Uroplasty Reports Record Quarterly Sales

- First Fiscal Quarter Net Sales of $4.5 Million; 53% Increase Year-Over-Year
-

MINNEAPOLIS, July 31 /PRNewswire-FirstCall/ -- Uroplasty, Inc.
(Amex: UPI), a medical device company that develops, manufactures and markets
innovative proprietary products for the treatment of voiding dysfunctions,
today reported financial results for the first quarter of fiscal 2009 ended
June 30, 2008. Net sales for the first quarter of fiscal 2009 were $4.5
million, up 53% from $2.9 million in the first quarter of fiscal 2008.
Excluding the translation impact of fluctuations in foreign currency exchange
rates, sales during the fiscal quarter increased by approximately 46%. U.S.
sales were $2.2 million, an increase of 118% from $1.0 million in the first
quarter of fiscal 2008.
Highlights for the First Quarter of Fiscal 2009
-- Achieved substantial operational improvements in the first quarter,
resulting in positive non-GAAP operating income, which excludes certain
non-cash items;
-- Achieved 53% revenue growth versus year ago quarter;
-- U.S. sales increased 118% versus year ago quarter;
-- International sales grew 20% versus year ago quarter;
-- Continued momentum in the U.S. for our Urgent PC system; active
customer base grew to 339;
-- Joined the National Association For Continence's (NAFC) Industry
Council;
-- Our common stock added to the Russell Microcap(R) Index.

"During the first quarter, we continued to grow our active U.S. customer
base for the Urgent PC system and we generated positive non-GAAP operating
income, excluding certain non-cash items," said David Kaysen, President and
Chief Executive Officer. "We generated strong international sales and
continued to build momentum in the U.S. market for our Urgent PC system, which
we believe is the only FDA-approved minimally invasive nerve stimulation
device designed for office-based treatment of urinary frequency, urinary
urgency and urge incontinence -- symptoms often associated with overactive
bladder. The increasing productivity of our domestic sales team enabled us to
expand our active Urgent PC customer base in the U.S. to 339, an increase from
166 customers during the comparable period a year ago. As doctors and their
patients experience positive results with the Urgent PC, we are confident
about our team's ability to continue to expand the active U.S. customer base
as the fiscal year progresses."
Fiscal First Quarter Ended June 30, 2008 Compared to June 30, 2007
-- Net sales for the first quarter of fiscal 2009 were $4.5 million, an
increase of 53%, compared with $2.9 million in the first quarter of
fiscal 2008. Excluding the translation impact of fluctuations in
foreign currency exchange rates, sales during the quarter increased by
approximately 46%.
-- Sales to customers in the U.S. in the first quarter of fiscal 2009 were
$2.2 million, an increase of 118%, compared with $1.0 million in the
year ago quarter. This increase was due to the continued momentum of
the company's sales force and the continued growth in our active Urgent
PC customer base. Non-U.S. sales in the first quarter were $2.3
million, up 20% from $1.9 million in first fiscal quarter of 2008.
Excluding the translation impact of fluctuations in foreign currency
rates, sales to customers outside the U.S. increased approximately 7%.
-- Non-GAAP operating income, which excludes non-cash charges for SFAS
123(R) stock-based compensation, and depreciation and amortization
expenses, was approximately $106,000 for the three months ended June
30, 2008, compared with a non-GAAP operating loss of approximately
$378,000 in the year ago quarter. This improvement is attributed
primarily to the increase in sales and an improvement in gross margin
rate.
-- Net loss for the fiscal quarter ended June 30, 2008 was $407,000 or
$0.03 per diluted share compared with a net loss of $841,000 or $0.06
per diluted share for the same period last year.
-- At June 30, 2008, cash and cash equivalents, and short-term investments
were $9.2 million compared with $5.6 million at June 30, 2007 and $10.1
million at March 31, 2008.

"Uroplasty is about to embark on a new, multicenter clinical study with
our Urgent PC system for patients afflicted with urinary urgency, urinary
frequency, and urge incontinence. The preparations are progressing well with
an anticipated start this fall and we believe the study will further enhance
the marketing of our Urgent PC," Mr. Kaysen added.
"Our strong financial results reflect our drive to achieve profitable and
sustainable growth, a key factor in determining long-term success. Getting
our business to generate non-GAAP breakeven operating income, excluding
certain non-cash charges has been an important focus of management. We
continue to believe we can grow fiscal 2009 sales in excess of 30% over fiscal
2008, and U.S. sales by more than 70% based on our expectations for continued
market adoption of our Urgent PC system. At the same time, we do expect to
experience the normal seasonality in our non-U.S. sales during the second
fiscal quarter. In addition, we expect to increase spending over fiscal first
quarter levels for a clinical study and to support our full-year revenue
growth. We continue to expect consistent operating income breakeven on a
non-GAAP basis, which excludes non-cash and unusual charges, to occur between
revenues of $19 million to $20 million," Mr. Kaysen concluded.
Conference Call
Uroplasty will host an audio conference call today at 3:30 pm Central,
4:30 pm Eastern, to review the financial results for the first fiscal quarter
of 2009. David Kaysen, President and Chief Executive Officer and Medi Jiwani,
Vice President, Chief Financial Officer and Treasurer will host the call.
Individuals wishing to participate in the conference call should dial
(866) 249-5225 (domestic) or (303) 262-2131 (international). An audio replay
will be available two hours after the call for 30 days by dialing
(800) 405-2236 (domestic) or (303) 590-3000 (international), with the passcode
11117192#.
About Uroplasty, Inc.
Uroplasty, Inc., headquartered in Minnetonka, Minnesota, with wholly-owned
subsidiaries in The Netherlands and the United Kingdom, is a medical device
company that develops, manufactures and markets innovative proprietary
products for the treatment of voiding dysfunctions. Our primary focus is the
commercialization of our Urgent PC system, which we believe is the only
FDA-approved minimally invasive nerve stimulation device designed for
office-based treatment of urinary urgency, urinary frequency and urge
incontinence -- symptoms often associated with overactive bladder. We also
offer Macroplastique(R) Implants, an injectable bulking agent for the
treatment of adult female stress urinary incontinence primarily due to
intrinsic sphincter deficiency. Please visit Uroplasty, Inc. at
http://www.uroplasty.com.
Safe Harbor
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This press release contains
forward-looking statements, which reflect our views regarding future events
and financial performance. These forward-looking statements are subject to
certain risks and uncertainties, including those identified below, which could
cause actual results to differ materially from historical results or those
anticipated. The words "aim," "believe," "expect," "anticipate," "intend,"
"estimate" and other expressions, which indicate future events and trends,
identify forward-looking statements. Actual future results and trends may
differ materially from historical results or those anticipated depending upon
a variety of factors, including, but not limited to: the ability to receive
third party reimbursement for our products; the impact of international
currency fluctuations on our cash flows and operating results; the impact of
technological innovation and competition; acceptance of our products by
physicians and patients, our historical reliance on a single product for most
of our current sales; our ability to commercialize our recently licensed
product lines; our intellectual property and the ability to prevent
competitors from infringing our rights; effect of government regulation,
including when and if we receive approval for marketing products in the United
States; the results of clinical trials; our continued losses and the possible
need to raise additional capital in the future; our ability to manage our
international operations; our ability to hire and retain key technical and
sales personnel; our dependence on key suppliers; future changes in applicable
accounting rules; and volatility in our stock price. We cannot assure that we
can successfully expand our U.S. field sales force, that our active Urgent PC
customer base will continue to grow or that we will be successful in helping
our active customers introduce, and our existing customers will continue to
market, our Urgent PC technology. Our first quarter fiscal 2009 financial
performance is not indicative of future performance. We also cannot assure
that (i) our sales representatives will continue to grow their sales
productivity, (ii) future additions to our sales force will increase our sales
or profitability, (iii) we can conduct our planned clinical study on budget or
achieve the desired objectives from the study, (iv) we will achieve our
projected revenue target range for fiscal 2009 or (v) we can achieve our
fiscal 2009 non-GAAP operating income objective at our targeted revenue level.
Uroplasty undertakes no obligation to update or revise these forward-looking
statements to reflect new events or uncertainties.
For Further Information:

Uroplasty, Inc. EVC Group
David Kaysen, President and CEO, or Doug Sherk/Dahlia Bailey
Medi Jiwani, Vice President, CFO, and (Investors) 415.896.6820
Treasurer, Steve DiMattia/Chris Gale
952.426.6140 (Media) 646.201.5445

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
June 30,
2008 2007

Net sales $4,525,622 $2,948,674
Cost of goods sold 707,967 594,212

Gross profit 3,817,655 2,354,462

Operating expenses
General and administrative 1,038,714 808,374
Research and development 405,519 506,125
Selling and marketing 2,620,035 1,632,789
Amortization of intangibles 210,975 216,521
4,275,243 3,163,809

Operating loss (457,588) (809,347)

Other income (expense)
Interest income 75,115 76,383
Interest expense (6,834) (11,365)
Foreign currency exchange loss (5,770) (2,029)
Other, net - 1,879
62,511 64,868

Loss before income taxes (395,077) (744,479)

Income tax expense 11,571 96,156

Net loss $(406,648) $(840,635)

Basic and diluted loss per common share $(0.03) $(0.06)

Weighted average common shares outstanding:
Basic and diluted 14,916,540 12,981,466

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, March 31,
2008 2008
(unaudited)
Assets
Current assets:
Cash and equivalents & short-term
investments $9,240,538 $10,146,081
Accounts receivable, net 2,187,908 2,318,604
Income tax receivable 58,370 50,841
Inventories 527,583 558,657
Other 404,276 244,517
Total current assets 12,418,675 13,318,700

Property, plant, and equipment, net 1,619,632 1,638,953
Intangible assets, net 3,989,915 4,200,890
Prepaid pension asset 33,265 26,482
Deferred tax assets 107,946 105,298

Total assets $18,169,433 $19,290,323

Liabilities and Shareholders' Equity
Total current liabilities 1,706,894 2,739,933
Long-term debt - less current maturities 392,384 413,279
Deferred rent - less current portion 172,628 180,979
Accrued pension liability 409,572 353,411

Total liabilities 2,681,478 3,687,602

Total shareholders' equity 15,487,955 15,602,721

Total liabilities and shareholders' equity $18,169,433 $19,290,323

UROPLASTY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended June 30, 2008 and 2007
(Unaudited)

Three Months Ended
June 30,
2008 2007
Cash flows from operating activities:
Net loss $(406,648) $(840,635)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 280,822 263,850
Gain on disposal of equipment - (2,771)
Stock-based consulting expense 16,029 14,067
Stock-based compensation expense 266,962 153,019
Deferred income taxes (2,637) 572
Deferred rent (8,750) (8,750)
Changes in operating assets and liabilities:
Accounts receivable 129,863 (524,327)
Inventories 32,627 10,651
Other current assets and income tax
receivable (167,223) (926)
Accounts payable (208,510) (97,291)
Accrued liabilities (784,377) (472,737)
Accrued pension liability, net 48,922 (145,556)
Net cash used in operating activities (802,920) (1,650,834)

Cash flows from investing activities:
Proceeds from sale of short-term investments 4,500,000 600,000
Purchase of short-term investments (2,542,267) -
Purchases of property, plant and equipment (50,750) (78,948)
Proceeds from sale of equipment - 9,952
Payments for intangible assets - (89,725)
Net cash provided by investing activities 1,906,983 441,279

Cash flows from financing activities:
Proceeds from financing obligations - 178,374
Repayment of debt obligations (58,187) (115,067)
Net proceeds from issuance of common stock,
warrants and option exercise - 575,998
Net cash provided by (used in) financing
activities (58,187) 639,305

Effect of exchange rates on cash and cash
equivalents 6,314 11,232

Net increase in cash and cash equivalents 1,052,190 559,018

Cash and cash equivalents at beginning of
period 3,880,044 3,763,702

Cash and cash equivalents at end of period $4,932,234 $3,204,684

Supplemental disclosure of cash flow
information:
Cash paid during the period for interest $6,850 $9,099
Cash paid during the period for income taxes 19,759 15,573

Supplemental disclosure of non-cash financing
and investing activities:
Purchase of intellectual property funded by
issuance of stock - $4,658,861

Non-GAAP Financial Measures: The following table reconciles our financial
results calculated in accordance with accounting principles generally accepted
in the U.S. (GAAP) to non-GAAP financial measures that exclude non-cash
charges for stock options under SFAS 123 (R), and depreciation and
amortization expenses from gross profit, operating expenses and operating
loss. The non-GAAP financial measures used by management and disclosed by us
are not a substitute for, or superior to, financial measures and consolidated
financial results calculated in accordance with GAAP, and you should carefully
evaluate our reconciliations to non-GAAP. We may calculate our non-GAAP
financial measures differently from similarly titled measures used by other
companies. Therefore, our non-GAAP financial measures may not be comparable
to those used by other companies. We have described the reconciliations of
each of our non-GAAP financial measures above to the most directly comparable
GAAP financial measures.
Management uses our non-GAAP financial measures, and in particular
non-GAAP operating loss, for internal managerial purposes because we believe
such measures are one important indicator of the strength and the performance
of our business as they provide a link to operating cash flow. We also
believe that analysts and investors use such measures to evaluate the overall
operating performance of companies in our industry, including as a means of
comparing period-to-period results and as a means of evaluating our results
with those of other companies.

Three Months Ended
June 30,
2008 2007
Gross Profit
GAAP gross profit $3,817,655 $2,354,462
% of sales 84% 80%
SFAS 123 (R) stock-based compensation 16,375 579
Depreciation expense 12,790 15,550

Non-GAAP gross profit 3,846,820 2,370,591

Operating Expenses
GAAP operating expenses 4,275,243 $3,163,809
SFAS 123 (R) stock-based compensation 266,616 166,506
Depreciation expense 57,057 31,779
Amortization expense 210,975 216,521

Non-GAAP operating expenses 3,740,595 2,749,003

Operating Loss
GAAP operating loss (457,588) (809,347)
SFAS 123 (R) stock-based compensation 282,991 167,085
Depreciation expense 69,847 47,329
Amortization expense 210,975 216,521

Non-GAAP operating income (loss) $106,225 $(378,412)

SOURCE Uroplasty, Inc.

David Kaysen, President and CEO, or Medi Jiwani, Vice President, CFO, and
Treasurer, both of Uroplasty, Inc., +1-952-426-6140; or Investors, Doug Sherk
or Dahlia Bailey, +1-415-896-6820, or Media, Steve DiMattia or Chris Gale,
+1-646-201-5445, all of the EVC Group, for Uroplasty, Inc.