Accuray Reports First Quarter Fiscal 2021 Financial Results

SUNNYVALE, Calif., Oct. 29, 2020 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported its financial results for the first quarter of fiscal 2021 ended September 30, 2020.

Accuray Incorporated (PRNewsFoto/Accuray Incorporated) (PRNewsFoto/Accuray Incorporated)

First Quarter Fiscal 2021 Summary

  • Net revenue of $85.3 million, operating income of $5.5 million
  • Adjusted EBITDA grew to $9 million from a loss of $1 million in the prior year first quarter
  • Gross orders of $50.5 million, ending backlog of $597.3 million, an increase of 21 percent from September 30, 2019

Other Recent Operational Highlights

  • Expect revenue recognition for China Type A systems previously awarded in October 2019 to start in the second quarter of fiscal 2021
  • Introduced ClearRT™ Helical kVCT Imaging for the Radixact System at ASTRO 2020
  • 44 clinical abstracts related to customer clinical experience on CyberKnife and TomoTherapy/Radixact exhibited at ASTRO 2020 Scientific Sessions

"We are off to a solid start in fiscal 2021 despite the headwinds created by the COVID-19 environment. Our global team continues to adapt and make the necessary adjustments to compete and operate effectively given the current market conditions and delivered the fourth consecutive quarter of operating profit, said Joshua H. Levine, President and CEO of Accuray. "Looking ahead, we will be focused on driving the revenue conversion process related to the China Type A systems beginning in the second quarter. Concurrent with this year's recent ASTRO meeting, we have received very positive customer feedback related to the introduction of our ClearRT™ Helical kVCT imaging upgrade for the Radixact System as we drive our long-term strategic commitment to continued innovation."

Q1 Fiscal 2021 Financial Highlights

Gross product orders totaled $50.5 million for the first quarter of fiscal 2021 compared to $78.5 million for the prior fiscal year first quarter. Order backlog as of September 30, 2020 was $597.3 million, approximately 21 percent higher than at the end of the prior fiscal year first quarter.

Total net revenue was $85.3 million for the first quarter of fiscal 2021 compared to $89.6 million for the prior fiscal year first quarter. Product revenue totaled $31.3 million for the first quarter of fiscal 2021 compared to $37.6 million for the prior fiscal year first quarter, while service revenue totaled $54.1 million for the first quarter of fiscal 2021 compared to $52.0 million for the prior fiscal year first quarter.

Total gross profit for the first quarter of fiscal 2021 was $35.4 million or approximately 41.5 percent of total net revenue, comprised of product gross margin of 41.1 percent of product net revenue and service gross margin of 41.7 percent of service net revenue. This compares to total gross profit of $32.9 million or 36.8 percent of total net revenue, comprised of product gross margin of 42.6 percent of product net revenue and service gross margin of 32.5 percent of service net revenue for the prior fiscal year first quarter.

Net income was $0.4 million, or $0.0 per share, for the first quarter of fiscal 2021, compared to a net loss of $9.4 million, or a loss of $0.11 per share, for the prior fiscal year first quarter.

Adjusted EBITDA for the first quarter of fiscal 2021 was a positive $9.0 million, compared to a negative $1.0 million for the prior fiscal year first quarter.

Cash, cash equivalents, and short-term restricted cash were $95.5 million as of September 30, 2020, a decrease of $13.1 million from June 30, 2020 primarily due to a $10 million prepayment in principal with respect to our long-term debt.

Financial Guidance

The impact of the COVID-19 pandemic on Accuray's fiscal 2021 results remains uncertain. Given the continued evolution of the COVID-19 pandemic and the uncertainty surrounding its impact on the global economy and the healthcare industry, Accuray believes it is prudent to refrain from providing financial guidance for fiscal year 2021.

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 2021 as well as recent corporate developments. Conference call dial-in information is as follows:

  • U.S. callers: (877) 270-2148
  • International callers: (412) 902-6510 

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.

In addition, a taped replay of the conference call will be available beginning approximately one hour after the call's conclusion and available for seven days. The replay telephone number is (877) 344-7529 (USA) or (412) 317-0088 (International), Conference ID:10148905. An archived webcast will also be available at Accuray's website until Accuray announces its results for the second quarter of fiscal 2021.

Use of Non-GAAP Financial Measures

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"). 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.

There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.  These non-GAAP financial measures should not be considered in isolation or as a substitute for 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) develops, manufactures and sells radiotherapy systems that are intended to make cancer treatments shorter, safer, personalized and more effective, ultimately enabling patients to live longer, better lives. Our radiation treatment delivery systems in combination with fully-integrated software solutions set the industry standard for precision and cover the full range of radiation therapy and radiosurgery procedures. 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 results of operations; expectations regarding the effect of the COVID-19 pandemic on the company and the company's position in a post-COVID-19 environment; the company's ability to adapt and make the necessary adjustments to compete and operate effectively; the company's ability to realize the benefits of working capital management and cash preservation activities; expectations regarding future sales in China; expectations regarding the company's Chinese joint venture, including the timing of revenue conversion and the manufacture and shipment of a joint venture manufactured product; expectations regarding the company's product portfolio, including with respect to the company's Synchrony and Clear RT Helical kVCT imaging upgrades as well as other strategic product innovations; expectations regarding the new Centers for Medicare and Medicaid Services alternative payment model and reimbursement schedule; expectations regarding gross orders, revenue and product mix; expectations regarding the future of radiotherapy treatment; and the company's leadership position in radiation oncology innovation and technologies.  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 COVID-19 pandemic on the operations of the company and those of its customers and suppliers; the company's ability to achieve widespread market acceptance of its products, including new product and software offerings; the company's ability to develop new products or enhance existing products to meet customers' needs and compete favorably in the market, the company's ability to effectively integrate and execute the joint venture, the company's ability to realize the expected benefits of the joint venture; the ability of customers in China to obtain Class A or B user licenses to purchase radiotherapy systems; risks inherent in international operations; the company's ability to effectively manage its growth; 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 25, 2020 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.

Financial Tables to Follow

 

Accuray Incorporated

Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)




Three Months Ended

September 30,




2020



2019


Gross Orders


$

50,528



$

78,487


Net Orders



23,554




38,981


Order Backlog



597,276




495,029


Net revenue:









Products


$

31,258



$

37,605


Services



54,074




51,972


Total net revenue



85,332




89,577


Cost of revenue:









Cost of products



18,426




21,570


Cost of services



31,503




35,064


Total cost of revenue



49,929




56,634


Gross profit



35,403




32,943


Operating expenses:









Research and development



12,148




13,341


Selling and marketing



8,898




13,266


General and administrative



8,889




10,616


Total operating expenses



29,935




37,223


Income (loss) from operations



5,468




(4,280)


Loss on equity investment, net



(28)





Other expense, net



(4,694)




(4,439)


Income (loss) before provision for income taxes



746




(8,719)


Provision for income taxes



344




637


Net income (loss)


$

402



$

(9,356)


Net income (loss) per share - basic


$

0.00



$

(0.11)


Net income (loss) per share - diluted


$

0.00



$

(0.11)


Weighted average common shares used in

   computing income (loss) per share:









Basic



91,194




88,772


Diluted



91,681




88,772


 

 

Accuray Incorporated

Consolidated Balance Sheets

(in thousands)

(Unaudited)




September 30,



June 30,




2020



2020


Assets









Current assets:









Cash and cash equivalents


$

89,955



$

107,577


Restricted cash



5,531




997


Accounts receivable, net



75,034




90,599


Inventories, net



141,017




134,374


Prepaid expenses and other current assets



18,139




21,227


Deferred cost of revenue



2,800




2,712


Total current assets



332,476




357,486


Property and equipment, net



14,540




15,349


Investment in joint venture



15,591




13,929


Goodwill



57,834




57,717


Intangible assets, net



606




663


Operating lease right-of-use assets



27,377




28,647


Other assets



16,286




17,136


Total assets


$

464,710



$

490,927


Liabilities and equity









Current liabilities:









Short-term debt


$

6,162



$


Accounts payable



17,841




23,126


Accrued compensation



19,618




17,963


Operating lease liabilities, current



8,381




8,224


Other accrued liabilities



19,047




27,180


Customer advances



16,712




22,571


Deferred revenue



81,344




83,207


Total current liabilities



169,105




182,271


Long-term other liabilities



7,644




7,416


Deferred revenue



24,406




24,125


Operating lease liabilities, non-current



22,588




24,173


Long-term debt



173,527




189,307


Total liabilities



397,270




427,292


Equity:









Common stock



91




91


Additional paid-in capital



547,651




545,741


Accumulated other comprehensive income (loss)



1,009




(484)


Accumulated deficit



(481,311)




(481,713)


Total equity



67,440




63,635


Total liabilities and equity


$

464,710



$

490,927


 

 

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

September 30,




2020



2019


GAAP net income (loss)


$

402



$

(9,356)


Depreciation and amortization



1,650




1,851


Stock-based compensation



2,244




1,700


Interest expense, net



4,393




4,200


Provision for income taxes



344




637


Adjusted EBITDA


$

9,033



$

(968)


 

Joe Diaz

Beth Kaplan

Investor Relations, Lytham Partners

Public Relations Director, Accuray

+1 (602) 889-9700

+1 (408) 789-4426

diaz@lythampartners.com

bkaplan@accuray.com

 

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SOURCE Accuray Incorporated

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