Company delivers record quarterly revenue and
unit volume in Q3; Reiterates fiscal year guidance
SUNNYVALE, Calif., April 26,
2023 /PRNewswire/ -- Accuray Incorporated
(NASDAQ: ARAY) today reported financial results for the third
quarter of fiscal 2023 ended March 31,
2023.
Third Quarter Fiscal 2023 Summary
- Net revenue of $118.1 million
increased 22.8 percent from the same period in the prior fiscal
year. Net revenue on a constant currency basis was $122.1 million, which represents a 27.0 percent
increase versus the same period in the prior fiscal year.
- GAAP net income of $0.6 million,
as compared to GAAP net loss of $1.0
million in the same period in the prior fiscal year.
Adjusted EBITDA of $8.3 million, as
compared to adjusted EBITDA of $5.4
million in the same period in the prior fiscal year, which
represents a 53.5 percent increase.
- Gross orders of $73.8 million
with a 3.0 percent increase in unit volume compared to the same
period in the prior fiscal year represented a book to bill ratio of
1.2. Gross orders on a constant currency basis were $76.7 million.
Other Recent Operational Highlights
- Shipped 30 systems setting a new record of quarterly shipments
and 67 percent growth compared to 18 systems shipped in the prior
year period.
- Achieved 1,000+ installed system milestone with 4 percent
global installed base growth year over year lifted by 31 percent
growth of installed systems in China.
- 45 percent global product revenue growth year over year
reflects strong customer adoption.
- PACE-A trial data indicates SBRT preserves urinary continence
and sexual function better than surgery in men with prostate
cancer.
"Accuray delivered strong revenue and EBITDA growth in the third
quarter driven by growing global demand for our advanced
radiotherapy solutions," said Suzanne
Winter, Chief Executive Officer. "Our teams are laser
focused on making meaningful progress against our long-term
strategic goals. We believe our investments in technology
innovation, focus on operational discipline and strategic
partnerships, matched with a best-in-class team, will enable us to
transform radiotherapy care and bring value to patients and
healthcare providers worldwide."
Fiscal Third Quarter Results
Total net revenue in the third quarter of fiscal 2023 was
$118.1 million, compared to
$96.2 million in the prior fiscal
year third quarter. Product revenue in the third quarter of fiscal
2023 was $62.8 million, compared to
$43.2 million in the prior fiscal
year third quarter, while service revenue for the third quarter of
fiscal 2023 was $55.2 million,
compared to $53.0 million in the
prior fiscal year third quarter.
Total gross profit in the third quarter of fiscal 2023 was
$38.7 million, or 32.8 percent of
total net revenue, compared to total gross profit of $34.8 million, or 36.2 percent of total net
revenue, in the prior fiscal year third quarter.
Operating expenses in the third quarter of fiscal 2023 were
$36.4 million, including
non-recurring charges of $0.8 million
for restructuring charges and $1.1
million of ERP and ERP related expenditures, compared to
$35.1 million in the prior fiscal
year third quarter. Excluding these non-recurring charges, total
operating expenses were down 1.5 percent compared to the same
period in the prior fiscal year third quarter.
Net income in the third quarter of fiscal 2023 was $0.6 million, or $0.01 per share, compared to a net loss of
$1.0 million, or $0.01 per share, in the prior fiscal year third
quarter. Adjusted EBITDA in the third quarter of fiscal 2023 was
$8.3 million, compared to
$5.4 million in the prior fiscal year
third quarter.
Gross product orders in the third quarter of fiscal 2023 totaled
$73.8 million compared to
$88.6 million in the prior fiscal
year third quarter. Order backlog as of March 31, 2023 was $506.6
million, approximately 12.7 percent lower than at the end of
the prior fiscal year third quarter. In the third quarter of fiscal
year 2023, there were $5.2 million in
order cancellations and $26.4 million
in orders aged out as they were more than 30 months in age.
Cash, cash equivalents, and short-term restricted cash were
$89.2 million as of March 31, 2023, an increase of $21.3 million from December 31, 2022.
Fiscal Nine Months Results
Total net revenue in the nine months ended March 31, 2023 was $329.3
million, compared to $319.9
million in the same prior fiscal year period. Product
revenue for the nine months ended March 31,
2023 was $170.7 million,
compared to $156.7 million in the
same prior fiscal year period, while service revenue totaled
$158.6 million, compared to
$163.2 million in the same prior
fiscal year period.
Total gross profit in the nine months ended March 31, 2023 was $116.3
million, or 35.3 percent of total net revenue, compared to
total gross profit of $116.9 million,
or 36.6 percent of total net revenue in the same prior fiscal year
period.
Operating expenses in the nine months ended March 31, 2023 were $113.4
million, including non-recurring charges of $2.7 million for restructuring charges and
$2.2 million of ERP and ERP related
expenditures, compared to $110.8
million in the same prior fiscal year period. Excluding
these non-recurring charges, total operating expenses were down 2.1
percent compared to the same prior fiscal year period.
Net loss in the nine months ended March
31, 2023 was $6.7 million, or
$0.07 per share, compared to a net
loss of $1.9 million, or $0.02 per share, in the same prior fiscal year
period. Adjusted EBITDA for the nine months ended March 31, 2023, was $18.7
million, compared to $17.7
million in the same prior fiscal year period.
Gross product orders in the nine months ended March 31, 2023 totaled $222.6 million, compared to $243.9 million in the same prior fiscal year
period. Order backlog as of March 31,
2023 was $506.6 million,
approximately 12.7 percent lower than at the end of same period in
the prior fiscal year period.
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 reaffirming 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 percent.
- 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, interest expense,
provision for income taxes, restructuring charges and ERP and ERP
related expenditures. 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 third 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: 3072079. An archived
webcast will also be available on Accuray's website until Accuray
announces its results for the fourth quarter of fiscal 2023.
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, including
restructuring charges and ERP and ERP related expenditures.
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. The GAAP measure
most directly comparable to gross orders on a constant currency
basis is gross orders. 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,
progressing against long-term strategic goals, and executing on
strategic partnerships; the company's ability to transform
radiotherapy care and create value for customers, patients,
employees, and shareholders; expectations regarding commercial
strategy and execution as well as growth opportunities;
expectations regarding the market in China as well as with respect to the company's
China joint venture and other
strategic partnerships, including expected timing of regulatory
clearances; expectations related to the markets in which the
company operates; the company's ability to accelerate profitability
in the long run; the impact of strategic pricing actions on revenue
and gross margins; and the company's ability to deliver on its
promise to improve the outcome and quality of life of patients.
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 Quarterly Report on Form 10-Q, filed with
the Securities and Exchange Commission (the "SEC") on
February 2, 2023 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)
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
62,846
|
|
|
$
|
43,198
|
|
|
$
|
170,738
|
|
|
$
|
156,678
|
|
Services
|
|
|
55,214
|
|
|
|
52,971
|
|
|
|
158,575
|
|
|
|
163,208
|
|
Total net
revenue
|
|
|
118,060
|
|
|
|
96,169
|
|
|
|
329,313
|
|
|
|
319,886
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
43,529
|
|
|
|
28,371
|
|
|
|
111,627
|
|
|
|
95,400
|
|
Cost of
services
|
|
|
35,813
|
|
|
|
33,014
|
|
|
|
101,404
|
|
|
|
107,551
|
|
Total cost of
revenue
|
|
|
79,342
|
|
|
|
61,385
|
|
|
|
213,031
|
|
|
|
202,951
|
|
Gross profit
|
|
|
38,718
|
|
|
|
34,784
|
|
|
|
116,282
|
|
|
|
116,935
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
14,209
|
|
|
|
14,104
|
|
|
|
42,942
|
|
|
|
43,183
|
|
Selling and
marketing
|
|
|
11,130
|
|
|
|
10,798
|
|
|
|
35,511
|
|
|
|
35,302
|
|
General and
administrative
|
|
|
11,063
|
|
|
|
10,174
|
|
|
|
34,990
|
|
|
|
32,350
|
|
Total operating
expenses
|
|
|
36,402
|
|
|
|
35,076
|
|
|
|
113,443
|
|
|
|
110,835
|
|
Income (loss) from
operations
|
|
|
2,316
|
|
|
|
(292)
|
|
|
|
2,839
|
|
|
|
6,100
|
|
Income on equity
method investment, net
|
|
|
2,027
|
|
|
|
1,946
|
|
|
|
960
|
|
|
|
774
|
|
Other expense,
net
|
|
|
(3,222)
|
|
|
|
(2,293)
|
|
|
|
(8,611)
|
|
|
|
(7,451)
|
|
Income (loss) before
provision for income taxes
|
|
|
1,121
|
|
|
|
(639)
|
|
|
|
(4,812)
|
|
|
|
(577)
|
|
Provision for income
taxes
|
|
|
522
|
|
|
|
407
|
|
|
|
1,912
|
|
|
|
1,318
|
|
Net income
(loss)
|
|
$
|
599
|
|
|
$
|
(1,046)
|
|
|
$
|
(6,724)
|
|
|
$
|
(1,895)
|
|
Net income (loss) per
share - basic
|
|
$
|
0.01
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.02)
|
|
Net income (loss) per
share - diluted
|
|
$
|
0.01
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.02)
|
|
Weighted average common
shares used in computing loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
95,522
|
|
|
|
92,761
|
|
|
|
94,532
|
|
|
|
91,780
|
|
Diluted
|
|
|
97,455
|
|
|
|
92,761
|
|
|
|
94,532
|
|
|
|
91,780
|
|
Accuray Incorporated
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(Unaudited)
|
|
|
|
March
31,
|
|
|
June
30,
|
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
89,057
|
|
|
$
|
88,737
|
|
Restricted
cash
|
|
|
189
|
|
|
|
204
|
|
Accounts receivable,
net
|
|
|
77,350
|
|
|
|
94,442
|
|
Inventories
|
|
|
150,581
|
|
|
|
142,254
|
|
Prepaid expenses and
other current assets
|
|
|
25,455
|
|
|
|
23,794
|
|
Deferred cost of
revenue
|
|
|
283
|
|
|
|
1,459
|
|
Total current
assets
|
|
|
342,915
|
|
|
|
350,890
|
|
Property and equipment,
net
|
|
|
11,722
|
|
|
|
12,685
|
|
Investment in joint
venture
|
|
|
12,217
|
|
|
|
13,879
|
|
Operating lease
right-of-use assets, net
|
|
|
24,408
|
|
|
|
16,798
|
|
Goodwill
|
|
|
57,807
|
|
|
|
57,840
|
|
Intangible assets,
net
|
|
|
257
|
|
|
|
250
|
|
Long-term restricted
cash
|
|
|
1,604
|
|
|
|
1,213
|
|
Other assets
|
|
|
24,790
|
|
|
|
19,294
|
|
Total
assets
|
|
$
|
475,720
|
|
|
$
|
472,849
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
28,647
|
|
|
$
|
31,337
|
|
Accrued
compensation
|
|
|
21,434
|
|
|
|
29,441
|
|
Operating lease
liabilities, current
|
|
|
4,009
|
|
|
|
8,567
|
|
Other accrued
liabilities
|
|
|
36,811
|
|
|
|
30,285
|
|
Customer
advances
|
|
|
22,078
|
|
|
|
25,290
|
|
Deferred
revenue
|
|
|
73,137
|
|
|
|
75,375
|
|
Short-term
debt
|
|
|
5,713
|
|
|
|
8,563
|
|
Total current
liabilities
|
|
|
191,829
|
|
|
|
208,858
|
|
Operating lease
liabilities, non-current
|
|
|
22,466
|
|
|
|
10,453
|
|
Long-term other
liabilities
|
|
|
4,643
|
|
|
|
3,748
|
|
Deferred revenue,
non-current
|
|
|
29,245
|
|
|
|
24,694
|
|
Long-term
debt
|
|
|
172,832
|
|
|
|
171,907
|
|
Total
liabilities
|
|
|
421,015
|
|
|
|
419,660
|
|
Equity:
|
|
|
|
|
|
|
Common
stock
|
|
|
96
|
|
|
|
94
|
|
Additional paid-in
capital
|
|
|
551,847
|
|
|
|
543,211
|
|
Accumulated other
comprehensive income
|
|
|
2,342
|
|
|
|
2,406
|
|
Accumulated
deficit
|
|
|
(499,580)
|
|
|
|
(492,522)
|
|
Total
equity
|
|
|
54,705
|
|
|
|
53,189
|
|
Total liabilities and
equity
|
|
$
|
475,720
|
|
|
$
|
472,849
|
|
Accuray Incorporated
|
Summary of Orders
and Backlog
|
(in thousands, except
book to bill ratio)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Gross Orders
|
|
$
|
73,764
|
|
|
$
|
88,561
|
|
|
$
|
222,647
|
|
|
$
|
243,926
|
|
Net Orders
|
|
|
54,737
|
|
|
|
43,542
|
|
|
|
115,176
|
|
|
|
124,488
|
|
Order
Backlog
|
|
|
506,587
|
|
|
|
580,428
|
|
|
|
506,587
|
|
|
|
580,428
|
|
Book to bill ratio
(a)
|
|
|
1.2
|
|
|
|
2.1
|
|
|
|
1.3
|
|
|
|
1.6
|
|
(a)
|
Book to bill ratio is
defined as gross orders for the period divided by product revenue
for the period
|
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)
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
GAAP net income
(loss)
|
|
$
|
599
|
|
|
$
|
(1,046)
|
|
|
$
|
(6,724)
|
|
|
$
|
(1,895)
|
|
Depreciation and
amortization (a)
|
|
|
1,103
|
|
|
|
1,406
|
|
|
|
3,430
|
|
|
|
4,247
|
|
Stock-based
compensation
|
|
|
1,559
|
|
|
|
2,695
|
|
|
|
7,601
|
|
|
|
7,906
|
|
Interest expense, net
(b)
|
|
|
2,707
|
|
|
|
1,975
|
|
|
|
7,605
|
|
|
|
6,081
|
|
Provision for income
taxes
|
|
|
522
|
|
|
|
407
|
|
|
|
1,912
|
|
|
|
1,318
|
|
Restructuring
charges
|
|
|
800
|
|
|
|
—
|
|
|
|
2,738
|
|
|
|
—
|
|
ERP and ERP related
expenditures
|
|
|
1,057
|
|
|
|
—
|
|
|
|
2,178
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
8,347
|
|
|
$
|
5,437
|
|
|
$
|
18,740
|
|
|
$
|
17,657
|
|
(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
loss
|
|
$
|
(7,000)
|
|
|
$
|
(3,000)
|
|
Depreciation and
amortization (a)
|
|
|
4,500
|
|
|
|
4,500
|
|
Stock-based
compensation
|
|
|
10,200
|
|
|
|
10,200
|
|
Interest expense, net
(b)
|
|
|
10,000
|
|
|
|
10,000
|
|
Provision for income
taxes
|
|
|
2,400
|
|
|
|
2,400
|
|
Restructuring
charges
|
|
|
2,700
|
|
|
|
2,700
|
|
ERP and ERP related
expenditures
|
|
|
3,200
|
|
|
|
3,200
|
|
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