,964)
|
|
$
95,020
|
|
$ (1,722,443)
|
|
$
(425,553)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share - Basic
|
$
(0.02)
|
|
$
0.01
|
|
$
(0.14)
|
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share - Diluted
|
$
(0.02)
|
|
$
0.01
|
|
$
(0.14)
|
|
$
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
12,316,878
|
|
12,196,977
|
|
12,222,146
|
|
12,194,620
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
12,316,878
|
|
12,724,610
|
|
12,222,146
|
|
12,194,620
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Rochester Medical Corporation