19% Order Growth YOY; 8% Service Revenue
Expansion; Confirms FY24 Guidance
MADISON,
Wis., Jan. 31, 2024 /PRNewswire/ -- Accuray
Incorporated (NASDAQ: ARAY) today reported financial results for
the second quarter and six-months ended December 31, 2023.
Second Quarter Fiscal 2024 Summary
- Net revenue of $107.2 million
increased 3 percent sequentially and decreased 7 percent from the
same period in the prior fiscal year. Net revenue on a constant
currency basis was $106.0 million,
which represented an 8 percent decrease from the same period in the
prior fiscal year.
- GAAP net loss was $9.6 million,
as compared to GAAP net loss of $1.9
million in the same period in the prior fiscal year.
Adjusted EBITDA was $2.0 million, as
compared to adjusted EBITDA of $8.5
million in the same period in the prior fiscal year.
- Gross orders of $93.9 million
increased 47 percent sequentially and increased 19 percent from the
same period in the prior fiscal year. The book to bill ratio was
1.8 in the second quarter of fiscal 2024, compared to a book to
bill ratio of 1.2 in the same period in the prior fiscal year.
Fiscal Six Months 2024 Summary
- Net revenue of $211.1 million
which was flat from the same period in the prior fiscal year. Net
revenue on a constant currency basis was $208.8 million, which represented a 1 percent
decrease from the same period in the prior fiscal year.
- GAAP net loss was $12.6 million,
as compared to GAAP net loss of $7.3
million in the same period in the prior fiscal year.
Adjusted EBITDA was $8.5 million as
compared to adjusted EBITDA of $10.4
million in the same period in the prior fiscal year.
- Gross orders of $157.6 million
increased 6 percent from the same period in the prior fiscal year.
The book to bill ratio was 1.5 in the first six months of fiscal
2024, compared to a book to bill ratio of 1.4 in the same period in
the prior fiscal year.
Other Recent Operational Highlights
- China orders in the second
quarter increased 44 percent year-over-year driven by
Tomo® C market launch.
- Strong performance in EIMEA region with 30 percent order growth
and 11 percent revenue growth year-over year.
- Service revenue expansion with an 8 percent increase
year-over-year in the second quarter.
- APAC region achieved 250 installed base milestone.
- Gained Shonin approval for the VitalHold™* breast cancer
treatment package and launched at JASTRO in Japan.
"We close out the first half of FY24 advancing multiple growth
catalysts for the business. I am pleased with our Q2 performance
which reflects sequential growth in orders, revenue and the
installed base. Customer adoption of the Tomo® C product
in China has been excellent and
demonstrates our ability to win in new market segments. Interest in
VitalHold™ on the Radixact® System and preference for
the CyberKnife® S7™ System by customers offering
SRS/SBRT programs remains strong," said Suzanne Winter, Chief Executive Officer. "We are
steadily executing on our three-year growth plan that advances
patient care through innovation, expanded access to radiotherapy in
target regions where this remains a challenge and improvements in
overall profitability and working capital."
Fiscal Second Quarter Results
Total net revenue in the second quarter of fiscal 2024 was
$107.2 million, compared to
$114.8 million in the prior fiscal
year second quarter. Product revenue in the second quarter of
fiscal 2024 was $51.5 million,
compared to $63.3 million in the
prior fiscal year second quarter. Service revenue in the second
quarter of fiscal 2024 was $55.7
million, compared to $51.5
million in the prior fiscal year second quarter.
Total gross profit in the second quarter of fiscal 2024 was
$35.9 million, or 33.5 percent of
total net revenue, compared to total gross profit of $43.0 million, or 37.4 percent of total net
revenue, in the prior fiscal year second quarter.
Operating expenses in the second quarter of fiscal 2024 were
$39.9 million, compared to
$40.3 million in the prior fiscal
year second quarter.
Net loss in the second quarter of fiscal 2024 was $9.6 million, or $0.10 per share, compared to a net loss of
$1.9 million, or $0.02 per share, in the prior fiscal year second
quarter. Adjusted EBITDA in the second quarter of fiscal 2024 was
$2.0 million, compared to
$8.5 million in the prior fiscal year
second quarter.
Gross product orders in the second quarter of fiscal 2024
totaled $93.9 million compared to
$79.0 million in the prior fiscal
year second quarter. Order backlog as of December 31, 2023 was $492.1 million increased approximately 1 percent
sequentially, and is approximately 4 percent lower than at the end
of the prior fiscal year second quarter.
Cash, cash equivalents, and short-term restricted cash were
$73.2 million as of December 31, 2023, a decrease of $4.2 million from September 30, 2023, and a decrease of
$16.7 million from June 30, 2023.
Fiscal Six Months Results
Total net revenue in the first six months of fiscal 2024 was
$211.1 million, compared to
$211.3 million in the same prior
fiscal year period. Product revenue in the first six months of
fiscal 2024 was $104.9 million,
compared to $107.9 million in the
same prior fiscal year period. Service revenue in the first six
months of fiscal 2024, was $106.2
million, compared to $103.4
million in the same prior fiscal year period.
Total gross profit in the first six months of fiscal 2024 was
$75.4 million, or 35.7 percent of
total net revenue, compared to total gross profit of $77.6 million, or 36.7 percent of total net
revenue in the same prior fiscal year period.
Operating expenses in the first six months of fiscal 2024 was
$77.1 million compared to
$77.0 million in the same prior
fiscal year period.
Net loss in the first six months of fiscal 2024 was $12.6 million, or $0.13 per share, compared to a net loss of
$7.3 million, or $0.08 per share, in the same prior fiscal year
period. Adjusted EBITDA in the first six months of fiscal 2024, was
$8.5 million, compared to
$10.4 million in the same prior
fiscal year period.
Gross product orders in the first six months of fiscal 2024 was
$157.6 million, compared to
$148.9 million in the same prior
fiscal year period.
Fiscal Year 2024 Financial Guidance
Accuray's financial guidance is based on current expectations.
The following statements are forward-looking and actual results
could differ materially depending on market and economic
conditions, supply chain disruption, and the factors set forth
under "Safe Harbor Statement" below.
The company is reaffirming guidance for fiscal year 2024 as
follows:
- Total revenue is expected in the range of $460 million to $470
million, representing a year-over-year growth range of 3 to
5 percent.
- Adjusted EBITDA for fiscal year 2024 is expected in the range
of $27 million to $30 million.
In addition, the Company expects third quarter of fiscal 2024
revenue to be in the range of $112
million to $118 million with
an expected adjusted EBITDA range of $6
million to $9 million for the
same period.
Guidance for non-GAAP financial measures excludes depreciation
and amortization, stock-based compensation, interest expense,
provision for income taxes, and ERP and ERP related expenditures.
For more information regarding the non-GAAP financial measures
discussed in this press release, please see "Use of Non-GAAP
Financial Measures" below.
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 second quarter of fiscal
2024 as well as recent corporate developments. Conference call
dial-in information is as follows:
- U.S. callers: (833) 316-0563
- International callers: (412) 317-5747
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. There will be a
slide presentation accompanying today's event which can also be
accessed on the company's Investor Relations page at
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 will be available for seven days. The replay number
is (877) 344-7529 (USA), or (412)
317-0088 (International), Conference ID: 1227335. An archived
webcast will also be available on Accuray's website until Accuray
announces its results for the third quarter of fiscal 2024.
Use of Non-GAAP Financial Measures
Accuray reports its financial results in accordance with
generally accepted accounting principles in the United States ("GAAP") and the rules of
the SEC. To supplement its financial statements prepared and
presented in accordance with GAAP, Accuray uses certain non-GAAP
financial measures, such as adjusted EBITDA, and net revenue on a
constant currency basis.
Accuray has supplemented its GAAP net income (loss) with a
non-GAAP measure of adjusted earnings before interest, taxes,
depreciation, amortization, stock-based compensation, ERP and ERP
related expenditures and restructuring charges ("adjusted EBITDA").
The calculation of adjusted EBITDA also excludes certain
non-recurring, irregular and one-time items. 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.
Accuray has also reported certain operating results on a
constant currency basis in order to facilitate period-to-period
comparisons of its results without regard to the impact of foreign
currency exchange rate fluctuations. Management believes disclosure
of non-GAAP constant currency results is helpful to investors
because it facilitates period-to-period comparisons of the
company's results by increasing the transparency of the underlying
performance by excluding the impact of foreign currency exchange
rate fluctuations. The GAAP measure most directly comparable to net
revenue on a constant currency basis is revenue. Accuray calculates
the constant currency amounts by translating local currency amounts
in the current period using the same foreign translation rate used
in the prior period being compared against rather than the actual
exchange rate in effect during the current period.
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) is committed to expanding
the powerful potential of radiation therapy to improve as many
lives as possible. We invent unique, market-changing solutions that
are designed to deliver radiation treatments for even the most
complex cases—while making commonly treatable cases even easier—to
meet the full spectrum of patient needs. We are dedicated to
continuous innovation in radiation therapy for oncology,
neuro-radiosurgery, and beyond, as we partner with clinicians and
administrators, empowering them to help patients get back to their
lives, faster. Accuray is headquartered in Madison, Wisconsin, with facilities
worldwide.
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, including expectations regarding: total
revenue and adjusted EBITDA; the company's three-year outlook and
strategic pillars; the effect of the global economic environment
and the COVID-19 pandemic on the company and the market in general,
including with respect to the company's ability to navigate supply
chain, logistics, macroeconomic, and foreign exchange challenges;
delivering on the company's strategic growth plan, progressing
against long-term strategic goals, and continuing adoption of its
technologies; the company's ability to execute on margin and
profitability expansion initiatives; expectations regarding
commercial strategy and execution as well as growth
opportunities; expectations regarding the market in China, the company's China joint venture and the Tomo® C
product as well as expectations with respect to other strategic
partnerships, including expected timing of regulatory clearances;
expectations related to the markets in which the company operates;
expectations regarding new product introductions and innovations
and their effect on use and adoption of the company's products as
well as revenue and profitability growth and EBITDA expansion;
expectations with respect to the company's cost savings
initiatives, including its reduction in global workforce and any
related costs; expectations regarding backlog; and the company's
ability to advance patient care through innovation, expanded access
to radiotherapy and improvements in overall profitability and
working capital. 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 global
macroeconomic environment on the operations of the company and
those of its customers and suppliers; disruptions to our supply
chain, including increased logistics costs; the company's ability
to achieve widespread market acceptance of its products; the
company's ability to realize the expected benefits of the
China joint venture and other
partnerships; risks inherent in international operations; 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
Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission (the "SEC") on November 7, 2023 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.
* VitalHold™ availability is subject to regulatory
clearance or approval in some markets
Aman Patel,
CFA
|
Beth Kaplan
|
Investor Relations,
ICR-Westwicke
|
Public Relations
Director, Accuray
|
+1 (443)
450-4191
|
+1 (408)
789-4426
|
aman.patel@westwicke.com
|
bkaplan@accuray.com
|
Financial Tables to Follow
Accuray
Incorporated
Condensed
Consolidated Statements of Operations
(in thousands, except
per share data)
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
|
Six Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
51,538
|
|
|
$
|
63,269
|
|
|
$
|
104,888
|
|
|
$
|
107,892
|
Services
|
|
|
55,700
|
|
|
|
51,491
|
|
|
|
106,242
|
|
|
|
103,361
|
Total net
revenue
|
|
|
107,238
|
|
|
|
114,760
|
|
|
|
211,130
|
|
|
|
211,253
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products
|
|
|
34,333
|
|
|
|
39,248
|
|
|
|
70,032
|
|
|
|
68,098
|
Cost of
services
|
|
|
37,003
|
|
|
|
32,545
|
|
|
|
65,703
|
|
|
|
65,591
|
Total cost of
revenue
|
|
|
71,336
|
|
|
|
71,793
|
|
|
|
135,735
|
|
|
|
133,689
|
Gross profit
|
|
|
35,902
|
|
|
|
42,967
|
|
|
|
75,395
|
|
|
|
77,564
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
15,281
|
|
|
|
14,641
|
|
|
|
29,294
|
|
|
|
28,733
|
Selling and
marketing
|
|
|
11,361
|
|
|
|
13,586
|
|
|
|
21,605
|
|
|
|
24,381
|
General and
administrative
|
|
|
13,224
|
|
|
|
12,035
|
|
|
|
26,247
|
|
|
|
23,927
|
Total operating
expenses
|
|
|
39,866
|
|
|
|
40,262
|
|
|
|
77,146
|
|
|
|
77,041
|
Income (loss) from
operations
|
|
|
(3,964)
|
|
|
|
2,705
|
|
|
|
(1,751)
|
|
|
|
523
|
Income (loss) from
equity method investment, net
|
|
|
(427)
|
|
|
|
(699)
|
|
|
|
4
|
|
|
|
(1,067)
|
Other expense,
net
|
|
|
(4,352)
|
|
|
|
(2,831)
|
|
|
|
(8,033)
|
|
|
|
(5,389)
|
Loss before provision
for income taxes
|
|
|
(8,743)
|
|
|
|
(825)
|
|
|
|
(9,780)
|
|
|
|
(5,933)
|
Provision for income
taxes
|
|
|
878
|
|
|
|
1,049
|
|
|
|
2,810
|
|
|
|
1,390
|
Net loss
|
|
$
|
(9,621)
|
|
|
$
|
(1,874)
|
|
|
$
|
(12,590)
|
|
|
$
|
(7,323)
|
Net loss per share -
basic and diluted
|
|
$
|
(0.10)
|
|
|
$
|
(0.02)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.08)
|
Weighted average common
shares used in computing loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
97,776
|
|
|
|
94,567
|
|
|
|
97,165
|
|
|
|
94,048
|
Accuray
Incorporated
Condensed
Consolidated Balance Sheets
(in
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
December
31,
|
|
|
June
30,
|
|
|
2023
|
|
|
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
72,756
|
|
|
$
|
89,402
|
Restricted
cash
|
|
|
485
|
|
|
|
524
|
Accounts receivable,
net
|
|
|
77,397
|
|
|
|
74,777
|
Inventories
|
|
|
155,228
|
|
|
|
145,150
|
Prepaid expenses and
other current assets
|
|
|
25,020
|
|
|
|
27,612
|
Deferred cost of
revenue
|
|
|
284
|
|
|
|
568
|
Total current
assets
|
|
|
331,170
|
|
|
|
338,033
|
Property and equipment,
net
|
|
|
25,919
|
|
|
|
20,926
|
Investment in joint
venture
|
|
|
14,536
|
|
|
|
15,128
|
Operating lease
right-of-use assets, net
|
|
|
23,094
|
|
|
|
25,853
|
Goodwill
|
|
|
57,771
|
|
|
|
57,681
|
Intangible assets,
net
|
|
|
116
|
|
|
|
210
|
Long-term restricted
cash
|
|
|
1,251
|
|
|
|
1,276
|
Other assets
|
|
|
22,493
|
|
|
|
20,107
|
Total
assets
|
|
$
|
476,350
|
|
|
$
|
479,214
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
|
39,180
|
|
|
$
|
33,739
|
Accrued
compensation
|
|
|
21,345
|
|
|
|
23,793
|
Operating lease
liabilities, current
|
|
|
5,707
|
|
|
|
4,151
|
Other accrued
liabilities
|
|
|
36,253
|
|
|
|
38,271
|
Customer
advances
|
|
|
22,677
|
|
|
|
20,777
|
Deferred
revenue
|
|
|
77,406
|
|
|
|
72,185
|
Short-term
debt
|
|
|
6,738
|
|
|
|
5,721
|
Total current
liabilities
|
|
|
209,306
|
|
|
|
198,637
|
Operating lease
liabilities, non-current
|
|
|
21,758
|
|
|
|
23,602
|
Long-term other
liabilities
|
|
|
4,804
|
|
|
|
4,675
|
Deferred revenue,
non-current
|
|
|
24,809
|
|
|
|
27,079
|
Long-term
debt
|
|
|
168,020
|
|
|
|
171,562
|
Total
liabilities
|
|
|
428,697
|
|
|
|
425,555
|
Equity:
|
|
|
|
|
|
Common
stock
|
|
|
99
|
|
|
|
97
|
Additional paid-in
capital
|
|
|
561,223
|
|
|
|
555,276
|
Accumulated other
comprehensive income
|
|
|
1,057
|
|
|
|
422
|
Accumulated
deficit
|
|
|
(514,726)
|
|
|
|
(502,136)
|
Total
equity
|
|
|
47,653
|
|
|
|
53,659
|
Total liabilities and
equity
|
|
$
|
476,350
|
|
|
$
|
479,214
|
Accuray
Incorporated
Summary of Orders
and Backlog
(in thousands, except
book to bill ratio)
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
|
Six Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
Gross orders
|
|
$
|
93,856
|
|
|
$
|
79,035
|
|
|
$
|
157,590
|
|
|
$
|
148,883
|
Net orders
|
|
|
54,606
|
|
|
|
40,869
|
|
|
|
86,346
|
|
|
|
60,439
|
Order
backlog
|
|
|
492,100
|
|
|
|
515,236
|
|
|
|
492,100
|
|
|
|
515,236
|
Book to bill ratio
(a)
|
|
|
1.8
|
|
|
|
1.2
|
|
|
|
1.5
|
|
|
|
1.4
|
(a) Book to bill ratio
is defined as gross orders for the period divided by product
revenue for the period.
|
Accuray
Incorporated
Reconciliation of
GAAP Net Loss to Adjusted EBITDA
(in
thousands)
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
|
Six Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
GAAP net
loss
|
|
$
|
(9,621)
|
|
|
$
|
(1,874)
|
|
|
$
|
(12,590)
|
|
|
$
|
(7,323)
|
Depreciation and
amortization (a)
|
|
|
1,546
|
|
|
|
1,151
|
|
|
|
2,797
|
|
|
|
2,327
|
Stock-based
compensation
|
|
|
2,314
|
|
|
|
3,126
|
|
|
|
4,706
|
|
|
|
6,042
|
Interest expense, net
(b)
|
|
|
2,713
|
|
|
|
2,642
|
|
|
|
5,341
|
|
|
|
4,898
|
Provision for income
taxes
|
|
|
878
|
|
|
|
1,049
|
|
|
|
2,810
|
|
|
|
1,390
|
Restructuring
charges
|
|
|
2,633
|
|
|
|
1,938
|
|
|
|
2,633
|
|
|
|
1,938
|
ERP and ERP related
expenditures
|
|
|
1,545
|
|
|
|
466
|
|
|
|
2,815
|
|
|
|
1,121
|
Adjusted
EBITDA
|
|
$
|
2,008
|
|
|
$
|
8,498
|
|
|
$
|
8,512
|
|
|
$
|
10,393
|
(a) Consists of
depreciation, primarily on property and equipment as well as
amortization of intangibles.
|
(b) Consists primarily
of interest expense associated with outstanding debt.
|
Accuray
Incorporated
Forward-Looking
Guidance
Reconciliation of
Projected GAAP Net Income (Loss) to Projected Adjusted
EBITDA
(in
thousands)
(Unaudited)
|
|
|
|
Three Months
Ending
March 31, 2024
|
|
|
From
|
|
|
To
|
GAAP net income
(loss)
|
|
$
|
(1,000)
|
|
|
$
|
2,000
|
Depreciation and
amortization (a)
|
|
|
1,300
|
|
|
|
1,300
|
Stock-based
compensation
|
|
|
2,300
|
|
|
|
2,300
|
Interest expense, net
(b)
|
|
|
2,600
|
|
|
|
2,600
|
Provision for income
taxes
|
|
|
800
|
|
|
|
800
|
Adjusted
EBITDA
|
|
$
|
6,000
|
|
|
$
|
9,000
|
|
|
|
Twelve Months
Ending
June 30, 2024
|
|
|
From
|
|
|
To
|
GAAP net
loss
|
|
$
|
(6,400)
|
|
|
$
|
(3,400)
|
Depreciation and
amortization (a)
|
|
|
5,000
|
|
|
|
5,000
|
Stock-based
compensation
|
|
|
9,200
|
|
|
|
9,200
|
Interest expense, net
(b)
|
|
|
10,000
|
|
|
|
10,000
|
Provision for income
taxes
|
|
|
3,800
|
|
|
|
3,800
|
Restructuring
charges
|
|
|
2,600
|
|
|
|
2,600
|
ERP and ERP related
expenditures
|
|
|
2,800
|
|
|
|
2,800
|
Adjusted
EBITDA
|
|
$
|
27,000
|
|
|
$
|
30,000
|
(a) Consists of
depreciation, primarily on property and equipment as well as
amortization of intangibles.
|
(b) Consists primarily
of interest expense associated with outstanding debt.
|
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SOURCE Accuray Incorporated