Wednesday, July 26, 2006

BlueLine Partners Discloses 8% Stake in Urologix (ULGX)

In a 13D filing on Urologix Inc. (Nasdaq: ULGX), BlueLine Partners, LLC discloses a 8% (1.15 million share) stake in the company.

From the 'Purpose of the Transaction':

BlueLine invests in public companies believed to be undervalued relative to their potential. These are generally companies with an established brand and products, strong distribution channels and significant growth potential. BlueLine’s strategy is to invest in companies that have hit some obstacle in the execution of their business plan, causing other investors to pull back and await resolution. As part of its investment approach, BlueLine seeks to work with the companies in which it invests, their management, directors and major shareholders to address and overcome existing challenges and thereby create or restore value. Because BlueLine’s perspective and advice relate to operational issues and not arcane financial engineering, BlueLine’s participation is usually well received by other stakeholders.
In the case of the Company, the challenge is responding to competitive pressures and investor concerns that its products have or will be supplanted by others. BlueLine believes that much of this concern is misplaced and that recent market developments demonstrate and have even strengthened the Company’s competitive position.

The Company is currently introducing its new CoolWave(TM) control unit which allows doctors to control the amount of energy used for each treatment. Recent results, particularly those related to sales of disposables, indicate that the Company's products are the treatment of choice for larger glands. If the Company can use CoolWave to counter its competitors marketing around “greater comfort” for treatment of smaller gland sizes, the Company’s products could become dominant in both segments of the market.
In addition, the Company’s recent efforts around expanding its mobile services unit offerings have better positioned the Company to take advantage of the serious supply problems currently being faced by one of its direct competitors. BlueLine expects the Company’s disposable sales to increase materially over the next several quarters and that this will be supplemented by additional CoolWave control unit sales.

Depending on market conditions, general economic conditions and other factors, the Reporting Entities may purchase additional shares of Common Stock in the open market or in private transactions, or may dispose of all or a portion of the shares of Common Stock that they or any of them presently own or may hereafter acquire.


Post a Comment

<< Home