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EX-32.1 - EXHIBIT 32.1 - UROPLASTY INCex32_1.htm
EX-31.1 - EXHIBIT 31.1 - UROPLASTY INCex31_1.htm

Exhibit 99.1
 
Graphic

 
UROPLASTY REPORTS THIRD QUARTER OF FISCAL 2012 FINANCIAL RESULTS

~Net sales increased 53% from the prior year to $5.3 million~
~Sales to U.S. customers grew 78% driven by an 89% increase in Urgent® PC~
~U.S. sales of Macroplastique® up 71%~
~Conference call today at 4:30 p.m. ET~

MINNEAPOLIS, MN, January 26, 2012 – 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 quarter of fiscal 2012 ended December 31, 2011.

Global sales increased 53% to $5.3 million in the third quarter of fiscal 2012, compared with $3.5 million in the fiscal third quarter a year ago.  Sales in the U.S. grew 78%, with an 89% increase in sales of the Urgent PC Neuromodulation System and a 71% increase in sales of Macroplastique.  Outside the U.S., sales rose by 19%.

“Year over year sales growth for both Urgent PC and Macroplastique remained strong inside and outside the U.S.  Macroplastique continued to gain market acceptance in the U.S.  Although we were not pleased that our sequential quarterly sales in the U.S. of Urgent PC were relatively flat, we are confident that by implementing key new initiatives, we will continue to realize growth in the upcoming quarters,” said David Kaysen, President and CEO of Uroplasty, Inc.

On a sequential basis, U.S. sales of Urgent PC in the third quarter of fiscal 2012 were essentially unchanged from the second quarter of fiscal 2012.  There were 500 active U.S. Urgent PC customers during the fiscal third quarter compared with 509 in the second quarter.  The Company sold 2,531 lead set boxes during the third quarter compared with 2,579 in the prior quarter.

“To accelerate Urgent PC sequential growth in the U.S., we intend to help our new customers ramp up and more quickly incorporate the therapy into their practices,” Mr. Kaysen continued.  “To accomplish this, we have aligned our sales initiatives and incentives, which we believe will shorten the period between the initial purchase and the scheduling of patients for treatment.  Second, to increase our penetration within our physician accounts, we are providing physicians with tools focused on helping them build their Urgent PC practices.  We also continue to focus on adding new customers.

“In addition, the Medicare carrier for Florida has released a formal, specific reimbursement policy for posterior tibial nerve stimulation (PTNS) that becomes effective February 1, a step that we have encouraged and that we believe will now streamline the processing of insurance claims submitted by our customers.  With this update in the reimbursement policy and through execution of our initiatives to increase penetration of our existing accounts, we expect U.S. sales of Urgent PC to improve.”
 
 
 

 

Urgent PC sales in the U.S. were $2.0 million in the quarter ended December 31, 2011, compared with $1.0 million in the same quarter last year.  The growth in Urgent PC sales is the result of the expanded sales and marketing efforts the Company made subsequent to obtaining the new Category I CPT® code for PTNS that became effective in January 2011, the expansion of the field sales organization and the increased reimbursement coverage by insurance carriers.

Macroplastique sales in the U.S. totaled $1.6 million in the recent third quarter compared to $925,000 during the same quarter last year.  Growth of Macroplastique sales was due to continued demand from customers of a competitor who has exited the bulking market.

Net sales to customers outside of the U.S. for the fiscal third quarter were $1.8 million, a 19% increase from $1.5 million in the same quarter last year.  Excluding the impact of foreign exchange translation, sales outside the U.S. increased by approximately 20%.

The Company reported an operating loss of $1.1 million in the fiscal third quarter, compared with $1.5 million in the same quarter last year.  Excluding non-cash charges for share-based compensation, and depreciation and amortization expense, the non-GAAP operating loss was $570,000 in the fiscal third quarter, compared with $1.1 million in the year-ago quarter.  The decrease in non-GAAP operating loss is attributed to the increase in sales and gross profit percent, which more than offset the increase in spending, primarily in selling and marketing.

For the nine-month period ended December 31, 2011, sales grew 53% to $15.0 million, reflecting an 81% increase in U.S. sales and an 18% increase in sales outside the U.S.  In the U.S., Urgent PC sales grew 86% and Macroplastique sales increased 75%.

The Company ended the quarter with cash, cash equivalents and cash investments of $16.7 million.

“We remain confident about the outlook for Urgent PC.  Doctors continue to report excellent results for their patients suffering from overactive bladder syndrome, and reimbursement at this stage of the product launch is working well.  To date, ten regional Medicare carriers representing 35 states, with approximately 31 million covered lives, have indicated they will provide coverage for PTNS treatments.  In addition, we estimate that private payers providing insurance to approximately 84 million lives have elected to provide coverage for PTNS treatments.  We believe that Urgent PC is one the most effective and safe solutions for the treatment of symptoms of overactive bladder, and we expect to return to sequential quarterly growth in Urgent PC sales,” 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 fiscal third quarter ended December 31, 2011. 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 877-941-9205. 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 4502445#.

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 Neuromodulation System, the only FDA-cleared system that delivers posterior tibial nerve stimulation for the office-based treatment of overactive bladder and the associated symptoms of urgency, frequency and urge incontinence.

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, that the rate of adoption of our productions by new customers will continue, 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.

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/Jenifer Kirtland (Investors)
415.568.4887
Chris Gale (Media)
646.201.5431
 
 
 

 
 
UROPLASTY, INC. AND SUBSIDIARIES
 
CONDENSED Consolidated Statements of Operations
(Unaudited)

   
Three Months Ended
December 31,
   
Nine Months Ended
December 31,
 
   
2011
   
2010
   
2011
   
2010
 
                         
Net sales
  $ 5,344,188     $ 3,492,067     $ 14,964,932     $ 9,772,389  
Cost of goods sold
    776,538       604,566       2,245,440       1,709,731  
 
                               
Gross profit
    4,567,650       2,887,501       12,719,492       8,062,658  
 
                               
Operating expenses
                               
General and administrative
    924,524       861,183       2,888,939       2,609,060  
Research and development
    586,439       423,794       1,499,070       1,296,431  
Selling and marketing
    3,902,952       2,871,456       11,366,969       6,877,402  
Amortization
    215,164       211,058       641,535       632,508  
 
    5,629,079       4,367,491       16,396,513       11,415,401  
                                 
Operating loss
    (1,061,429 )     (1,479,990 )     (3,677,021 )     (3,352,743 )
                                 
Other income (expense)
                               
Interest income
    14,268       21,135       45,818       52,762  
Interest expense
    -       (652 )     (57 )     (4,537 )
Foreign currency exchange gain (loss)
    (11,025 )     503       (14,304 )     12,867  
      3,243       20,986       31,457       61,092  
                                 
Loss before income taxes
    (1,058,186 )     (1,459,004 )     (3,645,564 )     (3,291,651 )
 
                               
Income tax expense
    9,352       8,927       31,768       28,260  
                                 
Net loss
  $ (1,067,538 )   $ (1,467,931 )   $ (3,677,332 )   $ (3,319,911 )
 
                               
Basic and diluted loss per common share
  $ (0.05 )   $ (0.07 )   $ (0.18 )   $ (0.18 )
                                 
Weighted average common shares outstanding:
                               
Basic and diluted
    20,718,347       20,514,530       20,678,865       18,314,157  
 
 
 

 
 
UROPLASTY, INC. AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
   
December 31, 2011
   
March 31, 2011
 
             
Assets
           
Current assets:
           
Cash and cash equivalents & short-term investments
  $ 12,302,995     $ 14,084,150  
Accounts receivable, net
    2,397,799       2,085,262  
Inventories
    810,120       677,960  
Other
    450,608       348,100  
Total current assets
    15,961,522       17,195,472  
                 
Property, plant, and equipment, net
    1,180,095       1,210,542  
Intangible assets, net
    1,161,339       1,725,136  
Long-term investments
    4,437,070       5,508,701  
Deferred tax assets
    84,292       87,031  
Total assets
  $ 22,824,318     $ 25,726,882  
                 
Liabilities and Shareholders’ Equity
               
Current liabilities:
               
Accounts payable
  $ 565,764     $ 658,107  
Current portion – deferred rent
    35,000       35,000  
Income tax payable
    11,865       6,901  
Accrued liabilities:
               
Compensation
    1,693,502       1,597,657  
Other
    488,344       247,451  
                 
Total current liabilities
    2,794,475       2,545,116  
                 
Deferred rent – less current portion
    50,851       77,272  
Accrued pension liability
    416,114       475,845  
                 
Total liabilities
    3,261,440       3,098,233  
                 
Total shareholders’ equity
    19,562,878       22,628,649  
                 
Total liabilities and shareholders’ equity
  $ 22,824,318     $ 25,726,882  
 
 
 

 
 
UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED Consolidated Statements of Cash Flows
 (Unaudited)
 
   
Nine Months Ended
December 31,
 
   
2011
   
2010
 
Cash flows from operating activities:
           
Net loss
  $ (3,677,332 )   $ (3,319,911 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization
    832,309       848,385  
Loss on disposal of  equipment
    6,475       192  
Amortization of premium on marketable securities
    27,210       7,226  
Share-based consulting expense
    4,125       9,739  
Share-based compensation expense
    498,906       279,083  
Deferred income taxes
    (4,698 )     (5,863 )
Deferred rent
    (26,421 )     (26,421 )
Changes in operating assets and liabilities:
               
Accounts receivable, net
    (374,068 )     (261,136 )
Inventories
    (146,058 )     (248,656 )
Other current assets
    (106,156 )     (48,492 )
Accounts payable
    (82,491 )     4,474  
Accrued liabilities
    356,589       616,036  
Accrued pension liability, net
    (25,428 )     (16,109 )
Net cash used in operating activities
    (2,717,038 )     (2,161,453 )
                 
Cash flows from investing activities:
               
Proceeds from maturity of marketable securities
    13,018,252       4,000,000  
Purchases of marketable securities
    (10,686,270 )     (16,311,352 )
Purchases of property, plant and equipment
    (222,826 )     (128,935 )
Purchase of intangible assets
    (77,738 )     (11,300 )
Net cash provided by (used in) investing activities
    2,031,418       (12,451,587 )
                 
Cash flows from financing activities:
               
Net proceeds from public offering of common stock
    -       14,917,059  
Net proceeds from exercise of warrants and options
    208,825       2,467,007  
Net cash provided by financing activities
    208,825       17,384,066  
                 
Effect of exchange rate changes on cash and cash equivalents
    (26,208 )     (37,554 )
                 
Net increase in cash and cash equivalents
    (503,003 )     2,733,472  
                 
Cash and cash equivalents at beginning of period
    6,063,573       2,311,269  
                 
Cash and cash equivalents at end of period
  $ 5,560,570     $ 5,044,741  
                 
Supplemental disclosure of cash flow information:
               
Cash paid during the period for interest
  $ 57     $ -  
Cash paid during the period for income taxes
    31,307       9,633  
 
 
 

 
 
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, 2011 and 2010 was approximately $570,000 and $1,059,000, respectively.  Our non-GAAP operating loss during the nine months ended December 31, 2011 and 2010 was approximately $2.3 million and $2.2 million, respectively.  The decrease in non-GAAP operating loss for the three months ended December 31, 2011 over the corresponding period a year ago is attributed to the increase in sales and gross profit percent, which more than offset the increase in spending, primarily in selling and marketing.

         
Expense Adjustments
             
Three-Months Ended
 
GAAP
   
Share-based
Expense
   
Depreciation
   
Amortization
   
Non-GAAP
 
December 31, 2011
                             
Gross Profit
  $ 4,568,000     $ 6,000     $ 9,000           $ 4,583,000  
% of sales
    85.5 %                           85.8 %
Operating Expenses
                                     
General & administrative
    925,000       (132,000 )     (40,000 )           753,000  
Research and development
    586,000       (11,000 )     (2,000 )           573,000  
Selling and marketing
    3,903,000       (62,000 )     (14,000 )           3,827,000  
Amortization
    215,000                       (215,000 )     -  
      5,629,000       (205,000 )     (56,000 )     (215,000 )     5,153,000  
Operating Loss
  $ (1,061,000 )   $ 211,000     $ 65,000     $ 215,000     $ (570,000 )
                                         
December 31, 2010
                                       
Gross Profit
  $ 2,888,000     $ 4,000     $ 12,000             $ 2,904,000  
% of sales
    82.7 %                             83.2 %
Operating Expenses
                                       
General & administrative
    861,000       (100,000 )     (38,000 )             723,000  
Research and development
    424,000       (7,000 )     (3,000 )             414,000  
Selling and marketing
    2,872,000       (29,000 )     (17,000 )             2,826,000  
Amortization
    211,000                       (211,000 )     -  
      4,368,000       (136,000 )     (58,000 )     (211,000 )     3,963,000  
Operating Loss
  $ (1,480,000 )   $ 140,000     $ 70,000     $ 211,000     $ (1,059,000 )
 
 
 

 

         
Expense Adjustments
             
Nine-Months Ended
 
GAAP
   
Share-based
Expense
   
Depreciation
   
Amortization
   
Non-GAAP
 
December 31, 2011
                             
Gross Profit
  $ 12,720,000     $ 16,000     $ 25,000           $ 12,761,000  
% of sales
    85.0 %                           85.3 %
Operating Expenses
                                     
General & administrative
    2,889,000       (296,000 )     (119,000 )           2,474,000  
Research and development
    1,499,000       (30,000 )     (8,000 )           1,461,000  
Selling and marketing
    11,367,000       (161,000 )     (39,000 )           11,167,000  
Amortization
    642,000                       (642,000 )     -  
      16,397,000       (487,000 )     (166,000 )     (642,000 )     15,102,000  
Operating Loss
  $ (3,677,000 )   $ 503,000     $ 191,000     $ 642,000     $ (2,341,000 )
                                         
December 31, 2010
                                       
Gross Profit
  $ 8,063,000     $ 13,000     $ 43,000             $ 8,119,000  
% of sales
    82.5 %                             83.1 %
Operating Expenses
                                       
General & administrative
    2,609,000       (168,000 )     (114,000 )             2,327,000  
Research and development
    1,297,000       (20,000 )     (8,000 )             1,269,000  
Selling and marketing
    6,877,000       (88,000 )     (51,000 )             6,738,000  
Amortization
    633,000                       (633,000 )     -  
      11,416,000       (276,000 )     (173,000 )     (633,000 )     10,334,000  
Operating Loss
  $ (3,353,000 )   $ 289,000     $ 216,000     $ 633,000     $ (2,215,000 )