EX-99.1 2 c76876exv99w1.htm EXHIBIT 99.1 Filed by Bowne Pure Compliance

(ROCHESTER MEDICAL)
Exhibit 99.1
RELEASE
3:00 P.M., C.S.T.
November 6, 2008


Rochester Medical Reports Record Fourth Quarter Sales and Record Annual Sales
Stewartville, MN November 6, 2008
Rochester Medical Corporation (NASDAQ: ROCM) today announced operating results for its fourth quarter and year ended September 30, 2008.
The Company reported record sales of $9,512,000 for the current quarter compared to $8,437,000 for the fourth quarter of last year. The Company also reported quarterly net income of $342,000 or $.03 per diluted share compared to $733,000 or $.06 per diluted share for the fourth quarter of last year. The approximate 13% increase in sales (16% on a constant currency basis) resulted from an 18% increase in Rochester Medical Branded Sales (23% on a constant currency basis), and a 4% increase in Private Label Sales (4% 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.
Net income adjusted for certain non-recurring unusual items and certain recurring non-cash expenses, or “Non-GAAP Net Income” for the current quarter is $789,000 or $.06 per diluted share compared to Non-GAAP Net Income of $1,211,000 or $.10 per diluted share for the fourth quarter of last year. The decrease for the current quarter is primarily attributable to increased strategic investment in Sales and Marketing Programs.
For the fiscal year ended September 30, 2008, the Company reported record sales of $35,192,000 compared to sales of $32,663,000 for the previous year. It reported net income for the year of $759,000 or $.06 per diluted share compared to a net income of $34,050,000 or $2.77 per diluted share for the previous year. The approximate 8% annual increase in sales (8% on a constant currency basis) resulted from a 24% annual increase in Rochester Medical Branded sales (24% increase on a constant currency basis) offset by a 16% decrease in Private Label Sales (16% decrease on a constant currency basis).
Non-GAAP Net Income for the current year is $2,776,000 or $.22 per diluted share compared to Non-GAAP net income of $4,966,000 or $.40 per diluted share for the previous year. The decrease for the current year is primarily attributable to the increased strategic investment in Sales and Marketing Programs.
Due to significant swings in the currency exchange rates, the Company is now also showing sales levels on a constant currency basis. In the fourth quarter the dollar strengthened significantly versus the pound sterling, thus affecting Branded sales growth levels in actual dollars.

 

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Commenting on today’s announcement, Rochester Medical’s CEO and President Anthony J. Conway said, “We had an excellent quarter and excellent year, and we look forward to building on that success in the United States, the United Kingdom, and other global markets. Our planned investments in Sales and Marketing are showing strong results. We are very pleased with the increasing interest in our Infection Control Catheters and with the solid growth in our Intermittent Catheter Sales. As we have previously stated, we look forward to exciting new product introductions this year which will further boost our reputation as a leader in the industry and also help boost our sales. We expect 2009 to be a good year for Rochester Medical.”
Rochester Medical has provided Non-GAAP Net Income in addition to earnings 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. Non-GAAP Net Income is not a measure 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 is not comparable to information provided by other companies. Non-GAAP Net Income has limitations as an analytical tool 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 are presented at the end of this press release.
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, 2007.
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 Daylight Time (5:00 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:
Domestic: 888.713.4214, password 27129424
International: 617.213.4866, password 27129424
Pre Registration:
https://www.theconferencingservice.com/prereg/key.process?key=PKQEEFANR
Replay will be available for seven days at www.rocm.com or via telephone at:
Domestic: 888-286-8010, password 85160784
International: 617-801-6888, password 85160784

 

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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/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).
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.

 

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ROCHESTER MEDICAL CORPORATION
Reconciliation of Reported GAAP Net Income to Non-GAAP Net Income
For the Three and Twelve months ended
September 30, 2008
                                 
    (unaudited)     (unaudited)  
    Three months ended     Tweleve months ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
 
                               
GAAP Net Income as Reported
  $ 342,000     $ 733,000     $ 759,000     $ 34,050,000  
 
                       
 
                               
Diluted EPS as Reported
  $ 0.03     $ 0.06     $ 0.06     $ 2.77  
 
                       
 
                               
Adjustments for non-recurring unusual items:
                               
Settlement income after taxes (1)
                      (31,305,000 )
Deferred revenue (2)
                      (564,000 )
 
                       
Subtotal
                      (31,869,000 )
 
                               
Adjustments for recurring non-cash expenses:
                               
Intangible Amortization (3)
    164,000       167,000       653,000       668,000  
FAS 123R Compensation Expense (4)
    283,000       311,000       1,364,000       2,117,000  
 
                       
Subtotal
    447,000       478,000       2,017,000       2,785,000  
 
                               
Non-GAAP Net Income
  $ 789,000     $ 1,211,000     $ 2,776,000     $ 4,966,000  
 
                       
 
                               
Non-GAAP Diluted EPS
  $ 0.06     $ 0.10     $ 0.22     $ 0.40  
 
                       
 
                               
Weighted Average Shares — Diluted
    12,587,427       12,582,793       12,577,337       12,272,172  
(1)  
Settlement income received November 20, 2006 from Premier, Inc. of $5,155,000 and December 14, 2006 from CR Bard, Inc. of $33,450,000 after taxes of $7,300,000. This adjustment reduces net income for amounts received net of taxes paid in connection with one-time settlement of certain litigation. These amounts were recorded in Other Income in the Statement of Operations for the fiscal year ended September 30, 2007.
 
(2)  
Deferred revenue from a $1,000,000 fee paid by Coloplast A/S in June 2002 for marketing rights to our antibacterial Release NF foley catheter. These rights with Coloplast A/S were cancelled by mutual agreement in March 2007, thus accelerating the recognition of the remaining amount as all conditions for revenue recognition have now been met. Also includes a $200,000 fee paid by Hollister for marketing rights to our hydorphilic intermittent catheter in September 2003. The fee paid by Hollister was fully recognized in December 2006. This adjustment reduces net income related to the realization of certain one-time revenue from marketing rights. The amounts were recorded in net sales in the Statement of Operations.
 
(3)  
Amortization of the intangibles acquired in June 2006 asset acquisition from Coloplast AS and Mentor Corporation. Management believes these assets are appreciating. This adjustment adds back amortization expense for the three and twelve months ended September 30, 2008 and 2007 related to certain intangibles.
 
(4)  
Compensation expense mandated by SFAS 123R. This adjustment adds back the compensation expense recorded when stock options are granted to employees and directors for the three and twelve months ended September 30, 2008 and 2007.

 

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Rochester Medical Corporation
Press Release — F08 Fourth Quarter
Condensed Balance Sheets
                 
    (unaudited)        
    September 30,     September 30,  
    2008     2007  
 
               
Assets
               
 
               
Current Assets
               
Cash and equivalents
  $ 8,508,000     $ 6,671,356  
Marketable securities
    28,493,648       30,465,244  
Accounts receivable
    6,009,023       5,527,518  
Inventories
    8,745,873       7,698,889  
Prepaid expenses and other assets
    1,110,291       6,480  
Deferred income tax asset
    1,143,931       876,032  
 
           
 
               
Total current assets
    54,010,766       51,245,519  
 
               
Property and equipment, net
    9,883,329       9,679,035  
Deferred income tax asset
    831,299       571,721  
Patents, net
    227,358       257,353  
Intangible assets, net
    6,860,213       7,821,562  
Goodwill
    5,169,661       5,920,255  
 
           
 
               
Total Assets
  $ 76,982,626     $ 75,495,445  
 
           
 
               
Liabilities and Stockholders’ Equity
               
 
               
Current liabilities:
               
Accounts payable
  $ 2,127,470     $ 1,091,874  
Accrued expenses
    1,152,118       1,978,937  
Short-term debt
    1,958,828       1,849,463  
 
           
 
               
Total current liabilities
    5,238,416       4,920,274  
 
               
Long-term liabilities
               
Other long-term liabilities
    239,496        
Long-term debt
    3,806,185       6,066,246  
 
           
 
               
Total long term liabilities
    4,045,681       6,066,246  
 
               
Stockholders’ equity
    67,698,529       64,508,925  
 
           
 
               
Total Liabilities and Stockholder Equity
  $ 76,982,626     $ 75,495,445  
 
           

 

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Rochester Medical Corporation
Press Release — F08 Fourth Quarter
Summary Statements Of Operations
                                 
    (unaudited)     (unaudited)  
    Three months ended     Tweleve months ended  
    Sept 30,     Sept 30,  
    2008     2007     2008     2007  
 
                               
Sales
  $ 9,512,191     $ 8,437,378     $ 35,191,949     $ 32,663,087  
 
                               
Cost of sales
    4,889,789       4,044,975       18,483,985       15,619,178  
 
                       
 
                               
Gross profit
    4,622,402       4,392,403       16,707,964       17,043,909  
Gross profit %
    49 %     52 %     47 %     52 %
 
                               
Costs and expense:
                               
Marketing and selling
    2,544,014       1,926,222       9,498,596       6,490,497  
Research and development
    308,913       232,725       1,044,205       943,225  
General and administrative
    1,447,707       1,540,034       6,658,002       6,742,665  
 
                       
 
                               
Total operating expenses
    4,300,634       3,698,981       17,200,803       14,176,387  
 
                       
 
                               
Income (loss) from operations
    321,768       693,422       (492,839 )     2,867,522  
 
                               
Other income (expense)
                               
 
                               
Interest income
    197,997       380,656       1,239,689       1,288,603  
Interest expense
    (82,674 )     (110,848 )     (477,560 )     (513,296 )
Other income (expense)
    (88,642 )     250,000       (88,642 )     38,855,000  
 
                       
 
                               
Net income (loss) before income taxes
  $ 348,449     $ 1,213,230     $ 180,648     $ 42,497,829  
 
                               
Income tax expense(benefit)
    6,291       479,747       (578,455 )     8,447,649  
 
                       
 
                               
Net income
    342,158       733,483       759,103       34,050,180  
 
                       
 
                               
Earnings per common share — Basic
  $ 0.03     $ 0.06     $ 0.06     $ 2.97  
 
                       
 
                               
Earnings per common share — Diluted
  $ 0.03     $ 0.06     $ 0.06     $ 2.77  
 
                       
 
                               
Weighted Average Shares:
    11,878,956       11,680,364       11,815,904       11,449,646  
 
                       
Basic
                               
 
                               
Weighted Average Shares:
                               
Diluted
    12,587,427       12,582,793       12,577,337       12,272,172  
 
                       

 

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