MINNEAPOLIS, Jan. 22, 2015 /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 2015 third quarter ended December 31, 2014.
Global revenue for the Company's Urgent(®) PC Neuromodulation System grew 14.5% to $4.4 million, a new quarterly revenue record, as compared to $3.9 million in the third quarter of the prior year. Global Macroplastique sales were $2.0 million during the third quarter as compared to $2.3 million in the third quarter of fiscal 2014. Total revenue for the third quarter of fiscal 2015 was $6.7 million, a 4.2% increase from the same quarter in the prior year. The impact of changes in foreign currency exchange rates negatively impacted revenue by approximately $0.1 million. Adjusting for the negative impact of foreign currency exchange rates, year-over-year total revenue growth would have been 5.7% in the fiscal third quarter, and Urgent PC revenue growth would have been 15.5%.
On December 22, 2014, the Company and Vision-Sciences, Inc. announced that they had entered into an agreement and plan of merger under which the two companies will combine in an all-stock transaction to create a new medical device company to be named Cogentix Medical, Inc. The proposed merger is expected to be completed in the first half of calendar 2015, subject to shareholder and other customary approvals. The combined company is expected to generate revenue growth between 10% and 14% in its first fiscal year beginning on April 1, 2015. Once the existing Uroplasty sales team is fully trained on Vision-Sciences' EndoSheath technology platform, the combined company is expected to achieve sustainable annual revenue growth of 15% beginning with its second fiscal year.
"Third quarter and year-to-date revenue growth for Urgent PC illustrates the ability of our sales organization to penetrate the urology market with innovative technologies that address key needs of our physician customers," said Rob Kill, President and Chief Executive Officer of Uroplasty. "Our team's execution during our fiscal third quarter gives us a high level of confidence about the potential to accelerate EndoSheath sales in the in-office urology market once we complete the proposed merger with Vision-Sciences. With more than five million units sold and zero reported cases of cross contamination, we believe that EndoSheath should be the standard of care for endoscopic applications, and our team fully intends to turn this efficacy leadership into market leadership," added Mr. Kill.
In the fiscal third quarter, the Company achieved a gross margin of 88.3%, 50 basis points higher than the 87.8% gross margin in the same quarter one year ago. Operating expenses for the period totaled $8.0 million compared to $6.3 million in the same quarter last year and includes approximately $820,000 of transaction expenses incurred in the third quarter associated with the proposed Vision-Sciences merger.
The operating loss of $2.1 million in the fiscal third quarter compares with a $0.7 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 $1.5 million ($0.7 million excluding merger related costs) in the third quarter of fiscal 2015, compared with a $0.3 million non-GAAP operating loss in the year ago period.
The loss per diluted share of $0.10 in the fiscal third quarter compares to a loss per diluted share of $0.03 in the same quarter last year. Excluding merger related costs, the non-GAAP loss per diluted share in the third quarter of fiscal 2015 was $0.06.
For the nine-month period ended December 31, 2014, global revenue from Urgent PC increased 17.1% to $12.7 million. Total revenue grew 7.1% to $19.5 million. At December 31, 2014, cash, cash equivalents and cash investments totaled $8.7 million. During the third quarter, the Company used $0.7 million in cash for operations.
For the fourth quarter of fiscal 2015, the Company currently expects Urgent PC sales to grow approximately 15% over the same quarter of the prior fiscal year and currently expects global Macroplastique sales to be approximately $2.0 million, which is consistent with the revenue generated from this product line over the prior four quarters. Total fiscal year 2015 revenue is now expected to be in a range from $26.5 million to $26.8 million.
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 888-523-1225. 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 888-203-1112 with the passcode 2270603. An archived webcast will also be available at investor.uroplasty.com.
About Uroplasty
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. Uroplasty's focus is the continued commercialization of its Urgent® PC Neuromodulation System, which Uroplasty believes is the only commercially available, FDA-cleared device that delivers percutaneous tibial nerve stimulation (PTNS) for the office-based treatment of overactive bladder (OAB). OAB is a chronic condition that affects approximately 42 million U.S. adults. The symptoms include urinary urgency, frequency and urge incontinence. Uroplasty also offers 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 Uroplasty and its products, please visit Uroplasty, Inc. at www.uroplasty.com.
Important Additional Information and Where to Find It
In connection with the proposed merger, Vision-Sciences plans to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Uroplasty and Vision-Sciences that also constitutes a prospectus of Vision-Sciences. Uroplasty and Vision-Sciences will make the joint proxy statement/prospectus available to their respective shareholders. Investors are urged to read the joint proxy statement/prospectus when it becomes available, because it will contain important information. The registration statement, definitive joint proxy statement/prospectus and other documents filed by Uroplasty and Vision-Sciences with the SEC will be available free of charge at the SEC's website (www.sec.gov) and from Uroplasty and Vision-Sciences. Requests for copies of the joint proxy statement/prospectus and other documents filed by Uroplasty with the SEC may be made by contacting Brett Reynolds, Senior Vice President, Chief Financial Officer by phone at (952) 426-6152 or by email at brett.reynolds@uroplasty.com, and request for copies of the joint proxy statement/prospectus and other documents filed by Vision-Sciences may be made by contacting Gary Siegel, Vice President, Finance by phone at (845) 848-1085 or by email at gary.siegel@visionsciences.com.
Participants in the Solicitation
Uroplasty, Vision-Sciences, their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from Uroplasty's and Vision-Sciences' respective shareholders in connection with the proposed transaction. Information about the directors and executive officers of Uroplasty and their ownership of Uroplasty stock is set forth in Uroplasty's annual report on Form 10-K for the fiscal year ended March 31, 2014, and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on July 22, 2014. Information regarding Vision-Sciences' directors and executive officers is contained in Vision-Sciences' annual report on Form 10-K for the fiscal year ended March 31, 2014 and its proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on June 17, 2014. These documents can be obtained free of charge from the sources indicated above. Certain directors, executive officers and employees of Uroplasty and Vision-Sciences may have direct or indirect interest in the transaction due to securities holdings, vesting of equity awards and rights to severance payments. Additional information regarding the participants in the solicitation of Uroplasty and Vision-Sciences shareholders will be included in the joint proxy statement/prospectus filed with the SEC.
Cautionary Statements Related to Forward-Looking Statements
This press release includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as "anticipate," "expect," "plan," "could," "may," "will," "believe," "estimate," "forecast," "goal," "project," and other words of similar meaning. Forward-looking statements in this press release include, but are not limited to, statements about the benefits of the transaction; expected revenue growth rates; the expected timing of the completion of the transaction; and the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, uncertainties as to the timing of the transaction; uncertainties as to whether Uroplasty shareholders and Vision-Sciences shareholders will approve the transaction; the risk that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived; the risk that shareholder litigation in connection with the transaction may result in significant costs of defense, indemnification and liability; other business effects, including the effects of industry, economic or political conditions outside of either company's control; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of Uroplasty and Vision-Sciences may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; operating costs and business disruption following completion of the transaction, including adverse effects on employee retention and on each company's respective business relationships with third parties; transaction costs; actual or contingent liabilities; the adequacy of the combined company's capital resources; and the risks identified under the heading "Risk Factors" in Uroplasty's Annual Report on Form 10-K, for the fiscal year ended March 31, 2014, filed with the Securities and Exchange Commission ("SEC") on June 9, 2014, and Vision-Sciences' Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed with the SEC on May 30, 2014, as well as both companies' subsequent Quarterly Reports on Form 10-Q and other information filed by each company with the SEC. Uroplasty and Vision-Sciences caution investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read Uroplasty's and Vision-Sciences' filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this release, and Uroplasty and Vision-Sciences undertake no obligation to update or revise any of these statements. Uroplasty's and Vision-Sciences' businesses are subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.
For Further Information:
Uroplasty, Inc.
---------------
Brett Reynolds, SVP and CFO
952-426-6152
EVC Group
---------
Doug Sherk/Brian Moore
(Investors)
415-652-9100/310-579-6199
Janine McCargo (Media)
646-688-0425
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2014 2013 2014 2013
---- ---- ---- ----
Net sales $6,666,905 $6,398,675 $19,506,164 $18,216,391
Cost of goods sold 778,406 778,267 2,322,942 2,268,156
------- ------- --------- ---------
Gross profit 5,888,499 5,620,408 17,183,222 15,948,235
--------- --------- ---------- ----------
Operating expenses
General and
administrative 2,283,333 1,194,882 5,148,998 5,166,255
Research and
development 665,539 526,224 2,226,018 1,434,647
Selling and
marketing 5,015,916 4,546,100 15,107,241 13,496,593
Amortization 7,584 7,873 24,136 22,347
----- ----- ------ ------
7,972,372 6,275,079 22,506,393 20,119,842
--------- --------- ---------- ----------
Operating loss (2,083,873) (654,671) (5,323,171) (4,171,607)
---------- -------- ---------- ----------
Other income (expense)
Interest income 1,761 3,836 6,606 18,576
Interest expense (250) - (250) -
Foreign currency
exchange gain
(loss) (2,038) (506) (3,317) (4,540)
(527) 3,330 3,039 14,036
---- ----- ----- ------
Loss before income
taxes (2,084,400) (651,341) (5,320,132) (4,157,571)
Income tax expense 20,938 19,491 55,785 50,033
------ ------ ------ ------
Net loss $(2,105,338) $(670,832) $(5,375,917) (4,207,604)
=========== ========= =========== ==========
Basic and diluted
net loss per common
share $(0.10) $(0.03) $(0.25) $(0.20)
Weighted average common shares outstanding:
Basic and diluted 21,663,924 21,258,736 21,683,892 21,035,874
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, 2014 March 31, 2014
----------------- --------------
Assets
Current assets:
Cash
and
cash
equivalents $8,703,789 $8,681,609
Short-
term
investments - 3,451,086
Accounts
receivable,
net 2,567,403 2,875,275
Inventories 437,471 517,217
Other 449,046 507,299
------- -------
Total
current
assets 12,157,709 16,032,486
Property,
plant,
and
equipment,
net 946,726 997,609
Intangible
assets,
net 95,845 119,980
Prepaid
pension
assets - 855
Deferred
tax
assets 127,625 150,116
------- -------
Total
assets $13,327,905 $17,301,046
=========== ===========
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts
payable $1,193,692 $904,879
Current
portion
-
deferred
rent - 2,917
Current
portion
-
capital
lease
obligation 4,434 -
Income
tax
payable 23,729 21,922
Accrued liabilities:
Compensation 2,199,586 1,999,966
Other 394,732 479,373
Total
current
liabilities 3,816,173 3,409,057
Deferred
rent
-
less
current
portion 26,644 171
Capital
lease
obligation
-
less
current
portion 18,411 -
Long-
term
incentive
plan 131,907 -
Accrued
pension
liability 543,934 678,118
------- -------
Total
liabilities 4,537,069 4,087,346
--------- ---------
Total
shareholders'
equity 8,790,836 13,213,700
--------- ----------
Total
liabilities
and
shareholders'
equity $13,327,905 $17,301,046
=========== ===========
UROPLASTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
December 31,
2014 2013
Cash flows from operating activities:
Net loss $(5,375,917) $(4,207,604)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 207,011 267,369
Loss (gain) on disposal of equipment 161 (5,000)
Amortization of premium on marketable
securities 311 7,562
Share-based compensation expense 1,077,928 1,210,201
Long-term incentive plan 131,907 -
Deferred income tax expense 5,129 3,245
Deferred rent 23,556 (27,790)
Changes in operating assets and liabilities:
Accounts receivable, net 220,002 79,428
Inventories 73,626 255,207
Other current assets 48,142 16,868
Accounts payable 295,113 21,724
Accrued compensation 212,259 274,139
Accrued liabilities (59,459) (120,881)
Accrued pension liability (56,226) (39,011)
------- -------
Net cash used in operating activities (3,196,457) (2,264,543)
---------- ----------
Cash flows from investing activities:
Proceeds from maturity of available-
for-sale instruments 3,450,000 2,750,000
Proceeds from held-to-maturity
instruments - 4,180,000
Purchases of property, plant and
equipment (206,498) (221,769)
Proceeds from sale of property, plant
and equipment 3,104 6,773
Payments for intangible assets - (41,300)
--- -------
Net cash provided by investing
activities 3,246,606 6,673,704
--------- ---------
Cash flows from financing activities:
Proceeds from exercise of stock options 67,850 172,485
------ -------
Net cash provided by financing
activities 67,850 172,485
------ -------
Effect of exchange rates on cash and
cash equivalents (95,819) 48,741
------- ------
Net increase in cash and cash
equivalents 22,180 4,630,387
Cash and cash equivalents at beginning
of period 8,681,609 3,533,864
--------- ---------
Cash and cash equivalents at end of
period $8,703,789 $8,164,251
========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for income
tax $56,144 $34,640
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, long-term incentive plan, 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 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 during the three months ended December 31, 2014 and 2013 was approximately $1,469,000 and $277,000, respectively. The increase in non-GAAP operating loss for the three months ended December 31, 2014 over the corresponding period a year ago is attributed to the increase in operating spending and business development expenses, partially offset by the increase in net sales and gross profit percent. Expenses related to business development activity in the quarter were $820,000. Our non-GAAP operating loss during the nine months ended December 31, 2014 and 2013 was $3,906,000 and $2,695,000, respectively. The increase in the non-GAAP operating loss for the nine months ended December 31, 2014 is attributed to an increase in operating and business development expenses, partially offset by the increase in net sales and gross profit percent.
Expense Adjustments
-------------------
(dollar amounts in thousands) GAAP Share-based Long-term Depreciation Amortization Non-GAAP
Compensation Incentive
Plan
--- ---
Three Months Ended December 31, 2014
Gross Profit $5,888 $11 $- $4 $- $5,903
% of sales 88.3% 88.6%
Operating Expenses
General & administrative 2,282 (313) (132) (36) - 1,801
Research and development 666 (11) - - - 655
Selling and marketing 5,016 (81) - (19) - 4,916
Amortization 8 - - - (8) -
--- --- --- --- --- ---
7,972 (405) (132) (55) (8) 7,372
Operating Loss $(2,084) $416 $132 $59 $8 $(1,469)
------- ---- ---- --- --- -------
Three Months Ended December 31, 2013
Gross Profit $5,620 $6 $- $8 $- $5,634
% of sales 87.8% 88.1%
Operating Expenses
General & administrative 1,195 (197) - (50) - 948
Research and development 526 (11) - (1) - 514
Selling and marketing 4,546 (75) - (22) - 4,449
Amortization 8 - - - (8) -
--- --- --- --- --- ---
6,275 (283) - (73) (8) 5,911
Operating Loss $(655) $289 $- $81 $8 $(277)
----- ---- --- --- --- -----
Expense Adjustments
-------------------
(dollar amounts in thousands) GAAP Share-based Long-term Depreciation Amortization Non-GAAP
Expense Incentive
Plan
--- ---
Nine Months Ended December 31, 2014
Gross Profit $17,183 $36 $- $13 $- $17,232
% of sales 88.1% 88.3%
Operating Expenses
General & administrative 5,149 (755) (132) (111) - 4,151
Research and development 2,226 (41) - (2) - 2,183
Selling and marketing 15,107 (246) - (57) - 14,804
Amortization 24 - - - (24) -
--- --- --- --- --- ---
22,506 (1,042) (132) (170) (24) 21,138
Operating Loss $(5,323) $1,078 $132 $183 $24 $(3,906)
------- ------ ---- ---- --- -------
Nine Months Ended December 31, 2013
Gross Profit $15,948 $20 $- $26 $- $15,994
% of sales 87.5% 87.8%
Operating Expenses
General & administrative 5,166 (952) - (153) - 4,061
Research and development 1,435 (36) - (3) - 1,396
Selling and marketing 13,497 (202) - (63) - 13,232
Amortization 22 - - - (22) -
--- --- --- --- --- ---
20,120 (1,190) - (219) (22) 18,689
Operating Loss $(4,172) $1,210 $- $245 $22 $(2,695)
------- ------ --- ---- --- -------
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SOURCE Uroplasty, Inc.
