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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the quarterly period ended
December 31,
2022
or
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the transition period from to
Commission File Number:
001-33301
ACCURAY INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
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Delaware
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20-8370041
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer
Identification Number)
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1310 Chesapeake Terrace
Sunnyvale,
California
94089
(Address of Principal Executive Offices Including Zip
Code)
(408)
716-4600
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.001 par value per share
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ARAY
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The Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
reports), and (2) has been subject to such filing requirements for
the past 90 days. ☒
Yes
☐ No
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes
☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
☒
No
As
of January 27, 2023, there were
95,494,729
shares
of the Registrant’s Common Stock, par value $0.001 per share,
outstanding.
+
Table of Contents
We own or have rights to various trademarks and tradenames used in
our business in the United States or other countries, including the
following: Accuray®, Accuray Logo®, CyberKnife®, Hi‑Art®,
RoboCouch®, Synchrony®, TomoTherapy®, Xsight®, Accuray Precision®,
AutoSegmentation™, CTrue™, H™ Series, iDMS®, InCise™, Iris™,
CyberKnife M6™ Series, Accuray OIS Connect™, PreciseART®,
PreciseRTX®, Treatment Planning System™, TomoDirect™, TomoEDGE™,
TomoH®, TomoHD®, TomoHDA™, TomoHelical™, TomoTherapy Quality
Assurance™, Radixact®, Onrad ™, S7™, and VoLO™.
2
PART I.
FINANCIAL INFORMATION
Item 1.
Unaudited Condensed Consolidated
Financial Statements
Accuray Incorporated
Unaudited Condensed Consolidated
Balance Sheets
(in thousands, except share amounts and par value)
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December 31,
2022
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June 30,
2022
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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67,729
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$
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88,737
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Restricted cash
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189
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204
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Accounts receivable, net of allowance for credit losses of
$910 and
$1,000 as
of December 31, 2022, and June 30, 2022, respectively
(a)
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89,187
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94,442
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Inventories
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155,665
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142,254
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Prepaid expenses and other current assets (b)
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23,536
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|
|
23,794
|
|
|
Deferred cost of revenue
|
|
|
642
|
|
|
|
1,459
|
|
|
Total current assets
|
|
|
336,948
|
|
|
|
350,890
|
|
|
Property and equipment, net
|
|
|
11,155
|
|
|
|
12,685
|
|
|
Investment in joint venture
|
|
|
12,276
|
|
|
|
13,879
|
|
|
Operating lease right-of-use assets, net
|
|
|
25,334
|
|
|
|
16,798
|
|
|
Goodwill
|
|
|
57,776
|
|
|
|
57,840
|
|
|
Intangible assets, net
|
|
|
268
|
|
|
|
250
|
|
|
Long-term restricted cash
|
|
|
1,293
|
|
|
|
1,213
|
|
|
Other assets
|
|
|
23,719
|
|
|
|
19,294
|
|
|
Total assets
|
|
$
|
468,769
|
|
|
$
|
472,849
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
33,861
|
|
|
$
|
31,337
|
|
|
Accrued compensation
|
|
|
20,099
|
|
|
|
29,441
|
|
|
Operating lease liabilities, current
|
|
|
4,913
|
|
|
|
8,567
|
|
|
Other accrued liabilities
|
|
|
30,301
|
|
|
|
30,285
|
|
|
Customer advances
|
|
|
17,169
|
|
|
|
25,290
|
|
|
Deferred revenue
|
|
|
72,675
|
|
|
|
75,375
|
|
|
Short-term debt
|
|
|
5,702
|
|
|
|
8,563
|
|
|
Total current liabilities
|
|
|
184,720
|
|
|
|
208,858
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
Operating lease liabilities, non-current
|
|
|
22,664
|
|
|
|
10,453
|
|
|
Long-term other liabilities
|
|
|
5,181
|
|
|
|
3,748
|
|
|
Deferred revenue, non-current
|
|
|
30,357
|
|
|
|
24,694
|
|
|
Long-term debt
|
|
|
174,102
|
|
|
|
171,907
|
|
|
Total liabilities
|
|
|
417,024
|
|
|
|
419,660
|
|
|
Commitments and
contingencies (Note
9)
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, $0.001 par
value; authorized:
200,000,000 shares
as of December 31, 2022, and June 30, 2022, respectively; issued
and outstanding:
95,494,729 and
93,499,500 shares
at December 31, 2022, and June 30, 2022, respectively
|
|
|
95
|
|
|
|
94
|
|
|
Additional paid-in-capital
|
|
|
550,288
|
|
|
|
543,211
|
|
|
Accumulated other comprehensive income
|
|
|
1,541
|
|
|
|
2,406
|
|
|
Accumulated deficit
|
|
|
(500,179
|
)
|
|
|
(492,522
|
)
|
|
Total stockholders' equity
|
|
|
51,745
|
|
|
|
53,189
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
468,769
|
|
|
$
|
472,849
|
|
(a)
Includes trade receivable from the China joint venture, an equity
method investment,
of
$21,867
and
$24,828
at
December 31, 2022, and June 30, 2022,
respectively. See Note 14.
(b)
Includes other receivable from the China joint venture, an equity
method investment, of
$487
and
$861
at
December 31, 2022, and June 30, 2022,
respectively.
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
3
Accuray Incorporated
Unaudited Condensed Consolidated Statements
of Operations and Comprehensive Income (Loss)
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Six Months Ended
December 31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products (a)
|
|
$
|
63,269
|
|
|
$
|
60,721
|
|
|
$
|
107,892
|
|
|
$
|
113,480
|
|
|
Services (b)
|
|
|
51,491
|
|
|
|
55,554
|
|
|
|
103,361
|
|
|
|
110,237
|
|
|
Total net revenue
|
|
|
114,760
|
|
|
|
116,275
|
|
|
|
211,253
|
|
|
|
223,717
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
|
|
|
39,248
|
|
|
|
35,520
|
|
|
|
68,098
|
|
|
|
67,029
|
|
|
Cost of services
|
|
|
32,545
|
|
|
|
38,128
|
|
|
|
65,591
|
|
|
|
74,537
|
|
|
Total cost of revenue
(c)
|
|
|
71,793
|
|
|
|
73,648
|
|
|
|
133,689
|
|
|
|
141,566
|
|
|
Gross profit
|
|
|
42,967
|
|
|
|
42,627
|
|
|
|
77,564
|
|
|
|
82,151
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
(d)
|
|
|
14,641
|
|
|
|
14,697
|
|
|
|
28,733
|
|
|
|
29,079
|
|
|
Selling and marketing
|
|
|
13,586
|
|
|
|
13,233
|
|
|
|
24,381
|
|
|
|
24,504
|
|
|
General and administrative
|
|
|
12,035
|
|
|
|
10,716
|
|
|
|
23,927
|
|
|
|
22,176
|
|
|
Total operating expenses
|
|
|
40,262
|
|
|
|
38,646
|
|
|
|
77,041
|
|
|
|
75,759
|
|
|
Income from operations
|
|
|
2,705
|
|
|
|
3,981
|
|
|
|
523
|
|
|
|
6,392
|
|
|
Loss on equity method investment, net
|
|
|
(699
|
)
|
|
|
(832
|
)
|
|
|
(1,067
|
)
|
|
|
(1,172
|
)
|
|
Other expense, net
|
|
|
(2,831
|
)
|
|
|
(2,490
|
)
|
|
|
(5,389
|
)
|
|
|
(5,158
|
)
|
|
Income (loss) before provision for income taxes
|
|
|
(825
|
)
|
|
|
659
|
|
|
|
(5,933
|
)
|
|
|
62
|
|
|
Provision for income taxes
|
|
|
1,049
|
|
|
|
480
|
|
|
|
1,390
|
|
|
|
911
|
|
|
Net income (loss)
|
|
$
|
(1,874
|
)
|
|
$
|
179
|
|
|
$
|
(7,323
|
)
|
|
$
|
(849
|
)
|
|
Net income (loss) per share - basic
|
|
$
|
(0.02
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
Net income (loss) per share - diluted
|
|
$
|
(0.02
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
Weighted average common shares used in computing net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
94,567
|
|
|
|
91,761
|
|
|
|
94,048
|
|
|
|
91,299
|
|
|
Diluted
|
|
|
94,567
|
|
|
|
93,932
|
|
|
|
94,048
|
|
|
|
91,299
|
|
|
Net income (loss)
|
|
$
|
(1,874
|
)
|
|
$
|
179
|
|
|
$
|
(7,323
|
)
|
|
$
|
(849
|
)
|
|
Foreign currency translation adjustment
|
|
|
2,790
|
|
|
|
(108
|
)
|
|
|
(865
|
)
|
|
|
123
|
|
|
Comprehensive income (loss)
|
|
$
|
916
|
|
|
$
|
71
|
|
|
$
|
(8,188
|
)
|
|
$
|
(726
|
)
|
(a)
Includes sales to the China joint venture, an equity method
investment, of
$16,715
and
$25,584
during the
three and six months ended December 31, 2022, and
$8,816
and
$14,735
during the
three and six months ended December 31, 2021,
respectively. See Note 14.
(b)
Includes sales to the China joint venture, an equity method
investment, of
$2,494
and
$5,451
during the
three and six months ended December 31, 2022, respectively,
and
$2,679
and
$5,494
during the
three and six months ended December 31, 2021, respectively.
See Note 14.
(c)
Includes cost of revenue from sales to the China joint venture, an
equity method investment, of
$9,916
and
$15,823
during the
three and six months ended December 31, 2022, respectively,
and
$6,203
and
$14,248
during the
three and six months ended December 31, 2021,
respectively.
(d)
Includes charge back to the China joint venture, an equity method
investment, related to a research and development project of
$487
and
$1,266
during the
three and six months ended December 31, 2022, respectively,
and
$415
and
$994
during the
three and six months ended December 31, 2021,
respectively.
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
4
Accuray Incorporated
Unaudited Condensed Consolidated Statements
of Stockholders’ Equity
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Accumulated
|
|
|
Total
Stockholders
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income (Loss)
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance at June 30, 2022
|
|
|
93,500
|
|
|
$
|
94
|
|
|
$
|
543,211
|
|
|
$
|
2,406
|
|
|
$
|
(492,522
|
)
|
|
$
|
53,189
|
|
|
Issuance of restricted stock
|
|
|
279
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Share-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
2,906
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,906
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,449
|
)
|
|
|
(5,449
|
)
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,655
|
)
|
|
|
—
|
|
|
|
(3,655
|
)
|
|
Balance at September 30, 2022
|
|
|
93,779
|
|
|
$
|
94
|
|
|
$
|
546,117
|
|
|
$
|
(1,249
|
)
|
|
$
|
(497,971
|
)
|
|
$
|
46,991
|
|
|
Issuance of restricted stock
|
|
|
1,062
|
|
|
|
—
|
|
|
|
(116
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(116
|
)
|
|
Issuance of common stock under employee stock purchase
plan
|
|
|
653
|
|
|
|
1
|
|
|
|
1,138
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,139
|
|
|
Share-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
3,136
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,136
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,874
|
)
|
|
|
(1,874
|
)
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,790
|
|
|
|
—
|
|
|
|
2,790
|
|
|
Other
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
(334
|
)
|
|
|
(321
|
)
|
|
Balance at December 31, 2022
|
|
|
95,494
|
|
|
$
|
95
|
|
|
$
|
550,288
|
|
|
$
|
1,541
|
|
|
$
|
(500,179
|
)
|
|
$
|
51,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Accumulated
|
|
|
Total
Stockholders
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Income
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance at June 30, 2021
|
|
|
90,822
|
|
|
$
|
91
|
|
|
$
|
554,680
|
|
|
$
|
2,093
|
|
|
$
|
(488,024
|
)
|
|
$
|
68,840
|
|
|
Cumulative adjustment due to adoption of ASU No. 2020-06
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,633
|
)
|
|
|
—
|
|
|
|
849
|
|
|
|
(24,784
|
)
|
|
Issuance of restricted stock
|
|
|
97
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Share-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
2,506
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,506
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,028
|
)
|
|
|
(1,028
|
)
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
231
|
|
|
|
—
|
|
|
|
231
|
|
|
Balance at September 30, 2021
|
|
|
90,919
|
|
|
$
|
91
|
|
|
$
|
531,553
|
|
|
$
|
2,324
|
|
|
$
|
(488,203
|
)
|
|
$
|
45,765
|
|
|
Exercise of stock options, net
|
|
|
331
|
|
|
|
1
|
|
|
|
1,223
|
|
|
|
|
|
|
|
|
$
|
1,224
|
|
|
Issuance of restricted stock
|
|
|
1,061
|
|
|
|
—
|
|
|
|
(258
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(258
|
)
|
|
Issuance of common stock under employee stock purchase
plan
|
|
|
422
|
|
|
|
1
|
|
|
|
1,523
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,524
|
|
|
Share-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
2,668
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,668
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
179
|
|
|
|
179
|
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(108
|
)
|
|
|
—
|
|
|
|
(108
|
)
|
|
Balance at December 31, 2021
|
|
|
92,733
|
|
|
$
|
93
|
|
|
$
|
536,709
|
|
|
$
|
2,216
|
|
|
$
|
(488,024
|
)
|
|
$
|
50,994
|
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
5
Accuray Incorporated
Unaudited Condensed Consolidated
Statements of Cash Flows
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
December 31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(7,323
|
)
|
|
$
|
(849
|
)
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,327
|
|
|
|
2,841
|
|
|
Share-based compensation
|
|
|
6,042
|
|
|
|
5,211
|
|
|
Amortization of debt issuance costs
|
|
|
447
|
|
|
|
379
|
|
|
Provision for credit losses
|
|
|
68
|
|
|
|
366
|
|
|
Provision for write-down of inventories
|
|
|
1,972
|
|
|
|
1,875
|
|
|
Loss on disposal of property and equipment
|
|
|
2
|
|
|
|
28
|
|
|
Loss on equity method investment
|
|
|
1,067
|
|
|
|
1,172
|
|
|
Deferral (release) of equity method investment intra-entity profit
margin from sales
|
|
|
(986
|
)
|
|
|
955
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
5,701
|
|
|
|
2,954
|
|
|
Inventories
|
|
|
(14,237
|
)
|
|
|
(550
|
)
|
|
Prepaid expenses and other assets
|
|
|
(2,488
|
)
|
|
|
(872
|
)
|
|
Deferred cost of revenue
|
|
|
817
|
|
|
|
1,653
|
|
|
Accounts payable
|
|
|
3,037
|
|
|
|
10,182
|
|
|
Operating lease liabilities, net of operating lease right-of-use
assets
|
|
|
23
|
|
|
|
(435
|
)
|
|
Accrued liabilities
|
|
|
(8,123
|
)
|
|
|
2,486
|
|
|
Customer advances
|
|
|
(8,203
|
)
|
|
|
(314
|
)
|
|
Deferred revenues
|
|
|
1,889
|
|
|
|
(3,071
|
)
|
|
Net cash provided by (used in) operating activities
|
|
|
(17,968
|
)
|
|
|
24,011
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(2,773
|
)
|
|
|
(2,259
|
)
|
|
Purchase of intangible asset
|
|
|
(33
|
)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
(2,806
|
)
|
|
|
(2,259
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Proceeds from employee stock plans
|
|
|
1,139
|
|
|
|
1,524
|
|
|
Proceeds from exercise of options
|
|
|
-
|
|
|
|
1,224
|
|
|
Taxes paid related to net share settlement of equity
awards
|
|
|
(116
|
)
|
|
|
(258
|
)
|
|
Debt issuance costs
|
|
|
(248
|
)
|
|
|
—
|
|
|
Paydown under Term Loan Facility
|
|
|
(3,000
|
)
|
|
|
(2,000
|
)
|
|
Repayments under the Notes
|
|
|
(2,865
|
)
|
|
|
—
|
|
|
Borrowings (Repayments) under Revolving Credit Facility,
net
|
|
|
5,000
|
|
|
|
(15,000
|
)
|
|
Net cash used in financing activities
|
|
|
(90
|
|