ROCHESTER MEDICAL CORPORATION 
By STEWARTVILLE, Minn., July 30, 2013 /PRNewswire/ -- Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its third quarter ended June 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20121228/CG34999LOGO)
The Company reported sales of $16,991,000 for the current quarter compared to $15,386,000 for the third quarter of last year. The Company also reported net income of $1,130,000 or $0.09 per diluted share compared to $496,000 or $0.04 per diluted share for the same period last year.
The approximately 10% increase in sales (11% on a constant currency basis) resulted from a 12% increase in Rochester Medical Direct sales (13% on a constant currency basis) and a 5% increase in Private Label Sales (5% 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 third quarter of last year and this year, overall direct sales growth was 20% (21% 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 $1,567,000 or $0.12 per diluted share compared to Non-GAAP Net Income of $838,000 or $0.07 per diluted share for the third quarter of last year. The increase was primarily due to the increased profits as a result of increased sales.
Commenting on the third quarter results, Rochester Medical's CEO and President Anthony J. Conway said, "We reported another quarter of strong growth, led by the United States and the United Kingdom, where Direct Sales, excluding Foley Catheters, grew 30% and 26% respectively. We are pleased with our performance this year and remain on track to achieve our Foley adjusted 2013 guidance for revenue of approximately $67 million and after-tax profit of approximately $7 million."
Conference Call and Webcast
The Company will hold a quarterly conference call on Tuesday July 30th, 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: 888.713.4214
International: 617.213.4866
Pass code: 27798303
PreRegistration:
https://www.theconferencingservice.com/prereg/key.process?key=PL6CJENLW
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: 43964308
Individual investors can listen to the call at www.fulldisclosure.com, Thomson Reuter'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).
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 Third Quarter
Condensed Consolidated Statements Of Operations
(unaudited) (unaudited)
Three months ended Nine months ended
June 30, June 30,
-------- --------
2013 2012 2013 2012
---- ---- ---- ----
Sales $16,991,383 $15,385,522 $50,878,461 $44,785,404
Cost of sales 8,322,926 7,760,078 25,341,167 22,444,487
--------- --------- ---------- ----------
Gross profit 8,668,457 7,625,444 25,537,294 22,340,917
Gross profit % 51.0% 49.6% 50.2% 49.9%
Costs and expense:
Marketing and
selling 4,294,868 4,611,034 13,006,092 13,651,910
Research and
development 319,995 358,551 971,176 982,709
General and
administrative 2,307,105 1,942,941 6,662,811 6,179,778
--------- --------- --------- ---------
Total operating expenses 6,921,968 6,912,526 20,640,079 20,814,397
--------- --------- ---------- ----------
Income from operations 1,746,489 712,918 4,897,215 1,526,520
Other income (expense) (926) 22,251 (40,744) (19,037)
---- ------ ------- -------
Net income before income taxes 1,745,563 735,169 4,856,471 1,507,483
Income tax expense 616,019 239,245 1,515,532 484,392
------- ------- --------- -------
Net income $1,129,544 $495,924 $3,340,939 $1,023,091
========== ======== ========== ==========
Net income per common share -
Basic $0.09 $0.04 $0.28 $0.09
===== ===== ===== =====
Net income per common share -
Diluted $0.09 $0.04 $0.27 $0.08
===== ===== ===== =====
Weighted Average Shares:
Basic 12,191,778 12,008,420 12,125,262 12,036,124
========== ========== ========== ==========
Weighted Average Shares:
Diluted 12,787,610 12,373,340 12,576,126 12,340,045
========== ========== ========== ==========
Rochester Medical Corporation
Press Release - F13 Third Quarter
Condensed
Consolidated
Balance Sheets
(unaudited)
June 30, September 30,
2013 2012
---- ----
Assets
Current Assets
Cash and
equivalents $19,333,989 $13,921,363
Marketable
securities 6,899,861 6,779,695
Accounts
receivable 10,332,970 11,008,429
Inventories 9,335,158 9,883,651
Prepaid
expenses
and other
assets 1,984,707 1,726,908
Deferred
income tax
asset 587,790 1,287,177
-------
Total current assets 48,474,475 44,607,223
Property and
equipment, net 13,372,658 11,862,072
Deferred income
tax asset 1,489,812 1,030,994
Intangible
assets, net 8,628,243 9,377,354
Goodwill 8,856,518 9,053,091
---------
Total Assets $80,821,706 $75,930,734
=========== ===========
Liabilities and Stockholders' Equity
Current
liabilities:
Accounts
payable $3,292,389 $3,070,329
Accrued
expenses 3,522,060 3,427,397
---------
Total current
liabilities 6,814,449 6,497,726
Long-term
liabilities 1,157,448 1,137,212
Stockholders'
equity 72,849,809 68,295,796
---------- ----------
Total
Liabilities
and
Stockholder
Equity $80,821,706 $75,930,734
=========== ===========
ROCHESTER MEDICAL CORPORATION
Press Release - F13 Third Quarter
For the Nine months ended
June 30, 2013 and 2012
(unaudited) (unaudited)
Three months ended Nine months ended
June 30, June 30,
-------- --------
2013 2012 2013 2012
---- ---- ---- ----
GAAP Net Income
as Reported $1,129,544 $495,924 $3,340,939 $1,023,091
========== ======== ========== ==========
Net Income Per
Share -Diluted
as Reported $0.09 $0.04 $0.27 $0.08
===== ===== ===== =====
Adjustments for
non-recurring
unusual items:
Severance costs
(1) - - 124,000 -
Foley Inventory
Write-Off (2) 177,998 - 404,428 -
------- --- ------- ---
Subtotal 177,998 - 528,428 -
Adjustments for
recurring non-
cash expenses:
Intangible
amortization (3) 149,000 158,000 453,000 474,000
ASC 718
compensation
expense (4) 110,000 184,000 385,000 644,000
------- ------- ------- -------
Subtotal 259,000 342,000 838,000 1,118,000
------- ------- ------- ---------
Non-GAAP Net
Income $1,566,542 $837,924 $4,707,367 $2,141,091
========== ======== ========== ==========
Non-GAAP Diluted
EPS $0.12 $0.07 $0.37 $0.17
===== ===== ===== =====
Weighted Average
Shares -Diluted 12,787,610 12,373,340 12,576,126 12,340,045
(1) Severance costs
associated with our exiting
of the Foley catheter
market. The company
announced it was exiting
the Foley Catheter market
on November 6, 2012. This
adjustment adds back
severance costs of certain
employees for the three
months ended June 30, 2013.
The gross amount of the
severance costs for the
three months ended June 30,
2013 is $0 net of taxes of
$0 for a net amount of $0.
The gross amount of the
severance costs for the
nine months ended June 30,
2013 is $171,000 net of
taxes of $47,000 for a net
amount of $124,000.
(2) Foley inventory write-
off relates to our exiting
of the Foley catheter
market. The gross amount of
write-offs for the three
months ended June 30, 2013
and 2012 is $177,998, and
$0. The gross amount of
write-off expense for the
nine months ended June 30,
2013 and 2012 is $404,428
and $0.
(3) 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
Rochester Medical BV
(formerly 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 June
30, 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 nine months
ended June 30, 2013 and
2012 is $639,000 and
$654,000 net of taxes of
$186,000 and $180,000 for
net amounts of $453,000 and
$474,000 respectively.
(4) 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 nine
months ended June 30, 2013
and 2012. The gross amount
of compensation expense for
the three months ended June
30, 2013 and 2012 is
$207,000 and $212,000 net
of taxes of $97,000 and
$28,000 for net amounts of
$110,000 and $184,000
respectively. The gross
amount of compensation
expense for the nine months
ended June 30, 2013 and
2012 is $591,000 and
$776,000 net of taxes of
$206,000 and $132,000 for
net amounts of $385,000 and
$644,000 respectively.
ROCHESTER MEDICAL CORPORATION
Press Release - F13 Third Quarter
For the Nine months ended
June 30, 2013 and 2012
(unaudited) (unaudited)
Three months ended Nine months ended
June 30, June 30,
-------- --------
2013 2012 2013 2012
---- ---- ---- ----
GAAP
Sales
as
Reported $16,991,383 $15,385,522 $50,878,461 $44,785,404
=========== =========== =========== ===========
British
Sterling
Exchange
rate
as
reported 1.54 1.58 1.56 1.58
==== ==== ==== ====
Euro
Exchange
rate
as
reported 1.31 1.28 1.31 1.31
==== ==== ==== ====
Constant
Currency
Sales $16,991,383 $15,345,181 $50,878,461 $44,705,026
=========== =========== =========== ===========
(1)
Exchange
rate
used
for
Constant
Currency
Purposes 1.54 1.54 1.56 1.56
==== ==== ==== ====
(2)
Exchange
rate
used
for
Constant
Currency
Purposes 1.31 1.31 1.31 1.31
==== ==== ==== ====
Net
Effect
of
Constant
Currency
Illustration
-
British
Sterling $ - $(159,042) $ - $(124,337)
Net
Effect
of
Constant
Currency
Illustration
-
Euros $ - $41,461 $ - $(33,281)
===================== ======= ===================== ========
Total
Net
Effect
of
Constant
Currency
Illustration $ - $(117,581) $ - $(157,618)
===================== ========= ===================== =========
(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
