Conceptus Reports Sharply Higher Second Quarter Net Sales of $25.7 Million

Generates $3 Million Positive Cash Flow in the Quarter

Revises 2008 Net Income Guidance
MOUNTAIN VIEW, Calif.--(Business Wire)--
Conceptus, Inc. (Nasdaq: CPTS), developer of the Essure(R)
procedure, the first and only non-incisional permanent birth control
method available, today reported financial results for the three and
six months ended June 30, 2008.

Net sales for the second quarter of 2008 were $25.7 million, up
64% compared with net sales of $15.7 million for the second quarter of
2007 and up 22% compared with net sales of $21.1 million for the first
quarter of 2008. These results are at the upper end of the Company's
net sales guidance of $25.0 to $26.0 million issued on May 6, 2008.
The net loss for the second quarter of 2008 was $1.6 million, or $0.05
per share. This compares with the net loss for the second quarter of
2007 of $2.1 million, or $0.07 per share, and the net loss for the
first quarter of 2008 of $6.4 million, or $0.21 per share. The net
loss for the 2008 second quarter exceeded the Company's guidance for a
net loss of $0.5 million to $1.5 million, largely due to
lower-than-expected returns on the Company's investment portfolio.

Net sales growth during the 2008 second quarter was due to higher
commercial sales of the Essure system worldwide. Compared with the
prior year second quarter, domestic sales of the Essure system
increased 43% to $19.9 million. International sales increased 232%
over the second quarter of 2007 to $5.8 million in part due to the
acquisition in January 2008 of Conceptus SAS and the recognition of
international sales at higher end-user pricing. Domestic sales growth
reflects continued increases in the numbers of physicians entering and
completing training and certified physicians performing the Essure
procedure in-office, the highest utilization setting. During the
second quarter of 2008, the Company entered 560 physicians into
preceptorship, certified 488 physicians and transitioned 464
physicians to performing procedures in the office setting. Domestic
in-office procedures represented 51% of net sales for the second
quarter of 2008, compared with 40% in the second quarter of 2007 and
46% in the first quarter of 2008.

"We are pleased with the strength of our U.S. business,
particularly in light of the current economic instability in the
country," commented Mark Sieczkarek, president and chief executive
officer of Conceptus. "Key physician metrics continue to trend up as
we successfully execute on our business plan. We remain focused on
helping physicians make a successful transition to the office as we
believe that is the best site of service for our birth control
procedure."

Gross profit for the second quarter of 2008 was $20.5 million, or
80% of net sales. This compares favorably with gross margin of 73% for
the second quarter of 2007 and is an improvement over the 74% gross
margin for the first quarter of 2008. The first quarter of 2008 was
negatively impacted by a one-time inventory adjustment related to the
acquisition of Conceptus SAS. The year-over-year increase in gross
margin is related to higher average selling prices from the
acquisition of Conceptus SAS, lower manufacturing costs associated
with higher unit volume, the introduction of the company's third
generation device and to a domestic price increase implemented during
the first quarter of 2008.

Research and development expenses were $1.6 million for the second
quarter of 2008, up from $1.1 million for the second quarter of 2007
and down from $1.9 million for the first quarter of 2008. R&D expenses
reflect product development, clinical and manufacturing engineering
expenditures, which are substantially related to the ongoing
development of the Essure device.

Selling, general and administrative expenses were $20.1 million
for the second quarter of 2008, compared with $13.2 million for the
second quarter of 2007 and $20.1 million for the first quarter of
2008. The increase in SG&A expenses was due primarily to $3.0 million
in expenses for the direct-to-consumer advertising campaign that was
launched during the first quarter of 2008. The Company continues to
increase the number of sales personnel in an effort to help physicians
transfer the Essure procedure to the office setting.

Other income and expense netted to a $0.2 million expense for the
second quarter of 2008, down from a net income of $0.7 million for the
second quarter of 2007 and essentially breakeven for the first quarter
of 2008. Interest income in the quarter was lower by $1.0 million
compared with the second quarter of 2007 and $0.6 million lower than
the first quarter of 2008. Interest income was negatively impacted by
lower interest rates on the Company's investment portfolio, including
holdings of auction rate securities that are currently earning below
market rates of interest.

Cash, cash equivalents and short-term investments were $21.2
million as of June 30, 2008, an increase of $3.0 million from March
31, 2008. This net cash increase compares with a net usage of $1.6
million in the second quarter of 2007 and a net usage of $27.0 million
in the first quarter of 2008, which included $24.3 million for the
acquisition of Conceptus SAS. The Company generated $3.0 million in
cash from operations in the second quarter of 2008 compared with a
$2.8 million usage in the second quarter of 2007 and a $5.1 million
usage in the first quarter of 2008.

"We are excited about the growth and leverage in our business,
reflected in positive cash flow and a significantly narrowed net loss
for the quarter, accomplished while investing in an intensive consumer
advertising program in several test markets," added Mark Sieczkarek.
"With gross margins reaching 80% and direct-to-consumer expenditures
declining for the remainder of this year, we are poised to achieve the
other major milestone of profitability in the back half of this year."

For the six months ended June 30, 2008, Conceptus reported net
sales of $46.8 million, up 59% compared with net sales of $29.4
million for the first six months of 2007. The net loss for the first
six months of 2008 of $8.0 million, or $0.27 per share, compares with
the net loss of $6.2 million, or $0.21 per share, for the first six
months of 2007.

Financial Guidance

Conceptus issued third quarter guidance including updated net
income expectations, as follows:

-- The Company expects net sales in the third quarter of 2008 to
be $25.0 million to $26.0 million reflecting the combination
of seasonally reduced international sales, offset by continued
growth in domestic net sales. The Company affirms guidance for
net sales for the full year to be in the range of $102.0
million to $105.0 million.

-- The Company expects gross margin to be between 79% and 81% for
the third quarter and for the remainder of the year. Previous
guidance issued in May of 2008 was for gross margin of between
79% and 80% for the remainder of the year.

-- The Company expects operating expenses to be $17.8 million to
$18.3 million for the third quarter of 2008 and $79.0 million
to $80.0 million for the full-year 2008. Previous guidance
issued in May of 2008 was for full-year operating expenses of
$76.0 million to $77.0 million.

-- The Company expects net income for the third quarter of 2008
to be $2.0 million to $2.5 million. The Company now expects
net income for the full-year to be in the range of $0.5
million to $2.0 million. Previous guidance issued in May of
2008 was for full-year net income of $3.0 million to $5.5
million.

"We have reviewed our expenses carefully and have decided that
further cuts are not prudent. Therefore, we are not planning to be
able to offset the impact of lower interest rates on invested capital,
nor the inventory adjustment taken with the Conceptus SAS acquisition
which together will have adversely impacted net income by more than
$3.0 million," concluded Mr. Sieczkarek. "We still expect to achieve
the very important milestone of profitability in each of the third and
fourth quarters, and remain confident of the longer term profitability
and exceptional cash-generation potential of this business."

These statements are only effective as of the date of this press
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 onto 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 6:30 p.m. Eastern time
July 23, 2008 through 11:59 p.m. Eastern time July 25, 2008 by dialing
(800) 642-1687 (domestic) or (706) 645-9291 (international) and
entering conference ID number 55654699.

About the Essure Procedure

The Essure procedure, approved by the FDA in 2002, is a permanent
birth control procedure that replaces tubal ligation for women. In the
comfort of a physician's office and in about 10 minutes, the soft
micro-inserts are placed into the Fallopian tubes through the cervix
eliminating the need for incisions. Once in place, the device is
designed to elicit tissue growth in and around the micro-insert to
form an occlusion or blockage in the Fallopian tubes.

The Essure confirmation test is performed three months after the
procedure to confirm that the micro-inserts are in the correct
location, the tubes are blocked and that the woman can discontinue
temporary birth control. The Essure procedure is 99.80% effective and
is the first and only FDA approved female sterilization procedure to
have zero pregnancies in clinical trials.

About Conceptus

Conceptus, Inc. manufactures and markets the Essure Permanent
Birth Control system, an innovative medical device and procedure
designed to provide a non-incisional alternative to tubal ligation,
which is currently the leading form of birth control worldwide. The
availability of the Essure procedure in the U.S. is expected to open
up a market currently occupied by incisional tubal ligation and
vasectomy, which combined account for over 1 million procedures
annually.

Additional information about the Essure procedure is available at
www.essure.com or by calling the Essure Information Center at
1-877-ESSURE1. Additional information about Conceptus is available at
www.conceptus.com or by calling 1-877-ESSURE2.

Except for the historical information contained herein, the
matters discussed in this press release are forward-looking
statements, the accuracy of which is necessarily subject to risks and
uncertainties. Discussions regarding financial guidance, growth in
physician utilization and the performance of Essure in the office
setting, results from the DTC campaign and decreasing DTC expenditures
and other matters discussed in this release, may differ significantly
from the discussion of such matters in the forward-looking statements.
Such differences may be based upon factors such as strategic planning
decisions by management, re-allocation of internal resources,
decisions by insurance companies, scientific advances by third
parties, and introduction of competitive products, 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.

-0-
*T
Conceptus, Inc.

Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2008 2007 2008 2007
--------- -------- -------- --------

Net sales $25,680 $15,669 $46,807 $29,449

Cost of goods sold 5,196 4,238 10,641 7,943
------------------ -----------------

Gross profit 20,484 11,431 36,166 21,506
------------------ -----------------

Operating expenses:
Research and development 1,644 1,061 3,575 2,703
Selling, general and
administrative 20,081 13,172 40,183 26,181
------------------ -----------------

Total operating expenses 21,725 14,233 43,758 28,884

Operating loss (1,241) (2,802) (7,592) (7,378)

Interest and other income
(expense), net (199) 662 (227) 1,138
------------------ -----------------

Income (loss) before provision
for income taxes (1,440) (2,140) (7,819) (6,240)

Provision for income taxes 168 - 168 -

Net loss $(1,608) $(2,140) $(7,987) $(6,240)
================== =================

Basic and diluted net loss per
share $ (0.05) $ (0.07) $ (0.27) $ (0.21)
================== =================

Shares used in computing basic
and diluted net loss per share 30,217 29,420 30,076 29,340
================== =================
*T

-0-
*T
Conceptus, Inc.

Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

June 30, December 31,
2008 2007
------------------------

Cash, cash equivalents and short-term
investments $ 21,160 $ 45,150

Accounts receivable, net 13,632 11,903

Inventories, net 4,746 2,418

Other current assets 2,309 3,271
------------------------

Total current assets 41,847 62,742

Property and equipment, net 7,091 5,312

Intangible assets, net 8,131 3,719

Long-term investments 45,835 48,800

Goodwill 16,062 -

Other assets 158 102
------------------------

Total assets $ 119,124 $ 120,675
========================

Total liabilities 101,709 98,748
------------------------

Common stock and additional paid in capital 263,207 257,176

Other comprehensive loss (2,556) -

Accumulated deficit (243,236) (235,249)
------------------------

Total stockholders' equity 17,415 21,927
------------------------

Total liabilities and stockholders' equity $ 119,124 $ 120,675
========================
*T

Corporate
Conceptus
Gregory Lichtwardt, CFO
650-962-4039
glichtwardt@conceptus.com
or
Investor Relations
Lippert/Heilshorn & Associates
Kim Sutton Golodetz
212-838-3777
kgolodetz@lhai.com
or
Bruce Voss
310-691-7100
bvoss@lhai.com
or
Media
Conceptus
Public Relations
650-962-4126
publicrelations@conceptus.com

Copyright Business Wire 2008