Urologix Reports Fourth Quarter and Fiscal Year 2013 Results

Urologix Reports Fourth Quarter and Fiscal Year 2013 Results

Executive Summary

  *Fiscal year 2013 revenue totaled $16.6 million in-line with the Company's
    fiscal year guidance range of $16.0 million to $17.0 million.
  *Fourth quarter revenue totaled $4.2 million, up 2.5% sequentially.
  *Completed restructuring of $7.5 million to settle outstanding liabilities
    related to the Prostiva license.
  *Introduces fiscal year 2014 total revenue guidance in the range of $15
    million to $17 million.

MINNEAPOLIS, Aug. 20, 2013 (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
year fourth quarter and fiscal year ended June 30, 2013.

Fourth quarter fiscal year 2013 revenue totaled $4.2 million, up 2.5%
sequentially from the third quarter of fiscal year 2013 and down 7.0% compared
to the fourth quarter of fiscal year 2012. The sequential increase in revenue
was driven by low single-digit growth in sales for both product lines, Cooled
ThermoTherapy^TM (CTT) and Prostiva® Radio Frequency (RF) Therapy. The
year-over-year decline in revenue was driven by a low single-digit decline in
sales of CTT and low double-digit declines in sales of Prostiva compared to
the prior year.

"We are pleased at achieving our guidance for FY2013 and generating sequential
growth in the fourth quarter. We believe these results reflect both the impact
of our market development initiatives and continuing improvement in our
execution," stated Greg Fluet, Chief Executive Officer. "Our fiscal year 2014
guidance reflects both our confidence in the continued contributions to growth
from execution of our sales and marketing strategy, heavily focused on patient
education, as well as the recognition of the challenging healthcare
environment. We enter the new fiscal year with certainty on our cash
obligations reflected in the balance sheet, a strong product portfolio of
leading in-office therapies for the treatment of BPH, a compelling market
development program and a strong team focused on achieving improved operating
performance."

As of June 30, 2013, the Company's cash balance was $2.3 million compared to
$5.1 million as of March 31, 2013. This amount includes the impact from the
$2.0 million payment to Medtronic which was made on June 28^th, 2013 upon the
signing of the restructuring agreement. Outside of the restructuring payment,
the cash balances decreased $807,000 compared to March 31, 2013. The Company
has an existing $2 million line of credit currently in place with Silicon
Valley Bank, which has not yet been drawn upon.

On a full year basis, the Company's cash balance increased $391,000 compared
to June 30, 2012. The change in the cash balance over the fiscal year was
impacted by the following items: (i) increased $3.8 million from a common
stock offering on July 5, 2012; (ii) decreased due to the cash payment of $2.0
million paid as part of the Prostiva restructuring, though this was offset by
the deferral of $2.0 million of payments due earlier in the year as part of
the license agreement and for deferred inventory payments and; (iii) the
receipt of $321,000 in January 2013 from the demutualization of an insurer.
Net of these items, the Company utilized $3.7 million in cash during fiscal
year 2013.

Gross profit for the fourth quarter of fiscal year 2013 was $1.9 million, or
45.5% of revenue, compared to $2.3 million, or 50.6% of revenue, in the fourth
quarter of fiscal year 2012. Fourth quarter fiscal year 2013 cost of goods
soldincluded an impairment charge of $274,000 related to a revaluation of
intangible assets acquired with the Prostiva product line. Excluding the
impairment charge, fourth quarter fiscal year 2013 non-GAAP gross margin was
52.1%. The improvement in gross margin, excluding the impairment charge, was
driven primarily by a reduction in manufacturing costs and mobile expenses.

Total operating expense was $3.2 million for the fourth quarter of fiscal year
2013, down 5.3% year-over-year. Total operating expenses in the fourth quarter
of fiscal year 2013 included an impairment charge of $160,000 related to a
revaluation of intangible assets acquired with the Prostiva product line.
Excluding this impairment charge and the gain on the change in value of
acquisition consideration in both the current quarter and the fourth quarter
of fiscal year 2012, operating expense declined 12.2% compared to the prior
year. The decrease in total operating expense, excluding the impairment charge
and gains on acquisition consideration, was driven by a decline of $399,000 in
General & Administrative expense related to a shift in accreted interest
expense to the interest expense line as a result of the restructuring of
Medtronic liabilities in the period as well as a reduction in Sales &
Marketing and Research & Development expenses of $96,000.

For the fourth quarter of fiscal year 2013, Urologix reported a net loss of
$1.2 million, or $0.06 per diluted share, compared to a net loss of $1.2
million, or $0.08 per diluted share, in the fourth quarter of fiscal year
2012. The net loss in the fourth quarter of fiscal year 2013 was impacted, on
a pre-tax basis, by an impairment charge of $434,000 on long-lived assets, a
$206,000 gain on debt extinguishment and $65,000 paid for the medical device
tax.

For the fiscal year 2013 period ended June 30, 2013, revenues totaled $16.6
million, down 2.6% compared to revenues of $17.0 million in fiscal year 2012.
The year-over-year decline in revenue was driven by a mid-single-digit decline
in sales of Cooled ThermoTherapy^TM (CTT) products and a mid-single-digit
increase in sales of Prostiva^® Radio Frequency (RF) Therapy products.
Prostiva growth benefitted from the inclusion of a full year of sales in
fiscal year 2013 compared to approximately ten months of sales contribution
following the Company's license acquisition in fiscal year 2012.

Gross profit for fiscal year 2013 was $8.2 million, or 49.3% of sales.
Excluding the impairment charge of $274,000 in the fourth quarter, fiscal year
2013 non-GAAP gross margin was 51.0%. Total operating expense of $12.1 million
for fiscal year 2013 declined 3.4% year-over-year compared to $12.5 million in
fiscal year 2012. Excluding the changes in the value of acquisition
consideration in both periods, the gain on demutualization and impairment
charges in fiscal year 2013, total operating expenses were flat
year-over-year. The Company reported a net loss of $4.3 million, or $0.21 per
diluted share, for fiscal year 2013, compared to a net loss of $4.7 million,
or $0.32 per diluted share, in the prior fiscal year period.

Outlook

The Company is introducing a fiscal year 2014 total revenue guidance range of
$15 million to $17 million.

Earnings Call Information

Urologix will host a conference call with the financial community to discuss
fiscal year 2013 fourth quarter results on Tuesday, August 20, 2013 at 4:00
p.m. Central Daylight Time. To listen to the call, please dial 1-877-703-6103
and enter the Participant Passcode 11902670 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.

Non-GAAP Gross Margin Percentage Reconciliation

                                       Three Months Ended Twelve Months Ended
                                        June 30, 2013      June 30, 2013
Sales                                   $ 4,184,000        $ 16,590,000
Cost of goods sold                      2,279,000          8,407,000
GAAP gross profit                       1,905,000          8,183,000
                                                         
Impairment charge excluded from cost of 274,000            274,000
goods sold
                                                         
Non-GAAP gross profit                   $2,179,000        $8,457,000

Non-GAAP gross margin percentage        52.1%              51.0%

Notes to Reconciliation of Non-GAAP Measure to GAAP

Management believes non-GAAP financial information provides meaningful
supplemental information regarding the Company's financial performance by
excluding the impairment charge to developed technology intangible asset in
the fourth quarter of fiscal year 2013. Management believes this impairment
charge is a non-recurring item that is not indicative of the operating results
of the business. Urologix believes that this additional financial information
is useful to management and investors in assessing the Company's historical
and future performance.

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, 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    Twelve Months Ended
                                June 30,               June 30,
                               2013        2012       2013        2012
Sales                           $4,184     $4,497    $16,590    $17,027
Cost of goods sold ^(1)         2,279       2,220      8,407       8,645
Gross profit                    1,905       2,277      8,183       8,382
                                                               
Costs and expenses:                                             
Sales and marketing             2,080       2,113      7,719       7,027
General and administrative      421         820        2,515       3,393
Research and development        514         577        2,269       2,189
Change in value of              (79)        (172)      (447)       (172)
acquisitionconsideration
Gain on demutualization         --          --         (321)       --
Medical device tax              65          --         106         --
Amortization                    26          26         104         90
Impairment of identifiable      160         --         160         --
intangible assets ^(1)
Total costs and expenses        3,187       3,364      12,105      12,527
                                                               
Operating loss                  (1,282)     (1,087)    (3,922)     (4,145)
Interest expense                (207)       (111)      (555)       (482)
Gain on debt extinguishment     206         --         206         --
^(2)
Foreign currency exchange       2           (10)       (7)         (13)
gain/(loss)
Loss before income taxes        (1,281)     (1,208)    (4,278)     (4,640)
Income tax expense/(benefit)    (34)        17         14          55
Net loss                        $(1,247)   $ (1,225)  $(4,292)   $(4,695)
                                                               
Net loss per common             $(0.06)    $(0.08)   $(0.21)    $(0.32)
share--basic
Net loss per common             $(0.06)    $(0.08)   $(0.21)    $(0.32)
share--diluted
Weighted average number of
common shares                   20,909      14,797     20,703      14,741
outstanding--basic
Weighted average number of
common shares                   20,909      14,797     20,703      14,741
outstanding--diluted
                                                               
(1) Total impairment charge of $434,000 in the fourth quarter of fiscal year
2013 includes a $274,000 impairment charge to the developed technology
intangible asset reported in cost of goods sold with the remaining $160,000
impairment charge reported in operating expense.
(2) The gain on extinguishment of debt is a result of the restructuring of
$7.5 million in outstanding Prostiva liabilities into a $2.0 million cash
payment and a $5.3 million note payable.




Urologix, Inc.
Balance Sheets
(Unaudited, in thousands)
                                                           
                                          June 30,          June 30,
                                           2013              2012
ASSETS                                                      
Current assets:                                             
Cash                                       $2,290           $1,899
Accounts receivable, net                   2,132             2,132
Inventories                                1,952             1,448
Prepaids and other current assets          128               290
Total current assets                       6,502             5,769
Property and equipment:                                     
Property and equipment                     12,165           12,006
Less accumulated depreciation              (11,430)         (11,144)
Property and equipment, net                735              862
Other intangible assets, net               1,587             2,262
Goodwill                                   3,036             3,115
Long-term inventories                      662               663
Other assets                               5                 5
Total assets                               $12,527          $12,676
                                                           
LIABILITIES AND SHAREHOLDERS' EQUITY                        
Current liabilities:                                        
Accounts payable ^(1)                      $628             $3,376
Accrued compensation                       721              732
Deferred income                            5                 7
Short-term deferred acquisition payment    681               2,395
^(1)
Other accrued expenses                     602               779
Total current liabilities                  2,637             7,289
                                                           
Deferred tax liability                     36                35
Long-term deferred acquisition payment     4,026             4,613
Long-term debt ^(1)                        5,333             --
Other accrued liabilities                  75                113
Total liabilities                          12,107            12,050
                                                           
Shareholders' equity:                                       
Common stock                               208              147
Additional paid-in capital                 119,230          115,205
Accumulated deficit                        (119,018)         (114,726)
Total shareholders' equity                 420               626
Total liabilities and shareholders' equity $12,527          $12,676
                                                           
(1) The material change in this account from June 30, 2012 is a result of the
restructuring of the Prostiva liabilities.




Urologix, Inc.
Condensed Statements of Cash Flows
(Unaudited, in thousands)
                                                         
                                                         Year Ended June 30,
                                                         2013      2012
Operating Activities:                                              
Net loss                                                  $ (4,292) $(4,695)
Adjustments to reconcile net loss to net cash used for             
operating activities:
Depreciation and amortization                             674       695
Impairment of identifiable intangible assets              434       --
Employee stock-based compensation expense                 257       359
Provision for bad debts                                   (23)      (34)
Loss on disposal of assets                                7         15
Accretion and interest expense on deferred acquisition    544       644
payments
Net adjustment to acquisition consideration               (447)     (172)
Gain on debt extinguishment                               (206)     --
Deferred income taxes                                     1         35
Change in operating items, net of acquisition:                     
Accounts receivable                                       23        (740)
Inventories                                               (626)     131
Prepaids and other assets                                 162       (41)
Accounts payable                                          1,760     2,635
Accrued expenses and deferred income                      (227)     455
Net cash used for operating activities                    (1,959)   (713)
                                                                  
Investing Activities:                                              
Purchases of property and equipment                       (79)      (57)
Acquisition of business                                   (1,368)   (500)
Purchases of intellectual property                        (32)      (8)
Net cash used for investing activities                    (1,479)   (565)
                                                                  
Financing Activities:                                              
Proceeds from stock option exercises                      15        116
Issuance of common stock                                  3,814     --
Net cash provided by financing activities                 3,829     116
Net decrease in cash                                      391       (1,162)
                                                                  
Cash:                                                              
Beginning of period                                       1,899     3,061
End of period                                             $ 2,290   $ 1,899
                                                                  
Supplemental cash-flow information                                 
Income taxes paid during the period                       $17      $12
Net amount of inventory transferred to property and       $202     $293
equipment
Non-cash consideration for acquisition                    $ --      $ 6,532
Deferred acquisition payment and accounts payable         $ 5,333   $ --
transferred to long- term debt

CONTACT: Urologix Media Contact
         Karen Snay
         (513) 484-2987
         KSnay@urologix.com
        
         Urologix Investor Relations Contact
         Brian Smrdel
         (763) 475-7696
         Bsmrdel@urologix.com

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