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

For Release at

3:05 P.M., C.D.T

April 30, 2007

Rochester Medical Reports Second Quarter Results

Stewartville, MN April 30, 2007

Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its second quarter ending March 31, 2007.

The Company reported record sales of $8,347,000 for the current quarter compared to $4,874,000 for the second quarter of last year. It also reported net income of $1,044,000 or $.08 per diluted share compared to a net loss of $(244,000) or $(.02) per diluted share for the second quarter of last year.

To aid in analysis of the quarterly results, the Company notes the following:

    The results for the current quarter include $523,000 of non-cash expenses comprised of $359,000 related to non-cash stock option compensation expenses under FAS123R and $164,000 for amortization of intangibles related to the 2006 asset acquisitions.

    The current quarter revenues include realization of $508,000 which represents the remaining portion of the $1 million fee paid by Coloplast A/S to Rochester Medical in 2002 for marketing rights to Rochester Medical’s antibacterial Foley Catheter. Those rights have now been cancelled by mutual agreement, thus triggering the immediate recognition of the remaining amount as all conditions of the revenue agreement have now been met.

    The results for the current quarter include an expense of approximately $200,000 related to enhancing IT systems and implementing procedures needed to become compliant with Section 404 of Sarbanes-Oxley, which the Company is required to complete by the end of this fiscal year. The Company expects these expenses will be non-recurring after third quarter 2007.

    The results for the quarter reflect a planned increased investment in marketing and sales in both the U.S. and U.K. The Company expects this investment will lead to increased sales and earnings in the future.

The 71% increase in sales revenues for the current quarter compared to last year’s second quarter resulted primarily from increased sales of Rochester Medical branded products and from increased Private Label sales. International sales resulting from the acquired U.K. business generated a significant portion of the increase. The increase in net income for the current quarter compared to last year’s second quarter was primarily due to increased contribution from increased sales.

“I am very pleased with our progress,” said Company CEO and President Anthony J. Conway. “The recent asset acquisitions are contributing to the Company very nicely and, apart from that, our year to date organic growth is a healthy 13%. We are carefully investing in our marketing and sales activities to support our new contract with Premier Purchasing Partners, L.P., one of the largest group purchasing organizations in the U.S., and also to support the introduction of new products into the United Kingdom and mainland Europe. We expect these planned expenditures will generate increased sales and income over the long term. We are very focused on continuing the growth of Rochester Medical, both through internal growth and through additional strategic opportunities. I look forward to continued progress ahead.”

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 time (5:00 p.m. eastern time). This call is being webcast by Thomson Financial and can be accessed at Rochester Medical’s website at www.rocm.com. To listen live to the conference call via telephone, call:

     
Domestic:
International:
  1-800-901-5241, password 60913482
1-617-786-2963, password 60913482
 
   
Replay will be available for seven days at:www.rocm.com or via telephone:
 
   
Domestic Replay:
International Replay:
  1-888-826-8010, password 43696339
1-617-801-6888, password 43696339

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 www.fulldisclosure.com, Thomson Financial individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).

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® 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

Condensed Balance Sheets

                 
    (unaudited)    
    March 31,    
    2007   September 30, 2006
Assets
               
Current Assets
               
Cash and equivalents
  $ 10,070,274     $ 2,906,698  
Marketable securities
    30,075,000        
Accounts receivable
    4,723,543       4,494,094  
Inventories
    6,331,134       4,642,578  
Prepaid expenses and other assets
    446,811       410,267  
Deferred income tax assets
    760,000       53,000  
 
               
Total current assets
    52,406,762       12,506,637  
Property and equipment
    8,979,199       8,239,246  
Deferred income tax asset
    336,000       1,178,000  
Patents, net
    270,155       271,171  
Intangible assets, net
    7,943,394       8,270,157  
Goodwill
    5,430,176       5,487,141  
 
               
Total Assets
    75,183,686       35,952,352  
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Accounts payable
  $ 1,983,960     $ 1,278,441  
Accrued expenses
    1,160,778       1,621,376  
Short term debt
    1,160,778       1,681,361  
Current maturities of capital leases
    43,081       42,084  
Income taxes payable
    1,850,089       105,559  
Deferred revenue
          114,287  
 
               
Total long term liabilities
    7,111,993       8,012,682  
Stockholders’ equity
    61,352,424       23,096,562  
 
               
Total Liabilities and Stockholder Equity
               
 
  $ 75,183,686     $ 35,952,352  

Summary Statement of Operation

                                                                         
                                            Six months ended
               
 
  Three months ended March 31,
                          March 31,                        
Sales
  $ 8,346,603           $ 4,874,079           $   15,858,569           $ 9,481,279        
Cost of sales
  3,919,245           3,314,823                   7,655,589           6,320,293        
 
                                                                       
Gross profit
  4,427,358           1,559,256                   8,202,980           3,160,986        
Gross profit %
  53 %           32 %                   52 %           33 %        
Cost and expense:
                                                                       
Marketing and selling
  1,520,685           576,374                   2,754,347           1,175,367        
Research and development
  240,495           186,974                   443,265           360,597        
General and administrative
  1,709,553           994,546                   3,758,699           1,566,800        
 
                                                                       
Total operating expenses
  3,470,733           1,757,894                   6,956,311           3,102,764        
 
                                                                       
Income from operations
  956,625           (198,638 )                   1,246,669           58,222        
Other income (expense)
                                                                       
(Loss) on Sale of Investments
            (103,532 )                             (103,532 )        
Interest income
  439,503           60,322                   514,353           117,447        
Interest expense
  (153,184 )           (2,471 )                   (312,822 )           (5,075 )        
Other income
                              38,605,000                  
 
                                                                       
Net income before income taxes
  $ 1,242,944           $ (244,319 )           $   40,053,200           $ 67,062        
Income tax expense
  199,426                             7,543,066                  
Net income
  1,043,518           (244,319 )                   32,510,134           67,062        
 
                                                                       
Earnings per common share – Basic
  $ 0.09           $ (0.02 )                   $ 2.89           $ 0.01        
 
                                                                       
Earnings per common share – Diluted
  $ 0.08           $ (0.02 )                   $ 2.64           $ 0.01        
 
                                                                       
Weighted Average Shares: Basic
  11,367,295           11,067,478                   11,233,207           11,059,844        
 
                                                                       
Weighted Average Shares: Diluted
  12,475,859           11,067,478                   12,331,312           11,564,226