Conceptus, Inc. (Nasdaq:CPTS), developer of the
Essure® procedure, the leading non-surgical permanent birth control
method, today reported financial results for the three months ended
March 31, 2012 and revised financial guidance for 2012.
Net sales for the first quarter of 2012 were $29.0 million, an
increase of 9.3% compared with net sales for the first quarter of
2011 of $26.6 million.
The net loss for the first quarter of 2012 was $2.8 million, or
($0.09) per share. This compares with a net loss for the first
quarter of 2011 of $2.9 million, or ($0.09) per share.
Adjusted earnings before interest, taxes, depreciation,
amortization and stock-based compensation ("adjusted EBITDA") for
the first quarter of 2012 was essentially breakeven. This compares
with adjusted EBITDA for the first quarter of 2011 of $0.07
million.
"We are pleased with our financial results for the first
quarter, particularly the growth of our domestic business. While
some portion of this domestic growth is attributable to the
comparative weakness of the first quarter of 2011, we are
nonetheless encouraged by more favorable U.S. macro-environmental
trends and the early effects of our programs to restore growth,"
said D. Keith Grossman, president and chief executive officer of
Conceptus. "We also believe that the U.S. hysteroscopic permanent
birth control market had positive year-over-year growth for the
first time in four quarters. We remain optimistic about the future
growth opportunity for Conceptus and our ability to increase share
of the permanent birth control market."
First Quarter Highlights
Domestic sales were $21.7 million for the first quarter of 2012,
compared with $18.9 million for the first quarter of 2011,
representing an increase of $2.9 million or 15.1%.
In the first quarter of 2012, the Company expanded U.S.
physician penetration by entering approximately 476 physicians into
preceptorship, certifying approximately 225 physicians and
transitioning approximately 96 physicians to performing Essure
procedures in the office setting. To date, there are
approximately 14,800 active U.S. physicians who have performed an
Essure procedure.
International sales were $7.3 million for the first quarter of
2012, compared with $7.7 million for the first quarter of
2011. The 5.2% decrease is due to lower sales to the Company's
distributor in Spain where the overall economic conditions continue
to be quite weak. The remainder of the Company's international
sales grew 5.6% in the first quarter compared to last year.
Gross profit was $23.9 million or 82.2% of net sales for the
first quarter of 2012, compared with $21.4 million or 80.4% of net
sales for the first quarter of 2011. The year-over-year increase in
gross profit margin was primarily due to continued reductions in
manufacturing costs, higher international average selling prices
and channel mix.
Total operating expenses were $27.7 million for the first
quarter of 2012, compared with $25.1 million for the first quarter
of 2011. This year-over-year increase is primarily
attributable to the Company's direct to consumer ("DTC")
advertising campaign, costs related to product development of the
next-generation Essure device and clinical trials for the Essure
Transvaginal Ultrasound confirmation study.
In the first quarter of 2012, the Company recorded a net income
tax benefit of $2.5 million due to a pre-tax loss of $5.3
million. This provision reflects a tax rate of approximately
46.6%.
Cash, cash equivalents and investments were $60.1 million as of
March 31, 2012, a decrease of $43.3 million from December 31, 2011
and a decrease of $31.6 million from March 31, 2011. The
Company's cash usage from operations in the first quarter of 2012
was $6.4 million, due primarily to an increase in working
capital. On February 15, 2012, the Company redeemed its 2027
senior convertible notes for cash including full principal and
accrued interest of $36.6 million. In December 2011 $50.0
million of the original 2027 notes were refinanced and are now due
in 2031.
2012 Financial Guidance
Conceptus revised its 2012 financial guidance as follows:
- Net sales: the Company expects 2012 net sales to be in the
range of $135 million to $139 million, compared with previous
guidance of $134 million to $138 million and 2011 net sales of $127
million.
- Adjusted EBITDA: the Company expects 2012 adjusted EBITDA
to be in the range of $23 million to $25 million, compared with
previous guidance of $22 million to $24 million and 2011 adjusted
EBITDA of $14.1 million.
"The strength of our first quarter was encouraging to the extent
that it reflected continuing improvements in domestic OB/GYN
physician office visits, recent sales force productivity
enhancements and possibly a favorable impact from our DTC
campaign. However, for the remainder of the year we expect
growth rates to be on track with our original guidance provided in
February," said Mr. Grossman. "We continue to focus
exclusively on initiatives that will restore long-term growth and
profitability of the business and remain confident in our direction
based on these early signs."
Conference Call
Conceptus will host an investment community conference call
beginning at 4:30 p.m. Eastern time today to discuss results and
answer questions. Conference call dial-in information is as
follows:
- U.S. callers: (888) 803-8296
- International callers: (706) 634-1250
Individuals interested in listening to the live conference call
via the Internet may do so by logging on to the Company's website,
www.conceptus.com.
A telephone replay will be available from 6:30 p.m. Eastern time
on April 26, 2012, through 11:59 p.m. Eastern time on April 30,
2012. Replay dial-in information is as follows:
- U.S. callers: (855) 859-2056
- International callers: (404) 537-3406
- Conference ID number (U.S. and international): 69218699
- The replay will also be available at www.conceptus.com
Use of Non-GAAP Financial Measures
The Company has supplemented its GAAP net income/loss with a
non-GAAP measure of adjusted EBITDA. Management believes that this
non-GAAP financial measure provides useful supplemental information
to management and investors regarding the performance of the
Company, facilitates a more meaningful comparison of results for
current periods with previous operating results, and assists
management in analyzing future trends, making strategic and
business decisions and establishing internal budgets and forecasts.
A reconciliation of non-GAAP adjusted EBITDA to GAAP net
income/loss in the most directly comparable GAAP measure is
provided in the schedule below.
There are limitations in using this non-GAAP financial measure
because it is not prepared in accordance with GAAP and may be
different from non-GAAP financial measures used by other
companies. This non-GAAP financial measure should not be
considered in isolation or as a substitute for GAAP financial
measures. Investors and potential investors should consider
non-GAAP financial measures only in conjunction with the Company's
consolidated financial statements prepared in accordance with GAAP
and the reconciliations of the non-GAAP financial measure provided
in the schedule below.
About the Essure® Procedure
The Essure procedure, FDA approved since 2002, is the first
permanent birth control method that can be performed in the comfort
of a physician's office in less than 10 minutes (average
hysteroscopic time) without hormones, cutting, burning or the risks
associated with general anesthesia or tubal ligation. Soft,
flexible inserts are placed in a woman's fallopian tubes through
the cervix without incisions. Over the next three months, the body
forms a natural barrier around and through the inserts to prevent
sperm from reaching the egg. Three months after the Essure
procedure, a doctor is able to perform an Essure Confirmation Test
to confirm that the inserts are properly placed and that the
fallopian tubes are fully blocked, allowing the patient to rely
upon Essure for permanent birth control.
The Essure procedure is 99.83% effective based on five years of
follow up with zero pregnancies reported in clinical trials, making
it the most effective form of permanent birth control on the
market. Essure's 10-year commercial data tracks closely with
its five-year clinical results, and Essure has been proven and
trusted by physicians since 2002. The Essure procedure is
covered in the U.S. by most public and private insurance plans and
more than 625,000 women worldwide have undergone the
procedure.
About Conceptus®, Inc.
Conceptus, Inc. is a leader in the design, development and
marketing of innovative solutions in women's healthcare. The
Company manufactures and markets the Essure procedure. The
Essure procedure is available in the United States, Europe,
Australia, New Zealand, Canada, Mexico, Central and South America
and the Middle East.
Please visit www.essure.com for more information on the Essure
procedure. Patients may call the Essure Information Center at
1-877-ESSURE-1 with questions or to find a physician in their
area.
The Conceptus, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7961
Forward Looking Statements
Except for the historical information contained herein, the
matters discussed in this press release include forward-looking
statements, the accuracy of which is subject to known and unknown
risks and uncertainties. These forward-looking statements
include, without limitation, discussions regarding projected net
sales and adjusted earnings before interest, taxes, depreciation,
amortization and stock-based compensation ("adjusted EBITDA") for
the full year 2012, the expected impact of
macro-environmental trends and U.S. OB/GYN office visits on
our growth in 2012, our ability to expand physician market
penetration and utilization, our ability to improve sales force
productivity, our ability to market effectively to physicians and
prospective patients, our ability to secure government
reimbursement in foreign countries, and make the Essure procedure
the standard of care in permanent birth control. These
discussions and other forward-looking statements included herein
may differ significantly from actual results. Such differences may
be based upon factors such as changes in strategic planning
decisions by management, re-allocation of internal resources,
changes in the impact of domestic and global macroeconomic
pressures, reimbursement decisions by insurance companies and
domestic and foreign governments, scientific advances by third
parties, litigation risks, and attempts to amend or repeal all or
part of the Patient Protection and Affordable Care Act of 2010 as
amended, as well as those factors set forth in the Company's most
recent Annual Report on Form 10-K and most recent Quarterly Report
on Form 10-Q, and other filings with the Securities and Exchange
Commission. These forward-looking statements speak only as to
the date on which the statements were made. We undertake no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
|
Conceptus,
Inc. |
Condensed Consolidated
Statements of Operations |
(Unaudited) |
(In thousands, except
per share amounts) |
|
|
|
|
Three Months
Ended |
|
March
31 |
|
2012 |
2011 |
|
|
|
Net sales |
$29,029 |
$26,570 |
Cost of goods sold |
5,178 |
5,201 |
Gross profit |
23,851 |
21,369 |
|
|
|
Operating expenses: |
|
|
Research and
development |
2,503 |
1,762 |
Selling, general and
administrative |
25,219 |
23,291 |
Total operating
expenses |
27,722 |
25,053 |
|
|
|
Operating loss |
(3,871) |
(3,684) |
Interest and other income (expense),
net |
(1,440) |
(1,548) |
Loss before benefit for income
taxes |
(5,311) |
(5,232) |
|
|
|
Benefit for income
taxes |
(2,473) |
(2,304) |
|
|
|
Net loss |
$ (2,838) |
$ (2,928) |
|
|
|
Basic and diluted net loss per
share |
$ (0.09) |
$ (0.09) |
|
|
|
Weighted-average shares used
in |
|
|
computing basic and diluted net loss
per share |
31,305 |
31,144 |
|
|
Conceptus,
Inc. |
Condensed Consolidated
Balance Sheets |
(Unaudited) |
(In
thousands) |
|
|
|
|
March 31, |
December 31, |
|
2012 |
2011 |
|
|
|
Cash and cash
equivalents |
$ 11,575 |
$ 42,237 |
Short-term
investments |
48,546 |
59,203 |
Accounts receivable,
net |
16,003 |
17,321 |
Inventories, net |
4,885 |
4,187 |
Short-term deferred tax
asset |
4,737 |
4,735 |
Other current assets |
7,783 |
6,655 |
Total current assets |
93,529 |
134,338 |
|
|
|
Property and equipment,
net |
8,824 |
9,465 |
Intangible assets, net |
22,326 |
23,092 |
Long-term investments |
-- |
2,000 |
Goodwill |
17,069 |
16,570 |
Long-term deferred tax
asset |
78,356 |
75,877 |
Other assets |
2,085 |
2,242 |
Total assets |
$ 222,189 |
$ 263,584 |
|
|
|
Total liabilities |
68,135 |
109,458 |
Common stock and additional paid in
capital |
319,490 |
317,675 |
Other comprehensive
loss |
(2,313) |
(3,264) |
Accumulated deficit |
(163,123) |
(160,285) |
Total stockholders'
equity |
154,054 |
154,126 |
Total liabilities and stockholders'
equity |
$ 222,189 |
$ 263,584 |
|
|
Conceptus,
Inc. |
Reconciliation of Net
Loss to Adjusted Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation (Adjusted
EBITDA) |
(Unaudited) |
(In
thousands) |
|
|
|
|
Three Months
Ended |
|
March
31, |
|
2012 |
2011 |
|
|
|
Net loss, as reported |
$ (2,838) |
$ (2,928) |
|
|
|
Adjustments to net
loss: |
|
|
Interest and other income
(expense), net (a) |
1,440 |
1,548 |
Provision (benefit) for income
taxes |
(2,473) |
(2,304) |
Amortization of intangibles
(b) |
903 |
813 |
Stock-based compensation
(c) |
1,695 |
1,695 |
Depreciation expense
(d) |
1,278 |
1,242 |
Adjustments to net
loss |
2,843 |
2,994 |
|
|
|
Adjusted EBITDA |
$ 5 |
$ 66 |
|
|
|
(a) Consists of
interest from available-for-sale securities, interest expense
associated with our convertible debt and foreign exchange currency
transactions |
(b) Consists of
amortization of intangible assets, primarily licenses and customer
relationships |
(c) Consists of
stock-based compensation in accordance with ASC 718 |
(d) Consists of
depreciation, primarily on property, plant and
equipment |
|
|
Conceptus,
Inc. |
Reconciliation of
Forward-Looking Guidance For Non-GAAP Financial
Measures |
To Projected GAAP Net
Income |
(Unaudited) |
|
|
|
|
Twelve Months
Ending |
|
December 31,
2012 |
|
From |
To |
|
|
|
Net Income Guidance |
$ 1,377 |
$ 2,476 |
|
|
|
Adjustments to net
income: |
|
|
Interest and other income
(expense), net (a) |
4,440 |
4,440 |
Provision for income
taxes |
1,124 |
2,025 |
Amortization of intangibles
(b) |
3,631 |
3,631 |
Stock-based compensation
(c) |
6,925 |
6,925 |
Depreciation expense
(d) |
5,503 |
5,503 |
Adjustments to net
income |
21,623 |
22,524 |
|
|
|
Adjusted EBITDA |
$ 23,000 |
$ 25,000 |
|
|
|
(a) Consists of
interest from available-for-sale securities, interest expense
associated with our convertible debt and foreign exchange currency
transactions |
(b) Consists of
amortization of intangible assets, primarily licenses and customer
relationships |
(c) Consists of
stock-based compensation in accordance with ASC 718 |
(d) Consists of
depreciation, primarily on property, plant and
equipment |
© 2012 Conceptus, Inc. – All rights reserved. Conceptus and
Essure are trademarks or registered trademarks of Conceptus,
Inc.
CC-3114 25APR12F
CONTACT: Investor and Public Relations Contact:
Cindy Klimstra
(650) 962-4032
cindy_klimstra@conceptus.com
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