Conceptus Reports Second Quarter 1998 Financial and Operational Results.

SAN CARLOS, Calif.--(BW HealthWire)--July 16, 1998--Conceptus, Inc. (NASDAQ:CPTS) announced today the financial results for its second quarter of 1998. The Company reported second quarter net sales of $85,000, an 80% decrease over the same period last year. The Company also reported a net loss of $3,863,000 or $0.41 loss per share for the second quarter compared with a net loss of $2,778,000, or $0.30 loss per share for the same period last year. For the six months ended June 30, 1998, the Company reported a net loss of $7,319,000, or $0.77 loss per share, on revenues of $252,000. This is compared to a loss of $5,574,000, or $0.60 loss per share, on revenues of $701,000 for the same period last year. Cash and equivalents at the end of June were $20.1 million.

Included in both the quarter and six-month financial results are expenses associated with a restructuring which aggregated to approximately $920,000. Included in these amounts are $725,000 associated with a previously announced reduction in force, and a charge of $195,000 to fully reserve all remaining inventory. In addition, Conceptus booked a charge of $146,000 in the quarter to fully reserve the accounts receivable from a former distributor, Imagyn Medical Technologies. Of the above mentioned charges $725,000 will represent cash outflow. In the aggregate these expenses amounted to $0.11 per share in the quarter.

As previously announced, Conceptus's restructuring will focus the Company on the development and clinical testing of its S/TOP(tm) (Selective Tubal Occlusion Procedure) product, which is designed to provide a non-surgical method of permanent contraception and thus address one of the largest medical device markets. Conceptus is in Phase II clinical trials of the S/TOP product. With the restructuring, the Company is targeting a substantial reduction in its quarterly negative cash flow, exclusive of severance charges to be paid out over the next several months but fully booked in the second quarter.

Having eliminated its sales and marketing organizations in the restructuring, Conceptus is seeking to outlicense or establish marketing relationships in order to distribute its current products, including the STARRT(tm) Falloposcopy system and the ERA(tm) and FUTURA(tm) Resectoscope Sleeves to the Interventional Gynecology market. Conceptus has over fifty customers for its ERA Resectoscope sleeve, designed to increase the margin of safety in operative hysteroscopy, which is growing in acceptance as an alternative to hysterectomy. The Company also has signed an exclusive agreement to supply the ERA Sleeve to a group of over 250 surgery centers.

Conceptus will hold a conference call at 2:30 p.m. EDT today, July 16, 1998. The telephone number to participate in the conference call is 212/896-6087. Kathryn Tunstall, CEO, and Sanford Fitch, CFO, will host the conference call.

Conceptus, Inc. designs, develops and markets innovative interventional medical devices for use in reproductive medicine. The Company's initial focus is on the development of systems to improve the diagnosis and treatment of fallopian tube disorders, a primary cause of infertility and on technology designed to improve the safety and ease-of-use of the therapeutic hysteroscopy, a growing, less-invasive alternative to hysterectomy. The Company is in Phase II clinical trials of a non-surgical approach to fallopian tube sterilization, the most commonly performed contraceptive procedure worldwide.

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. The receipt of regulatory approvals, results of product development programs, clinical efficacy of and market demand for products, among 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 within Conceptus's control, suctrol, such as delays by regulatory authorities, OF OPERATIONS

(In thousands of dollars, except share data)

(unaudited)

Three Months Ended et sales 85 167 42(591) (669) ( 328) (1,260) (493)

Ope 1,024 898 685 1,922 1,447

-------- -------- -------- -------- -------- Total operating expenses 3,605 3,163 2,894 6,768 6,017

-------- -------- -------- -------- --------

Operating loss (4,196) (3,832) (3,222) (8,028) (6,510)

Interest and -- -------- --------

Net loss ======== ======== ====== 1998 1997

-------- --------

(Unaudited) (a)

Cash, cash equivalents and short term investments $ 20,148 $ 27,058 Inventory - 355 Trade accounts receivable 72 540 Total current assets 20,784 28,243 PP&E, net 1,474 1,090 Total assets 22,380 29,480

Accounts payable & accruals ORD: CALIFORNIA

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