Uroplasty Sets New Quarterly Revenue Record During Fiscal Second Quarter 2014 Continued Sequential and Year-over-Year Urgent PC Revenue Growth Reflects Impact of New Sales Strategy and Improved Execution

MINNEAPOLIS, Oct. 24, 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 fiscal 2014 second quarter ended September 30, 2013. 

Total revenues for the fiscal second quarter 2014 were $6 million, up 5% from the same quarter in the prior year. Sales in the U.S. were $4.5 million, driven by an 11% increase in sales of the Urgent® PC Neuromodulation System compared with sales in the second quarter a year ago.  U.S. Urgent PC sales in the fiscal second quarter 2014 were $3.1 million.  Net sales outside of the U.S. increased slightly to $1.5 million compared with the fiscal second quarter of 2013.  

"Our strong momentum from last quarter continued, and we delivered 10% sequential and 11% year-over-year sales growth in the U.S. for Urgent PC," said Rob Kill, President and Chief Executive Officer of Uroplasty.  "Our refocused sales organization is already demonstrating success in both broadening and re-engaging our customer base of physicians. It's clear that Urgent PC has the potential to be the leading alternative treatment for patients suffering from Overactive Bladder (OAB) who cannot tolerate drug therapy, and we are well positioned to capitalize on this significant market opportunity." 

The Company reported a gross margin of 87.6% in the recent fiscal second quarter compared with 86.4% in the same quarter a year ago.  Operating expenses totaled $7.2 million in the second quarter, compared to $5.6 million in the same quarter last year.  The increase in operating expenses was due to $1.2 million of one-time costs associated with changes in executive management and internal review costs, with the remainder of the increase primarily due to increased selling and marketing costs.

The operating loss of $1.9 million in the fiscal second quarter compares with a $0.6 million 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 $0.9 million in the second quarter of fiscal 2014, compared with a $0.2 million non-GAAP operating loss in the second quarter a year ago. 

Conference Call
Uroplasty will host a conference call and webcast today at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss these results. Rob Kill, President and Chief Executive Officer, and Brett Reynolds, Chief Financial Officer, will host the call. Individuals wishing to participate in the conference call should dial 877-941-8631. No passcode is necessary.  To access a live webcast of the call, go to Uroplasty's website at www.uroplasty.com and click on the Investor Relations section.

An audio replay will be available for 30 days following the call at 800-406-7325 with the passcode 4643847#.  An archived webcast will also be available at 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 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 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.
Brett Reynolds, SVP and CFO
952.426.6152

EVC Group
Leigh Salvo/ (Investors)/Janine McCargo (Business Media)
415.568.9348/646.688.0245

 

UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED Consolidated Statements of Operations

(Unaudited)






Three Months Ended


Six Months Ended


September 30

September 30


2013


2012


2013


2012









Net sales

$5,976,875


$5,709,840


$11,817,716


$11,286,963

Cost of goods sold

741,842


774,963


1,489,889


1,530,550









Gross profit

5,235,033


4,934,877


10,327,827


9,756,413









Operating expenses








General and administrative

2,390,610


1,027,835


3,971,373


2,119,681

Research and development

428,763


598,933


908,423


1,161,974

Selling and marketing

4,323,084


3,734,042


8,950,493


7,698,877

Amortization

7,826


215,681


14,474


431,290


7,150,283


5,576,491


13,844,763


11,411,822









Operating loss

(1,915,250)


(641,614)


(3,516,936)


(1,655,409)









Other income (expense)








Interest income

5,476


10,931


14,740


23,509

Foreign currency exchange gain (loss)

(1,339)


5,794


(4,034)


(3,877)


4,137


16,725


10,706


19,632









Loss before income taxes

(1,911,113)


(624,889)


(3,506,230)


(1,635,777)









Income tax expense

16,367


14,637


30,542


23,104









Net loss

$(1,927,480)


$(639,526)


$(3,536,772)


$(1,658,881)









Basic and diluted net loss per common share

$(0.09)


$(0.03)


$(0.17)


$(0.08)









Weighted average common shares outstanding:








Basic and diluted

21,076,315


20,763,345


20,921,693


20,753,368

 

UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



September 30, 2013


March 31, 2013







Assets





     Current assets:





          Cash, cash equivalents and short-term investments

$12,536,821


$11,470,469


          Accounts receivable, net

2,400,531


2,553,447


          Inventories

625,102


718,933


          Other

442,351


566,536


     Total current assets

16,004,805


15,309,385







     Property, plant and equipment, net

1,108,079


1,033,085


     Intangible assets, net

127,328


100,502


     Long-term investments

-


3,451,711


     Deferred tax assets

148,900


146,052


     Total assets

$17,389,112


$20,040,735






Liabilities and Shareholders' Equity




     Current liabilities:




          Accounts payable

$673,500


$618,916

          Current portion – deferred rent

21,615


35,000

          Income tax payable

6,123


7,729

          Accrued liabilities:




               Compensation

1,507,596


1,550,846

               Other

406,549


476,287

          Total current liabilities

2,615,383


2,688,778





     Deferred rent – less current portion

-


5,141

     Accrued pension liability

557,495


660,580





     Total liabilities

3,172,878


3,354,499





     Total shareholders' equity

14,216,234


16,686,236





     Total liabilities and shareholders' equity

$17,389,112


$20,040,735

 

UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED Consolidated Statements of Cash Flows

(Unaudited)




Six Months Ended

September 30


2013


2012

Cash flows from operating activities:




Net loss

$(3,536,772)


$(1,658,881)

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




Depreciation and amortization

179,123


576,665

(Gain) loss on disposal of equipment

(5,000)


2,797

Amortization of premium on marketable securities

6,070


26,716

Share-based consulting expense

-


1,623

Share-based compensation expense

920,729


353,060

Deferred income tax expense

4,979


2,860

Deferred rent

(18,526)


(18,374)

Changes in operating assets and liabilities:




Accounts receivable, net

197,216


100,537

Inventories

97,787


(175,833)

Other current assets

127,104


(102,998)

Accounts payable

51,232


26,516

Accrued compensation

(51,129)


(68,162)

Accrued liabilities, other

(78,620)


78,202

Accrued pension liability, net

(137,089)


(36,401)

Net cash used in operating activities

(2,242,896)


(891,673)





Cash flows from investing activities:




Proceeds from maturity of available-for-sale investments

2,000,000


2,000,000

Proceeds from maturity of held-to-maturity investments

3,940,000


3,800,000

Purchases of available-for-sale investments

-


(3,218,286)

Purchases of held-to-maturity investments

-


(1,780,000)

Purchases of property, plant and equipment

(208,768)


(93,981)

Proceeds from sale of property, plant and equipment

6,773


7,276

Payments for intangible assets

(41,300)


(4,440)

Net cash provided by investing activities

5,696,705


710,569





Cash flows from financing activities:




Proceeds from exercise of options

69,360


150,000

Net cash provided by financing activities

69,360


150,000





Effect of exchange rate changes on cash and cash equivalents

34,724


(10,580)





Net increase (decrease) in cash and cash equivalents

3,557,893


(41,684)





Cash and cash equivalents at beginning of period

3,533,865


4,653,226





Cash and cash equivalents at end of period

$7,091,758


$4,611,542









 

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, nor 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 because we believe such measures are important indicators 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 September 30, 2013 and 2012 was approximately $917,000 and $163,000, respectively.  The increase in non-GAAP operating loss for the three months ended September 30, 2013 over the corresponding period a year ago is attributed to the increase in operating spending, offset slightly by the increase in net sales and gross profit percent.  Our non-GAAP operating loss during the six months ended September 30, 2013 and 2012 was approximately $2.4 million and $724,000, respectively.  The increase in non-GAAP operating loss for the six months ended September 30, 2013 over the corresponding period a year ago is attributed to the increase in operating spending, offset slightly by the increase in net sales and gross profit percent.



Expense Adjustments


Three-Months Ended

GAAP

Share-based  Expense

Depreciation

Amortization of Intangibles

Non-GAAP

September 30, 2013






Gross profit

$5,235,000

$6,000

$9,000


$5,250,000

% of net sales

87.6%




87.8%

Operating expenses






    General and administrative

2,390,000

(834,000)

(53,000)


1,503,000

    Research and development

429,000

(11,000)

(1,000)


417,000

    Selling and marketing

4,323,000

(54,000)

(22,000)


4,247,000

    Amortization

8,000



(8,000)

-


7,150,000

(899,000)

(76,000)

(8,000)

6,167,000







Operating loss

$(1,915,000)

$905,000

$85,000

$8,000

$(917,000)







September 30, 2012






Gross profit

$4,935,000

$8,000

$9,000


$4,952,000

% of net sales

86.4%




86.7%

Operating expenses






    General and administrative

1,028,000

(108,000)

(50,000)


870,000

    Research and development

599,000

(14,000)

(1,000)


584,000

    Selling and marketing

3,734,000

(60,000)

(13,000)


3,661,000

    Amortization

216,000



$(216,000)

-


5,577,000

(182,000)

(64,000)

(216,000)

5,115,000







Operating loss

$(642,000)

$190,000

$73,000

$216,000

$(163,000)

 



Expense Adjustments


Six-Months Ended

GAAP

Share-based Expense

Depreciation

Amortization of Intangibles

Non-GAAP

September 30, 2013






Gross profit

$10,328,000

$14,000

$18,000


$10,360,000

% of net sales

87.4%




87.7%

Operating expenses






     General and administrative

3,971,000

(755,000)

(103,000)


3,113,000

     Research and development

908,000

(25,000)

(2,000)


881,000

     Selling and marketing

8,951,000

(127,000)

(41,000)


8,783,000

     Amortization

15,000



(15,000)

-


13,845,000

(907,000)

(146,000)

(15,000)

12,777,000







Operating loss

$(3,517,000)

$921,000

$164,000

$15,000

$(2,417,000)







September 30, 2012






Gross profit

$9,756,000

$15,000

$18,000


$9,789,000

% of net sales

86.4%




86.7%

Operating expenses






     General and administrative

2,120,000

(194,000)

(96,000)


1,830,000

     Research and development

1,162,000

(26,000)

(2,000)


1,134,000

     Selling and marketing

7,699,000

(120,000)

(30,000)


7,549,000

     Amortization

431,000



$(431,000)

-


11,412,000

(340,000)

(128,000)

(431,000)

10,513,000







Operating loss

$(1,656,000)

$355,000

$146,000

$431,000

$(724,000)

SOURCE Uroplasty, Inc.



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