STEWARTVILLE, Minn.,
July 26, 2012 /PRNewswire/ --
Rochester Medical Corporation (NASDAQ:ROCM) today announced
operating results for its third quarter ended June 30, 2012.
The Company reported sales of $15,252,000 for the current quarter compared to
$14,281,000 for the third quarter of
last year. It also reported net income of $496,000 or $0.04
per diluted share compared to net loss of ($294,000) or ($0.02) per diluted share for the same quarter of
last year.
The approximate 7% increase (10% on a constant currency basis)
in sales resulted from a 5% increase in Rochester Medical Direct
Sales (9% on a constant currency basis) and a 16% increase in
Private Label Sales (16% on a constant currency basis).
Direct Sales include sales made directly to the end consumer
and include all Rochester branded
sales, U.K. Script Easy sales, and all Laprolan sales.
Constant currency basis assumes current exchange rates for all
periods in order to exclude the impact of foreign exchange
variations. In the third quarter of fiscal 2012, the U.S.
dollar was stronger versus the pound sterling and the Euro, thus
negatively affecting Rochester Medical Direct Sales by $425,000 due to foreign currency
translations.
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 $838,000 or
$0.07 per diluted share compared to
Non-GAAP Net Income of $442,000 or
$0.04 per diluted share for the third
quarter of last year. The increase for the current quarter is
primarily due to increased gross profits as a result of increased
sales.
Commenting on the quarter results, Rochester Medical's CEO and
President Anthony J. Conway said,
"The Company's direct business is doing very well, especially in
the United States and United
Kingdom. U.S. Direct Sales grew 34% and U.K. Direct Sales
rose 13% (17% on a constant currency basis). European sales
fell below our expectations with Laprolan sales down 17% (6% on a
constant currency basis), and the rest of Europe and the Middle East (EME) down 32%. The decline
in EME sales is due primarily to the timing of orders, which we
expect will rebound in the next quarter. We believe our
recent investments to strengthen the Laprolan team will begin to
produce significant gains by mid fiscal 2013. Looking ahead we
expect a strong final quarter for fiscal 2012 and increasing top
and bottom line strength in fiscal 2013."
Conference Call and Webcast
The Company will hold a quarterly conference call tomorrow
(July 27, 2012) to discuss its
earnings report. The call will begin at 10:00 a.m. central time (11:00 a.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
680.0894
|
International:
|
617
213.4860
|
Pass
code:
|
51614892
|
Preregistration:
|
https://www.theconferencingservice.com/prereg/key.process?key=PXYJ838DM
|
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:
|
48884549
|
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 quarterly reports on Forms 10-Q. 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 in addition
to net income calculated in accordance with generally accepted
accounting principles (GAAP) because management believes Non-GAAP
Net Income provides a more consistent basis for comparisons that
are not influenced by certain charges and non-cash expenses and are
therefore helpful in understanding Rochester Medical's underlying
operating results. Similarly, constant currency represents
reported sales with the cost/benefit of currency movements
removed. Management uses the measure to understand the growth
of the business on a constant dollar basis, as fluctuations in
exchange rates can distort the underlying growth of the business
both positively and negatively. While we recognize that
foreign exchange volatility is a reality for a global company, we
routinely review our Company performance on a constant dollar
basis, and we believe this also allows our shareholders to
understand better our Company's growth trends.
Non-GAAP Net Income and constant currency are not measures of
financial performance under GAAP, and should not be considered an
alternative to net income or any other measure of performance or
liquidity under GAAP. Non-GAAP Net Income and constant currency are
not comparable to information provided by other companies. Non-GAAP
Net Income and constant currency have limitations as analytical
tools and should not be considered in isolation or as a
substitution for analysis of our results as reported under
GAAP. Reconciliations of GAAP Net Income and Non-GAAP Net
Income, and reconciliations of sales under GAAP and sales on a
constant currency basis, are presented at the end of this press
release.
About Rochester Medical Corporation
Rochester Medical Corporation develops, manufactures, and
markets disposable medical catheters and devices for urological and
continence care applications. The Company also sells certain
ostomy and wound and scar care products and other brands of
urological products into the European marketplace.
For further information, please contact Anthony J. Conway, President and Chief Executive
Officer or David A. Jonas, Chief
Financial Officer of Rochester Medical Corporation at (507)
533-9600 or Parice Halbert, CFA, at
Westwicke Partners (443) 213-0500. More information about
Rochester Medical is available on its website at
http://www.rocm.com.
ROCHESTER
MEDICAL CORPORATION
|
Reconciliation of Reported GAAP Revenue to Non-GAAP
Revenue in Constant Currency
|
For the
Three and Nine months ended
|
June 30,
2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
|
|
|
|
GAAP Sales
as Reported
|
|
$ 15,252,218
|
$ 14,280,558
|
|
$ 44,356,495
|
$ 38,079,564
|
British Sterling Exchange rate as Reported
|
|
1.58
|
1.63
|
|
1.58
|
1.60
|
Euro
Exchange rate as Reported
|
|
1.28
|
1.44
|
|
1.31
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
Currency Sales
|
|
$ 15,252,218
|
$ 13,855,283
|
|
$ 44,356,495
|
$ 37,450,372
|
(1) Exchange rate used for Constant Currency
Purposes
|
1.58
|
1.58
|
|
1.58
|
1.58
|
(2) Exchange rate used for Constant Currency
Purposes
|
1.28
|
1.28
|
|
1.31
|
1.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect
of Constant Currency Illustration - British Sterling
|
$
-
|
$
(142,238)
|
|
$
-
|
$
(249,591)
|
Net Effect
of Constant Currency Illustration - Euros
|
|
$
-
|
$ (283,037)
|
|
$
-
|
$ (379,601)
|
|
|
|
|
|
|
|
Total Net
Effect of Constant Currency Illustration
|
|
$
-
|
$ (425,275)
|
|
$
-
|
$ (629,192)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For
illustrative purposes constant currency translates prior period
foreign sales at current exchange rates.
|
For Rochester Medical Corporation this
is the conversion rate of British pounds to US dollars. The
rate represents the
|
average exchange rate for the respective
three or nine month period.
|
(2) For
illustrative purposes constant currency translates prior period
foreign sales at current exchange rates.
|
For Rochester Medical Corporation this
is the conversion rate of Euros to US dollars. The rate
represents the
|
average exchange rate for the respective
three or nine month period.
|
ROCHESTER
MEDICAL CORPORATION
|
|
|
|
|
|
|
Reconciliation of Reported GAAP Net Income to
Non-GAAP Net Income
|
|
|
|
For the
Three and Nine months ended
|
|
|
|
|
|
|
June 30,
2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|
|
|
|
|
|
GAAP Net
Income (Loss) as Reported
|
|
$ 496,000
|
$ (294,000)
|
|
$ 1,023,000
|
$ (1,722,000)
|
|
|
|
|
|
|
|
Diluted
EPS as Reported
|
|
$
0.04
|
$
(0.02)
|
|
$
0.08
|
$
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for non-recurring unusual
items:
|
|
|
|
|
|
|
Merger and acquisition costs for
Laprolan (1)
|
|
|
304,000
|
|
|
695,000
|
Subtotal
|
|
-
|
304,000
|
|
-
|
695,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for recurring non-cash
expenses:
|
|
|
|
|
|
|
Intangible amortization (2)
|
|
158,000
|
195,000
|
|
474,000
|
518,000
|
ASC 718 compensation expense
(3)
|
|
184,000
|
237,000
|
|
644,000
|
883,000
|
Subtotal
|
|
342,000
|
432,000
|
|
1,118,000
|
1,401,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Net Income
|
|
$ 838,000
|
$ 442,000
|
|
$ 2,141,000
|
$ 374,000
|
|
|
|
|
|
|
|
Non-GAAP
Diluted EPS
|
|
$
0.07
|
$
0.04
|
|
$
0.17
|
$
0.03
|
|
|
|
|
|
|
|
Weighted
Average Shares - Diluted
|
|
12,373,340
|
12,587,175
|
|
12,340,045
|
12,616,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Merger
and acquisition costs related to the purchase of Laprolan B.V. from
Fornix N.V.
|
|
|
|
|
|
|
|
(2)
Amortization of the intangibles acquired in June 2006 asset
acquisition from Coloplast AS and Mentor
|
Corporation and the
intangibles acquired in the January 2011 acquisition of Laprolan
from Fornix N.V.
|
Management believes
these assets are appreciating. This adjustment adds back
amortization
|
expense for the three
and nine months ended June 30, 2012 and 2011 related to certain
intangibles.
|
The gross amount of
amortization expense for the three months ended June 30, 2012 and
2011 is
|
$218,000 and
$251,000 net of taxes of $60,000 and $56,000 for net amounts of
$158,000 and $195,000
|
respectively. The gross amount of amortization expense for
the nine months ended June 30, 2012 and 2011
|
is $654,000 and
$665,000 net of taxes of $180,000 and $147,000 for net amounts of
$474,000 and $518,000
|
respectively.
|
|
|
|
|
|
|
|
(3)
Compensation expense mandated by ASC 718. This adjustment
adds back the compensation expense
|
recorded for stock
options granted to employees and directors that vested during the
three and nine months ended
|
June 30, 2012 and
2011. The gross amount of compensation expense for the three
months ended June 30, 2012
|
and 2011 is $212,000
and $302,000 net of taxes of $28,000 and $65,000 for net amounts of
$184,000 and
|
$237,000
respectively. The gross amount of compensation expense for
the nine months ended June 30, 2012
|
and 2011 is $776,000
and $1,179,000 net of taxes of $132,000 and $296,000 for net
amounts of $644,000 and
|
$883,000
respectively.
|
Rochester
Medical Corporation
|
|
|
|
|
|
|
Press
Release - F12 Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary
Statements Of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
|
|
|
|
June
30,
|
|
June
30,
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$
15,252,218
|
|
$
14,280,558
|
|
$
44,356,495
|
|
$
38,079,563
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
7,801,896
|
|
7,280,930
|
|
22,507,964
|
|
19,316,610
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
7,450,322
|
|
6,999,628
|
|
21,848,531
|
|
18,762,953
|
|
Gross
profit %
|
|
|
48.8%
|
|
49.0%
|
|
49.3%
|
|
49.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Marketing
and selling
|
|
4,435,912
|
|
4,991,626
|
|
13,159,524
|
|
13,649,370
|
|
Research
and development
|
358,552
|
|
222,974
|
|
982,710
|
|
752,500
|
|
General
and administrative
|
1,942,941
|
|
2,276,495
|
|
6,179,778
|
|
6,626,269
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
6,737,405
|
|
7,491,095
|
|
20,322,012
|
|
21,028,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations
|
|
712,917
|
|
(491,467)
|
|
1,526,519
|
|
(2,265,186)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
8,917
|
|
49,601
|
|
28,117
|
|
154,148
|
|
Interest
expense
|
|
-
|
|
(70,239)
|
|
(89,545)
|
|
(225,094)
|
|
Other
income
|
|
|
13,335
|
|
(22,603)
|
|
42,392
|
|
(51,750)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) before income taxes
|
735,169
|
|
(534,708)
|
|
1,507,483
|
|
(2,387,882)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense (benefit)
|
|
239,245
|
|
(240,744)
|
|
484,392
|
|
(665,439)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
$
495,924
|
|
$
(293,964)
|
|
$
1,023,091
|
|
$
(1,722,443)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share - Basic
|
$
0.04
|
|
$
(0.02)
|
|
$
0.09
|
|
$
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share - Diluted
|
$
0.04
|
|
$
(0.02)
|
|
$
0.08
|
|
$
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares:
|
|
12,008,420
|
|
12,316,878
|
|
12,036,124
|
|
12,222,146
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares:
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
12,373,340
|
|
12,316,878
|
|
12,340,045
|
|
12,222,146
|
|
|
|
|
|
|
|
|
|
|
|
|
Rochester
Medical Corporation
|
|
|
|
|
|
Press
Release - F12 Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
June
30,
|
|
September
30,
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
|
$
11,589,268
|
|
$
8,722,935
|
|
|
Marketable
securities
|
|
|
6,792,119
|
|
26,182,308
|
|
|
Accounts
receivable
|
|
|
8,906,666
|
|
8,644,332
|
|
|
Inventories
|
|
|
10,417,080
|
|
11,278,694
|
|
|
Prepaid
expenses and other assets
|
|
1,529,736
|
|
1,361,259
|
|
|
Deferred
income tax asset
|
|
|
2,006,611
|
|
1,618,495
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
41,241,480
|
|
57,808,023
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
11,874,770
|
|
12,052,685
|
|
Deferred
income tax asset
|
|
|
1,176,252
|
|
1,242,010
|
|
Intangible
assets, net
|
|
|
9,509,672
|
|
10,272,671
|
|
Goodwill
|
|
|
|
8,860,377
|
|
9,094,725
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
$
72,662,551
|
|
$
90,470,114
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
2,729,040
|
|
$
2,773,398
|
|
|
Accrued
expenses
|
|
|
2,408,064
|
|
2,961,270
|
|
|
Short-term
debt
|
|
|
-
|
|
17,862,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
5,137,104
|
|
23,596,853
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities
|
|
|
1,198,635
|
|
896,414
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
66,326,812
|
|
65,976,847
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholder Equity
|
|
$
72,662,551
|
|
$
90,470,114
|
|
|
|
|
|
|
|
|
|
SOURCE Rochester Medical Corporation