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Conceptus Inc., (CPTS)

F1Q09 Earnings Call

April 21, 2009 4:30 pm ET


Kim Sutton Golodetz – Investor Relations, Lippert/Heilshorn & Associates

Mark M. Sieczkarek - President and Chief Executive Officer

Gregory E. Lichtwardt - Executive Vice President, Treasurer, and Chief Financial Officer


Jonathan Block - Suntrust Robinson Humphrey

Shawn Fitz - Stephens, Inc.

Jason Bedford - Raymond James

Eric Schneider - UBS

Amit Hazan - Oppenheimer & Co.

Charley Jones - Berrington Research

Thomas Kouchoukas - Stifel Nicholas

Kevin Kotler - Broadfin Capital



Good afternoon ladies and gentlemen. At this time I would like to welcome everyone to the Conceptus Incorporated First Quarter 2009 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded today, Tuesday April 21. I would now like to turn the conference over to Miss Golodetz. Please go ahead ma’am.

Kim Sutton Golodetz

Thank you. This is Kim Golodetz with Lippert/Heilshorn and Associates. Thank you all for participating in today's call. Joining me this afternoon from Conceptus are Mark Sieczkarek, President and Chief Executive Officer and Greg Lichtwardt, Chief Financial Officer.

This call will follow the usual format, beginning with prepared remarks by management, and then we'll open the call up to your questions. In order to accommodate as many of you as possible, we ask that you limit your questions to one, plus one follow-up before rejoining the queue.

Earlier today, Conceptus issued financial results for the first quarter of 2009 and financial guidance for 2009. If you have not received this news release or if you would like to be added to the Company's distribution list, please call Lippert/Heilshorn in New York at 212-838-3777 and speak with Cheryl Palazzo.

Before we begin, I would like to caution that comments made during this conference call by management will 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 Form 10-K and Forms 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 strategic planning decisions by management, reallocation of internal resources, general recessionary pressures, decisions by public and private sector payers, scientific advances by third parties, and introduction of competitive products, among others.

Importantly, the content of this conference call contains time sensitive information that is accurate only as of the date of the live call, today, April 21, 2009. The Company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that said, I would like to turn the call over to Mark Sieczkarek. Mark?

Mark Sieczkarek

Thank you, Kim, and good afternoon to everyone. We appreciate you joining us today. In our prepared remarks today Greg and I will discuss the financial performance of Conceptus for the first quarter of 2009, guidance for both the second quarter and full year of 2009 and then I will update you on our important goals for this year and beyond. After that, of course, we will take your questions.

Let me start with a brief discussion about our first quarter financial performance before turning the call over to Greg. For the first quarter of 2009 we reported net sales growth of 29%: now this result is virtually identical to our fourth quarter 2008 results of 30% year-over-year growth after adjusting for the European Distributor acquisition. This is a great result for us and indicates that we are not only correctly forecasting the seasonal impact of deductibles resetting, but also we do not see a further change to our business from the global economic contraction as compared to the fourth quarter.

As a reminder, we discussed on the last call the offsetting impacts that we felt the economy may be having on our business. On the one hand layoffs can certainly impact medical procedure volume if unemployment is protracted and health insurance is lost. On the other hand, as we are all reading in the media, families are reexamining their priorities and for many the worsening economy can lead to a permanent birth control decision that has been under consideration given the difficulty of an unplanned pregnancy in tough economic times. Despite the negative macroeconomic affect on elective medical procedures, we feel that these two effects have mostly offset one another.

One further note related to the first quarter results on our physician metrics: As we anticipated and forecasted, the number of physicians entering and exiting preceptorship and transitioning to the office has continued to remain healthy and robust, although a bit below levels of recent record historical quarters.

Because we continue device programs and tactics to step up our performance it is my full expectation that we are again going to see a pick up in each of these metrics with the typical seasonal rebound in the business in Q2 as well as from the impacts of advertising in the consumer awareness territories.

Overall our goals for the year remain to add 1,800 to 2,000 physicians to preceptorship and certified status and to add between 1,300 and 1,500 physicians through the ranks of those doctors performing Essure in sights of minimal anesthesia including the office.

With respect to guidance, as we indicated in the press release, we remain confident in our full year numbers both top line and bottom line. For top line the range implies a growth of 23% to 32%. With the first quarter growth of 29% and the expectation that our consumer awareness campaign from both this year and last year will contribute to our growth for the remainder of the year, we are confident that we are solidly in the range for the full year. The bottom end, of course, continues to assume a flight or worsening economy and volatile currency markets as well

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