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Conceptus, Inc. (CPTS)
Q4 2012 Earnings Conference Call
February 5, 2013 4:30 p.m. ET
D. Keith Grossman – President & CEO
Gregory E. Lichtwardt – CFO & Treasurer
Thomas Gunderson – Piper Jaffray
Jonathan Block – Stifel Nicolaus
Matt Dolan – Roth Capital Partners
Jeremy Feffer – Cantor Fitzgerald
Matt Hewitt – Craig-Hallum Capital Group LLC
Michael Rich – Raymond James
Chris Cooley – Stephens
Tony Barch – Park West
Mark Landy – Summer Street Research Partners
Good day ladies and gentlemen and welcome to the Conceptus 2012 Fourth Quarter Financial Results Conference Call. (Operator Instructions).
I would now like to turn the conference over to your host for today, Mr. Greg Lichtwardt, Chief Financial Officer. Sir you may begin.
Previous Statements by CPTS
» Conceptus Inc., F1Q09 Earnings Call Transcript
» Conceptus, Inc. Q4 2008 Earnings Call Transcript
» Conceptus, Inc. Q3 2008 Earnings Call Transcript
» Conceptus, Inc. Q2 2008 Earnings Call Transcript
We will begin with prepared remarks and then open the call to your questions. To accommodate as many questionnaires as possible and the time we have allotted for today’s call, we ask that you limit your questions to one plus one follow-up before rejoining the queue.
As we begin, I would like to caution everyone that comments made my management on this call will contain forward-looking statements regarding the operations and future results of Conceptus that involve risks and uncertainties. I encourage you to review the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
These factors include changes and strategic planning decisions by management, reallocation 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 third parties, risk, limitations and attempts to amend or appeal all are part of the Patient Protection Affordable Care Act of 2010 as amended among others.
Importantly, this conference call contains time sensitive information that is accurate only as of the date of the live call, today, February 5, 2013. Conceptus undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.
I will now turn the call over to Keith Grossman. Keith?
Thanks, Greg, and good afternoon everyone. On today’s call I’ll provide a review of our business including an overview of our fourth quarter performance and what we believe are strong trends and tailwinds behind our business. Greg, will then provide more details on our financial results for 2012 as well as financial guidance for 2013 and I’ll then wrap up with more detail about our commercial value drivers and strategy and initiatives to maintain and improve growth.
After our prepared remarks, we’ll then take your questions.
Overall, we’re very excited about the fourth quarter and the momentum we carry into 2013. We continue to execute on our plan to reestablish meaningful growth as measured by our record sales results and the 23.6% worldwide assured growth rate on a constant currency basis.
In the U.S., our fourth quarter sales result of $32.2 million was also a record one for the company and represented a healthy assured growth rate of 20.6% compared to prior year. This was driven by a combination of strong underlying growth and demand as we approximate organic growth of 13.5% as well as the conversion of Adiana market share which added another 7.1% to our growth in the quarter.
At the beginning of 2012, we told you we would not only begin to reenergize robust and sustainable top line growth, but also begin to show some real operating leverage as well. We also indicated them that our earnings productivity would grow over the course of the year.
For the fourth quarter, our adjusted EBITDA increased 371% and for the full year it increased 100%. We believe we can continue to show increasing drop through particularly in 2013 and we reflected as much in our guidance.
From the standpoint of the overall market backdrop, the patient visits to U.S. OB/GYNs for several quarters now have been ranging from $22 million to $23 million and the fourth quarter was no exception at around $22.7 million. Although this is the highest value within the past four quarters. Although this metric is not necessarily directly related to our current sales performance, we do believe a place some roll over time as a leading directional indicator of overall patient demand.
Within the U.S. permanent birth control market, our data shows that we are continuing to move the market share needle. As we previously reported, IMS data shows that there were approximately 605,000 U.S. female permanent birth control procedures in 2011. IMS data through November suggests that 2012 overall market will be about 2.5% lower at roughly 590,000 procedures, as the majority of which, the majority of that decline rather, can be attributable to the removal of Adiana from the market.
We estimate that our share of the total U.S. female permanent birth control in the fourth quarter was 15.1%, up 250 basis points year-over-year reaching an all-time high, as well our share of what we call the most addressable portion of the market and interval and vaginal delivery postpartum procedures was 25.3% in the fourth quarter and that reflects an increase of 450 basis points year-over-year.
Throughout 2012 we made steady progress on several consumer related growth drivers including branding, consumer awareness and website traffic generation and this continued through the fourth quarter. This year, we’re continuing our national direct-to-consumer or DTC print and digital advertising campaign that will be increasingly emphasizing online initiatives including streaming applications, mobile applications and social media.