MINNEAPOLIS, Feb. 4, 2014 (GLOBE NEWSWIRE) -- Urologix®, Inc. (OTCQB:ULGX), the leading provider of in-office procedures for the safe, durable and effective treatment of BPH, today reported financial results for its fiscal second quarter ended December 31, 2013.
Operating Results for the Second Quarter of Fiscal Year 2014
Second quarter fiscal year 2014 revenue totaled $3.8 million, up 0.7% sequentially which is relatively flat with the first quarter of fiscal year 2014 and down 12.6% compared to the second quarter of fiscal year 2013. The revenue decline compared to the second quarter of fiscal year 2013 was due to lower volume of units sold in both product lines.
"Second quarter revenue improved slightly sequentially, but did not meet our growth expectations. Our results combined with our assessment of where we can have the most impact in our market led us to implement the restructuring of the organization at the beginning of January. Careful management of our resources in advance of the restructuring helped our ending cash position in the quarter," stated Greg Fluet, Chief Executive Officer. "Our new organizational structure should allow us to meet our operational goals with improved profitability in the future. We remain intently focused on serving the unmet clinical needs of the large number of men suffering from the symptoms related to BPH. The execution of our market development and patient education programs will continue as we work to expand the market for our in-office BPH treatments."
As of December 31, 2013, the Company's cash balance was $1.3 million compared to $1.6 million as of September 30, 2013. Cash utilization in the quarter was $284,000. The Company's cash utilization benefited from increased collections at the end of the calendar year and reduced operating expenses. The Company's cash needs will be determined by a number of items including operating performance, accessibility of the Silicon Valley Bank ("SVB") line of credit and the timing of the payment of annual royalty amounts due and unpaid in the second quarter of the fiscal year totaling $650,000 which are included in short-term deferred acquisition payments on the balance sheet. The Company is pleased to announce today that it entered into an amendment to the line of credit with SVB which extends the line through June 30, 2014. Additional information on this extension is included in a separate press release issued today.
Gross profit for the second quarter of fiscal year 2014 was $1.8 million, or 47.2% of revenue, compared to $2.2 million, or 51.4% of revenue, in the second quarter of fiscal year 2013. Gross margin also declined sequentially compared to 49.3% in the first quarter of fiscal year 2014. The change in gross margin compared to the prior year second quarter and first quarter of fiscal year 2014 was primarily due to lower production volumes to reduce inventory levels in the second quarter of fiscal year 2014 as well as higher costs related to the Prostiva product line. The lower production volumes resulted in increased fixed manufacturing costs on a per-unit basis.
Total operating expense was $2.7 million for the second quarter of fiscal year 2014, representing a decline of 12.3% compared to the prior year period and a decline of 11.1% sequentially. The decline as compared to the second quarter of fiscal year 2013 in total operating expense was driven by lower sales and marketing expense as well as lower research and development expense, offset partially by the medical device excise tax which was not assessed in the prior year period. The sequential decline in operating expense was driven by the combination of lower costs in sales and marketing as well as lower legal and audit fees.
For the second quarter of fiscal year 2014, Urologix reported a net loss of $1.1 million, or $0.05 per diluted share, compared to a net loss of $970,000, or $0.05 per diluted share, in the second quarter of fiscal year 2013. The change in net loss in the second quarter of fiscal year 2014 was primarily due to lower sales and gross profit compared to the prior year second quarter. The net loss this quarter represented a modest sequential improvement over the net loss of $1.3 million, or $0.06 per share, in the first quarter of fiscal 2014. The sequential improvement in net loss in the second quarter was driven by lower operating expenses.
Earnings Call Information
Urologix will host a conference call with the financial community to discuss fiscal year 2014 second quarter results on Tuesday, February 4, 2014 at 4:00 p.m. Central Standard Time. To listen to the call, please dial 1-800-688-0836 and enter the Participant Passcode 89504173 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 Prostiva® RF Therapy System delivers radio frequency energy directly into the prostate destroying prostate tissue, reducing constriction of the urethra, and thereby relieving BPH symptoms. Both of these therapies 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.
If you'd like more information on this topic, please contact Brian Smrdel at (763) 475-7696 or bsmrdel@urologix.com or to learn more about Urologix and its products and services, visit their website at www.urologix.com.
The Urologix, Inc. logo is available at www.urologix.com/clinicians/resource-library.php.
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, the effectiveness of the Company's sales and marketing strategies and organization, the Company's future revenue and operating performance, the effect on expenses or cash balances as a result of the previously announced strategic restructuring, the development and marketing of new products, the timing or payment of any amounts to Medtronic, or the availability of borrowing under the line of credit with Silicon Valley Bank. 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, 2013 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 December 31, |
Six Months Ended December 31, |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Sales | $ 3,806 | $ 4,354 | $ 7,585 | $ 8,324 |
| Cost of goods sold | 2,008 | 2,117 | 3,923 | 4,072 |
| Gross profit | 1,798 | 2,237 | 3,662 | 4,252 |
| Costs and expenses: | ||||
| Sales and marketing | 1,681 | 2,007 | 3,527 | 3,724 |
| General and administrative | 561 | 646 | 1,246 | 1,383 |
| Research and development | 452 | 602 | 874 | 1,218 |
| Change in value of acquisition consideration | (85) | (215) | (93) | (369) |
| Medical device tax | 59 | -- | 119 | -- |
| Amortization expense | 22 | 26 | 44 | 52 |
| Total costs and expenses | 2,690 | 3,066 | 5,717 | 6,008 |
| Operating loss | (892) | (829) | (2,055) | (1,756) |
| Interest expense | (178) | (127) | (338) | (249) |
| Foreign currency exchange gain/(loss) | 1 | 2 | 2 | (3) |
| Loss before income taxes | (1,069) | (954) | (2,391) | (2,008) |
| Income tax expense | 16 | 16 | 28 | 32 |
| Net loss | $ (1,085) | $ (970) | $ (2,419) | $ (2,040) |
| Net loss per common share---basic | $ (0.05) | $ (0.05) | $ (0.11) | $ (0.10) |
| Net loss per common share---diluted | $ (0.05) | $ (0.05) | $ (0.11) | $ (0.10) |
| Weighted average number of common shares outstanding---basic | 21,245 | 20,835 | 21,132 | 20,507 |
| Weighted average number of common shares outstanding---diluted | 21,245 | 20,835 | 21,132 | 20,507 |
| Urologix, Inc. | ||
| Balance Sheets | ||
| (Unaudited, in thousands) | ||
|
December 31, 2013 |
June 30, 2013 |
|
| ASSETS | ||
| Current assets: | ||
| Cash | $ 1,267 | $ 2,290 |
| Accounts receivable, net | 1,856 | 2,132 |
| Inventories | 1,357 | 1,571 |
| Prepaids and other current assets | 264 | 128 |
| Total current assets | 4,744 | 6,121 |
| Property and equipment: | ||
| Property and equipment | 12,158 | 12,165 |
| Less accumulated depreciation | (11,569) | (11,430) |
| Property and equipment, net | 589 | 735 |
| Other intangible assets, net | 1,483 | 1,587 |
| Goodwill | 3,036 | 3,036 |
| Long-term inventories | 959 | 1,043 |
| Other assets | 5 | 5 |
| Total assets | $ 10,816 | $ 12,527 |
| LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) | ||
| Current liabilities: | ||
| Accounts payable | $ 1,054 | $ 628 |
| Accrued compensation | 677 | 721 |
| Deferred income | 7 | 5 |
| Short-term deferred acquisition payment | 1,270 | 681 |
| Other accrued expenses | 525 | 602 |
| Total current liabilities | 3,533 | 2,637 |
| Deferred tax liability | 54 | 36 |
| Long-term deferred acquisition payment | 3,552 | 4,026 |
| Long-term debt | 5,333 | 5,333 |
| Other accrued liabilities | 56 | 75 |
| Interest payable | 165 | -- |
| Total liabilities | 12,693 | 12,107 |
| Shareholders' equity/(deficit): | ||
| Common stock | 209 | 208 |
| Additional paid-in capital | 119,351 | 119,230 |
| Accumulated deficit | (121,437) | (119,018) |
| Total shareholders' equity/(deficit) | (1,877) | 420 |
| Total liabilities and shareholders' equity/(deficit) | $ 10,816 | $ 12,527 |
| Urologix, Inc. | ||
| Condensed Statements of Cash Flows | ||
| (Unaudited, in thousands) | ||
| Six Months Ended | ||
| December 31, | ||
| 2013 | 2012 | |
| Operating Activities: | ||
| Net loss | $ (2,419) | $ (2,040) |
| Adjustments to reconcile net loss to net cash used for operating activities: | ||
| Depreciation and amortization | 302 | 339 |
| Employee stock-based compensation expense | 122 | 151 |
| Provision for bad debts | 29 | 23 |
| Loss on disposal of assets | 3 | 7 |
| Accretion expense on deferred acquisition payments | 209 | 284 |
| Net adjustment to acquisition consideration | (93) | (369) |
| Deferred income taxes | 18 | 22 |
| Change in operating items, net of acquisition: | ||
| Accounts receivable | 247 | (92) |
| Inventories | 276 | (577) |
| Prepaids and other assets | (136) | 44 |
| Accounts payable | 426 | 1,599 |
| Accrued expenses and deferred income | (139) | (177) |
| Interest payable | 165 | -- |
| Net cash used for operating activities | (990) | (786) |
| Investing Activities: | ||
| Purchase of property and equipment | (27) | (36) |
| Purchases of intellectual property | (6) | (12) |
| Net cash used for investing activities | (33) | (48) |
| Financing Activities: | ||
| Issuance of common stock | -- | 3,814 |
| Net cash provided by financing activities | -- | 3,814 |
| Net decrease in cash and cash equivalents | (1,023) | 2,980 |
| Cash and cash equivalents: | ||
| Beginning of period | 2,290 | 1,899 |
| End of period | $1,267 | $ 4,879 |
| Supplemental cash-flow information | ||
| Income taxes paid during the period | $ 12 | $ 15 |
| Net amount of inventory transferred to property and equipment | $ 22 | $ 56 |