Conceptus Inc. (CPTS), contraception device maker, reported net loss per share of 9 cents during the first quarter of fiscal 2011 missing the Zacks Consensus Estimate of net loss per share of 5 cents. The company had reported a loss of 8 cents per share in the year-ago quarter.
Revenues for the quarter declined 20.4% year over year to $26.6 million and lagged behind the Zacks Consensus Estimate of $32 million. Macroeconomic pressures leading to persistent unemployment, challenging insurance trends with loss of insurance coverage and competitive market were mainly responsible for the significant dip in sales during the quarter.
Conceptus derives a major share of its revenues from Essure, which is a permanent birth control system. Domestic sales of the Essure system were down 25.6% year over year to $18.9 million impacted by reduction in patient visits to OB/GYN offices. International sales declined 3.8% to $7.7 million in the reported quarter. The year-over-year downfall in International sales was due to a decline in shipments to international distributors offset by an increase in direct sales in France.
Sales of the Essure system depends on the number of physicians trained to perform the procedure. Conceptus is working to make the system available worldwide by raising consumer and physician awareness as well as imparting training to the physicians on performing the procedure.
During the quarter, the company enrolled 340 physicians into preceptorship, certified 189 physicians and transitioned 89 physicians to perform procedures in the office setting. Till date, approximately 12,870 physicians have performed the Essure procedure.
Conceptus reported gross profit of $21.4 million, down 20.8% compared to the year-ago quarter. Higher percentage of lower-margin international sales during the quarter resulted in a decline in gross margin by 42 basis points (bps) to 80.4%.
Operating expenses were down by 9.6% to $25.1 million driven by a 10.3% decline in selling, general and administrative expenses due to lower marketing expenses. However the company witnessed a huge operating loss of $3.7 million compared to $0.7 million loss in the prior year quarter.
Conceptus exited the quarter with cash, cash equivalents and short-term investments of $91.7 million, up from $77.8 million at the end of December 2010. During the quarter, the company generated $3.7 million in cash from operations.
Guidance
Conceptus affirmed its revenue guidance for the fiscal 2011. For the full year, the company expects revenues of $135–$150 million. The Zacks Consensus Estimate of $142 million is within the range.
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