Urologix, Inc. (ULGX)
F4Q2012 Earnings Conference Call
August 23, 2012, 17:00 p.m. ET
Stryker Warren, Jr. - CEO
Brian Smrdel - CFO
Deepak Chaulagai - Dougherty & Company
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Good day ladies and gentlemen and welcome to the Urologix, Inc. Fiscal Year 2012 Fourth Quarter Conference Call. My name is Keith and I’ll be your coordinator for today. At this all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. As a reminder this conference is being recorded for replay purposes.
Certain information discussed during this conference call including answers to your questions 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 stated or implied in any forward-looking statements due to the risks and uncertainties. A detailed discussion of risks and uncertainties maybe found in Urologix’s recent Annual Report on Form 10-K for the year ended June 30, 2011 and other documents filed with the Securities and Exchange Commission. Urologix disclaims any obligations to update any forward-looking statements made during the course of this call.
At this time I’ll turn the call over to Mr. Stryker Warren, Jr., Chief Executive Officer. Please go ahead, sir.
Stryker Warren, Jr.
Thank you, Keith, and good afternoon to all of those joining us today to discuss the company’s results for the fourth quarter of our fiscal year 2012. Joining me are Brian Smrdel, the company’s Chief Financial Officer and Greg Fluet, the company’s Executive Vice President and Chief Operating Officer.
Today’s call will begin with a summary of our fourth quarter performance and a brief review of the fiscal year 2012, which was a transformational year for the company. Brian will then review the financial results for the fourth quarter and fiscal year 2012 in detail. Finally, I intend to share an update on the progress we are making on our growth strategy described some of the near-term challenges we will be focused on, review our near-term priorities and provide color surrounding our fiscal year 2013 guidance before opening up the call for questions.
Fiscal 2012 was a transformational year for the company. The acquisition of the Prostiva RF Therapy System from Medtronic at the end of quarter one not only broadened our product portfolio but also increased our account based urologist in the U.S., our sales and marketing infrastructure and our distribution footprint and importantly our addressable patient population.
The combination of the Prostiva RF Therapy System with Cooled ThermoTherapy made Urologix the clear leader for the in-office treatment of BPH with an extended population of men whom we can effectively treat.
We have two complementary in-office technologies which combined have approximately 60% market share and both products have demonstrated durable clinical effectiveness for the treatment of BPH providing the requisite clinical validation upon which the urologist relies. Following this acquisition we set upon an effort to leverage this impressive footprint in the in-office BPH treatment market and to drive revenue growth. Specifically, our strategic marketing initiatives including our patient education seminars our think Outside the Pillbox campaign were a priority and they have showed impressive results.
In addition to increase in BHP patient awareness of our non-surgical alternatives to drugs, many urologists have expressed amazement that the patient turnout which [opens arise] to the significant unmet need amongst their patients particularly the silently suffering BHP prescription drug patient. While we are encouraged with the progress we have made since the acquisition last September, we are disappointed that our financial performance is not yet reflected what we view is a compelling growth opportunity for us in our market.
While the fourth quarter was at the low end of our expectations on the revenue line, we were pleased with the continued strong performance of our seminars again this quarter as well as the interest we saw coming out of the AUA annual meeting this past spring.
I’ll now turn the call over to Brian to discuss our fourth quarter performance in detail, then I will share my thoughts on some of the challenges we have seen to-date, some external, some internal to better explain what has happened in our business over the last several quarters. I’ll then share with you the key action plans we have in place to improve our results and I’ll update you on our progress on strategic growth initiatives specifically our patient education seminars and how we plan on leveraging these market development initiatives to drive our fiscal 2013 revenue projections and then we will open up the call to your questions. Brian?
Thank you, Stryker. Before diving into a review of our financial results, I will provide some color on how we will talk about our financial and operating performance for the company going forward.
Historically, we have broken down our revenue performance into three buckets; Urologix direct, company-owned mobile and third-party mobile. In recent quarters, we have also disclosed revenue performance by product lines, specifically CTT and Prostiva. We will continue to describe our revenue performance in each of these categories to the first quarter of fiscal 2013, but thereafter, we will be presenting our quarterly performance in terms of how we plan, operate and evaluate the business every day, specifically we will discuss our revenue by the following channels; Urologix direct, company-owned mobile and international.
Starting with the smallest channel total company sales, international sales. The addition of Prostiva last September included international distribution operations in select countries from which we began recognizing revenue in the second quarter of fiscal year 2012. Despite representing only [4 to 5%] of our total company sales on an annualized basis, these distribution operations occur outside of primary market the U.S. and separate discussion of fundamental each quarter. Similarly, our third-party mobile operation also represents a small portion of total company sales, approximately 10% of fiscal year 2012 sales and while we are committed to our third-party mobile partners in many cases we do not have the amount of direct contact with the customer, the urologist practices, we would have in our Urologix direct channel.