Conceptus(R) Reports Fourth Quarter Financial Results and Introduces 2013 Financial Guidance

Conceptus(R) Reports Fourth Quarter Financial Results and Introduces 2013
Financial Guidance

New ACOG Practice Bulletin Highlights Hysteroscopic Sterilization for the
First Time

  * Record sales of $40.7 million reflects growth of 21.5%; 23.6% constant
    currency Essure only
  * Record U.S. Essure^® Sales grew 20.6% in the fourth quarter and 14.4% for
    2012
  * 2012 Adjusted EBITDA increased 100% to $28.2 million

MOUNTAIN VIEW, Calif., Feb. 5, 2013 (GLOBE NEWSWIRE) -- Conceptus, Inc.
(Nasdaq:CPTS), developer of the Essure^® procedure, the leading non-surgical
permanent birth control method, today reported financial results for the three
and twelve month periods ended December 31, 2012.

Fourth Quarter Highlights

  * Total revenues reached $40.7 million for the fourth quarter, representing
    21.5% growth. U.S. sales were $32.2 million, representing 19.3% growth.
    International sales were $8.5 million, representing 30.8% growth.
  * Gross margin was 84.1% versus 83.5% in fourth quarter 2011.
  * Operating expenses were $24.9 million for the fourth quarter of 2012,
    compared with $30.8 million for the fourth quarter of 2011.
  * Net income of $5.9 million, or $0.17 per fully diluted share for the
    fourth quarter of 2012, compared to a net loss for the fourth quarter of
    2011 of $2.6 million, or ($0.08) per share. Adjusted earnings before
    interest, taxes, depreciation, amortization and stock-based compensation
    ("adjusted EBITDA") for the fourth quarter of 2012 were $12.9 million, an
    increase of 371% compared with the fourth quarter of 2011.
  * Cash, cash equivalents, investments and restricted cash were $85.3 million
    as of December 31, 2012, an increase of $15.9 million from September 30,
    2012. During the fourth quarter, the company restricted $2.2 million of
    cash related to its signing of a long term lease for a new headquarters
    building.
  * Conceptus expanded US physician penetration by entering 427 physicians
    into preceptorship, certifying 288 physicians and transitioning 77
    physicians to performing Essure procedures in the office setting. To date,
    approximately 16,000 U.S. physicians have performed an Essure procedure.

"Both our domestic and international businesses contributed to an outstanding
fourth quarter financial performance.  Domestic Essure sales growth continued
to improve with 20.6% total growth, of which organic growth was 13.5% and
growth attributable to sales in our former competitor's accounts was 7.1%,"
said D. Keith Grossman, President and Chief Executive Officer of
Conceptus. "We are pleased with the progress made in our commercial execution
and in the improved profitability of the company during this important
transition year."

Twelve Month Highlights

  * Total sales for the twelve months ended December 31, 2012 reached $140.7
    million, representing an increase of 10.8%. U.S. sales were $109.1
    million, representing 13.1% growth. Essure domestic sales increased 14.4%.
     International sales were $31.6 million, representing growth of 3.6%.  On
    a constant-currency basis, international growth for 2012 was approximately
    10.8%.
     
  * Gross profit was 83.3% of net sales in 2012, compared with 82.2% of net
    sales for 2011.
     
  * Operating expenses were $103.9 million, compared with $107.5 million for
    2011. This decrease reflects a reduction in severance costs associated
    with the company's former CEO, lower domestic sales headcount, and lower
    legal fees partially offset by increased expenses for domestic consumer
    marketing, and costs related to product development of the next-generation
    Essure device and clinical trials for the Essure TVU confirmation study.
     
  * Net income for 2012 was $5.4 million, or $0.16 per fully diluted share,
    compared with a net loss for 2011 of $7.9 million, or ($0.25) per share.
    Adjusted EBITDA for 2012 was $28.2 million, an increase of 100.0% compared
    with adjusted EBITDA for 2011 of $14.1 million.

2013 Financial Guidance

Conceptus introduces its 2013 financial guidance as follows:

  * Sales: the Company expects 2013 sales to be in the range of $155 million
    to $159 million. This represents a growth of 10% to 13% over sales in
    2012.
     
  * Adjusted EBITDA: the Company expects 2013 adjusted EBITDA to be in the
    range of $34 million to $37 million. This represents a growth of 21% to
    31% over adjusted EBITDA in 2012.

"We are excited about 2013, and our guidance reflects our anticipation that we
will complete the execution improvements in our commercial operations started
last year. In addition, our business may benefit from several important
tailwinds this year, and we hope to position ourselves to take full advantage
of the favorable environment," commented Mr. Grossman.

ACOG Practice Bulletin

The American College of Obstetricians and Gynecologists (ACOG) published its
updated Practice Bulletin on the Benefits and Risks of Sterilization to
replace the previous version which published in 2003. ACOG's practice
bulletins are intended to provide OBGYNs updated information on established
techniques and current clinical management guidelines. The February, 2013
bulletin provides a comprehensive review of the safety and effectiveness of
all female sterilization compared with other forms of contraception and
prominently features hysteroscopic tubal occlusion for the first time.
Specifically, the bulletin makes two key points in support of Essure. The
first point is that "hysteroscopic occlusion techniques, followed by a
confirmatory HSG, have at least equal if not superior efficacy to tubal
occlusion done by laparoscopy or minilaparotomy." The second point is that
"hysteroscopic tubal occlusion for sterilization has high efficacy and low
procedure-related risk, cost, and resource requirement." 

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: (866) 428-9517    
  * International callers: (253) 237-1155
  * Conference ID Number (U.S. and international): 87049882

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.
The webcast will be available on the Company's Web site for 14 days following
the completion of the call.

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 only surgery-free and
hormone-free 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 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
works with the inserts to form a natural barrier in the fallopian tubes to
prevent sperm from reaching the egg. Three months after the Essure procedure,
an Essure Confirmation Test is given to confirm that the inserts are in place
and that the fallopian tubes are blocked, verifying that the patient can rely
on 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
permanent birth control available. 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 approximately 730,000 women
worldwide have undergone the procedure.  

About Conceptus^®, Inc.

Conceptus, Inc. is the global leader in the development and commercialization
of innovative device-based solutions in permanent birth control. The Company
manufactures and markets the Essure Permanent Birth Control System.

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 sales and adjusted earnings before interest, taxes, depreciation,
amortization and stock-based compensation ("adjusted EBITDA") for the full
year 2013, our ability to improve commercial execution and increase sales
growth rates and profitability, and our ability to 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 fourth 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   Twelve Months Ended 
                                    December 31,         December 31, 
                                    2012      2011       2012       2011
                                                                     
Net sales                            $ 40,730  $ 33,513   $ 140,731  $ 126,981
Cost of goods sold                   6,457     5,534      23,483     22,597
Gross profit                         34,273    27,979     117,248    104,384
                                                                     
Operating expenses:                                                  
Research and development            2,858     2,410      9,916      7,985
Selling, general and administrative 22,058    28,370     93,973     99,491
Total operating expenses             24,916    30,780     103,889    107,476
                                                                     
Operating income (loss)             9,357     (2,801)    13,359     (3,092)
Interest and other income            (1,094)   (1,992)    (4,625)    (6,826)
(expense), net
Income (loss) before provision      8,263     (4,793)    8,734      (9,918)
(benefit) for income taxes
                                                                     
Provision (benefit) for income       2,393     (2,233)    3,357      (1,982)
taxes
                                                                     
Net income (loss)                    $ 5,870   $ (2,560)  $ 5,377    $ (7,936)
                                                                     
Basic income (loss) per share        $ 0.18    $ (0.08)   $ 0.17     $ (0.25)
Shares used in computing basic net   31,867    31,241     31,545     31,204
income (loss) 
                                                                     
Diluted income (loss) per share      $ 0.17    $ (0.08)   $ 0.16     $ (0.25)
Shares used in computing diluted     33,810    31,241     32,737     31,204
net income (loss) 

 
Conceptus, Inc.
Condensed Consolidated Balance Sheets 
(Unaudited)
(In thousands)
                                                          
                                            December 31, December 31,
                                            2012         2011
                                                          
Cash and cash equivalents                    $ 29,494     $ 42,237
Short-term investments                       40,496       59,203
Accounts receivable, net                     23,035       17,321
Inventories, net                             5,166        4,187
Short-term deferred tax asset                11,389       4,735
Other current assets                         7,240        6,655
Total current assets                         116,820      134,338
                                                          
Property and equipment, net                  7,593        9,465
Intangible assets, net                       19,568       23,092
Long-term investments                        13,142       2,000
Restricted cash                              2,200        -- 
Goodwill                                     16,911       16,570
Long-term deferred tax asset                 65,363       75,877
Other assets                                 1,703        2,242
Total assets                                 $ 243,300    $ 263,584
                                                          
Total liabilities                            68,928       109,458
Common stock and additional paid in capital  331,762      317,675
Other comprehensive loss                     (2,482)      (3,264)
Accumulated deficit                          (154,908)    (160,285)
Total stockholders' equity                   174,372      154,126
Total liabilities and stockholders' equity   $ 243,300    $ 263,584

 
Conceptus, Inc.
Reconciliation of Net Income (loss) to Adjusted Earnings Before Interest,
Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted
EBITDA)
(Unaudited)
(In thousands)
                                                                   
                          Three Months Ended         Twelve Months Ended
                          December 31,               December 31, 
                          2012         2011          2012         2011
                                                                   
Net Income (Loss), as      $ 5,870      $ (2,560)     $ 5,377      $ (7,936)
reported
                                                                   
Adjustments to net income                                          
(loss):
Interest and other income  1,094        1,992         4,625        6,826
(expense), net (a)
Provision (benefit) for   2,393        (2,233)       3,357        (1,982)
income taxes
Amortization of           901          909           3,596        3,356
intangibles (b)
Stock-based compensation  1,416        3,365         6,211        8,598
(c)
Depreciation expense (d)  1,224        1,264         5,043        5,229
                                                                   
Adjustments to net income  7,028        5,297         22,832       22,027
(loss)
                                                                   
Adjusted EBITDA            $ 12,898     $ 2,737       $ 28,209     $ 14,091
                                                                   
                                                                   
(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, 2013
                                          From               To
                                                              
Net Income Guidance                        $ 7,025            $ 8,675
                                                              
Estimated Non-GAAP Guidance                                   
Interest and other income (expense), net   4,818              4,818
(a)
Provision for income taxes                 5,747              7,097
Amortization of intangibles (b)            3,573              3,573
Stock-based compensation (c)               7,576              7,576
Depreciation expense (d)                   5,261              5,261
Adjustments to net income                  $ 26,975           $ 28,325
                                                              
Adjusted EBITDA                            $ 34,000           $ 37,000
                                                              
                                                              
(a) Consists of interest from available-for-sale securities, interest expense
associated with our convertible debt and corporate headquarters 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

© 2013 Conceptus, Inc.— All rights reserved.

CONTACT: Investor and Public Relations Contact:
         Lynn Pieper
         Westwicke Partners
         415-202-5678
         Lynn.pieper@westwicke.com

Conceptus, Inc. Logo