From Accuray 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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