ROCM Rochester Medical Corp. (MM)

Rochester Medical Reports Fourth Quarter and Annual Results STEWARTVILLE, Minn., Oct. 27 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (NASDAQ:ROCM) today announced operating results for its fourth quarter and fiscal year ending September 30, 2004. The Company reported sales of $3,595,000 for the quarter compared to $3,621,000 for the fourth quarter of last year. It reported net income of $157,000 or $.03 cents per share compared to a net income of $41,000 or $.01 per share for the fourth quarter of last year. Significantly increased sales of new products this quarter were offset primarily by decreased private label sales of base products. The increase in earnings was due primarily to reduced costs and expenses. For the fiscal year ended September 30, 2004 net sales were $15,011,000 with net income of $747,000 or $.14 per share compared to net sales of $14,655,000 with net income of $330,000 or $.06 per share for the previous fiscal year. The approximate 2% sales increase resulted from significant growth in sales of new products partially offset by a decrease in private label sales of the Company's base products. The 226% increase in earnings resulted from increased sales and margins and from reduced costs and expenses. Commenting on the quarter and the year, Rochester Medical CEO and President Anthony J. Conway said, "This year we expected sales of our new Advanced Intermittent Catheters, particularly the Hydrophilic version, would grow at a significant double digit rate, and we expected our base products, mainly Male External Catheters, would grow in single digits. Sales of Intermittent Catheters met our expectations, growing by $878,000 for the year, representing an overall annual growth rate of 185% that included a 45% growth rate for our own Rochester Medical Brand. Base product private label sales, however, were lower for the quarter and for the year with an overall decrease of $605,000 or 7%. Given the year's reduction in base product private label sales, I remain very pleased with the reception of our advanced Hydrophilic products. I am also pleased with our cost management during the quarter and year resulting in our bottom line achievement. "The decrease in private label sales was due mainly to an unanticipated overstocking by our customers during the very rapid initial conversion of the European market from latex male external Catheters to silicone male external catheters, and in part from inventory management changes at some of our major accounts. The conversion to silicone continues in Europe, but at a more modest pace. I believe our customers have worked through the overstock, and we now anticipate modest sales growth for our private label base products during the coming year. We also expect continued good sales growth in our Hydrophilic Intermittent Catheter line despite the recently announced patent litigation between Coloplast and Hollister that has somewhat slowed the European introduction of the products. "Additionally, we expect future growth from our new Hydrophilic Antibacterial Intermittent catheter which was recently cleared for market by the FDA. This new product is the only Intermittent Catheter that combines both Hydrophilic and Antibacterial properties, and I am very pleased to announce that it is being introduced into the marketplace today. This year, we will also be introducing both the Hydrophilic and Antibacterial Hydro Intermittent catheters in the closed system configurations that are preferred by many users. "In 2005 we also plan to introduce a new Advanced Foley Catheter. Our Advanced Foley Catheter is designed to enhance the performance characteristics of silicone Foley catheters as compared to latex Foley catheters. Based on tests results to date and on the very positive feedback we have received from clinical experts, I believe our Advanced Foley Catheter will be a strong addition to our advanced products group." Conway added, "We are in discussions with current and potential strategic partners to establish additional distribution channels for our products, and will report the developments as they occur." The immediately preceding statement contains forward-looking statements that involve risks and uncertainties, including the uncertainty of gaining acceptance of the anti-infection catheters and hydrophilic catheters in the marketplace, the uncertainty of new product introductions, the uncertainty of gaining new strategic relationships, the uncertainty of timing of private label sales revenues (particularly international customers), FDA and other regulatory review and response times, as well as 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 (Part II, Item 6) for the year ended September 30, 2003. Rochester Medical Corporation develops, manufactures, and markets latex-free disposable medical catheters and devices for urological and continence care applications. The Company markets under its own Rochester Medical brand and under private label arrangements. For further information, please contact Anthony J. Conway, President and Chief Executive Officer of Rochester Medical Corporation at (507) 533-9600. More information about Rochester Medical is available on its website at http://www.rocm.com/ . Rochester Medical has scheduled a conference call today at 4:00 p.m., C.D.T. regarding this announcement. The call is being webcast by Thompson/CCBN and can be accessed at Rochester Medical's website http://www.rocm.com/ . To listen live to the conference call via telephone, call: 1-800-659-1966, password 69859205 Replay will be available for seven days at: http://www.rocm.com/ or via telephone at 1-888-286-8010, password 30587402. Condensed Balance Sheets September 30, September 30, 2004 2003 Assets Current Assets Cash and equivalents $620,441 $1,764,499 Marketable securities 5,251,763 4,201,736 Accounts receivable 2,631,188 2,454,310 Inventories 3,945,313 3,542,619 Prepaid expenses and other assets 273,229 272,245 Total current assets 12,721,934 12,235,409 Property and equipment 8,442,427 8,663,662 Intangible assets 219,296 225,597 $21,383,657 $21,124,668 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $778,766 $507,580 Accrued expenses 595,145 1,098,578 Short term debt 34,000 34,000 Current maturities of capital leases 37,611 40,263 Deferred revenue 157,143 157,143 Total current liabilities 1,602,665 1,837,564 Long-term debt Long term debt 68,000 102,000 Capital leases, less current portion 103,814 164,806 Deferred revenue 721,429 878,571 Total long term debt 893,243 1,145,377 Stockholders' equity 18,887,749 18,141,727 $21,383,657 $21,124,668 Summary Statements Of Operations Three months ended Twelve months ended September 30, September 30, 2004 2003 2004 2003 Sales $3,594,543 $3,621,022 $15,011,419 $14,655,372 Cost of sales 2,342,807 2,334,875 9,615,427 9,574,414 Gross profit 1,251,736 1,286,147 5,395,992 5,080,958 Gross profit % 35% 36% 36% 35% Costs and expense: Marketing and selling 535,243 597,170 2,175,665 2,225,376 Research and development 154,250 239,521 706,157 874,715 General and administrative 432,648 444,632 1,856,858 1,808,838 Total operating expenses 1,122,141 1,281,323 4,738,680 4,908,929 Income from operations 129,595 4,824 657,312 172,029 Other income (expense) Interest income - Net 27,583 36,115 89,501 157,874 Net Income $157,178 $40,939 $746,813 $329,903 Earnings per common share - Basic $0.03 $0.01 $0.14 $0.06 Earnings per common share - Diluted $0.03 $0.01 $0.13 $0.06 Shares in per share computation Basic 5,439,491 5,421,183 5,434,338 5,379,954 Shares in per share computation Diluted 5,660,087 5,735,383 5,686,594 5,653,859 DATASOURCE: Rochester Medical Corporation CONTACT: Anthony J. Conway, President and Chief Executive Officer of Rochester Medical Corporation, +1-507-533-9600 Web site: http://www.rocm.com/

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