Rochester Medical Corporation (Form: 8-K)

Stewartville, MN October 27, 2004 Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its fourth quarter and fiscal year ending September 30, 2004.

The Company reported sales of $3,595,000 for the quarter compared to $3,621,000 for the fourth quarter of last year. It reported net income of $157,000 or $.03 cents per share compared to a net income of $41,000 or $.01 per share for the fourth quarter of last year. Significantly increased sales of new products this quarter were offset primarily by decreased private label sales of base products. The increase in earnings was due primarily to reduced costs and expenses.

For the fiscal year ended September 30, 2004 net sales were $15,011,000 with net income of $747,000 or $.14 per share compared to net sales of $14,655,000 with net income of $330,000 or $.06 per share for the previous fiscal year. The approximate 2% sales increase resulted from significant growth in sales of new products partially offset by a decrease in private label sales of the Company’s base products. The 226% increase in earnings resulted from increased sales and margins and from reduced costs and expenses.

Commenting on the quarter and the year, Rochester Medical CEO and President Anthony J. Conway said, “This year we expected sales of our new Advanced Intermittent Catheters, particularly the Hydrophilic version, would grow at a significant double digit rate, and we expected our base products, mainly Male External Catheters, would grow in single digits. Sales of Intermittent Catheters met our expectations, growing by $878,000 for the year, representing an overall annual growth rate of 185% that included a 45% growth rate for our own Rochester Medical Brand. Base product private label sales, however, were lower for the quarter and for the year with an overall decrease of $605,000 or 7%. Given the year’s reduction in base product private label sales, I remain very pleased with the reception of our advanced Hydrophilic products. I am also pleased with our cost management during the quarter and year resulting in our bottom line achievement.

“The decrease in private label sales was due mainly to an unanticipated overstocking by our customers during the very rapid initial conversion of the European market from latex male external Catheters to silicone male external catheters, and in part from inventory management changes at some of our major accounts. The conversion to silicone continues in Europe, but at a more modest pace. I believe our customers have worked through the overstock, and we now anticipate modest sales growth for our private label base products during the coming year. We also expect continued good sales growth in our Hydrophilic Intermittent Catheter line despite the recently announced patent litigation

1 between Coloplast and Hollister that has somewhat slowed the European introduction of the products.

“Additionally, we expect future growth from our new Hydrophilic Antibacterial Intermittent catheter which was recently cleared for market by the FDA. This new product is the only Intermittent Catheter that combines both Hydrophilic and Antibacterial properties, and I am very pleased to announce that it is being introduced into the marketplace today. This year, we will also be introducing both the Hydrophilic and Antibacterial Hydro Intermittent catheters in the closed system configurations that are preferred by many users.

“In 2005 we also plan to introduce a new Advanced Foley Catheter. Our Advanced Foley Catheter is designed to enhance the performance characteristics of silicone Foley catheters as compared to latex Foley catheters. Based on tests results to date and on the very positive feedback we have received from clinical experts, I believe our Advanced Foley Catheter will be a strong addition to our advanced products group.”

Conway added, “We are in discussions with current and potential strategic partners to establish additional distribution channels for our products, and will report the developments as they occur.”

The immediately preceding statement contains forward-looking statements that involve risks and uncertainties, including the uncertainty of gaining acceptance of the anti- infection catheters and hydrophilic catheters in the marketplace, the uncertainty of new product introductions, the uncertainty of gaining new strategic relationships, the uncertainty of timing of private label sales revenues (particularly international customers), FDA and other regulatory review and response times, as well as 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 (Part II, Item 6) for the year ended September 30, 2003.

Rochester Medical Corporation develops, manufactures, and markets latex-free disposable medical catheters and devices for urological and continence care applications. The Company markets under its own Rochester Medical brand and under 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 has scheduled a conference call today at 4:00 p.m., C.D.T. regarding this announcement. The call is being webcast by Thompson/CCBN and can be accessed at Rochester Medical’s website www.rocm.com. To listen live to the conference call via telephone, call:


	September 30,		September 30,
	2004		2003
Assets
Current Assets
Cash and equivalents	$	620,441	$	1,764,499
Marketable securities		5,251,763		4,201,736
Accounts receivable		2,631,188		2,454,310
Inventories		3,945,313		3,542,619
Prepaid expenses and other assets		273,229		272,245

Total current assets		12,721,934		12,235,409
Property and equipment		8,442,427		8,663,662
Intangible assets		219,296		225,597

	$	21,383,657	$	21,124,668

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	778,766	$	507,580
Accrued expenses		595,145		1,098,578
Short term debt		34,000		34,000
Current maturities of capital leases		37,611		40,263
Deferred revenue		157,143		157,143

Total current liabilities		1,602,665		1,837,564
Long-term debt
Long term debt		68,000		102,000
Capital leases, less current portion		103,814		164,806
Deferred revenue		721,429		878,571

Total long term debt		893,243		1,145,377
Stockholders’ equity		18,887,749		18,141,727

	$	21,383,657	$	21,124,668


	Three months ended						Twelve months ended
	September 30,						September 30,
	2004			2003			2004			2003
Sales	$	3,594,543		$	3,621,022		$	15,011,419		$	14,655,372
Cost of sales		2,342,807			2,334,875			9,615,427			9,574,414

Gross profit		1,251,736			1,286,147			5,395,992			5,080,958
Gross profit %		35	%		36	%		36	%		35	%
Costs and expense:
Marketing and selling		535,243			597,170			2,175,665			2,225,376
Research and development		154,250			239,521			706,157			874,715
General and administrative		432,648			444,632			1,856,858			1,808,838

Total operating expenses		1,122,141			1,281,323			4,738,680			4,908,929

Income from operations		129,595			4,824			657,312			172,029
Other income (expense)
Interest income — Net		27,583			36,115			89,501			157,874

Net Income	$	157,178		$	40,939		$	746,813		$	329,903

Earnings per common share — Basic	$	0.03		$	0.01		$	0.14		$	0.06

Earnings per common share — Diluted	$	0.03		$	0.01		$	0.13		$	0.06

Shares in per share computation Basic		5,439,491			5,421,183			5,434,338			5,379,954

Shares in per share computation Diluted		5,660,087			5,735,383			5,686,594			5,653,859


Minnesota	0-18933	41-1613227
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

One Rochester Medical Drive, Stewartville, Minnesota		55976
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	Rochester Medical Corporation

October 29, 2004	By:	David A. Jonas

		Name: David A. Jonas
		Title: Chief Financial Officer


Exhibit No.		Description

99.1		Press Release, dated October 27, 2004, issued by Rochester Medical Corporation.


Date of Report (Date of Earliest Event Reported):		October 27, 2004


Registrant’s telephone number, including area code:		507-533-9600