2014

Rochester Medical Reports Second Quarter Results

STEWARTVILLE, Minn., April 24, 2012 /PRNewswire/ -- Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its second quarter ended March 31, 2012.

The Company reported record sales of $15,259,000 for the current quarter compared to $12,853,000 for the second quarter of last year. It also reported net income of $603,000 or $0.05 per diluted share compared to net loss of ($1,259,000) or ($0.10) per diluted share for the same quarter of last year.

The approximate 19% increase in sales (20% on a constant currency basis) resulted from a 17% increase in Rochester Medical Direct Sales (20% on a constant currency basis) and a 24% increase in Private Label Sales (24% 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 second quarter of fiscal 2012, the U.S. dollar was somewhat stronger versus the pound sterling and the Euro, thus negatively affecting Rochester Medical Direct Sales growth levels in actual U.S. dollars given the significant volume of direct sales in the United Kingdom and The Netherlands.

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 $920,000 or $0.08 per diluted share compared to Non-GAAP Net Loss of ($437,000) or ($0.04) per diluted share for the second 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 second quarter results, Rochester Medical's CEO and President Anthony J. Conway said, "We are very pleased with our recent progress.  Our Direct Sales are strengthening nicely.  Overall U.S. Direct Sales rose 32% over last year's second quarter with U.S. Home Care sales growing at a strong 39% pace and U.S. Acute Care sales rising 15%.  These numbers continue to reflect the increasing effectiveness of our U.S. Sales and Marketing team and the increasing acceptance of our advanced catheter technologies.  The United Kingdom also reported solid constant currency growth of 18%.  Laprolan sales declined 11% year-over-year in constant currency, however we expect improving sales going forward driven by recent investments to strengthen the Sales and Management team in that part of our organization.  International Direct Sales outside of the U.K. and the markets served by Laprolan were very strong this quarter, increasing 69% year-over-year.  Private Label sales showed strong growth of 24%, but as we have previously noted, these sales can fluctuate significantly from quarter to quarter due to the timing of orders."

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:

888 680.0892

International:

617 213.4858

Pass code:

76674231

Preregistration:


https://www.theconferencingservice.com/prereg/key.process?key=P77FPAVK9




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:

54644869

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 Revenue to Non-GAAP Revenue in Constant Currency




For the Three and Six months ended







March 31, 2012 and 2011























(unaudited)


(unaudited)



Three months ended


Six months ended



March 31,


March 31,



2012

2011


2012

2011








GAAP Sales as Reported


$ 15,258,611

$ 12,852,601


$ 29,104,277

$ 23,799,006

         British Sterling Exchange rate as Reported


1.57

1.60


1.57

1.59

         Euro Exchange rate as Reported


1.31

1.37


















Constant Currency Sales


$ 15,258,611

$ 12,671,515


$ 29,104,277

$ 23,595,089

  (1)  Exchange rate used for Constant Currency Purposes

1.57

1.57


1.57

1.57

  (2)  Exchange rate used for Constant Currency Purposes

1.31

1.31


1.31

1.31















Net Effect of Constant Currency Illustration - British Sterling

$                   -

$       (84,522)


$                   -

$     (107,353)

Net Effect of Constant Currency Illustration - Euros


$                   -

$       (96,564)


$                   -

$       (96,564)








Total Net Effect of Constant Currency Illustration


$                   -

$     (181,086)


$                   -

$     (203,917)















(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 six 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 six month period.  The six month rate is the same as the three month 

   rate as the acquisition of Laprolan was effective January 1, 2011.












 

ROCHESTER MEDICAL CORPORATION







Reconciliation of Reported GAAP Net Income to Non-GAAP Net Income





For the Three and Six months ended







March 31, 2012 and 2011























(unaudited)


(unaudited)



Three months ended


Six months ended



March 31,


March 31,



2012

2011


2012

2011








GAAP Net Income (Loss) as Reported


$    603,000

$(1,259,000)


$    527,000

$(1,428,000)








Diluted EPS as Reported


$           0.05

$          (0.10)


$           0.04

$          (0.12)















Adjustments for non-recurring unusual items:







   Merger and acquisition costs for Laprolan (1)



255,000



391,000

Subtotal


-

255,000


-

391,000















Adjustments for recurring non-cash expenses:







   Intangible amortization (2)


158,000

195,000


316,000

323,000

   ASC 718 compensation expense (3)


159,000

372,000


361,000

567,000

Subtotal


317,000

567,000


677,000

890,000















Non-GAAP Net Income


$    920,000

$    (437,000)


$ 1,204,000

$    (147,000)








Non-GAAP Diluted EPS


$           0.08

$          (0.04)


$           0.10

$          (0.01)








Weighted Average Shares - Diluted


12,235,701

12,223,347


12,258,402

12,174,780















(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 six months ended March 31, 2012 and 2011 related to certain intangibles.


      The gross amount of amortization expense for the three months ended March 31, 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 six months ended March 31, 2012 and 2011

       is $436,000 and $414,000 net of taxes of $120,000 and $91,000 for net amounts of $316,000 and $323,000

       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, 2012 and 2011.  The gross amount of compensation expense for the three months ended March 31, 2012

      and 2011 is $248,000 and $582,000 net of taxes of $89,000 and $210,000 for net amounts of $159,000 and

      $372,000 respectively.  The gross amount of compensation expense for the six months ended March 31, 2012  

      and 2011 is $564,000 and $877,000 net of taxes of $203,000 and $310,000 for net amounts of $361,000 and

      $567,000 respectively.














 

ROCHESTER MEDICAL CORPORATION








Press Release - F12 Second Quarter












































Summary Statements Of Operations 


















(unaudited)


(unaudited)






Three months ended


Six months ended






March 31,


March 31,






2012


2011


2012


2011

























Sales



$15,258,611


$12,852,601


$29,104,277


$23,799,006













Cost of sales



7,828,875


6,493,407


14,706,068


12,035,681













Gross profit



7,429,736


6,359,194


14,398,209


11,763,325


Gross profit %



48.7%


49.5%


49.5%


49.4%













Costs and expenses:










Marketing and selling


4,219,492


5,012,747


8,723,612


8,894,727


Research and development

247,889


251,672


624,158


529,527


General and administrative

2,128,024


2,403,698


4,236,837


4,112,791













Total operating expenses


6,595,405


7,668,117


13,584,607


13,537,045













Income (loss) from operations


834,331


(1,308,923)


813,602


(1,773,720)













Other income (expense)






















Interest income



9,465


51,977


19,200


104,547


Interest expense


(8,395)


(123,596)


(89,545)


(154,855)


Other income



48,712


(12,865)


29,057


(29,147)













Net income (loss) before income taxes

884,113


(1,393,407)


772,314


(1,853,175)













Income tax expense(benefit)


281,599


(134,009)


245,147


(424,695)













Net income (loss)



$     602,514


$ (1,259,398)


$     527,167


$ (1,428,480)

























Earnings (loss) per common share - Basic

$          0.05


$         (0.10)


$          0.04


$         (0.12)













Earnings (loss) per common share - Diluted

$          0.05


$         (0.10)


$          0.04


$         (0.12)













Weighted Average Shares:


12,003,167


12,223,347


12,049,900


12,174,780


Basic






















Weighted Average Shares:










Diluted



12,235,701


12,223,347


12,258,402


12,174,780













 

Rochester Medical Corporation






Press Release - F12 Second Quarter 

































Condensed Balance Sheets
















(unaudited)









March 31,


September 30,







2012


2011










Assets
















Current Assets








Cash and equivalents



$  8,813,309


$   8,722,935



Marketable securities



6,810,597


26,182,308



Accounts receivable



9,931,708


8,644,332



Inventories



11,367,361


11,278,694



Prepaid expenses and other assets


1,607,363


1,361,259



Deferred income tax asset



2,036,493


1,618,495













Total current assets



40,566,831


57,808,023











Property and equipment, net



12,181,449


12,052,685


Deferred income tax asset



1,180,015


1,242,010


Intangible assets, net



10,040,656


10,272,671


Goodwill




9,859,132


9,764,075











Total Assets



$73,828,083


$  91,139,464










Liabilities and Stockholders' Equity
















Current liabilities:








Accounts payable



$  2,580,460


$   2,773,398



Accrued expenses



2,698,674


2,961,270



Short-term debt



-


17,862,185













Total current liabilities



5,279,134


23,596,853











Long-term liabilities



1,931,143


1,565,764











Stockholders' equity



66,617,806


65,976,847











Total Liabilities and Stockholder Equity


$73,828,083


$  91,139,464










 

SOURCE Rochester Medical Corporation



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