Rochester Medical Reports Fiscal 2013 Second Quarter Results

Apr 25, 2013, 16:00 ET from Rochester Medical Corporation

STEWARTVILLE, Minn., April 25, 2013 /PRNewswire/ -- Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its second quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20121228/CG34999LOGO)

The Company reported sales of $16,635,000 for the current quarter compared to $15,427,000 for the second quarter of last year.  The Company also reported net income of $1,199,000 or $0.10 per diluted share compared to $603,000 or $0.05 per diluted share for the same period last year.

The approximately 8% increase in sales (8% on a constant currency basis) resulted from a 10% increase in Rochester Medical Direct sales (11% on a constant currency basis) partially offset by a 1% decrease in Private Label sales (1% decrease on a constant currency basis).  Constant currency basis assumes current exchange rates for all periods in order to exclude the impact of foreign exchange variations.

The Company announced in November 2012 its decision to cease manufacturing and marketing its line of Foley Catheters.  Excluding Foley Catheter sales from the second quarter of last year and this year, overall Direct sales growth was 13% (14% on a constant currency basis).

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 $1,488,000 or $0.12 per diluted share compared to Non-GAAP Net Income of $920,000 or $0.08 per diluted share for the first quarter of last year.  The increase in Non-GAAP Net Income in the second quarter was primarily due to increased gross profits as a result of higher sales revenue.

Commenting on the second quarter results, Rochester Medical's CEO and President Anthony J. Conway said, "We continue to make nice progress, especially in the United States and United Kingdom where Direct Sales, excluding Foley Catheters, grew 24% and 23% respectively.  We look forward to further progress in the second-half of fiscal 2013 driven by continued share gains in our primary strategic market, serving the patient population in the Home Care channel."

Conference Call and Webcast

The Company will hold a quarterly conference call on Thursday, April 25, 2013 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:

888 679 8018

International:

617 213 4845

Pass code:

69140545

PreRegistration:

https://www.theconferencingservice.com/prereg/key.process?key=PFY3WDB6C

 

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:

48212906

 

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, 2012, 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 Mike Piccinino, at Westwicke Partners (443) 213-0500.  More information about Rochester Medical is available on its website at http://www.rocm.com.

 

Rochester Medical Corporation

Press Release - F13 Second Quarter

Condensed Consolidated Statements Of Operations

(unaudited)

(unaudited)

Three months ended

Six months ended

March 31,

March 31,

2013

2012

2013

2012

Sales

$  16,635,070

$  15,427,275

$  33,887,078

$  29,399,882

Cost of sales

8,239,481

7,822,941

17,018,241

14,684,409

Gross profit

8,395,589

7,604,334

16,868,837

14,715,473

Gross profit %

50.5%

49.3%

49.8%

50.1%

Costs and expense:

Marketing and selling

4,162,179

4,394,090

8,711,223

9,040,876

Research and development

312,023

247,889

651,181

624,158

General and administrative

2,148,164

2,128,024

4,355,706

4,236,837

Total operating expenses

6,622,366

6,770,003

13,718,110

13,901,871

Income from operations

1,773,223

834,331

3,150,727

813,602

Other income (expense)

(50,081)

49,782

(39,818)

(41,288)

Net income before income taxes

1,723,142

884,113

3,110,909

772,314

Income tax expense 

523,892

281,599

899,514

245,147

Net income 

$    1,199,250

$       602,514

$    2,211,395

$       527,167

Net income per common share - Basic

$            0.10

$            0.05

$            0.18

$            0.04

Net income per common share - Diluted

$            0.10

$            0.05

$            0.18

$            0.04

Weighted Average Shares:

Basic

12,146,969

12,003,167

12,092,003

12,049,900

Weighted Average Shares:

Diluted

12,604,099

12,235,701

12,482,558

12,258,402

 

Rochester Medical Corporation

Press Release - F13 Second Quarter

Condensed Consolidated Balance Sheets

(unaudited)

March 31,

September 30,

2013

2012

Assets

Current Assets

Cash and equivalents

$16,291,745

$  13,921,363

Marketable securities

6,499,900

6,779,695

Accounts receivable

10,776,753

11,008,429

Inventories

9,265,672

9,883,651

Prepaid expenses and other assets

1,905,531

1,726,908

Deferred income tax asset

1,327,652

1,287,177

Total current assets

46,067,253

44,607,223

Property and equipment, net

12,769,153

11,862,072

Deferred income tax asset

1,088,406

1,030,994

Intangible assets, net

8,806,573

9,377,354

Goodwill

8,785,417

9,053,091

Total Assets

$77,516,802

$  75,930,734

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$  2,252,362

$   3,070,329

Accrued expenses

3,535,273

3,427,397

Total current liabilities

5,787,635

6,497,726

Long-term liabilities

1,128,641

1,137,212

Stockholders' equity

70,600,526

68,295,796

Total Liabilities and Stockholder Equity

$77,516,802

$  75,930,734

 

ROCHESTER MEDICAL CORPORATION

Press Release - F13 Second Quarter

For the Six months ended

March 31, 2013 and 2012

(unaudited)

(unaudited)

Three months ended

Six months ended

March 31,

March 31,

2013

2012

2013

2012

GAAP Net Income as Reported

$ 1,199,250

$    603,000

$ 2,211,395

$    527,000

Net Income Per Share - Diluted as Reported

$           0.10

$           0.05

$           0.18

$           0.04

Adjustments for non-recurring unusual items:

  Severance costs (1)

13,000

-

124,000

-

Subtotal

13,000

-

124,000

-

Adjustments for recurring non-cash expenses:

   Intangible amortization (2)

149,000

158,000

304,000

316,000

   ASC 718 compensation expense (3)

127,000

159,000

275,000

361,000

Subtotal

276,000

317,000

579,000

677,000

Non-GAAP Net Income

$ 1,488,250

$    920,000

$ 2,914,395

$ 1,204,000

Non-GAAP Diluted EPS

$           0.12

$           0.08

$           0.23

$           0.10

Weighted Average Shares - Diluted

12,604,099

12,235,701

12,482,558

12,258,402

 

(1) Severance costs associated with our exiting of the Foley Catheter market. The company announced they were exiting the Foley Catheter market on November 6, 2012. This adjustment adds back severance costs of certain employees for the three months ended March 31, 2013. The gross amount of the severance costs for the three months ended March 31, 2013 is $19,000 net of taxes of $6,000 for a net amount of $13,000. The gross amount of the severance costs for the six months ended March 31, 2013 is $171,000 net of taxes of $47,000 for a net amount of $124,000.

(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. This adjustment adds back amortization expense for the three and six months ended March 31, 2013 and 2012 related to certain intangibles. The gross amount of amortization expense for the three months ended March 31, 2013 and 2012 is $213,000 and $218,000 net of taxes of $64,000 and $60,000 for net amounts of $149,000 and $158,000 respectively. The gross amount of amortization expense for the six months ended March 31, 2013 and 2012 is $426,000 and $436,000 net of taxes of $122,000 and $120,000 for net amounts of $304,000 and $316,000 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 six months ended March 31, 2013 and 2012. The gross amount of compensation expense for the three months ended March 31, 2013 and 2012 is $182,000 and $248,000 net of taxes of $55,000 and $89,000 for net amounts of $127,000 and $159,000 respectively. The gross amount of compensation expense for the six months ended March 31, 2013 and 2012 is $384,000 and $564,000 net of taxes of $109,000 and $203,000 for net amounts of $275,000 and $361,000 respectively.

 

ROCHESTER MEDICAL CORPORATION

Press Release - F13 Second Quarter

For the Six months ended

March 31, 2013 and 2012

(unaudited)

(unaudited)

Three months ended

Six months ended

March 31,

March 31,

2013

2012

2013

2012

GAAP Sales as Reported

$16,635,070

$15,427,275

$ 33,887,078

$ 29,399,882

    British Sterling Exchange rate as reported

1.55

1.57

1.58

1.57

    Euro Exchange rate as reported

1.32

1.31

1.31

1.33

Constant Currency Sales

$16,635,070

$15,367,079

$ 33,887,078

$ 29,359,845

   (1) Exchange rate used for Constant Currency Purposes

1.55

1.55

1.58

1.58

   (2) Exchange rate used for Constant Currency Purposes

1.32

1.32

1.31

1.31

Net Effect of Constant Currency Illustration - British Sterling

$ -

$ 10,529

$ -

$ (74,742)

Net Effect of Constant Currency Illustration - Euros

$ -

$ (70,725)

$ -

$ 34,705

Total Net Effect of Constant Currency Illustration

$ -

$ (60,196)

$ -

$ (40,037)

 

(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 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 month period.

SOURCE Rochester Medical Corporation



RELATED LINKS

http://www.rocm.com