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Exhibit 99.1
NEWS RELEASE
(UROPLASTY LOGO)
UROPLASTY REPORTS IMPROVED FINANCIAL PERFORMANCE FOR
FOURTH QUARTER FY2010
-Macroplastique® Generates Strong Growth in the U.S. -
-Urgent
® PC Receives CPT® CategoryI Code Effective January 2011
-Operating and Net Loss Reduced-
- Conference Call to be Held Today at 3:30 pm Central Time -
MINNEAPOLIS, MN, May 27, 2010 — Uroplasty, Inc. (NYSE Amex: UPI), a medical device company that develops, manufactures and markets innovative proprietary products to treat voiding dysfunctions, today reported financial results for the fourth fiscal quarter and full year ended March 31, 2010. The results were highlighted by continued strong U.S. sales growth for Macroplastique and a reduction in operating and net loss compared to the prior year.
“From all perspectives, our team successfully executed our fiscal 2010 strategy focused on growing U.S. Macroplastique sales and maximizing the potential for gaining a unique CPT code for Urgent PC® treatments,” said David Kaysen, President & CEO. “In early May, we reported success on the CPT front with the news that percutaneous tibial nerve stimulation (PTNS), the procedure performed using our Urgent PC Neuromodulation System, will receive a Category I CPT reimbursement code. Reimbursement rates for the procedure have not yet been established and a new CPT code number has not yet been assigned. The new CPT code number and the reimbursement amount will be published in the Federal Register by the Centers for Medical and Medicare Services (CMS) sometime in October or early November 2010. Physicians may not request reimbursement using the new CPT code prior to January 2011. Receiving a Category I CPT code represents a major milestone for our Company as well as further advancement of Urgent PC to treat symptoms associated with overactive bladder.
“Our fiscal fourth quarter sales illustrate the continued strong growth of Macroplastique in the U.S.,” continued Mr. Kaysen. “Sales of Macroplastique in the U.S. about doubled over the corresponding year-ago period and our momentum in the market continues to be quite strong. Macroplastique’s fourth quarter performance in the U.S. allowed us to reverse the overall sales decline in earlier quarters compared to the corresponding year-ago periods, even while the now-stable Urgent PC sales in the U.S. declined due to the current uncertain reimbursement situation. We also continued our solid management of expenses and ended the fiscal year with a cash position of $5.8 million.”
Fiscal Fourth Quarter and Full Year Results for the Periods Ended March 31, 2010
Net sales for the three months ended March 31, 2010 were $3.0 million versus $2.9 million for the year-ago quarter. Net sales for fiscal 2010 were $11.9 million versus $14.7 million for the prior fiscal year.

 


 

Sales to customers in the U.S. for the three months ended March 31, 2010 were $1.6 million, about equal to the sales in the same period a year ago. A decline in sales of Urgent PC product was about equally offset by an increase in sales of Macroplastique. Macroplastique sales of $654,000 about doubled from $348,000 in the year-ago quarter. Urgent PC sales of $909,000 declined from $1.2 million in the year-ago quarter. For fiscal 2010 sales of $6.1 million declined from $8.0 million in fiscal 2009 due to the Urgent PC sales decline, which was partially offset by an increase in Macroplastique sales. Sales in the U.S. of Urgent PC declined to $3.8 million in fiscal 2010, from $6.8 million in fiscal 2009. The trend in decline of Urgent PC sales over corresponding year-ago periods began in the second half of fiscal 2009 due to reimbursement related issues. Urgent PC sales in fiscal 2010 have stabilized at around $0.9 million to $1 million per quarter. Sales in the U.S. of Macroplastique about doubled to $2.2 million in fiscal 2010 from $1.1 million in fiscal 2009. Sales of Macroplastique have steadily increased because of increased sales and marketing focus, and the announced withdrawal from the market of a competitive product.
Net sales to customers outside of the U.S. for the three months ended March 31, 2010 were $1.4 million, an increase of 8%, compared to $1.3 million in the year-ago period. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales increased by approximately 1%. Sales to customers outside of the U.S. for fiscal 2010 were $5.8 million, a decrease of 14 percent, from $6.8 million in fiscal 2009. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales decreased by approximately 12%. The sales decrease for the fiscal year is mainly attributed to increased competition during the first half of the year for Macroplastique from a newly-introduced product. In addition, in fiscal 2010, the Company discontinued in the United Kingdom its mid-urethral sling product, which accounted for approximately $191,000 of sales in fiscal 2009.
Operating loss for the fourth fiscal quarter ended March 31, 2010 was $561,000 compared to an operating loss of $1.7 million in the year-ago quarter. Operating loss for fiscal 2010 was $3.2 million as compared with an operating loss of $3.6 million in fiscal 2009. Net loss for the fourth fiscal quarter ended March 31, 2010 was $577,000, or $0.04 per diluted share, versus a net loss of $1.7 million, or $0.11 per diluted share in the year-ago quarter. For fiscal 2010, the net loss was $3.2 million, or $0.21 per diluted share as compared with a net loss of $3.6 million in fiscal 2009, or $0.24 per diluted share. The decline in operating and net loss is attributed primarily to spending reductions.
At March 31, 2010, cash and cash equivalents, and short-term investments were $5.8 million compared with $5.9 million at December 31, 2009 and $7.8 million as of March 31, 2009. In addition, since March 31, 2010, the Company has realized approximately $0.9 million in proceeds from warrants exercised to purchase its common shares. Further, on May 26, 2010 the Company exercised the early call provision on the remaining warrants to purchase 522,500 shares of common stock at an exercise price of $2.50 per share.
Fiscal 2011 Outlook
     “Looking ahead, our fiscal 2011 is already off to an excellent start now that we have clarity about the CPT reimbursement code for Urgent PC. Building off this momentum, Urgent PC will be the subject of a podium presentation and a poster presentation at the upcoming American Urological Association (AUA) Annual Meeting, which begins on May 29 in San Francisco, CA. In addition, Macroplastique will be featured in a poster presentation at the AUA also,” added Mr. Kaysen.
“From a revenue perspective, our goal for fiscal 2011 is to continue the strong growth of Macroplastique. While reimbursement claims using the new CPT code for Urgent PC may not be submitted prior to January

 


 

2011, our team is preparing for a significant sales and marketing push later this calendar year. We expect that U.S. Urgent PC sales will remain relatively stable during the first nine months of fiscal 2011, as compared to fiscal 2010 levels, and begin ramping in the fiscal fourth quarter once the CPT code becomes effective. If reimbursement rates are adequate, we hope to capture some portion of the market for patients who discontinue the drug regimens to treat symptoms of overactive bladder due to the harsh side effects of those drugs. Over time, if we can capture just five percent of those patients, we believe this could result in revenue of more than $200 million. In addition, during fiscal 2011, we will be exploring the emerging opportunity in the U.S. to treat fecal incontinence using the Urgent PC. The Urgent PC is already CE-marked for treatment of fecal incontinence and our Urgent PC business in Europe, though small, is primarily focused on the fecal incontinence market with good success. In summary, we are quite excited about the opportunities ahead for our company, and are focused on executing plans that fully capitalize on those opportunities,” Mr. Kaysen concluded.
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 fourth fiscal quarter and full year ended March 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 800-762-8779. 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 4303460#.
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-approved 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, which 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. Further, we cannot assure you that third-party payers will provide or continue to provide coverage and reimbursement for our products, or reimburse the providers an amount sufficient to cover their costs and expenses. We further cannot assure that reimbursement or other issues will not further impact our future fiscal results.
CPT is a registered trademark of the American Medical Association.

 


 

     
For Further Information: Uroplasty, Inc.
David Kaysen, President and CEO, or
Medi Jiwani, Vice President, CFO, and Treasurer
952.426.6140
  EVC Group
Doug Sherk (Investors)
415.896.6820
Chris Gale (Media)
646.201.5431
(tables to follow)

 


 

UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                 
    Three Months Ended        
    March 31,     Fiscal Year Ended  
    (unaudited)     March 31,  
    2010     2009     2010     2009  
 
                               
Net sales
  $ 2,982,656     $ 2,908,759     $ 11,863,202     $ 14,742,182  
Cost of goods sold
    466,412       492,822       2,058,855       2,283,975  
 
                       
 
                               
Gross profit
    2,516,244       2,415,937       9,804,347       12,458,207  
 
                       
 
                               
Operating expenses
                               
General and administrative
    597,701       758,306       2,798,900       3,428,959  
Research and development
    420,211       1,093,905       1,785,405       2,551,075  
Selling and marketing
    1,848,534       2,004,118       7,576,776       9,255,025  
Amortization
    211,048       211,957       845,553       845,524  
 
                       
 
    3,077,494       4,068,286       13,006,634       16,080,583  
 
                       
 
                               
Operating loss
    (561,250 )     (1,652,349 )     (3,202,287 )     (3,622,376 )
 
                       
 
                               
Other income (expense)
                               
Interest income
    15,639       34,056       92,736       196,714  
Interest expense
    (3,490 )     (1,789 )     (14,476 )     (17,160 )
Foreign currency exchange loss
    (14,522 )     (13,111 )     (37,552 )     (13,843 )
Other, net
    (670 )     (2,060 )     (853 )     (6,747 )
 
                       
 
    (3,043 )     17,096       39,855       158,964  
 
                       
 
                               
Loss before income taxes
    (564,293 )     (1,635,253 )     (3,162,432 )     (3,463,412 )
 
                               
Income tax expense
    12,349       81,334       41,379       114,708  
 
                       
 
                               
Net loss
  $ (576,642 )   $ (1,716,587 )   $ (3,203,811 )   $ (3,578,120 )
 
                       
 
                               
Basic and diluted loss per common share
    ($0.04 )     ($0.11 )     ($0.21 )     ($0.24 )
 
                               
Weighted average common shares outstanding:
                               
Basic and diluted
    14,946,540       14,932,540       14,944,354       14,922,502  

 


 

UROPLASTY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
                 
    2010     2009  
Assets:
               
Current assets:
               
Cash, equivalents and short-term investments
  $ 5,811,269     $ 7,776,299  
Accounts receivable, net
    1,287,440       1,214,049  
Income tax receivable
    23,820        
Inventories
    341,497       495,751  
Other
    237,321       279,898  
 
           
Total current assets
    7,701,347       9,765,997  
 
               
Property, plant, and equipment, net
    1,230,771       1,401,229  
Intangible assets, net
    2,533,095       3,378,648  
Prepaid pension asset
          66,130  
Deferred tax assets
    108,530       68,793  
 
           
 
               
Total assets
  $ 11,573,743     $ 14,680,797  
 
           
 
               
Liabilities and Shareholders’ Equity:
               
Total current liabilities
    1,645,679       1,927,998  
Deferred rent — less current portion
    112,500       147,576  
Accrued pension liability
    601,037       296,646  
 
           
 
               
Total liabilities
    2,359,216       2,372,220  
 
           
 
               
Total shareholders’ equity
    9,214,527       12,308,577  
 
           
 
               
Total liabilities and shareholders’ equity
  $ 11,573,743     $ 14,680,797  
 
           

 


 

UROPLASTY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31,
                 
    2010     2009  
Cash flows from operating activities:
               
Net loss
    ($3,203,811 )     ($3,578,120 )
 
               
Adjustments to reconcile net loss to net cash used in operations:
               
Depreciation and amortization
    1,138,077       1,135,800  
Loss on disposal of equipment
    853       6,757  
Share-based consulting expense
          60,093  
Share-based compensation expense
    414,507       689,513  
Deferred income taxes
    (39,741 )     17,594  
Deferred rent
    (35,000 )     (35,000 )
Changes in operating assets and liabilities:
               
Accounts receivable
    (56,052 )     918,959  
Inventories
    172,723       (19,512 )
Other current assets and income tax receivable
    (42,827 )     50,086  
Accounts payable
    (127,355 )     (25,781 )
Accrued liabilities
    (152,776 )     (655,186 )
Accrued pension liability, net
    39,159       13,111  
 
           
Net cash used in operating activities
    (1,892,243 )     (1,421,686 )
 
           
 
               
Cash flows from investing activities:
               
Proceeds from sale of short-term investments
    5,500,000       14,157,410  
Purchase of short-term investments
    (4,500,000 )     (12,391,373 )
Purchases of property, plant and equipment
    (111,154 )     (199,704 )
Proceeds from sales of equipment
    2,800        
Payments for intangible assets
          (23,282 )
 
           
Net cash provided by investing activities
    891,646       1,543,051  
 
           
 
               
Cash flows from financing activities:
               
Repayment of debt obligations
          (455,913 )
 
           
Net cash used in financing activities
          (455,913 )
 
           
 
               
Effect of exchange rates on cash and cash equivalents
    35,567       (269,197 )
 
           
 
               
Net decrease in cash and cash equivalents
    (965,030 )     (603,745 )
 
               
Cash and cash equivalents at beginning of year
    3,276,299       3,880,044  
 
           
Cash and cash equivalents at end of year
  $ 2,311,269     $ 3,276,299  
 
           
Supplemental disclosure of cash flow information:
               
Cash paid during the year for interest
  $ 7,697     $ 13,612  
Cash paid during the year for income tax
    135,032       18,335  

 


 

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 such 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 for fiscal 2010 and 2009 was approximately $1.6 million and $1.7 million, respectively.
                 
    Years ended  
    March 31,  
    2010     2009  
 
               
Gross Profit
               
GAAP gross profit
  $ 9,804,347     $ 12,458,207  
% of sales
    83 %     85 %
Share-based compensation
    27,400       42,818  
Depreciation expenses
    58,105       52,432  
 
               
 
           
Non-GAAP gross profit
    9,889,852       12,553,457  
 
           
 
               
Operating Expenses
               
GAAP operating expenses
    13,006,634       16,080,583  
Share-based compensation
    387,107       706,788  
Depreciation expenses
    234,419       237,844  
Amortization expenses
    845,553       845,524  
 
               
 
           
Non-GAAP operating expenses
    11,539,555       14,290,427  
 
           
 
               
Operating Loss
               
GAAP operating loss
    (3,202,287 )     (3,622,376 )
Share-based compensation
    414,507       749,606  
Depreciation expenses
    292,524       290,276  
Amortization expenses
    845,553       845,524  
 
               
 
           
Non-GAAP operating loss
    ($1,649,703 )     ($1,736,970 )