EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1

Exhibit 99.1

Rochester Medical Reports Fourth Quarter and Annual Results

Stewartville, MN October 25, 2005

Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its fourth quarter and fiscal year ending September 30, 2005.

The Company reported sales of $4,314,000 for the current quarter compared to $3,595,000 for the fourth quarter of last year. It reported net income for the current quarter of $611,000 or $.11 per diluted share compared to a net income of $157,000 or $.03 per diluted share for the fourth quarter of last year. The 20% increase in sales resulted from increased sales of both Rochester Medical Brand products and products sold under private label. The increase in earnings resulted from the recognition of a portion of the Company’s deferred tax assets.

For the fiscal year ended September 30, 2005 net sales were $15,942,000 with net income of $934,000 or $.16 per diluted share compared to net sales of $15,011,000 with net income of $.13 per diluted share for the previous fiscal year. The approximate 6% overall sales increase reflected a 12% growth in Rochester Medical Brand sales and a 2% increase in private label sales. The 25% increase in earnings was due to the recognition of $454,000 of a deferred tax asset offset primarily by higher costs and expenses.

Regarding the quarter and the year Rochester Medical CEO and President Anthony J. Conway said, “Our sales strengthened nicely in the fourth quarter. We continue to be very pleased with the market acceptance of the recently introduced Closed System configurations of our Hydrophilic and Antibacterial Hydrophilic Intermittent Catheters. Early stage manufacturing inefficiencies on these new products have temporarily impacted margins, and we expect margins will continue to improve as we continue refining our manufacturing processes. Some costs and expenses were up significantly for the year. Annual medical costs for our employees were unexpectedly high. They were up $266,000 over last year due to several unexpected high claims. Legal costs were higher than the previous year and, as planned, we invested more in sales and marketing to support introduction of our new products.

“Going forward into fiscal 2006 I expect solid growth over fiscal 2005. Our Hydrophilic Intermittent offerings should continue to do well. This year we expect a ruling in the U.K. on the European packaging patent issue between Coloplast and Hollister, our Private Label customer for Hydrophilic Intermittent Catheters. The matter is scheduled for trial in November of this year. Regardless of the outcome of that litigation, Rochester Medical will introduce new, more advanced hydrophilic catheter technology worldwide in 2006 in a packaging configuration that avoids the claims in the Coloplast patent.

“Our improved silicone Foley catheter offering will be introduced in the U.S. early in calendar 2006 with European introduction following in mid-year. Refinements to our proprietary balloon technology address the issue of balloon cuffing that has previously limited silicone catheters’ replacement of latex Foleys.

“We recently announced the signing of a group purchasing contract with Managed Healthcare Associates (MHA) which I believe will help spur additional growth in the Alternate Care arena as we move further into the fiscal year. With respect to the Acute Care market, we continue to work diligently on the lawsuit we filed against C.R. Bard, TYCO, Premier, and Novation. The case is scheduled to go to trial in September 2006. Also, we continue to assess and discuss other strategic business possibilities which can benefit the Company.”

Conway concluded, “I am looking forward to an exciting and solid year.”

The immediately preceding statement contains forward-looking statements that involve risks and uncertainties, including the uncertainty of market acceptance 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, I tem 6) for the year ended September 30, 2004.

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 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.

1

Rochester Medical Corporation

Press Release — F05 Fourth Quarter

Condensed Balance Sheets

                         
            (unaudited)   September 30, 2004
            September 30, 2005        
Assets
               
Current Assets
                       
   Cash and equivalents
  $ 1,129,876     $ 620,441  
   Marketable securities
    5,286,553       5,251,763  
   Accounts receivable
    3,204,824       2,631,188  
   Inventories
    3,936,243       3,945,313  
   Prepaid expenses and other assets
    351,027       273,229  
   Deferred income tax asset
    21,000        
 
                       
Total current assets
    13,929,523       12,721,934  
   Property and equipment
    7,561,303       8,442,427  
   Deferred income tax asset
    433,000        
   Patents, net
    285,194       219,296  
 
                       
   Total Assets
  $ 22,209,020     $ 21,383,657  
 
                       
Liabilities and Stockholders’ Equity
               
Current Liabilities:
                       
   Accounts payable
  $ 283,332     $ $778,766  
   Accrued expenses
    744,260       595,145  
   Short term debt
    34,000       34,000  
   Current maturities of capital leases
    39,785       37,611  
   Deferred revenue
    157,143       157,143  
 
                       
   Total Current Liabilities
    1,258,520       1,602,665  
Long-term liabilities
                       
   Long term debt
    34,000       68,000  
   Capital leases, less current portion
    64,030       103,814  
   Deferred revenue
    564,286       721,429  
 
                       
Total long term liabilities
    662,316       893,243  
Stockholders’ equity
            20,288,184       18,887,749  
Total Liabilities and Stockholder Equity
  $ 22,209,020     $ 21,383,657  
 
                       

Rochester Medical Corporation

Press Release — F05 Fourth Quarter

Summary Statements Of Operations

                                         
            (unaudited)   (unaudited)
            Three months ended   Twelve months ended
            September 30,   September 30,
            2005   2004   2005   2004
Sales
          $ 4,313,742     $ 3,594,543     $ 15,941,649     $ 15,011,419  
Cost of Sales
            2,917,301       2,342,807       10,330,113       9,615,427  
 
                                       
Gross profit
            1,396,441       1,251,736       5,611,536       5,395,992  
   Gross profit %
    32 %     35 %     35 %     36 %
Costs and expense:
                                       
   Marketing and selling
    644,617       535,243       2,397,816       2,175,665  
   Research and development
    166,010       154,250       730,105       706,157  
   General and administrative
    467,635       432,648       2,126,813       1,856,858  
 
                                       
Total operating expenses
            1,278,262       1,122,141       5,254,734       4,738,680  
Income from operations
            118,179       129,595       356,802       657,312  
Other income (expense)
                                       
   Interest income - Net
    38,974       27,583       123,625       89,501  
 
                                       
Net income before income taxes
    157,153       157,178       480,427       746,813  
Income tax benefit
            454,000             454,000        
 
                                       
Net income
          $ 611,153     $ 157,178     $ 934,427     $ 746,813  
 
                                       
Earnings per common share — Basic
    0.11       0.03       0.17       0.14  
 
                                       
Earnings per common share — Diluted
    0.11       0.03       0.16       0.13  
 
                                       
Weighted Average Shares:
            5,488,228       5,439,491       5,466,123       5,434,338  
 
                                       
   Basic
                               
Weighted Average Shares:
            5,698,173       5,660,087       5,714,615       5,686,594  
 
                                       
   Diluted
                               

2