Rochester Medical Corporation Announces Decision To Exit The Foley
Catheter Business
STEWARTVILLE, Minn.,
Nov. 6, 2012 /PRNewswire/ -- Rochester Medical Corporation
(NASDAQ:ROCM) today announced its decision to cease manufacturing
and marketing its line of Foley Catheters, including its
StrataSI™ and StrataNF™ advanced silicone
Foley Catheters. The Company will continue to fulfill orders
for up to 90 days, during which time it expects to deplete the
majority of its Foley
inventory.
The Company will focus on its core product lines of Intermittent
Catheters and Male External Catheters, both of which are
successful, profitable, and growing steadily.
Earlier in the current year, the Company engaged Piper Jaffray to help explore its options in
exiting or selling the Foley Catheter business. After
completing that process, the Company and the Board of Directors
determined that exiting the Foley
business presented the best alternative. The Company will
continue to own the intellectual property associated with its
Foley catheters in anticipation of
deriving additional value from those assets in the future
Current annual sales of Foley Catheters are approximately
$3.9 million, representing
approximately 6% of the Company's total sales. Costs and
expenses associated with manufacturing and marketing the product
are extensive, and this product line has not yet reached a point of
positive earnings contribution. As such, the Company
estimates the decision to exit this business will significantly
enhance its profitability, adding an estimated $3 to $4 million to its pre-tax profit line on an
annual basis.
Commenting on today's announcement, Rochester Medical's CEO and
President Anthony J. Conway said,
"This is clearly the right decision for the Company. We have
been unable to capture any significant share of the Foley market and cannot justify the
significant costs associated with that effort.
"I am pleased to say we will be a much stronger and more
profitable company going forward, and we will be tightly focused on
the core parts of our business that are robust and growing:
Intermittent Catheters and Male External Catheters."
Conway noted that a summary of the long-awaited National
Healthcare System Foley Catheter Study was released yesterday in
the online publication of The Lancet. The formal study will
be published in The Lancet on November 9, 2012. The study showed no
significant difference among the three studied catheters, including
the Company's StrataNF™ Foley catheter, in reducing symptomatic
infections. Conway also noted, "Today's announcement to exit
the Foley business is the result
of a very deliberate and thorough strategic evaluation process
conducted over the last several months, and nothing in the study's
results suggested we should change our course of action."
The Company plans to provide more clarity on the financial
impacts of this announcement on its fiscal 2012 fourth quarter
earnings conference call to be held next Tuesday, November 13, 2012 at 3:30 p.m. Central (4:30
p.m. Eastern). For further details about the earnings call,
please refer to the investor section of the Rochester Medical
website at http://www.rocm.com.
Forward-Looking Statements
This press release contains "forward-looking statements" with
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to,
statements about the future financial and operating results of
Rochester Medical. Such statements are based on currently
available information, operating plans and management's
expectations about future events and trends. Such statements
inherently involve significant 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, and our level of
success in increasing Rochester Medical Direct Sales revenue,
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,
2011, and quarterly reports on Forms 10-Q. 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.
About Rochester Medical Corporation
Rochester Medical Corporation develops, manufactures, and
markets disposable medical catheters and devices for urological and
continence care applications. The Company also sells certain
ostomy and wound and scar care products and other brands of
urological products into the European marketplace.
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 or Parice Halbert, CFA, at
Westwicke Partners (443) 213-0500. More information about
Rochester Medical is available on its website at
http://www.rocm.com.
SOURCE Rochester Medical Corporation