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Rochester Medical Reports Record Fourth Quarter and Fiscal Year Results



   Rochester Medical Reports Record Fourth Quarter and Fiscal Year Results

Provides An Update to Fiscal 2013 Outlook

PR Newswire

STEWARTVILLE, Minn., Nov. 13, 2012

STEWARTVILLE, Minn., Nov. 13, 2012 /PRNewswire/ -- Rochester Medical
Corporation (NASDAQ: ROCM) today announced operating results for its fourth
quarter and fiscal year ended September 30, 2012.

The Company reported record sales and record income from operations for the
fourth quarter. Sales were $16,733,000 compared to $14,839,000 for the fourth
quarter of last year.  Income from operations for the quarter was $1,687,000
compared to income from operations of $588,000 in the fourth quarter of last
year.  Net income for the fourth quarter of fiscal 2012 was $1,027,000 or
$0.08 per diluted share compared to net income of $407,000 or $0.03 per
diluted share for the fourth quarter of last year.

Fourth quarter sales increased 13% year over year (16% on a constant currency
basis) driven by a 14% increase in Rochester Medical Direct Sales (19% on a
constant currency basis) and a 7% increase in Private Label Sales (7% 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 fourth 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 $1,366,000 or $0.11 per diluted share compared to Non-GAAP Net Income of
$822,000 or $0.07 per diluted share for the fourth quarter of last year.  The
increase in Non-GAAP net income for the fourth quarter is primarily due to
increased gross profit as a result of the higher sales versus last year.

For the fiscal year ended September 30, 2012, the Company reported record
sales of $61,089,000 compared to sales of $52,919,000 for the previous year. 
It also had a record $3,213,000 of income from operations compared to a loss
from operations of ($1,677,000) in fiscal 2011.  The 15% increase in annual
total sales (18% on constant currency basis) resulted from an 18% increase in
Rochester Medical Direct Sales (21% on a constant currency basis) and a 6%
increase in Private Label Sales (6% on a constant currency basis).  The
Company reported net income for the year of $2,050,000 or $0.17 per diluted
share compared to a net loss of ($1,315,000) or ($0.11) per diluted share for
the previous year.  The increase in net income for this fiscal year was
primarily attributable to increased gross profit as a result of higher sales.

Non-GAAP Net Income for the current year was $3,507,000 or $0.28 per diluted
share compared to Non-GAAP Net Income of $1,073,000 or $0.09 per diluted share
for the previous year.  The increase was primarily due to increased gross
profit as a result of higher sales.

Commenting on the results, Rochester Medical's CEO and President Anthony J.
Conway said, "We had a solid quarter and a good year.  Our Direct Sales
continue to grow nicely, especially our Intermittent Catheters which we sell
into an $800 million global market.  In the fourth quarter on a global basis,
Intermittent Catheters sales were up 44% overall.  In the U.S., Intermittent
Catheter sales were up 47%.  This market is a primary focus for the Company
going forward.  We expect to introduce further advanced products into this
marketplace in late calendar year 2013.

"We announced last week that the Company will exit the Foley Catheter
marketplace.  Though we have excellent products, our rate of market
penetration was simply not strong enough to justify the considerable expense
and attention that it required.  We are confident that the Company will be
significantly stronger as a result of our decision."

"The Company also announced an update to its three-year strategic plan
originally provided in November 2010.  From continuing operations the Company
now expects Fiscal 2013 revenues to be approximately $67 million and net
income to be approximately $7 million.  The primary reasons for the change in
the strategic plan are the result of the discontinuation of the Foley Catheter
line, and to a lesser extent, a more conservative assumption about the
performance in our international sales business given the broader economic
challenges in Europe."

Conway continued, "As our updated plan indicates, despite the reduction in our
expected results of our three-year plan we nonetheless have demonstrated solid
growth in fiscal years 2011 and 2012 and, importantly, we continue to grow our
business at a robust rate.  Total sales are expected to increase 17% year over
year after adjusting for the exclusion of Foley Catheter sales in both years,
and net income is expected to double from fiscal 2012 given the higher level
of profitability we expect to achieve.  We are looking forward to a good
fiscal 2013."

Conference Call and Webcast
The Company will hold a quarterly conference call on Tuesday, November 13,
2012 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 8038
International:                            617 213 4850
Pass code:                                51602204
Preregistration:
https://www.theconferencingservice.com/prereg/key.process?key=PFBBPA8XA
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:                                63543382

 

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 Twelve months ended
September 30, 2012 and 2011
                        (unaudited)                 (unaudited)
                        Three months ended          Twelve months ended
                        September 30,               September 30,
                        2012          2011          2012          2011
GAAP Sales as           $ 16,732,915  $ 14,839,311  $ 61,089,410  $ 52,918,875
Reported
         British
Sterling Exchange       1.58          1.61          1.58          1.61
rate as reported
         Euro
Exchange rate as        1.25          1.41          1.30          1.41
reported
Constant Currency       $ 16,732,915  $ 14,493,113  $ 61,089,410  $ 51,943,485
Sales
  (1)  Exchange rate
used for Constant       1.58          1.58          1.58          1.58
Currency purposes
  (2)  Exchange rate
used for Constant       1.25          1.25          1.30          1.30
Currency purposes
Net Effect of Constant  $             $             $             $    
Currency Illustration -       -       (83,417)            -       (333,008)
British Sterling
Net Effect of           $             $             $             $    
Constant Currency             -       (262,781)           -       (642,382)
Illustration - Euros
Total Net Effect of     $             $             $             $    
Constant Currency             -       (346,198)           -       (975,390)
Illustration
(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 Twelve months ended
September 30, 2012 and 2011
                      (unaudited)                 (unaudited)
                      Three months ended          Twelve months ended
                      September 30,               September 30,
                      2012         2011           2012         2011
GAAP Net Income       $ 1,027,000  $              $ 2,050,000  $  (1,315,000)
(Loss) as Reported                  407,000
Diluted EPS as        $            $              $            $          
Reported              0.08           0.03         0.17          (0.11)
Adjustments for
non-recurring
unusual items:
   Merger and
acquisition costs                  30,000                      725,000
for Laprolan (1)
Subtotal              -            30,000         -            725,000
Adjustments for
recurring non-cash
expenses:
   Intangible         158,000      183,000        632,000      701,000
amortization (2)
   ASC 718
compensation          181,000      202,000        825,000      962,000
expense (3)
Subtotal              339,000      385,000        1,457,000    1,663,000
Non-GAAP Net          $ 1,366,000  $              $ 3,507,000  $   1,073,000
Income                              822,000
Non-GAAP Diluted      $            $              $            $            
EPS                   0.11           0.07         0.28         0.09
Weighted Average      12,367,693   12,470,989     12,339,500   12,282,545
Shares - Diluted
(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 aquisition of Laprolan from Fornix N.V. Management believes these
assets are appreciating.  This adjustment adds back amortization expense for
the three and twelve months ended September 30, 2012 and 2011 related to
certain intangibles. The gross amount of amortization expense for the three
months ended September 30, 2012 and 2011 is $218,000 and $236,000 net of taxes
of $60,000 and $53,000 for net amounts of $158,000 and $183,000 respectively. 
The gross amount of amortization expense for the twelve months ended September
30, 2012 and 2011 is $872,000 and $901,000 net of taxes of $240,000 and
$200,000 for net amounts of $632,000 and $701,000 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 twelve months ended September 30,
2012 and 2011.  The gross amount of compensation expense for the three months
ended September 30, 2012 and 2011 is $208,000 and $316,000 net of taxes of
$27,000 and $114,000 for net amounts of $181,000 and $202,000 respectively. 
The gross amount of compensation expense for the twelve months ended September
30, 2012 and 2011 is $984,000 and $1,495,000 net of taxes of $159,000 and
$533,000 for net amounts of $825,000 and $962,000 respectively.

 

 

 

Rochester Medical Corporation
Press Release - F12 Fourth Quarter
Summary Statements Of Operations 
                        (unaudited)                 (unaudited)
                        Three months ended          Twelve months ended
                        September 30,               September 30,
                        2012           2011         2012         2011
Sales                   $  16,732,915  $            $            $  52,918,875
                                       14,839,311    61,089,410
Cost of sales           8,446,864      7,504,817    30,954,828   26,821,427
Gross profit            8,286,051      7,334,494    30,134,582   26,097,448
    Gross profit %      49.5%          49.4%        49.3%        49.3%
Costs and expenses:
    Marketing and       4,401,448      4,613,771    17,560,971   18,263,141
    selling
    Research and        207,385        256,266      1,190,095    1,008,767
    development
    General and         1,990,690      1,876,686    8,170,468    8,502,956
    administrative
Total operating         6,599,523      6,746,723    26,921,534   27,774,864
expenses
Income (loss) from      1,686,528      587,771      3,213,048    (1,677,416)
operations
Other income (expense)
    Interest income     15,126         (14,293)     43,243       139,859
    Interest expense    -              (51,917)     (89,545)     (277,008)
    Other income        (126,850)      (72,145)     (84,458)     (123,901)
Net income (loss)       1,574,804      449,416      3,082,288    (1,938,466)
before income taxes
Income tax              547,410        42,277       1,031,804    (623,162)
expense(benefit)
Net income (loss)       $   1,027,394  $            $            $  
                                       407,139      2,050,484    (1,315,304)
Earnings (loss) per     $              $            $            $          
common share - Basic    0.09           0.03         0.17         (0.11)
Earnings (loss) per     $              $            $            $          
common share - Diluted  0.08           0.03         0.17         (0.11)
Weighted Average        12,020,167     12,205,299   12,032,113   12,217,900
Shares:
    Basic
Weighted Average
Shares:
    Diluted             12,367,693     12,470,989   12,339,500   12,217,900

 

 

 

Rochester Medical Corporation
Press Release - F12 Fourth Quarter 
Condensed Balance Sheets
                                          (unaudited)
                                          September 30,    September 30,
                                          2012             2011
Assets
 Current Assets
       Cash and equivalents               $   13,921,363   $     8,722,935
       Marketable securities              6,779,695        26,182,308
       Accounts receivable                11,008,429       8,644,332
       Inventories                        9,883,651        11,278,694
       Prepaid expenses and other assets  1,726,908        1,361,259
       Deferred income tax asset          1,287,177        1,618,495
              Total current assets        44,607,223       57,808,023
 Property and equipment, net              11,862,073       12,052,685
 Deferred income tax asset                1,030,994        1,242,010
 Intangible assets, net                   9,377,354        10,272,671
 Goodwill                                 9,053,091        9,094,725
 Total Assets                             $   75,930,735   $    90,470,114
Liabilities and Stockholders' Equity
 Current liabilities:
       Accounts payable                   $     3,070,329  $     2,773,398
       Accrued expenses                   3,427,397        2,961,270
       Short-term debt                    -                17,862,185
              Total current liabilities   6,497,726        23,596,853
 Long-term liabilities                    1,137,212        896,414
 Stockholders' equity                     68,295,797       65,976,847
 Total Liabilities and Stockholder Equity $   75,930,735   $    90,470,114

 

 

 

SOURCE Rochester Medical Corporation

Website: http://www.rocm.com
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