Strong customer demand. Navigating FX and
Supply Chain Challenges. Company reiterates full year
guidance.
SUNNYVALE, Calif., Nov. 2, 2022
/PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today
reported financial results for the first quarter of fiscal 2023
ended September 30, 2022.
First Quarter Fiscal 2023 Summary
- Gross orders of $69.8 million,
were flat versus the prior fiscal year. On a constant currency
basis, gross orders compared to the same period in the prior fiscal
year increased $4.7 million, a 6.5%
growth
- Net revenue of $96.5 million
represents a decrease of 10% versus the same period in the prior
fiscal year mainly driven by supply chain constraints and a
$5.8 million foreign exchange
headwind on a constant currency basis
- GAAP net loss of $5.4 million as
compared to GAAP net loss of $1.0
million in the prior fiscal year period. Adjusted EBITDA of
$1.9 million as compared to adjusted
EBITDA of $5.4 million in the prior
fiscal year period
Other Recent Operational Highlights
- Introduction of VitalHold™* breast cancer treatment package for
the Radixact® System in partnership with C-RAD
- Data published in The Lancet Oncology indicate men with
prostate cancer treated with the CyberKnife® System experienced
lower incidence of certain bladder side effects
- New, global commercial partnership with GE Healthcare to expand
access, advance Precision Radiation Therapy
- NMPA regulatory submission completed for Tomo® C, the Joint
Venture product for the China Type B segment
"I am pleased with a solid start to the year. Demand continues
to reflect strong customer adoption for our precision radiation
therapy solutions." said Suzanne
Winter, Chief Executive Officer. "We remain laser focused on
navigating supply chain and macroeconomic challenges including
foreign exchange headwinds, delivering on our innovation-driven
growth agenda and executing on strategic partnerships that will
help us deliver differentiated solutions and create long term value
for customers, patients, employees and shareholders."
Fiscal First Quarter Results
Total net revenue was $96.5
million for the first quarter of fiscal 2023 compared to
$107.4 million for the prior fiscal
year first quarter. Product revenue totaled $44.6 million for the first quarter of fiscal
2023 compared to $52.8 million for
the prior fiscal year first quarter, while service revenue totaled
$51.9 million for the first quarter
of fiscal 2023 compared to $54.7
million in the prior fiscal year first quarter.
Total gross profit for the first quarter of fiscal 2023 was
$34.6 million or approximately 35.9 %
of total net revenue, compared to total gross profit of
$39.5 million or 36.8% of total net
revenue in the prior fiscal year first quarter.
Operating expenses for the first quarter of fiscal 2023 were
$36.8 million, compared to
$37.1 million in the prior fiscal
year first quarter.
Net loss was $5.4 million, or
$(0.06) per share, for the first
quarter of fiscal 2023, compared to net loss of $1.0 million, or $(0.01) per share, for the prior fiscal year
first quarter.
Gross product orders totaled $69.8
million for the first quarter of fiscal 2023 compared to
$70.0 million for the prior fiscal
year first quarter. Order backlog as of September 30, 2022 was $538.4 million, approximately 11% lower than at
the end of the prior fiscal year first quarter due primarily to
$51.2 million aging beyond 30 months.
Minimal cancellations occurred within the quarter with 1 order
cancellation representing $1.5
million.
Adjusted EBITDA for the first quarter of fiscal 2023 was
$1.9 million, compared to
$5.4 million for the prior fiscal
year first quarter.
Cash, cash equivalents, and short-term restricted cash were
$81.2 million as of September 30, 2022, a decrease of $7.7 million from June 30,
2022.
Fiscal Year 2023 Financial Guidance
Accuray's financial guidance is based on current expectations.
The following statements are forward-looking and actual results
could differ materially depending on market conditions, the impact
of the current global economic environment and the Covid-19
pandemic, supply chain disruption, and the factors set forth under
"Safe Harbor Statement" below.
The company is re-affirming guidance for fiscal year 2023 as
follows:
- Total revenue is expected in the range of $447.0 million to $455.0
million, representing a year-over-year growth at the
midpoint of the range of 5%.
- Adjusted EBITDA is expected in the range of $26.0 million to $30.0
million.
Guidance for non-GAAP financial measures excludes depreciation
and amortization, stock-based compensation expense, interest
expense and provision for income taxes. For more information
regarding the non-GAAP financial measures discussed in this press
release, please see "Use of Non-GAAP Financial Measures" below.
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 quarter of fiscal
2023 as well as recent corporate developments. Conference call
dial-in information is as follows:
- U.S. callers: (833) 316-0563
- International callers: (412) 317-5747
Individuals interested in listening to the live conference call
via the Internet may do so by logging on to the Investor Relations
section of Accuray's website, www.accuray.com. There will be a
slide presentation accompanying today's event which can also be
accessed on the company's Investor Relations page at
www.accuray.com.
In addition, a taped replay of the conference call will be
available beginning approximately one hour after the call's
conclusion and will be available for seven days. The replay number
is (877) 344-7529 (USA), or (412)
317-0088 (International), Conference ID: 6435845. An archived
webcast will also be available on Accuray's website until Accuray
announces its results for the second quarter of fiscal 2023.
*510(k) pending. VitalHold is not available for sale in the
USA. It is not CE marked and
availability is subject to regulatory clearance or approval in some
markets
Use of Non-GAAP Financial Measures
Accuray reports its financial results in accordance with
generally accepted accounting principles in the United States (GAAP) and the rules of the
SEC. To supplement its financial statements prepared and presented
in accordance with GAAP, Accuray uses certain non-GAAP financial
measures, such as adjusted EBITDA, gross orders on a constant
currency basis and net revenue on a constant currency basis.
Accuray has supplemented its GAAP net income (loss) with a
non-GAAP measure of adjusted earnings before interest, taxes,
depreciation, amortization and stock-based compensation ("adjusted
EBITDA"). The calculation of adjusted EBITDA also excludes
certain non-recurring, irregular and one-time items. 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 income (loss) (the most
directly comparable GAAP measure) to non-GAAP adjusted EBITDA is
provided in the schedules below.
Accuray has also reported certain operating results on a
constant currency basis in order to facilitate period-to-period
comparisons of its results without regard to the impact of foreign
currency exchange rate fluctuations. Management believes disclosure
of non-GAAP constant currency results is helpful to investors
because it facilitates period-to-period comparisons of the
company's results by increasing the transparency of the underlying
performance by excluding the impact of foreign currency exchange
rate fluctuations. The GAAP measure most directly comparable to net
revenue on a constant currency basis is revenue. Accuray calculates
the constant currency amounts by translating local currency amounts
in the current period using the same foreign translation rate used
in the prior period being compared against rather than the actual
exchange rate in effect during the current period.
There are limitations in using these non-GAAP financial measures
because they are not prepared in accordance with GAAP and may not
be directly comparable to similarly titled measures used by other
companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for comparable 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 committed to expanding
the powerful potential of radiation therapy to improve as many
lives as possible. We invent unique, market-changing solutions that
are designed to deliver radiation treatments for even the most
complex cases—while making commonly treatable cases even easier—to
meet the full spectrum of patient needs. We are dedicated to
continuous innovation in radiation therapy for oncology,
neuro-radiosurgery, and beyond, as we partner with clinicians and
administrators, empowering them to help patients get back to their
lives, faster. Accuray is headquartered in Sunnyvale, California, with facilities
worldwide.
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 expectations regarding: total
revenue and adjusted EBITDA; the effect of the global economic
environment and the COVID-19 pandemic on the company and the market
in general, including with respect to the company's ability to
navigate supply chain, logistics, macroeconomic, and foreign
exchange challenges; delivering on the company's growth agenda and
executing on strategic partnerships; creating long term value for
customers, patients, employees, and shareholders; expectations
regarding commercial strategy and execution as well as growth
opportunities; the company's order and revenue growth and ability
to gain market share; the company's China joint venture and other partnerships,
including the timing of any product launches; the company's product
innovations and developments, including those developed with
strategic partners, and the ability of such innovations and
developments to provide a competitive advantage and expand the
market; and the effect of clinical evidence generation. 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 effect of the global macroeconomic
environment, including foreign exchange, and the COVID-19 pandemic
on the operations of the company and those of its customers and
suppliers; disruptions to our supply chain, including increased
logistics costs; the company's ability to achieve widespread market
acceptance of its products; the company's ability to realize the
expected benefits of the China
joint venture and other partnerships; risks inherent in
international operations; 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; 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 17, 2022 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.
Aman Patel,
CFA
|
Beth Kaplan
|
Investor Relations,
ICR-Westwicke
|
Public Relations
Director, Accuray
|
+1 (443)
450-4191
|
+1 (408)
789-4426
|
aman.patel@westwicke.com
|
bkaplan@accuray.com
|
###
Financial Tables to Follow
Accuray
Incorporated Condensed Consolidated Statements of
Operations (in thousands, except per share data)
(Unaudited)
|
|
|
|
For the Three
Months
Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
Net revenue:
|
|
|
|
|
|
|
Products
|
|
$
|
44,623
|
|
|
$
|
52,759
|
|
Services
|
|
|
51,870
|
|
|
|
54,683
|
|
Total net
revenue
|
|
|
96,493
|
|
|
|
107,442
|
|
Cost of
revenue:
|
|
|
|
|
|
|
Cost of
products
|
|
|
28,850
|
|
|
|
31,509
|
|
Cost of
services
|
|
|
33,046
|
|
|
|
36,409
|
|
Total cost of
revenue
|
|
|
61,896
|
|
|
|
67,918
|
|
Gross profit
|
|
|
34,597
|
|
|
|
39,524
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development
|
|
|
14,092
|
|
|
|
14,382
|
|
Selling and
marketing
|
|
|
10,795
|
|
|
|
11,271
|
|
General and
administrative
|
|
|
11,892
|
|
|
|
11,460
|
|
Total operating
expenses
|
|
|
36,779
|
|
|
|
37,113
|
|
Income (loss) from
operations
|
|
|
(2,182)
|
|
|
|
2,411
|
|
Loss on equity method
investment, net
|
|
|
(368)
|
|
|
|
(340)
|
|
Other expense,
net
|
|
|
(2,558)
|
|
|
|
(2,668)
|
|
Loss before provision
for income taxes
|
|
|
(5,108)
|
|
|
|
(597)
|
|
Provision for income
taxes
|
|
|
341
|
|
|
|
431
|
|
Net loss
|
|
$
|
(5,449)
|
|
|
$
|
(1,028)
|
|
Net loss per share -
basic
|
|
$
|
(0.06)
|
|
|
$
|
(0.01)
|
|
Net loss per share -
diluted
|
|
$
|
(0.06)
|
|
|
$
|
(0.01)
|
|
Weighted average common
shares used in
computing loss per share:
|
|
|
|
|
|
|
Basic
|
|
|
93,529
|
|
|
|
90,838
|
|
Diluted
|
|
|
93,529
|
|
|
|
90,838
|
|
Accuray
Incorporated Condensed Consolidated Balance
Sheets (in thousands)
(Unaudited)
|
|
|
|
September
30,
|
|
|
June
30,
|
|
|
|
2022
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
81,007
|
|
|
$
|
88,737
|
|
Restricted
cash
|
|
|
203
|
|
|
|
204
|
|
Accounts receivable,
net
|
|
|
77,029
|
|
|
|
94,442
|
|
Inventories
|
|
|
152,624
|
|
|
|
142,254
|
|
Prepaid expenses and
other current assets
|
|
|
24,241
|
|
|
|
23,794
|
|
Deferred cost of
revenue
|
|
|
161
|
|
|
|
1,459
|
|
Total current
assets
|
|
|
335,265
|
|
|
|
350,890
|
|
Property and equipment,
net
|
|
|
10,938
|
|
|
|
12,685
|
|
Investment in joint
venture
|
|
|
12,776
|
|
|
|
13,879
|
|
Operating lease
right-of-use assets, net
|
|
|
26,789
|
|
|
|
16,798
|
|
Goodwill
|
|
|
57,658
|
|
|
|
57,840
|
|
Intangible assets,
net
|
|
|
214
|
|
|
|
250
|
|
Long-term restricted
cash
|
|
|
1,180
|
|
|
|
1,213
|
|
Other assets
|
|
|
21,529
|
|
|
|
19,294
|
|
Total
assets
|
|
$
|
466,349
|
|
|
$
|
472,849
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
32,945
|
|
|
$
|
31,337
|
|
Accrued
compensation
|
|
|
30,890
|
|
|
|
29,441
|
|
Operating lease
liabilities, current
|
|
|
4,864
|
|
|
|
8,567
|
|
Other accrued
liabilities
|
|
|
30,201
|
|
|
|
30,285
|
|
Customer
advances
|
|
|
17,983
|
|
|
|
25,290
|
|
Deferred
revenue
|
|
|
69,948
|
|
|
|
75,375
|
|
Short-term
debt
|
|
|
5,705
|
|
|
|
8,563
|
|
Total current
liabilities
|
|
|
192,536
|
|
|
|
208,858
|
|
Operating lease
liabilities, non-current
|
|
|
24,123
|
|
|
|
10,453
|
|
Long-term other
liabilities
|
|
|
3,626
|
|
|
|
3,748
|
|
Deferred revenue,
non-current
|
|
|
28,453
|
|
|
|
24,694
|
|
Long-term
debt
|
|
|
170,620
|
|
|
|
171,907
|
|
Total
liabilities
|
|
|
419,358
|
|
|
|
419,660
|
|
Equity:
|
|
|
|
|
|
|
Common
stock
|
|
|
94
|
|
|
|
94
|
|
Additional paid-in
capital
|
|
|
546,117
|
|
|
|
543,211
|
|
Accumulated other
comprehensive income (loss)
|
|
|
(1,249)
|
|
|
|
2,406
|
|
Accumulated
deficit
|
|
|
(497,971)
|
|
|
|
(492,522)
|
|
Total
equity
|
|
|
46,991
|
|
|
|
53,189
|
|
Total liabilities and
equity
|
|
$
|
466,349
|
|
|
$
|
472,849
|
|
Accuray
Incorporated Summary of Orders and Backlog (in
thousands)
(Unaudited)
|
|
|
|
For the Three
Months
Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
Gross Orders
|
|
$
|
69,848
|
|
|
$
|
69,984
|
|
Net Orders
|
|
|
19,571
|
|
|
|
40,763
|
|
Order
Backlog
|
|
|
538,447
|
|
|
|
602,905
|
|
Accuray
Incorporated Reconciliation of GAAP Net Income (Loss) to
Adjusted Earnings Before Interest, Taxes,
Depreciation, Amortization and Stock-Based Compensation
(Adjusted EBITDA) (in thousands)
(Unaudited)
|
|
|
|
For the Three
Months
Ended September 30,
|
|
|
|
2022
|
|
|
2021
|
|
GAAP net
loss
|
|
$
|
(5,449)
|
|
|
$
|
(1,028)
|
|
Depreciation and
amortization (a)
|
|
|
1,176
|
|
|
|
1,419
|
|
Stock-based
compensation
|
|
|
2,916
|
|
|
|
2,516
|
|
Interest expense, net
(b)
|
|
|
2,256
|
|
|
|
2,036
|
|
Provision for income
taxes
|
|
|
341
|
|
|
|
431
|
|
ERP and ERP related
expenditures
|
|
|
655
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
1,895
|
|
|
$
|
5,374
|
|
(a)
|
consists of
depreciation, primarily on property and equipment as well as
amortization of intangibles.
|
(b)
|
consists primarily of
interest expense associated with outstanding debt.
|
Accuray
Incorporated Forward-Looking
Guidance Reconciliation of Projected Net Income (Loss) to
Projected Adjusted Earnings Before Interest, Taxes,
Depreciation,
Amortization and Stock-Based Compensation (Adjusted
EBITDA) (in thousands)
(Unaudited)
|
|
|
Twelve Months
Ending
June 30, 2023
|
|
|
|
From
|
|
|
To
|
|
GAAP net income
(loss)
|
|
$
|
(3,500)
|
|
|
$
|
500
|
|
Depreciation and
amortization (a)
|
|
|
6,300
|
|
|
|
6,300
|
|
Stock-based
compensation
|
|
|
11,600
|
|
|
|
11,600
|
|
Interest expense, net
(b)
|
|
|
8,000
|
|
|
|
8,000
|
|
Provision for income
taxes
|
|
|
2,000
|
|
|
|
2,000
|
|
ERP and ERP related
expenditures
|
|
|
1,600
|
|
|
|
1,600
|
|
Adjusted
EBITDA
|
|
$
|
26,000
|
|
|
$
|
30,000
|
|
(a)
|
consists of
depreciation, primarily on property and equipment as well as
amortization of intangibles.
|
(b)
|
consists primarily of
interest expense associated with outstanding debt.
|
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SOURCE Accuray Incorporated