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10-Q - FORM 10-Q - UROPLASTY INC | c62679e10vq.htm |
EX-32.1 - EX-32.1 - UROPLASTY INC | c62679exv32w1.htm |
EX-31.1 - EX-31.1 - UROPLASTY INC | c62679exv31w1.htm |
Exhibit 99.1
UROPLASTY REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER FY2011
Global sales increase 14%
Sales to U.S. customers up 33% driven by 64% growth in Macroplastique®
Urgent® PC customers increase to 236 in the third quarter from 185
in the second quarter of the fiscal year
in the second quarter of the fiscal year
Two Additional Regional Medicare Carriers Begin Payment for PTNS
Conference call today at 4:30 p.m. ET
MINNEAPOLIS, MN, January 27, 2011 Uroplasty, Inc. (NASDAQ: UPI), a medical device
company that develops, manufactures and markets innovative proprietary products to treat voiding
dysfunctions, today reported financial results for the third fiscal quarter ended December 31,
2010.
Global sales grew 14% to $3.5 million, compared with $3.1 million in the same quarter a year ago.
The growth was driven by strength in U.S. sales, up 33% from the third quarter a year ago. The
increase in U.S. sales reflected a 64% increase in sales of the Macroplastique product line, where
the Company has had a focused marketing effort. Sales of the Urgent PC Neuromodulation System in
the U.S. for the recent third fiscal quarter totaled $1.0 million, an increase of 10% from the
prior years third quarter. The number of customers in the U.S. purchasing the Urgent PC
Neuromodulation System during the quarter increased to 236 from 185 in the second quarter ended
September 30, 2010.
The Company also announced that two additional Medicare carriers, Cahaba Government Benefit
Administrators®, LLC and First Coast Service Options, Inc. (FCSO), have begun to pay for
Percutaneous Tibial Nerve Stimulation (PTNS) treatments, using the Urgent PC Neuromodulation
System. Cahaba administers Medicare health insurance for the states of Alabama, Georgia,
Mississippi and Tennessee. FCSO is the Medicare carrier for Florida, Puerto Rico and the U.S.
Virgin Islands.
With the addition of these two carriers, there are now nine regional Medicare carriers providing
coverage for PTNS, using Urgent PC, for the treatment of symptoms of overactive bladder syndrome in
29 states and two territories. Coverage of PTNS using the Urgent PC Neuromodulation System,
currently extends to approximately 28 million lives of the 46 million total lives covered under
Medicare.
We were very encouraged by the growth in Urgent PC customers in the U.S. We believe the
availability of a Category I CPT® code for PTNS, a favorable reimbursement amount under
Medicare coverage and recent decisions by several Medicare carriers to cover the treatment when the
CPT code became effective on January 1, 2011 are creating renewed interest in PTNS, said David
Kaysen, President & CEO of Uroplasty, Inc. The number of customers grew in the third quarter as
physicians began to ramp up their practices in light of the positive Medicare reimbursement
decisions. We saw a
surge in new and reengaged customers in December and expect to see continued growth in the adoption
of Urgent PC. However, it is important to note that the exceptional rate of adoption we experienced
in the third quarter reflected some pent up demand from physicians, who were waiting for
implementation of the CPT code and confirmation of positive reimbursement rates.
The coverage of PTNS using Urgent PC, by Cahaba and FCSO continues to show the strength of the
clinical data that supports the effectiveness and safety of Urgent PC for treating the symptoms of
overactive bladder, Mr. Kaysen added. In addition to the nine regional Medicare carriers that
today provide reimbursement for PTNS, there is now one carrier, representing five states with
approximately two million covered lives that has indicated it will cover on a case-by-case basis.
An additional three Medicare carriers, representing 16 states with approximately 17 million covered
lives, continue to decline reimbursement coverage for PTNS.
Our reimbursement team is working to move the case-by-case coverage to routine coverage and to
have the negative coverage decisions reversed, continued Mr. Kaysen. We are also working with
select private health insurers to educate them on the benefits and results of clinical studies that
demonstrate the success of PTNS in the treatment of overactive bladder. In anticipation of
increased interest in Urgent PC, we have expanded our U.S. field sales and support organization.
At December 31, 2010, we had 31 sales representatives compared with 19 sales reps at September 30,
2010.
As we look ahead, we anticipate continued demand for our Urgent PC Neuromodulation System, as
physicians become more comfortable with the treatment and gather additional patient feedback and
reimbursement experience. We are focused on execution, driving adoption and sales of Urgent PC and
Macroplastique in the U.S., and maintaining our presence in international markets. With the
capital raise in July, we have sufficient cash to pursue these growth initiatives, Mr. Kaysen
concluded.
Fiscal Third Quarter and First Nine Months Results for the Period Ended December 31, 2010
Net sales for the three months ended December 31, 2010 totaled $3.5 million, an increase of 14%
over net sales of $3.1 million for the third quarter of the prior fiscal year. Excluding the
translation impact of foreign currency exchange rates, sales increased by approximately 17%. For
the nine months ended December 31, 2010, net sales were $9.8 million, a 10% increase above net
sales for the comparable period of 2009 of $8.9 million. Excluding the impact of foreign exchange
translation, sales grew by 14%.
Sales to customers in the U.S. for the three months ended December 31, 2010 were $2.0 million, a
33% increase compared to $1.5 million in net sales for the year-ago quarter. During the first nine
months of fiscal 2011, sales to customers in the U.S. totaled $5.5 million, representing a 22%
increase over net sales of $4.5 million for the comparable nine month period of fiscal 2010.
Sales in the U.S. of the Urgent PC product for the three months ended December 31, 2010 increased
10% to $1.0 million compared with $934,000 for the same period last year. For the recent nine
month period, sales from Urgent PC totaled approximately $3.0 million, an increase of 1% over sales
in the comparable period last year.
Sales in the U.S. of Macroplastique increased 64% to $925,000 for the three months ended December
31, 2010, from $565,000 for the same period last year. For the nine months of fiscal 2011, sales
of Macroplastique increased 60% to $2.4 million compared with $1.5 million in the same period a
year ago, reflecting the increased sales and marketing focus on this product line.
Net sales to customers outside of the U.S. for the third quarter ended December 31, 2010 were $1.5
million, a decrease of 5% from $1.6 million in the same quarter last year. Excluding the impact of
foreign exchange translation, sales increased by approximately 2%. For the nine months ended
December 31, 2010, sales were $4.3 million, a decrease of 2% compared with $4.4 million in the
comparable period of the prior year. Excluding the impact of foreign exchange translation, sales
increased by approximately 5%.
The operating loss for the fiscal 2011 third quarter was $1.5 million compared with $392,000 in the
prior year. The operating loss, excluding non-cash charges for share-based compensation and
depreciation and amortization, of $1.1 million in the recent third quarter increased from
approximately $42,000 in the year-ago quarter, primarily due to increased spending attributable to
higher bonuses, commissions, travel expenses and increase in headcount. The net loss for the three
months ended December 31, 2010 was $1.5 million, or $0.07 per share, as compared to a net loss of
$387,000, or $0.03 per share, for the quarter ended December 31, 2009.
Cash, cash equivalents and cash investments at December 31, 2010 totaled $20.8 million. Reflected
in the total was the contribution from the proceeds of a public offering of common shares in July
2010. The Company issued 4.6 million shares at $3.50 per share, for net proceeds of approximately
$14.9 million. The Company plans to use the proceeds to expand the U.S. sales and marketing
organizations to support the Urgent PC business, and for clinical studies, working capital and
general corporate purposes.
Conference Call
Uroplasty will host an audio conference call today at 3:30 pm Central, 4:30 pm Eastern, to review
the financial results for the third fiscal quarter ended December 31, 2010. David Kaysen, President
and Chief Executive Officer and Medi Jiwani, Vice President, Chief Financial Officer and Treasurer,
will host the call. Individuals wishing to participate in the conference call should dial
877-941-8609. An audio replay will be available for 30 days following the call at 800-406-7325
(domestic) or 303-590-3030 (international), with the passcode 4402505.
CPT is a registered trademark of the American Medical Association.
About Uroplasty, Inc.
Uroplasty, Inc., headquartered in Minnetonka, Minnesota, with wholly-owned subsidiaries in
The Netherlands and the United Kingdom, is a medical device company that develops, manufactures and
markets innovative proprietary products for the treatment of voiding dysfunctions. Our focus is the
continued commercialization of our Urgent PC system, which we believe is the only FDA-cleared
minimally invasive nerve stimulation device designed for office-based treatment of urinary urgency,
urinary frequency and urge incontinence symptoms often associated with overactive bladder.
We also offer Macroplastique Implants, an injectable urethral bulking agent for the treatment of
adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency. For more
information on the company and its products, please visit Uroplasty, Inc. at www.uroplasty.com.
Forward-Looking Information
This press release contains forward-looking statements that reflect our best estimates regarding
future events and financial performance. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from our anticipated results. We
discuss
in detail the factors that may affect the achievement of our forward-looking statements in our
Annual Report on Form 10-K filed with the SEC. In particular, we cannot be certain that we will
ever achieve sustained profitability, that the rate of reimbursement for PTNS treatments will be
adequate to justify the cost of our product, that other Medicare carriers or private payers will
provide coverage for this treatment or that existing carriers and payers will not change their
coverage decisions, or that any of the other risks identified in our 10-K will not adversely affect
our expectations as described in these forward-looking statements.
For Further Information: |
||
Uroplasty, Inc.
|
EVC Group | |
David Kaysen, President and CEO, or
|
Doug Sherk/Jenifer Kirtland (Investors) | |
Medi Jiwani, Vice President, CFO, and
|
415.896.6820 | |
Treasurer
|
Chris Gale (Media) | |
952.426.6140
|
646.201.5431 |
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 3,492,067 | $ | 3,068,142 | $ | 9,772,389 | $ | 8,880,546 | ||||||||
Cost of goods sold |
604,566 | 505,399 | 1,709,731 | 1,592,443 | ||||||||||||
Gross profit |
2,887,501 | 2,562,743 | 8,062,658 | 7,288,103 | ||||||||||||
Operating expenses |
||||||||||||||||
General and administrative |
861,183 | 639,608 | 2,608,868 | 2,201,199 | ||||||||||||
Research and development |
423,794 | 401,481 | 1,296,431 | 1,365,194 | ||||||||||||
Selling and marketing |
2,871,456 | 1,702,900 | 6,877,402 | 5,728,242 | ||||||||||||
Amortization |
211,058 | 211,189 | 632,508 | 634,505 | ||||||||||||
4,367,491 | 2,955,178 | 11,415,209 | 9,929,140 | |||||||||||||
Operating loss |
(1,479,990 | ) | (392,435 | ) | (3,352,551 | ) | (2,641,037 | ) | ||||||||
Other income (expense) |
||||||||||||||||
Interest income |
21,135 | 21,468 | 52,762 | 77,097 | ||||||||||||
Interest expense |
(652 | ) | (1,291 | ) | (4,537 | ) | (10,986 | ) | ||||||||
Foreign currency exchange gain (loss) |
503 | (8,335 | ) | 12,867 | (23,030 | ) | ||||||||||
Other, net |
| | (192 | ) | (183 | ) | ||||||||||
20,986 | 11,842 | 60,900 | 42,898 | |||||||||||||
Loss before income taxes |
(1,459,004 | ) | (380,593 | ) | (3,291,651 | ) | (2,598,139 | ) | ||||||||
Income tax expense |
8,927 | 6,143 | 28,260 | 29,030 | ||||||||||||
Net loss |
$ | (1,467,931 | ) | $ | (386,736 | ) | $ | (3,319,911 | ) | $ | (2,627,169 | ) | ||||
Basic and diluted loss per common share |
$ | (0.07 | ) | $ | (0.03 | ) | $ | (0.18 | ) | $ | (0.18 | ) | ||||
Weighted average common shares
outstanding: |
||||||||||||||||
Basic and diluted |
20,514,530 | 14,946,540 | 18,314,157 | 14,943,638 |
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Unaudited)
December 31, 2010 | March 31, 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents & short-term investments |
$ | 14,822,635 | $ | 5,811,269 | ||||
Accounts receivable, net |
1,547,665 | 1,287,440 | ||||||
Inventories |
592,181 | 341,497 | ||||||
Income tax receivable |
| 23,820 | ||||||
Other |
308,137 | 237,321 | ||||||
Total current assets |
17,270,618 | 7,701,347 | ||||||
Property, plant, and equipment, net |
1,133,179 | 1,230,771 | ||||||
Intangible assets, net |
1,911,887 | 2,533,095 | ||||||
Long-term investments |
6,009,337 | | ||||||
Deferred tax assets |
112,907 | 108,530 | ||||||
Total assets |
$ | 26,437,928 | $ | 11,573,743 | ||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 489,093 | $ | 485,594 | ||||
Current portion deferred rent |
35,000 | 35,000 | ||||||
Income tax payable |
12,487 | 10,000 | ||||||
Accrued liabilities: |
||||||||
Compensation |
1,476,238 | 903,057 | ||||||
Other |
251,455 | 212,028 | ||||||
Total current liabilities |
2,264,273 | 1,645,679 | ||||||
Deferred rent less current portion |
86,079 | 112,500 | ||||||
Accrued pension liability |
578,262 | 601,037 | ||||||
Total liabilities |
2,928,614 | 2,359,216 | ||||||
Total shareholders equity |
23,509,314 | 9,214,527 | ||||||
Total liabilities and shareholders equity |
$ | 26,437,928 | $ | 11,573,743 | ||||
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Unaudited)
Nine Months Ended | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (3,319,911 | ) | $ | (2,240,434 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
848,385 | 567,238 | ||||||
Loss on disposal of equipment |
192 | 186 | ||||||
Amortization of premium on marketable securities |
7,226 | |||||||
Share-based consulting expense |
9,739 | | ||||||
Share-based compensation expense |
279,083 | 291,462 | ||||||
Deferred income taxes |
(5,863 | ) | (3,249 | ) | ||||
Deferred rent |
(26,421 | ) | (17,500 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(261,136 | ) | 91,206 | |||||
Inventories |
(248,656 | ) | 47,499 | |||||
Other current assets and income tax receivable |
(48,492 | ) | (102,998 | ) | ||||
Accounts payable |
4,474 | (185,406 | ) | |||||
Accrued liabilities |
610,710 | (348,381 | ) | |||||
Accrued pension liability, net and income tax payable |
(10,783 | ) | (58,492 | ) | ||||
Net cash used in operating activities |
(2,161,453 | ) | (1,958,869 | ) | ||||
Cash flows from investing activities: |
||||||||
Proceeds from maturity of marketable securities |
4,000,000 | 2,500,000 | ||||||
Purchases of marketable securities |
(16,311,352 | ) | (2,000,000 | ) | ||||
Purchases of property, plant and equipment |
(128,935 | ) | (61,334 | ) | ||||
Purchase of intangible assets |
(11,300 | ) | | |||||
Proceeds from sale of property, plant and equipment |
| 2,000 | ||||||
Net cash (used in) provided by investing activities |
(12,451,587 | ) | 440,666 | |||||
Cash flows from financing activities: |
||||||||
Net proceeds from public offering of common stock |
14,917,059 | | ||||||
Net proceeds from exercise of warrants and options |
2,467,007 | | ||||||
Net cash provided by financing activities |
17,384,066 | | ||||||
Effect of exchange rates on cash and cash equivalents |
(37,554 | ) | 34,771 | |||||
Net increase (decrease) in cash and cash equivalents |
2,733,472 | (1,483,432 | ) | |||||
Cash and cash equivalents at beginning of period |
2,311,269 | 3,276,299 | ||||||
Cash and cash equivalents at end of period |
$ | 5,044,741 | $ | 1,792,867 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid during the period for interest |
$ | | $ | 6,145 | ||||
Cash received(paid) during the period for income taxes |
9,633 | (105,877 | ) |
Non-GAAP Financial Measures: The following table reconciles our operating loss calculated in
accordance with accounting principles generally accepted in the U.S. (GAAP) to non-GAAP financial
measures that exclude non-cash charges for share-based compensation, and depreciation and
amortization expenses from gross profit, operating expenses and operating loss. The non-GAAP
financial measures used by management and disclosed by us are not a substitute for, or superior to,
financial measures and consolidated financial results calculated in accordance with GAAP, and you
should carefully evaluate our reconciliations to non-GAAP. We may calculate our non-GAAP financial
measures differently from similarly titled measures used by other companies. Therefore, our
non-GAAP financial measures may not be comparable to those used by other companies. We have
described the reconciliations of each of our non-GAAP financial measures described above to the
most directly comparable GAAP financial measures.
We use these non-GAAP financial measures, and in particular non-GAAP operating loss, for internal
managerial purposes and incentive compensation for senior management because we believe such
measures are one important indicator of the strength and the operating performance of our business.
Analysts and investors frequently ask us for this information. We believe that they use these
measures to evaluate the overall operating performance of companies in our industry, including as a
means of comparing period-to-period results and as a means of evaluating our results with those of
other companies.
Our non-GAAP operating loss during the three months ended December 31, 2010 and 2009 was
approximately $1,059,000 and $42,000, respectively. Our non-GAAP operating loss during the nine
months ended December 31, 2010 and 2009 was approximately $2.2 million and $1.4 million,
respectively.
Three Months Ended | Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Gross Profit |
||||||||||||||||
GAAP gross profit |
$ | 2,887,501 | $ | 2,562,743 | $ | 8,062,658 | $ | 7,288,103 | ||||||||
% of sales |
83 | % | 84 | % | 83 | % | 82 | % | ||||||||
Share-based compensation |
4,184 | 4,771 | 12,851 | 23,218 | ||||||||||||
Depreciation expense |
12,007 | 14,481 | 43,470 | 42,780 | ||||||||||||
Non-GAAP gross profit |
2,903,692 | 2,581,995 | 8,118,979 | 7,354,101 | ||||||||||||
Operating Expenses |
||||||||||||||||
GAAP operating expenses |
4,367,491 | 2,955,178 | 11,415,209 | 9,929,140 | ||||||||||||
Share-based compensation |
135,947 | 60,351 | 275,971 | 333,365 | ||||||||||||
Depreciation expense |
57,745 | 59,462 | 172,407 | 175,085 | ||||||||||||
Amortization expense |
211,057 | 211,189 | 632,508 | 634,505 | ||||||||||||
Non-GAAP operating expenses |
3,962,742 | 2,624,176 | 10,334,323 | 8,786,185 | ||||||||||||
Operating Loss |
||||||||||||||||
GAAP operating loss |
(1,479,990 | ) | (392,435 | ) | (3,352,551 | ) | (2,641,037 | ) | ||||||||
Share-based compensation |
140,131 | 65,122 | 288,822 | 356,583 | ||||||||||||
Depreciation expense |
69,752 | 73,943 | 215,877 | 217,865 | ||||||||||||
Amortization expense |
211,057 | 211,189 | 632,508 | 634,505 | ||||||||||||
Non-GAAP operating loss |
$ | (1,059,050 | ) | $ | (42,181 | ) | $ | (2,215,344 | ) | $ | (1,432,084 | ) | ||||