Accuray Reports Fiscal 2020 First Quarter Financial Results

SUNNYVALE, Calif., Oct. 29, 2019 /PRNewswire/ -- Accuray Incorporated ARAY today reported its financial results for the first quarter of fiscal 2020 ended September 30, 2019.

Accuray Incorporated (PRNewsFoto/Accuray Incorporated) (PRNewsFoto/Accuray Incorporated)

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 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

 

Cision 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

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesConference Call Announcements
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!