STEWARTVILLE, Minn., July 27 /PRNewswire/ -- Rochester Medical Corporation
(Nasdaq: ROCM) today announced operating results for its quarter and nine-
month period ended June 30, 1999.
    Net sales decreased 30% to $1,733,000 for the third quarter of fiscal 1999
from $2,489,000 for the comparable quarter of last year.  The decrease in net
sales is the result of continued lower private label sales as previously
announced by the Company.  Third quarter net sales of Rochester Medical brand
products were up 42% compared to the third quarter of last year, with growth
in both domestic sales and international markets.  The Company reported a net
loss of $1,233,000 or ($.23) per share for the current quarter compared to a
net loss of $728,000 or ($.14) per share for the third quarter of last year.
The increase in net loss is primarily attributable to the lower net sales
levels during the current quarter.
    For the nine months ended June 30, 1999, net sales decreased 19% to
$5,461,000 from $6,767,000 for the comparable period of last year.  The
Company reported a net loss for the nine-month period of $2,962,000 or ($.56)
per share compared to a net loss of $1,695,000 or ($0.33) per share for the
comparable period last year.  The Company anticipates net sales for the fiscal
year ending September 30, 1999 will be below last year, primarily due to lower
private label sales.
    Anthony J. Conway, the Company's Chief Executive Officer commented, "The
results for the quarter are in line with our expectations and plans for the
Company.  We remain focused on the market development and commercialization of
our more advanced products, the Release-NF(TM) Foley catheter and the
FemSoft(R) Insert.  At the same time, we continue to make good progress with
our branded base products, particularly in the domestic market."

    Release NF Market Campaign
    Conway added, "We continue to be encouraged by the level of interest
hospitals are showing for Release-NF with its infection prevention capability.
Converting that interest to actual trial and use of the product, however, is
an extensive process."
    "Our sales activities are focused on hospital specialty care units that
are most sensitive to the need for infection control.  Even so, the newness of
this premium technology, together with the preventative medicine concept that
underlies its value, initially requires more time to sell in a market now
fiercely conditioned to reduce up front costs.  We believe our technology is
superior for the patient in preventing catheter associated urinary tract
infections (CAUTI) and in delivering hospital cost savings that more than
justify the premium.  As prominent medical institutions come to this same
conclusion through their own careful evaluations, I believe that the value of
Release-NF will become more generally recognized and accepted throughout the
health care system.  The challenge at this point is getting the initial early
adopters through product trials and converted to use of Release-NF."
    "In this regard, we are very pleased to note that the first full trial of
Release-NF has just been completed at the University of Maryland Medical
System.  Release-NF has been under formal evaluation in the Neurocare Unit at
that hospital for six months.  Use of our catheter showed significant
reduction from the historical rate of CAUTIs resulting in conversion to
primary use of Release-NF in this unit.  We have trials ongoing in other
prominent institutions, and we are working aggressively to increase the flow
of Release-NF prospects into the product trial pipeline.  We believe that
additional positive results in this area will provide an important validation
of the premium technology and will accelerate our trial and conversion
results."
    The Release-NF catheter is a latex-free Foley catheter which incorporates
nitrofurazone, a broad-spectrum antibacterial agent, into the structure of the
catheter.  The design of the Release-NF permits the sustained release of a
controlled dosage directly into the urinary tract to prevent the onset of
infection.  Each year in the U.S., approximately one million hospitalized
patients develop CAUTIs, resulting in estimated treatment costs over one
billion dollars, along with increase morbidity and risk of serious
complications.  The Release-NF catheter received FDA marketing approval in
1998.

    FemSoft Insert -- Regulatory Approval Status; Market Introduction Planning
    Regarding the FemSoft Insert, Conway said, "We are optimistically awaiting
U.S. Food and Drug Administration (FDA) approval of the Company's Pre-Market
Approval (PMA) application to market the FemSoft Insert in the U.S.  Based on
the information we have at this time, we believe the FemSoft Insert will be
approved for marketing in due course.  We have also recently announced another
important milestone in the regulatory area, having secured CE Mark approval
for clearance to market the FemSoft Insert in Europe.  This is excellent news,
as we are now able to allow selected European clinicians to start gaining
experience with the device in local populations, while we continue to seek
potential European distribution partners."
    "We continue making extensive preparations for a phased introduction of
the FemSoft Insert in the U.S.  The introduction process is expected to begin
in late 1999, given FDA approval.  Our phased approach is designed to fully
leverage the extensive clinical expertise and support we have already
established, by launching the product in certain of the locations where
clinical trials have been conducted since early 1997.  We have also identified
a number of additional key opinion leaders and institutions not previously
involved with the clinical trial activity that will be included in the early
phases of the introduction process.  We believe this approach will enable us
to enter the market in a controlled fashion with a significant level of
clinician support.  In the early phases, we will focus on refining our
marketing, selling, and distribution activities, so that the remainder of our
national introduction effort can be executed efficiently and expeditiously."
    The FemSoft Insert is a single-use disposable product designed to prevent
leakage of urine in women suffering from stress urinary incontinence.  It is a
small, soft device that a women inserts into her urethra.  The latex-free
device consists of a soft, thin, fluid filled silicone sleeve.  As a women
inserts the device, the soft liquid sleeve easily slides into and conforms to
her urethra forming an effective seal at the neck of the bladder to prevent
unintended urine leakage.  It is removed during regular bathroom visits where
it is discarded and then replaced by a fresh insert.  Stress urinary
incontinence is estimated to affect approximately 6.6 million U.S. women and a
similar number in Europe.  The condition can cause them to be incontinent
during everyday acts (sneezing, coughing), simple exertion (standing up,
lifting a grocery bag or a child), or exercise (dancing, aerobics, tennis,
golf).  Other options for management of female stress urinary incontinence
include absorbent pads, surgery, and pelvic muscle strengthening techniques.
    This press release contains forward looking statements that involve risks
and uncertainties, including the results of product evaluations, the securing
of GPO contract participation, the timing of purchases by customers,
manufacturing capacities for both current products and new products, the
results of clinical tests, the timing of clinical preference testing and
product introductions, and FDA 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, 1998.
    Rochester Medical Corporation develops, manufactures and markets latex-
free disposable medical catheters and devices for urological and continence
care applications.  The Company markets its products 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 or Brian J. Wierzbinski, Chief Financial Officer of
Rochester Medical Corporation at 507-533-9600.

                        Rochester Medical Corporation
                       Summary Statement of Operations

                               Three months ended       Nine months ended
                                   June 30,                 June 30,
                             1999        1998        1999         1998

    Net Sales             $1,733,368 $2,488,842   $5,460,680  $6,766,812
    Cost of sales          1,375,701  1,744,229    4,215,435   4,668,609

    Gross Profit             357,667    744,613    1,245,245   2,098,203
    Gross Profit %               21%        30%          23%         31%

    Cost and expense:
    Marketing and selling  1,068,347    951,475    2,623,344   2,239,826
    Research and
     development             238,877    339,370      747,994   1,061,840
    General and
     administrative          458,084    407,613    1,368,746   1,122,658

    Total other expenses   1,765,308  1,698,458    4,740,084   4,424,324

    Loss from operations  (1,407,641)  (953,845)  (3,494,839) (2,326,121)

     Other income (expense):
     Interest income         174,776    226,344      532,562     630,786
     Net Loss            $(1,232,865) $(727,501) $(2,962,277)$(1,695,335)

     Net loss per common
      share                   $(0.23)    $(0.14)      $(0.56)     $(0.33)

    Shares in per share
     computation           5,349,500  5,264,489    5,327,264   5,097,255

                          Rochester Medical Corporation
                             Condensed Balance Sheets

                                          June 30, 1999 September 30, 1998

    Assets:
    Cash and cash equivalents                $6,243,545          2,864,922
    Marketable securities                     8,077,002         13,545,271
    Accounts receivable                       1,096,358          1,955,048
    Inventories                               2,358,306          2,209,599
    Prepaid expenses and other assets           234,663            489,002

        Total current assets                 18,009,874         21,063,841

    Property and equipment                   11,391,319         11,419,697
    Intangible assets                           205,945            252,212

        Total                               $29,607,138        $32,735,750

    Liabilities and Stockholders' Equity:

    Current liabilities:
    Accounts payable                           $406,863           $766,304
    Accrued expenses                            584,823          1,051,717

        Total current liabilities               991,686          1,818,021

    Stockholders' equity                     28,615,452         30,917,729
        Total                               $29,607,138        $32,735,750

Link to this page: