STEWARTVILLE, Minn.,
Jan. 25, 2012 /PRNewswire/ --
Rochester Medical Corporation (NASDAQ:ROCM) today announced
operating results for its first quarter ended December 31, 2011.
The Company reported sales of $13,846,000 for the current quarter compared to
$10,946,000 for the first quarter of
last year. It also reported net loss of $75,000 or ($.01)
per diluted share compared to net loss of $169,000 or ($.01)
per diluted share for the same quarter of last year.
The 26% increase in sales resulted from a 45% increase in
Rochester Medical Direct Sales partially offset by a 20% decrease
in Private Label Sales. The percentages were the same on a
constant currency basis which assumes current exchange rates for
all periods in order to exclude the impact of foreign exchange
variations.
Net income adjusted for certain non-recurring unusual items and
certain recurring non-cash expenses, or "Non-GAAP Net Income" for
the current quarter was $285,000 or
$.02 per diluted share compared to
Non-GAAP Net Income of $377,000 or
$.03 per diluted share for the first
quarter of last year. The decrease for the current quarter
was due to increased gross profit being more than offset by
increased expenses primarily related to our expanded sales and
marketing efforts.
Commenting on the first quarter, Rochester Medical's CEO and
President Anthony J. Conway said,
"Our organic Direct Sales are growing nicely, especially where we
have our own dedicated sales and marketing personnel. Overall U.S.
Direct Sales rose 27% over last year's first quarter with U.S.
Acute Care sales rising 31% and U.S. Home Care sales growing at a
27% pace. These are strong numbers, and they reflect the
increasing effectiveness of our U.S. Sales and Marketing team and
the growing acceptance of our advanced catheter technology.
The United Kingdom also reported strong 18% Direct Sales
growth. The solid Direct Sales activities were offset by soft
Private Label Sales which, as we have noted in the past, can
fluctuate significantly in any given quarter due to the timing of
orders. We believe that Private Label Sales for the full
fiscal year remain on track. Direct Sales to International
distributors were down somewhat compared to the same period last
year. This too was due to timing of orders to some of our
larger distributors, and we expect sales to those distributors to
show growth for the full fiscal year. Overall I am pleased
with our first quarter results, and we continue to expect strong
Direct Sales growth and stable annualized Private Label Sales going
forward."
Conference Call and Webcast
The Company will hold a quarterly conference call today to
discuss its earnings report.
The call will begin at 3:30 p.m. central
time (4:30 p.m. eastern
time).
This call is being webcast by Thomson Reuters and can be accessed
at Rochester Medical's website at www.rocm.com. To listen
live to the conference call via telephone, call:
Domestic:
|
888.680.0865
|
|
International:
|
617.213.4853
|
|
Pass code:
|
76698813
|
|
Preregistration:
|
https://www.theconferencingservice.com/prereg/key.process?key=PUJTDK4BA
|
|
|
|
Replay will be available for seven days at www.rocm.com or via
telephone at:
Domestic:
|
888
286.8010
|
|
International:
|
617
801.6888
|
|
Pass code:
|
23609340
|
|
|
|
Individual investors can listen to the call at
www.fulldisclosure.com, Thomson Reuters individual investor portal,
powered by StreetEvents. Institutional investors can access
the call via Thomson's password-protected event management site,
StreetEvents (www.streetevents.com).
Forward-Looking Statements
This press release contains "forward-looking statements" with
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to,
statements about the future financial and operating results of
Rochester Medical. Such statements are based on currently
available information, operating plans and management's
expectations about future events and trends. Such statements
inherently involve significant risks and uncertainties that could
cause actual results to differ materially from those predicted in
such forward-looking statements, including the uncertainty of
estimated revenues and profits, the uncertainty of current domestic
and international economic conditions that could adversely affect
the level of demand for the Company's products and increased
volatility in foreign exchange rates, the uncertainty of market
acceptance of new product introductions, and our level of success
in increasing Rochester Medical Direct Sales revenue, the
uncertainty of gaining new strategic relationships or locating and
capitalizing on strategic opportunities, the uncertainty of timing
of Private Label Sales revenues (particularly international
customers), FDA and other regulatory review and response times, and
other risk factors listed from time to time in the Company's SEC
reports and filings, including, without limitation, the section
entitled "Risk Factors" in the Company's Annual Report on Form 10-K
for the year ended September 30,
2011, and reports on Forms 10-Q and 8-K. Readers are
cautioned not to place undue reliance on any such forward-looking
statements, which speak only as of the date they are made.
The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Use of Non-GAAP Financial Measures
Rochester Medical has provided Non-GAAP Net Income (Loss) in
addition to net income (loss) calculated in accordance with
generally accepted accounting principles (GAAP) because management
believes Non-GAAP Net Income (Loss) provides a more consistent
basis for comparisons that are not influenced by certain charges
and non-cash expenses and are therefore helpful in understanding
Rochester Medical's underlying operating results. Similarly,
constant currency represents reported sales with the cost/benefit
of currency movements removed. Management uses the measure to
understand the growth of the business on a constant dollar basis,
as fluctuations in exchange rates can distort the underlying growth
of the business both positively and negatively. While we
recognize that foreign exchange volatility is a reality for a
global company, we routinely review our Company performance on a
constant dollar basis, and we believe this also allows our
shareholders to understand better our Company's growth trends.
Non-GAAP Net Income (Loss) and constant currency are not
measures of financial performance under GAAP, and should not be
considered an alternative to net income or any other measure of
performance or liquidity under GAAP. Non-GAAP Net Income (Loss) and
constant currency are not comparable to information provided by
other companies. Non-GAAP Net Income (Loss) and constant currency
have limitations as analytical tools and should not be considered
in isolation or as a substitution for analysis of our results as
reported under GAAP. Reconciliations of Net Loss and Non-GAAP
Net Income (Loss), and reconciliations of sales under GAAP and
sales on a constant currency basis, are presented at the end of
this press release.
About Rochester Medical Corporation
Rochester Medical Corporation develops, manufactures, and
markets disposable medical catheters and devices for urological and
continence care applications. The Company also sells certain
ostomy and wound and scar care products and other brands of
urological products into the European marketplace.
For further information, please contact Anthony J. Conway, President and Chief Executive
Officer or David A. Jonas, Chief
Financial Officer of Rochester Medical Corporation at (507)
533-9600 or Parice Halbert, CFA, at
Westwicke Partners (443) 213-0500. More information about
Rochester Medical is available on its website at
http://www.rocm.com.
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Net Income to Non-GAAP Net Income
|
|
For the Three months
ended
|
|
December 31, 2011 and
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Three months
ended
|
|
|
|
December
31,
|
|
|
|
2011
|
2010
|
|
|
|
|
|
|
GAAP Net Loss as
Reported
|
|
$
(75,000)
|
$
(169,000)
|
|
|
|
|
|
|
Loss Per Share as
Reported
|
|
$
(0.01)
|
$
(0.01)
|
|
|
|
|
|
|
Adjustments for non-recurring
unusual items:
|
|
|
|
|
Recruitment costs for
additional US sales force (1)
|
|
-
|
132,000
|
|
Merger and acquisition
costs for Laprolan B.V. (2)
|
|
-
|
90,000
|
|
Subtotal
|
|
-
|
222,000
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for recurring
non-cash expenses:
|
|
|
|
|
Intangible amortization
(3)
|
|
158,000
|
129,000
|
|
ASC 718 compensation
expense (4)
|
|
202,000
|
195,000
|
|
Subtotal
|
|
360,000
|
324,000
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
|
$
285,000
|
$
377,000
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
|
$
0.02
|
$
0.03
|
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
|
12,311,866
|
12,605,122
|
|
|
|
|
|
|
|
|
|
|
|
(1) Costs associated with
recruitment firm to locate and hire 34 additional sales staff in
the US. The gross amount
|
|
of
recruiting costs are $200,500 net of taxes of $68,500 for a net
amount of $132,000.
|
|
|
|
|
|
|
(2) Merger and acquisition
related expenses net of taxes pertaining to the agreement to
purchase Laprolan B.V.
|
|
The gross
amount of acquisition costs are $136,000 net of taxes of $46,000
for a net amount of $90,000.
|
|
|
|
|
|
|
(3) Amortization of the
intangibles acquired in June 2006 asset acquisition from Coloplast
AS and Mentor
|
|
Corporation
and the intangibles acquired in the January 2011 acquisition of
Laprolan from Fornix N.V.
|
|
Management
believes these assets are appreciating. This adjustment adds
back amortization
|
|
expense for
the three months ended December 31, 2011 and 2010 related to
certain intangibles.
|
|
The gross
amount of amortization expense for the three months ended December
31, 2011 and 2010 is
|
|
$218,000
and $163,000 net of taxes of $60,000 and $34,000 for net amounts of
$158,000 and $129,000
|
|
respectively.
|
|
|
|
|
|
|
(4) Compensation expense
mandated by ASC 718. This adjustment adds back the
compensation expense
|
|
recorded
for stock options granted to employees and directors that vested
during the three months ended
|
|
December
31, 2011 and 2010. The gross amount of compensation expense
for the three months ended
|
|
December
31, 2011 and 2010 is $316,000 and $295,000 net of taxes of $114,000
and $100,000 for net amounts of
|
|
$202,000
and $195,000 respectively.
|
|
|
|
|
|
Condensed
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
|
|
|
|
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$ 8,337,578
|
|
$
8,722,935
|
|
|
|
Marketable securities
|
|
|
25,218,950
|
|
26,182,308
|
|
|
|
Accounts receivable
|
|
|
8,455,770
|
|
8,644,332
|
|
|
|
Inventories
|
|
|
11,670,635
|
|
11,278,694
|
|
|
|
Prepaid expenses and other
assets
|
|
|
1,663,245
|
|
1,361,259
|
|
|
|
Deferred income tax
asset
|
|
|
1,992,998
|
|
1,618,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
57,339,176
|
|
57,808,023
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
12,171,612
|
|
12,052,685
|
|
|
Deferred income tax
asset
|
|
|
1,167,763
|
|
1,242,010
|
|
|
Intangible assets,
net
|
|
|
9,860,980
|
|
10,272,671
|
|
|
Goodwill
|
|
|
|
9,569,190
|
|
9,764,075
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
$ 90,108,721
|
|
$ 91,139,464
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$ 2,651,057
|
|
$
2,773,398
|
|
|
|
Accrued expenses
|
|
|
2,546,604
|
|
2,961,270
|
|
|
|
Short-term debt
|
|
|
18,330,905
|
|
17,862,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
23,528,566
|
|
23,596,853
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
1,806,711
|
|
1,565,764
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
64,773,444
|
|
65,976,847
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholder Equity
|
|
|
$ 90,108,721
|
|
$ 91,139,464
|
|
|
|
|
|
|
|
|
|
|
Summary
Statements Of Operations
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
$ 13,845,666
|
|
$ 10,946,405
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
6,877,193
|
|
5,542,274
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
6,968,473
|
|
5,404,131
|
|
|
Gross profit %
|
|
|
50.3%
|
|
49.4%
|
|
|
|
|
|
|
|
|
|
|
Costs and expense:
|
|
|
|
|
|
|
|
Marketing and selling
|
|
4,504,120
|
|
3,881,980
|
|
|
Research and
development
|
|
376,269
|
|
277,855
|
|
|
General and
administrative
|
|
2,108,813
|
|
1,709,093
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
6,989,202
|
|
5,868,928
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(20,729)
|
|
(464,797)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
Interest income
|
|
|
9,735
|
|
52,570
|
|
|
Interest expense
|
|
|
(81,150)
|
|
(31,259)
|
|
|
Other expense
|
|
|
(19,655)
|
|
(16,282)
|
|
|
|
|
|
|
|
|
|
|
Net loss before income
taxes
|
|
(111,799)
|
|
(459,768)
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
(36,452)
|
|
(290,686)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
(75,347)
|
|
$
(169,082)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share -
Basic
|
$
(0.01)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share -
Diluted
|
$
(0.01)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
Basic
|
|
|
12,136,125
|
|
12,127,268
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares:
|
|
|
|
|
|
|
Diluted
|
|
|
12,136,125
|
|
12,127,268
|
|
|
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP
Revenue to Non-GAAP Revenue in Constant Currency
|
|
For the Three months
ended
|
|
December 31, 2011 and
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
Three months
ended
|
|
|
|
December
31,
|
|
|
|
2011
|
2010
|
|
|
|
|
|
|
GAAP Sales as
Reported
|
|
$
13,845,666
|
$
10,946,405
|
|
Exchange rate as Reported
|
|
1.57
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency
Sales
|
|
$
13,845,666
|
$
10,923,574
|
|
(1) Exchange rate
used for Constant Currency Purposes
|
|
1.57
|
1.57
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
|
$
-
|
$
(22,831)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For illustrative purposes
constant currency translates prior period foreign sales at current
exchange rates.
|
|
For Rochester Medical
Corporation this is the conversion rate of pound sterling to US
dollars. The rate represents
|
|
the average exchange rate
for the respective three month period.
|
|
|
|
|
|
SOURCE Rochester Medical Corporation