STEWARTVILLE, Minn.,
April 29 /PRNewswire-FirstCall/ --
Rochester Medical Corporation (Nasdaq: ROCM) today announced
operating results for its second quarter ended March 31, 2010.
The Company reported sales of $9,845,000 for the current quarter compared to
$8,445,000 for the second quarter of
last year. It also reported net loss of $351,000 or ($.03)
per diluted share compared to net income of $361,000 or $.03
per diluted share for the same quarter of last year.
The approximate 17% increase in sales (14% on a constant
currency basis) resulted from a 32% increase in Rochester Medical
Branded Sales (27% on a constant currency basis), partially offset
by a 12% decrease in Private Label Sales (12% 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. In the second quarter of 2010
the U.S. dollar was somewhat weaker versus the pound sterling, thus
having a positive effect on Rochester Medical Branded Sales levels
in translated U.S. dollars given the significant volume of branded
sales in the United Kingdom.
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 $140,000 or
$.01 per diluted share compared to
Non-GAAP Net Income of $207,000 or
$.02 per diluted share for the second
quarter of last year. The decrease for the current quarter is
primarily attributable to increased investment in sales and
marketing programs (particularly with respect to the Company's
FemSoft® product) and lower gross margin due to rapid growth of
advanced Rochester Medical Branded products which are not yet at
sales volumes needed for margin efficiencies.
Commenting on today's announcement Rochester Medical CEO and
President Anthony Conway said, "We
are very pleased with our continuing excellent growth of Rochester
Medical Branded Sales. The overall 32% increase is very
strong, and the growth in our main product areas of focus is even
better. Combined sales of Rochester Medical Branded products
in the U.S. and U.K. market grew 35% due in large part to a 79%
increase in Intermittent Catheter sales in the combined market, and
also due to a 69% increase in Foley Catheter sales in the U.S.
marketplace. These results reflect the Company's ongoing
strategy to invest in sales and marketing programs for our advanced
Rochester Medical Branded products. The Magic3™ Intermittent
technology and the new StrataSI™ and StrataNF™ Foley Catheters are
being very well received. Rochester Medical Branded Sales
were 74% of total sales revenue this quarter. Private Label
Sales, which were down 12%, continue to fluctuate on a quarterly
basis."
Conway also commented on the pilot FemSoft® sales and marketing
effort underway in North Carolina
and Florida and also in the U.K.
saying, "We started a significant Direct To Consumer pilot campaign
in February in coordination with clinical institutions and a
Distributor, primarily in the Charlotte
N.C. and South Florida
area. So far this year we have invested over $600,000 in the campaign, most of it in Q2.
As expected, consumer and clinician interest is very high,
but it is still too early to tell how many of the interested women
will begin using the product. We expect to be able to
evaluate the continuing campaign's progress and effectiveness later
in the year and then map out the future course of action."
In conclusion Conway stated, "More than ever, the marketplace is
recognizing and requesting the uniqueness and superiority of
Rochester Medical's technology and products. We look forward
to continuing that trend."
Rochester Medical has provided Non-GAAP Net Income in addition
to earnings 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 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.
This press release contains "forward-looking statements" that
are based on currently available information, operating plans and
management's expectations about future events and trends.
They inherently involve 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, 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, 2009 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.
The Company will hold a quarterly conference call 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/CCBN and can be accessed
at Rochester Medical's website at www.rocm.com. To listen
live to the conference call via telephone, call:
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Domestic:
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888.679.8037
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International:
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617.213.4849
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Pass code:
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98857904
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Pre Registration: https://www.theconferencingservice.com/prereg/key.process?key=PEEYXUKPQ
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Replay will be available for seven days at
www.rocm.com or via telephone
at:
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Domestic:
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888-286-8010
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|
International:
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617-801-6888
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Pass code:
|
31256772
|
|
|
|
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|
Individual investors can listen to the call at
www.fulldisclosure.com, Thomson/CCBN's individual investor portal,
powered by StreetEvents. Institutional investors can access
the call via Thomson's password-protected event management site,
StreetEvents (www.streetevents.com).
Rochester Medical Corporation develops, manufactures, and
markets disposable medical catheters and devices for urological and
continence care applications. The Company markets under its
own Rochester Medical® brand and under existing private label
arrangements.
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. 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, 2010
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March
31,
|
|
March
31,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
GAAP Sales as Reported
|
$
9,845,480
|
$
8,445,029
|
|
$
20,077,292
|
$
16,881,114
|
|
Exchange
rate as Reported
|
1.56
|
1.43
|
|
1.60
|
1.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Sales
|
$
9,845,480
|
$
8,661,240
|
|
$
20,077,292
|
$
17,204,829
|
|
(1) Exchange rate used for
Constant Currency Purposes
|
1.56
|
1.56
|
|
1.60
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Effect of Constant Currency
Illustration
|
$
-
|
$
216,211
|
|
$
-
|
$
323,715
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
ROCHESTER MEDICAL
CORPORATION
|
|
Reconciliation of Reported GAAP Net
Income to Non-GAAP Net Income
|
|
For the Three and Six months
ended
|
|
March 31, 2010 and 2009
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
March
31,
|
|
March
31,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss) as
Reported
|
$
(351,000)
|
$
361,000
|
|
$
(521,000)
|
$
415,000
|
|
|
|
|
|
|
|
|
Diluted EPS as Reported
|
$
(0.03)
|
$
0.03
|
|
$
(0.04)
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for non-recurring unusual
items:
|
|
|
|
|
|
|
Settlement income after taxes
(1)
|
-
|
(637,000)
|
|
-
|
(637,000)
|
|
Subtotal
|
-
|
(637,000)
|
|
-
|
(637,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for recurring non-cash
expenses:
|
|
|
|
|
|
|
Intangible amortization
(2)
|
129,000
|
129,000
|
|
258,000
|
258,000
|
|
ASC 718 compensation expense
(3)
|
362,000
|
354,000
|
|
550,000
|
476,000
|
|
Subtotal
|
491,000
|
483,000
|
|
808,000
|
734,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
|
$
140,000
|
$
207,000
|
|
$
287,000
|
$
512,000
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted EPS
|
$
0.01
|
$
0.02
|
|
$
0.02
|
$
0.04
|
|
|
|
|
|
|
|
|
Weighted Average Shares -
Diluted
|
12,768,464
|
12,671,119
|
|
12,703,486
|
12,663,538
|
|
|
|
|
|
|
|
|
(1) Settlement
income received January 15, 2009 from Covidien Ltd. of $1,000,000,
$637,000 after taxes of $363,000. This adjustment reduces net
income for amounts received net of taxes paid in connection with
one-time settlement of certain litigation. These amounts were
recorded in Other Income in the Statement of Operations for the
fiscal year ended September 30, 2009.
|
|
|
|
(2) Amortization
of the intangibles acquired in June 2006 asset acquisition from
Coloplast AS and Mentor Corporation. Management believes
these assets are appreciating. This adjustment adds back
amortization expense for the three and sixth months ended March 31,
2010 and 2009 related to certain intangibles. The gross amount of
amortization is $163,000 per quarter after taxes of $34,000 for a
net amount of $129,000.
|
|
|
|
(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 sixth
months ended March 31, 2010 and 2009. The gross amount of
compensation expense for the three months ended March 31, 2010 and
2009 is $565,000 and $478,000 net of taxes of $203,000 and $172,000
for net amounts of $362,000 and $354,000 respectively. The
gross amount of compensation expense for the six months ended March
31, 2010 and 2009 is $850,000 and $743,000 net of taxes of $300,000
and $267,000 for net amounts of $550,000 and $476,000
respectively.
|
|
|
|
|
|
|
|
Condensed Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
3,847,848
|
|
$
6,365,584
|
|
|
|
Marketable securities
|
|
|
31,943,237
|
|
29,896,740
|
|
|
|
Accounts receivable
|
|
|
7,364,565
|
|
6,418,656
|
|
|
|
Inventories
|
|
|
9,031,412
|
|
9,710,234
|
|
|
|
Prepaid expenses and other
assets
|
|
|
1,313,918
|
|
1,076,183
|
|
|
|
Deferred income tax
|
|
|
1,118,207
|
|
1,153,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
54,619,187
|
|
54,621,361
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
10,111,072
|
|
9,683,808
|
|
|
Deferred income tax
|
|
|
1,003,902
|
|
768,874
|
|
|
Patents, net
|
|
|
224,473
|
|
224,815
|
|
|
Intangible assets, net
|
|
|
5,612,826
|
|
6,017,944
|
|
|
Goodwill
|
|
|
|
4,407,481
|
|
4,648,165
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
$
75,978,941
|
|
$
75,964,967
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
2,199,712
|
|
$
1,755,472
|
|
|
|
Accrued expenses
|
|
|
1,418,187
|
|
1,527,352
|
|
|
|
Short-term debt
|
|
|
2,752,014
|
|
2,786,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
6,369,913
|
|
6,069,446
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
62,424
|
|
55,889
|
|
|
|
Long-term debt
|
|
|
1,056,526
|
|
1,019,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
|
|
1,118,950
|
|
1,075,624
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
68,490,078
|
|
68,819,897
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholder's
Equity
|
|
|
$
75,978,941
|
|
$
75,964,967
|
|
|
|
|
|
|
|
|
|
|
Summary Statements
Of Operations
|
|
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
Three
months
ended
|
|
Six
months
ended
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
9,845,480
|
|
$
8,445,029
|
|
$
20,077,292
|
|
$
16,881,114
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
5,186,396
|
|
4,030,671
|
|
10,805,100
|
|
8,541,842
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
4,659,084
|
|
4,414,358
|
|
9,272,192
|
|
8,339,272
|
|
|
Gross profit %
|
47%
|
|
52%
|
|
46%
|
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
2,871,675
|
|
2,448,122
|
|
5,648,992
|
|
5,014,384
|
|
|
Research and development
|
241,390
|
|
299,103
|
|
684,418
|
|
616,763
|
|
|
General and administrative
|
1,747,604
|
|
1,757,499
|
|
3,438,351
|
|
3,123,255
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
4,860,669
|
|
4,504,724
|
|
9,771,761
|
|
8,754,402
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
(201,585)
|
|
(90,366)
|
|
(499,569)
|
|
(415,130)
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
14,943
|
|
34,256
|
|
43,952
|
|
201,528
|
|
|
Interest expense
|
(39,435)
|
|
(80,354)
|
|
(80,553)
|
|
(164,128)
|
|
|
Other income
|
-
|
|
1,000,000
|
|
-
|
|
1,200,442
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before income
taxes
|
(226,077)
|
|
863,536
|
|
(536,170)
|
|
822,712
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense(benefit)
|
125,339
|
|
502,334
|
|
(15,596)
|
|
407,883
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(351,416)
|
|
$
361,202
|
|
$
(520,574)
|
|
$
414,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share -
Basic
|
$
(0.03)
|
|
$
0.03
|
|
$
(0.04)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share -
Diluted
|
$
(0.03)
|
|
$
0.03
|
|
$
(0.04)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
12,195,334
|
|
12,083,169
|
|
12,193,441
|
|
12,031,460
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares:
|
|
|
|
|
|
|
|
|
|
Diluted
|
12,195,334
|
|
12,671,119
|
|
12,193,441
|
|
12,663,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Rochester Medical Corporation