Uroplasty Reports Fiscal Fourth Quarter And Full Year 2013 Financial Results

~U.S. Sales of Urgent® PC increase 11% in Fourth Quarter and 35% for Full Fiscal Year

onference call today at 4:30 p.m. ET

30 May, 2013, 16:03 ET from Uroplasty, Inc.

MINNEAPOLIS, May 30, 2013 /PRNewswire/ -- 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 fourth quarter and fiscal year 2013 ended March 31, 2013. 

Fiscal Fourth Quarter 2013 Financial Results

Fiscal fourth quarter 2013 sales in the U.S. increased 2%, driven by an 11% increase in sales of the Urgent® PC Neuromodulation System, compared with fiscal fourth quarter a year ago.  Global sales declined 1% to $5.5 million in the fourth quarter of fiscal 2013, compared with $5.6 million in the fiscal fourth quarter a year ago.

U.S. Urgent PC Sales in the fiscal fourth quarter of 2013 were $2.6 million.  Macroplastique sales in the U.S. totaled $1.4 million in the recent fiscal fourth quarter, a decrease of 13% over the same quarter last year.

The Company sold 3,365 lead set boxes to 581 active Urgent PC customers in the U.S. in the fiscal fourth quarter compared with 3,501 lead set boxes to 620 active customers during the fiscal third quarter. 

"While sales of Urgent PC in the U.S. increased year over year, we were disappointed with our progress," said Rob Kill, Interim Chief Executive Officer of Uroplasty. "We are executing our strategy to reinvigorate and regain the momentum of Urgent PC sales, especially in the U.S.  By mid-May, under our new sales leadership, we had replaced sales representatives in six territories. We are focused on finding sales representatives with experience in medical device sales, a solid understanding of their regional markets and strong relationships with physician groups in their territories. By end of June we expect to have 45 total sales representatives in place."

Net sales to customers outside the U.S. for the fiscal fourth quarter totaled $1.5 million, compared to $1.6 million in the fiscal fourth quarter last year.  Excluding the impact of fluctuations in foreign currency exchange rates, sales outside the U.S. were down 7%. 

The Company reported a gross margin of 86.5% in the recent fiscal fourth quarter compared with 85.9% in the same quarter a year ago.  The operating loss of $968,000 in the fiscal fourth quarter compares with a $589,000 operating loss 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 $477,000 in the fourth quarter of fiscal 2013, compared with a $122,000 non-GAAP operating loss in the fourth quarter a year ago.  The increase in operating loss was primarily attributable to the decrease in sales and an increase in operating expenses.

Full Year Fiscal 2013 Financial Results

For the full year ended March 31, 2013, sales grew $1.9 million to $22.4 million, reflecting an 18% increase in U.S. sales and a 10% decrease in sales outside the U.S.  In the U.S., sales of Urgent PC increased 35% to $10.5 million, and Macroplastique sales decreased 2% to $5.7 million.  At March 31, 2013, cash, cash equivalents and investments totaled $14.9 million compared to $15.6 million at December 31, 2012.

R&D Initiatives

The Company continues to make progress on two R&D initiatives - an implantable tibial nerve stimulator for in-home treatments for OAB for the markets outside of the U.S. and an indication for use of Urgent PC to treat bowel incontinence for the U.S. market.  Both products have the potential to expand Uroplasty's addressable market.

The implantable tibial nerve stimulator will allow patients to receive the benefits of PTNS treatments at home with the patient controlling the treatment interval.  The Company continues to make progress on prototypes for this new product.

The Company has identified two U.S. centers to conduct a pilot clinical trial for the treatment of bowel incontinence using the Urgent PC Neuromodulation System.  The investigators at those centers are currently in the screening process for potential candidates for treatment.  The pilot trial, for the initial treatments, is scheduled for completion late next year.  Urgent PC has CE Mark approval for the treatment of bowel incontinence and has been used in Europe for this indication for several years. 

Outlook

"Our focus in the near term will be on driving sales of Urgent PC through additional investments in sales and marketing. We made progress in the quarter in hiring experienced sales reps with strong relationships in their markets and have also revised our sales incentives to be better aligned with our financial objectives.  We are also adding clinical representatives to the team who will focus on working with our customers to expand patient access to Urgent PC.  We anticipate it will take a few months for our new reps to become productive.

"In addition, we have commenced a search for a new CEO.  Working with an outside search firm, we are seeking a senior executive with experience in leading the commercial expansion of new medical device therapies and scaling an organization in the $25 to $200 million range of revenue for sustained top and bottom line growth.  We remain optimistic about the opportunities ahead for Uroplasty through this transition and our ability to return to sales growth and improved operating results during the second half of the fiscal year," concluded Mr. Kill.

Conference Call

Uroplasty will host a conference call and webcast today at 3:30 pm Central, 4:30 pm Eastern, to review the financial results for the fiscal fourth quarter and full year of 2013.  Rob Kill, Interim Chief Executive Officer, and Medi Jiwani, Vice President, Chief Financial Officer and Treasurer, will host. Individuals wishing to participate in the conference call should dial 888-549-7750. An audio replay will be available for 30 days following the call at 800-406-7325 with the passcode 4618943#.

To access the live webcast of the call, go to Uroplasty's website at www.uroplasty.com and click on the Investor Relations section. An archived webcast will also be available at http://investor.uroplasty.com.

About Uroplasty, Inc.

Uroplasty, Inc., headquartered in Minnetonka, Minnesota, with wholly-owned subsidiaries in The Netherlands and the United Kingdom, is a global medical company committed to offering transformative treatment options to specialty physicians. Our products are designed to help providers change the lives of their voiding dysfunction patients and strengthen the efficiency of their practices. Our focus is the continued commercialization of our Urgent® PC Neuromodulation System, the only FDA-cleared system that delivers percutaneous tibial nerve stimulation (PTNS) for the office-based treatment of overactive bladder and associated symptoms of urgency, frequency and urge incontinence. We also offer Macroplastique®, 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 products 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.

For Further Information:

Uroplasty, Inc.

Medi Jiwani, Vice President, CFO,

and Treasurer

952.426.6140

EVC Group

Jenifer Kirtland (Investors)

415.568.9349

Amy Phillips (Media)

412.327.9499

 

 

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Year Ended

March 31,

March 31,

(unaudited)

2013

2012

2013

2012

Net sales

$5,540,586

$5,596,782

$22,417,980

$20,561,714

Cost of goods sold 

750,165

791,527

3,014,886

3,036,967

Gross profit

4,790,421

4,805,255

19,403,094

17,524,747

Operating expenses

  General and administrative

1,009,580

843,684

4,187,819

3,732,623

  Research and development

719,282

406,296

2,415,123

1,905,366

  Selling and marketing

3,814,194

3,929,248

15,238,600

15,296,217

  Amortization

215,862

215,460

862,833

856,995

5,758,918

5,394,688

22,704,375

21,791,201

Operating loss

(968,497)

(589,433)

(3,301,281)

(4,266,454)

Other income (expense)

  Interest income

10,203

14,254

46,039

60,072

  Interest expense

(695)

-

(707)

(57)

  Foreign currency exchange gain

5,005

18,084

1,573

3,780

14,513

32,338

46,905

63,795

Loss before income taxes

(953,984)

(557,095)

(3,254,376)

(4,202,659)

Income tax expense 

14,958

15,944

50,770

47,712

Net loss

$(968,942)

$(573,039)

$(3,305,146)

$(4,250,371)

Basic and diluted loss per common share

$(0.05)

$(0.03)

$(0.16)

$(0.21)

Weighted average common shares outstanding:

Basic and diluted

20,803,530

20,722,910

20,777,238

20,689,819

 

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2013

March 31, 2012

Assets

Current assets:

Cash and cash equivalents & short-term investments

$11,470,469

$11,854,127

Accounts receivable, net

2,553,447

2,704,434

Inventories

718,933

698,742

Other

566,536

363,639

Total current assets

15,309,385

15,620,942

Property, plant, and equipment, net

1,033,085

1,171,979

Intangible assets, net 

100,502

945,880

Long-term investments

3,451,711

4,429,140

Deferred tax assets

146,052

122,872

Total assets

$20,040,735

$22,290,813

Liabilities and Shareholders' Equity

  Current liabilities:

 Accounts payable

$618,916

$593,585

 Current portion – deferred rent

35,000

35,000

 Income tax payable

7,729

17,892

 Accrued liabilities:

Compensation

1,550,846

1,576,147

Other

476,287

316,995

Total current liabilities

2,688,778

2,539,619

Deferred rent – less current portion

5,141

42,043

Accrued pension liability

660,580

474,396

Total liabilities

3,354,499

3,056,058

Total shareholders' equity

16,686,236

19,234,755

Total liabilities and shareholders' equity

$20,040,735

$22,290,813

 

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended

March 31,

2013

2012

Cash flows from operating activities:

Net loss

$(3,305,146)

$(4,250,371)

Adjustments to reconcile net loss to net cash used in operating activities:

  Depreciation and amortization

1,152,929

1,118,243

  Loss on disposal of  equipment

7,617

8,447

  Amortization of premium on marketable securities

47,559

35,277

  Share-based consulting expense

1,623

5,448

  Share-based compensation expense

810,016

679,471

  Deferred income taxes

(29,053)

(40,116)

  Deferred rent credit

(36,902)

(35,228)

  Changes in operating assets and liabilities:

  Accounts receivable, net

108,495

(653,110)

  Inventories

(25,370)

(29,719)

  Other current assets

(205,778)

(17,510)

  Accounts payable

30,925

(59,025)

  Accrued liabilities

138,875

63,981

  Accrued pension liability, net

79,598

45,843

Net cash used in operating activities

(1,224,612)

(3,128,369)

Cash flows from investing activities:

Proceeds from maturity of available-for-sale marketable securities

4,200,000

10,018,252

Proceeds from maturity of held-to-maturity marketable securities

6,920,000

3,740,000

Purchases of available-for-sale marketable securities

(8,425,034)

(3,046,270)

Purchases of held-to-maturity marketable securities

(2,500,000)

(8,840,000)

Purchases of property, plant and equipment

(189,929)

(267,944)

Proceeds from sale of property, plant and equipment

5,591

-

Payments for intangible assets

(17,455)

(77,738)

Net cash provided by (used in) investing activities

(6,827)

1,526,300

Cash flows from financing activities:

   Net proceeds from exercise of options

150,000

208,825

Net cash provided by financing activities

150,000

208,825

Effect of exchange rate changes on cash and cash equivalents

(37,923)

(17,103)

Net decrease in cash and cash equivalents

(1,119,362)

(1,410,347)

Cash and cash equivalents at beginning of period

4,653,226

6,063,573

Cash and cash equivalents at end of period

$3,533,864

$4,653,226

Cash paid during the period for interest

$707

$57

Cash paid during the period for income taxes

57,288

39,005

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 for the three months ended March 31, 2013 and 2012 was approximately $477,000 and $122,000, respectively.  Our non-GAAP operating loss for fiscal 2013 and 2012 was approximately $1.3 million and $2.5 million, respectively.  The fiscal 2013 decrease in non-GAAP operating loss is attributed primarily to an increase in Net sales which more than offset the increase in non-GAAP spending. 

 

Expense Adjustments

GAAP

Share-based Expense

Depreciation

Amortization of Intangibles

Non-GAAP

Three Months Ended March 31, 2013

Gross Profit

$4,790,000

$8,000

$8,000

$4,806,000

% of net sales

86.5%

86.8%

Operating Expenses

     General and administrative

1,009,000

(133,000)

(50,000)

826,000

     Research and development

719,000

(14,000)

(1,000)

704,000

     Selling and marketing

3,814,000

(47,000)

(14,000)

3,753,000

     Amortization

216,000

0

0

$(216,000)

0

5,758,000

(194,000)

(65,000)

(216,000)

5,283,000

Operating Loss

$(968,000)

$202,000

$73,000

$216,000

$(477,000)

Three Months Ended March 31, 2012

Gross Profit

$4,805,000

$6,000

$9,000

$4,820,000

% of net sales

85.9%

86.1%

Operating Expenses

     General and administrative

844,000

(116,000)

(44,000)

684,000

     Research and development

406,000

(9,000)

(1,000)

396,000

     Selling and marketing

3,929,000

(51,000)

(16,000)

3,862,000

     Amortization

215,000

$(215,000)

-

5,394,000

(176,000)

(61,000)

(215,000)

4,942,000

Operating Loss

$(589,000)

$182,000

$70,000

$215,000

$(122,000)

Expense Adjustments

GAAP

Share-based Expense

Depreciation

Amortization of Intangibles

Non-GAAP

Year Ended March 31, 2013

Gross Profit

$19,403,000

$31,000

$34,000

$19,468,000

% of net sales

86.6%

86.8%

Operating Expenses

     General and administrative

4,188,000

(473,000)

(196,000)

3,519,000

     Research and development

2,415,000

(54,000)

(3,000)

2,358,000

     Selling and marketing

15,238,000

(254,000)

(57,000)

14,927,000

     Amortization

863,000

$(863,000)

-

22,704,000

(781,000)

(256,000)

(863,000)

20,804,000

Operating Loss

$(3,301,000)

$812,000

$290,000

$863,000

$(1,336,000)

Year Ended March 31, 2012

Gross Profit

$17,525,000

$22,000

$34,000

$17,581,000

% of net sales

85.2%

85.5%

     Operating Expenses

     General and administrative

3,733,000

(412,000)

(163,000)

3,158,000

     Research and development

1,905,000

(39,000)

(9,000)

1,857,000

     Selling and marketing

15,296,000

(212,000)

(55,000)

15,029,000

     Amortization

857,000

$(857,000)

-

21,791,000

(663,000)

(227,000)

(857,000)

20,044,000

Operating Loss

$(4,266,000)

$685,000

$261,000

$857,000

$(2,463,000)

 

SOURCE Uroplasty, Inc.



RELATED LINKS

http://www.uroplasty.com