One Year After TomoTherapy Acquisition, Accuray on Track to Meet or Exceed Integration Success Metrics And Expecting Near-term Return to Profitability
CFO Presents Strategy to Deliver Growth and Vision for Future at Wells Fargo Healthcare Conference
SUNNYVALE, Calif., June 21, 2012 /PRNewswire/ -- Accuray Incorporated (Nasdaq: ARAY), the premier radiation oncology company, announced today the company's successes since its acquisition of TomoTherapy Incorporated one year ago and its vision for growth and profitability in the future, as part of a presentation by the company's chief financial officer Derek Bertocci at the Wells Fargo Healthcare Conference in Boston.
As part of Accuray's transformative acquisition of TomoTherapy Incorporated on June 10, 2011, the company set forth success metrics. Through the first three quarters of FY2012, Accuray has consistently met or exceeded these goals.
In addition to reiterating the company's plans to return to profitability by the end of fiscal year 2013, which ends June 30, 2013, Accuray provided additional milestones for its fiscal year 2013. These included enhanced revenue growth, beyond the maintained or modestly increased revenue the company committed to for fiscal 2012. Specific guidance for fiscal year 2013 will be announced during Accuray's earnings call for the results for 4th quarter of fiscal 2012, but the company intends to focus on maximizing product sales through continued product innovation and market penetration.
Accuray also anticipates further service gross margin improvements reaching 20-22 percent for the full fiscal year 2013, which is higher than originally announced. This continues the significant achievement of three consecutive quarters of strong service gross margin improvements during fiscal 2012, climbing to 16.1 percent in Q3 of fiscal 2012, surpassing the company's original goal of 10 percent by the end of fiscal 2012. Service gross margin improvements stemmed primarily from improvement in the reliability of TomoTherapy® Systems, which has enhanced customer confidence and helped drive system sales.
"At the one year anniversary of Accuray's acquisition of TomoTherapy Incorporated, we look back with pride on what we've accomplished to date, but most importantly reaffirm our commitment not only to achieving, but surpassing, our integration and growth goals," said Derek Bertocci, senior vice president, chief financial officer of Accuray. "We are realizing the strategic benefits we outlined when we announced the acquisition of TomoTherapy Incorporated through installed base expansion, revenue growth and improvement of service gross margins. The dramatic progress we've made means a lot of forward momentum as we start into our next fiscal year and work to return to profitability."
Customers continue to recognize the value of Accuray's technologies – the CyberKnife® and TomoTherapy Systems – which are not only well differentiated but also best-in-class at delivering stereotactic radiosurgery/stereotactic body radiation therapy and image guided-intensity modulated radiation therapy. While cross selling multiple products to customers and the associated revenue synergies remain a significant future benefit of the acquisition, the majority of Accuray's growth continues to come from taking market share from its competitors, with 90 percent of the company's more than 600 units installed in rooms previously occupied by competitive products or newly constructed vaults. Therefore, unlike its competitors, the majority of installations for Accuray are to new customers that grow the company's market position and fuel the growth of its installed base, and in turn grow the company's service business.
In order to maintain the company's strong innovation lead and accelerate both products, Accuray continues to invest heavily in R&D. Enabled by the acquisition of TomoTherapy, Accuray increased its R&D spend by 23 percent for the first three quarters of FY2012 from the spend by both companies during the same period in fiscal year 2011. Accuray expects to see operating expense benefits as a result of the company's increased scale and intends to reduce operating expenses to approximately 45 percent or less of revenues by the end of fiscal 2013.
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. As of March 31, 2012, 635 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 revenue growth, service gross margin & reliability improvements, market penetration, installed base expansion, acquisition revenue synergies, market share gains, investment in R&D, and reduction in operating expenses. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including risks detailed from time to time under the heading "Risk Factors" in the Company's report on Form 10-K for fiscal year 2011, and its reports on Form 10-Q for the first, second and third 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 place undue reliance on any forward-looking statements.
SOURCE Accuray Incorporated
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