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Accuray Announces Results for Second Quarter Fiscal 2010
Date:2/4/2010

SUNNYVALE, Calif., Feb. 4 /PRNewswire-FirstCall/ -- Accuray Incorporated (Nasdaq: ARAY), a global leader in the field of radiosurgery, announced today financial results for the second quarter of fiscal year 2010, ended December 31, 2009.

For the second quarter of fiscal 2010, Accuray reported total revenue of $57.3 million, compared to the second quarter of fiscal 2009 total revenue of $57.6 million.

Accuray reported a net loss for the second quarter of fiscal 2010 of ($1.2) million, or ($0.02) per share, compared to net income of $1.4 million, or $0.02 per diluted share, during the same period last year.

During the second quarter of fiscal 2010, 18 orders for CyberKnife® Robotic Radiosurgery Systems with a value of $84.9 million were added to company backlog, which combined with service renewal orders and other ancillary accessory orders yielded a total addition to backlog of $92.1 million. For the first six months of fiscal 2010, Accuray added 27 CyberKnife Systems to backlog and shipped 18 units.

In the second quarter of fiscal 2010, 11 new CyberKnife Systems were installed, including the replacement of an early model, bringing the worldwide CyberKnife installation base to 190 units.

Non-cash, stock-based compensation charges were $3.2 million for the second quarter of fiscal 2010, compared to $3.6 million for the same period in fiscal 2009.

For the six months ended December 31, 2009, total revenue was $107.9 million, a five percent decrease over total revenue of $113.5 million during the same period last year. Net loss for the first half of fiscal 2010 was ($4.5) million or a loss of ($0.08) per share, compared to a net loss of ($1.8) million or ($0.03) per share during the first half of fiscal 2009. The net loss in the first six months of fiscal 2010 was primarily driven by product mix and higher levels of lower margin service revenue.

"We are very pleased with the number of new orders added to backlog during the second quarter, as well as the steadily expanding installed base of CyberKnife units globally," said Euan S. Thomson, Ph.D., Accuray's president and chief executive officer. "Adding 27 new orders to backlog in the first six months of fiscal 2010, plus shipping 18 units validates the growing worldwide demand for the CyberKnife and bodes well for the future."

Accuray's cash and investment balances at the end of the second quarter of fiscal 2010 totaled $151.1 million, which includes cash and cash equivalents of $39.5 million, restricted cash of $873,000, short-term investments of $96.5 million and long-term investments of $14.3 million.

Outlook

The following statement is forward-looking and actual results may differ materially. During fiscal year 2010 Accuray expects that revenue will be in the range of $220 million to $230 million, up from its prior guidance of $215 million to $230 million. CyberKnife System revenue, which represents approximately two-thirds of total revenue, is driven by customer installation schedules.

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 Thursday, February 4, 2010 at 2:00 p.m. PT / 5:00 p.m. ET. The conference call dial-in numbers are 1-866-831-6247 (USA) or 1-617-213-8856 (International), Conference ID:  13147425. 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: 38994158, beginning at 5:00 p.m. PT / 8:00 p.m. ET, February 4, 2010 and will be available through February 7, 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 third quarter of fiscal 2010, ending March 31, 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 deliver more than 80,000 treatments worldwide and currently 190 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 2010, the portion of revenue attributable to CyberKnife System revenue, customer installation schedules, realization of backlog, service activity and stock based compensation. 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 2009 fiscal year as well as in our quarterly report on Form 10-Q, for the second quarter of fiscal year 2010, both of which have 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       Six months ended    
                         ------------------       -----------------     
                      December 31, December 31, December 31, December 31,
                         2009        2008         2009         2008  
                        --------    --------    --------     -------- 
    Net revenue:                                               
      Products           $35,686     $41,301    $66,032     $78,756 
      Shared                                                
       ownership                                            
       program               456         876        937       1,912 
      Services            20,688      13,922     40,342      29,829 
      Other                  491       1,538        585       2,997 
                             ---       -----        ---       ----- 
      Total net                                             
       revenue            57,321      57,637    107,896     113,494 
    Cost of                                                 
     revenue:                                               
      Cost of                                                 
       products           17,556      17,520     32,207      32,264 
      Cost of                                               
       shared                                               
       ownership                                            
       program               329         207        650         469 
      Cost of                                               
       services           13,133       8,972     27,053      20,157 
      Cost of                                               
       other                 339       1,529        403       2,766 
                             ---       -----        ---       ----- 
      Total                                                 
       cost of                                              
       revenue            31,357      28,228     60,313      55,656 
                          ------      ------     ------      ------ 
      Gross                                                 
       profit             25,964      29,409     47,583      57,838 
    Operating                                               
     expenses:                                              
      Selling and                                           
       marketing          10,063      10,723     18,712      24,203 
      Research and                                          
       development         7,769       8,794     15,431      17,548 
      General and                                           
       administrative     10,430       9,259     19,360      19,692 
                          ------       -----     ------      ------ 
      Total                                                 
       operating                                            
       expenses           28,262      28,776     53,503      61,443 
                          ------      ------     ------      ------ 
    Income                                                  
     (loss) from                                            
     operations           (2,298)        633     (5,920)     (3,605)
    Interest                                                
     and other                                              
     income, net             426         748        911       1,861 
                             ---         ---        ---       ----- 
    Income                                                  
     (loss) before                                                 
     provision                                              
     for income                                             
     taxes                (1,872)      1,381     (5,009)     (1,744)
    Provision                                               
     (benefit)                                              
     for income                                             
     taxes                  (696)         31       (557)         85 
                            ----          --       ----          -- 
    Net income                                              
     (loss)              $(1,176)     $1,350    $(4,452)    $(1,829)
                         =======      ======    =======     ======= 
                                                            
    Net income                                              
     (loss) per                                             
     common                                                 
     share, basic                                           
     and diluted:                                           
      Basic               $(0.02)      $0.02     $(0.08)     $(0.03)
      Diluted             $(0.02)      $0.02     $(0.08)     $(0.03)
    Weighted                                                
     average                                                
     common                                                 
     shares                                                 
     outstanding                                            
     used in                                                
     computing                                              
     net income                                             
     (loss) per                                             
     share:                                                 
      Basic               57,405      55,064     57,112      54,845 
      Diluted             57,405      58,267     57,112      54,845 
    Cost of revenue,                                        
     selling and                                            
     marketing,                                             
     research and                                           
     development, and                                       
     general and                                            
     administrative                                         
     expenses include                                       
     stock-based                                            
     compensation                                           
     charges as                                             
     follows:                                               
      Cost of                                               
       revenue              $445        $547       $676      $1,179 
      Selling and                                           
       marketing            $655        $935     $1,463      $1,980 
      Research and                                          
       development          $653        $751     $1,301      $1,533 
      General and                                           
       administrative     $1,496      $1,348     $2,914      $3,860 
    
    
    
                             Accuray Incorporated
                  Unaudited Condensed Consolidated Balance Sheets
                        (in thousands, except share amounts)
    
                                                    December 31,   June 27,
                                                        2009        2009 
                                                        ----        ---- 
    Assets                                                               
    Current assets:                                                      
      Cash and cash equivalents                      $39,463     $36,835 
      Restricted cash                                    873         527 
      Short-term available-for-                                          
       sale securities                                74,504      64,634 
      Trading securities                              22,011           - 
      Accounts receivable, net                                           
       of allowance for                                                  
       doubtful accounts of $24                                          
       at December 31, 2009 and                                         
       $484 at June 27, 2009                          37,433      36,427 
      Inventories                                     25,292      28,909 
      Prepaid expenses and                                               
       other current assets                            8,973       6,186 
      Deferred cost of revenue-current                15,761      18,984 
                                                      ------      ------ 
        Total current assets                         224,310     192,502 
                                                     -------     ------- 
    Long-term available-for-                                             
     sale securities                                  14,254      35,245 
    Long-term trading securities                           -      22,007 
    Property and equipment, net                       12,502      15,066 
    Goodwill                                           4,495       4,495 
    Intangible assets, net                               517         668 
    Deferred cost of revenue-noncurrent                2,817       2,933 
    Other assets                                       1,622       1,470 
                                                       -----       ----- 
        Total assets                                $260,517    $274,386 
                                                    ========    ======== 
    Liabilities and                                                      
     stockholders' equity                                                
    Current liabilities:                                                 
      Accounts payable                               $11,175     $14,941 
      Accrued expenses                                18,345      15,768 
      Customer advances-current                       13,577      13,185 
      Deferred revenue-current                        53,098      68,105 
                                                      ------      ------ 
        Total current liabilities                     96,195     111,999 
                                                      ------     ------- 
    Long-term liabilities:                                               
      Long-term other liabilities                        697         708 
      Deferred revenue-noncurrent                      6,218       7,777 
                                                       -----       ----- 
        Total liabilities                            103,110     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: 59,847,863                                                
       and 58,783,547 shares at December 31,                            
       2009 and June 27,2009, respectively;                            
       outstanding: 57,707,845 and                                     
       56,643,529 shares at December 31,                               
       2009 and June 27, 2009, respectively               58          57 
      Additional paid-in capital                     282,048     273,946 
      Accumulated other                                                  
       comprehensive income                              270         416 
      Accumulated deficit                           (124,969)   (120,517)
                                                    --------    -------- 
        Total stockholders' equity                   157,407     153,902 
                                                     -------     ------- 
        Total liabilities and                                            
         stockholders' equity                       $260,517    $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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