Achieves Solid Revenue, Positive Service Margins and Positive Cash Flow
Integration Performance Metrics Ahead of Plan; Remains on Track for Return to Profitability
SUNNYVALE, Calif., February 8, 2012 – Accuray Incorporated (Nasdaq: ARAY), the premier radiation oncology company, announced today financial results for the second quarter of fiscal 2012 that ended December 31, 2011. The fiscal 2012 financial data presented below reflects the consolidation of both Accuray and TomoTherapy, a company that was acquired by Accuray in June 2011. Non-GAAP results are provided to enhance understanding of Accuray’s ongoing core results of operations.
Highlights from the second quarter of fiscal 2012 included solid revenue, positive service margins and effective management of operating expenses. Accuray continued to successfully execute its integration plans from its acquisition of TomoTherapy and reported integration performance metrics that met or exceeded the company’s stated goals. The company was cash-flow positive during the quarter and remains on track to return to profitability on a non-GAAP basis by the end of fiscal year 2013 as forecasted.
“We are pleased to achieve another quarter of solid revenue as our integration of TomoTherapy continues to progress well and our global installed base continues to expand,” said Euan S. Thomson, Ph.D., president and chief executive officer of Accuray. “We continue to capture competitive vault space, and as our installed base grows, so does our recurring service revenue. We remain ahead of plan with our TomoTherapy System reliability improvements and have made significant progress on improving service gross margins. Overall, we’re pleased to report that we remain on track to return to profitability on a non-GAAP basis as scheduled by the end of fiscal year 2013.”
For the second quarter of fiscal 2012, Accuray reported total consolidated GAAP revenue of $106.4 million and non-GAAP total revenue of $102.9 million. By comparison, for the quarter ended December 31, 2010, the sum of the revenue reported by Accuray and TomoTherapy as separate companies totaled $116.3 million on a pro forma basis. The higher 2010 revenue was a result of historically high legacy TomoTherapy revenue for the quarter due to calendar year-end shipment and installation activity. Legacy TomoTherapy’s fiscal year ended December 31. Non-GAAP revenue for the six-month period ended December 31, 2011 was $198.6 million, which is slightly higher than the same period in the prior year.
The consolidated GAAP gross profit margin for the second quarter of fiscal 2012 was 48.6 percent for products and 21.2 percent for services. The consolidated non-GAAP gross profit margin for the second quarter of fiscal 2012 was 55.8 percent for products and 12.3 percent for services. Positive service gross margins were driven largely by continued increase in reliability and reduction of service costs for TomoTherapy Systems. Accuray significantly improved service gross margins and with its reported metrics, remains ahead of plan for achieving at least 10 percent service margins by the fourth quarter of fiscal year 2012 and at least 20 percent by the fourth quarter of fiscal year 2013 on a non-GAAP basis.
Consolidated GAAP net loss attributable to stockholders for the second quarter of fiscal 2012 was $10.4 million, or $0.15 per share. Non-GAAP net loss for the second quarter of fiscal 2012 was $7.1 million or $0.10 per share. By comparison, for the quarter ended December 31, 2010 the sum of the net losses reported by Accuray and TomoTherapy as separate companies totaled $1.9 million on a pro forma basis.
Accuray continues to see a significant sales pipeline in all four of its regional business units for both its CyberKnife and TomoTherapy technologies. During the second quarter of fiscal 2012, $70.3 million of net new system orders were added to backlog, resulting in a total system backlog of $276.8 million as of December 31, 2011, an increase of 2.2 percent from the prior quarter.
During the second quarter of fiscal 2012, 25 units were shipped and 23 were installed, increasing the worldwide Accuray installed base to 616 systems.
Accuray’s cash, cash equivalents and restricted cash totaled $152.0 million as of December 31, 2011.
Outlook
The following statement, among others in this release, is forward-looking and actual results may differ materially. During fiscal year 2012, Accuray expects that revenue will be in the range of $411 million to $426 million (GAAP), or $400 million to $415 million (non-GAAP).
Additional Information
Additional information including slides of second quarter highlights which will be discussed during the conference call, is available in the Investor Relations section of the company’s website at www.accuray.com.
Earnings Call Open to Investors
Accuray will hold a conference call for financial analysts and investors on Wednesday, February 8, 2012 at 2:00 p.m. PST/5:00 p.m. EST. The conference call dial-in numbers are 1-800-706-7748 (USA) or 1-617-614-3473 (International), Conference ID: 85618699. A live webcast of the call will also be available from the Investor Relations section of the corporate website at www.accuray.com/investors. In addition, a recording of the call will be available by calling 1-888-286-8010 (USA) or 1-617-801-6888 (International), Conference ID: 85149521, beginning at 5:00 p.m. PST/8:00 p.m. EST on February 8, 2012 and will be available through February 16, 2012. A webcast replay will also be available from the Investor Relations section of the Company’s website at www.accuray.com/investors from approximately 5:00 p.m. PST/8:00 p.m. EST today through Accuray’s release of its results for the third quarter of fiscal 2012, ending March 31, 2012.
About Accuray
Accuray Incorporated (Nasdaq: ARAY), based in Sunnyvale, Calif., is the premier radiation oncology company that develops, manufactures and sells personalized, 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 – the CyberKnife and TomoTherapy Systems – are designed to deliver radiosurgery, stereotactic body radiation therapy, intensity modulated radiation therapy, image guided radiation therapy, and adaptive radiation therapy. To date, more than 200,000 patients worldwide have been treated using the Company’s technologies and 616 systems have been installed in leading hospitals around the world. 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 profitability, continuing improvements in gross margins and expected achievement of specific targets for fiscal years 2012 and 2013, future demand for its products and services and revenue for fiscal 2012. 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 timeliness and success of the integration of TomoTherapy; the company’s ability to convert backlog to revenue; the success of its worldwide sales and marketing efforts; the extent of market acceptance for the company’s products and services; the company’s ability to develop and bring to market new or enhanced products; 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 for fiscal year 2011 filed on September 19, 2011, and in reports on Form 10-Q for the first and second quarters of fiscal 2012.
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.