>>Conceptus Reports Record $10 Million Second Quarter Net Sales
Tuesday July 25, 4:02 pm ET
Sets new highs for physician training
Increases 2006 guidance
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 25, 2006--Conceptus, Inc. (Nasdaq:CPTS - News), developer of the Essure® non-incisional permanent birth control system, today reported financial results for the three and six months ended June 30, 2006.
Net sales for the second quarter of 2006 were $10.0 million, up 99% over net sales of $5.0 million for the second quarter of 2005 and up 26% over net sales of $8.0 million for the first quarter of 2006. These results exceeded the Company's guidance for second quarter 2006 net sales of $9.0 million. The net loss for the second quarter of 2006 was $5.3 million, or $0.18 per share, including charges of $1.6 million, or $0.05 per share, for stock-based compensation due to the adoption of SFAS 123R. The net loss for the second quarter of 2005 was $6.0 million, or $0.24 per share, and the net loss for the first quarter of 2006 was $5.8 million, or $0.20 per share. The net loss for the 2006 second quarter, excluding stock-based compensation, was better than the Company's guidance for a net loss of $4.5 million to $4.7 million also excluding stock-based compensation expense.
For the six months ended June 30, 2006, Conceptus reported net sales of $18.0 million, up 102% over net sales of $8.9 million during the comparable six month period in 2005. The net loss for the first half of 2006 of $11.1 million, or $0.38 per share, compares favorably to the net loss of $12.4 million, or $0.49 per share for the first half of 2005. Included in the net loss for the first half of 2006 are charges of $3.0 million, or $0.10 per share, for stock-based compensation due to the adoption of SFAS 123R.
Net sales growth during the 2006 second quarter was due to higher commercial sales of the Essure system worldwide, and reflects increasing numbers of physicians entering and completing training in the use of the procedure and higher utilization by trained physicians. Domestic sales of the Essure system for the second quarter of 2006 increased 108% and international sales increased 43%, both compared with the comparable prior-year period. For the second quarter of 2006 there were 431 physicians entered into training and 238 physicians were certified to perform the Essure procedure without a trainer.
"We are making very strong progress this year with the Essure device," commented Mark Sieczkarek, president and chief executive officer of Conceptus. "We are executing very well as a company and our programs to drive adoption are working even better than planned. Our sales force additions continue to provide broad-based growth by adding new accounts, increasing usage at existing accounts and driving the paradigm shift to in-office procedures where the Essure system is widely preferred over surgery by both patients and physicians."
Gross profit for the second quarter of 2006 was $6.4 million, or 64% of net sales. This compares favorably with gross profit for the second quarter of 2005 of $2.9 million, or 58% of net sales and is consistent with the 64% gross profit margin for the first quarter of 2006. The year over year increase in gross margin is related to lower manufacturing costs associated with higher unit volume and a domestic price increase instituted during the first quarter of 2006.
Research and development expenses were $1.1 million for the second quarter of 2006, increased from the 2005 second quarter of $0.9 million and down from $1.2 million in the first quarter of 2006. R&D expenses reflect product development, clinical, and manufacturing engineering expenditures, which are substantially related to the ongoing development of improvements to the Essure device. SFAS 123R stock-based compensation expenses included in second quarter 2006 R&D totaled $0.2 million.
Selling, general and administrative expenses were $10.9 million for the second quarter of 2006, up from $8.2 million for the second quarter of 2005 and $10.0 million for the first quarter of 2006. SFAS 123R stock-based compensation expenses included in second quarter 2006 SG&A totaled $1.3 million. The Company is continuing to expand its sales force, adding nine representatives during the quarter for a total of 59 sales representatives at the close of the quarter, up from 32 sales representatives at the close of the second quarter of 2005 and 50 at the end of the first quarter of 2006. In addition, the Company increased expenditures related to patient awareness initiatives and incurred certain administrative expenses in the 2006 second quarter.
Cash, cash equivalents, short-term investments and restricted cash were $25.6 million as of June 30, 2006, a reduction of $3.0 million from $28.6 million as of March 31, 2006. This net cash usage of $3.0 million compares with $4.5 million for the second quarter of 2005 and $3.9 million for the first quarter of 2006.
"Our execution will continue to center around building our sales force and driving patient awareness in a way that will allow us to realize an immediate and improving return in financial performance," added Mark Sieczkarek. "The 99% growth in net sales for the quarter only required a 15% growth in operating expenses, excluding stock-based compensation expense, demonstrating the leverage of our business, even at a time when we are making significant investments in the marketing of the Essure system. We are confident that we can continue to build the momentum of our procedure toward standard of care and improve financial performance at the same time, making this is a very exciting time to steward the commercialization of the Essure device."
Financial Guidance
The Company also announced financial guidance for the third quarter of 2006, and raised full-year 2006 net sales and lowered full-year 2006 net loss guidance, excluding the effects of SFAS 123R.
Conceptus expects net sales in the third quarter to be approximately $10.0 million, resulting from increases in domestic sales offset by seasonal declines in international sales. Net sales for the full year are now expected to be approximately $39.0 million, compared with previous guidance of $36.0 million, which was issued on April 26, 2006. The net loss for the third quarter, excluding stock-based compensation, is expected to be $3.6 million to $3.8 million. The Company is lowering full-year net loss guidance to a range of $15.0 million to $15.3 million, or $0.52 to $0.53 per share, based on an estimated 29.0 million shares outstanding. This full-year net loss range compares with previous guidance for a net loss of $16.5 million to $17.0 million, or $0.57 to $0.59 per share, also on an estimated 29.0 million shares outstanding. Net loss guidance excludes the effects of SFAS 123R.
These statements are only effective as of the date of this release and Conceptus undertakes no duty to publicly revise or update these forward-looking statements, whether as a result of new information, future developments or otherwise.
Conference Call
Management will host an investment-community conference call beginning at 4:30 p.m. Eastern Time today to discuss these results and to answer questions. To participate in the live call by telephone, please dial (888) 803-8296 from the U.S., or (706) 634-1250 from outside the U.S. 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 replay will be available on the website for 14 days.
A telephone replay will be available from 7:30 p.m. Eastern Time July 25, 2006 through 11:59 p.m. Eastern Time on July 27, 2005 by dialing (800) 642-1687 (domestic) or (706) 645-9291 (international) and entering conference ID number 2717214.<<
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Cheers, Tuck |
