SUNNYVALE, Calif., Jan. 27, 2015 /PRNewswire/ -- Accuray
Incorporated (Nasdaq: ARAY) announced today financial results for
the second fiscal quarter and six months ended December 31, 2014.
Second Quarter Highlights
- Generates improved order volume with gross orders of
$72.3 million
- Increases total revenue by 5% to $98.2
million from year ago period
- Expands service gross profit margins sequentially to 36% from
31%
- Achieves adjusted EBITDA of $3.7
million
"Our fiscal second quarter results illustrate the progress our
team is making in executing our plan. The company's gross
system order volume increased as expected and supports our belief
that we will see gross orders in the second half of the fiscal year
grow at a rate faster than the overall market," said Joshua H. Levine, president and chief executive
officer of Accuray. "Additionally, the trends in the business
enable us to reaffirm our full fiscal year financial guidance
despite foreign currency headwinds that have materially reduced our
overall year-to-date revenue results. The Accuray team
remains focused on generating profitable revenue growth, expanding
gross profit margins and ultimately driving sustained cash flow and
profitability for all of our stakeholders."
Financial Highlights
Gross product orders totaled
$72.3 million for the second fiscal
quarter, a decrease of $8.0 million
or 10% from the second quarter of the prior fiscal year. On a
constant currency basis, gross product orders for the current year
fiscal quarter would have totaled $74.4
million. Ending product backlog was $358 million or approximately 1% lower than
backlog at the end of the prior fiscal year second quarter.
Total revenue reached $98.2
million, representing an increase of 5%, or 9% on a constant
currency basis, from the prior fiscal year second quarter.
The Americas region total revenues were $45.7 million, an increase of 31% from the prior
fiscal year second quarter. Total revenues outside the Americas
region were $52.5 million, a decrease
of 11% from the prior fiscal year second quarter. Product
revenues totaled $47.7 million and
represented an increase of 6% from the prior fiscal year second
quarter while service revenues totaled $50.5
million, an increase of 4% over the prior fiscal year second
quarter.
Total gross profit for the second quarter of fiscal 2015 was
$38.5 million or 39% of sales
comprised of product gross margin of 43% and service gross margin
of 36%. This compares to total gross margin of 41%, product
gross margin of 45% and service gross margin of 37% for the prior
fiscal year second quarter. Total gross margin for the second
quarter of fiscal 2015 would have been 41% on a constant currency
basis as compared to the prior year period.
Operating expenses were $42.1
million, reflecting an increase of 8% compared with
$38.9 million in the prior fiscal
year second quarter. Included in other income and expense is
a foreign exchange loss of approximately $1.5 million. Selling and marketing
expenses rose 11% against the prior fiscal year second quarter due
to the growth and compensation of the sales force that occurred in
the prior fiscal year. General and administrative expenses
also grew 10% primarily due to legal costs incurred in the second
fiscal quarter of 2015.
Net loss was $10.0 million, or
$0.13 per share for the second
quarter of fiscal 2015, compared to a net loss of $5.4 million, or $0.07 per share, for the prior fiscal year second
quarter.
Adjusted EBITDA for the second quarter of 2015 was $3.7 million, compared to $6.8 million in the prior fiscal year second
quarter.
Cash, cash equivalents, and investments were $150.8 million as of December 31, 2014, a decrease of $1.9 million from September 30, 2014.
Six Month Highlights
For the six months ended
December 31, 2014, total revenue
reached $180.5 million, representing
an increase of 6%, or 9% on a constant currency basis, from the
comparable period of fiscal year 2014. Product revenue for
the six month period was $80.7
million, representing an increase of 8% while service
revenue was $99.9 million,
representing 5% growth over the comparable prior fiscal year
period.
Gross profit margin for the six months ended December 31, 2014 was 37%, comprised of product
gross margin of 41% and service gross margin of 34%. This
compares to total gross margin of 38% for the comparable prior
fiscal year period. Total gross margin for the six months
ended December 31, 2014 would have
been 38% on a constant currency basis as compared to the comparable
prior fiscal year period.
Operating expenses were $85.2
million for the six months ended December 31, 2014, compared with $77.7 million in the comparable prior fiscal year
period.
Net loss for the six months ended December 31, 2014 was $31.6 million, or $0.41 per share, compared to a net loss of
$21.0 million, or $0.28 per share, for the comparable prior fiscal
year period.
Adjusted EBITDA for the six months ended December 31, 2014 was a loss of $4.8 million, compared to a profit of
$3.0 million in the comparable prior
fiscal year period.
2015 Financial Guidance
Accuray reaffirmed its
financial guidance for fiscal year 2015 as follows: total
revenue of $390.0 million to $410.0
million and adjusted EBITDA of $18.0
million to $27.0 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: (888) 539-3612
- International callers: (719) 325-2494
- Conference ID Number (U.S. and international): 7150733
Individuals interested in listening to the live conference call
via the Internet may do so by logging on to the company's website,
www.accuray.com. In addition, a dial-up replay of the
conference call will be available beginning January 27, 2015 at 5:00
p.m. PT/8:00 p.m. ET and
ending February 5, 2015. The
replay telephone number is 1-888-203-1112 (USA) or 1-719-457-0820 (International),
Conference ID: 7150733.
Use of Non-GAAP Financial Measures
The company 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.
There are limitations in using this non-GAAP financial measure
because it is not prepared in accordance with GAAP and may be
different from non-GAAP financial measures used by other companies.
This non-GAAP financial measure 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
and the reconciliations of the non-GAAP financial measure provided
in the schedule below.
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 regarding growth in
gross orders, gross profit margins, revenues and adjusted EBITDA,
ability to meet financial targets, 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 successful
commercialization of the company's new technologies; 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 29, 2014, the company's
report on Form 10-Q which was filed on November 7, 2014, and 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
December 31,
|
|
Six Months Ended
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Gross
Orders
|
|
$ 72,261
|
|
$ 80,294
|
|
$ 131,024
|
|
$ 143,692
|
Net Orders
|
|
41,474
|
|
59,366
|
|
73,756
|
|
119,429
|
Order
Backlog
|
|
357,831
|
|
362,044
|
|
357,831
|
|
362,044
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
Products
|
|
$ 47,650
|
|
$ 45,148
|
|
$ 80,665
|
|
$ 74,716
|
Services
|
|
50,505
|
|
48,486
|
|
99,871
|
|
95,559
|
Total net
revenue
|
|
98,155
|
|
93,634
|
|
180,536
|
|
170,275
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
27,171
|
|
24,980
|
|
47,836
|
|
43,581
|
Cost of
services
|
|
32,495
|
|
30,483
|
|
66,410
|
|
62,045
|
Total cost of
revenue
|
|
59,666
|
|
55,463
|
|
114,246
|
|
105,626
|
Gross
profit
|
|
38,489
|
|
38,171
|
|
66,290
|
|
64,649
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
13,917
|
|
13,435
|
|
28,066
|
|
26,385
|
Selling and
marketing
|
|
15,802
|
|
14,262
|
|
33,776
|
|
28,716
|
General and
administrative
|
|
12,361
|
|
11,190
|
|
23,311
|
|
22,550
|
Total operating
expenses
|
|
42,080
|
|
38,887
|
|
85,153
|
|
77,651
|
Loss from
operations
|
|
(3,591)
|
|
(716)
|
|
(18,863)
|
|
(13,002)
|
Other expense,
net
|
|
(5,528)
|
|
(3,775)
|
|
(10,989)
|
|
(6,235)
|
Loss before provision
for income taxes
|
|
(9,119)
|
|
(4,491)
|
|
(29,852)
|
|
(19,237)
|
Provision for income
taxes
|
|
873
|
|
950
|
|
1,790
|
|
1,737
|
Net loss
|
|
$ (9,992)
|
|
$ (5,441)
|
|
$ (31,642)
|
|
$ (20,974)
|
|
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted
|
|
$ (0.13)
|
|
$ (0.07)
|
|
$ (0.41)
|
|
$ (0.28)
|
Weighted average
common shares used in computing loss per share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
77,924
|
|
75,280
|
|
77,607
|
|
74,990
|
|
|
|
|
|
|
|
|
|
Accuray
Incorporated
Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
|
|
|
|
|
December
31,
|
|
June
30,
|
|
2014
|
|
2014
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 97,273
|
|
$ 92,346
|
Investments
|
53,517
|
|
79,553
|
Restricted
cash
|
1,436
|
|
1,492
|
Accounts
receivable, net
|
62,987
|
|
72,152
|
Inventories
|
104,490
|
|
87,752
|
Prepaid
expenses and other current assets
|
15,076
|
|
17,873
|
Deferred cost
of revenue
|
11,960
|
|
13,302
|
Total current
assets
|
346,739
|
|
364,470
|
Property and
equipment, net
|
30,830
|
|
34,391
|
Goodwill
|
58,015
|
|
58,091
|
Intangible
assets, net
|
19,541
|
|
23,517
|
Deferred cost
of revenue
|
2,220
|
|
2,899
|
Other
assets
|
10,220
|
|
11,820
|
Total
assets
|
$
467,565
|
|
$ 495,188
|
Liabilities
and equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$ 15,980
|
|
$ 15,639
|
Accrued
compensation
|
19,482
|
|
32,569
|
Other accrued
liabilities
|
24,478
|
|
24,464
|
Customer
advances
|
19,673
|
|
19,804
|
Deferred
revenue
|
92,495
|
|
92,093
|
Total current
liabilities
|
172,108
|
|
184,569
|
Long-term
liabilities:
|
|
|
|
Long-term other
liabilities
|
10,483
|
|
6,593
|
Deferred
revenue
|
9,875
|
|
9,866
|
Long-term
debt
|
199,152
|
|
195,612
|
Total
liabilities
|
391,618
|
|
396,640
|
Commitment and
contingencies
|
|
|
|
Equity:
|
|
|
|
Common
stock
|
78
|
|
77
|
Additional
paid-in capital
|
461,995
|
|
451,750
|
Accumulated
other comprehensive income
|
610
|
|
1,815
|
Accumulated
deficit
|
(386,736)
|
|
(355,094)
|
Total
equity
|
75,947
|
|
98,548
|
Total
liabilities and equity
|
$
467,565
|
|
$ 495,188
|
|
|
|
|
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
December 31,
|
|
Six
Months Ended December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
GAAP net
loss
|
|
$
(9,992)
|
|
$
(5,441)
|
|
$ (31,642)
|
|
$ (20,974)
|
Amortization of intangibles (a)
|
|
1,988
|
|
2,201
|
|
3,976
|
|
4,403
|
Depreciation (b)
|
|
2,994
|
|
2,927
|
|
5,984
|
|
6,173
|
Stock-based compensation (c)
|
|
3,854
|
|
2,803
|
|
7,127
|
|
4,983
|
Interest
expense, net (d)
|
|
4,023
|
|
3,341
|
|
8,011
|
|
6,647
|
Provision for income taxes
|
|
873
|
|
950
|
|
1,790
|
|
1,737
|
Adjusted
EBITDA
|
|
$
3,740
|
|
$
6,781
|
|
$ (4,754)
|
|
$
2,969
|
(a)
|
Consists of
amortization of intangibles – developed technology, distributor
licenses and backlog
|
(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 Incorporated