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8-K - FORM 8-K - ROCHESTER MEDICAL CORPORATION | c64518e8vk.htm |
Exhibit 99.1
For Release 3:00 p.m., C.S.T. May 5, 2011 |
Rochester Medical Reports Second Quarter Results
Stewartville, MN May 5, 2011.
Rochester Medical Corporation (NASDAQ:ROCM) today announced operating results for its second
quarter ended March 31, 2011.
The Company reported record sales of $12,853,000 for the current quarter compared to $9,845,000 for
the second quarter of last year. It also reported net loss of ($1,259,000) or ($0.10) per diluted
share compared to net loss of ($351,000) or ($0.03) per diluted share for the same quarter of last
year.
The approximate 31% increase in sales (29% on constant currency basis) resulted from a 39% increase
in Rochester Medical Direct Sales (37% on a constant currency basis) and an 8% increase in Private
Label Sales (8% on a constant currency basis). Direct Sales include sales made directly to the end
consumer and include all Rochester Medical branded sales, UK Script Easy sales, and all Laprolan
sales. Beginning with the second quarter of this fiscal year, the Companys operating results
include the operating results of Laprolan B.V., the Companys newly acquired subsidiary in The
Netherlands. Constant currency basis assumes current exchange rates for all periods in order to
exclude the impact of foreign exchange variations. In the second quarter of fiscal 2011, the U.S.
dollar was somewhat weaker versus the pound sterling thus positively affecting Rochester Medical
Direct Sales growth levels in actual U.S. dollars given the significant volume of direct sales in
the United Kingdom.
Net loss adjusted for certain non-recurring unusual items and certain recurring non-cash expenses,
or Non-GAAP Net Income (Loss) for the current quarter was ($437,000) or ($.04) per diluted share
compared to Non-GAAP Net Income of $140,000 or $.01 per diluted share for the second quarter of
last year. The net loss for the current quarter is attributable to the recent significant increase
in the Companys strategic investment in Sales and Marketing. In the second quarter the completed
expansion of the U.S. sales and marketing force added over a million dollars in incremental costs
compared to the same period last year. The Company believes the investment will generate
significant increases in revenue over the next few years.
Commenting on todays results Rochester Medicals CEO and President Anthony J. Conway said, The
excellent 37% constant currency growth in Direct Sales for the quarter was in large part due to the
Laprolan acquisition reinforced by continued solid growth in Direct Sales of 24% in the combined
U.S. and U.K. markets where we have a sales force presence. The growth was partially offset by a
decline in Direct Sales in other parts of the world due to timing of orders and shipments.
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I want to thank our Laprolan employees for their spirit of co-operation and excitement as they
have become an important part of the Rochester Medical Team. Now, with significant presence in the
U.K., The Netherlands, and the United States, and with sales in countries throughout the world, we
are truly becoming a recognized global leader in our field.
Conway concluded, By fiscal year end we expect to be operating profitably. Looking ahead, we are
strongly focused on growing the top line, flattening costs, and generating profits.
Acquisition of Laprolan B.V.
On April 7, 2011, Rochester Medical announced the completed acquisition of Laprolan B.V., the
former Medical Supplies Division and wholly owned subsidiary of Fornix BioSciences N.V. Under the
terms of the purchase agreement the purchase is deemed retroactive to January 1, 2011. The final
purchase price for Laprolan B.V., was $14,878,125 net of interest paid.
Agreement with Teleflex Incorporated
Rochester Medical today announced an exclusive agreement with Teleflex Incorporated whereby
they will market and sell Rochester Medicals Strata-NF Anti-Infection Foley Catheter in a number
of countries in mainland Europe.
Conference Call and Webcast
The Company will hold a quarterly conference call today 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/CCBN and can be accessed at Rochester Medicals website at
www.rocm.com. To listen live to the conference call via telephone, call:
Domestic:
|
888.713.4211 | |
International:
|
617.213.4864 | |
Pass code:
|
65580251 |
Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=P6YE3FJK6
https://www.theconferencingservice.com/prereg/key.process?key=P6YE3FJK6
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:
|
70081655 |
Individual
investors can listen to the call at www.fulldisclosure.com, Thomson/CCBNs
individual investor portal, powered by StreetEvents. Institutional investors can access the call
via Thomsons password-protected event management site,
StreetEvents (www.streetevents.com).
Use of Non-GAAP Financial Measures
Rochester Medical has provided Non-GAAP Net Income (Loss) in addition to net income (loss)
calculated in accordance with generally accepted accounting principles (GAAP)
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because management believes Non-GAAP Net Income (Loss) 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 Medicals 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 Companys growth trends.
Non-GAAP Net Income (Loss) 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 (Loss) and constant currency are not comparable to
information provided by other companies. Non-GAAP Net Income (Loss) 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 Net Loss and Non-GAAP Net
Income (Loss), 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.
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 managements 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 Companys 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
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other regulatory review and response times, and other risk factors listed from time to time in the
Companys SEC reports and filings, including, without limitation, the section entitled Risk
Factors in the Companys Annual Report on Form 10-K for the year ended September 30, 2010, and
reports on Forms 10-Q and 8-K. 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.
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Rochester Medical Corporation
Press Release F11 Second Quarter
Press Release F11 Second Quarter
Summary Statements Of Operations
(unaudited) | (unaudited) | |||||||||||||||
Three months ended | Six months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Sales |
$ | 12,852,601 | $ | 9,845,480 | $ | 23,799,006 | $ | 20,077,292 | ||||||||
Cost of sales |
6,493,407 | 5,186,396 | 12,035,681 | 10,805,100 | ||||||||||||
Gross profit |
6,359,194 | 4,659,084 | 11,763,325 | 9,272,192 | ||||||||||||
Gross profit % |
49.5 | % | 47.3 | % | 49.4 | % | 46.2 | % | ||||||||
Costs and expenses: |
||||||||||||||||
Marketing and selling |
5,012,747 | 2,871,675 | 8,894,727 | 5,648,992 | ||||||||||||
Research and development |
251,672 | 241,390 | 529,527 | 684,418 | ||||||||||||
General and administrative |
2,403,698 | 1,747,604 | 4,112,791 | 3,438,351 | ||||||||||||
Total operating expenses |
7,668,117 | 4,860,669 | 13,537,045 | 9,771,761 | ||||||||||||
Loss from operations |
(1,308,923 | ) | (201,585 | ) | (1,773,720 | ) | (499,569 | ) | ||||||||
Other income (expense) |
||||||||||||||||
Interest income |
51,977 | 49,717 | 104,547 | 105,373 | ||||||||||||
Interest expense |
(123,596 | ) | (39,470 | ) | (154,855 | ) | (80,588 | ) | ||||||||
Other income |
(12,865 | ) | (34,739 | ) | (29,147 | ) | (61,386 | ) | ||||||||
Net loss before income taxes |
(1,393,407 | ) | (226,077 | ) | (1,853,175 | ) | (536,170 | ) | ||||||||
Income tax expense(benefit) |
(134,009 | ) | 125,339 | (424,695 | ) | (15,596 | ) | |||||||||
Net loss |
$ | (1,259,398 | ) | $ | (351,416 | ) | $ | (1,428,480 | ) | $ | (520,574 | ) | ||||
Loss per common share Basic |
$ | (0.10 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.04 | ) | ||||
Loss per common share Diluted |
$ | (0.10 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.04 | ) | ||||
Weighted Average Shares: |
12,223,347 | 12,195,334 | 12,174,780 | 12,193,441 | ||||||||||||
Basic |
||||||||||||||||
Weighted Average Shares: |
||||||||||||||||
Diluted |
12,223,347 | 12,195,334 | 12,174,780 | 12,193,441 | ||||||||||||
Rochester Medical Corporation
Press Release F11 Second Quarter
Press Release F11 Second Quarter
Condensed Balance Sheets
(unaudited) | ||||||||
March 31, | September 30, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current Assets |
||||||||
Cash and equivalents |
$ | 4,889,264 | $ | 4,545,907 | ||||
Marketable securities |
29,468,851 | 30,967,007 | ||||||
Accounts receivable |
9,179,768 | 7,858,540 | ||||||
Inventories |
11,867,139 | 9,240,291 | ||||||
Prepaid expenses and other assets |
2,236,128 | 846,899 | ||||||
Deferred income tax |
851,562 | 872,849 | ||||||
Total current assets |
58,492,712 | 54,331,493 | ||||||
Property and equipment, net |
11,929,967 | 10,017,239 | ||||||
Deferred income tax |
1,195,440 | 1,175,052 | ||||||
Intangible assets, net |
11,159,888 | 5,580,726 | ||||||
Goodwill |
10,680,572 | 4,561,781 | ||||||
Total Assets |
$ | 93,458,579 | $ | 75,666,291 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,893,187 | $ | 2,016,058 | ||||
Accrued expenses |
2,294,800 | 2,069,222 | ||||||
Short-term debt |
16,723,998 | 2,641,233 | ||||||
Total current liabilities |
21,911,985 | 6,726,513 | ||||||
Long-term liabilities |
1,698,738 | 46,327 | ||||||
Stockholders equity |
69,847,856 | 68,893,451 | ||||||
Total Liabilities and Stockholders Equity |
$ | 93,458,579 | $ | 75,666,291 | ||||
ROCHESTER MEDICAL CORPORATION
Reconciliation of Reported GAAP Revenue to Non-GAAP Revenue in Constant Currency
For the Three and Six months ended
March 31, 2011
Reconciliation of Reported GAAP Revenue to Non-GAAP Revenue in Constant Currency
For the Three and Six months ended
March 31, 2011
(unaudited) | (unaudited) | |||||||||||||||
Three months ended | Six months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
GAAP Sales as Reported |
$ | 12,852,601 | $ | 9,845,480 | $ | 23,799,006 | $ | 20,077,292 | ||||||||
Exchange rate as Reported |
1.60 | 1.56 | 1.59 | 1.60 | ||||||||||||
Constant Currency Sales |
$ | 12,852,601 | $ | 9,947,168 | $ | 23,799,006 | $ | 20,056,899 | ||||||||
(1) Exchange rate used for Constant Currency Purposes |
1.60 | 1.60 | 1.59 | 1.59 | ||||||||||||
Net Effect of Constant Currency Illustration |
$ | | $ | 101,688 | $ | | $ | (20,393 | ) | |||||||
(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 and the Euro to US dollars. The rate represents the average exchange rate for the respective three or six month period. For fiscal 2011 there will be no rate variance from the Euro to the US dollar. |
ROCHESTER MEDICAL CORPORATION
Reconciliation of Reported GAAP Net (Loss) to Non-GAAP Net Income (Loss)
For the Three and Six months ended
March 31, 2011 and 2010
Reconciliation of Reported GAAP Net (Loss) to Non-GAAP Net Income (Loss)
For the Three and Six months ended
March 31, 2011 and 2010
(unaudited) | (unaudited) | |||||||||||||||
Three months ended | Six months ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
GAAP Net Income (Loss) as Reported |
$ | (1,259,000 | ) | $ | (351,000 | ) | $ | (1,428,000 | ) | $ | (521,000 | ) | ||||
Diluted EPS as Reported |
$ | (0.10 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.04 | ) | ||||
Adjustments for non-recurring unusual items: |
||||||||||||||||
Merger and acquisition costs for Laprolan (1) |
255,000 | | 391,000 | | ||||||||||||
Subtotal |
255,000 | | 391,000 | | ||||||||||||
Adjustments for recurring non-cash expenses: |
||||||||||||||||
Intangible amortization (2) |
195,000 | 129,000 | 323,000 | 258,000 | ||||||||||||
ASC 718 compensation expense (3) |
372,000 | 362,000 | 567,000 | 550,000 | ||||||||||||
Subtotal |
567,000 | 491,000 | 890,000 | 808,000 | ||||||||||||
Non-GAAP Net Income (Loss) |
$ | (437,000 | ) | $ | 140,000 | $ | (147,000 | ) | $ | 287,000 | ||||||
Non-GAAP Diluted EPS |
$ | (0.04 | ) | $ | 0.01 | $ | (0.01 | ) | $ | 0.02 | ||||||
Weighted Average Shares Diluted |
12,223,347 | 12,768,464 | 12,174,780 | 12,703,486 |
(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 acquisition of Laprolan from Fornix N.V. Management believes these assets are appreciating. This adjustment adds back amortization expense for the three and sixth months ended March 31, 2011 and 2010 related to certain intangibles. The gross amount of amortization expense for the three months ended March 31, 2011 and 2010 is $251,000 and $163,000 net of taxes of $56,000 and $34,000 for net amounts of $195,000 and $129,000 respectively. The gross amount of amortization expense for the six months ended March 31, 2011 and 2010 is $414,000 and $326,000 net of taxes of $91,000 and $68,000 for net amounts of $323,000 and $258,000 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 sixth months ended March 31, 2011 and 2010. The gross amount of compensation expense for the three months ended March 31, 2011 and 2010 is $582,000 and $565,000 net of taxes of $210,000 and $203,000 for net amounts of $372,000 and $362,000 respectively. The gross amount of compensation expense for the six months ended March 31, 2011 and 2010 is $877,000 and $850,000 net of taxes of $310,000 and $300,000 for net amounts of $567,000 and $550,000 respectively. |