Urologix, Inc. (
F2Q2011 (Qtr End 12/31/10) Earnings Call
January 25, 2011 5:00 p.m. ET
Stryker Warren Jr. – CEO
Brian Smrdel – CFO
Greg Fluet - EVP & COO
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Good day, ladies and gentlemen, and welcome to the Urologix Incorporated Fiscal 2011 second quarter conference call. My name is Karis and I will be your coordinator for today.
At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of the conference. As a reminder, this conference is being recorded for replay purposes.
Statements made at this presentation may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in any forward-looking statements due to risk and uncertainties.
A detailed discussion of risks and uncertainties may be found in Urologix recent Annual Report on the Form 10-K for the year ended June 30, 2010 and other documents filed with the Securities and Exchange Commission.
At this time, I will turn the call over to Mr. Stryker Warren Jr., Chief Executive Officer. Please precede, sir.
Stryker Warren Jr.
Good afternoon. This is Stryker Warren and as Chief Executive Officer of Urologix, I welcome you to this earnings call to discuss the company’s results for the second quarter of Fiscal Year 2011.
Joining me are Brian Smrdel, the company’s Chief Financial Officer and Greg Fluet, the Executive Vice President and Chief Operating Officer of Urologix.
Before I share my perspective, I will ask Brian to review the financial results.
Thank you, Stryker.
Revenue for the second quarter was $3.3 million, 1% lower than the revenue reported in the first quarter of the 2011 fiscal year, and 18% less than the 4.1 million reported in the same period of Fiscal Year 2010.
The $31,000 decrease in revenue compared to the first quarter is primarily the result of smaller order volume from direct customers and fewer scheduled mobile cases from our current customers.
On a year-over-year comparison basis, the revenue decline is impacted by the temporary withdraw of a competitor’s product in the prior year.
To further break down the source of Urologix revenue on a sequential basis, revenue from catheter sales to direct accounts contributed 36% of overall revenue in the second quarter of Fiscal 2011 compared to 38% in the previous quarter.
Urologix Mobile Service Treatment revenue contributed 44% of overall revenue and third-party mobil revenue contributed 15% of overall revenue in the second quarter of Fiscal Year 2011 compared to 46% and 14% respectively for the first quarter of the fiscal year.
The net loss for the Fiscal Year 2011 second quarter was $712,000, or $0.05 per diluted share. This represents a 1% increase in net loss compared to the $708,000, or $0.05 per diluted share in the first quarter of 2011 fiscal year. And a $439,000 increase in our net loss compared to the net loss of $273,000, or $0.02 per diluted share in the second quarter of Fiscal Year 2010.
Cash and cash equivalence were $4.3 million at December 31, 2010 compared to $5.7 million at June 30, 2010 and $6 million at December 31, 2009.
Cash utilization decreased 588,000 from the prior quarter since historically cash utilization’s greatest in the first quarter due to a number of annual payments made during this period.
In the second quarter of the prior fiscal year, the company generated $22,000 in cash.
On a trailing 90-day sales basis, our day sales outstanding at the end of the second quarter, adjusted for a large non-customer receivable was 41 days, slightly higher than the 40 days reported at the end of the first quarter of Fiscal Year 2011 and 38 days reported at the end of Fiscal Year 2010.
As mentioned in today’s press release, based on our Fiscal Year 2011 projections, management believes that the $4.3 million cash balance at December 31
2010 will be sufficient to fund our working capital needs beyond the next 12 months.
Gross profit for the first quarter of Fiscal Year 2011 was 1.8 million, or 56% of revenue, an increase of 1 percentage point when compared to gross profit rate in the prior quarter.
Gross profit as a percentage of revenue was down 1 percentage point when compared to the prior year second quarter. The 1 percentage point decrease in the gross profit rate compared to the second quarter of the prior fiscal year is a result of fixed costs being allocated over fewer units built due to decreased production targets that reflect the lower demand in the second quarter of Fiscal Year 2011.
Reported first quarter operating expense totaled $2.6 million, an increase of $37,000 or 2% when compared to the first quarter of Fiscal Year 2011 and a decrease of $42,000 or 2% when compared to the second quarter of Fiscal Year 2010.
The increase in operating expense when compared to the first quarter of the 2011 fiscal year is the result of an increase in sales and marketing expense due to training and travel costs for new members of our sales team.
The decrease in operating expense when compared to the second quarter of the prior fiscal year is primarily the result of lower commission payments due to the reduced sales level. This was partially offset by the company’s investment in additional R&D resources, increasing this expense by 33% over the same period in the prior fiscal year.