SUNNYVALE, Calif., April 26, 2016 /PRNewswire/ -- Accuray
Incorporated (NASDAQ: ARAY) announced today financial results for
the third fiscal quarter and nine months ended March 31, 2016.
Fiscal Third Quarter Highlights
- Gross orders were $56.4 million;
9% year-over-year growth; Net orders were $57.6 million; 60% year-over-year growth
- Ending product backlog was $370.5
million; 7% year-over-year growth
- Total revenue was $105.3 million,
an increase of 8% year-over-year
- Adjusted EBITDA expanded sequentially to $13.9 million from $6.8
million
- Net operating income of $5.4
million; Net income of $0.8
million
- Gross profit margin expanded to 42.7% from 39.6% in the prior
year
"In the third quarter we exceeded our expectations for gross
margins, operating profits, net income and adjusted EBITDA.
While the third quarter gross orders were below expectations, we
grew our overall backlog, which is what fuels our future revenue
growth, and were up seven percent from a year ago," said
Joshua H. Levine, president and
chief executive officer of Accuray. "Additionally, we are
excited to report that we submitted a 510(k) premarket notification
with the Food and Drug Administration (FDA) for our innovative
Radixactâ„¢ Treatment Delivery System*, the next generation
TomoTherapy® platform. The Radixact System, with
its unique architecture, is intended to strengthen our sales funnel
by providing expanded clinical options for clinicians and
innovative treatment opportunities for their patients."
*The Radixact Treatment Delivery System is pending FDA 510(k)
clearance and not available for sale within the United
States. This product may also be subject to international
regulatory approval or licensing processes such that the
availability of this product may vary according to geographical
location.
Financial Highlights
Total revenue was $105.3 million,
an increase of 8 percent year-over-year. The Americas region
total revenue was $32.7 million and
total revenue outside of the Americas region was $72.6 million. Product revenue increased 16
percent to $53.7 million while
service revenue increased modestly to $51.5
million.
Total gross profit of $44.9
million, or 43 percent of sales, was comprised of product
gross margin of 45 percent and service gross margin of 40
percent. This compares to total gross margin of 40 percent,
product gross margin of 41 percent and service gross margin of 38
percent for the prior fiscal year third quarter.
Operating expenses were $39.5
million, an increase of 5 percent compared with $37.5 million in the third quarter of the prior
year. The increase was primarily due to higher legal expenses
relating to an arbitration award to our former distributor in
China in the amount of
$2.4 million.
Net income increased to $0.8
million, or $0.01 per basic
and diluted share, for the third quarter of fiscal 2016, compared
to a net loss of ($3.0) million, or
($0.04) per basic and diluted share,
for the third quarter of fiscal 2015.
Adjusted EBITDA for the third quarter of fiscal 2016 was
$13.9 million, compared to
$9.9 million in the third quarter of
the prior fiscal year.
Cash, cash equivalents and investments were $149.8 million as of March
31, 2016, a decrease of $6.0
million from December 31,
2015. The decrease was primarily related to the payment of
$5.5 million to the Company's former
distributor in China for an
arbitration award that was finalized in January 2016.
Nine Month Highlights
For the nine months ended March 31,
2016, total revenues were $303.8
million, representing an increase of 9 percent, or 12
percent on a constant currency basis, from the comparable period of
fiscal year 2015. Product revenue for the nine month period
was $149.5 million, representing an
increase of 18 percent while service revenue was $154.3 million, representing 2 percent growth
over the comparable prior fiscal year period.
Gross profit margin for the nine months ended March 31, 2016 was 40 percent, comprised of
product gross margin of 43 percent and service gross margin of 37
percent. This compares to total gross margin of 38 percent
for the comparable prior fiscal year period.
Operating expenses were $123.3
million for the nine months ended March 31, 2016, compared with $122.6 million in the comparable prior fiscal
year period.
Net loss for the nine months ended March
31, 2016 was $18.3 million, or
$0.23 per share, compared to a net
loss of $34.6 million, or
$0.44 per share, for the comparable
prior fiscal year period.
Adjusted EBITDA for the nine months ended March 31, 2016 was $19.6
million, compared to $5.1
million in the comparable prior fiscal year period.
Cash, cash equivalents, and investments increased $5.9 million from June 30,
2015.
2016 Financial Guidance
Accuray is revising financial guidance for fiscal year 2015 as
follows: total revenue is now expected to be between $395 million to $405 million and adjusted EBITDA
is now expected to be between $25 million to
$30 million. This compares to previously issued guidance
expectations in January 2016 of
$395 million to $410 million in
revenue and $25 million to $35
million in adjusted EBITDA. Accuray expects gross
orders for the fiscal year will be $280
million to $290 million, compared to previously issued
guidance of approximately $295
million.
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: +1 (262) 912-4764
- Conference ID Number (U.S. and international): 87031372
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 April 26, 2016 at 5:00
p.m. PT/8:00 p.m. ET and
ending when Accuray announces its results for the fourth quarter of
fiscal, 2016 ending June 30,
2016. The replay telephone number is (855) 859-2056
(USA) or +1 (404) 537-3406
(International), Conference ID: 87031372.
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
This press release contains management's current intentions and
expectations for the future, all of which are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Words such as "estimate," "project," "intend," "expect," "believe,"
"target," and similar expressions are intended to identify
forward-looking statements. 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 growth in orders,
gross profit margins, revenues and adjusted EBITDA, ability to meet
financial targets, anticipated regulatory approvals and launches of
new products, market uptake of recently launched products, market
growth and Accuray's leadership position in radiation oncology
innovation and technologies. 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, the company's report on Form 10-Q, which were filed
on November 5, 2015 and February 1, 2016, 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.
Doug Sherk
Investor Relations,
EVC Group
+1 (415)
652-9100
dsherk@evcgroup.com
|
Beth
Kaplan
Public Relations
Director, Accuray
+1 (408)
789-4426
bkaplan@accuray.com
|
Financial Tables to Follow
Accuray
Incorporated
Consolidated
Statements of Operations
(in thousands, except
per share data)
(Unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
Nine Months
Ended
March 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Gross
Orders
|
$ 56,410
|
|
$ 51,891
|
|
$ 188,416
|
|
$ 182,915
|
Net Orders
|
57,559
|
|
35,937
|
|
145,037
|
|
109,693
|
Order
Backlog
|
370,488
|
|
347,408
|
|
370,488
|
|
347,408
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
Products
|
$ 53,740
|
|
$ 46,361
|
|
$ 149,494
|
|
$ 127,026
|
Services
|
51,544
|
|
51,154
|
|
154,333
|
|
151,025
|
Total net
revenue
|
105,284
|
|
97,515
|
|
303,827
|
|
278,051
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Cost of
products
|
29,622
|
|
27,332
|
|
85,356
|
|
75,168
|
Cost of
services
|
30,718
|
|
31,523
|
|
97,058
|
|
97,933
|
Total cost of
revenue
|
60,340
|
|
58,855
|
|
182,414
|
|
173,101
|
Gross
profit
|
44,944
|
|
38,660
|
|
121,413
|
|
104,950
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
13,270
|
|
12,836
|
|
42,497
|
|
40,902
|
Selling and
marketing
|
12,516
|
|
12,987
|
|
41,009
|
|
46,763
|
General and
administrative
|
13,716
|
|
11,665
|
|
39,820
|
|
34,976
|
Total operating
expenses
|
39,502
|
|
37,488
|
|
123,326
|
|
122,641
|
Income (loss) from
operations
|
5,442
|
|
1,172
|
|
(1,913)
|
|
(17,691)
|
Other expense,
net
|
(3,963)
|
|
(3,618)
|
|
(14,124)
|
|
(14,607)
|
Income (loss) before
provision for income taxes
|
1,479
|
|
(2,446)
|
|
(16,037)
|
|
(32,298)
|
Provision for income
taxes
|
723
|
|
521
|
|
2,260
|
|
2,311
|
Net income
(loss)
|
$
756
|
|
$
(2,967)
|
|
$ (18,297)
|
|
$ (34,609)
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - basic
|
$
0.01
|
|
$
(0.04)
|
|
$
(0.23)
|
|
$
(0.44)
|
Net income (loss) per
share - diluted
|
$
0.01
|
|
$
(0.04)
|
|
$
(0.23)
|
|
$
(0.44)
|
Weighted average
common shares used in computing income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
80,860
|
|
78,746
|
|
80,320
|
|
77,981
|
Diluted
|
82,071
|
|
78,746
|
|
80,320
|
|
77,981
|
Accuray
Incorporated
Consolidated
Balance Sheets
(in
thousands)
(Unaudited)
|
|
|
March
31,
|
|
June
30,
|
|
2016
|
|
2015
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 79,155
|
|
$ 79,551
|
Investments
|
70,650
|
|
64,306
|
Restricted
cash
|
1,080
|
|
3,734
|
Accounts
receivable, net
|
89,319
|
|
77,727
|
Inventories
|
117,122
|
|
106,151
|
Prepaid
expenses and other current assets
|
14,688
|
|
15,991
|
Deferred cost
of revenue
|
8,632
|
|
6,869
|
Total current
assets
|
380,646
|
|
354,329
|
Property and
equipment, net
|
29,061
|
|
31,829
|
Goodwill
|
57,936
|
|
58,054
|
Intangible
assets, net
|
9,599
|
|
15,564
|
Deferred cost
of revenue
|
1,654
|
|
1,500
|
Other
assets
|
11,124
|
|
5,497
|
Total
assets
|
$
490,020
|
|
$ 466,773
|
Liabilities
and equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 21,737
|
|
$ 13,096
|
Accrued
compensation
|
20,534
|
|
21,934
|
Other accrued
liabilities
|
23,415
|
|
18,720
|
Short-term
debt
|
39,278
|
|
-
|
Customer
advances
|
19,732
|
|
19,385
|
Deferred
revenue
|
104,935
|
|
96,780
|
Total current
liabilities
|
229,631
|
|
169,915
|
Long-term
liabilities:
|
|
|
|
Long-term other
liabilities
|
10,925
|
|
10,934
|
Deferred
revenue
|
16,722
|
|
10,489
|
Long-term
debt
|
170,395
|
|
199,655
|
Total
liabilities
|
427,673
|
|
390,993
|
Commitment and
contingencies
|
|
|
|
Equity:
|
|
|
|
Common
stock
|
81
|
|
79
|
Additional
paid-in capital
|
476,165
|
|
471,430
|
Accumulated
other comprehensive loss
|
(299)
|
|
(426)
|
Accumulated
deficit
|
(413,600)
|
|
(395,303)
|
Total
equity
|
62,347
|
|
75,780
|
Total
liabilities and equity
|
$
490,020
|
|
$ 466,773
|
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
March 31,
|
|
Nine
Months Ended March 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
GAAP net income
(loss)
|
$
756
|
|
$
(2,967)
|
|
$ (18,297)
|
|
$ (34,609)
|
Amortization of intangibles (a)
|
1,988
|
|
1,989
|
|
5,964
|
|
5,965
|
Depreciation (b)
|
2,594
|
|
2,915
|
|
7,679
|
|
8,899
|
Stock-based compensation (c)
|
3,566
|
|
3,377
|
|
9,445
|
|
10,504
|
Interest
expense, net (d)
|
4,291
|
|
4,051
|
|
12,585
|
|
12,062
|
Provision for income taxes
|
723
|
|
521
|
|
2,260
|
|
2,311
|
Adjusted
EBITDA
|
$ 13,918
|
|
$
9,886
|
|
$ 19,636
|
|
$
5,132
|
|
|
|
|
|
|
|
|
|
(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 and term
loan.
|
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, 2016
|
|
From
|
|
To
|
GAAP net
loss
|
$ (26,100)
|
|
$ (21,100)
|
Amortization of intangibles (a)
|
7,950
|
|
7,950
|
Depreciation (b)
|
10,350
|
|
10,350
|
Stock-based compensation (c)
|
12,900
|
|
12,900
|
Interest
expense, net (d)
|
16,900
|
|
16,900
|
Provision for income taxes
|
3,000
|
|
3,000
|
Adjusted
EBITDA
|
$ 25,000
|
|
$ 30,000
|
|
|
|
|
|
(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 and tem
loan
|
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SOURCE Accuray Incorporated