|
|
| Urologix Reports Third Quarter and Nine Month Results |
MINNEAPOLIS, May 5 /PRNewswire/ -- Urologix, Inc. (Nasdaq: ULGX), a developer and marketer of minimally invasive medical devices for the treatment of urological diseases, today announced third quarter sales in line with the expectations it reported on March 12, 1998. Sales for the fiscal 1998 third quarter ended March 31, 1998, were $2.5 million versus $1.8 million in the same quarter a year ago. For the fiscal 1998 third quarter, the company incurred a net loss of $3.5 million, or 32 cents per basic and diluted share, which included a one-time charge of approximately $700,000 for inventory write down, compared with a net loss of $1.9 million, or 20 cents per basic and diluted share, a year ago. The number of shares outstanding was higher in the fiscal 1998 period primarily as a result of the company's 1.725 million share offering in November 1997. Sales for the nine months were $8.3 million versus $3.7 million in the same period a year ago. Net loss for the nine months was $7.7 million, or 75 cents per basic and diluted share, on a higher number of shares outstanding, versus $5.3 million, or 57 cents per basic and diluted share, for the same period a year ago. "As we discussed in our earlier release, market development for the Targis(TM) System is taking longer than the company's original plan," said Jack Meyer, president and chief executive officer. "Gaining broad acceptance of a new treatment modality requires successfully overcoming a number of challenges. The complex process of changing physician practice patterns relating to the treatment of benign prostatic hyperplasia (BPH), confusion regarding reimbursement, and competitive activity have resulted in a longer- than-anticipated selling cycle and lower-than-expected utilization rates." "In an effort to overcome these challenges, we continue to aggressively and consistently execute our market development strategies, which include: * placing Targis Systems at prominent urological centers throughout the world to gain the support of key opinion leaders, and demonstrate the clinical and economic advantages of the Targis System; * conducting quality outcome training sessions for medical personnel that perform Targis System treatments in order to ensure that the superior clinical results and durability achieved by the Targis System in clinical studies are continued in commercial settings; * utilizing targeted public relations efforts to assist urologists in identifying BPH patients seeking treatment; and, * continuing to follow and report on clinical study patients to demonstrate the durability of the Targis System procedure." "Given the challenges inherent in introducing new technology to an established market, we are encouraged with the early success of our strategies and with the competitive position of the Targis System. At the end of March, there were approximately 42 Targis Systems installed worldwide. Clinical results continue to demonstrate strong evidence of patient satisfaction and long-term durability. Utilization rates at commercial sites in the U.S. reached approximately eight procedures per month, and there are signs that utilization can be positively affected by targeted public relations efforts." In the third quarter, the company took a charge to cost of goods sold of approximately $700,000 resulting from an electronic component in the Targis System catheter that demonstrated an occasional failure. Only a few of the Targis System treatments worldwide have experienced the problem and the failure of the component does not present a safety issue. However, the company decided to write down its existing catheter inventory and only ship new catheters. While some shipments were delayed, few treatments were affected and the shipments were resumed by the end of the quarter. In other developments, the trial for the company's previously discussed litigation with BSD Medical Corporation (BSD) took place in the third quarter. (See the company's press releases dated January 6, and 13, 1998, for background information concerning this lawsuit.) The court has not yet rendered its decision following the trial. The timing of the court's decision in this non-jury trial is difficult to predict. Urologix continues to believe that it did not breach the confidentiality provision of a 1994 settlement and license agreement as alleged by BSD; that the company has not caused any damage to BSD; and that BSD has no basis for attempting to terminate the BSD Settlement Agreement. Research and development expense for the third fiscal quarter of 1998 included approximately $350,000 related to the BSD litigation. Certain statements in this press release that relate to future performance of the company are "forward-looking" and are subject to risks and uncertainties inherent in the company's business. These risks and uncertainties include: competition from other BPH treatments; the ability of the company's distributors and representatives to successfully market and sell the Targis System; the company's ability to manufacture the Targis System in sufficient quantities; the company's ability to maintain intellectual property protection for its proprietary products and to defend its existing intellectual property rights from challenges by third parties; and the extent to which the physicians performing the Targis System procedures are able to obtain third-party reimbursement. In addition, a detailed discussion of risks and uncertainties may be found in the Risk Factors section of the company's Prospectus dated November 12, 1997. Urologix, Inc., based in Minneapolis, develops, manufactures and markets minimally invasive medical devices for the treatment of urological diseases. The company has developed the Targis System, a non-surgical, anesthesia-free, catheter-based therapy that uses a proprietary microwave technology for the treatment of benign prostatic hyperplasia (BPH), a disease that affects over 23 million men worldwide. The Targis System has been approved for marketing in the United States, the European Union, Japan and Canada. UROLOGIX, INC. CONDENSED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 1998 1997 1998 1997 Sales $2,508,515 $1,789,500 $8,311,495 $3,661,300 Cost of goods sold 2,601,553 1,524,123 6,479,980 3,400,144 Gross profit (loss) (93,038) 265,377 1,831,515 261,156 Costs and expenses: Research and development 1,913,307 1,245,730 4,731,713 3,564,086 Sales and marketing 1,671,194 730,601 4,525,025 1,757,419 General and administrative 567,320 576,895 1,699,326 1,600,053 Total costs and expenses 4,151,821 2,553,226 10,956,064 6,921,558 Operating loss (4,244,859) (2,287,849) (9,124,549) (6,660,402) Interest income, net 743,256 418,083 1,466,980 1,403,503 Net loss $(3,501,603) $(1,869,766) $(7,657,569) $(5,256,899) Basic and diluted net loss per common share $(0.32) $(0.20) $(0.75) $(0.57) Basic and diluted weighted average number of common shares outstanding 11,102,222 9,158,231 10,184,104 9,149,020 SELECTED BALANCE SHEET DATA March 31 June 30 1998 1997 Cash and marketable securities $46,736,443 $26,100,809 Current assets 54,032,894 30,160,769 Total assets 59,516,586 35,582,087 Current liabilities 2,927,430 3,147,319 Long-term obligations 22,761 37,725 Shareholders' equity 56,566,395 32,397,043SOURCE Urologix, Inc.
back to topRelated links:
CONTACT:
Jack Meyer, President & CEO, or Wes Johnson,
CFO, 612-475-1400, both of Urologix; or Leslie Hunziker, Mike
Arneth or Kathy Brunson, Analyst Inquiries, 312-266-7800, all of
The Financial Relations Board
NOTE TO EDITORS: To receive Urologix, Inc.'s latest news release
and other corporate documents, free of charge via fax, simply
dial 1-800-PRO-INFO. Use company ticker ULGX
