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Uroplasty Reports Record Sales for Third Fiscal Quarter and Nine Months Ended December 31, 2007
Date:2/11/2008

- Sales Grow 73% over Same Quarter Last Year -

- FY08 Revenue Guidance Raised -

- Conference Call to be Held Today at 10:00 am Central Time -

MINNEAPOLIS, Feb. 11 /PRNewswire-FirstCall/ -- Uroplasty, Inc. (Amex: UPI), a medical device company that develops, manufactures and markets innovative proprietary products for the treatment of voiding dysfunction, today reported record net sales of $3.7 million for the third quarter of fiscal 2008 ended December 31, 2007, up 73% from $2.2 million in the year ago quarter. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales during the third fiscal quarter increased by approximately 65%.

For the three months ended December 31, 2007, sales to customers in the U.S. increased to $2.0 million from $396,000 in the year ago period. Sales to customers outside the U.S. for the three months ended December 31, 2007 and 2006 were $1.8 million in each period. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales to customers outside of the U.S. declined by approximately 10%.

"Our relatively new U.S. sales force has begun to hit stride by adding over 100 new customer relationships for the Urgent(R) PC neuromodulation system, bringing to more than 300 the total number of active U.S. customers who purchased our Urgent PC system or additional lead sets during our third fiscal quarter," said David B. Kaysen, Uroplasty's President and CEO. "As a result, we had exceptional third quarter revenue growth and are able to increase our revenue guidance for the full fiscal year. The Urgent PC is gaining rapid acceptance within our target market and doctors report very high patient satisfaction rates. Due to the strong growth in the third quarter in active customers for and the positive feedback on the Urgent PC, our sales team will focus a large amount of their time over the near term on building utilization limited to: the effect of government regulation, including when and if we receive approval for marketing products in the United States; the impact of international currency fluctuations on our cash flows and operating results; the impact of technological innovation and competition; acceptance of our products by physicians and patients, our historical reliance on a single product for most of our current sales; our ability to commercialize our recently licensed product lines; our intellectual property and the ability to prevent competitors from infringing our rights; the ability to receive third party reimbursement for our products; the results of clinical trials; our continued losses and the possible need to raise additional capital in the future; our ability to manage our international operations; our ability to hire and retain key technical and sales personnel; our dependence on key suppliers; future changes in applicable accounting rules; and volatility in our stock price. We cannot assure that we can successfully expand our U.S. field sales force, that our active customer base will continue to grow or that we will be successful in helping our active customers introduce, and our existing customers will continue to market, our Urgent PC technology. Our fiscal 2008 to date financial performance is not indicative of future performance. We cannot assure that we will achieve our projected revenue target range for fiscal 2008 or 2009. Uroplasty undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.

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/Julie Huang (Investors)

646.443.6963

Steve DiMattia/Chris Gale (Media)

646.201.5445

rates with our newer customers. To help, we recently launched an expanded CO-OP marketing program to give our customers more options to enhance their practice, and market the benefits and availability of the Urgent PC system to treat overactive bladder (OAB) symptoms to their patients. Our efforts and focus on the existing customer base will help us actively penetrate the market and further position Urgent PC to be the leading choice for effective, and patient-friendly treatment for OAB symptoms with minimal side effects."

For the nine months ended December 31, 2007, net sales of $9.7 million increased 71% from $5.7 million for the same period in the prior year. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales increased by approximately 64%.

For the nine months ended December 31, 2007, sales to customers in the U.S. increased to $5.5 million, compared to $752,000 in the same nine-month period last year. Sales to customers outside the U.S. for the nine months ended December 31, 2007 were $5.5 million, representing a 12% increase, compared to $4.9 million in the same nine-month period last year. Excluding the translation impact of fluctuations in foreign currency exchange rates, sales to customers outside of the U.S. increased by approximately 4%.

Non-GAAP operating loss, which excludes non cash charges attributed to SFAS 123 (R) stock options, and depreciation and amortization expenses, as set forth below and reconciled to GAAP operating loss, declined to approximately $466,000 and $1.5 million for the three and nine months ended December 31, 2007 respectively, from approximately $820,000 and $3.3 million for the respective year ago periods. Included in the three and nine months ended December 31, 2007 is a $214,000 charge attributed to the cost for exiting the lease of the manufacturing facility in Eindhoven, The Netherlands and severance pay. The decline in non-GAAP operating loss is attributed primarily to the increase in sales and an improvement in gross margin rate, offset partially by an increase in cash operating expenses.

Net loss for the three- and nine-month period ended December 31, 2007 was $900,000 or $0.06 per diluted share, and $3.1 million, or $0.23 per diluted share, respectively. Net loss for the corresponding periods in the prior year was $563,000, or $0.07 per diluted share, and $4.0 million, or $0.51 per diluted share, respectively.

Mr. Kaysen continued, "Based on our year-to-date performance, we are pleased to raise our fiscal year 2008 revenue guidance to approximately $13.5 million. In addition, we continue to believe we can grow fiscal 2009 sales 30% to 40% and sales to customers in the U.S. over 60% based on the continued market adoption of Urgent PC system and the continued successful expansion of our U.S. direct sales force."

As previously announced, Uroplasty will host an audio conference call on Monday, February 11, 2008, at 10.00 am central time to review the financial results for the third fiscal quarter. 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 800-240-5318 (domestic) or 303-262-2140 (international). An audio replay will be available two hours after the call for 30 days by dialing (800) 405-2236 (domestic) or 303-590-3000 (international), with the passcode 11108161#.

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended Nine Months Ended

December 31, December 31,

2007 2006 2007 2006

Net sales $3,729,314 $2,158,273 $9,717,531 $5,683,253

Cost of goods sold 789,955 752,181 2,053,208 1,760,553

Gross profit 2,939,359 1,406,092 7,664,323 3,922,700

Operating expenses

General and

administrative 799,193 707,288 2,755,000 2,365,574

Research and

development 460,374 424,987 1,393,496 1,758,350

Selling and

marketing 2,399,227 1,301,575 6,006,598 3,837,858

Amortization of

intangibles 209,862 25,210 632,865 78,323

3,868,656 2,459,060 10,787,959 8,040,105

Operating loss (929,297) (1,052,968) (3,123,636) (4,117,405)

Other income (expense)

Interest income 74,928 15,776 216,550 53,592

Interest expense (6,497) (8,671) (27,141) (25,136)

Warrant benefit - 522,995 - 150,315

Foreign currency

exchange gain

(loss) (37,632) 4,413 (53,538) 34,376

Other, net 2,134 - 4,014 3,585

32,933 534,513 139,885 216,732

Loss before income

taxes (896,364) (518,455) (2,983,751) (3,900,673)

Income tax expense 4,004 44,802 141,944 62,713

Net loss $(900,368) $(563,257) $(3,125,695) $(3,963,386)

Basic and diluted

loss per common share $(0.06) $(0.07) $(0.23) $(0.51)

Weighted average

common shares

outstanding:

Basic and diluted 14,119,583 8,555,586 13,482,928 7,766,463

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2007 March 31, 2007

(unaudited)

Assets

Cash, cash equivalents and short-term

investments $10,307,261 $6,763,702

All other current assets 2,877,962 2,449,081

Property, plant, and equipment, net 1,553,000 1,431,749

Intangible assets, net 4,426,101 308,093

Deferred tax assets 96,399 93,819

Total assets $19,260,723 $11,046,444

Liabilities and Shareholders' Equity

Total current liabilities 2,477,318 2,005,608

Long-term debt - less current maturities 405,761 427,382

Deferred rent - less current portion 189,329 214,381

Accrued pension liability 346,838 596,026

Total liabilities 3,419,246 3,243,397

Total shareholders' equity 15,841,477 7,803,047

Total liabilities and shareholders'

equity $19,260,723 $11,046,444

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended December 31, 2007 and 2006

(Unaudited)

Nine Months Ended

December 31,

2007 2006

Cash flows from operating activities:

Net loss $(3,125,695) $(3,963,386)

Adjustments to reconcile net loss to

net cash used in operating activities:

Depreciation and amortization 796,748 223,048

Gain on disposal of equipment (2,769) (3,576)

Warrant benefit - (150,315)

Stock-based consulting expense 37,942 48,043

Stock-based compensation expense 829,146 587,904

Deferred income taxes 7,113 (64,694)

Deferred rent (26,250) (23,333)

Changes in operating assets and liabilities:

Accounts receivable (534,542) (365,812)

Inventories 64,390 (149,247)

Other current assets and income tax

receivable 191,921 288,974

Accounts payable 94,198 91,619

Accrued liabilities and income tax payable 312,158 (24,069)

Accrued pension liability, net (247,388) 214,909

Net cash used in operating activities (1,603,028) (3,289,935)

Cash flows from investing activities:

Proceeds from sale of short-term

investments 4,200,000 1,137,647

Purchase of short-term investments (3,648,447) -

Purchases of property, plant and

equipment (210,875) (150,578)

Proceeds from sale of equipment 4,811 4,294

Payments for intangible assets (92,013) -

Net cash provided by investing activities 253,476 991,363

Cash flows from financing activities:

Proceeds from financing obligations 178,374 210,999

Repayment of debt obligations (239,872) (158,820)

Net proceeds from issuance of common

stock, warrants and option exercise 5,374,233 6,393,795

Net cash provided by financing activities 5,312,735 6,445,974

Effect of exchange rates on cash and cash

equivalents 131,929 3,663

Net increase in cash and cash equivalents 4,095,112 4,151,065

Cash and cash equivalents at beginning of

period 3,763,702 1,563,433

Cash and cash equivalents at end of period $7,858,814 $5,714,498

Supplemental disclosure of cash flow

information:

Cash paid during the period for interest $25,204 $22,011

Cash paid during the period for income taxes 87,900 93,935

Supplemental disclosure of non-cash financing

and investing activities:

Employee retirement savings plan contribution

issued in common shares - 44,385

Property, plant and equipment additions funded

by lessor allowance and classified as deferred

rent - 280,000

Purchase of intellectual property funded by

issuance of stock 4,658,861 -

Non-GAAP Financial Measures. The following table reconciles our non-GAAP financial measures that exclude non cash charges attributed to stock options under SFAS 123 (R), and depreciation and amortization expenses from gross profit, operating expenses and operating loss to our GAAP financial statements above. 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 above to the most directly comparable GAAP financial measures.

Management uses our non-GAAP financial measures, and in particular non-GAAP operating loss, for internal managerial purposes because we believe such measures are one important indicator of the strength and the performance of our business because they provide a link to operating cash flow. We also believe that analysts and investors 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.

Three Months Ended Nine Months Ended

December 31, December 31,

2007 2006 2007 2006

Gross Profit

GAAP gross profit $2,939,359 $1,406,092 $7,664,323 $3,922,700

% of sales 79% 65% 79% 69%

SFAS 123 (R) stock

option charges 9,008 - 18,695 1,361

Depreciation expenses 13,277 12,330 41,882 36,358

Non-GAAP gross

profit 2,961,644 1,418,422 7,724,900 3,960,419

Operating Expenses

GAAP operating

expenses 3,868,656 $2,459,060 $10,787,959 $8,040,105

SFAS 123 (R) stock

option charges 187,438 158,770 848,394 634,585

Depreciation

expenses 43,842 37,015 122,001 108,367

Amortization

expenses 209,862 25,210 632,865 78,323

Non-GAAP operating

expenses 3,427,514 2,238,065 9,184,699 7,218,830

Operating Loss

GAAP operating

loss (929,297) (1,052,968) (3,123,636) (4,117,405)

SFAS 123 (R) stock

option charges 196,446 158,770 867,089 635,946

Depreciation

expenses 57,119 49,345 163,883 144,725

Amortization

expenses 209,862 25,210 632,865 78,323

Non-GAAP operating

loss $(465,870) $(819,643) $(1,459,799) $(3,258,411)

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 primary focus is the commercialization of our Urgent PC system, which we believe is the only FDA-approved non-surgical neurostimulation therapy for the treatment of overactive bladder (OAB) symptoms. We also offer Macroplastique(R) Implants, a bulking agent for the treatment of urinary incontinence. Please visit Uroplasty, Inc. at http://www.uroplasty.com.

Safe Harbor

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements, which reflect our views regarding future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words "aim," "believe," "expect," "anticipate," "intend," "estimate" and other expressions, which indicate future events and trends, identify forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending upon a variety of factors, including, but not
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SOURCE Uroplasty, Inc.
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