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Uroplasty Reports Continued Progress During Second Quarter of Fiscal 2009
Date:10/29/2008

- Second Fiscal Quarter Net Sales of $3.9 Million; 29% Increase

Year-Over-Year -

- Second Fiscal Quarter U.S. Sales of $2.2 Million; 83% Increase

Year-Over-Year - - Multicenter Clinical Study Launched to Expand Reimbursement, Support

Marketing -

- Conference Call to be Held Today at 3:30 pm Central Time -

MINNEAPOLIS, Oct. 29 /PRNewswire-FirstCall/ -- Uroplasty, Inc. (Amex: UPI), a medical device company that develops, manufactures and markets innovative proprietary products to treat voiding dysfunctions, today reported financial results for the second quarter of fiscal 2009 ended September 30, 2008. Net sales for the second quarter of fiscal 2009 were $3.9 million, up 29% from $3.0 million in the second quarter of fiscal 2008. U.S. sales were $2.2 million, an increase of 83% from $1.2 million in the second quarter of fiscal 2008.

"During our second fiscal quarter, our team continued to execute our strategies and we generated solid growth," said David Kaysen, President and CEO. "In the U.S., support for the Urgent PC(R) system is continuing to build after the release of the initial results of the OrBIT study in May which demonstrated Urgent PC's efficacy to be comparable to the number-one prescribed pharmaceutical for overactive bladder. In addition, we continued to make progress in building sales of Macroplastique(R), which we introduced in the U.S. market in mid-2007," added Mr. Kaysen.

The Urgent PC system is the only FDA-approved minimally invasive nerve stimulation device designed for office-based treatment of urinary frequency, urinary urgency and urge incontinence -- symptoms often associated with overactive bladder. The system is an office-based, nonsurgical, percutaneous tibial nerve stimulation (PTNS) device that treats these symptoms. Macroplastique is an injectable urethral bulking agent for the treatment of adult-female stress-urinary incontinence primarily due to intrinsic sphincter deficiency.

Fiscal Second Quarter and Six Month Results for the Periods Ended September 30, 2008

-- Net sales for the three months ended September 30, 2008 were $3.9

million, an increase of 29%, compared with $3.0 million for the same

period a year ago. Net sales for the six months ended September 30,

2008 were $8.4 million, up 41% from $6.0 million for the same period a

year ago.

-- Sales to customers in the U.S. for the three months ended September 30,

2008 were $2.2 million, an increase of 83%, compared with $1.2 million

in the same period a year ago. This increase was due to the growing

effectiveness of the company's sales force and the continued growth in

the active Urgent PC customer base. Non-U.S. sales for the three

months ended September 30, 2008 were $1.7 million, down 7% from $1.8

million in year ago period. Excluding the translation impact of

fluctuations in foreign currency exchange rates, non-U.S. sales

declined by approximately 10%.

-- Six month sales to customers in the U.S. were $4.4 million, up 99% from

$2.2 million for the same period last year. Six month non-U.S. sales

were $4.0 million, up 7% from $3.8 million for the same period last

year. Excluding the translation impact of fluctuations in foreign

currency exchange rates, non-U.S. sales declined by approximately 1%.

-- Net loss for the second fiscal quarter ended September 30, 2008 was

$561,000, or $0.04 per diluted share versus $1.4 million, or $0.10 per

diluted share for the second quarter of last year. For the six months

ended September 30, 2008, net loss was $968,000, or $0.06 per diluted

share compared with a net loss of $2.2 million, or $0.17 per diluted

share for the same period last year.

-- Non-GAAP operating performance, which excludes non-cash charges for

share-based compensation under SFAS 123 (R), and depreciation and

amortization expenses, improved from a loss of approximately $0.6

million and $1.0 million, respectively, for the three and six months

ended September 30, 2007, to a (loss) gain of approximately ($98,000)

and $8,000, respectively for the three and six months ended September

30, 2008. The improvement in non-GAAP operating performance is

attributed to the increase in sales and an improvement in gross margin,

partially offset by an increase in cash operating expenses.

-- At September 30, 2008, cash and cash equivalents, and short-term

investments were $9.0 million compared with $9.2 million at June 30,

2008 and $10.1 million at March 31, 2008.

"Earlier this month, we announced the first patient enrollment in a new, multicenter clinical study that will support our U.S. reimbursement efforts, and is part of a very focused strategy to solidify reimbursement coverage for PTNS," continued Mr. Kaysen. "We are making impressive progress with center and patient enrollment in the new study which compares the Urgent PC system treatment against non-active treatment (placebo or sham treatment). This study design was suggested by professional associations that help to educate third party insurance carriers establish reimbursement for procedures. We anticipate applying to the American Medical Association for a specific "listed" CPT reimbursement code for Urgent PC treatments once the data is compiled and analyzed.

"Meanwhile, we have implemented a comprehensive program designed to educate medical directors of insurance carriers around the country. Physicians using Urgent PC are communicating their successes to these medical directors. In addition, we are in active communication with professional associations who are involved with reimbursement and believe we have the right people and the right resources to proactively address various reimbursement related issues. It is important to remember that reimbursement uncertainties are common with practically every new medical technology. We have been successfully educating the market on the benefits of Urgent PC since we received FDA approval and believe that our strategies to solidify reimbursement coverage are generating positive responses from the market," added Mr. Kaysen.

"As we look to the remainder of fiscal 2009, we still anticipate solid revenue growth over the prior fiscal year, albeit at a lower rate than we previously forecasted. In this challenging market environment we have maintained more than 330 active customers through the end of the second fiscal quarter. We now believe that overall sales in the current fiscal year will grow by approximately 20% over fiscal 2008, and we expect U.S. sales to grow between 30% and 40%. As we have previously discussed, we anticipate spending between $1.1 million and $1.4 million for the new clinical study, substantially all of it in the second half of fiscal 2009. We continue to expect consistent operating income breakeven on a non-GAAP basis, which excludes non-cash and unusual charges, to occur between revenues of $19 million to $20 million," 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 second fiscal quarter of 2009. 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) 218-0204 (domestic) or (303) 262-2161 (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 11121202#.

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 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(R) Implants, an injectable bulking agent for the treatment of adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency. Please visit Uroplasty, Inc. at http://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 effect the achievement of our forward-looking statements in our Annual Report on Form 10-K filed with the SEC. These factors include:

-- decisions by government and third party reimbursement agencies as to

the rate of reimbursement for our products, or whether reimbursement

will be allowed;

-- 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 intellectual property and the ability to prevent competitors from

infringing our rights;

-- the effect of government regulation, including when and if we receive

approval for marketing products in the United States;

-- the results of clinical trials; and

-- our continued losses and the possible need to raise additional capital

in the future.

We cannot assure you that our clinical trial will produce favorable results, that third-party payors will provide or continue to provide coverage and reimbursement, or reimburse the providers an amount sufficient to cover their costs and expenses, nor can we assure you that we will timely obtain, or even succeed at all at obtaining, a specific "listed" CPT reimbursement code from the AMA for Urgent PC treatments. We further cannot assure that reimbursement or other issues will not further impact our fiscal 2009 results.

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/Dahlia Bailey

(Investors)

415.896.6820

Chris Gale/Steve DiMattia (Media)

646.201.5431

UROPLASTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended Six Months Ended

September 30, September 30,

2008 2007 2008 2007

Net sales $3,920,516 $3,039,543 $8,446,138 $5,988,217

Cost of goods sold 549,199 669,041 1,257,166 1,263,253

Gross profit 3,371,317 2,370,502 7,188,972 4,724,964

Operating expenses

General and

administrative 918,394 1,147,432 1,957,108 1,955,806

Research and

development 327,978 426,997 733,498 933,122

Selling and

marketing 2,505,598 1,974,583 5,125,632 3,607,372

Amortization of

intangibles 210,966 206,482 421,941 423,003

3,962,936 3,755,494 8,238,179 6,919,303

Operating loss (591,619) (1,384,992) (1,049,207) (2,194,339)

Other income (expense)

Interest income 63,542 65,239 138,656 141,622

Interest expense (6,750) (9,279) (13,585) (20,644)

Foreign currency

exchange gain (loss) 5,038 (13,877) (732) (15,906)

Other, net (4,687) - (4,687) 1,880

57,143 42,083 119,652 106,952

Loss before income

taxes (534,476) (1,342,909) (929,555) (2,087,387)

Income tax expense 26,487 41,783 38,057 137,940

Net loss $(560,963) $(1,384,692) $(967,612) $(2,225,327)

Basic and diluted

loss per common

share $(0.04) $(0.10) $(0.06) $(0.17)

Weighted average

common shares

outstanding:

Basic and

diluted 14,916,540 13,342,284 14,916,540 13,162,862

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2008 March 31, 2008

(unaudited)

Assets

Current assets:

Cash and cash equivalents and

short-term investments $9,024,697 $10,146,081

Accounts receivable, net 1,690,285 2,318,604

Income tax receivable 34,445 50,841

Inventories 527,460 558,657

Other 359,598 244,517

Total current assets 11,636,485 13,318,700

Property, plant, and equipment, net 1,546,601 1,638,953

Intangible assets, net 3,778,949 4,200,890

Prepaid pension asset 36,482 26,482

Deferred tax assets 105,961 105,298

Total assets $17,104,478 $19,290,323

Liabilities and Shareholders' Equity

Total current liabilities 1,830,420 2,739,933

Long-term debt - less current maturities - 413,279

Deferred rent - less current portion 164,277 180,979

Accrued pension liability 290,744 353,411

Total liabilities 2,285,441 3,687,602

Total shareholders' equity 14,819,037 15,602,721

Total liabilities and shareholders'

equity $17,104,478 $19,290,323

UROPLASTY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Six Months Ended September 30, 2008 and 2007

(Unaudited)

Six Months Ended

September 30,

2008 2007

Cash flows from operating activities:

Net loss $(967,612) $(2,225,327)

Adjustments to reconcile net loss to net

cash used in operating activities:

Depreciation and amortization 566,949 529,766

(Gain) loss on disposal of equipment 4,687 (2,771)

Share-based consulting expense 36,409 26,005

Share-based compensation expense 453,592 644,637

Deferred income taxes (10,164) 2,474

Deferred rent (17,500) (17,500)

Changes in operating assets and liabilities:

Accounts receivable 537,959 (498,578)

Inventories (11,128) (16,176)

Other current assets and income tax

receivable (108,041) 64,660

Accounts payable (145,610) 190,508

Accrued liabilities (634,851) (80,460)

Accrued pension liability, net (44,772) (305,435)

Net cash used in operating activities (340,082) (1,688,197)

Cash flows from investing activities:

Proceeds from sale of short-term

investments 8,808,304 1,800,000

Purchase of short-term investments (7,891,373) (1,200,000)

Purchases of property, plant and equipment (130,421) (135,984)

Proceeds from sale of equipment - 4,417

Payments for intangible assets - (89,725)

Net cash provided by investing activities 786,510 378,708

Cash flows from financing activities:

Proceeds from financing obligations - 178,374

Repayment of debt obligations (455,913) (184,458)

Net proceeds from issuance of

common stock, warrants and option exercise - 768,298

Net cash provided by (used in) financing

activities (455,913) 762,214

Effect of exchange rates on cash and cash

equivalents (194,967) 93,320

Net decrease in cash and cash equivalents (204,452) (453,955)

Cash and cash equivalents at beginning

of period 3,880,044 3,763,702

Cash and cash equivalents at end of period $3,675,592 $3,309,747

Supplemental disclosure of cash flow

information:

Cash paid during the period for interest $13,612 $17,024

Cash paid during the period for income taxes 35,474 38,923

Supplemental disclosure of non-cash financing

and investing activities:

Purchase of intellectual property funded

by issuance of stock $ - $4,658,861

Non-GAAP Financial Measures: The following table reconciles our financial results 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 under SFAS 123 (R), 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 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 as 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.

Our non-GAAP operating performance improved from a loss of approximately $0.6 million and $1 million, respectively, for the three and six months ended September 30, 2007 to a (loss) gain of approximately ($98,000) and $8,000, respectively, for the three and six months ended September 30, 2008. We attribute this improvement in non-GAAP operating performance to the increase in sales and an improvement in gross margin rate, offset partially by an increase in cash operating expenses.

Three Months Ended Six Months Ended

September 30, September 30,

2008 2007 2008 2007

Gross Profit

GAAP gross profit 3,371,317 $2,370,502 7,188,972 $4,724,964

% of sales 86% 78% 85% 79%

SFAS 123 (R)

share-based

compensation 8,879 9,107 25,253 9,686

Depreciation

expenses 13,057 13,054 25,847 28,604

Non-GAAP gross

profit 3,393,253 2,392,663 7,240,072 4,763,254

Operating Expenses

GAAP operating

expenses 3,962,936 3,755,494 8,238,179 $6,919,303

SFAS 123 (R)

share-based

compensation 198,131 494,449 464,748 660,956

Depreciation

expenses 62,104 46,379 119,161 78,159

Amortization

expenses 210,966 206,482 421,941 423,003

Non-GAAP operating

expenses 3,491,735 3,008,184 7,232,329 5,757,185

Operating (Loss) Gain

GAAP operating

loss (591,619) (1,384,992) (1,049,207) (2,194,339)

SFAS 123 (R)

share-based

compensation 207,010 503,556 490,001 670,642

Depreciation

expenses 75,161 59,433 145,008 106,763

Amortization

expenses 210,966 206,482 421,941 423,003

Non-GAAP

operating (loss)

gain (98,482) $(615,521) 7,743 $(993,931)


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SOURCE Uroplasty, Inc.
Copyright©2008 PR Newswire.
All rights reserved


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