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Rochester Medical Reports Record Fourth Quarter Sales and Record Year

STEWARTVILLE, Minn., Nov. 15 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (Nasdaq: ROCM) today announced operating results for its fourth quarter and year ending September 30, 2007.

The Company reported 23% sales growth with record sales of $8,437,000 for the current quarter compared to $6,826,000 for the fourth quarter of last year, resulting from increases in both Rochester Medical Brand Sales and Private Label sales. It reported net income of $733,000 or $.06 per diluted share compared to a net income of $906,000 or $.08 per diluted share for the fourth quarter of last year. Net income excluding stock option expense and expense for amortization of intangibles, or "Non-GAAP Net Income" for the current quarter is $1,211,000 or $.10 per diluted share, compared to Non-GAAP Net Income of $1,237,000 or $.10 per diluted share for the fourth quarter of last year. To aid in comparison between the quarters the Company notes that fourth quarter 2006 included an $87,000 income tax expense while fourth quarter 2007 included a $480,000 income tax expense, resulting in a 30% increase in net income before income taxes for this fourth quarter as compared to last year's fourth quarter.

For the fiscal year ending September 30, 2007 the Company reported record sales of $32,663,000 compared to sales of $21,666,000 for the previous fiscal year. It reported net income for the year of $34,050,000 or $2.77 per diluted share compared to a net income of $1,959,000 of $.17 per diluted share for the previous year. Non-GAAP net income for fiscal year 2007 was $4,966,000 or $.40 per diluted share compared to $1,948,000 or $.17 per diluted share for fiscal 2006. The 155% increase was primarily due to increased gross profit partially offset by higher costs and income taxes. The Company notes that in Fiscal 2007 it received approximately $31,000,000 (after taxes) in settlements for a lawsuit.

Commenting on today's announcement, Rochester Medical CEO and President Anthony J. Conway said, "Once again at year end I am very pleased to say that this has been an excellent quarter and excellent year for the Company. Sales and operating income have strengthened very nicely, and we have been investing a portion of that increased income back into the Company in order to continue on a solid growth path for the future. Sales and Marketing expenses, for example, increased by over $3 million dollars in Fiscal 2007 as compared to Fiscal 2006. We are continuing the development and expansion of our Sales and Marketing team. I believe these investments make good strategic sense, and while they will impact net income somewhat in the short term, I am confident they will strengthen the Company's future performance."

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 To listen live to the conference call via telephone, call:

Domestic: 1-800-295-3991, password 50354381

International: 617-614-3924, password 50354381

Replay will be available for seven days at or via telephone


Domestic: 1-888-286-8010, password 86563659

International: 617-801-6888, password 86563659

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, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (

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, 2006.

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


Reconciliation of Reported GAAP Net Income to Non-GAAP Net Income

For the three months and fiscal year ended

September 30, 2007

Three months ended Fiscal year ended

September 30, September 30,

2007 2006 2007 2006

GAAP Net Income as Reported $733,000 $906,000 $34,050,000 $1,959,000

Diluted EPS as Reported $0.06 $0.08 $2.77 $0.17

Adjustments for non-recurring

unusual items:

Settlement income after

taxes (1) - (31,305,000) -

Deferred revenue (2) - (39,000) (564,000) (157,000)

Deferred tax benefit (3) - - - (672,000)

Subtotal - (39,000) (31,869,000) (829,000)

Adjustments for recurring

non-cash expenses:


Amortization (4) 167,000 188,000 668,000 218,000

FAS 123R Compensation

Expense (5) 311,000 95,000 2,117,000 600,000

Subtotal 478,000 283,000 2,785,000 818,000

Non-GAAP Net Income $1,211,000 $1,150,000 $4,966,000 $1,948,000

Non-GAAP Diluted EPS $0.10 $0.10 $0.40 $0.17

Weighted Average Shares -

Diluted 12,582,793 11,854,210 12,272,172 11,665,992

(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 is 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 have been cancelled by mutual agreement, thus

accelerating the recognition of the remaining amount as all conditions

for revenue recognition have now been met. Also includes a $250,000

fee paid by Hollister for marketing rights to our hydrophilic

intermittent catheter in September 2003. This adjustment relates to

the realization of certain one-time revenue from marketing rights.

The amounts were recorded in net sales in the Statement of Operations

for the fiscal years ended September 30, 2007 and 2006.

(3) Increase in the deferred tax asset which resulted in a tax benefit.

This adjustment deducts net income for certain one-time tax benefits

recorded in the three and twelve months ended September 30, 2006.

(4) Amortization of the intangibles acquired in June 2006 asset

acquisition from Coloplast AS and Mentor Corporation. This adjustment

adds back amortization expense for the three and twelve months ended

September 30, 2007 and 2006 related to certain intangibles.

(5) 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 and twelve months ended

September 30, 2007 and 2006.

Condensed Balance Sheets


September 30, September 30,

2007 2006


Current Assets

Cash and equivalents $6,671,356 $2,906,698

Marketable securities 30,465,244 -

Accounts receivable 5,527,518 4,494,094

Inventories 7,698,889 4,642,578

Prepaid expenses and other assets 6,480 410,267

Deferred income tax asset 876,032 53,000

Total current assets 51,245,519 12,506,637

Property and equipment, net 9,679,035 8,239,246

Deferred income tax asset 571,721 1,178,000

Patents, net 257,353 271,171

Intangible assets, net 7,821,562 8,270,157

Goodwill 5,920,255 5,487,141

Total Assets $75,495,445 $35,952,352

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $1,091,874 $1,278,441

Accrued expenses 1,355,845 1,621,376

Short-term debt 1,849,463 1,681,361

Current maturities of capital leases - 42,084

Income taxes payable 623,093 105,559

Deferred revenue - 114,287

Total current liabilities 4,920,275 4,843,108

Long-term liabilities

Long-term debt 6,066,246 7,540,737

Capital leases, less current portion - 21,946

Deferred revenue - 449,999

Total long-term liabilities 6,066,246 8,012,682

Stockholders' equity 64,508,924 23,096,562

Total Liabilities and Stockholders'

Equity $75,495,445 $35,952,352

Summary Statements Of Operations

(unaudited) (unaudited)

Three months ended Twelve months ended

September 30, September 30,

2007 2006 2007 2006

Sales $8,437,378 $6,826,473 $32,663,087 $21,665,837

Cost of sales 4,044,975 3,374,888 15,619,178 13,057,090

Gross profit 4,392,403 3,451,585 17,043,909 8,608,747

Gross profit % 52% 51% 52% 40%

Costs and expense

Marketing and

selling 1,926,222 1,147,250 6,490,497 3,109,207

Research and

development 232,725 189,982 943,225 759,639

General and

administrative 1,540,034 989,277 6,742,665 3,344,662

Total operating

expenses 3,698,981 2,326,509 14,176,387 7,213,508

Income from operations 693,422 1,125,076 2,867,522 1,395,239

Other income (expense)

(Loss) on sale of

investments - - - (103,532)

Interest income 380,656 31,494 1,288,603 219,873

Interest expense (110,848) (163,450) (513,296) (224,848)

Other income 250,000 - 38,855,000 -

Net income before

income taxes $1,213,230 $993,120 $42,497,829 $1,286,732

Income tax expense

(benefit) 479,747 86,823 8,447,649 (672,176)

Net income 733,483 906,297 34,050,180 1,958,908

Earnings per common

share - Basic $0.06 $0.08 $2.97 $0.18

Earnings per common

share - Diluted $0.06 $0.08 $2.77 $0.17

Weighted Average

Shares: 11,680,364 11,079,604 11,449,646 11,068,102


Weighted Average


Diluted 12,582,793 11,854,210 12,272,172 11,665,992

SOURCE Rochester Medical Corporation
Copyright©2007 PR Newswire.
All rights reserved

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