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Urologix Reports Fiscal Year 2013 First Quarter Results and Revises Annual Guidance

Wednesday, November 14, 2012 4:00 PM


  • First quarter revenue of $4.0 million, up 26.3% year-over-year
  • Cash balance increases to $5.3 million after completion of follow-on offering
  • Cooled ThermoTherapy reimbursement code supported in Medicare review
  • The Company revises fiscal year 2013 total revenue guidance range to $16.0 million to $17.0 million

MINNEAPOLIS, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Urologix®, Inc. (Nasdaq:ULGX), the leading provider of in-office procedures for the safe, durable and effective treatment of BPH, today reported financial results for its fiscal year first quarter ended September 30, 2012.

First quarter fiscal year 2013 revenue totaled $4.0 million, up 26.3% year-over-year and down 11.7% sequentially. The first quarter year over year increase in revenue was driven by the incremental contribution of Prostiva® Radio Frequency (RF) Therapy product revenue. The sequential decline in total Urologix revenue was due to lower procedure kit sales volume in the Company's direct channel, approximately half of which was driven by a decline in Prostiva product sales.

As of September 30, 2012, the Company's cash balance was $5.3 million compared to $1.9 million as of June 30, 2012. The change in cash balance was driven primarily by the contributions from the Company's completed follow-on offering in the period which added approximately $3.9 million to cash balances in the fiscal year 2013 first quarter.  The Company's cash flow benefitted from the delayed timing of payments for Prostiva product, royalties and license fees.

"The first quarter of fiscal year 2013 started off slower than expected and our revised guidance reflects our cautiousness with respect to healthcare procedure trends for the balance of the fiscal year," stated Stryker Warren, Jr., CEO. "We remain intently focused on leveraging our leading market share position, our expanded sales organization and our innovative market development and patient education programs to drive top-line growth going forward."

Gross profit for the first quarter of fiscal year 2013 was $2.0 million, or 50.8% of revenue, compared to $1.4 million, or 45.0% of revenue, in the first quarter of fiscal year 2012. The increase in the percentage of gross profit compared to the prior year was due to the negative impact of lower production volumes in the prior year as part of a plan to reduce inventory levels that reduced gross margin by 450 basis points in that period.

Total operating expense of $2.9 million in the first quarter of fiscal year 2013 increased 7.5% year-over-year, driven primarily by the investment in the direct sales force and our seminar program that resulted from the acquisition of the Prostiva product line. Total operating expense declined 12.5% on a sequential basis due to: (i) expenses related to the Annual AUA meeting that were incurred in the fourth quarter of fiscal year 2012; and (ii) lower sales compensation expense as a result of the decrease in sales compared to the last quarter. First quarter fiscal year 2013 operating expense included a gain of $154,000 due to a change in the fair value of the acquisition consideration for the Prostiva business.

For the first quarter of fiscal year 2013, Urologix reported a net loss of $1.1 million, or $0.05 per diluted share, compared to a net loss of $1.4 million, or $0.09 per diluted share, in the first quarter of fiscal year 2012. The net loss in the first quarter of fiscal year 2013 was positively impacted by the gain of $154,000 due to a change in the fair value of the acquisition consideration.

Recent Developments

On November 1, 2012, the Centers for Medicare and Medicaid Services (CMS), in the Final Rule for the Medicare Physician Fee Schedule for 2013, updated payment rates for Urologix's Cooled ThermoTherapy technology as part of a broad re-evaluation of 70 codes across multiple specialties. The AMA recommended the physician work "relative value units" (RVUs) for Urologix's Cooled ThermoTherapy (CTT) remain at current levels. CMS accepted the AMA recommendation and made no material adjustments to either physician time, or to overall practice expense for CTT's Current Procedural Terminology (CPT®) code (53850).

Guidance

The Company is revising the fiscal year 2013 total revenue guidance range to approximately $16.0 million to $17.0 million compared to $17.5 to $19.0 million previously.

Earnings Call Information

Urologix will host a conference call with the financial community to discuss fiscal year 2013 first quarter results on Wednesday, November 14, 2012 at 4:00 p.m. Central Standard Time. To listen to the call, please dial 1-866-202-1971 and enter the Participant Passcode 75425848 at least 10 minutes prior to the call. A live webcast of the call will be available through the investor relations section of the Company's website at www.urologix.com and available for replay approximately two hours after the completion of the call.

About Urologix

Urologix, Inc., based in Minneapolis, develops, manufactures, markets and distributes minimally invasive medical products for the treatment of obstruction and symptoms due to Benign Prostatic Hyperplasia (BPH).  Urologix' Cooled ThermoTherapy™ produces targeted microwave energy combined with a unique cooling mechanism to protect healthy tissue and enhance patient comfort.  The Cooled ThermoTherapy™ product line includes the CoolWave® and Targis® Control Units and the CTC Advance® and Targis® catheter families.  The Prostiva® RF Therapy System distributed by Urologix delivers radio frequency energy directly into the prostate destroying prostate tissue, reducing constriction of the urethra, and thereby relieving BPH voiding symptoms.  Both of these products provide safe, effective and lasting relief of the symptoms and obstruction due to BPH. Prostiva® is a registered trademark of Medtronic, Inc., used under license.  All other trademarks are the property of Urologix.

The Urologix, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7867

Forward Looking Statements

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. Such forward looking statements include, for example, statements about the effectiveness of the Company's sales and marketing strategies, the Company's future revenue and operating performance, or about the development and marketing of new products. The statements made by the Company are based upon management's current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Company's control and the risk factors and other cautionary statements described in the Company's Annual Report on Form 10-K for the year ended June 30, 2012 and other documents filed with the Securities and Exchange Commission.

Urologix, Inc.
Statements of Operations
(Unaudited, in thousands, except per share data)
   
  Three Months Ended September 30,
  2012 2011
     
Sales $ 3,970 $ 3,142
Cost of goods sold 1,954 1,727
Gross profit 2,016 1,415
     
Costs and expenses:    
Sales and marketing 1,717 1,365
General and administrative 738 880
Research and development 615 481
Change in value of acquisition consideration (154) --
Amortization expense 26 12
Total costs and expenses 2,942 2,738
     
Operating loss (926) (1,323)
Interest expense (123) (56)
Foreign currency exchange loss (4) --
Loss before income taxes (1,053) (1,379)
     
Income tax expense 16 5
Net loss $ (1,069) $ (1,384)
     
Net loss per common share---basic $ (0.05) $ (0.09)
     
Net loss per common share---diluted $ (0.05) $ (0.09)
     
Weighted average number of common shares outstanding---basic 20,180 14,646
     
Weighted average number of common shares outstanding---diluted 20,180 14,646
Urologix, Inc.
Balance Sheets
(Unaudited, in thousands)
     
  September 30,
2012
June 30,
2012
ASSETS    
Current assets:    
Cash and cash equivalents $   5,349   $    1,899
Accounts receivable, net 2,096 2,132
Inventories 2,060 1,448
Prepaids and other current assets 313 290
Total current assets 9,818 5,769
Property and equipment:    
Property and equipment  12,023  12,006
Less accumulated depreciation  (11,205)  (11,144)
Property and equipment, net  818  862
Other intangible assets, net 2,199 2,262
Goodwill 3,036 3,115
Long-term inventories 698 663
Other assets 5 5
Total assets $     16,574 $    12,676
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $     4,535 $    3,376
Accrued compensation  606  732
Deferred income 13 7
Short-term deferred acquisition payment 2,457 2,395
Other accrued expenses 759 779
Total current liabilities 8,370 7,289
     
Deferred tax liability 46 35
Long-term deferred acquisition payment 4,567 4,613
Other accrued liabilities 103 113
Total liabilities 13,086 12,050
     
Shareholders' equity:    
Common stock  207  147
Additional paid-in capital  119,076  115,205
Accumulated deficit (115,795) (114,726)
Total shareholders' equity 3,488 626
Total liabilities and shareholders' equity $     16,574 $    12,676
     
Urologix, Inc.
Condensed Statements of Cash Flows
(Unaudited, in thousands)
   
  Three Months Ended
September 30,
  2012 2011
Operating Activities:    
Net loss $   (1,069) $  (1,384)
Adjustments to reconcile net loss to net cash used for operating activities:    
Depreciation and amortization 172 139
Employee stock-based compensation expense 58 87
Provision for bad debts (12) --
Loss on disposal of assets -- 10
Implied interest on deferred acquisition payments 170 56
Net adjustment to acquisition consideration (154) --
Deferred income taxes 11 --
Change in operating items, net of acquisition:    
 Accounts receivable 48 (433)
 Inventories (624) 348
 Prepaids and other assets (23) (105)
 Accounts payable 1,159 (75)
 Accrued expenses and deferred income (150) 277
Net cash used for operating activities (414) (1,080)
     
Investing Activities:    
Purchase of property and equipment (4) (5)
Acquisition of business -- (500)
 Purchases of intellectual property (5) --
Net cash used for investing activities (9) (505)
     
Financing Activities:    
 Proceeds from stock option exercises -- 79
 Issuance of common stock 3,873 --
Net cash provided by financing activities 3,873 79
Net increase/(decrease) in cash and cash equivalents 3,450 (1,506)
Cash and cash equivalents:    
Beginning of period 1,899 3,061
End of period    5,349    1,555
     
Supplemental cash-flow information    
Income taxes paid during the period $   15  11
Net amount of inventory transferred to property and equipment $  56 $   36 
Non-cash consideration for acquisition $   -- $ 6,532
CONTACT: Brian J. Smrdel, Chief Financial Officer, (763) 475-7696

Urologix, Inc. Logo

(Source: PrimeZone )
(Source: Quotemedia)

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