Urologix Inc. (NSDQ:ULGX) posted second-quarter sales of $4.1 million for the three months ended Dec. 31, 2009, up 20 percent compared with $3.4 million during the same period in 2008. Urologix posted a net loss of $273,000 for the quarter, compared with a net loss of $1.1 million during Q2 2008:
Press Release
Urologix Reports Continued Revenue Growth in Second Quarter of Fiscal
Year 2010 over Prior Periods
- Revenue Increased 20% over the same quarter of the prior fiscal year
- Revenue Increased 5% over the prior quarter of fiscal year 2010
-
Cash Balance Increased $22,000 during the second quarter of fiscal
year 2010
MINNEAPOLIS–(BUSINESS WIRE)–Urologix®, Inc. (NASDAQ:ULGX), a medical device company that develops, manufactures and markets minimally invasive Cooled ThermoTherapy™ treatment catheters that provide a durable and effective procedure delivered in the comfort of an urologist’s office for patients suffering from benign prostatic hyperplasia (BPH), today reported financial results for the fiscal 2010 second quarter ended December 31, 2009.
“We are pleased by the achievements this quarter but not satisfied; the continuing focus is to expand the addressable market while distancing ourselves from our competitors based on clinical outcomes and customer service.”
2010 Second Quarter Financial Results
Revenue for the second quarter ended December 31, 2009 was $4.1 million, or 20 percent more than the $3.4 million reported in the same quarter of fiscal year 2009. Revenue was 5 percent more than the $3.9 million reported in the first quarter of fiscal year 2010. The increase in revenue over the second quarter of fiscal year 2009 is due to increased sales in all distribution channels: Urologix mobile service, direct and third-party mobile services. The increase in revenue over the first quarter of fiscal 2010 is due to increased sales in direct and Urologix mobile service distribution channels.
Cash generated in the second quarter of fiscal year 2010 was $22,000. The Company’s cash balance was $6.0 million as of December 31, 2009, which management considers sufficient to fund working capital and capital resource needs beyond the next 12 months.
“Generating positive cash flow this quarter represents achievement of a goal the entire company has worked toward and speaks to our ability to manage expenses as we continue to invest in the growth of the business. For the third consecutive quarter we have grown our revenues while our gross margins also continued to improve,” stated Stryker Warren Jr., CEO. “We are pleased by the achievements this quarter but not satisfied; the continuing focus is to expand the addressable market while distancing ourselves from our competitors based on clinical outcomes and customer service.”
Net loss for the second quarter was $273,000, or a loss of $0.02 per diluted share. This compares to a net loss of $1.1 million or $0.07 per diluted share for the second quarter of fiscal 2009, and a loss of $677,000 or $0.05 per diluted share in the first quarter of fiscal year 2010.
In the second quarter of fiscal year 2010, revenue derived from the Urologix mobile service represented 48 percent of overall revenue, compared to 45 percent in the first quarter of fiscal 2010. The Urologix mobile service generated sequential revenue growth for the fifth consecutive quarter. Revenue from catheter sales to direct accounts contributed 35 percent of overall revenue in the second quarter of fiscal 2010, as compared to 33 percent in the first quarter of fiscal 2010. Third party mobile revenue represented approximately 15 percent of overall revenue in the second quarter of fiscal 2010, four percentage points lower than the 19 percent of revenue reported in the prior quarter of this fiscal year.
Gross profit for the second quarter of fiscal 2010 was $2.3 million, or 57 percent of revenue, compared to $1.8 million or 54 percent of revenue for the second quarter of fiscal 2009 and $2.1 million or 55 percent of revenue in the first quarter of fiscal 2010. The increase in gross margin compared to prior periods is primarily the result of cost benefits from increased production volumes in response to increased demand.
Operating expenses for the second quarter of fiscal 2010 decreased $265,000, or 9 percent, when compared to the second quarter of fiscal 2009 as we continue to manage our expenses. Operating expenses decreased $208,000, or 7 percent, when compared with the first quarter of fiscal 2010, primarily due to the timing of certain expenses related to our fiscal year-end reporting that are incurred in the first quarter.
“Urologix has developed leading technology supported by strong clinical evidence that delivers value to patients, physicians and payors. Many urologists and patients are unhappy with the clinical results, side effects and cost associated with chronic BPH medication. We see an opportunity to expand patient access to our technology by educating these same constituents that Urologix’ Cooled ThermoTherapy™ is an effective, safe and cost effective treatment option that can provide superior clinical outcomes with long term durability. Focusing upon this objective, we will continue to remind the urologist that Urologix is the reliable choice: reliable product, reliable people and reliable outcomes,” stated Stryker Warren Jr., CEO.
Earnings Call Information
Urologix will host a conference call with the financial community to discuss fiscal 2010 second quarter results on Thursday, January 21, 2010 at 4:00 p.m. Central Time. To listen to the call, please dial 1-800-599-9829 and enter the Participant Passcode 16916961 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 and markets minimally invasive medical products for the treatment of urological disorders. The Company has developed and offers non-surgical, anesthesia-free, catheter-based treatments that use a proprietary cooled microwave technology for the treatment of benign prostatic hyperplasia (BPH), a condition that affects more than 23 million men worldwide. Urologix’ products include the CoolWave®, Targis® and Prostatron® control units and the CTC Advance™, Cooled ThermoCath®, Targis® and Prostaprobe® catheter families. All of Urologix’ products utilize Cooled ThermoTherapy™ – targeted microwave energy combined with a unique cooling mechanism to protect healthy tissue and enhance patient comfort – and provide safe, effective, lasting relief of the symptoms of BPH.
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 Company’s working capital and capital resource needs and future revenue and operating performance, statements about the Company’s ability to develop and market new products, and statements about the Company-owned Cooled ThermoTherapy mobile service. 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, 2009 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 | Six Months Ended | |||||||||||||||
Dec. 31, | Dec. 31, | |||||||||||||||
|
||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Sales | $ | 4,064 | $ | 3,386 | $ | 7,917 | $ | 6,040 | ||||||||
Cost of goods sold | 1,735 | 1,572 |
|
3,449 |
3,055 |
|||||||||||
Gross profit | 2,329 | 1,814 | 4,468 | 2,985 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Selling, general and administrative |
2,193 | 2,245 | 4,570 | 4,080 | ||||||||||||
Research and development |
|
418 | 631 | 860 |
1,253 |
|||||||||||
Total costs and expenses | 2,611 |
|
2,876 |
5,430 |
5,333 | |||||||||||
Operating loss | (282 | ) | (1,062 | ) | (962 | ) | (2,348 | ) | ||||||||
Interest income |
– |
6 |
– | 52 | ||||||||||||
Loss before income taxes | (282 | ) | (1,056 | ) | (962 | ) | (2,296 | ) | ||||||||
Income tax expense (benefit) | (9 | ) | 12 | (12 | ) | 46 | ||||||||||
Net loss |
$ |
(273 | ) | $ | (1,068 | ) | $ | (950 | ) | $ | (2,342 | ) | ||||
Net loss per common share–basic | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.16 | ) | ||||
Net loss per common share–diluted | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.16 | ) | ||||
Weighted average number of common shares outstanding–basic | 14,506 | 14,464 |
14,493 |
14,465 | ||||||||||||
Weighted average number of common shares outstanding–diluted |
|
14,506 | 14,464 | 14,493 |
14,465 |
|||||||||||
Urologix, Inc. | ||||||||
Balance Sheets | ||||||||
(Unaudited, in thousands) | ||||||||
|
||||||||
Dec. 31, | June 30, | |||||||
2009 | 2009 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,011 | $ | 7,032 | ||||
Accounts receivable, net | 1,821 | 1,505 | ||||||
Inventories | 1,266 | 1,407 | ||||||
Prepaids and other current assets | 252 | 80 | ||||||
Total current assets | 9,350 | 10,024 | ||||||
Property and equipment: | ||||||||
Property and equipment | 11,872 | 11,788 | ||||||
Less accumulated depreciation | (10,606 | ) |
|
(10,380 | ) | |||
Property and equipment, net | 1,266 | 1,408 | ||||||
Identifiable intangible assets, net | 130 | 143 | ||||||
Other assets |
450 |
566 | ||||||
Total assets | $ | 11,196 | $ |
12,141 |
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: |
||||||||
Accounts payable | $ | 483 | $ | 462 | ||||
Accrued compensation | 694 | 791 | ||||||
Deferred income | 207 | 210 | ||||||
Other accrued expenses |
507 |
598 | ||||||
Total current liabilities | 1,891 | 2,061 | ||||||
Deferred income | 63 | 155 |
|
|||||
Total liabilities | 1,954 | 2,216 |
|
|||||
Shareholders’ equity: | ||||||||
Common stock |
144 |
144 |
||||||
Additional paid-in capital | 114,177 | 113,910 | ||||||
Accumulated deficit | (105,079 | ) | (104,129 | ) | ||||
Total shareholders’ equity |
9,242 |
9,925 | ||||||
Total liabilities and shareholders’ equity | $ |
11,196 |
$ | 12,141 | ||||
Urologix, Inc. | ||||||||
Condensed Statements of Cash Flows |
||||||||
(Unaudited, in thousands) | ||||||||
Six Months Ended | ||||||||
Dec. 31, | ||||||||
2009 | 2008 | |||||||
Operating Activities: | ||||||||
Net loss | $ | (950 | ) | $ | (2,342 | ) | ||
Adjustments to reconcile net loss to net cash used for operating activities: |
||||||||
Depreciation and amortization | 422 | 532 | ||||||
Employee stock-based compensation expense | 257 | 263 | ||||||
Other | 12 | 3 | ||||||
Change in operating items: | ||||||||
Accounts receivable |
(326 |
) |
284 |
|||||
Inventories |
(77 |
) |
(192 |
) | ||||
Prepaids and other assets | (56 | ) | (17 | ) | ||||
Accounts payable | 21 | (43 | ) | |||||
Accrued expenses and deferred income | (283 |
) |
(951 |
) | ||||
Net cash used for operating activities | (980 |
) |
(2,463 |
) | ||||
Investing Activities: | ||||||||
Purchase of property and equipment | (51 |
) |
(44 |
) | ||||
Net cash used for investing activities | (51 |
) |
(44 |
) | ||||
Financing Activities: | ||||||||
Proceeds from stock option exercises | 10 |
|
8 |
|||||
Net cash provided by financing activities | 10 |
|
8 |
|||||
Net decrease in cash and cash equivalents | (1,021 | ) | (2,499 | ) | ||||
Cash and cash equivalents: |
||||||||
Beginning of period | 7,032 | 11,031 | ||||||
End of period | $ | 6,011 | $ | 8,532 |
|
|||
Supplemental cash-flow information |
||||||||
Income taxes paid during the period |
$ |
4 |
$ |
21 |
||||
Net amount of inventory transferred to property and equipment |
$ |
218 |
$ |
143 |
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