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For the first quarter of fiscal 2009, Accuray reported total revenue of$55.9 million, a 15 percent increase over first quarter of fiscal 2008 totalrevenue of $48.6 million and a 10 percent sequential increase over the fourthquarter of fiscal 2008 total revenue of $50.9 million.
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Net loss for the first quarter of fiscal 2009 was $3.2 million, or $0.06per diluted share, compared to net income of $2.3 million, or $0.04 perdiluted share, during the same period last year. The loss for the quarter wasdriven primarily by non-recurring employee separation expenses of $2.1 millionand inventory write downs of $1.3 million.
Non-cash, stock based compensation charges for the first quarter of fiscal2009 were $5.0 million, or $0.09 per diluted share.
During the first quarter of fiscal 2009, the company added 12 newcontracts to backlog, representing a total value of $58.6 million. Of the 12contracts, 7 came from international customers.
At September 27, 2008, backlog was approximately $644 million, withapproximately $358 million associated with CyberKnife(R) Robotic RadiosurgerySystem contracts and approximately $286 million associated with services andother recurring revenue. Accuray's backlog is composed of signed contractsthat the company believes have a substantially high probability of beingrecognized as revenue in future periods. Of the $644 million in backlog atthe end of the quarter, 70 percent consisted of non-contingent contracts,representing backlog for which contractual contingencies have been satisfied.
Accuray's cash and investment balances at the end of the quarter totaled$162.1 million, which includes cash and cash equivalents of $27.2 million,short-term investments of $91.5 million, long-term investments of $38.0million and $5.4 million in restricted cash. At the end of the first quarterthe company continued to have zero debt.
Accuray's Audit Committee concluded its independent investigation intoallegations made by a former Accuray employee regarding possible improprietiesin the handling and accounting of certain inventory items. Upon completion ofthe investigation, the Audit Committee determined that although a materialweakness has been identified in the company's internal control over financialreporting with respect to inventory processes, no material prior periodadjustments were identified. It was therefore determined that no financialrestatement was needed for prior quarters or years.
Outlook
The following statement is forward-looking and actual results may differmaterially. Accuray expects revenue for fiscal 2009 to be in the range of$230 million to $250 million.
Additional Information
Additional information regarding backlog segmentation, which will bediscussed during the conference call, is available in the Investor Relationssection of the company's Web site at http://www.accuray.com.
Earnings Call Open to Investors
Accuray will hold a conference call for financial analysts and investorson Friday December 19, 2008 at 5:30 a.m. PT / 8:30 a.m. ET. The conferencecall dial-in numbers are 1-866-379-2019 (USA) or 1-706-634-1525(International), Conference ID: 78712534. A live webcast of the call willalso be available from the Investor Relations section on the company's Website at http://www.accuray.com. In addition, a recording of the call will beavailable by calling 1-800-642-1687 (USA) or 1-706-645-9291 (International),Conference ID number: 78712534, beginning at 7:30 a.m. PT / 10:30 a.m. ET,December 19, 2008 and will be available through December 26, 2008. A webcastreplay will also be available from the Investor Relations section of thecompany's Web site at http://www.accuray.com from approximately 7:30 a.m. PT /10:30 a.m. ET tomorrow through Accuray's release of its results for the secondquarter of fiscal 2009, ending December 27, 2008.
About the CyberKnife(R) Robotic Radiosurgery System
The CyberKnife Robotic Radiosurgery System is the world's only roboticradiosurgery system designed to treat tumors anywhere in the bodynon-invasively. Using continual image guidance technology and computercontrolled robotic mobility, the CyberKnife System automatically tracks,detects and corrects for tumor and patient movement in real-time throughoutthe treatment. This enables the CyberKnife System to deliver high-doseradiation with pinpoint precision, which minimizes damage to surroundinghealthy tissue and eliminates the need for invasive head or body stabilizationframes.
About Accuray
Accuray Incorporated (Nasdaq: ARAY), based in Sunnyvale, Calif., is aglobal leader in the field of radiosurgery dedicated to providing an improvedquality of life and a non-surgical treatment option for those diagnosed withcancer. Accuray develops and markets the CyberKnife Robotic RadiosurgerySystem, which extends the benefits of radiosurgery to include extracranialtumors, including those in the spine, lung, prostate, liver and pancreas. Todate, the CyberKnife System has been used to treat more than 50,000 patientsworldwide and currently 150 systems have been installed in leading hospitalsin the Americas, Europe and Asia. For more information, please visithttp://www.accuray.com.
Safe Harbor Statement
The foregoing may contain certain forward-looking statements that involverisks and uncertainties, including uncertainties associated with the medicaldevice industry. Except for the historical information contained herein, thematters set forth in this press release, as to financial guidance includingrealization of backlog, procedure growth, market acceptance; clinical studies,regulatory review and approval, and commercialization of products areforward-looking statements within the meaning of the "safe harbor" provisionsof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements speak only as of the date the statements are made and are based oninformation available at the time those statements are made and/ormanagement's good faith belief as of that time with respect to future events.You should not put undue reliance on any forward-looking statements. Importantfactors that could cause actual performance and results to differ materiallyfrom the forward-looking statements we make include: market acceptance ofproducts; variability of installation and sales cycle including customerfinancing and construction delays; competing products, the combination of ourproducts with complementary technology; and other risks detailed from time totime under the heading "Risk Factors" in our report on Form 10-K for the 2008fiscal year, as updated from time to time by our quarterly reports on Form10-Q and our other filings with the Securities and Exchange Commission. TheCompany's actual results of operations may differ significantly from thosecontemplated by such forward-looking statements as a result of these and otherfactors. We assume no obligation to update forward-looking statements toreflect actual performance or results, changes in assumptions or changes inother factors affecting forward-looking information, except to the extentrequired by applicable securities laws.Accuray Incorporated Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share data) Three months ended September 27, September 29, 2008 2007 Net revenue: Products $37,455 $36,984 Shared ownership programs 1,036 2,312 Services 15,907 6,999 Other 1,459 2,351 Total net revenue 55,857 48,646 Cost of revenue: Costs of products 14,744 16,440 Costs of shared ownership programs 262 712 Costs of services 11,185 4,458 Costs of other 1,237 1,125 Total cost of revenue 27,428 22,735 Gross profit 28,429 25,911 Operating expenses: Selling and marketing 13,480 10,156 Research and development 8,754 7,715 General and administrative 10,433 7,901 Total operating expenses 32,667 25,772 Income (loss) from operations (4,238) 139 Interest and other income, net 1,113 2,612 Income (loss) before provision for income taxes and non-controlling interest (3,125) 2,751 Provision for income taxes 54 486 Net income (loss) attributable to common shareholders (3,179) 2,265 Net income (loss) per common share, basic and diluted: Basic $(0.06) $0.04 Diluted $(0.06) $0.04 Weighted average common shares outstanding used in computing net income (loss) per share: Basic 54,625 54,025 Diluted 54,625 61,154 Cost of revenue, selling and marketing, research and development, and general and administrative expenses include stock-based compensation charges as follows: Cost of revenue $632 $321 Selling and marketing $1,045 $1,107 Research and development $782 $675 General and administrative $2,512 $2,201 Accuray Incorporated Unaudited Condensed Consolidated Balance Sheets September 27, June 28, 2008 2008 Assets Current assets: Cash and cash equivalents $27,196 $36,936 Restricted cash 5,411 4,830 Short-term marketable securities 91,471 85,536 Accounts receivable, net of allowance for doubtful accounts of $27 at both September 27, 2008 and June 30, 2008 24,969 33,918 Inventories 26,610 23,047 Prepaid expenses and other current assets 7,702 6,431 Deferred cost of revenue-current 23,527 31,667 Total current assets 206,886 222,365 Long-term marketable securities 37,988 37,014 Deferred cost of revenue-noncurrent 12,842 11,724 Property and equipment, net 16,846 17,140 Goodwill 4,495 4,495 Intangible assets, net 861 926 Other assets 1,381 1,340 Total assets $281,299 $295,004 Liabilities, temporary equity and stockholders' equity Current liabilities: Accounts payable $12,974 $12,962 Accrued expenses 14,183 11,873 Customer advances-current 17,131 22,331 Deferred revenue-current 76,057 87,455 Total current liabilities 120,345 134,621 Long-term liabilities: Customer advances-noncurrent 2,500 2,900 Deferred revenue-noncurrent 26,749 26,720 Total liabilities 149,594 164,241 Commitments and contingencies Stockholders' equity Preferred stock, $0.001 par value; authorized: 5,000,000 shares; no shares issued and outstanding. Common stock, $0.001 par value; authorized: 100,000,000 shares; issued: 56,990,566 and 56,719,864 at September 30, 2008 and June 30, 2008, respectively; outstanding: 54,850,548 and 54,579,846 shares at September 30, 2008 and June 30, 2008, respectively. 55 55 Additional paid-in capital 258,776 252,901 Accumulated other comprehensive (loss) (2,821) (1,067) Accumulated deficit (124,305) (121,126) Total stockholders' equity 131,705 130,763 Total liabilities and stockholders' equity $281,299 $295,004
SOURCE Accuray Incorporated
