UPDATE: Accuray Announces Restructuring, Cutting Jobs by ~13%
From Accuray (NASDAQ: ARAY) press release:
The second fiscal quarterly results reflect a shortfall relative to expectations, which is attributable to challenges faced in two primary areas of the business: (1) manufacturing and supply related issues, which delayed contribution from new products launched at the 2012 Annual Meeting of the American Society for Radiation Oncology (ASTRO), and (2) commercial focus and salesforce transitional issues.
Accuray is announcing a restructuring of operations to focus on improving commercial execution and position the company to support sustainable revenue growth and profitability. Through the restructuring, management is establishing a cost structure that will reallocate resources to commercial sales and marketing initiatives and improved business processes to support accelerated revenue growth. The restructuring is expected to reduce staffing by approximately 13 percent and is most heavily concentrated in the United States.
As a result of the restructuring, Accuray expects to take a non-recurring charge of $3 million to $4 million in the third quarter fiscal 2013. The company expects operating expense savings of approximately $40 million per year compared to fiscal 2012, with initial impact benefitting fourth quarter fiscal 2013 results.
"In my first 90 days at Accuray, I have spent considerable time evaluating the strategic and operational activities at the company, and have found many reasons to be highly enthusiastic and confident in the future prospects and success of the company. We have truly differentiated technologies in our two primary product platforms and a loyal installed base of customers. Our new systems introduced at ASTRO expand the treatable patient population, increase accuracy, and improve throughput – creating economic value for our radiation oncology customers and clinical benefit for patients," said Joshua Levine, President and Chief Executive Officer of Accuray.
"However, we have identified challenges that have pressured results operationally and distinct areas that require improvement – and we have a clearly defined path to address these. As such, we are initiating a strategic transformation at Accuray in order to drive consistent performance that is required to create value to our customers and shareholders over the long term," said Levine. "Through the restructuring we announced today, we are establishing a cost structure to support sustainable revenue growth and profitability through commercial execution, service excellence and improved business processes."
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