Urologix announces fiscal 2009 fourth-quarter and full-year financial results

Urologix®, Inc. (NASDAQ:ULGX), a medical device company focused on developing, manufacturing and marketing Cooled ThermoTherapy™ systems, a durable and effective catheter based in-office alternative to drugs or surgery for patients suffering from benign prostatic hyperplasia (BPH), today reported financial results for the fourth quarter ended June 30, 2009 and for fiscal year 2009.

2009 Fourth Quarter Financial Results

Revenue for the fourth quarter was $3.4 million, or 4 percent more than the $3.3 million reported in the third quarter of this fiscal year; however, it was 6 percent less than the $3.7 million reported in the same period of fiscal 2008.

Net loss for the fourth quarter was $876,000, or a loss of $0.06 per diluted share. This compares to a net loss of $1.2 million or $0.08 per diluted share in the third quarter of fiscal 2009, and a loss of $2.2 million or $0.16 per diluted share for the fourth quarter of fiscal 2008.

Cash utilization for the quarter ended June 30, 2009 was $603,000, a 33 percent reduction from the cash utilization of the prior fiscal quarter and an 11 percent reduction from the cash utilization in the fourth quarter of fiscal 2008. The Company’s cash balance was $7.0 million as of June 30, 2009, which management considers sufficient to fund working capital and capital resource needs beyond fiscal year 2010.

"We believe the fourth quarter results continue to demonstrate the early returns from a stable and maturing sales force, improved operational efficiencies and management of departmental expenses. In the fourth quarter of fiscal year 2009, we left the American Urological Association (AUA) 2009 Annual Meeting having introduced the complete CTC Advance® catheter family, robust five year data dramatizing durable clinical outcomes, and the first data supporting the ability to customize our high energy, Cooled ThermoTherapy treatment for patient comfort without sacrificing clinical outcomes at the one year post-treatment milestone. The top priority at Urologix is to fuel this initial momentum by continuing to focus on the advantages provided to the urologist and BPH patient by Urologix’ technology in producing durable clinical outcomes as well as improved comfort and ease-of-use through the CTC Advance® catheter and customized therapy. Our sales force is delivering this message to our customers and prospects while tasked with providing unmatched customer service. We believe these initiatives will drive continued improvement in our financial results," stated Stryker Warren, Jr., CEO.

In the fourth quarter of fiscal year 2009, revenue from catheter sales to direct accounts contributed 36 percent of overall revenue as compared to 35 percent in the third fiscal quarter. Revenue derived from the Urologix mobile service represented 48 percent of overall revenue in the fourth quarter of fiscal 2009, consistent with the third quarter of fiscal 2009. Third party mobile revenue represented approximately 14 percent of overall revenue in the fourth quarter of fiscal 2009, also consistent with 14 percent of revenue in the prior quarter. The Urologix mobile treatment volume grew sequentially in the second, third and fourth quarters of the 2009 fiscal year. In the fourth quarter the Company achieved sequential growth across the business in all distribution channels: direct, Urologix mobile services, and third-party mobile services.

Gross profit for the fourth quarter of fiscal 2009 was $1.8 million, or 52 percent of revenue, compared to $1.7 million or 50 percent of revenue in the third quarter of fiscal 2009, and $2.0 million or 55 percent of revenue for the fourth quarter of fiscal 2008. The increase in gross margin over the third quarter of fiscal 2009 is partially due to a decrease in unabsorbed manufacturing expenses as a result of increased production, as well as a decrease in manufacturing costs. The increase in production was in response to an increase in the number of shipments and did not increase inventory levels. The 3 percent decrease in gross margin from the fourth quarter of the prior fiscal year is due to current year higher manufacturing expense per unit as a result of lower production volume, as well as an increase in the Urologix mobile service as a percentage of revenue.

Operating expenses decreased $137,000, or 5 percent, when compared to the third quarter of fiscal 2009 through the management of expenses and timing of certain items. Urologix invested in its sales force throughout the year both in building the direct and mobile channels and increasing the support structure for the team. This was achieved while simultaneously reducing overall operating expenses. Operating expenses decreased $1.6M, or 37 percent when compared with the fourth quarter of fiscal 2008 primarily due to a reduction of departmental expenses, as well as the $755,000 sales tax reserve which was recorded in the fourth quarter of fiscal 2008.

2009 Full-Year Financial Results

Revenue for the fiscal year ended June 30, 2009 was $12.8 million, a 14 percent decrease when compared to revenue of $14.9 million reported for fiscal year 2008. The net loss for the fiscal year ended June 30, 2009 was $4.4 million, or a loss of $0.31 per diluted share, compared to a net loss of $14.9 million, or a loss of $1.04 per diluted share for the fiscal year ended June 30, 2008. The net loss for the fiscal year ended June 30, 2008 includes a net non-cash impairment charge of $8.6 million, or $0.60 per share, which resulted from the $10.2 million write-off of goodwill net of the reversal of the related deferred tax liability of $1.6 million taken in the quarter ended December 31, 2007.

“Urologix entered fiscal year 2009 having begun a significant cultural change that continued throughout the fiscal year against a challenging economic backdrop. The Company’s workforce continues to embrace a focus on patient outcomes, patient comfort, customer service, and teamwork. We exit the year with an improving business, stable distribution channels, a technology platform supported by striking new clinical data, a newly completed product family, and a particular focus on achieving positive cash flow,” said Mr. Warren.

http://www.urologix.com