SUNNYVALE, Calif., Oct. 29, 2019 /PRNewswire/ -- Accuray
Incorporated (NASDAQ: ARAY) today reported its financial results
for the first quarter of fiscal 2020 ended September 30, 2019.
Recent Company Highlights
- Gross orders increased 28 percent year over year to
$78.5 million
- 11 orders received from China,
including 2 orders sourced from the China joint venture
- Accuray systems named in 50 out of 58 Class A licenses awarded
by the China Ministry of Health
"Our first quarter performance represented a solid start to our
fiscal year with double digit gross order growth," said
Joshua H. Levine, president and
chief executive officer. "We are also very excited about Accuray
systems named in 50 out of 58 Class A licenses recently awarded by
the China National Health Commission which were announced on
October 9, 2019. We need to remember
that the process identified by the Ministry of Health requires a
tender process following the license awards for all participating
end user hospitals prior to being able to take receipt of a Type A
device. This tender process has been put in place to define the
transactional terms and conditions related to each hospital's
equipment order and is not a competitive bidding situation that
would result in changes in the specific device that the hospital
has received the Type A license for. We expect that based on the
timelines required for this tendering process, we would not begin
to see revenue impact related to the China Type A awards until
sometime in our fiscal 4th quarter, and we remain
excited about the China market
opportunity as a significant growth catalyst for our business."
Fiscal First Quarter Results
Gross orders totaled $78.5
million, an increase of 28 percent compared to $61.4 million for the prior year period. Backlog
as of September 30, 2019 was
$495.0 million, an increase of 7
percent compared to $461.9 million
for the prior year period.
Total revenue was $89.6 million
compared to $95.8 million for the
prior year period. Product revenue totaled $37.6 million compared to $41.5 million, while service revenue totaled
$52.0 million compared to
$54.3 million.
Total gross profit for the fiscal 2020 first quarter was
$32.9 million, or 36.8 percent of
sales, comprised of product gross margin of 42.6 percent and
service gross margin of 32.5 percent. This compares to total gross
profit of $37.9 million, or 39.5
percent of sales, comprised of product gross margin of 40.9 percent
and service gross margin of 38.5 percent for the prior fiscal year
first quarter.
Operating expenses were $37.2
million, a decrease of 13 percent compared to $42.6 million in the prior fiscal year first
quarter.
Net loss was $9.4 million, or
$0.11 per share, compared to a net
loss of $9.2 million, or $0.11 per share, for the prior fiscal year
period.
Adjusted EBITDA for the first quarter of fiscal 2020 was a loss
of $1.0 million, compared to
$4.0 million in the prior fiscal
period.
Cash, cash equivalents and short-term restricted cash were
$86.7 million as of September 30, 2019 compared with $87.0 million as of June
30, 2019.
2020 Financial Guidance
The Company is reiterating its revenue and adjusted EBITDA
guidance provided on August 15, 2019.
Total revenue for fiscal year 2020 is expected to range between
$410.0 and $420.0 million with revenue during the first half
of the fiscal year expected to be approximately five to six percent
below the first half of the prior fiscal year. The Company expects
to generate revenue growth during the second half of fiscal year
2020 compared to the second half of the prior fiscal year. Adjusted
EBITDA for fiscal year 2020 is expected to range between
$19.0 to $24.0
million and include approximately $2.0 million of the Company's share of expected
loss from the joint venture operations in China.
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 first fiscal quarter 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): 4191278
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: 4191278. An archived webcast will also be available
at Accuray's website until Accuray announces its results for the
second 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 our
competitive position related to Class A licenses; expectations
related to revenue growth; expectations related to our market
opportunity in China and its
ability to grow our business; 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
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 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; risks and uncertainties
related to future China Class A and B license announcement; and
such other risks identified under the heading "Risk Factors" in the
company's Annual Report on Form 10-K, filed with the Securities and
Exchange Commission (the "SEC") on August
23, 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.
Financial Tables to Follow
Accuray
Incorporated
|
|
Consolidated
Statements of Operations
|
|
(in thousands, except
per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
Gross
Orders
|
|
$
|
78,487
|
|
|
$
|
61,414
|
|
Net Orders
|
|
|
38,981
|
|
|
|
24,911
|
|
Order
Backlog
|
|
|
495,029
|
|
|
|
461,876
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
37,605
|
|
|
$
|
41,517
|
|
Services
|
|
|
51,972
|
|
|
|
54,312
|
|
Total net
revenue
|
|
|
89,577
|
|
|
|
95,829
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
21,570
|
|
|
|
24,524
|
|
Cost of
services
|
|
|
35,064
|
|
|
|
33,426
|
|
Total cost of
revenue
|
|
|
56,634
|
|
|
|
57,950
|
|
Gross
profit
|
|
|
32,943
|
|
|
|
37,879
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
13,341
|
|
|
|
13,889
|
|
Selling and
marketing
|
|
|
13,266
|
|
|
|
13,036
|
|
General and
administrative
|
|
|
10,616
|
|
|
|
15,642
|
|
Total operating
expenses
|
|
|
37,223
|
|
|
|
42,567
|
|
Loss from
operations
|
|
|
(4,280)
|
|
|
|
(4,688)
|
|
Other expense,
net
|
|
|
(4,439)
|
|
|
|
(3,983)
|
|
Loss before provision
for income taxes
|
|
|
(8,719)
|
|
|
|
(8,671)
|
|
Provision for income
taxes
|
|
|
637
|
|
|
|
535
|
|
Net loss
|
|
$
|
(9,356)
|
|
|
$
|
(9,206)
|
|
Net loss per share -
basic and diluted
|
|
$
|
(0.11)
|
|
|
$
|
(0.11)
|
|
Weighted average
common shares used in
computing loss per share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
88,772
|
|
|
|
86,479
|
|
Accuray
Incorporated
|
|
Consolidated
Balance Sheets
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
|
2019
|
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
80,911
|
|
|
$
|
76,798
|
|
Restricted
cash
|
|
|
5,751
|
|
|
|
10,218
|
|
Accounts receivable,
net
|
|
|
104,684
|
|
|
|
111,885
|
|
Inventories
|
|
|
129,233
|
|
|
|
120,823
|
|
Prepaid expenses and
other current assets
|
|
|
20,500
|
|
|
|
24,205
|
|
Deferred cost of
revenue
|
|
|
148
|
|
|
|
146
|
|
Total current
assets
|
|
|
341,227
|
|
|
|
344,075
|
|
Property and
equipment, net
|
|
|
16,682
|
|
|
|
17,122
|
|
Goodwill
|
|
|
57,657
|
|
|
|
57,770
|
|
Intangible assets,
net
|
|
|
643
|
|
|
|
679
|
|
Operating lease
right-of-use assets
|
|
|
28,864
|
|
|
|
-
|
|
Other
assets
|
|
|
18,674
|
|
|
|
18,535
|
|
Total
assets
|
|
$
|
463,747
|
|
|
$
|
438,181
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
23,621
|
|
|
$
|
29,562
|
|
Accrued
compensation
|
|
|
21,578
|
|
|
|
31,150
|
|
Operating lease
liabilities, current
|
|
|
7,092
|
|
|
|
-
|
|
Other accrued
liabilities
|
|
|
25,847
|
|
|
|
32,742
|
|
Customer
advances
|
|
|
18,413
|
|
|
|
20,395
|
|
Deferred
revenue
|
|
|
79,596
|
|
|
|
78,332
|
|
Total current
liabilities
|
|
|
176,147
|
|
|
|
192,181
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
Long-term other
liabilities
|
|
|
6,344
|
|
|
|
9,646
|
|
Deferred
revenue
|
|
|
26,273
|
|
|
|
26,639
|
|
Operating lease
liabilities, non-current
|
|
|
25,549
|
|
|
|
-
|
|
Long-term
debt
|
|
|
188,460
|
|
|
|
159,844
|
|
Total
liabilities
|
|
|
422,773
|
|
|
|
388,310
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
89
|
|
|
|
89
|
|
Additional paid-in
capital
|
|
|
536,809
|
|
|
|
535,332
|
|
Accumulated other
comprehensive loss
|
|
|
(1,028)
|
|
|
|
(10)
|
|
Accumulated
deficit
|
|
|
(494,896)
|
|
|
|
(485,540)
|
|
Total
equity
|
|
|
40,974
|
|
|
|
49,871
|
|
Total liabilities and
equity
|
|
$
|
463,747
|
|
|
$
|
438,181
|
|
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
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
GAAP net
loss
|
|
$
|
(9,356)
|
|
|
$
|
(9,206)
|
|
Depreciation and
amortization (a)
|
|
|
1,851
|
|
|
|
2,129
|
|
Stock-based
compensation
|
|
|
1,700
|
|
|
|
3,212
|
|
Interest expense, net
(b)
|
|
|
4,200
|
|
|
|
3,592
|
|
Impairment charge
(c)
|
|
|
-
|
|
|
|
3,707
|
|
Provision for income
taxes
|
|
|
637
|
|
|
|
535
|
|
Adjusted
EBITDA
|
|
$
|
(968)
|
|
|
$
|
3,969
|
|
|
(a) consists of
depreciation, primarily on property and equipment as well as
amortization of intangible assets.
|
(b) consists
primarily of interest expense associated with our outstanding
debt.
|
(c) consists of
a one-time accounts receivable impairment charge related to one
customer.
|
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 intangible assets.
|
(b) consists of
interest expense associated with outstanding debt.
|
Michael
Polyviou
|
Beth
Kaplan
|
Investor Relations,
EVC Group
|
Public Relations
Director, Accuray
|
+1 (732)
933-2754
|
+1 (408)
789-4426
|
mpolyviou@evcgroup.com
|
bkaplan@accuray.com
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/accuray-reports-fiscal-2020-first-quarter-financial-results-300947583.html
SOURCE Accuray Incorporated