STEWARTVILLE, Minn., Oct. 26 /PRNewswire/ -- Rochester Medical Corporation
(Nasdaq: ROCM) today announced operating results for its quarter and fiscal
year ended September 30, 1999.
Net sales decreased 32% to $1,880,000 for the fourth quarter of fiscal
1999 from $2,751,000 for the comparable quarter of last year. The decrease in
net sales is the result of continued lower sales to domestic private label
customers as previously announced by the company, partially offset by a 12%
increase in domestic branded sales and a 51% increase in international sales.
The Company reported a net loss of $1,438,000 or ($.27) per share for the
current quarter compared to a net loss of $563,000 or ($.11) per share for the
fourth quarter of last year. The increase in net loss for the quarter is
attributable to the lower net sales levels and comparably higher operating
expenses, primarily related to marketing of the Company's advanced new
products.
For the twelve months ended September 30, 1999, net sales decreased 23% to
$7,341,000 from $9,518,000 for the comparable period of last year. The
Company reported a net loss for the twelve-month period of $4,401,000 or
($.83) per share compared to a net loss of $2,258,000 or ($0.44) per share for
the comparable period last year.
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 continue to make progress with our branded base products in the
domestic market, and our International business is also growing. In addition,
we continue the process of validating the premium value of the Release-NF(TM)
technology in the marketplace. Our Release-NF catheter has been performing
extremely well in reducing infection rates during hospital evaluations,
recently resulting in some initial institutional sales for that product."
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 catheter associated urinary tract infections, 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.
Conway continued, "On September 30, 1999 we announced that our FemSoft
Insert(R) has been given marketing clearance by the FDA and we eagerly look
forward to the introduction of that product throughout the coming year. The
FemSoft Insert will provide millions of women with a new alternative to
absorbents."
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.
"We are planning a phased introduction of the FemSoft Insert under the
Rochester Medical brand in the coming year," said Conway. "We have selected
several cities in which the sales campaign will begin, and we will then target
additional cities throughout the year. Our approach is quite straightforward:
the device will be prescribed by the patient's physician who will give her a
several day sample supply to take home. The woman can then have her
prescription filled by simply calling 1-800-FEMSOFT. The product is then
shipped directly to her home.
"Though our domestic sales force will be very focused on the FemSoft
Insert introduction, we will continue our efforts to gain evaluations of, and
conversions to, Release-NF in major institutions. Though we expect modest
gains in Release-NF sales throughout the year, we believe each conversion will
ultimately contribute to a broader acceptance of this premium product as the
appropriate standard for protecting patients from the risk of urinary tract
infection. We will also place strong emphasis on continuing the solid growth
of our branded base products: the Male External, Intermittent, and Foley
Catheters. On the international front we expect continued growth in base
product sales, mainly through private label distributors, and we are working
toward gaining distribution arrangements for our advanced products, the
Release-NF and the FemSoft Insert.
"The Company is very focused on the need to increase sales, especially now
that our advanced products are coming to market, and we are restructuring our
sales and marketing organization to meet this need. I am pleased to announce
that Brian J. Wierzbinski has been promoted to Executive Vice President, and
he will have functional responsibility for sales going forward. Todd
Cianfrocca has been promoted to National Sales Director and will have
responsibility for all domestic Rochester Medical brand sales. The domestic
sales force has been restructured under Todd in order to prepare for the
FemSoft Insert introduction. In his new position Todd will report to Brian;
as will Martyn Sholtis, Vice President of International and Private Label
Sales. Also, Dara Lynn Horner has been promoted to Vice President of
Marketing and will direct marketing strategies and activities for all the
Company's products.
"We also will be continuing our product development efforts, and we expect
to introduce some interesting new products to the market in Fiscal 2000 using
our proprietary technologies."
This press release contains forward looking statements that involve risks
and uncertainties, including the results of product evaluations, the securing
of Group Purchasing Organization 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, Executive Vice President and
Chief Financial Officer of Rochester Medical Corporation at 507-533-9600.
Rochester Medical Corporation
Selected Financial and Operating Information
Results of Operations
The Following table sets forth, for the fiscal periods indicated, certain
items from the statements of operations of the Company expressed as percentage
of net sales.
Three Months Twelve Months
Ended Ended
September 30, September 30,
1999 1998 1999 1998
Net Sales
Private Label 61% 72% 64% 75%
Rochester Medical Brand 39% 28% 36% 25%
Total Net Sales 100% 100% 100% 100%
Cost of Sales 74% 70% 76% 69%
Gross Margin 26% 30% 24% 31%
Operating Expenses
Marketing and Selling 70% 34% 54% 34%
Research and Development 16% 12% 14% 15%
General and Administrative 26% 12% 25% 15%
Total Operating Expenses 112% 58% 93% 64%
Loss From Operations (86%) (28%) (70%) (33%)
Interest Income (Expense) Net 10% 8% 10% 9%
Net Loss (76%) (20%) (60%) (24%)
Condensed Balance Sheets
September 30, September 30,
1999 1998
Assets
Current assets:
Cash and equivalents $4,216,814 $2,864,922
Marketable securities 9,029,296 13,545,271
Accounts receivable 1,369,662 1,955,048
Inventories 2,047,820 2,209,599
Prepaid expenses and other assets 347,860 489,002
Total current assets 17,011,452 21,063,841
Property and equipment 11,471,725 11,419,697
Intangible assets 219,218 252,212
Total assets $28,702,395 $32,735,750
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $689,475 $766,304
Accrued liabilities 835,914 1,051,717
Total current liabilities 1,525,389 1,818,021
Stockholders' equity 27,177,006 30,917,729
Total liabilities and
stockholders' equity $28,702,395 $32,735,750
Summary Statement of Operations
Three months ended Twelve months ended
September 30, September 30,
1999 1998 1999 1998
Net sales $1,880,190 $2,751,499 $7,340,870 $9,518,311
Cost of sales 1,386,607 1,935,592 5,602,042 6,604,201
Gross profit 493,583 815,907 1,738,828 2,914,110
Gross profit % 26% 30% 24% 31%
Costs and expense:
Marketing and
selling 1,320,246 950,816 3,943,589 3,190,642
Research and
development 304,096 322,370 1,052,090 1,384,210
General and
administrative 494,448 322,509 1,863,194 1,445,167
Total other expenses 2,118,790 1,595,695 6,858,873 6,020,019
Loss from
operations (1,625,207) (779,788) (5,120,045) (3,105,909)
Other income
(expense)
Interest income 186,760 216,876 719,322 847,662
Net loss $(1,438,447) $(562,912) $(4,400,723) $(2,258,247)
Net loss per common
share $(0.27) $(0.11) $(0.83) $(0.44)
Shares in per share
calculation 5,349,500 5,269,500 5,332,868 5,140,670
SOURCE Rochester Medical Corporation
 back to top
CONTACT:
Anthony J. Conway, Chief Executive Officer,
507-533-9600, or Brian J. Wierzbinski, Chief Financial Officer,
507-533-9604, both of Rochester Medical, or General Inquiries,
Craig Dickson, Analyst Inquiries, Leslie Loyet, or Media
Inquiries, Joyce Hanson, 312-266-7800, all of The Financial
Relations Board
|
