SUNNYVALE, Calif., Aug. 15, 2019 /PRNewswire/ -- Accuray
Incorporated (NASDAQ: ARAY) today reported financial results for
the fourth quarter and fiscal year ended June 30, 2019.
Q4 Fiscal 2019 and Recent Operating Highlights
- Revenue increased 3 percent to $117.4
million, the highest ever quarterly revenue reported; Gross
orders increased to $97.2
million
- $3.3 million of operating profit,
which grew 5 percent
- Signed first multi-system order bundling Accuray and RaySearch
Laboratories product and software offerings
- Signed first upgrade order for Synchrony motion tracking and
correction technology for Radixact
Fiscal Year 2019 Highlights
- Gross orders increased 12 percent year-over-year to
$342.3 million
- Revenue increased 3 percent over the prior fiscal year to
$418.8 million
- Recorded first full year of operating profit since 2011
"From all perspectives, fiscal 2019 was a very successful year,"
said Joshua H. Levine, president and
chief executive officer. "We generated 12 percent gross order
growth for the year while our efforts to increase efficiencies led
to the Company's first operating profit since 2011. Additionally,
we set a new quarterly revenue record during the fourth quarter.
From a strategic growth perspective, we advanced our opportunities
in China which is the world's
fastest growing radiotherapy market. It should be noted that our
progress during fiscal 2019 came without significant revenue
contribution from the China market
as the process for awarding and issuing Class A and B user licenses
for radiotherapy systems is still in an early phase."
Q4 Fiscal 2019 Financial Highlights
Gross product orders totaled $97.2
million for the fourth quarter of fiscal 2019 compared to
$96.4 million for the prior fiscal
year fourth quarter. Ending order backlog was $495.6 million, approximately 4 percent higher
than at the end of the prior fiscal year.
Total revenue was $117.4 million,
an increase of 3 percent compared to $113.8
million in the prior fiscal year fourth quarter. Product
revenue totaled $60.6 million
compared to $54.6 million in the
prior fiscal year fourth quarter, while service revenue totaled
$56.8 million compared to
$59.2 million in the prior fiscal
year fourth quarter.
Total gross profit for the fourth quarter of fiscal 2019 was
$45.9 million or approximately 39.1
percent of sales, comprised of product gross margin of 40.7 percent
and service gross margin of 37.4 percent. This compares to total
gross profit of $48.0 million or 42.2
percent of sales, comprised of product gross margin of 47.4 percent
and service gross margin of 37.4 percent for the prior fiscal year
fourth quarter.
Net loss was $1.4 million, or
$0.02 per share, for the fourth
quarter of fiscal 2019, compared to a net loss of $0.9 million, or $0.01 per share, for the fourth quarter of fiscal
2018.
Adjusted EBITDA for the fourth quarter of fiscal 2019 was
$8.9 million, compared to
$7.8 million in the prior fiscal year
fourth quarter.
Cash, cash equivalents, investments and short-term restricted
cash were $87.0 million as of
June 30, 2019, an increase of
$22.4 million from March 31, 2019.
Fiscal Year 2019 Highlights
For the fiscal year ended June 30,
2019, gross product orders totaled $342.3 million, representing growth of 12 percent
compared to the prior fiscal year period.
Total revenue was $418.8 million
compared to $404.9 million in the
prior fiscal year period. Product revenue totaled $196.7 million compared to $183.9 million in the prior fiscal year period,
while service revenue totaled $222.1
million compared to $221.0
million from the prior fiscal year period.
Total gross profit for the year ended June 30, 2019 was $162.7
million or 38.8 percent of sales, comprised of product gross
margin of 40.7 percent and service gross margin of 37.2 percent.
This compares to total gross profit of $161.7 million or 39.9 percent of sales,
comprised of product gross margin of 44.0 percent and service gross
margin of 36.6 percent for the same prior fiscal year period.
Operating expenses were $162.1
million, a decrease of 2 percent compared to $165.5 million in the prior fiscal year
period.
Net loss was $16.4 million, or
$0.19 per share, for the fiscal year
ended June 30, 2019, compared to a
net loss of $23.9 million, or
$0.28 per share, for the prior fiscal
year period.
Adjusted EBITDA for the fiscal year ended June 30, 2019 was $23.7
million, compared to $17.1
million in the prior fiscal year period.
2020 Financial Guidance
The Company is introducing guidance for fiscal year 2020 as
follows:
- Total revenue is expected to range between $410.0 million to $420.0
million due to the expected delay in timing of Class A
system revenue with total revenue during the first half of the year
expected to be slightly below fiscal 2019 levels. The total revenue
range includes the impact of 25% Chinese tariffs currently in
place
- Adjusted EBITDA is expected to range between $19.0 million to $24.0
million, including a loss of approximately $2 million from our China joint venture equity interest
Guidance for non-GAAP financial measures excludes depreciation
and amortization, stock-based compensation expense, interest
expense, net and provision for income taxes. For more
information regarding the non-GAAP financial measures discussed in
this press release, please see "Use of Non-GAAP Financial Measures"
below.
Conference Call Information
Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m.
ET today to discuss results for the fourth quarter and
fiscal 2019 as well as recent corporate developments. Conference
call dial-in information is as follows:
- U.S. callers: (855) 867-4103
- International callers: (262) 912-4764
- Conference ID Number (U.S. and international): 3297842
Individuals interested in listening to the live conference call
via the Internet may do so by logging on to Accuray's website,
www.accuray.com. In addition, a taped replay of the conference
call will be available beginning approximately two hours after the
call's conclusion and available for seven days. The replay
telephone number is (855) 859-2056 (USA) or (404) 537-3406 (International),
Conference ID: 3297842. An archived webcast will also be available
at Accuray's website until Accuray announces its results for the
first quarter of fiscal 2020.
Use of Non-GAAP Financial Measures
Accuray has supplemented its GAAP net loss with a non-GAAP
measure of adjusted earnings before interest, taxes, depreciation,
amortization and stock-based compensation ("adjusted
EBITDA"). Management believes that this non-GAAP financial
measure provides useful supplemental information to management and
investors regarding the performance of the company and facilitates
a meaningful comparison of results for current periods with
previous operating results. A reconciliation of GAAP net loss
(the most directly comparable GAAP measure) to non-GAAP adjusted
EBITDA is provided in the schedule below.
There are limitations in using these non-GAAP financial measures
because they are not prepared in accordance with GAAP and may be
different from non-GAAP financial measures used by other
companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for GAAP financial
measures. Investors and potential investors should consider
non-GAAP financial measures only in conjunction with the company's
consolidated financial statements prepared in accordance with
GAAP.
About Accuray
Accuray Incorporated (Nasdaq: ARAY) develops, manufactures and
sells radiotherapy systems that are intended to make cancer
treatments shorter, safer, personalized and more effective,
ultimately enabling patients to live longer, better lives. Our
radiation treatment delivery systems in combination with
fully-integrated software solutions set the industry standard for
precision and cover the full range of radiation therapy and
radiosurgery procedures. For more information, please visit
www.accuray.com.
Safe Harbor Statement
Statements made in this press release that are not statements of
historical fact are forward-looking statements and are subject to
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements in this press
release relate, but are not limited, to the company's future
results of operations, including management's expectations
regarding revenue and adjusted EBITDA; expectations regarding
future sales in China and the
impact of tariffs in China;
expectations regarding our Chinese joint venture; expectations
regarding the company's product portfolio; and the company's
leadership position in radiation oncology innovation and
technologies. These forward-looking statements involve risks
and uncertainties. If any of these risk or uncertainties
materialize, or if any of the company's assumptions prove
incorrect, actual results could differ materially from the results
express or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, the
company's ability to achieve widespread market acceptance of its
products, including new product and software offerings; the
company's ability to develop new products or enhance existing
products to meet customers' needs and compete favorably in the
market, the company's ability to effectively integrate and execute
the joint venture, the company's ability to realize the expected
benefits of the joint venture; the ability of customers in
China to obtain Class or B user
licenses to purchase radiotherapy systems; risks inherent in
international operations, the company's ability to effectively
manage its growth, the company's ability to maintain or increase
its gross margins on product sales and services; delays in
regulatory approvals or the development or release of new
offerings; the company's ability to meet the covenants under its
credit facilities; the company's ability to convert backlog to
revenue; and such other risks identified under the heading "Risk
Factors" in the company's Quarterly Report on Form 10-Q, filed with
the Securities and Exchange Commission (the "SEC") on May 9, 2019 and as updated periodically with the
company's other filings with the SEC.
Forward-looking statements speak only as of the date the
statements are made and are based on information available to the
company at the time those statements are made and/or management's
good faith belief as of that time with respect to future
events. The company assumes no obligation to update
forward-looking statements to reflect actual performance or
results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent
required by applicable securities laws. Accordingly, investors
should not put undue reliance on any forward-looking
statements.
Michael
Polyviou
|
Beth
Kaplan
|
Investor Relations,
EVC Group
|
Public Relations
Director, Accuray
|
+1 (732)
933-2755
|
+1 (408)
789-4426
|
mpolyviou@evcgroup.com
|
bkaplan@accuray.com
|
Financial Tables to Follow
Accuray
Incorporated
|
Consolidated
Statements of Operations
|
(in thousands, except
per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Gross
Orders
|
|
$
|
97,166
|
|
|
$
|
96,442
|
|
|
$
|
342,321
|
|
|
$
|
304,903
|
Net Orders
|
|
|
64,364
|
|
|
|
64,967
|
|
|
|
218,263
|
|
|
|
209,534
|
Order
Backlog
|
|
|
495,627
|
|
|
|
478,482
|
|
|
|
495,627
|
|
|
|
478,482
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
60,646
|
|
|
$
|
54,632
|
|
|
$
|
196,665
|
|
|
$
|
183,898
|
Services
|
|
|
56,771
|
|
|
|
59,154
|
|
|
|
222,120
|
|
|
|
220,999
|
Total net
revenue
|
|
|
117,417
|
|
|
|
113,786
|
|
|
|
418,785
|
|
|
|
404,897
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
35,956
|
|
|
|
28,747
|
|
|
|
116,711
|
|
|
|
103,038
|
Cost of
services
|
|
|
35,535
|
|
|
|
37,054
|
|
|
|
139,423
|
|
|
|
140,164
|
Total cost of
revenue
|
|
|
71,491
|
|
|
|
65,801
|
|
|
|
256,134
|
|
|
|
243,202
|
Gross
profit
|
|
|
45,926
|
|
|
|
47,985
|
|
|
|
162,651
|
|
|
|
161,695
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
16,051
|
|
|
|
14,588
|
|
|
|
56,493
|
|
|
|
57,251
|
Selling and
marketing
|
|
|
14,920
|
|
|
|
16,864
|
|
|
|
55,998
|
|
|
|
60,105
|
General and
administrative
|
|
|
11,697
|
|
|
|
13,440
|
|
|
|
49,577
|
|
|
|
48,136
|
Total operating
expenses
|
|
|
42,668
|
|
|
|
44,892
|
|
|
|
162,068
|
|
|
|
165,492
|
Income (loss) from
operations
|
|
|
3,258
|
|
|
|
3,093
|
|
|
|
583
|
|
|
|
(3,797)
|
Other expense,
net
|
|
|
(3,794)
|
|
|
|
(4,450)
|
|
|
|
(14,927)
|
|
|
|
(19,224)
|
Loss before provision
for income taxes
|
|
|
(536)
|
|
|
|
(1,357)
|
|
|
|
(14,344)
|
|
|
|
(23,021)
|
Provision for (benefit
from) income taxes
|
|
|
864
|
|
|
|
(411)
|
|
|
|
2,086
|
|
|
|
878
|
Net loss
|
|
$
|
(1,400)
|
|
|
$
|
(946)
|
|
|
$
|
(16,430)
|
|
|
$
|
(23,899)
|
Net loss per share -
basic and diluted
|
|
$
|
(0.02)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.28)
|
Weighted average
common shares used in computing
loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
88,202
|
|
|
|
85,677
|
|
|
|
87,465
|
|
|
|
84,893
|
Accuray
Incorporated
|
Consolidated
Balance Sheets
|
(in
thousands)
|
(Unaudited)
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
2019
|
|
|
2018
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
76,798
|
|
|
$
|
83,083
|
Restricted
cash
|
|
|
10,218
|
|
|
|
9,830
|
Accounts receivable,
net
|
|
|
111,885
|
|
|
|
65,994
|
Inventories
|
|
|
120,823
|
|
|
|
108,540
|
Prepaid expenses and
other current assets
|
|
|
24,205
|
|
|
|
15,569
|
Deferred cost of
revenue
|
|
|
146
|
|
|
|
1,141
|
Total current
assets
|
|
|
344,075
|
|
|
|
284,157
|
Property and
equipment, net
|
|
|
17,122
|
|
|
|
23,698
|
Goodwill
|
|
|
57,770
|
|
|
|
57,855
|
Intangible assets,
net
|
|
|
679
|
|
|
|
821
|
Other
assets
|
|
|
18,535
|
|
|
|
12,196
|
Total
assets
|
|
$
|
438,181
|
|
|
$
|
378,727
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
29,562
|
|
|
$
|
19,694
|
Accrued
compensation
|
|
|
31,150
|
|
|
|
28,992
|
Other accrued
liabilities
|
|
|
32,742
|
|
|
|
22,448
|
Customer
advances
|
|
|
20,395
|
|
|
|
22,896
|
Deferred
revenue
|
|
|
78,332
|
|
|
|
75,404
|
Total current
liabilities
|
|
|
192,181
|
|
|
|
169,434
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term other
liabilities
|
|
|
9,646
|
|
|
|
8,608
|
Deferred
revenue
|
|
|
26,639
|
|
|
|
20,976
|
Long-term
debt
|
|
|
159,844
|
|
|
|
131,077
|
Total
liabilities
|
|
|
388,310
|
|
|
|
330,095
|
Equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
89
|
|
|
|
86
|
Additional paid-in
capital
|
|
|
535,332
|
|
|
|
521,738
|
Accumulated other
comprehensive income (loss)
|
|
|
(10)
|
|
|
|
1,093
|
Accumulated
deficit
|
|
|
(485,540)
|
|
|
|
(474,285)
|
Total
equity
|
|
|
49,871
|
|
|
|
48,632
|
Total liabilities and
equity
|
|
$
|
438,181
|
|
|
$
|
378,727
|
Accuray
Incorporated
|
Reconciliation of
GAAP Net Loss to Adjusted Earnings Before Interest, Taxes,
Depreciation,
|
Amortization and
Stock-Based Compensation (Adjusted EBITDA)
|
(in
thousands)
|
(Unaudited)
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Twelve Months
Ended
June
30,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
GAAP net
loss
|
|
$
|
(1,400)
|
|
|
$
|
(946)
|
|
|
$
|
(16,430)
|
|
|
$
|
(23,899)
|
Amortization of
intangibles
|
|
|
36
|
|
|
|
36
|
|
|
|
144
|
|
|
|
143
|
Depreciation
(a)
|
|
|
2,142
|
|
|
|
2,309
|
|
|
|
8,122
|
|
|
|
9,589
|
Stock-based
compensation
|
|
|
2,822
|
|
|
|
3,215
|
|
|
|
10,601
|
|
|
|
12,289
|
Interest expense, net
(b)
|
|
|
3,973
|
|
|
|
3,627
|
|
|
|
15,015
|
|
|
|
18,087
|
Impairment charge
(c)
|
|
|
-
|
|
|
|
-
|
|
|
|
3,707
|
|
|
|
-
|
Cost savings
initiative (d)
|
|
|
511
|
|
|
|
-
|
|
|
|
1,509
|
|
|
|
-
|
Gain on lease
termination (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,007)
|
|
|
|
-
|
Provision for (benefit
from) income taxes
|
|
|
864
|
|
|
|
(411)
|
|
|
|
2,086
|
|
|
|
878
|
Adjusted
EBITDA
|
|
$
|
8,948
|
|
|
$
|
7,830
|
|
|
$
|
23,747
|
|
|
$
|
17,087
|
|
|
|
|
(a)
|
consists of
depreciation, primarily on property and equipment.
|
(b)
|
consists primarily of
interest expense associated with our outstanding debt and non-cash
loss on extinguishment of debt.
|
(c)
|
consists of a
one-time accounts receivable impairment charge related to one
customer in the first quarter of 2019.
|
(d)
|
consists of costs
associated with a staff reduction.
|
(e)
|
consists of a
non-cash reversal of deferred rent related to a facility lease that
was terminated.
|
Accuray
Incorporated
|
Forward-Looking
Guidance
|
Reconciliation of
Projected Net Loss to Projected Adjusted Earnings Before Interest,
Taxes, Depreciation, Amortization and Stock-Based Compensation
(Adjusted EBITDA)
|
(in
thousands)
|
(Unaudited)
|
|
|
|
Twelve Months
Ending
June 30,
2020
|
|
|
From
|
|
|
To
|
GAAP net
loss
|
|
$
|
(17,500)
|
|
|
$
|
(13,500)
|
Depreciation and
amortization (a)
|
|
|
7,200
|
|
|
|
8,000
|
Stock-based
compensation
|
|
|
12,100
|
|
|
|
12,100
|
Interest expense, net
(b)
|
|
|
15,400
|
|
|
|
15,400
|
Provision for income
taxes
|
|
|
1,800
|
|
|
|
2,000
|
Adjusted
EBITDA
|
|
$
|
19,000
|
|
|
$
|
24,000
|
|
|
|
|
(a)
|
consists of
depreciation, primarily on property and equipment as well as
amortization of intangibles.
|
(b)
|
consists primarily of
interest expense associated with outstanding debt.
|
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SOURCE Accuray Incorporated