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STEWARTVILLE, Minn., Feb. 4 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (Nasdaq: ROCM) today announced operating results for its first quarter ending December 31, 2007.
The Company reported sales of $8,223,000 for the current quarter compared to $7,512,000 for the first quarter of last year. It also reported net income of $272,000 or $.02 per diluted share compared to a net income of $31,467,000 or $2.59 per diluted share for the first quarter of last year. Net income for the first quarter of last year included $31,305,000 received from lawsuit settlements net of taxes.
The approximately 9% overall increase in sales resulted from a 31% increase in Rochester Medical Branded Sales partially offset by a 21% decrease in Private Label Sales. The Company expects that the decrease in Private Label Sales for the quarter is temporary and is attributable to the timing of large Private Label orders. The Company believes that Private Label Sales will improve throughout the year.
Net income adjusted for certain non-recurring unusual items and certain recurring non-cash expenses, or "Non-GAAP Net Income" for the current quarter is $686,000 or $.05 per diluted share compared to Non-GAAP Net Income of $1,388,000 or $.11 per diluted share for the first quarter of last year. The decrease for this quarter is primarily attributable to increased investment in Sales and Marketing Programs.
Commenting on today's announcement Rochester Medical CEO and President Anthony J. Conway said, "I am very pleased with our progress this quarter. The 31% organic growth rate in our Rochester Medical Branded Sales demonstrates solid initial success resulting from our strategic decision to increase investments in Sales and Marketing. I firmly believe these investments will continue to drive strong Branded Sales growth.
"The decrease in Private Label Sales for the quarter is a timing issue, and we expect Private Label Sales to normalize throughout the year. Led by continued solid growth of Rochester Medical Branded Sales, we expect greater overall sales in Q2."
Conway went on to say, "We will continue our commitment to expanded Sales and Marketing programs, and I believe it will lead to significantly increased revenue and income in the future."
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. Non-GAAP Net Income is not a measure 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 is not comparable to information provided by other companies. Non-GAAP Net Income has limitations as an analytical tool 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 are presented at the end of this press release.
The Company will hold a quarterly conference call this afternoon to
discuss its earnings report. The call will begin at 4:00 p.m. Central
Standard Time (5:00 p.m. eastern time). This call is being webcast by
Thomson/CCBN and can be accessed at Rochester Medical's website at
http://www.rocm.com. To listen live to the conference call via telephone,
call:
Domestic: 1-888-680-0894, password 57867978
International: 617-213-4860, password 57867978
Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=PDE3XBGGV
Replay will be available for seven days at http://www.rocm.com or via
telephone at:
Domestic: 1-888-286-8010, password 37130118
International: 617-801-6888, password 37130118
The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://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 (http://www.streetevents.com).
This press release contains forward-looking statements that involve risks and uncertainties, including the uncertainty of estimated revenues and profits, as well as 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, 2007.
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(R) brand and under existing private label arrangements.
For further information, please contact Anthony J. Conway, President
and Chief Executive 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 Net Income to Non-GAAP Net Income
For the three months ended
December 31, 2007
Three months ended
December 31,
2007 2006
GAAP Net Income as Reported $272,000 $31,467,000
Diluted EPS as Reported $0.02 $2.59
Adjustments for non-recurring unusual
items:
Settlement income after taxes (1) - (31,305,000)
Deferred revenue (2) - (39,000)
Subtotal - (31,344,000)
Adjustments for recurring non-cash
expenses:
Intangible Amortization (3) 163,000 163,000
FAS 123R Compensation Expense (4) 251,000 1,102,000
Subtotal 414,000 1,265,000
Non-GAAP Net Income $686,000 $1,388,000
Non-GAAP Diluted EPS $0.05 $0.11
Weighted Average Shares - Diluted 12,587,229 12,158,281
(1) Settlement income received November 20, 2006 from Premier, Inc of
$5,155,000 and December 14, 2006 from CR Bard, Inc. of $33,450,000
after taxes. 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, 2007.
(2) Deferred revenue from a $1,000,000 fee paid by Coloplast A/S in June
2002 for marketing rights to our antibacterial Release NF foley
catheter. These rights with Coloplast A/S were cancelled by mutual
agreement in March 2007, thus accelerating the recognition of the
remaining amount as all conditions for revenue recognition have now
been met. Also includes a $200,000 fee paid by Hollister for
marketing rights to our hydorphilic intermittent catheter in September
2003. The fee paid by Hollister was fully recognized in December
2006. This adjustment reduces net income related to the realization
of certain one-time revenue from marketing rights. The amounts were
recorded in net sales in the Statement of Operations.
(3) 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 months ended December 31, 2007 and
2006 related to certain intangibles.
(4) Compensation expense mandated by SFAS 123R. This adjustment adds back
the compensation expense recorded when stock options are granted to
employees and directors for the three months ended December 31, 2007
and 2006.
Condensed Balance Sheets
(unaudited)
December 31, September 30,
2007 2007
Assets
Current Assets
Cash and equivalents $8,736,066 $6,671,356
Marketable securities 28,676,923 30,465,244
Accounts receivable 4,913,202 5,527,518
Inventories 8,588,850 7,698,889
Prepaid expenses and other
assets 508,563 6,480
Deferred income tax asset 828,588 876,032
Total current assets 52,252,192 51,245,519
Property and equipment, net 9,683,109 9,679,035
Deferred income tax asset 621,664 571,721
Patents, net 256,316 257,353
Intangible assets, net 7,590,075 7,821,562
Goodwill 5,761,715 5,920,255
Total Assets $76,165,071 $75,495,445
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,233,178 $1,091,874
Accrued expenses 920,163 1,978,937
Short-term debt 1,809,106 1,849,463
Total current liabilities 4,962,447 4,920,274
Long-term liabilities
Long-term debt 5,774,352 6,066,246
Total long term liabilities 5,774,352 6,066,246
Stockholders' equity 65,428,272 64,508,925
Total Liabilities and Stockholder
Equity $76,165,071 $75,495,445
Summary Statements Of Operations
(unaudited)
Three months ended
December 31,
2007 2006
Sales $8,223,288 $7,511,966
Cost of sales 4,082,485 3,736,344
Gross profit 4,140,803 3,775,622
Gross profit % 50% 50%
Costs and expense:
Marketing and selling 2,224,365 1,233,662
Research and development 228,943 202,770
General and administrative 1,615,118 2,049,146
Total operating expenses 4,068,426 3,485,578
Income from operations 72,377 290,044
Other income (expense)
Interest income 453,340 74,850
Interest expense (149,489) (159,647)
Other income - 38,605,000
Net income before income taxes 376,228 38,810,247
Income tax expense 104,674 7,343,640
Net income $271,554 $31,466,607
Earnings per common share - Basic $0.02 $2.83
Earnings per common share - Diluted $0.02 $2.59
Weighted Average Shares:
Basic 11,730,234 11,102,034
Weighted Average Shares:
Diluted 12,587,229 12,158,281
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