Uroplasty Inc Reports Operating Results (10-Q)
Uroplasty is a medical device company that develops manufactures and markets innovative proprietary products for the treatment of voiding dysfunctions. The Company\'s minimally invasive products treat urinary incontinence and overactive bladder symptoms. They believe that the company is uniquely positioned because we offer a broad and diverse set of products to address the various preferences of doctors and patients as well as the quality of life issues presented by voiding dysfunctions. Uroplasty Inc has a market cap of $11.6 million; its shares were traded at around $0.78 with and P/S ratio of 0.8. Highlight of Business Operations:Sales to customers in the U.S. during the three months ended June 30, 2009 totaled $1.5 million, representing a $753,000, or a 34% decrease, over net sales of $2.2 million for the three months ended June 30, 2008. Sales of our Urgent PC of $1.0 million declined from $2.0 million in the year-ago quarter. The trend in decline of our Urgent PC sales over corresponding year-ago periods began in the second half of fiscal 2009 due to reimbursement related issues. Partially offsetting this decline was an increase in Macroplastique sales to $0.4 million from $0.2 million in the year-ago quarter. Sales of our Macroplastique product have steadily increased because of our increased sales and marketing focus.
General and Administrative Expenses (G&A): G&A expenses decreased $190,000 from $1,039,000 during the three months ended June 30, 2008 to $849,000 during the same period in 2009. G&A expenses decreased primarily because of a decrease in personnel-related costs and professional and consulting fees. We have implemented concentrated efforts to reduce expenses until reimbursement in the U.S. for Urgent PC recovers and the economy improves.
Research and Development Expenses (R&D): R&D expenses increased from $406,000 during the three months ended June 30, 2008 to $528,000 during the same period in 2009. The increase is attributed primarily to an increase in spending for clinical studies. We have undertaken clinical studies that we anticipate may assist us in obtaining a specific listed CPT code that will encourage broader use of our Urgent PC. We spent approximately $1.3 million in fiscal 2009, have spent approximately $0.2 million in the three months ended June 30, 2009 and anticipate spending approximately $0.4 million in the remainder of the current fiscal year for such clinical studies.
Selling and Marketing Expenses (S&M): S&M expenses decreased from $2.6 million during the three months ended June 30, 2008 to $2.1 million during the same period in 2009. We attribute the decrease to a $141,000 decrease in commissions, due to the decrease in sales, $91,000 decrease in travel costs, $102,000 decrease in compensation-related costs primarily due to a decrease in bonuses and recruitment expenses, and a $101,000 decrease in consultancy costs, mainly reimbursement related. Although we have maintained our assembled U.S. sales force and redirected some of their effort to our Macroplastique product line until reimbursement for Urgent PC stabilizes, we have taken steps to control other sales and marketing expenses.
Amortization of Intangibles: Amortization of intangibles was $212,000 and $211,000 for the three months ended June 30, 2009 and 2008, respectively. In April 2007, we acquired from CystoMedix, Inc., certain intellectual property assets related to the Urgent PC system for $4.7 million, which we are amortizing over six years.
At June 30, 2009, we had working capital of approximately $7.0 million. For the three months ended June 30, 2009, we used $1.5 million of cash in operating activities, compared to $0.8 million of cash used in the same period a year ago. We attribute the increase in cash used in operating activities primarily to the decrease in sales, and a decrease of the gross profit rate, offset partially by a decrease in cash used for working capital and a decrease in cash operating expenses.
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