STEWARTVILLE, Minn., Oct. 25 /PRNewswire-FirstCall/ -- Rochester Medical Corporation 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(R) 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) September 30, September 30, 2005 2004 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 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: Basic 5,488,228 5,439,491 5,466,123 5,434,338 Weighted Average Shares: Diluted 5,698,173 5,660,087 5,714,615 5,686,594
Rochester Medical Corporation
CONTACT: Anthony J. Conway, President and Chief Executive Officer ofRochester Medical Corporation, +1-507-533-9600
Web site: http://www.rocm.com/
