Accuray Announces Results for Fourth Quarter and Fiscal Year 2010

Strong CyberKnife® Orders Highlight Quarter and Fiscal Year

Aug 31, 2010, 16:10 ET from Accuray Incorporated

SUNNYVALE, Calif., Aug. 31 /PRNewswire-FirstCall/ -- Accuray Incorporated (Nasdaq: ARAY), a global leader in the field of radiosurgery, announced today financial results for the fourth quarter and fiscal year 2010, ended June 30, 2010.

For the fourth quarter of fiscal 2010, Accuray reported total revenue of $61.8 million, a 5.1 percent increase over the fourth quarter of fiscal 2009 total revenue of $58.8 million. For the fiscal year ended June 30, 2010, total revenue was $221.6 million, a twelve million dollar decrease from the $233.6 million in total revenue recorded for fiscal year 2009.

Net income for the fourth quarter of fiscal 2010 was $5.0 million, or $0.08 per diluted share, compared to net income of $1.2 million, or $0.02 per diluted share, during the same period last year. Net income for fiscal year 2010 was $2.8 million or $0.05 per diluted share, compared to net income of $609,000 or $0.01 per diluted share for fiscal year 2009.

During the fourth quarter of fiscal 2010, 16 CyberKnife® Robotic Radiosurgery Systems were added to company backlog, with a total value of $74 million. In addition, new service and other ancillary orders with a value of $18 million were signed.  During the fourth quarter, one order was canceled by a customer and removed from backlog.

Total backlog for the end of the fourth quarter of fiscal 2010 was $374 million, with approximately $132 million associated with CyberKnife System contracts and approximately $242 million associated with services and other recurring revenue.  

In the fourth quarter of fiscal 2010, 10 new CyberKnife Systems were installed, making a full year installation total of 31 systems. At the end of the 2010 fiscal year, the worldwide CyberKnife installation base was 206.

"With 16 CyberKnife orders added into backlog, we are pleased to report another strong quarter of continued sales momentum, which has yielded 56 net orders for fiscal 2010," said Euan Thomson, president and chief executive officer of Accuray Incorporated. "Cancer patients worldwide are receiving highly precise, non-invasive, state-of-the-art radiosurgery treatment from an expanding base of installed CyberKnife Systems."

Accuray's cash and investment balances at the end of the fourth quarter of 2010 totaled $145.3 million, which includes cash and cash equivalents of $45.4 million, restricted cash of $22,000 and short-term investments of $99.9 million. Not included in the year-end cash and investments balance was $5.9 million, net, of in-transit cash associated with the liquidation of our auction-rate securities on June 30, 2010, which was received on July 1, 2010.

Outlook

The following statement is forward-looking and actual results may differ materially.  During fiscal year 2011 Accuray expects revenue to be in the range of $210 million to $225 million.

Additional Information

Additional information regarding backlog segmentation, which will be discussed during the conference call, is available in the Investor Relations section of the company's Web site at www.accuray.com.

Earnings Call Open to Investors  

Accuray will hold a conference call for financial analysts and investors on Tuesday, August 31, 2010 at 2:00 p.m. PT / 5:00 p.m. ET. The conference call dial-in numbers are 1-866-578-5771 (USA) or 1-617-213-8055 (International), Conference ID:  28021423.  A live webcast of the call will also be available from the Investor Relations section on the company's Web site at www.accuray.com. 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 number: 24002694, beginning at 5:00 p.m. PT / 8:00 p.m. ET, August 31, 2010 and will be available through September 3, 2010. A webcast replay will also be available from the Investor Relations section of the company's Web site at www.accuray.com from approximately 5:00 p.m. PT / 8:00 p.m. ET today through Accuray's release of its results for the first quarter of fiscal 2011, ending September 30, 2010.  

About the CyberKnife® Robotic Radiosurgery System

The CyberKnife Robotic Radiosurgery System is the world's only robotic radiosurgery system designed to treat tumors anywhere in the body non-invasively. Using continual image guidance technology and computer controlled robotic mobility, the CyberKnife System automatically tracks, detects and corrects for tumor and patient movement in real-time throughout the treatment. This enables the CyberKnife System to deliver high-dose radiation with pinpoint precision, which minimizes damage to surrounding healthy tissue and eliminates the need for invasive head or body stabilization frames.

About Accuray

Accuray Incorporated (Nasdaq: ARAY), based in Sunnyvale, Calif., is a global leader in the field of radiosurgery dedicated to providing an improved quality of life and a non-surgical treatment option for those diagnosed with cancer. Accuray develops and markets the CyberKnife Robotic Radiosurgery System, which extends the benefits of radiosurgery to include extracranial tumors, including those in the spine, lung, prostate, liver and pancreas. To date, the CyberKnife System has been used to treat more than 95,000 patients worldwide and currently more than 206 systems have been installed in leading hospitals in the Americas, Europe and Asia. For more information, please visit www.accuray.com

Safe Harbor Statement

This press release contains forward-looking statements, including those concerning Accuray's expectations about revenue for fiscal year 2011, the portion of revenue attributable to CyberKnife System revenue, gross margin, profitability, customer installation schedules, realization of backlog and service activity. Forward looking statements involve risks and uncertainties that may lead to actual results varying materially from the forward looking statements. Accordingly, investors are cautioned not to place undue reliance on such statements. Many factors could cause actual performance or results to differ materially from these forward looking statements, including, but not limited to the uncertainties associated with the medical device industry; variability of installation and sales cycle including customer financing and construction delays; changes in the regulatory environment, including reimbursement for CyberKnife procedures; market acceptance of products; and the impact of competition. These and other risks are discussed under the heading "Risk Factors" in our report on Form 10-K for the 2010 fiscal year which has been filed with the Securities and Exchange Commission. 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.

Accuray Incorporated

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three months ended

Years ended

June 30, 2010

June 27, 2009

June 30, 2010

June 27, 2009

Net revenue:  

Products

$         41,482

$         39,495

$       141,297

$       159,257

Shared ownership program

469

454

1,890

3,651

Services

19,617

18,614

77,504

66,344

Other

220

240

934

4,346

Total net revenue

61,788

58,803

221,625

233,598

Cost of revenue:  

Cost of products

18,559

19,010

65,197

68,904

Cost of shared ownership program

142

121

1,019

775

Cost of services

11,873

12,377

50,732

44,591

Cost of other

156

205

659

4,038

Total cost of revenue

30,730

31,713

117,607

118,308

Gross profit

31,058

27,090

104,018

115,290

Operating expenses:  

Selling and marketing

8,296

9,870

34,187

45,493

Research and development

8,373

9,185

31,523

35,992

General and administrative

8,393

7,710

35,472

36,223

Total operating expenses

25,062

26,765

101,182

117,708

Income (loss) from operations

5,996

325

2,836

(2,418)

Interest and other income, net

(683)

646

1

3,082

Income before provision for income taxes

5,313

971

2,837

664

Provision (benefit) for income taxes

292

(251)

(4)

55

Net income

$           5,021

$           1,222

$           2,841

$              609

Net income per common share, basic and diluted:

Basic

$             0.09

$             0.02

$             0.05

$             0.01

Diluted  

$             0.08

$             0.02

$             0.05

$             0.01

Weighted average common shares outstanding used in computing net income per share:  

Basic

58,205

56,238

57,560

55,413

Diluted

60,564

59,324

60,191

58,729

Cost of revenue, selling and marketing, research and development, and general and administrative expenses include stock-based compensation charges as follows:  

Cost of revenue

$              553

$              484

$           1,721

$           2,285

Selling and marketing

$                54

$              923

$           1,433

$           3,441

Research and development

$              913

$              860

$           2,850

$           3,190

General and administrative

$              889

$           1,518

$           4,642

$           6,545

Accuray Incorporated

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

June 30,

June 27,

2010

2009

Assets  

Current assets:  

Cash and cash equivalents

$  45,434

$  36,835

Restricted cash

22

527

Short-term marketable securities

99,881

64,634

Accounts receivable, net of allowance for doubtful accounts of $115

at June 30, 2010 and $484 at June 27, 2009

37,955

36,427

Inventories

28,186

28,909

Prepaid expenses and other current assets

19,356

6,186

Deferred cost of revenue—current

7,889

18,984

Total current assets

238,723

192,502

Long-term marketable securities

-

57,252

Property and equipment, net

14,684

15,066

Goodwill

4,495

4,495

Intangible assets, net

388

668

Deferred cost of revenue—noncurrent

3,213

2,933

Other assets

1,681

1,470

Total assets

$263,184

$274,386

Liabilities and stockholders' equity  

Current liabilities:  

Accounts payable

$  10,317

$  14,941

Accrued expenses

21,455

16,188

Customer advances—current

12,884

13,185

Deferred revenue—current

42,019

68,105

Total current liabilities

86,675

112,419

Long-term liabilities:  

Long-term other liabilities

1,059

288

Customer advances—noncurrent

-

-

Deferred revenue—noncurrent

5,374

7,777

Total liabilities

93,108

120,484

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: 60,666,974       and 58,783,159 shares at June 30, 2010 and June 27, 2009, respectively; outstanding:       58,526,956 and 56,643,529 shares at June 30, 2010 and June 27, 2009, respectively.

59

57

Additional paid-in capital

287,764

273,946

Accumulated other comprehensive income (loss)

(71)

416

Accumulated deficit

(117,676)

(120,517)

Total stockholders' equity

170,076

153,902

Total liabilities and stockholders' equity

$263,184

$274,386

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.

Euan Thomson, Ph.D

https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=81869

SOURCE Accuray Incorporated



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