Lower Net Loss for Urologix - Analyst Blog

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Urologix ( ULGX ) reported net loss of $1.225 million or a loss of 8 cents per share in the fourth quarter of 2012, a nominal improvement from a net loss of $1.33 million or a loss of 9 cents per share in the year-ago quarter. Reported loss, however, lagged the Zacks Consensus Estimate of a loss of 6 cents per share. The reported quarter also included $205,000 of non-cash imputed interest expense on deferred acquisition payments.

For the full year 2012, net loss of 32 cents per share came as a disappointment compared with the previous year's loss of 26 cents per share and the Zacks Consensus Estimate of loss of 28 cents per share.

Revenues increased 54.2% year over year to $4.5 million during the quarter driven by incremental contribution from the Prostiva radio frequency ("RF") therapy product revenue. However, revenues dropped 5% on a sequential basis due to lower procedure kit sales volume in the company's direct channel. Revenues during 2012 increased 35.4% to $17 million.

Gross profit during the quarter was $2.3 million representing gross margin of 50.6%, up from the adjusted (after considering accounting adjustment) margin of 48.4% in the year-ago quarter. Margin during the reported quarter was adversely affected by 110 basis points from non-cash (accounting) items related to the purchase of the Prostiva RF therapy system. Moreover, operating expenses are on the rise as selling and marketing (up 61.5% year over year to $2.1 million) and general and administrative expenses (up 21.8% to $0.8 million) recorded significant increases, while research and development expenses dropped 1% to $0.57 million. We believe that higher expenses were primarily associated with the induction of the Prostiva RF therapy system to the company's portfolio.

Urologix exited the fiscal with cash and cash equivalents of $1.9 million, lower than $3.1 million at the end of the previous fiscal. The company expects to report revenues of $17.5−$19 million during fiscal 2013.

The Minneapolis based company develops, manufactures and markets non-surgical catheter-based therapies for the treatment of Benign Prostatic Hyperplasia ("BPH"), a disease that affects more than 23 million men worldwide. Under a license agreement signed in September 2011, Medtronic ( MDT ) and its subsidiary VidaMed granted Urologix an exclusive, worldwide license to the Prostiva RF therapy System for the treatment of BPH.

The stock carries a Zacks #3 Rank (Hold) in the short term.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MDT , ULGX

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