Uroplasty (UPI) 10-K 2012 FY Annual report

EXHIBIT 99.1

 

UROPLASTY REPORTS FISCAL FOURTH QUARTER AND FULL YEAR 2012

FINANCIAL RESULTS

~Sales of Urgent® PC in the U.S. increased 79% to $2.3 million in the fourth quarter~

~Positive Reimbursement Developments for Urgent PC in the U.S.~

~Conference call today at 4:30 p.m. ET~

MINNEAPOLIS, MN, May 24, 2012 – 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 fourth quarter and year ended March 31, 2012.

Global sales increased 39% to $5.6 million for the fourth quarter of fiscal 2012, compared with $4.0 million in the fiscal fourth quarter a year ago.  Sales in the U.S. grew 63%, driven by a 79% increase in sales of the Urgent® PC Neuromodulation System.  U.S. sales of Macroplastique grew 53% from the prior year.  Outside the U.S., sales rose by 4%.

Fiscal fourth quarter U.S. Urgent PC sales, number of active customers and number of lead set boxes increased sequentially over fiscal third quarter.  Sales of $2.3 million increased 19% over the fiscal third quarter sales.  There were 538 active Urgent PC customers in the fiscal fourth quarter compared with 500 in the fiscal third quarter.  The Company sold 3,023 lead set boxes in the fiscal fourth quarter compared with 2,531 in the fiscal third quarter and utilization in the fiscal fourth quarter increased to 5.6 lead set boxes per active customer compared with 5.1 in the third quarter.

“We demonstrated solid sequential quarterly improvement in the performance metrics of our U.S. Urgent PC business,” said David Kaysen, President and CEO of Uroplasty.  “Our success is the result of good execution of the initiatives we put in place in January 2012 to accelerate our growth through increased penetration of existing physician accounts and increase in active customers.  New processes and tools are beginning to help our customers to ramp up and incorporate Urgent PC as a key component in their practices much more quickly.  The fiscal fourth quarter results also benefitted from a streamlined Medicare reimbursement policy in Florida that became effective February 1st.  We were also pleased with the growth in the number of active customers during the quarter and we anticipate continued momentum in fiscal 2013.”

“In addition, we had a positive development on reimbursement recently,” Mr. Kaysen continued.  “Novitas Solutions (formerly Highmark Medicare Services) published its decision to provide coverage for percutaneous tibial nerve stimulation (PTNS) treatments retroactive to April 9, 2012, and physicians in its network have been able to file claims for treatments using Urgent PC.  Novitas Solutions is the Medicare Administrative Contractor for Delaware, Maryland, New Jersey, Pennsylvania and the District of Columbia and provides benefits to approximately 4.6 million Medicare beneficiaries.  PTNS treatments are now covered by 11 of the 13 regional Medicare carriers.

Fourth Quarter Fiscal 2012 Results

Urgent PC sales in the U.S. were $2.3 million in the quarter ended March 31, 2012, compared with $1.3 million in the same quarter last year, an increase of 79%.  Macroplastique sales in the U.S. totaled $1.6 million in the recent fourth quarter compared to $1.0 million in the same quarter last year.  Growth of Macroplastique sales was due to market share gains achieved when a competitor exited the market.

Net sales to customers outside of the U.S. for the fiscal fourth quarter were $1.6 million, an increase of 4% from the prior fiscal year’s fourth quarter.  Excluding the impact of fluctuations in foreign currency exchange rates, sales outside the U.S. grew 8%.

The Company reported an operating loss of $589,000 in the fiscal fourth quarter, compared with a $1.3 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 $122,000 in the fourth quarter of fiscal 2012, compared with a $928,000 loss in the fourth quarter a year ago.  The decrease was primarily attributable to the increase in sales, which more than offset the increase in selling and marketing expense.

Full Year Fiscal 2012 Results

For the full year ended March 31, 2012, global sales grew 49% to $20.6 million, compared with $13.8 million in fiscal 2011.  The increase reflected a 75% increase in U.S. sales to $13.9 million and a 14% increase in sales outside the U.S. to $6.7 million.  In the U.S., Urgent PC sales grew 84% to $7.8 million compared with $4.3 million in fiscal 2011.  Macroplastique sales were up 69% to $5.9 million.  Adjusted for the fluctuations in foreign currency exchange rates, total sales grew 47% and sales outside the U.S. increased 10%.

Cash, cash equivalents and cash investments totaled $16.3 million at March 31, 2012, compared with $16.7 million at the end of December.  The Company used $3.1 million of cash for operating activities in fiscal 2012.

“We made good progress in fiscal 2012.  In the U.S., with the exit of a competitor from the bulking market, we gained a significant market share with Macroplastique.  We have established Urgent PC, recognized for its efficacy and safety, as a viable treatment for the symptoms of OAB.  We have strengthened our sales and marketing approach with existing customers, providing them with additional support to help them build their PTNS practices and we continue to bring in new physician accounts based on solid clinical evidence of Urgent PC’s benefits to patients,” concluded Mr. Kaysen.

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 fiscal fourth quarter and full year ended March 31, 2012. 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 877-941-0844. An audio replay will be available for 30 days following the call at 800-406-7325 (domestic) or 303-590-3030 (international), with the passcode 4531976#.

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 focus is the continued commercialization of our Urgent PC Neuromodulation System, the only FDA-cleared system that delivers posterior tibial nerve stimulation for the office-based treatment of overactive bladder and the associated symptoms of urgency, frequency and urge incontinence.

We also offer Macroplastique Implants, 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.	EVC Group
David Kaysen, President and CEO, or	Doug Sherk/Jenifer Kirtland (Investors)
Medi Jiwani, Vice President, CFO, and	415.568.4887
Treasurer	Chris Gale (Media)
952.426.6140	646.201.5431

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Year Ended
	March 31,						March 31,
	(unaudited)
	2012			2011			2012			2011
Net sales	$	5,596,782		$	4,014,643		$	20,561,714		$	13,787,032
Cost of goods sold		791,527			676,700			3,036,967			2,386,431
Gross profit		4,805,255			3,337,943			17,524,747			11,400,601
Operating expenses
General and administrative		843,684			833,892			3,732,623			3,442,952
Research and development		406,296			423,101			1,905,366			1,719,532
Selling and marketing		3,929,248			3,214,660			15,296,217			10,092,062
Amortization		215,460			211,094			856,995			843,602
		5,394,688			4,682,747			21,791,201			16,098,148
Operating loss		(589,433	)		(1,344,804	)		(4,266,454	)		(4,697,547	)
Other income (expense)
Interest income		14,254			19,664			60,072			72,426
Interest expense		-			(530	)		(57	)		(5,067	)
Foreign currency exchange gain (loss)		18,084			(2,145	)		3,780			10,722
		32,338			16,989			63,795			78,081
Loss before income taxes		(557,095	)		(1,327,815	)		(4,202,659	)		(4,619,466	)
Income tax expense		15,944			577			47,712			28,837
Net loss	$	(573,039	)	$	(1,328,392	)	$	(4,250,371	)	$	(4,648,303	)
Basic and diluted loss per common share	$	(0.03	)	$	(0.06	)	$	(0.21	)	$	(0.25	)
Weighted average common shares outstanding:
Basic and diluted		20,722,910			20,584,668			20,689,819			18,874,009

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,

	2012		2011
Assets
Current assets:
Cash and cash equivalents & short-term investments	$	11,854,127	$	14,084,150
Accounts receivable, net		2,704,434		2,085,262
Inventories		698,742		677,960
Other		363,639		348,100
Total current assets		15,620,942		17,195,472
Property, plant, and equipment, net		1,171,979		1,210,542
Intangible assets, net		945,880		1,725,136
Long-term investments		4,429,140		5,508,701
Deferred tax assets		122,872		87,031
Total assets	$	22,290,813	$	25,726,882
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	593,585	$	658,107
Current portion – deferred rent		35,000		35,000
Income tax payable		17,892		6,901
Accrued liabilities:
Compensation		1,576,147		1,597,657
Other		316,995		247,451
Total current liabilities		2,539,619		2,545,116
Deferred rent – less current portion		42,043		77,272
Accrued pension liability		474,396		475,845
Total liabilities		3,056,058		3,098,233
Total shareholders’ equity		19,234,755		22,628,649
Total liabilities and shareholders’ equity	$	22,290,813	$	25,726,882

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended March 31,

	2012			2011
Cash flows from operating activities:
Net loss	$	(4,250,371	)	$	(4,648,303	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		1,118,243			1,119,227
Loss  on disposal of equipment		8,447			5,358
Amortization of premium on marketable securities		35,277			18,910
Share-based consulting expense		5,448			11,261
Share-based compensation expense		679,471			422,893
Deferred income taxes		(40,116	)		26,192
Deferred rent		(35,228	)		(35,228	)
Changes in operating assets and liabilities:
Accounts receivable, net		(653,110	)		(752,970	)
Inventories		(29,719	)		(328,754	)
Other current assets		(17,510	)		(85,529	)
Accounts payable		(59,025	)		170,326
Accrued liabilities		63,981			711,832
Accrued pension liability, net		45,843			(11,680	)
Net cash used in operating activities		(3,128,369	)		(3,376,465	)
Cash flows from investing activities:
Proceeds from maturity of available-for-sale marketable securities		10,018,252			2,261,568
Proceeds from maturity of held-to-maturity marketable securities		3,740,000			5,000,000
Purchases of available-for-sale marketable securities		(3,046,270	)		(12,318,915	)
Purchases of held-to-maturity marketable securities		(8,840,000	)		(5,000,000	)
Purchases of property, plant and equipment		(267,944	)		(229,131	)
Payments for intangible assets		(77,738	)		(35,643	)
Net cash provided by (used in) investing activities		1,526,300			(10,322,121	)
Cash flows from financing activities:
Net proceeds from public offering of common stock		-			14,917,059
Net proceeds from exercise of  warrants and options		208,825			2,542,207
Net cash provided by financing activities		208,825			17,459,266
Effect of exchange rates on cash and cash equivalents		(17,103	)		(8,376	)
Net increase (decrease) in cash and cash equivalents		(1,410,347	)		3,752,304
Cash and cash equivalents at beginning of year		6,063,573			2,311,269
Cash and cash equivalents at end of year	$	4,653,226		$	6,063,573
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	57		$	17
Cash paid during the year for income tax		39,005			17,549

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, 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 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 and incentive compensation for senior management 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 for the three months ended March 31, 2012 and 2011 was approximately $122,000 and $928,000, respectively.  Our non-GAAP operating loss for fiscal 2012 and 2011 was approximately $2.5 million and $3.1 million, respectively.  The fiscal 2012 decrease in non-GAAP operating loss is attributed primarily to an increase in net sales which more than offset the increase in non-GAAP spending.

				Expense Adjustments
	GAAP			Share-based  Compensation			Depreciation			Amortization			Non-GAAP
Three Months Ended March 31, 2012
Gross Profit	$	4,805,000		$	6,000		$	9,000					$	4,820,000
% of sales		85.9	%											86.1	%
Operating Expenses
General & administrative		844,000			(116,000	)		(44,000	)					684,000
Research and development		406,000			(9,000	)		(1,000	)					396,000
Selling and marketing		3,929,000			(51,000	)		(16,000	)					3,862,000
Amortization		215,000									(215,000	)		-
		5,394,000			(176,000	)		(61,000	)		(215,000	)		4,942,000
Operating Loss	$	(589,000	)	$	182,000		$	70,000		$	215,000		$	(122,000	)

Three Months Ended March 31, 2011
Gross Profit	$	3,338,000		$	4,000		$	9,000					$	3,351,000
% of sales		83.1	%											83.5	%
Operating Expenses
General & administrative		834,000			(101,000	)		(37,000	)					696,000
Research and development		423,000			(7,000	)		(3,000	)					413,000
Selling and marketing		3,215,000			(33,000	)		(12,000	)					3,170,000
Amortization		211,000									(211,000	)		-
		4,683,000			(141,000	)		(52,000	)		(211,000	)		4,279,000
Operating Loss	$	(1,345,000	)	$	145,000		$	61,000		$	211,000		$	(928,000	)

				Expense Adjustments
	GAAP			Share-based  Compensation			Depreciation			Amortization			Non-GAAP
Year Ended March 31, 2012
Gross Profit	$	17,525,000		$	22,000		$	34,000					$	17,581,000
% of sales		85.2	%											85.5	%
Operating Expenses
General & administrative		3,733,000			(412,000	)		(163,000	)					3,158,000
Research and development		1,905,000			(39,000	)		(9,000	)					1,857,000
Selling and marketing		15,296,000			(212,000	)		(55,000	)					15,029,000
Amortization		857,000								$	(857,000	)		-
		21,791,000			(663,000	)		(227,000	)		(857,000	)		20,044,000
Operating Loss	$	(4,266,000	)	$	685,000		$	261,000		$	857,000		$	(2,463,000	)

Year Ended March 31, 2011
Gross Profit	$	11,401,000		$	17,000		$	52,000					$	11,470,000
% of sales		82.7	%											83.2	%
Operating Expenses
General & administrative		3,443,000			(269,000	)		(150,000	)					3,024,000
Research and development		1,720,000			(27,000	)		(10,000	)					1,683,000
Selling and marketing		10,092,000			(121,000	)		(63,000	)					9,908,000
Amortization		844,000								$	(844,000	)		-
		16,099,000			(417,000	)		(223,000	)		(844,000	)		14,615,000
Operating Loss	$	(4,698,000	)	$	434,000		$	275,000		$	844,000		$	(3,145,000	)