UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM
to
Commission File Number: 0-18933
ROCHESTER MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
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MINNESOTA
(State or other jurisdiction of
incorporation or organization)
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41-1613227
(I.R.S. Employer
Identification No.)
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ONE ROCHESTER MEDICAL DRIVE,
STEWARTVILLE, MN
(Address of principal executive offices)
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55976
(Zip Code)
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(507) 533-9600
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
þ
No
o
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definitions of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
(check one):
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
o
No
þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
12,258,651 Common Shares as of August 5, 2011.
Table of Contents
ROCHESTER MEDICAL CORPORATION
Report on Form 10-Q
for quarter ended
June 30, 2011
PART I. FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS (UNAUDITED)
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ROCHESTER MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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June 30,
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September 30,
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2011
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2010
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Assets:
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Current assets:
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Cash and cash equivalents
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$
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8,654,064
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$
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4,545,907
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Marketable securities
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25,109,521
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30,967,007
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Accounts receivable, net
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9,825,371
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7,858,540
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Inventories, net
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11,677,284
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9,240,291
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Prepaid expenses and other current assets
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2,144,508
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846,899
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Deferred income tax asset
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837,073
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872,849
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Total current assets
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58,247,821
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54,331,493
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Property, plant and equipment:
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Land and buildings
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11,819,739
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7,997,423
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Equipment and fixtures
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19,675,557
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18,543,813
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31,495,296
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26,541,236
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Less accumulated depreciation
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(19,237,499
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)
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(16,523,997
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)
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Total property, plant and equipment
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12,257,797
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10,017,239
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Deferred income tax asset
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1,300,739
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1,175,052
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Goodwill
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10,428,630
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4,561,781
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Finite life intangibles, net
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11,057,185
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5,580,726
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Total assets
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$
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93,292,172
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$
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75,666,291
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Liabilities and Shareholders Equity:
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Current liabilities:
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Accounts payable
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$
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3,215,743
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$
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2,016,058
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Accrued compensation
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1,271,544
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1,458,652
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Accrued expenses
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1,078,367
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610,570
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Current maturities of long-term debt
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17,862,185
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2,641,233
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Total current liabilities
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23,427,839
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6,726,513
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Long-term liabilities:
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Other long-term liabilities
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1,670,516
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46,327
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Total long-term liabilities
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1,670,516
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46,327
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Shareholders equity:
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Common stock, no par value:
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Authorized shares 40,000,000 Issued and outstanding shares (12,250,651 at June 30, 2011;
12,072,452 at September 30, 2010)
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57,739,277
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57,200,531
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Retained earnings
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12,856,234
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14,578,678
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Accumulated other comprehensive loss
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(2,401,694
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(2,885,758
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Total shareholders equity
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68,193,817
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68,893,451
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Total liabilities and shareholders equity
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$
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93,292,172
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$
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75,666,291
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Note The Balance Sheet information at September 30, 2010 was derived from the audited financial statements at that date, but does not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
ROCHESTER MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended
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Nine Months Ended
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June 30,
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June 30,
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2011
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2010
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2011
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2010
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Net sales
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$
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14,280,558
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$
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10,244,158
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$
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38,079,563
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$
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30,321,451
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Cost of sales
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7,280,930
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5,202,198
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19,316,610
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16,007,297
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Gross profit
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6,999,628
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5,041,960
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18,762,953
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14,314,154
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Operating expenses:
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Marketing and selling
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5,237,739
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3,151,458
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14,132,466
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8,800,449
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Research and development
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222,974
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246,401
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752,500
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930,819
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General and administrative
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2,030,382
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1,369,406
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6,143,173
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4,807,757
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Total operating expenses
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7,491,095
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4,767,265
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21,028,139
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14,539,025
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Income (loss) from operations
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(491,467
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274,695
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(2,265,186
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)
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(224,871
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Other income (expense):
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Interest income
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49,601
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51,514
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154,148
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156,889
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Interest expense
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(70,239
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(36,540
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(225,094
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(117,128
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Other income (expense)
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(22,603
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4,325
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(51,750
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(57,064
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Net income (loss) before income taxes
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(534,708
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293,994
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(2,387,882
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(242,174
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)
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Income tax expense (benefit)
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(240,744
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)
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198,974
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(665,439
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)
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183,379
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Net income (loss)
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$
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(293,964
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$
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95,020
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$
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(1,722,443
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)
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$
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(425,553
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)
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Net income (loss) per share basic
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$
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(0.02
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)
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$
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0.01
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$
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(0.14
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$
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(0.03
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)
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Net income (loss) per share diluted
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$
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(0.02
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)
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$
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0.01
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$
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(0.14
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)
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$
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(0.03
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)
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Weighted average number of common shares outstanding
basic
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12,316,878
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12,196,977
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12,222,146
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12,194,620
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Weighted average number of common shares outstanding
diluted
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12,316,878
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12,724,610
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12,222,146
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12,194,620
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The accompanying notes are an integral part of these condensed consolidated financial statements
2
ROCHESTER MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Nine Months Ended
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June 30,
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2011
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2010
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Operating activities:
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Net loss
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$
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(1,722,443
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)
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$
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(425,553
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)
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Adjustments to reconcile net loss to net cash
provided by (used in) operating activities, net of acquisition:
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Depreciation
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1,127,617
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1,052,678
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Amortization
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705,064
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520,650
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Stock based compensation
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1,179,922
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1,164,260
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Deferred income tax
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(163,172
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)
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(321,270
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)
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Changes in operating assets and liabilities:
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Accounts receivable
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(371,714
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)
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(720,185
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)
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Inventories
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(575,568
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693,770
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Other current assets
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(1,296,117
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)
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92,453
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Accounts payable
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854,855
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240,504
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Income tax payable
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199,665
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241,519
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Other current liabilities
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(387,410
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)
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(361,495
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)
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Net cash provided by (used in) operating activities
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(449,301
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)
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2,177,331
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Investing activities:
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Purchase of property, plant and equipment
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(1,349,157
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)
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(1,461,497
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Business acquisition
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(15,057,816
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)
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Patents, intangibles and goodwill
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320,527
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(33,070
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Purchases of marketable securities
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(28,761,550
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)
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(48,786,945
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)
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Sales and maturities of marketable securities
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34,672,191
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47,891,929
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Net cash used in investing activities
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(10,175,805
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)
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(2,389,583
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)
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Financing activities:
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Proceeds from long-term debt
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17,864,367
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Payments on long-term debt
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(2,643,415
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)
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(1,460,811
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)
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Excess tax benefit from exercises of stock options
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22,189
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Repurchase of common stock
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(1,184,074
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)
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Proceeds from issuance of common stock
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542,898
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|
21,452
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|
|
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Net cash provided by (used in) financing activities
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14,579,776
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|
|
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(1,417,170
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)
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|
|
|
|
|
|
|
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Effect of exchange rate on cash and cash equivalents
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|
153,487
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(167,939
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)
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|
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Increase (decrease) in cash and cash equivalents
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4,108,157
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(1,797,361
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)
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Cash and cash equivalents at beginning of period
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|
4,545,907
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|
|
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6,365,584
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Cash and cash equivalents at end of period
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$
|
8,654,064
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$
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4,568,223
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Supplemental Cash Flow Information
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Interest paid
|
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$
|
73,907
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|
|
$
|
157,821
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Income taxes paid
|
|
$
|
60,000
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$
|
264,743
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|
|
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|
The accompanying notes are an integral part of these condensed consolidated financial
statements
|
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|
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|
|
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|
3
ROCHESTER MEDICAL CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2011
Note A Basis of Presentation
The accompanying unaudited condensed consolidated financial statements which have been derived
from the Companys audited financial statements as of September 30, 2010 and the unaudited June 30,
2011 and 2010 condensed consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for interim financial information and
pursuant to the rules and regulations of the Securities and Exchange Commission which include the
instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the financial statements and related notes
included in the Companys Form 10-K for the year ended September 30, 2010. In the opinion of
management, the unaudited condensed consolidated financial statements contain all recurring
adjustments considered necessary for a fair presentation of the financial position and results of
operations and cash flows for the interim periods presented. Operating results for the nine-month
period ended June 30, 2011 are not necessarily indicative of the results that may be expected for
the year ending September 30, 2011.
Note B Acquisition of Laprolan B.V. from Fornix BioSciences N.V.
On April 7, 2011, the Company completed the acquisition of the outstanding capital stock of
Laprolan B.V., a corporation organized under the laws of The Netherlands and a wholly owned
subsidiary of Fornix BioSciences N.V., pursuant to a Share Purchase Agreement dated as of January
12, 2011 (the Purchase Agreement). As provided in the Purchase Agreement, the transaction has a
retroactive effective date of January 1, 2011, and the operating results of Laprolan are for the
account of the Company from and after January 1, 2011. The Company is applying purchase accounting
as of that date and has included the results of Laprolan in its financial statements beginning in
the second quarter. At closing, the Company paid to Fornix 10,474,974 (US$15,057,775, of which
$60,217 was paid for the cash balance of Laprolan on January 1, 2011 and $119,433 was interest from
January 1, 2011 until closing).
The following table summarizes the estimated fair values of the assets and liabilities
acquired at the date of acquisition. Included in the intangible assets acquired is approximately
$5,678,000 of goodwill and $5,612,000 of finite lived intangibles. As the Company completes its
post-closing review and valuation of the acquisition, the allocation of the purchase price may
change. Any change to the preliminary values of finite-lived intangibles and property and
equipment could result in more or less amortization expense. There were no post-closing valuation
adjustments during the quarter ended June 30, 2011.
|
|
|
|
|
Current assets
|
|
$
|
3,136,000
|
|
Property and equipment
|
|
|
1,831,000
|
|
Intangible assets
|
|
|
11,290,000
|
|
|
|
|
|
Total assets acquired
|
|
$
|
16,257,000
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
824,000
|
|
Long term liabilities
|
|
|
1,546,000
|
|
|
|
|
|
Total liabilities assumed
|
|
$
|
2,370,000
|
|
|
|
|
|
The pro forma unaudited results of operations for the three and nine months ended June 30,
2011 and 2010, assuming consummation of the purchase of Laprolan B.V. as of October 1, 2009, are as
follow (in thousands):
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Net sales
|
|
$
|
14,077
|
|
|
$
|
12,238
|
|
|
$
|
40,794
|
|
|
$
|
39,355
|
|
Net income (loss)
|
|
|
29
|
|
|
|
546
|
|
|
|
(596
|
)
|
|
|
1,615
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.13
|
|
In the table above, $304,000 and $695,000 have been added back to net income (loss) for the
three and nine months ended June 30, 2011, respectively, for one-time merger and acquisition costs
and $19,000 and $45,000 have been added back to net income (loss) for the three and nine months
ended June 30, 2011, respectively, related to a short term accounting and IT support contract.
The pro forma unaudited results do not purport to be indicative of the results which would
actually have been obtained had the acquisition of Laprolan B.V. been completed as of the beginning
of the earliest period presented.
Note C Net Income (Loss) Per Share
The Companys basic net income (loss) per common share is computed by dividing net income
(loss) by the weighted average number of common shares outstanding during the period. Diluted net
income per common share is computed by dividing net income by the weighted average number of common
shares outstanding during the period, increased to include dilutive potential common shares
issuable upon the exercise of stock options that were outstanding during the period. For periods of
net loss, diluted net loss per common share equals basic net loss per common share because common
stock equivalents are not included in periods where there is a loss, as they are antidilutive. A
reconciliation of the numerator and denominator in the basic and diluted net income (loss) per
share calculation is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(293,964
|
)
|
|
$
|
95,020
|
|
|
$
|
(1,722,443
|
)
|
|
$
|
(425,553
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic net income (loss)
per share-weighted average shares outstanding
|
|
|
12,316,878
|
|
|
|
12,196,977
|
|
|
|
12,222,146
|
|
|
|
12,194,620
|
|
Effect of dilutive stock options
|
|
|
|
|
|
|
527,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted net income
(loss) per share-weighted average shares outstanding
|
|
|
12,316,878
|
|
|
|
12,724,610
|
|
|
|
12,222,146
|
|
|
|
12,194,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilute net income (loss) per share
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options to purchase 1,083,500 shares and 842,000 shares were excluded from the
diluted net income (loss) per share calculation for the third quarter of fiscal years 2011 and
2010, and options to purchase 981,995 shares
5
and 699,000 shares were excluded for the nine months ended June 30, 2011 and 2010, respectively,
because their exercise prices were greater than the average market price of the Companys common
stock and their effect would have been antidilutive. For the quarter ended June 30, 2011 and the
nine months ended June 30, 2011 and 2010, diluted net loss per common share equals basic net loss
per common share because common stock equivalents are not included in periods where there is a net
loss, as they are antidilutive.
Note D Stock Based Compensation
On January 28, 2010, the Companys shareholders approved the Rochester Medical Corporation
2010 Stock Incentive Plan. As of that same date, no new awards were allowed to be granted under
the Companys 1991 Stock Option Plan or the 2001 Stock Incentive Plan. The 2010 Stock Incentive
Plan authorizes the issuance of up to 1,000,000 shares of common stock pursuant to grants of
incentive stock options, non-incentive stock options, stock appreciation rights, restricted stock,
restricted stock units, dividend equivalents, performance awards, stock awards, and other
stock-based awards. Per the terms of the 2010 Stock Incentive Plan, awards may be granted with a
term no longer than ten years. The vesting schedule and other terms of the awards granted under
the 2010 Stock Incentive Plan will be determined by the Compensation Committee of the Board of
Directors at the time of the grant. As of June 30, 2011, there were 527,000 shares that remain
available for issuance under the 2010 Stock Incentive Plan, and there were 433,000 options and
40,000 shares of restricted stock outstanding under this plan. As of June 30, 2011, the Company
also had 1,203,750 options outstanding under the 2001 Stock Incentive Plan.
The Company measures stock-based compensation cost at the grant date based on the fair value
of the award and recognizes the compensation expense over the requisite service period, which is
generally the vesting period. The Company recorded approximately $302,000 ($231,000 net of tax) and
$1,179,000 ($877,000 net of tax) of related stock-based compensation expense for the quarter and
nine months ended June 30, 2011 and approximately $314,000 ($246,000 net of tax) and $1,164,000
($879,000 net of tax) of related stock-based compensation expense for the quarter and nine months
ended June 30, 2010, respectively. This stock-based compensation expense reduced both basic and
diluted earnings per share by $0.02 for each of the quarters ended June 30, 2011 and 2010, and
$0.07 for each of the nine months ended June 30, 2011 and 2010.
As of June 30, 2011, there is approximately $1,959,000 of unrecognized compensation cost that
is expected to be recognized over a weighted average period of approximately thirteen months.
Stock Options and Restricted Stock
In the third quarter of fiscal 2011, the Company granted 40,000 shares of restricted stock and
no stock options. In the third quarter of fiscal 2010, no stock options or restricted shares were
granted. The estimated fair value of the restricted shares was determined by the market price at
the date of grant and expensed over a period of four years. The Black-Scholes option pricing model
was used to estimate the fair value of stock-options granted during the fiscal year with the
following weighted average assumptions.
|
|
|
|
|
|
|
2011
|
|
Dividend yield
|
|
|
0
|
%
|
Expected volatility
|
|
|
47
|
%
|
Risk-free interest rate
|
|
|
3.42
|
%
|
Expected holding period (in years)
|
|
|
8.74
|
|
Weighted-average grant-date fair value
|
|
$
|
6.29
|
|
The risk-free interest rate is based on a treasury instrument whose term is consistent with
the expected life of the Companys stock options. The expected volatility, holding period, and
forfeitures of options are based on historical experience.
6
The following table represents stock-based awards activity for the nine months ended June 30,
2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
|
|
|
|
|
Weighted-Average
|
|
|
Remaining Contract
|
|
|
|
Number of Shares
|
|
|
Exercise Price
|
|
|
Life
|
|
Outstanding awards at beginning of period
|
|
|
1,672,700
|
|
|
$
|
7.83
|
|
|
5.31 Yrs
|
Granted options
|
|
|
230,000
|
|
|
$
|
9.13
|
|
|
|
|
|
Granted restricted shares
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(305,950
|
)
|
|
$
|
1.78
|
|
|
|
|
|
Outstanding awards at end of period
|
|
|
1,636,750
|
|
|
$
|
9.18
|
|
|
5.92 Yrs.
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding awards exercisable at end of period
|
|
|
1,208,625
|
|
|
$
|
8.42
|
|
|
4.95 Yrs.
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2011, the aggregate intrinsic value of options outstanding was $2,529,389, and the
aggregate intrinsic value of options exercisable was $2,529,389. Total intrinsic value of options
exercised was $2,534,092 for the nine months ended June 30, 2011. Shares available for future
stock-based awards to employees and directors under the 2010 Stock Incentive Plan were 527,000 at
June 30, 2011.
Note E Marketable Securities
As of June 30, 2011, the Company has $25.1 million invested in high quality, investment grade
debt securities, consisting of $21.8 million invested in U.S. treasury bills and $3.3 million
invested in a mutual fund. At September 30, 2010, the Companys marketable securities included
$31.0 million invested in high quality, investment grade debt securities, consisting of $25.7
million invested in U.S. treasury bills, $3.1 million invested in a mutual fund and $2.2 million
invested in CDs. The Company is reporting an unrealized loss of $359,000 related to the mutual
fund investment as of June 30, 2011; the unrealized loss was $413,000 at September 30, 2010. The
Company currently considers this unrealized loss to be temporary.
Marketable securities are classified as available for sale and are carried at fair value, with
unrealized gains or losses included as a separate component of shareholders equity. The cost and
fair value of available-for-sale securities were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
Cost
|
|
|
Loss
|
|
|
Fair Value
|
|
June 30, 2011
|
|
$
|
25,468,949
|
|
|
$
|
(359,428
|
)
|
|
$
|
25,109,521
|
|
September 30, 2010
|
|
$
|
31,379,590
|
|
|
$
|
(412,583
|
)
|
|
$
|
30,967,007
|
|
Losses recognized are recorded in
Other income (expense)
, in the consolidated statements of
operations. Gains and losses from the sale of investments are calculated based on the specific
identification method.
The Company applies the accounting standards set forth in ASC 820,
Fair Value Measurements and
Disclosures
, for financial assets and liabilities that are re-measured and reported at fair value
at each reporting period. Fair value is defined as the price that would be received from selling
an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. ASC 820 requires that fair value measurements be classified and disclosed
using one of the following three categories:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2. Inputs other than Level 1 that are observable, either directly or indirectly, such as
quoted prices in active markets for similar assets or liabilities; quoted prices for identical or
similar assets in markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or
liabilities; or
7
Level 3. Inputs that are unobservable for the asset or liability and that are significant to
the fair value of the assets or liabilities.
The Company has determined that the values given to its marketable securities are appropriate
and are measured using Level 1 inputs.
Note F Inventories
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
September 30,
|
|
|
|
2011
|
|
|
2010
|
|
Raw materials
|
|
$
|
1,729,897
|
|
|
$
|
1,756,313
|
|
Work-in-process
|
|
|
3,537,421
|
|
|
|
3,233,644
|
|
Finished goods
|
|
|
6,715,889
|
|
|
|
4,375,798
|
|
Reserve for inventory obsolescence
|
|
|
(305,923
|
)
|
|
|
(125,464
|
)
|
|
|
|
|
|
|
|
|
|
$
|
11,677,284
|
|
|
$
|
9,240,291
|
|
|
|
|
|
|
|
|
Note G Income Taxes
On a quarterly basis, the Company evaluates the realizability of its deferred tax assets and
assesses the requirements for a valuation allowance. As of June 30, 2011, the Company has a
valuation allowance of $42,000 related to Minnesota R&D credit carryovers as the Company believes
it is more likely than not that the deferred tax asset will not be utilized in future years. The
balance of the valuation allowance was reduced by $5,000 from the prior quarter due to a change in
estimate based on the recently completed tax returns. For the quarter ended June 30, 2011, the
Company had an effective income tax rate of approximately 45%. The variation of income tax rate
from the federal income tax rate of 35% is primarily due to current year permanent adjustments for
acquisition related expenses, meals and entertainment expenses, incentive stock options, state
taxes and foreign taxes. In future periods, the Company expects the U.S. effective tax rate to be
significantly higher than the federal and state statutory rates on U.S. income due to the impact of
permanent adjustments as noted above. The effective tax rate on worldwide income may fluctuate
depending upon inter-company eliminations, profitability of foreign operations, and any discrete
items.
The Company adopted accounting provisions that now form part of ASC 740,
Income Taxes
, and
which clarify the accounting for uncertainty in tax positions recognized in the financial
statements. These provisions create a single model to address uncertainty in tax positions and
clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax
position is required to meet before being recognized in the financial statements. ASC 740 also
provides guidance on derecognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition. At the adoption date, October 1, 2007, the Company
did not have a material liability for unrecognized tax benefits. As of June 30, 2011, the Company
has recognized approximately $56,000 for unrecognized tax benefits. If the Company were to prevail
on all unrecognized tax benefits recorded at June 30, 2011, the total gross unrecognized tax
benefit of approximately $56,000 would benefit the Companys effective tax rate.
It is the Companys practice to recognize penalties and/or interest to income tax matters in
income tax expense. As of June 30, 2011, the Company did not have a material amount of accrued
interest or penalties related to unrecognized tax benefits.
The Company is subject to income tax examinations from time to time in the U.S. Federal
jurisdiction, as well as in the United Kingdom, the Netherlands and various state jurisdictions.
Note H Goodwill and Other Intangible Assets
The Company records as goodwill the excess of purchase price over the fair value of the
identifiable net assets acquired. Goodwill and intangibles with indefinite useful lives are not
amortized but the Company is required to perform, at a minimum, an annual assessment of the
carrying value of goodwill and other intangibles with indefinite useful lives. If the carrying
value of goodwill or an intangible asset exceeds its fair value, an impairment loss will be
8
recognized. The Company has $4,271,000 of goodwill carrying value as of June 30, 2011
resulting from our acquisition in the UK of Rochester Medical Ltd in 2006 and $6,158,000 of
goodwill carrying value resulting from our acquisition in the Netherlands of Laprolan B.V. in 2011.
The Company tests annually for impairment of goodwill, which is currently on June 2nd of each
fiscal year for the goodwill associated with the Companys 2006 UK acquisition and for the goodwill
related to the 2011 Netherlands acquisition, or more frequently if events and circumstances
indicate that the asset might be impaired. The recoverability of other long-lived assets to be
held and used is measured by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an
asset exceeds its estimated undiscounted future cash flows, an impairment charge would be
recognized by the amount that the carrying amount of the asset exceeds the fair value of the asset.
The Company performed its most recent annual goodwill impairment
testing on June
2, 2011, and concluded that goodwill was not impaired. The increase in value of goodwill as of
June 30, 2011 is entirely related to the goodwill recorded during the purchase of Laprolan, offset
by a decrease due to a change in foreign currency exchange rates in the United Kingdom and a final
purchase price adjustment per the Mentor/Coloplast purchase agreement.
Note I Comprehensive Loss
Comprehensive loss includes net loss, changes in foreign currency translation, and changes in
the unrealized gains and losses on available-for-sale securities held. The comprehensive loss for
the three and nine months ended June 30, 2011 and 2010 consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Net income (loss)
|
|
$
|
(293,964
|
)
|
|
$
|
95,020
|
|
|
$
|
(1,722,443
|
)
|
|
$
|
(425,553
|
)
|
Foreign currency adjustment
|
|
|
130,003
|
|
|
|
(222,648
|
)
|
|
|
449,806
|
|
|
|
(1,010,369
|
)
|
Unrealized gain (loss) on securities held
|
|
|
(25,739
|
)
|
|
|
(47,064
|
)
|
|
|
34,258
|
|
|
|
40,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(189,700
|
)
|
|
$
|
(174,692
|
)
|
|
$
|
(1,238,379
|
)
|
|
$
|
(1,395,872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note J Geographic Information
Geographic net sales information reflects the destination of the product shipped. Long-lived
tangible assets information is based on the physical location of the asset.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Geographic net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
4,389,000
|
|
|
$
|
3,949,000
|
|
|
$
|
13,450,000
|
|
|
$
|
12,302,000
|
|
United Kingdom
|
|
|
4,708,000
|
|
|
|
3,734,000
|
|
|
|
13,319,000
|
|
|
|
10,845,000
|
|
The Netherlands
|
|
|
2,586,000
|
|
|
|
|
|
|
|
4,893,000
|
|
|
|
|
|
Europe &
Middle East*
|
|
|
2,245,000
|
|
|
|
2,323,000
|
|
|
|
5,648,000
|
|
|
|
6,509,000
|
|
Rest of world
|
|
|
353,000
|
|
|
|
238,000
|
|
|
|
770,000
|
|
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
14,281,000
|
|
|
$
|
10,244,000
|
|
|
$
|
38,080,000
|
|
|
$
|
30,321,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe
sales exclude sales in the U.K. and the Netherlands.
Sales are attributed to countries based upon the address to which the Company ships products, as
set forth on the customers purchase order.
Long-lived tangible assets of the Company are located in the United States, United Kingdom and the
Netherlands as follows:
9
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
September 30,
|
|
|
|
2011
|
|
|
2010
|
|
Long-lived assets:
|
|
|
|
|
|
|
|
|
United States
|
|
|
8,747,000
|
|
|
|
8,668,000
|
|
United Kingdom
|
|
|
1,377,000
|
|
|
|
1,349,000
|
|
The Netherlands
|
|
|
2,134,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,258,000
|
|
|
$
|
10,017,000
|
|
|
|
|
|
|
|
|
Note K Line of Credit and Long-Term Debt
In June 2006, in conjunction with an asset purchase agreement with Coloplast A/S, the Company
entered into an unsecured loan note deed with Coloplast with an outstanding principal amount of
$5,340,000. The promissory note was non-interest bearing and payable in five equal annual
installments of $1,068,000 payable annually on June 2. The Company discounted the note at 6.90%
which reflected the Companys cost of borrowing at the date of the purchase agreement and the
discount was amortized over the life of the note. The final payment of $1,068,000 was paid in May
2011.
In December 2010, the Company entered into a credit facility with RBC Wealth Management
(RBC). The credit facility consists of a revolving line of credit of up to $25,000,000 with
interest accruing monthly at a variable rate currently at 1.375%. In conjunction with the closing
of the Laprolan acquisition described under Note B, on April 7, 2011 the Company drew down
$15,057,775 from its credit line with RBC. As of June 30, 2011, the Company had an outstanding
balance under the revolving line of credit of $17,862,185.
Note L Share Repurchase Program
On March 3, 2009, the Company announced its intention to repurchase some of its outstanding
common shares pursuant to its previously authorized share repurchase program. Up to 2,000,000
shares may be repurchased from time to time on the open market, or pursuant to negotiated or block
transactions, in accordance with applicable Securities and Exchange Commission regulations. During
the three months ended June 30, 2011, the Company repurchased 127,751 common shares at an average
price of $9.27 per share. Total cash consideration for the repurchased shares was approximately
$1,184,000. As of June 30, 2011, there remained 1,587,341 shares that may be purchased under the
program.
Note M Recently Issued Accounting Standards
In January 2010, the Financial Accounting Standards Board (FASB) issued ASU No. 2010-06,
Fair
Value Measurements and Disclosures,
that requires entities to make new disclosures about recurring
or nonrecurring fair-value measurements and provides clarification of existing disclosure
requirements. For assets and liabilities that are measured at fair value on a recurring basis, the
ASU requires disclosure of significant transfers between Levels 1 and 2, and transfers into and out
of Level 3 of the fair value hierarchy and the reasons for those transfers. Significant transfers
into each level must be disclosed and discussed separately from transfers out of each level.
Significance is judged with respect to earnings, total assets, total liabilities or total equity.
An accounting policy must be determined and disclosed as to when transfers between levels are
recognized: (1) actual date, (2) beginning of period or (3) end of period. The ASU amends the
reconciliation of the beginning and ending balances of Level 3 recurring fair value measurements to
present information about purchases, sales, issuances and settlements on a gross basis rather than
as a net number. The ASU amends ASC 820 to require fair value measurement disclosures for each
class of assets and liabilities and clarifies that a description of the valuation technique and
inputs used to measure fair value is required for both recurring and nonrecurring fair value
measurements. This standard became effective for the Companys fiscal year ended September 30,
2010, except for the requirement to provide the Level activity of purchases, sales, issuances and
settlement on a gross basis, which became effective beginning in the first quarter of fiscal year
2011. The adoption of this standard did not have a material impact on the Companys condensed
consolidated financial statements.
10
In July 2010, the FASB issued ASU No. 2010-20,
Disclosures about the Credit Quality of
Financing Receivables and the Allowance for Credit Losses.
ASU No. 2010-20 amends the guidance
with ASC Topic 310,
Receivables
to facilitate financial statement users evaluation of (1) the
nature of credit risk inherent in the entitys portfolio of financing receivables; (2) how that
risk is analyzed and assessed in arriving at the allowance for credit losses; and (3) the changes
and reasons for those changes in the allowance for credit losses. The amendments in ASU No. 2010-20
also require an entity to provide additional disclosures such as a rollforward schedule of the
allowance for credit losses on a portfolio segment basis, credit quality indicators of financing
receivables and the aging of past due financing receivables. The Company was required to adopt ASU
No. 2010-20 as of December 15, 2010. The adoption of this standard did not have a material impact
on the Companys condensed consolidated financial statements.
In December 2010, the FASB issued ASU No. 2010-29,
Disclosures of Supplementary Pro Forma
Information for Business Combinations.
This ASU requires a public entity to disclose pro forma
information for business combinations that occurred in the current reporting period. The
disclosures include pro forma revenue and earnings of the combined entity for the current reporting
period as though the acquisition date for all business combinations that occurred during the year
had been as of the beginning of the annual reporting period. If comparative financial statements
are presented, the pro forma revenue and earnings of the combined entity for the comparable prior
reporting period should be reported as though the acquisition date for all business combinations
that occurred during the current year had been as of the beginning of the comparable prior annual
reporting period. ASU No. 2010-29 affects any public entity as defined by ASC 805 that enters into
business combinations that are material on an individual or aggregate basis. ASU No. 2010-29 is
effective prospectively for business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2010. Early
adoption is permitted and the Company adopted ASU No. 2010-29 in the second fiscal quarter of 2011.
The adoption of this standard did not have a material impact on the Companys condensed
consolidated financial statements.
In June 2011, the FASB issued ASU No. 2011-05,
Presentation of Comprehensive Income.
This
ASU eliminates the current option to report other comprehensive income and its components in the
statement of changes in equity and requires that all non-owner changes in stockholders equity be
presented either in a single continuous statement of comprehensive income or in two separate but
consecutive statements. In addition, it requires entities to present on the face of the financial
statements reclassification adjustments for items that are reclassified from other comprehensive
income to net income in the statements where the components of net income and the components of
other comprehensive income are presented. ASU No. 2011-05 will become effective for public entities
for fiscal years, and interim periods within those years, beginning after December 15, 2011, with
early adoption permitted. The standard will become effective for the Company in January 2012. The
Company is currently evaluating the impact of ASU No. 2011-05 on its consolidated financial
statements.
|
|
|
Item 2.
|
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
We develop, manufacture and market a broad line of innovative, technologically enhanced
PVC-free and latex-free urinary continence and urine drainage care products for the home care and
acute care markets. Acute care markets are generally hospitals and treatment facilities while home
care users are generally patients who use our products at home. The products we manufacture
include our male external catheters, standard silicone and anti-infection intermittent catheters
and our
FemSoft Insert
. The primary markets for our products are distributors, extended care
facilities and individual hospitals and healthcare institutions.
We sell our products directly and through our private label partners, both domestically and
internationally. Private label sales include our products manufactured by us and sold under brand
names owned by other companies. Direct sales include all our
Rochester Medical
®
branded sales,
Script Easy sales and all of our other sales at Laprolan. In the UK, we use our Script Easy
program to sell any product covered under drug tariff, and in the Netherlands we also have the
exclusive rights to market a range of continence care, ostomy and wound and scar care products.
As part of our three year strategic business plan through 2013, we have increased the level of
investment in our sales and marketing programs in fiscal 2011 to support our direct sales growth
in the U.S. and Europe through the addition of more than 30 additional sales staff. We expect such
increased investment to be funded primarily through cash generated from operations. Increasing our
percentage of direct sales versus private label sales over time will have a positive impact on our
gross margin. Direct sales accounted for 81% of total sales for the quarter ended June 30, 2011,
11
compared to 74% for the quarter ended June 30, 2010. Home care direct sales accounted for 87% of
total direct sales for the quarters ended June 30, 2011 and 2010.
In September 2009, the
FemSoft Insert
was approved for inclusion in Part IX of the UK Drug
Tariff as a prescription product that is reimbursable under the National Healthcare System,
commencing in 2010. In November 2009, the Centers for Medicare & Medicaid Services (CMS) issued a
specific reimbursement code which covers our
FemSoft Insert
. In January 2011, the CMS notified us
of their decision regarding the Medicare reimbursement fee to be used for the
FemSoft Insert
in
response to our request that the pricing data used to establish the fee schedule be revised. The
current Medicare fee schedule amount is based on price data that is closest to a 1986/1987 base
period and is significantly lower than the current retail price for the
FemSoft Insert
. We
continue to believe that the reimbursement fee is unreasonably low, and we intend to continue to
pursue a dialog with the CMS in an effort to change the reimbursement rate. We continue to believe
the availability of National Healthcare System and Medicare reimbursement will help this unique
device become an economically accessible and often preferred solution for incontinent women in the
United Kingdom and in the United States.
On April 7, 2011, we completed the acquisition of the outstanding capital stock of Laprolan
B.V., a corporation organized under the laws of The Netherlands and a wholly owned subsidiary of
Fornix BioSciences N.V., pursuant to a Share Purchase Agreement dated as of January 12, 2011 (the
Purchase Agreement). We paid a cash purchase price at closing of 10,474,974 (US$15,057,775, of
which $60,217 was paid for the cash balance of Laprolan on January 1, 2011 and $119,433 was
interest paid to Fornix from January 1, 2011 until closing). As provided in the Purchase
Agreement, the transaction has a retroactive effective date of January 1, 2011, and the operating
results of Laprolan are for our account from and after January 1, 2011. We are applying purchase
accounting as of that date and are including the results of Laprolan beginning with our second
quarter of fiscal 2011.
The following discussion pertains to our results of operations and financial position for the
quarters ended June 30, 2011 and 2010. Results of the periods are not necessarily indicative of
the results to be expected for the complete year. For the third quarter ended June 30, 2011, we
reported a net loss of $0.02 per diluted share, compared to net income of $0.01 per diluted share
for the same period last year. Loss from operations was $491,000 for the quarter ended June 30,
2011 compared to income from operations of $275,000 for the quarter ended June 30, 2010, while net
loss was $294,000 for the quarter ended June 30, 2011 compared to net income of $95,000 for the
quarter ended June 30, 2010.
As of June 30, 2011, we had $8.7 million in cash and cash equivalents and $25.1 million
invested in marketable securities. The marketable securities consist of $21.8 million invested in
U.S. treasury bills and $3.3 million invested in a mutual fund. Our investments in marketable
securities are subject to interest rate risk and the value thereof could be adversely affected due
to movements in interest rates. Our investment choices, however, are conservative and are intended
to reduce the risk of loss or any material impact on our financial condition. We are currently
reporting an unrealized loss of $359,000 related to the mutual fund investment as a result of the
recent fluctuations in the credit markets impacting the current market value. We currently
consider this unrealized loss to be temporary.
Results of Operations
The following table sets forth, for the fiscal periods indicated, certain items from our
statements of operations expressed as a percentage of net sales.
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
Net sales
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
Cost of sales
|
|
|
51
|
|
|
|
51
|
|
|
|
51
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
49
|
|
|
|
49
|
|
|
|
49
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
|
37
|
|
|
|
31
|
|
|
|
37
|
|
|
|
29
|
|
Research and development
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
3
|
|
General and administrative
|
|
|
14
|
|
|
|
13
|
|
|
|
16
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
53
|
|
|
|
46
|
|
|
|
55
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
(6
|
)
|
|
|
(1
|
)
|
Interest income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before taxes
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
(6
|
)
|
|
|
(1
|
)
|
Income tax expense (benefit)
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) after taxes
|
|
|
(2)
|
%
|
|
|
1
|
%
|
|
|
(4
|
)%
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth, for the periods indicated, net sales information by market
category (acute care and home care), marketing method (private label and direct sales) and
distribution channel (domestic and international markets) (all dollar amounts below are in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter ended June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
$
|
608
|
|
|
$
|
723
|
|
|
$
|
203
|
|
|
$
|
1,534
|
|
|
$
|
691
|
|
|
$
|
209
|
|
|
$
|
95
|
|
|
$
|
995
|
|
Home Care Direct
|
|
|
1,969
|
|
|
|
7,962
|
|
|
|
147
|
|
|
|
10,078
|
|
|
|
1,651
|
|
|
|
4,821
|
|
|
|
137
|
|
|
|
6,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
2,577
|
|
|
|
8,685
|
|
|
|
350
|
|
|
|
11,612
|
|
|
|
2,342
|
|
|
|
5,030
|
|
|
|
232
|
|
|
|
7,604
|
|
Private Label
|
|
|
1,812
|
|
|
|
854
|
|
|
|
3
|
|
|
|
2,669
|
|
|
|
1,607
|
|
|
|
1,027
|
|
|
|
6
|
|
|
|
2,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$
|
4,389
|
|
|
$
|
9,539
|
|
|
$
|
353
|
|
|
$
|
14,281
|
|
|
$
|
3,949
|
|
|
$
|
6,057
|
|
|
$
|
238
|
|
|
$
|
10,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Product Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
|
24
|
%
|
|
|
8
|
%
|
|
|
58
|
%
|
|
|
13
|
%
|
|
|
30
|
%
|
|
|
4
|
%
|
|
|
41
|
%
|
|
|
13
|
%
|
Home Care Direct
|
|
|
76
|
%
|
|
|
92
|
%
|
|
|
42
|
%
|
|
|
87
|
%
|
|
|
70
|
%
|
|
|
96
|
%
|
|
|
59
|
%
|
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter ended June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
Direct Geographic Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
|
5
|
%
|
|
|
6
|
%
|
|
|
2
|
%
|
|
|
13
|
%
|
|
|
9
|
%
|
|
|
3
|
%
|
|
|
1
|
%
|
|
|
13
|
%
|
Home Care Direct
|
|
|
17
|
%
|
|
|
69
|
%
|
|
|
1
|
%
|
|
|
87
|
%
|
|
|
22
|
%
|
|
|
63
|
%
|
|
|
2
|
%
|
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
22
|
%
|
|
|
75
|
%
|
|
|
3
|
%
|
|
|
100
|
%
|
|
|
31
|
%
|
|
|
66
|
%
|
|
|
3
|
%
|
|
|
100
|
%
|
YOY Percentage Net
Sales Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
10
|
%
|
|
|
73
|
%
|
|
|
51
|
%
|
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Label
|
|
|
13
|
%
|
|
|
(17
|
%)
|
|
|
(50
|
%)
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales
|
|
|
11
|
%
|
|
|
57
|
%
|
|
|
48
|
%
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year to Date ended June 30,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
|
US
|
|
|
Europe & Middle East
|
|
|
Rest of World
|
|
|
Total
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
$
|
1,867
|
|
|
$
|
2,005
|
|
|
$
|
559
|
|
|
$
|
4,431
|
|
|
$
|
1,812
|
|
|
$
|
805
|
|
|
$
|
250
|
|
|
$
|
2,867
|
|
Home Care Direct
|
|
|
5,557
|
|
|
|
19,342
|
|
|
|
188
|
|
|
|
25,087
|
|
|
|
4,659
|
|
|
|
13,679
|
|
|
|
394
|
|
|
|
18,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
7,424
|
|
|
|
21,347
|
|
|
|
747
|
|
|
|
29,518
|
|
|
|
6,471
|
|
|
|
14,484
|
|
|
|
644
|
|
|
|
21,599
|
|
Private Label
|
|
|
6,026
|
|
|
|
2,513
|
|
|
|
23
|
|
|
|
8,562
|
|
|
|
5,831
|
|
|
|
2,870
|
|
|
|
21
|
|
|
|
8,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$
|
13,450
|
|
|
$
|
23,860
|
|
|
$
|
770
|
|
|
$
|
38,080
|
|
|
$
|
12,302
|
|
|
$
|
17,354
|
|
|
$
|
665
|
|
|
$
|
30,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Product Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
|
25
|
%
|
|
|
9
|
%
|
|
|
75
|
%
|
|
|
15
|
%
|
|
|
28
|
%
|
|
|
6
|
%
|
|
|
39
|
%
|
|
|
13
|
%
|
Home Care Direct
|
|
|
75
|
%
|
|
|
91
|
%
|
|
|
25
|
%
|
|
|
85
|
%
|
|
|
72
|
%
|
|
|
94
|
%
|
|
|
61
|
%
|
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Geographic Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acute Care Direct
|
|
|
6
|
%
|
|
|
7
|
%
|
|
|
2
|
%
|
|
|
15
|
%
|
|
|
8
|
%
|
|
|
4
|
%
|
|
|
1
|
%
|
|
|
13
|
%
|
Home Care Direct
|
|
|
19
|
%
|
|
|
65
|
%
|
|
|
1
|
%
|
|
|
85
|
%
|
|
|
22
|
%
|
|
|
63
|
%
|
|
|
2
|
%
|
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Total
|
|
|
25
|
%
|
|
|
72
|
%
|
|
|
3
|
%
|
|
|
100
|
%
|
|
|
30
|
%
|
|
|
67
|
%
|
|
|
3
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YOY Percentage Net
Sales Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
|
|
|
15
|
%
|
|
|
47
|
%
|
|
|
16
|
%
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Label
|
|
|
3
|
%
|
|
|
(12
|
%)
|
|
|
10
|
%
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Sales
|
|
|
9
|
%
|
|
|
37
|
%
|
|
|
16
|
%
|
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Direct sales include sales made directly to the end consumer and include all
Rochester Medical
branded sales, UK Script Easy Sales and all Laprolan sales. Private label sales include our
products packaged and sold by other manufacturers. Acute care refers to hospital sales. Home care
refers to non-hospital sales.
Three Month and Nine Month Periods Ended June 30, 2011 and June 30, 2010
Net Sales.
Net sales for the third quarter of fiscal 2011 increased 39% to $14,281,000 from
$10,244,000 for the comparable quarter of last fiscal year. The sales increase primarily resulted
from an increase in direct sales in the U.S.
14
and the Europe and Middle East (EME) region, combined with a small increase in sales of
private label products domestically, and offset by a decrease in private label sales in EME. US
direct sales increased by 10% for the quarter compared to the same period last year, led by a 19%
increase in home care sales offset by a 12% decrease in acute care sales. Our EME direct sales
increased 73% compared to the same period last year led by a strong increase in both the UK and the
Netherlands in acute care sales of 246% and home care sales of 65%. Management believes these
results demonstrate the favorable impact of our strategic decision to increase investment in sales
and marketing programs, particularly in our direct sales business in the US and EME. Additionally,
beginning with the quarter ended March 31, 2011, direct sales include the sales of Laprolan B.V.,
our recently acquired subsidiary in the Netherlands. Total sales were partially strengthened (2%
or $354,000) as a result of the change in foreign currency exchange rates in the United Kingdom as
the U.S. dollar was somewhat weaker versus the pound sterling, thereby affecting sales positively
given the significant volume of our
Rochester Medical
branded product sales in the United Kingdom.
Direct sales in the rest of the world (ROW) increased 51% compared to the same period last year
including a 7% increase in home care sales and a 113% increase in acute care sales. Private label
sales for the third quarter were up 1% from last year and continue to fluctuate on a quarterly
basis. Private label sales accounted for approximately 19% of total sales for the quarter ended
June 30, 2011.
Net sales for the nine months ended June 30, 2011 increased 26% to $38,080,000 from
$30,321,000 for the comparable nine-month period of last fiscal year. The sales increase resulted
from an increase in direct sales in the US, EME and ROW, offset by a decrease in private label
sales in the EME. Our EME direct sales increased 47% compared to the same period last year, led by
increases in both the UK and the Netherlands. Beginning with the quarter ended March 31, 2011, net
sales include the sales of Laprolan.
Gross Margin
. Our gross margin as a percentage of net sales for the third quarter of fiscal
2011 and 2010 was 49%. Gross margin this quarter was primarily impacted by higher margins on
Laprolan sales offset by lower margins in the US. Management expects the sale of Laprolan products
and our direct sales in both the US and EME will continue to have a positive impact on margin as we
continue to focus on direct sales. Gross margin for the nine months ended June 30, 2011 increased
to 49% from 47%. Factors affecting the comparative nine month gross margin are generally
consistent with those discussed above for the current quarter.
Marketing and Selling.
Marketing and selling expense primarily includes costs associated with
base salary paid to sales and marketing personnel, sales commissions, and travel and advertising
expense. Marketing and selling expense for the third quarter of fiscal 2011 increased 66% to
$5,238,000 from $3,151,000 for the comparable quarter of last fiscal year. The increase in
marketing and selling expense is primarily due to increased compensation and benefits associated
with the increased sales staff in the US and UK, and the addition of our Laprolan sales personnel,
partially offset by a reduction in advertising costs. Marketing and selling expense as a
percentage of net sales for the fiscal quarters ended June 30, 2011 and 2010 was 37% and 31%,
respectively.
Marketing and selling expense for the nine months ended June 30, 2011 increased 61% to
$14,132,000 from $8,800,000 for the comparable nine-month period of last fiscal year. Factors
affecting the comparative nine-month expense levels are generally consistent with those discussed
above for the current quarter.
Research and Development.
Research and development expense primarily includes internal labor
costs, as well as expense associated with third-party vendors performing validation and
investigative research regarding our products and development activities. Research and development
expense for the third quarter of fiscal 2011 decreased 9% to $223,000 from $246,000 for the
comparable quarter of last fiscal year. The decrease in research and development expense results
primarily from general increases in salaries and wages and normal increases from last fiscal year
offset by R&D tax credits. Research and development expense as a percentage of net sales for the
fiscal quarters ended June 30, 2011 and 2010 was 2%.
Research and development expense for the nine months ended June 30, 2011 decreased 19% to
$753,000 from $931,000 for the comparable nine-month period of last fiscal year. The decrease in
research and development expense for the nine months ended June 30, 2011 primarily relates to
decreased testing and development of new and existing products that were in development in the
first quarter of fiscal 2010.
General and Administrative.
General and administrative expense primarily includes payroll
expense relating to our management and accounting, information technology and human resources
staff, as well as fees and expenses of
15
outside legal counsel, accounting advisors, auditors and utilities. General and
administrative expense for the third quarter of fiscal 2011 increased 48% to $2,030,000 from
$1,369,000 for the comparable quarter of last fiscal year. The increase in general and
administrative expense is primarily related to one-time costs associated with the acquisition of
Laprolan, administrative expenses in Laprolan, increased taxes and benefits, increased wages and an
increase in consulting fees and supplies . General and administrative expense as a percentage of
net sales for the fiscal quarters ended June 30, 2011 and 2010 was 14% and 13%, respectively.
General and administrative expense for the nine months ended June 30, 2011 increased 28% to
$6,143,000 from $4,808,000 for the comparable nine-month period of last fiscal year. The increase
in general and administrative expenses for the nine month period are generally consistent with
those discussed above for the current quarter.
Interest Income.
Interest income for the third quarter of fiscal 2011 decreased 4% to $50,000
from $52,000 for the comparable quarter of last fiscal year. The decrease in interest income
reflects lower returns on a smaller amount of investments.
Interest income for the nine months ended June 30, 2011 decreased 2% to $154,000 from $157,000
for the comparable nine-month period of last fiscal year. Factors affecting the comparative
nine-month interest income reflect slightly higher returns on CDs and investments early in the
fiscal year.
Interest Expense
. Interest expense for the third quarter of fiscal 2011 increased 92% to
$70,000 from $37,000 for the comparable quarter of last fiscal year. The increase in interest
expense reflects increased interest related to the acquisition of Laprolan offset by lower amounts
of debt as a result of quarterly debt payments.
Interest expense for the nine months ended June 30, 2011 increased 92% to $225,000 from
$117,000 for the comparable nine-month period of last fiscal year. The increase in interest
expense for the nine month period are generally consistent with those discussed above for the
current quarter.
Income Taxes
. For the quarter ended June 30, 2011, we had an effective income tax rate of
approximately 45%. The tax rate is affected by the estimated annual book income before tax in
relation to permanent tax adjustments, particularly acquisition related expenses and incentive
stock options, and in future periods we expect to report an income tax provision using an effective
tax rate in the range of 40-42% for U.S. income. The effective tax rate on worldwide income may
fluctuate depending upon inter-company eliminations, profitability of foreign operations, and any
discrete items.
We have recorded an income tax benefit of $665,000 for the nine months ended June 30, 2011
compared to an expense of $183,000 for the comparable nine-month period of last fiscal year. The
change in income taxes is attributable to the level of estimated annual book income (loss) before
tax as compared to permanent book to tax differences.
Liquidity and Capital Resources
Our cash, cash equivalents and marketable securities were $33.8 million at June 30, 2011
compared to $35.5 million at September 30, 2010. The decrease in cash primarily resulted from
payments on debt, stock repurchases, cash used in operations and capital expenditures offset by
cash provided from the sale of common stock upon exercise of options. As of June 30, 2011, we had
$25.1 million invested in marketable securities. The marketable securities consist of $21.8
million invested in U.S. treasury bills and $3.3 million invested in a mutual fund. We are
currently reporting an unrealized loss of $359,000 related to the mutual fund investment as a
result of the recent fluctuations in the credit markets impacting the current market value. We
currently consider this unrealized loss to be temporary.
During the nine-month period ended June 30, 2011, we used $449,000 of cash from operating
activities compared to $2,177,000 of cash provided by operations during the comparable period of
the prior fiscal year. The net cash used in operating activities in the first nine months of fiscal
2011 primarily reflects our net loss adjusted for non-cash items related to depreciation,
amortization, and stock based compensation and increases in accounts receivable, inventories and
other current assets and decreases in other current liabilities offset by increases in accounts
payable and income taxes payable. Accounts receivable during this period increased 5% or $372,000,
while inventories increased $576,000, or 6%, primarily as a result of rebuilding inventory levels
since year end. Other current assets during this
16
period increased 164% or $1,296,000, primarily as a result of prepaid income taxes on
intercompany profits and taxes receivable related to incentive stock option exercises. Accounts
payable increased 42%, or $855,000, primarily reflecting timing of expenses related to quarter end.
Other current liabilities increased 10%, or $200,000, primarily reflecting timing of normal
operating accruals. In addition, capital expenditures during this period were $1,349,000 compared
to $1,461,000 for the comparable period last year. We also repurchased $1,184,000 worth of common
stock.
In June 2006, in conjunction with the asset purchase agreement with Coloplast, we entered into
an unsecured loan note deed with Coloplast with an outstanding principal amount of $5,340,000. The
promissory note was non-interest bearing, payable and due in five equal installments of $1,068,000
payable annually on June 2. We discounted the note at 6.90%. We made the final payment of
$1,068,000 in May 2011.
In December 2010, we entered into a credit facility with RBC Wealth Management. The credit
facility consists of a revolving line of credit of up to $25,000,000 with interest accruing monthly
at a variable rate currently at 1.375%. In conjunction with the closing of the Laprolan
acquisition, on April 7, 2011, we drew down $15,057,775 from the line of credit. As of June 30,
2011, we had an outstanding balance under the revolving line of credit of $17,862,185.
We believe that our capital resources on hand at June 30, 2011, together with cash generated
from sales, will be sufficient to satisfy our working capital requirements for the foreseeable
future as described in the Liquidity and Capital Resources portion of Managements Discussion and
Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the
fiscal year ended September 30, 2010. In the event that additional financing is needed, we may
seek to raise additional funds through public or private financing, collaborative relationships or
other arrangements. Any additional equity financing may be dilutive to shareholders, and debt
financing, if available, may involve significant restrictive covenants. Collaborative
arrangements, if necessary to raise additional funds, may require us to relinquish our rights to
certain of our technologies, products or marketing territories. Failure to raise capital when
needed could have a material adverse effect on our business, financial condition and results of
operations. There can be no assurance that such financing, if required, will be available on terms
satisfactory to us, if at all.
Cautionary Statement Regarding Forward Looking Information
Statements other than historical information contained herein constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may be identified by the use of terminology such as believe, may,
will, expect, anticipate, predict, intend, designed, estimate, should or continue
or the negatives thereof or other variations thereon or comparable terminology. Such
forward-looking statements involve known or unknown risks, uncertainties and other factors which
may cause our actual results, performance or achievements, or industry results, to be materially
different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, the following:
|
|
|
the uncertainty of market acceptance of new product introductions;
|
|
|
|
|
the uncertainty of gaining new strategic relationships;
|
|
|
|
|
the uncertainty of successfully establishing our separate
Rochester Medical
brand
identity;
|
|
|
|
|
the uncertainty of timing of revenues from private label sales (particularly with
respect to international customers);
|
|
|
|
|
the uncertainty of successfully growing our international operations;
|
|
|
|
|
the risks associated with operating an international business, including the impact of
foreign currency exchange rate fluctuations;
|
|
|
|
|
the securing of Group Purchasing Organization contract participation;
|
|
|
|
|
the uncertainty of gaining significant sales from secured GPO contracts;
|
|
|
|
|
FDA and other regulatory review and response times;
|
|
|
|
|
the impact of continued healthcare cost containment;
|
|
|
|
|
new laws related to healthcare availability, healthcare reform, payment for healthcare
products and services or the marketing and distribution of products, including legislative
or administrative reforms to the U.S. Medicare and Medicaid systems or other U.S. or
international reimbursement systems;
|
|
|
|
|
changes in the tax or environmental laws or standards affecting our business;
|
17
and other risk factors listed from time to time in our SEC reports, including, without limitation,
the section entitled Risk Factors in our Annual Report on Form 10-K for the year ended September
30, 2010.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our primary financial instrument market risk results from fluctuations in interest rates. Our
cash is invested in bank deposits and money market funds denominated in United States dollars and
pound sterling. The carrying value of these cash equivalents approximates fair market value. Our
investments in marketable securities are subject to interest rate risk and the value thereof could
be adversely affected due to movements in interest rates. Our investment choices, however, are
conservative in light of current economic conditions, and include primarily U.S. treasury bills to
reduce the risk of loss or any material impact on our financial condition. Our revolving line of
credit bears interest at a variable rate currently at 1.375%. As of June 30, 2011, we had an
outstanding balance under the revolving line of credit of $17,862,185.
In future periods, we believe a greater portion of our revenues could be denominated in
currencies other than the U.S. dollar, thereby increasing our exposure to exchange rate gains and
losses on non-United States currency transactions. Sales through our subsidiary, Rochester
Medical, Ltd., are denominated in pound sterling, and fluctuations in the rate of exchange between
the U.S. dollar and the pound sterling could adversely affect our financial results. Similarly,
sales through our subsidiary, Laprolan B.V., are denominated in euros, and fluctuations in the rate
of exchange between the U.S. dollar and the euro could adversely affect our financial results.
Otherwise, we do not believe our operations are currently subject to significant market risks
for interest rates, foreign currency exchange rates, commodity prices or other relevant market
price risks of a material nature. We do not currently use derivative financial instruments to
manage interest rate risk or enter into forward exchange contracts to hedge exposure to foreign
currencies, or any other derivative financial instruments for trading or speculative purposes. In
the future, if we believe an increase in our currency exposure merits further review, we may
consider entering into transactions to mitigate that risk.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
. As of the end of the period covered by this
report (the Evaluation Date) we carried out an evaluation, under the supervision and with the
participation of management, including our Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 as amended (the Exchange Act)). Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of
the Evaluation Date, our disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports that we file or submit under the Exchange Act
is (i) recorded, processed, summarized and reported within the time periods specified in the
Commissions rules and forms, and (ii) accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
Changes in Internal Controls
. During our third fiscal quarter, there has been no change in
our internal control over financial reporting (as defined in Rule 13(a)-15(f) under the Exchange
Act) that materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
On March 3, 2009, we announced our intention to repurchase some of our outstanding common
shares pursuant to our previously authorized share repurchase program. Up to 2,000,000 shares may
be repurchased from time to time
on the open market, or pursuant to negotiated or block transactions, in accordance with applicable
Securities and Exchange Commission regulations. The repurchase program does not have an expiration
date. During the period from
18
April 1, 2011 to June 30, 2011, we repurchased shares in the open
market. The following table summarizes the repurchases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
Maximum Number
|
|
|
|
Total Number
|
|
|
Average Price
|
|
|
Purchased as
|
|
|
of Shares that
|
|
|
|
of Shares
|
|
|
Paid per
|
|
|
Part of Publicly
|
|
|
May Yet Be Purchased
|
|
Period
|
|
Purchased
|
|
|
Share
|
|
|
Announced Plans
|
|
|
Under the Plan
|
|
April 1, 2011 April 30,
2011
|
|
|
|
|
|
|
|
|
|
|
285,568
|
|
|
|
1,714,432
|
|
May 1, 2011 May 31, 2011
|
|
|
30,908
|
|
|
$
|
9.79
|
|
|
|
316,476
|
|
|
|
1,683,524
|
|
June 1, 2011 June 30, 2011
|
|
|
96,843
|
|
|
$
|
9.10
|
|
|
|
413,319
|
|
|
|
1,586,681
|
|
Item 6. Exhibits
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer.
|
|
|
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer.
|
|
|
|
101
|
|
Interactive Data Files.
|
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
ROCHESTER MEDICAL CORPORATION
|
|
Date: August 9, 2011
|
By:
|
/s/ Anthony J. Conway
|
|
|
|
Anthony J. Conway
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date: August 9, 2011
|
By:
|
/s/ David A. Jonas
|
|
|
|
David A. Jonas
|
|
|
|
Chief Financial Officer and Treasurer
|
|
20
INDEX TO EXHIBITS
|
|
|
Exhibit
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer.
|
|
|
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer.
|
|
|
|
101
|
|
Interactive Data Files.
|
21
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