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Weekly UpdatesRochester Medical Corporation (NASDAQ:ROCM), Stewartville, Minn., has announced operating results for its third quarter ended June 30, 2009.
The company reported sales of $8,908,000 for the current quarter compared to $8,241,000 for the third quarter of last year. The company also reported net loss of $77,000 or ($.01) per diluted share for the quarter compared to net income of $312,000 or $.02 per diluted share for the same period of last year.
The approximate 8% increase in sales (18% on a constant currency basis) resulted from a 42% increase in Private Label Sales (42% increase on a constant currency basis), partially offset by a 4% decrease in Rochester Medical Branded Sales (8% increase 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. In the third quarter of 2009 the U.S. dollar was significantly stronger versus the pound sterling, thus negatively affecting Rochester Medical Branded Sales growth levels in actual U.S. dollars given the significant volume of our branded product sales in the United Kingdom.
Net income adjusted for certain non-recurring unusual items and certain recurring non-cash expenses, or "Non-GAAP Net Income" for the current quarter was $245,000 or $.02 per diluted share compared to Non-GAAP Net Income of $636,000 or $.05 per diluted share for the third quarter of last year. The decrease for the current quarter on a Non-GAAP basis is primarily attributable to a tax benefit of $654,000 taken in the third quarter of last year.
Rochester Medical's CEO and president Anthony J. Conway said, "Once again, excluding exchange rate influences, the company had a very solid quarter. The overall 18% sales growth is very good, and we are also pleased that U.S. & European Rochester Medical Branded Sales are up 15% overall on a constant currency basis. Branded sales in the rest of the world were down 16%, and we believe that is simply a reflection of order timing from certain International distributors. I would also note that the 42% increase in Private Label Sales reflects a significant upward quarterly percentage aberration due to the timing of orders from large Private Label customers."
Conway added, "I am very pleased with our progress in certain important areas. We have made significant strides in U.S. Acute Care, with several major opinion leading institutions now making product purchases, and with increasing interest and commitment from other major institutions. We have just begun the introduction of our new StrataSI Foley Catheter technology, and the initial reception is very positive. We are now initiating ReleaseNF catheter evaluations in the United Kingdom, and we are exploring potential partnerships for introduction of the ReleaseNF Anti-Infection Foley Technology into mainland Europe. Also, I'm pleased to report that our new MAGIC3 Intermittent Catheter Technology is doing very well in the U.S. and in the United Kingdom, and is now being introduced in mainland Europe."
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. Similarly, constant currency represents reported sales with the cost/benefit of currency movements removed. Management uses the measure to understand the growth of the business on a constant dollar basis, as fluctuations in exchange rates can distort the underlying growth of the business both positively and negatively. While we recognize that foreign exchange volatility is a reality for a global company, we routinely review our company performance on a constant dollar basis, and we believe this also allows our shareholders to understand better our company's growth trends.
Non-GAAP Net Income and constant currency are not measures 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 and constant currency are not comparable to information provided by other companies. Non-GAAP Net Income and constant currency have limitations as analytical tools and should not be considered in isolation or as a substitution for analysis of our results as reported under GAAP.
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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