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Uroplasty Reports Fiscal Fourth Quarter and Full Year Results

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SOURCE Uroplasty, Inc.

~ Global Urgent PC Revenue Up 34% in Q4

~~ Total Revenue Up 15% in Q4

MINNEAPOLIS, May 15, 2014 /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 fourth quarter and full year ended March 31, 2014. 

Global revenue from the Company's Urgent® PC Neuromodulation System grew 34% to $4.1 million, as compared to $3.1 million in the fourth quarter of the prior year.  Sales of Urgent PC in the U.S. were up 27% in the fourth quarter while sales of Urgent PC in international markets were up 74%. 

Total global revenue for the fiscal fourth quarter 2014 was $6.4 million, up 15% from the same quarter in the prior year. Total domestic net revenue grew 13% to $4.5 million, as compared with $4.0 million during the year ago period while net international revenue grew 20% to $1.8 million, as compared with $1.5 million the fiscal fourth quarter of the prior fiscal quarter. 

"Urgent PC continues to gain traction in both the U.S. and international markets, which led to the first quarter ever with revenue in excess of $4.0 million for this product line," said Rob Kill, President and Chief Executive Officer of Uroplasty.  "While our execution improved throughout the year, we still have work to do in order to maximize our opportunities.  We will continue to invest in sales and marketing to support continued growth in Urgent PC.  Additionally, we will invest in R&D initiatives to expand our product offerings.  We are excited about the potential of Urgent PC to treat fecal incontinence, and based on the encouraging early results in our pilot study, we expect to begin enrollment later this fiscal year for a pivotal trial on the use of Urgent PC to treat this debilitating condition impacting nearly 30 million Americans."    

The Company generated a gross margin of 87.7% in the fiscal fourth quarter compared with 86.5% in the same quarter a year ago.  Operating expenses for the period totaled $6.7 million compared to $5.8 million in the same quarter last year and were up $0.4 million as compared to the fiscal third quarter of 2014.  The increased operating expenses resulted from the expansion and full staffing of the sales team.     

The operating loss of $1.1 million in the fiscal fourth quarter compares with a $1.0 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 $0.8 million in the fourth quarter of fiscal 2014, compared with a $0.5 million non-GAAP operating loss in the fourth quarter a year ago. 

For the year ended March 31, 2014, total revenue grew 10% to $24.6 million, reflecting a 10% increase in U.S. revenue and a 9% increase in international revenue. Revenue from Urgent PC increased 17% to $12.3 million in the United States and increased 29% to $2.7 million in international markets.  At March 31, 2014, cash, cash equivalents and cash investments totaled $12.1 million.

Reimbursement Update

Three new payers have recently written positive coverage policies for Percutaneous Tibial Nerve Stimulation (PTNS) delivered via Urgent PC for treatment of overactive bladder (OAB) and associated symptoms of urinary urgency, urinary frequency and urge incontinence.

Blue Cross Blue Shield of Michigan, Premera Blue Cross and UPMC Health Plan each now have positive coverage policies for PTNS.   Blue Cross Blue Shield of Michigan is the largest provider in the state of Michigan and covers 5.6 million members.  Premera Blue Cross provides coverage in Washington and Alaska and covers 1.6 million members.  UPMC Health Plan is a leading network in Western Pennsylvania and the surrounding area and covers 2.2 million members.

"These positive coverage decisions continue to demonstrate the growing appreciation for the clinical benefits and cost effectiveness of Urgent PC in treating patients with OAB," said Dan Merz, Vice President of Healthcare Affairs.  "We now have approximately 119 million lives covered by private payers and over 40 million Medicare beneficiaries with access to Urgent PC therapy."

Fiscal 2015 Expectations

Management expects total revenue growth in Fiscal 2015 to range from 9% to 12%, or revenue of $26.8 million to $27.6 million.  Total Urgent PC revenue is expected to grow approximately 15% in fiscal 2015 while total Macroplastique revenue is expected to be similar to fiscal 2014. 

Excluding non-cash charges for share-based compensation and depreciation and amortization expense, the fiscal 2015 non-GAAP operating loss is projected to range from $3 million to $4 million. This guidance assumes ongoing base business investments in the U.S. sales force and marketing programs, research and development, as well as clinical initiatives.

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 877-941-8609. 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 4682013#.  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 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 commercially available 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)
415.568.9348 or
Doug Sherk
415.652.9100
Janine McCargo (Media)
646.688.0425

           

UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three Months Ended


Year Ended


March 31

March 31


2014


2013


2014


2013









Net sales

$6,360,735


$5,540,586


$24,577,126


$22,417,980

Cost of goods sold

781,655


750,165


3,049,811


3,014,886









Gross profit

5,579,080


4,790,421


21,527,315


19,403,094









Operating expenses








General and administrative

1,356,133


1,009,580


6,522,388


4,187,819

Research and development

716,610


719,282


2,151,257


2,415,123

Selling and marketing

4,625,140


3,814,194


18,121,732


15,238,600

Amortization

8,115


215,862


30,462


862,833


6,705,998


5,758,918


26,825,839


22,704,375









Operating loss

(1,126,918)


(968,497)


(5,298,524)


(3,301,281)









Other income (expense)








Interest income

3,520


10,203


22,095


46,039

Interest expense

-


(695)


-


(707)

Foreign currency exchange gain (loss)

(222)


5,005


(4,762)


1,573


3,298


14,513


17,333


46,905









Loss before income taxes

(1,123,620)


(953,984)


(5,281,191)


(3,254,376)









Income tax expense

21,866


14,958


71,899


50,770









Net loss

$(1,145,486)


$(968,942)


$(5,353,090)


$(3,305,146)









Basic and diluted net loss per common
share

$(0.05)


$(0.05)


$(0.25)


$(0.16)









Weighted average common shares
outstanding:








Basic and diluted

21,366,881


20,803,530


21,118,258


20,777,238









 

 

UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



March 31, 2014


March 31, 2013





Assets




       Current assets:




           Cash and cash equivalents

$8,681,609


$3,533,864

           Short-term investments

3,451,086


7,936,605

           Accounts receivable, net

2,875,275


2,553,447

           Inventories

517,217


718,933

           Other

507,299


566,536

       Total current assets

16,032,486


15,309,385





       Property, plant and equipment, net

997,609


1,033,085

       Intangible assets, net

119,980


100,502

       Long-term investments

-


3,451,711

       Deferred tax assets

150,971


146,052

       Total assets

$17,301,046


$20,040,735





Liabilities and Shareholders' Equity




       Current liabilities:




           Accounts payable

$904,879


$618,916

           Current portion – deferred rent

2,917


35,000

           Income tax payable

21,922


7,729

           Accrued liabilities:




               Compensation

1,999,966


1,550,846

               Other

479,373


476,287

       Total current liabilities

3,409,057


2,688,778





       Deferred rent – less current portion

171


5,141

       Accrued pension liability

678,118


660,580





       Total liabilities

4,087,346


3,354,499





       Total shareholders' equity

13,213,700


16,686,236





       Total liabilities and shareholders' equity

$17,301,046


$20,040,735

 

 


UROPLASTY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Year Ended


March 31


2014


2013

Cash flows from operating activities:




Net loss

$(5,353,090)


$(3,305,146)

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




Depreciation and amortization

353,238


1,152,929

(Gain) loss on disposal of equipment

(2,872)


7,617

Amortization of premium on marketable securities

8,341


47,559

Share-based consulting expense

-


1,623

Share-based compensation expense

1,436,270


810,016

Deferred income tax expense

6,498


(29,053)

Deferred rent

(37,053)


(36,902)

Changes in operating assets and liabilities:




Accounts receivable, net

(257,794)


108,495

Inventories

207,050


(25,370)

Other current assets

63,899


(205,778)

Accounts payable

281,104


30,925

Accrued compensation

436,765


(25,301)

Accrued liabilities, other

6,472


164,176

Accrued pension liability, net

(51,000)


79,598

Net cash used in operating activities

(2,902,172)


(1,224,612)





Cash flows from investing activities:




Proceeds from maturity of available-for-sale investments

7,930,000


4,200,000

Proceeds from maturity of held-to-maturity investments

-


6,920,000

Purchases of available-for-sale marketable investments

-


(8,425,034)

Purchases of held-to-maturity marketable investments

-


(2,500,000)

Purchases of property, plant and equipment

(248,105)


(189,929)

Proceeds from sale of property, plant and equipment

6,773


5,591

Payments for intangible assets

(49,940)


(17,455)

Net cash provided by (used in) investing activities

7,638,728


(6,827)





Cash flows from financing activities:




Proceeds from exercise of options

359,502


150,000

Net cash provided by financing activities

359,502


150,000





Effect of exchange rate changes on cash and cash equivalents

51,687


(37,923)





Net increase in cash and cash equivalents

5,147,745


(1,119,362)





Cash and cash equivalents at beginning of period

3,533,864


4,653,226





Cash and cash equivalents at end of period

$8,681,609


$3,533,864









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, depreciation and amortization 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 for the three months ended March 31, 2014 and 2013 was approximately $814,000 and $477,000, respectively.  Our non-GAAP operating loss for fiscal 2014 and 2013 was approximately $3,510,000 and $1,336,000, respectively.  The fiscal 2014 increase in non-GAAP operating loss is attributed to the increase in operating spending (including $1.4 million of cash costs related to our review of internal control over financial reporting and executive management changes), offset partially 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

March  31, 2014






Gross profit

$5,579,000

$6,000

$7,000

$-

$5,592,000

% of net sales

87.7%




87.9%

Operating expenses






    General and administrative

1,356,000

(166,000)

(47,000)

-

1,143,000

    Research and development

717,000

(15,000)

(1,000)

-

701,000

    Selling and marketing

4,625,000

(39,000)

(24,000)

-

4,562,000

    Amortization

8,000

-

-

(8,000)

-


6,706,000

(220,000)

(72,000)

(8,000)

6,406,000







Operating loss

$(1,127,000)

$226,000

$79,000

$8,000

$(814,000)







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

-

-

(216,000)

-


5,758,000

(194,000)

(65,000)

(216,000)

5,283,000







Operating loss

$(968,000)

$202,000

$73,000

$216,000

$(477,000)





Expense Adjustments


Year Ended

GAAP

Share-based
Expense

Depreciation

Amortization
of Intangibles

Non-GAAP

March 31, 2014






Gross profit

$21,527,000

$27,000

$33,000

$-

$21,587,000

% of net sales

87.6%




87.8%

Operating expenses






    General and administrative

6,522,000

(1,117,000)

(200,000)

-

5,205,000

    Research and development

2,151,000

(51,000)

(4,000)

-

2,096,000

    Selling and marketing

18,123,000

(241,000)

(86,000)

-

17,796,000

    Amortization

30,000

-

-

(30,000)

-


26,826,000

(1,409,000)

(290,000)

(30,000)

25,097,000







Operating loss

$(5,299,000)

$1,436,000

$323,000

$30,000

$(3,510,000)







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)

 

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