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."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV