Rochester Medical Corporation Announces Decision To Exit The Foley Catheter
Significant Cost Savings Expected
STEWARTVILLE, Minn., Nov. 6, 2012
STEWARTVILLE, Minn., Nov.6, 2012 /PRNewswire/ -- Rochester Medical
Corporation (NASDAQ:ROCM) today announced its decision to cease manufacturing
and marketing its line of Foley Catheters, including its StrataSI™ and
StrataNF™ advanced silicone Foley Catheters. The Company will continue to
fulfill orders for up to 90 days, during which time it expects to deplete the
majority of its Foley inventory.
The Company will focus on its core product lines of Intermittent Catheters and
Male External Catheters, both of which are successful, profitable, and growing
Earlier in the current year, the Company engaged Piper Jaffray to help explore
its options in exiting or selling the Foley Catheter business. After
completing that process, the Company and the Board of Directors determined
that exiting the Foley business presented the best alternative. The Company
will continue to own the intellectual property associated with its Foley
catheters in anticipation of deriving additional value from those assets in
Current annual sales of Foley Catheters are approximately $3.9 million,
representing approximately 6% of the Company's total sales. Costs and
expenses associated with manufacturing and marketing the product are
extensive, and this product line has not yet reached a point of positive
earnings contribution. As such, the Company estimates the decision to exit
this business will significantly enhance its profitability, adding an
estimated $3 to $4 million to its pre-tax profit line on an annual basis.
Commenting on today's announcement, Rochester Medical's CEO and President
Anthony J. Conway said, "This is clearly the right decision for the Company.
We have been unable to capture any significant share of the Foley market and
cannot justify the significant costs associated with that effort.
"I am pleased to say we will be a much stronger and more profitable company
going forward, and we will be tightly focused on the core parts of our
business that are robust and growing: Intermittent Catheters and Male External
Conway noted that a summary of the long-awaited National Healthcare System
Foley Catheter Study was released yesterday in the online publication of The
Lancet. The formal study will be published in The Lancet on November 9, 2012.
The study showed no significant difference among the three studied catheters,
including the Company's StrataNF™ Foley catheter, in reducing symptomatic
infections. Conway also noted, "Today's announcement to exit the Foley
business is the result of a very deliberate and thorough strategic evaluation
process conducted over the last several months, and nothing in the study's
results suggested we should change our course of action."
The Company plans to provide more clarity on the financial impacts of this
announcement on its fiscal 2012 fourth quarter earnings conference call to be
held next Tuesday, November 13, 2012 at 3:30 p.m. Central (4:30 p.m. Eastern).
For further details about the earnings call, please refer to the investor
section of the Rochester Medical website at http://www.rocm.com.
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.
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
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.
SOURCE Rochester Medical Corporation
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