CONCEPTUS INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Quarter Ended September 30, 2002

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission file number: 0-27596

CONCEPTUS, INC.
(Exact name of registrant as specified in its charter)

Delaware		94-3170244
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1021 Howard Avenue
San Carlos, CA 94070
(Address of principal executive offices)

Registrant’s telephone number, including area code: (650) 802-7240

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

Yes

As of October 31, 2002, 21,283,305 shares of the registrant’s Common Stock were outstanding.

CONCEPTUS, INC.

FORM 10-Q for the Three and Nine Months Ended September 30, 2002

INDEX

			Page

Part I.	Financial Information

Item 1.	Condensed Consolidated Financial Statements (Unaudited)

	a)	Condensed Consolidated Balance Sheets at September 30, 2002 and December 31, 2001	3

	b)	Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2002 and 2001	4

	c)	Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2002 and 2001	5

	d)	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		8

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		20

Item 4.	Controls and Procedures		20

Part II.	Other Information		21

Item 1.	Legal Proceedings		21

Item 2.	Changes in Securities and Use of Proceeds		21

Item 3.	Defaults upon Senior Securities		21

Item 4.	Submission of Matters to a Vote of Security Holders		21

Item 5.	Other Information		21

Item 6.	Exhibits and Reports on Form 8-K		21

Signature			23

Certification			24

PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements

Conceptus, Inc.

Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

			September 30, 2002			December 31, 2001

Assets
	Current assets:
		Cash and cash equivalents	$	77,499		$	33,734
		Short-term investments		2,988			—
		Restricted cash		69			69
		Accounts receivable, net		509			247
		Inventories, net		1,820			1,134
		Other current assets		778			556

	Total current assets			83,663			35,740
	Property and equipment, net			2,380			1,658
	Other assets			415			380

Total assets			$	86,458		$	37,778

Liabilities and stockholders’ equity
	Current liabilities:
		Accounts payable	$	1,540		$	1,809
		Clinical trial accruals		159			422
		Accrued compensation		1,867			1,025
		Other accrued liabilities		336			861

	Total current liabilities			3,902			4,117
	Long-term clinical liabilities			338			486

	Total liabilities			4,240			4,603

	Stockholders’ equity:
		Common stock		64			49
		Additional paid-in capital		188,037			118,348
		Accumulated other comprehensive loss		(2	)		—
		Accumulated deficit		(105,881	)		(85,222	)

	Total stockholders’ equity			82,218			33,175

Total liabilities and stockholders’ equity			$	86,458		$	37,778

The accompanying notes are an intergral part of these condensed consolidated financial statements

Conceptus, Inc.

Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

		Three Months Ended September 30,						Nine Months Ended September 30,

		2002			2001			2002			2001

Net sales		$	481		$	123		$	1,185		$	286

Operating costs and expenses:
	Cost of sales and start-up manufacturing costs		845			537			2,484			1,183
	Research and development		2,170			1,953			6,500			5,818
	Selling, general and administrative		5,972			2,234			13,207			6,631

Total operating costs and expenses			8,987			4,724			22,191			13,632

Operating loss			(8,506	)		(4,601	)		(21,006	)		(13,346	)
Other expenses			—			—			(314	)		—
Interest and other income			359			143			661			545

Net loss		$	(8,147	)	$	(4,458	)	$	(20,659	)	$	(12,801	)

Basic and diluted net loss per share		$	(0.38	)	$	(0.33	)	$	(1.14	)	$	(0.99	)

Weighted-average shares used in computing basic and diluted net loss per share			21,220			13,712			18,183			12,920

The accompanying notes are an integral part of these condensed consolidated financial statements.

Conceptus, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

			Nine Months Ended September 30,

			2002			2001

Cash flows from operating activities
Net loss			$	(20,659	)	$	(12,801	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization			852			532
	Stock based compensation			93			202
	Provision for inventories			80			—
	Provision for doubtful accounts			29			—
	Changes in operating assets and liabilities:
		Accounts receivable		(291	)		(150	)
		Inventories		(766	)		(870	)
		Other current assets		(216	)		(148	)
		Other assets		(36	)		(61	)
		Accounts payable		(276	)		20
		Accrued liabilities		(114	)		(782	)

Net cash used in operating activities				(21,304	)		(14,058	)

Cash flows from investing activities
	Purchase of investments			(9,927	)		(5,262	)
	Maturities of investments			6,939			7,788
	Capital expenditures			(1,574	)		(966	)

Net cash (used in) provided by investing activities				(4,562	)		1,560

Cash flows from financing activities
	Proceeds from issuance of common stock, net			69,611			11,366

Net cash provided by financing activities				69,611			11,366

Effect of foreign exchange rate changes on cash				20			—

Net increase (decrease) in cash and cash equivalents				43,765			(1,132	)
Cash and cash equivalents at beginning of period				33,734			4,621

Cash and cash equivalents at end of period			$	77,499		$	3,489

The accompanying notes are an integral part of these condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necess

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