Urologix Reports Fiscal Year 2014 Second Quarter Results

Urologix Reports Fiscal Year 2014 Second Quarter Results

Second Quarter Revenue Totaled $3.8 Million

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 Six Months Ended
                                        December 31,      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                      (85)      (215)    (93)     (369)
acquisitionconsideration
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       21,245    20,835   21,132    20,507
shares outstanding---basic
                                                                 
Weighted average number of common       21,245    20,835   21,132    20,507
shares outstanding---diluted

                                                                
Urologix, Inc.
Balance Sheets
(Unaudited, in thousands)
                                                                
                                                    December 31, June 30,
                                                     2013         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        $ 22      $ 56
equipment
                                                                   

CONTACT: Urologix Investor Relations Contact
         Brian Smrdel
         (763) 475-7696
         Bsmrdel@urologix.com

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