STEWARTVILLE, Minn., July 29 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (Nasdaq: ROCM) today announced operating results for its third quarter ended June 30, 2010.

The Company reported record sales of $10,244,000 for the current quarter compared to $8,908,000 for the third quarter of last year. The Company also reported net income of $95,000 or $.01 per diluted share for the quarter compared to net loss of $77,000 or ($.01) per diluted share for the same period of last year.

The 15% increase in sales (17% on a constant currency basis) resulted from a 32% increase in Rochester Medical Branded Sales (35% on a constant currency basis), partially offset by a 16% decrease in Private Label Sales (16% decrease on a constant currency basis).

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 $428,000 or $.03 per diluted share compared to Non-GAAP Net Income of $245,000 or $.02 per diluted share for the third quarter of last year. The increase for the current quarter is primarily attributable to higher gross profit resulting from increased sales and higher gross margin, partially offset by increased investment in the Company's Sales and Marketing programs as part of our ongoing strategy to increase branded sales.

"We believe our emphasis on strategic growth of Rochester Medical® branded products is having a positive impact," said Anthony J. Conway, Company President and CEO. "Once again, the 32% overall branded growth is solid, and we continue to be pleased by the strong growth in sales of our MAGIC3(TM) Intermittent Catheters and StrataSI(TM) and StrataNF(TM) Foley Catheters. Our branded sales now make up nearly 75% of total sales."

Conway continued, "We have recently invested significantly in pilot introductory activities for the FemSoft Insert in both the United States and United Kingdom. This unique disposable device offers immediate relief for women dealing with the difficulties of urinary incontinence. While it is still too early to know the ultimate potential of this product in the marketplace, we are confident of its viability and believe it will become an integral part of our offering in both countries as we move forward."

Conway then added, "The future looks bright for Rochester Medical. We believe we will continue to show excellent growth going forward."

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. Reconciliations of Net Income and Non-GAAP Net Income, and reconciliations of sales under GAAP and sales on a constant currency basis, are presented at the end of this press release.

This press release contains "forward-looking statements" that are based on currently available information, operating plans and management's expectations about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements, including the uncertainty of estimated revenues and profits, the uncertainty of current domestic and international economic conditions that could adversely affect the level of demand for the Company's products and increased volatility in foreign exchange rates, 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, 2009 and reports on Forms 10-Q and 8-K. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

The Company will hold a quarterly conference call to discuss its earnings report. The call will begin at 3:30 p.m. central time (4:30 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:         888.679.8040
    International:    617.213.4851
    Pass code:                                                   97798974
    Pre Registration:
    https://www.theconferencingservice.com/prereg/
     key.process?key=PG3QT3L6T
    Replay will be available for seven days at www.rocm.com or via
     telephone at:
    Domestic:         888-286-8010
    International:    617-801-6888
    Pass code:                                                   79705563

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 or David A. Jonas, Chief Financial Officer of Rochester Medical Corporation at (507) 533-9600. More information about Rochester Medical is available on its website at http://www.rocm.com.

    ROCHESTER MEDICAL CORPORATION
    Reconciliation of Reported GAAP Revenue to Non-GAAP Revenue in
    Constant Currency
    For the Three and Nine months ended
    June 30, 2010

                                                  (unaudited)
                                               Three months ended
                                                    June 30,
                                                    --------
                                                  2010           2009
                                                  ----           ----

    GAAP Sales as Reported                 $10,244,158     $8,908,416
                                           ===========     ==========
             Exchange rate as Reported            1.49           1.55
                                                  ====           ====


    Constant Currency Sales                $10,244,158     $8,796,578
                                           ===========     ==========
      (1)  Exchange rate used for Constant
       Currency Purposes                          1.49           1.49
                                                  ====           ====


    Net Effect of Constant Currency
     Illustration                                   $-      $(111,838)
                                                   ===      =========

                                                   (unaudited)
                                                Nine months ended
                                                     June 30,
                                                     --------
                                                  2010             2009
                                                  ----             ----

    GAAP Sales as Reported                 $30,321,451      $25,789,530
                                           ===========      ===========
             Exchange rate as Reported            1.56             1.52
                                                  ====             ====


    Constant Currency Sales                $30,321,451      $26,001,407
                                           ===========      ===========
      (1)  Exchange rate used for Constant
       Currency Purposes                          1.56             1.56
                                                  ====             ====


    Net Effect of Constant Currency
     Illustration                                   $-         $211,877
                                                   ===         ========

    (1) For illustrative purposes Constant currency translates prior
    period foreign sales at current exchange rates.
       For Rochester Medical Corporation this is the conversion rate of
       British pounds to US dollars.  The rate represents the
       average exchange rate for the respective three or nine month period.

    ROCHESTER MEDICAL CORPORATION
    Reconciliation of Reported GAAP Net Income to Non-GAAP Net Income
    For the Three and Nine months ended
    June 30, 2010 and 2009

                                       (unaudited)            (unaudited)
                                    Three months ended     Nine months ended
                                         June 30,               June 30,
                                         --------               --------
                                     2010        2009        2010        2009
                                     ----        ----        ----        ----

    GAAP Net Income (Loss) as
     Reported                     $95,000    $(77,000)  $(426,000)   $338,000
                                  =======    ========   =========    ========

    Diluted EPS as Reported         $0.01      $(0.01)     $(0.03)      $0.03
                                    =====      ======      ======       =====


    Adjustments for non-
     recurring unusual items:
       Settlement income after
        taxes (1)                       -           -           -    (637,000)
                                      ---         ---         ---    --------
    Subtotal                            -           -           -    (637,000)


    Adjustments for recurring
     non-cash expenses:
       Intangible amortization
        (2)                       129,000     129,000     387,000     386,000
       ASC 718 compensation
        expense (3)               204,000     193,000     754,000     683,000
                                  -------     -------     -------     -------
    Subtotal                      333,000     322,000   1,141,000   1,069,000
                                  -------     -------   ---------   ---------


    Non-GAAP Net Income          $428,000    $245,000    $715,000    $770,000
                                 ========    ========    ========    ========

    Non-GAAP Diluted EPS            $0.03       $0.02       $0.06       $0.06
                                    =====       =====       =====       =====

    Weighted Average Shares -
     Diluted                   12,724,610  12,603,331  12,747,669  12,637,414

    (1) Settlement income received January 15, 2009 from Covidien Ltd. of
    $1,000,000, $637,000 after taxes of $363,000. 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, 2009.
    (2) 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 ninth months
    ended June 30, 2010 and 2009 related to certain intangibles.
    The gross amount of amortization is $163,000 per quarter after taxes
    of $34,000 for a net amount of $129,000.

    (3) Compensation expense mandated by ASC 718. This adjustment adds
    back the compensation expense recorded for stock options
    granted to employees and directors that vested during the three and
    ninth months ended June 30, 2010 and 2009. The gross amount of
    compensation expense for the three months ended June 30, 2010
    and 2009 is $314,000 and $293,000 net of taxes of $110,000 and
    $100,000 for net amounts of $204,000 and $193,000 respectively.
    The gross amount of compensation expense for the nine months ended
    June 30, 2010 and 2009 is $1,164,000 and $1,035,000 net of
    taxes of $410,000 and $352,000 for net amounts of $754,000 and
    $683,000 respectively.

    Rochester Medical Corporation
    Press Release - F10 Third Quarter



                                 Condensed Balance Sheets

                                          (unaudited)
                                           June 30,      September 30,
                                                    2010          2009
                                                    ----          ----

                    Assets

      Current Assets
        Cash and equivalents                  $4,568,223    $6,365,584
        Marketable securities                 30,853,898    29,896,740
        Accounts receivable                    6,944,048     6,418,656
        Inventories                            8,839,536     9,710,234
        Prepaid expenses and other assets        975,763     1,076,183
        Deferred income tax                    1,119,902     1,153,964
                                               ---------     ---------

          Total current assets                53,301,370    54,621,361

      Property and equipment, net             10,003,912     9,683,808
      Deferred income tax                      1,094,759       768,874
      Patents, net                               212,376       224,815
      Intangible assets, net                   5,430,522     6,017,944
      Goodwill                                 4,338,316     4,648,165
                                               ---------     ---------

      Total Assets                           $74,381,255   $75,964,967
                                             ===========   ===========

    Liabilities and Stockholders'
     Equity

      Current liabilities:
        Accounts payable                      $1,961,962    $1,755,472
        Accrued expenses                       1,379,406     1,527,352
        Short-term debt                        2,345,546     2,786,622
                                               ---------     ---------

          Total current liabilities            5,686,914     6,069,446

      Long-term liabilities
        Other long-term liabilities               62,424        55,889
        Long-term debt                                 -     1,019,735
                                                     ---     ---------

          Total long-term liabilities             62,424     1,075,624

      Stockholders' equity                    68,631,917    68,819,897
                                              ----------    ----------

      Total Liabilities and Stockholders'
       Equity                                $74,381,255   $75,964,967
                                             ===========   ===========

    Rochester Medical Corporation
    Press Release - F10 Third Quarter


                               Summary Statements Of Operations

                                                          (unaudited)
                                                       Three months ended
                                                            June 30,
                                                            --------
                                                         2010            2009
                                                         ----            ----


    Sales                                         $10,244,158      $8,908,416

    Cost of sales                                   5,202,198       4,724,893
                                                    ---------       ---------

    Gross profit                                    5,041,960       4,183,523
                     Gross
                  profit %                                49%             47%

    Costs and expenses:
                  Marketing and
                  selling                          3,151,458       2,541,552
                  Research and
                  development                        246,401         352,248
                  General and
                  administrative                   1,369,406       1,451,041


    Total operating expenses                        4,767,265       4,344,841
                                                    ---------       ---------

    Income (loss) from operations                     274,695        (161,318)

    Other income (expense)

                  Interest
                  income                               55,733          39,964
                  Interest
                  expense                             (36,434)        (54,586)
                  Other
                  income


    Net income (loss) before income
     taxes                                            293,994        (175,940)

    Income tax expense(benefit)                       198,974         (99,040)
                                                      -------         -------

    Net income (loss)                                 $95,020        $(76,900)
                                                      =======        ========


    Earnings (loss) per common share -
     Basic                                              $0.01          $(0.01)
                                                        =====          ======

    Earnings (loss) per common share -
     Diluted                                            $0.01          $(0.01)
                                                        =====          ======

    Weighted Average Shares:                       12,196,977      12,025,966
                                                   ==========      ==========
                 Basic

    Weighted Average Shares:
                 Diluted                           12,724,610      12,025,966

                                                (unaudited)
                                             Nine months ended
                                                  June 30,
                                                  --------
                                              2010             2009
                                              ----             ----


    Sales                              $30,321,451      $25,789,530

    Cost of sales                       16,007,297       13,266,735
                                        ----------       ----------

    Gross profit                        14,314,154       12,522,795
                     Gross
                  profit %                     47%              49%

    Costs and expenses:
                  Marketing and
                  selling               8,800,449        7,555,936
                  Research and
                  development             930,819          969,011
                  General and
                  administrative        4,807,757        4,574,296


    Total operating expenses            14,539,025       13,099,243
                                        ----------       ----------

    Income (loss) from operations         (224,871)        (576,448)

    Other income (expense)

                  Interest
                  income                    99,684          241,490
                  Interest
                  expense                 (116,987)        (218,714)
                  Other
                  income                                  1,200,442


    Net income (loss) before income
     taxes                                (242,174)         646,770

    Income tax expense(benefit)            183,379          308,843
                                           -------          -------

    Net income (loss)                    $(425,553)        $337,927
                                         =========         ========


    Earnings (loss) per common share -
     Basic                                  $(0.03)           $0.03
                                            ======            =====

    Earnings (loss) per common share -
     Diluted                                $(0.03)           $0.03
                                            ======            =====

    Weighted Average Shares:            12,194,620       12,029,629
                                        ==========       ==========
                 Basic

    Weighted Average Shares:
                 Diluted                12,194,620       12,637,414

SOURCE Rochester Medical Corporation