ACCURAY INCORPORATED SUNNYVALE, Calif., Oct. 29, 2015 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) announced today financial results for the fiscal first quarter ended September 30, 2015.
Fiscal First Quarter Highlights
-- Gross orders were $64.9 million, representing 10 percent year-over-year
growth or 18 percent on a constant currency basis
-- Total revenue was $89.6 million, an increase of 9 percent year-over-year
or 12 percent on a constant currency basis
-- Gross profit margin expanded to 38 percent from 34 percent in the prior
year period, driven by both improved product and service margins
-- Adjusted EBITDA was a positive $2.3 million compared to a negative $8.5
million in the prior year, representing a $10.8 million improvement
-- Cash and investments increased $9.2 million compared to a $19.2 million
decrease in the prior year quarter
-- Single and dual vault sites comprised more than 50 percent of total
TomoTherapy(®) System orders
"We executed on our commercial strategies during the first quarter, resulting in continued momentum in order activity and improvements in overall financial performance," said Joshua H. Levine, president and chief executive officer of Accuray. "Our team focused on positioning the TomoTherapy System as a mainstream device, which led to more than 50 percent of its orders during the quarter being placed by sites with single or dual vaults. At the same time, we continued to see order momentum for the CyberKnife(®) M6(TM) with the InCise(TM) Multileaf Collimator as our first installation sites demonstrated its ability to provide extremely precise treatments in significantly reduced time for an expanded patient population."
Financial Highlights
Gross product orders totaled $64.9 million for the 2016 fiscal first quarter, an increase of $6.1 million or 10 percent from the first quarter of the prior fiscal year. On a constant currency basis, gross product orders increased 18 percent from the prior fiscal year first quarter. Ending product backlog was $379.8 million, approximately 4 percent higher than backlog at the end of the prior fiscal year first quarter.
Total revenue was $89.6 million, an improvement of 9 percent from the prior fiscal year first quarter and an increase of 12 percent on a constant currency basis. The Americas region total revenue was $45.3 million and total revenue outside of the Americas region was $44.3 million. Product revenue increased 21 percent to $40.0 million while service revenue totaled $49.6 million, which was a slight increase compared to the prior year.
Total gross profit for the fiscal first quarter of 2016 was $33.9 million or 37.8 percent of sales, comprised of product gross margin of 42.5 percent and service gross margin of 34.1 percent. This compares to total gross margin of 33.7 percent, product gross margin of 37.4 percent and service gross margin of 31.3 percent for the prior fiscal year first quarter. On a constant currency basis, total gross margin for the first quarter of fiscal 2016 was 38.6 percent.
Operating expenses were $37.7 million, a decrease of 12 percent compared with $43.1 million in the prior fiscal first quarter. The decrease was primarily because of timing of tradeshow related expenses in sales and marketing, as well as reduced compensation related expenses in sales and marketing and general and administrative functions, offset by a slight increase in research and development to support ongoing product development efforts.
Net loss improved to $9.6 million, or $0.12 per share, for the first quarter of fiscal 2016, compared to a net loss of $21.7 million, or $0.28 per share, for the first quarter of fiscal 2015.
Adjusted EBITDA for the first quarter of fiscal 2016 was a positive $2.3 million, compared to an $8.5 million loss in the first quarter of the prior fiscal year.
Cash, cash equivalents, and investments were $153.1 million as of September 30, 2015, an increase of $9.2 million from June 30, 2015.
2016 Financial Guidance
Accuray reaffirmed its financial guidance for fiscal 2016 on total revenue of $395 million to $410 million and adjusted EBITDA of $25 million to $35 million.
This financial guidance is unchanged from that provided on August 20, 2015.
Conference Call Information
Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss these results. 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): 55674990
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 dial-up replay of the conference call will be available beginning October 29, 2015 at 5:00 p.m. PT/8:00 p.m. ET and ending November 6, 2015. The replay telephone number is (855) 859-2056 (USA) or (404) 537-3406 (International), Conference ID: 55674990.
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 more 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.
Accuray presents certain measures, such as period-over-period revenue growth, on a constant currency basis, which excludes the effects of foreign currency translation. Due to the continuing strengthening of the U.S. dollar against foreign currencies and the overall variability of foreign exchange rates from period to period, management uses these measures on a constant currency basis to evaluate period-over-period operating performance. Measures presented on a constant currency basis are calculated by translating current period results at prior period monthly average exchange rates.
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) is a radiation oncology company that develops, manufactures and sells precise, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The company's leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments. 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 for revenue and adjusted EBITDA in fiscal 2016. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: the company's ability to convert backlog to revenue; the success of the adoption of our CyberKnife and TomoTherapy Systems; the company's ability to manage its expenses; continuing uncertainty in the global economic environment; and other risks detailed from time to time under the heading "Risk Factors" in the company's report on Form 10-K, which was filed on August 28, 2015 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,
-------------
2015 2014
---- ----
Gross Orders $64,928 $58,763
Net Orders 44,799 32,282
Order Backlog 379,792 364,007
Net revenue:
Products $39,995 $33,015
Services 49,636 49,366
------ ------
Total net revenue 89,631 82,381
Cost of revenue:
Cost of products 23,017 20,665
Cost of services 32,716 33,915
------
Total cost of
revenue 55,733 54,580
------ ------
Gross profit 33,898 27,801
Operating expenses:
Research and
development 14,296 14,149
Selling and
marketing 13,417 17,974
General and
administrative 10,028 10,950
Total operating
expenses 37,741 43,073
------ ------
Loss from
operations (3,843) (15,272)
Other expense,
net (5,091) (5,461)
Loss before
provision for
income taxes (8,934) (20,733)
Provision for
income taxes 704 917
--- ---
Net loss $(9,638) $(21,650)
======= ========
Net loss per
share -basic
and diluted $(0.12) $(0.28)
====== ======
Weighted average common shares used in
computing loss per share:
Basic and diluted 79,760 77,290
====== ======
Accuray Incorporated
Consolidated Balance Sheets
(in thousands)
(Unaudited)
September 30, June 30,
2015 2015
---- ----
Assets
Current assets:
Cash and cash equivalents $85,584 $79,551
Investments 67,513 64,306
Restricted cash 3,795 3,734
Accounts receivable, net 56,636 77,727
Inventories 113,798 106,151
Prepaid expenses and other current assets 16,527 15,991
Deferred cost of revenue 6,799 6,869
Total current assets 350,652 354,329
Property and equipment, net 29,482 31,829
Goodwill 57,965 58,054
Intangible assets, net 13,576 15,564
Deferred cost of revenue 2,264 1,500
Other assets 7,863 8,695
Total assets $461,802 $469,971
========
Liabilities and equity
Current liabilities:
Accounts payable $13,652 $13,096
Accrued compensation 18,377 21,934
Other accrued liabilities 19,115 18,720
Short-term debt 95,134 -
Customer advances 22,949 19,385
Deferred revenue 90,719 96,780
Total current liabilities 259,946 169,915
Long-term liabilities:
Long-term other liabilities 10,761 10,934
Deferred revenue 13,938 10,489
Long-term debt 109,639 202,853
Total liabilities 394,284 394,191
Commitment and contingencies
Equity:
Common stock 80 79
Additional paid-in capital 473,025 471,430
Accumulated other comprehensive loss (646) (426)
Accumulated deficit (404,941) (395,303)
Total equity 67,518 75,780
------
Total liabilities and equity $461,802 $469,971
========
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,
-------------
2015 2014
---- ----
GAAP net loss $(9,638) $(21,650)
Amortization of
intangibles
(a) 1,988 1,988
Depreciation
(b) 2,571 2,990
Stock-based
compensation
(c) 2,514 3,273
Interest
expense, net
(d) 4,156 3,988
Provision for
income taxes 704 917
Adjusted EBITDA $2,295 $(8,494)
====== =======
(a) consists of amortization of
intangibles -developed technology
(b) consists of depreciation,
primarily on property and equipment
(c) consists of stock-based
compensation in accordance with ASC
718
(d) consists primarily of interest
income from available-for-sale
securities and interest expense
associated with our convertible notes
Accuray Incorporated
Forward-Looking Guidance
Reconciliation of Projected GAAP Net Loss to Adjusted Earnings Before Interest,
Taxes, Depreciation,
Amortization and Stock-Based Compensation (Adjusted EBITDA)
(In thousands)
(Unaudited)
Twelve Months Ending
June 30, 2016
---------------------
From To
---- ---
GAAP net loss $(28,200) $(18,300)
Amortization of
intangibles (a) 7,950 7,950
Depreciation (b) 10,850 10,850
Stock-based
compensation (c) 14,100 14,100
Interest expense, net
(d) 17,300 17,300
Provision for income
taxes 3,000 3,100
Adjusted EBITDA $25,000 $35,000
======= =======
(a) consists of amortization of
intangibles -developed technology
(b) consists of depreciation,
primarily on property and equipment
(c) consists of stock-based
compensation in accordance with ASC
718
(d) consists primarily of interest
income from available-for-sale
securities and interest expense
associated with
our convertible notes
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SOURCE Accuray
