Rochester Medical Reports Fiscal 2011 Third Quarter Results

STEWARTVILLE, Minn., July 28, 2011 /PRNewswire/ -- Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its third quarter ended June 30, 2011.

The Company reported record sales of $14,281,000 for the current quarter compared to $10,244,000 for the third quarter of last year.  It also reported net loss of $294,000 or ($.02) per diluted share compared to net income of $95,000 or $.01 per diluted share for the same quarter of last year.

The 39% increase in sales (35% on constant currency basis) resulted from a 53% increase in Rochester Medical Direct Sales (46% on a constant currency basis) and a 1% increase in Private Label Sales (1% 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 third quarter of fiscal 2011, the U.S. dollar was 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 income adjusted for certain non-recurring unusual items and certain recurring non-cash expenses, or "Non-GAAP Net Income" for the current quarter was $398,000 or $.03 per diluted share compared to Non-GAAP Net Income of $428,000 or $.03 per diluted share for the third quarter of last year.  The decrease for the current quarter is primarily attributable to significantly increased gross profits from higher sales, offset by the Company's recently increased investment in sales and marketing programs.

Direct Sales to the Home Care market which are approximately 87% of the total Global Direct Sales grew approximately 53% from $6.6 million dollars last quarter to $10.1 million dollars this quarter. The increase resulted from a 64% increase in International Direct Home Care Sales (53% constant currency growth) and a 19% increase in U.S. Direct Home Care Sales. Direct sales to the Acute Care market which are approximately 13% of the total Global Direct Sales grew approximately 54% from just under $1 million dollars in the third quarter of last year to just over $1.5 million this quarter.  The increase came from a 205% increase in International Direct Acute Care Sales (195% constant currency growth) partially offset by a 12% decrease in U.S. Direct Acute Care Sales.  

Commenting on the quarterly results, Rochester Medical's CEO and President Anthony J. Conway, said, "Overall we are pleased with our progress this quarter.  The strong 46% constant currency growth in Direct Sales is a result of the Laprolan acquisition coupled with solid organic growth in Direct Sales from the rest of the Company, particularly in our U.S. and U.K. Home Care business.  Though we fell short of our growth goals in U.S. Acute Care sales this quarter, we fully expect that we will resume growth in this business in Q4 given the increased sales and marketing efforts that we have recently put in place."

He concluded, "Excepting the final Laprolan acquisition costs, our bottom line this quarter is approaching the break even level as we had expected.  As we have previously stated, we expect to be operating profitably by fiscal year end. Looking ahead, we are strongly focused on growing the top line, flattening costs, and generating increasing profits."

3M Infection Prevention Leadership Summit Partner

Rochester Medical has been chosen as one of three companies to partner with 3M in an upcoming Infection Prevention Leadership Summit on Oct 2-4, 2011. The Summit is a collaborative effort with the participation of the leading professional associations in infection prevention, SHEA, APIC, AORN and IAHCSMM.  As a best in class customer education event, it will feature strategic thinkers with proven leadership skills, expertise and experience in the field of infection prevention, and serve to increase awareness of the infection prevention solutions provided by the collaborative partners, including Rochester Medical.

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 Medical's website at www.rocm.com.  To listen live to the conference call via telephone, call:

Individual investors can listen to the call at 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 (www.streetevents.com).  

Use of Non-GAAP Financial Measures

Rochester Medical has provided Non-GAAP Net Income in addition to net income (loss) 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 (Loss) 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 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.

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, 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.

SOURCE Rochester Medical Corporation

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