ROCM

[la-onda]

Profile:
Rochester Medical (NasdaqGM: ROCM) develops, manufactures, and markets innovative urinary continence and urine drainage care products for the extended care and acute care markets in the United States and internationally. Its extended care products include a line of male external catheters for managing male urinary incontinence and a line of intermittent catheters for managing both male and female urinary retention.

- Reported record sales of $7,512,000 for the quarter ending 12/31/06 compared to $4,607,000 for the first quarter of last year. It also reported net income of $31,467,000 or $2.59 per diluted share compared to a net income of $311,000 or $.03 per diluted share for the first quarter of last year.
- Quarterly results include $38,605,000 of income resulting from the previously announced lawsuit settlements.
- The 63% increase in sales revenues for the current quarter compared to last year's first quarter resulted from increased Rochester Medical Brand sales, primarily attributable to increased international sales of Rochester Medical Brand products resulting from the previously announced acquisition in the United Kingdom, and also from increased Private Label sales.
- "This has certainly been an eventful quarter," said Company CEO and President
- Anthony J. Conway. "We were awarded a National Group Purchasing Contract by Premier Purchasing Partners, L.P.; we renewed our Private Label sales agreement with Hollister, Inc.; we secured two lawsuit settlements in our anti-trust litigation; and we realized strong sales and earnings. We are pleased with the Company's progress, and we look forward to a good year." Announced that it has signed a new Private Label Agreement for supply of Male External Catheters (MECs) to Hollister Incorporated and also announced that the parties have amended their 2003 OEM/Private Label Agreement.The MEC Agreement has a five year term commencing on January 1, 2007. Under the Agreement Rochester Medical will continue to supply Hollister with its requirements of non-latex Male External Catheters for sale under the Hollister brand worldwide, excluding the United Kingdom.
- Announced that group purchasing organization, Premier Purchasing Partners, L.P. ("Premier") has awarded the Company a national contract for supplying Premier's participating members with urological products, including Rochester Medical's line of infection control catheters. Premier is one of the largest Group Purchasing Organizations in the United States with over $27 billion in contract purchases per year. Its members include more than 1,500 hospital facilities and hundreds of other care sites. The contract has a 27 month term from the effective date of March 1, 2007. Initial marketing efforts are expected to commence prior to that date.
(seeking alpha)

Last quarter results:
Rochester Medical Reports Second Quarter Results
Monday , April 30, 2007 16:05ET
STEWARTVILLE, Minn., April 30 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (Nasdaq: ROCM) today announced operating results for its second quarter ending March 31, 2007.

The Company reported record sales of $8,347,000 for the current quarter compared to $4,874,000 for the second quarter of last year. It also reported net income of $1,044,000 or $.08 per diluted share compared to a net loss of $(244,000) or $(.02) per diluted share for the second quarter of last year.

To aid in analysis of the quarterly results, the Company notes the following:

    -- The results for the current quarter include $523,000 of non-cash
       expenses comprised of $359,000 related to non-cash stock option
       compensation expenses under FAS123R and $164,000 for amortization of
       intangibles related to the 2006 asset acquisitions.

    -- The current quarter revenues include realization of $508,000 which
       represents the remaining portion of the $1 million fee paid by
       Coloplast A/S to Rochester Medical in 2002 for marketing rights to
       Rochester Medical's antibacterial Foley Catheter.  Those rights have
       now been cancelled by mutual agreement, thus triggering the immediate
       recognition of the remaining amount as all conditions of the revenue
       agreement have now been met.

    -- The results for the current quarter include an expense of approximately
       $200,000 related to enhancing IT systems and implementing procedures
       needed to become compliant with Section 404 of Sarbanes-Oxley, which
       the Company is required to complete by the end of this fiscal year.
       The Company expects these expenses will be non-recurring after third
       quarter 2007.

    -- The results for the quarter reflect a planned increased investment in
       marketing and sales in both the U.S. and U.K.  The Company expects this
       investment will lead to increased sales and earnings in the future.

The 71% increase in sales revenues for the current quarter compared to last year's second quarter resulted primarily from increased sales of Rochester Medical branded products and from increased Private Label sales. International sales resulting from the acquired U.K. business generated a significant portion of the increase. The increase in net income for the current quarter compared to last year's second quarter was primarily due to increased contribution from increased sales.
"I am very pleased with our progress," said Company CEO and President Anthony J. Conway. "The recent asset acquisitions are contributing to the Company very nicely and, apart from that, our year to date organic growth is a healthy 13%. We are carefully investing in our marketing and sales activities to support our new contract with Premier Purchasing Partners, L.P., one of the largest group purchasing organizations in the U.S., and also to support the introduction of new products into the United Kingdom and mainland Europe. We expect these planned expenditures will generate increased sales and income over the long term. We are very focused on continuing the growth of Rochester Medical, both through internal growth and through additional strategic opportunities. I look forward to continued progress ahead."

IV board analysis:
Rochester Medical (ROCM) has been through the most bizarre five days of trading and reporting that I hope we ever see, with subscriber Steve and many others asking: "Why is ROCM dropping so fast?"

Last Friday, the stock suddenly plunged from $29.48 to $22.59 on no news, but heavy volume of 3.3 million shares -- 3X to 4X normal volume -- with most of the volume and the drop taking only several minutes. The stock ranked #6 on the Investor's Business Daily Top 100, and I knew the momentum players and day traders were in it. So did the hedge funds. With earnings coming on Monday, the hedge funds were able to knock the stock down enough to set off some of the day trader's stops, and that cascaded it down into another round of stops, and so on. It's called a Bear Raid, and the hedge funds target IBD stocks that have lots of weak holders like momentum and day traders -- especially when it is a Friday, with earnings coming the following week, and the stock has a relatively low short interest.

The weekend IBD Top 100 listed ROCM with the comment: "Continence product maker dives on Q2 EPS, after streak of accelerating growth." Of course, the company had not reported their earnings at that point, so it looked like IBD was in cahoots with the hedge funds. They probably meant "dives on fears over Q2 EPS," but even that looked suspicious because there were no fears over the earnings. No analysts publish on the company, and ROCM does not give specific guidance, so it would be hard for them to "miss."

The stock rallied a bit on Monday before the earnings, gaining 86 cents to close at $23.45 on more heavy volume of 2.4 million shares. And then things got really weird. The earnings report was a little ahead of my expectations, and the company laid out a conservative roadmap for continued growth. The stock cratered on Tuesday, losing $5.01 on 3.7 million shares, closing at $18.44. Wednesday was little better, with ROCM down another $1.35 to $17.09 on 2.2 million shares. Today started the recovery, up $1.06 to $18.15.
So, let's look at the quarter. Sales hit $8.347 million, up 71% from $4.874 million last year. A good bit of that was due to an acquisition in the U.K., and internal growth was about 13%. Sequentially, ROCM went from $5.4 million in the June 2006 third quarter to $6.8 million in September, $7.5 million in December, and now $8.3 million. That's a sequential growth rate averaging almost 16% per quarter. But say revenue growth averages only 12% per quarter going forward -- that's still 40% a year.
ROCM reported eight cents a share compared to a loss of two cents last year. The eight cents included a charge of about 29 cents a share for a stock option expense, which I and most other analysts would exclude to get pro forma earnings. But it also included a 28-cent-per-share gain from the settlement of a distribution contract, and about 11 cents in Sarbanes-Oxley expenses that will diminish this quarter and then go away. They mentioned another $300,000, or about 17 cents a share, increased investment in marketing, but I don't see that as nonrecurring. In fact, they will probably increase marketing spending to take advantage of their new distribution channel to hospitals.
So the real bottom line for pro forma earnings was about 20 cents a share this quarter, after a 12-cent net adjustment. In the June quarter, the adjustment will be around 33 cents a share, and in the September fourth quarter, about 30 cents.
I said in my original write-up on ROCM that I thought they could do around 50 cents this year. That's probably a little high on a GAAP (Generally Accepted Accounting Principles) basis and way low on a pro forma basis. The reason it is a little high on GAAP is that management laid out a longer sales cycle than I expected. Even though Foley catheters are well-known to hospitals, the company is expecting the sales cycle at most hospitals to include getting a committee to agree to a trial, then a three- to six-month trial, and only then once the lawsuits are resolved, will adoption of ROCM catheters and large orders follow. ROCM will slowly build its sales and marketing staff expenses, while orders will be delayed about 90 days longer than my original model. I still think the company will exit the calendar year -- their December first quarter -- at a $1.20 to $1.40 run rate on GAAP earnings. Due to the recent drop in the stock and the great buying opportunity that it is presenting, I'm making ROCM a Top Buy at current levels, and keeping the buy limit at $23 and the target price at $40.
link:
http://www1.investorvillage.com/smbd.asp?mb=971&mn=97220&pt=msg&mid=2054101

chart:

[la-onda]

finding the correct entry point seems to be difficult, jsut chart update, be on my close watchlist

[la-onda]

I couldn´t resist, bought some ROCM shares @ 16$

anybody with me??

[la-onda]

just on my watchlist, no monex left to invest but looks nice now!

update:

ROCM: Short Interest UP 4.3% to 1.7M in Jul 2007
Tuesday , July 24, 2007 16:21ET

According to new short interest data from NASDAQ, short interest for Rochester Medical Corporation (NasdaqNM: ROCM) INCREASED 4.3% to 1,670,138 shares for the month ended mid-July, 2007.

SYMBOL     JUNE            JULY          CHANGE       %CHANGE        DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
ROCM           1,601,592       1,670,138         +68,546        +4.28%          12

Based on ROCM's 20-day average daily share volume of 143,215, it would require approximately 12 day(s) of buying to cover this short interest.

&

Rochester Medical Announces Third Quarter 2007 Earnings Conference Call Tuesday, July 31, 2007
Wednesday July 25, 2:59 pm ET

STEWARTVILLE, Minn., July 25 /PRNewswire-FirstCall/ -- Rochester Medical Corporation (Nasdaq: ROCM - News) will announce quarterly results after financial markets close on Tuesday, July 31, 2007. The Company will then hold a quarterly conference call to discuss its earnings report. The call will begin at 4:00 p.m. central time (5:00 p.m. eastern time).

chart:

[la-onda]

nice breakout chart on no news: 

[livermore]

la-onda that was some very nice work by you there.

I would be interested on your take on SDTH holding TRA not sure whether to push more cash there than in TRA.

[la-onda]

Rochester Medical (ROCM) has a chance to really shine this quarter, with a full quarter of sales through Premiere. The one analyst following the stock is very cautious, looking for $8.4 million in sales in the September fourth quarter and seven cents a share, followed by $8.7 million and another seven cents in the December period. That would have ROCM coming in at $32.6 million and 23 cents for the September 2007 fiscal year, and the lone analyst is looking for only $38.9 million and 34 cents for fiscal 2008. I think they can beat $40 million and do 40 cents. ROCM is a Top Buy up to $23 for my $40 target.

[la-onda]

from IV:
A Bullish Diagnosis on Rochester Medical
Rochester Medical Corporation (ROCM) develops and manufactures a line of urinary continence and urine drainage care products, which are marketed to hospitals and extended-care facilities. The Company's extended care products include a line of male external catheters for managing male urinary incontinence and a line of intermittent catheters for managing male and female urinary retention. Its acute care products include a line of standard Foley catheters and its innovative RELEASE-NF Catheter, an antibacterial Foley catheter that reduces the incidence of hospital acquired urinary tract infections. Most of the company's products are made of silicone rather than latex to reduce the risk of allergic reactions.

The Company recently reported record FY07 revenues of $32.7 million (up 51% from FY06 revenues of $21.7M) and net income (less $31M in net gains from legal settlements) of $3M (up over 50% from $1.96M during FY06). The Company's antibacterial Foley catheter is poised for market share gains based on legal victories and a focus on preventing hospital-acquired infections that is currently underway. In addition, ongoing litigation against Tyco (TYC), which is set to resume in February 2008, may result in a cash windfall of between $20M - $30M and injunctive relief from alleged anti-competitive conduct by Tyco (Covidien: COV is the independent company that was spun off from Tyco Healthcare) based on previous settlements with other defendants named in the same lawsuit.

I have modeled for an expected cash/equivalents position at the end of FY08 of between $58M - $68M based on cash flow from operations and a successful resolution to the ongoing Tyco lawsuit, yielding an enterprise value (EV) of just $99M. The larger and slower-growing CR Bard (BCR) trades at a ratio of 3.8X EV/Revenue (ttm). Applying this multiple to Rochester Medical results in an expected EV of $152M for FY08 and $179M for FY09 on conservative sales estimates of $40M and $47M, respectively. The equivalent market cap is $207M for FY08 and $234M for FY09, which yields a fully diluted 2008 – 2009 price range of $16.43 to $18.57. However, I believe that ROCM warrants a 50% premium to this EV/revenue valuation model, resulting in a 2008 – 2009 price range of between $25 - $28 per share. This premium is justified because of the Company's better growth prospects which are starting at a smaller base level of sales, smaller market cap, continued medical device industry M&A activity, and continued product innovations to meet emerging medical needs (such as the current opportunity for its antibacterial Foley catheter in hospitals).

New rules adopted by the Centers for Medicare and Medicaid Services call for payments to be withheld from hospitals for care associated with treating certain hospital-acquired infections, such as catheter-associated urinary tract infections. These new rules will go into effect in October 2008 and build upon legislative efforts which are ongoing in many states for the public reporting of hospital-acquired infections. Both of these factors provide incentive for hospitals to increase resources for infection control and prevention; and since catheter-associated infections are the most common form of hospital-acquired infection, the Company's antibacterial catheter is poised to gain market share. CDC data reveals that catheter-associated urinary tract infections are the most common (40%) infection developed by patients in hospitals, with an annual cost to hospitals of $451 million, affecting 600,000 patients per year among an estimated 4 million patients who undergo urinary catheterizations each year.


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