Urologix, Inc. (
Q4 FY 2011 Earnings Call (Quarter Ended June 30, 2011)
August 23, 2011 5:00 p.m. ET
Stryker Warren, Jr. – CEO
Brian Smrdel – CFO
Ernie Andberg – Feltl & Co.
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Good day, ladies and gentlemen, and welcome to the Urologix Incorporated Fiscal Year 2011 and Fourth Quarter Conference Call. My name is Melanie and I'll be your coordinator for today.
At this time, all participants are in 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.
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 Provision 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 risks and uncertainties. A detailed discussion of risks and uncertainties may be found in Urologix's recent annual report on Form 10-K for the year ended June 30, 2010 and other documents filed with the Securities and Exchange Commission. Urologix disclaims any obligation to update any forward-looking statements made during the course of this call.
At this time, I would turn the call over to Mr. Stryker Warren, Jr., Chief Executive Officer. Please proceed, sir.
Stryker Warren, Jr.
Good afternoon. I welcome you to this earnings call to discuss the company's results for the fourth quarter and fiscal year 2011. With me are Brian Smrdel, the company's Chief Financial Officer, and Greg Fluet, the Executive Vice President and Chief Operating Officer of Urologix. We're pleased you've joined us.
Today's call will begin with Brian reviewing the financial results for the fourth quarter of fiscal year 2011. I will then provide an update on our market dynamics and on recently-released clinical evidence supporting in-office treatments for BPH. I will then review some of our key strategic initiatives, talk about our key investment in our sales and marketing leadership, and conclude with some final thoughts and a perspective on the broader Urologix story. We will then open the call for a question-and-answer session.
I will now turn the call over to Brian to review the financial results.
Thank you, Stryker.
Revenue for the fourth quarter of fiscal year 2011 was $2.9 million or 2% less than the $3 million reported in the third quarter of this fiscal year and 11% less than the $3.3 million reported in the same period of fiscal year 2010. The decrease in revenue compared to the third quarter is a result of the decrease in sales revenue performance in our third-party mobile channel. The year-over-year revenue decline results from an overall reduced order volume in all distribution channels: directs, mobile and third-party mobile.
To further break down the sources of Urologix's revenue on a sequential basis, revenue from catheter sales direct accounts contributed 40% of overall revenue in the fourth quarter of fiscal year 2011 compared to 36% in the previous quarter. Urologix's mobile service treatment revenue contributed 46% of overall revenue, and third-party mobile revenue contributed 12% of overall revenue in the fourth quarter of fiscal 2011 compared to 47% and 14%, respectively, for the third quarter of this year
Our net loss for the fiscal year 2011 fourth quarter was $1.3 million or $0.09 per diluted share compared to $983,000 net loss or $0.07 per diluted share in the third quarter of this fiscal year, and a net loss of $622,000 or $0.04 per diluted share in the fourth quarter of fiscal year 2010.
Cash and cash equivalents were $3.1 million at June 30, 2011 compared to $3.8 million at March 31, 2011 and $5.7 million at June 30, 2010. Cash utilization increased $231,000 from the prior quarter and $667,000 from the fourth quarter of fiscal year 2010. On a trailing 12-month sales basis, our days sales outstanding at the end of the fourth quarter was 38 days, similar to the end of the third quarter fiscal 2011, but up from 34 days at June 30th of 2010.
Gross profit for the fourth quarter of fiscal year 2011 was $1.3 million or 43% of revenue compared to $1.6 million or 54% of revenue for the prior quarter and $1.8 million or 54% of revenue when compared to the prior-year fourth quarter. The decrease in gross margin rate in the fourth quarter of fiscal year 2011 is the result of allocating fixed manufacturing costs over reduced sales volume, as well as the expensing of an additional $158,000 of capitalized manufacturing variance which had accumulated over fiscal year 2011.
Reported fourth quarter operating expense totaled $2.6 million, a decrease of $28,000 or 1% when compared to the third quarter of fiscal year 2011, and an increase of $117,000 or 5% when compared to the $2.5 million reported in the fourth quarter of fiscal year 2010. The decrease in operating when compared to the third quarter is the result of the $75,000 decrease in sales and marketing expense, partially offset by a $30,000 increase in research and development expense as the company continued its investment in product and clinical research efforts. The increase in operating expense when compared to the fourth quarter of the prior year is primarily the result of an additional $70,000 in research and development expense.