ACCURAY INCORPORATED SUNNYVALE, Calif., Aug. 20, 2015 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) announced today financial results for the fiscal fourth quarter and fiscal year ended June 30, 2015.
Fiscal Fourth Quarter Highlights
-- Gross orders were $84.9 million, representing 14 percent year-over-year
growth or 20 percent on a constant currency basis
-- Total revenue was $101.8 million, relatively flat year-over-year but an
increase of 5 percent on a constant currency basis
-- Total gross profit margins expanded to 40 percent from 38 percent in the
prior fiscal year fourth quarter
-- Adjusted EBITDA was $6.7 million compared to $2.5 million in the prior
fiscal year fourth quarter
-- CyberKnife(®) System gross product orders were the highest in four
years, following launch of the InCise(TM) Multileaf Collimator (MLC)
-- Sites with single and dual vaults comprised 48 percent of total
TomoTherapy(®) System orders
-- Three system orders received from Group Purchasing Organizations went to
backlog
-- Four additional licenses for Accuray systems awarded to hospitals by the
China NHFPC
"Our team finished the year with strong momentum globally as we executed on our core strategies for driving consistent growth," said Joshua H. Levine, president and chief executive officer of Accuray. "We successfully launched the InCise MLC for the CyberKnife System, continued to gain traction with our TomoTherapy System positioning, began to see results from our domestic GPO/strategic account selling initiative and continued to expand on our success in China. Underlying these achievements was a focus on our customers who continued to report industry leading customer satisfaction with regard to Accuray equipment."
Financial Highlights
Gross product orders totaled $84.9 million for the 2015 fiscal fourth quarter, an increase of $10.4 million or 14 percent from the fourth quarter of the prior fiscal year. On a constant currency basis, gross product orders increased 20 percent from the prior fiscal year fourth quarter. Ending product backlog was $375.0 million, approximately 3 percent higher than backlog at the end of the prior fiscal year fourth quarter, or a growth of 10 percent on a constant currency basis.
Total revenue was $101.8 million, which was relatively flat from the prior fiscal year fourth quarter but an increase of 5 percent on a constant currency basis. The Americas region total revenue was $37.2 million and total revenue outside of the Americas region was $64.6 million. Product revenue totaled $51.7 million while service revenue totaled $50.1 million, both of which were relatively flat from the fiscal 2014 fourth quarter.
Total gross profit for the 2015 fiscal fourth quarter was $40.5 million or 40 percent of sales, comprised of product gross margin of 43 percent and service gross margin of 36 percent. This compares to total gross margin of 38 percent, product gross margin of 45 percent and service gross margin of 31 percent for the prior fiscal year fourth quarter. On a constant currency basis, total gross margin for the fourth quarter of fiscal 2015 was 42 percent.
Operating expenses were $41.9 million, a decrease of 3 percent compared with $43.1 million in the prior fiscal fourth quarter. The decrease was primarily due to lower sales and marketing costs, partially offset by increased research and development costs to support ongoing product development efforts.
Net loss was $5.6 million, or $0.07 per share, for the fourth quarter of fiscal 2015, compared to a net loss of $9.8 million, or $0.13 per share, for the fourth quarter of fiscal 2014.
Adjusted EBITDA for the fourth quarter of fiscal 2015 was $6.7 million, compared to $2.5 million in the prior fiscal year fourth quarter.
Cash, cash equivalents, and investments were $143.9 million as of June 30, 2015, a decrease of $5.8 million from March 31, 2015.
Fiscal Year Highlights
For the fiscal year ended June 30, 2015, total revenue was $379.8 million, representing an increase of 3 percent, or 7 percent on a constant currency basis, from fiscal year 2014. The Americas region revenue was $174.0 million, an increase of 11 percent. Revenue outside the Americas region was $205.8 million, a decrease of 3 percent as reported, but an increase of 3 percent on a constant currency basis. Product revenue for fiscal 2015 was $178.7 million, representing an increase of 3 percent from the prior fiscal year while service revenue was $201.1 million, also representing 3 percent growth from the prior fiscal year.
Gross profit margin for the year ended June 30, 2015 was 38 percent, comprised of product gross margin of 42 percent and service gross margin of 35 percent. This compares to total gross margin of 39 percent for the prior fiscal year. Total gross margin for the year ended June 30, 2015 was 40 percent on a constant currency basis.
Operating expenses were $164.6 million for the fiscal year ended June 30, 2015, compared with $160.9 million in fiscal year 2014.
Net loss for the fiscal year ended June 30, 2015 was $40.2 million, or $0.51 per share, compared to a net loss of $35.4 million, or $0.47 per share, for the prior fiscal year.
Adjusted EBITDA for the fiscal year ended June 30, 2015 was $11.8 million, compared to $13.3 million in the prior fiscal year.
2016 Financial Guidance
-- Revenue: Accuray expects fiscal 2016 revenue to be in the range of $395
million to $410 million. This represents growth of 4 percent to 8
percent over revenue in fiscal 2015. Revenue by quarter as a percent of
total year is expected to be similar to fiscal 2015.
-- Adjusted EBITDA: Accuray expects fiscal 2016 adjusted EBITDA to be in
the range of $25 million to $35 million. This represents growth of 112
percent to 197 percent over adjusted EBITDA in fiscal 2015, reflecting
flat to moderately improving gross margins and ongoing expense control.
Conference Call Information
Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss these results. Conference call dial-in information is as follows:
-- U.S. callers: (855) 867-4103
-- International callers: (262) 912-4764
-- Conference ID Number (U.S. and international): 3203995
Individuals interested in listening to the live conference call via the Internet may do so by logging on to Accuray's website, www.accuray.com. In addition, a dial-up replay of the conference call will be available beginning August 20, 2015 at 5:00 p.m. PT/8:00 p.m. ET and ending August 28, 2015. The replay telephone number is (855) 859-2056 (USA) or (404) 537-3406 (International), Conference ID: 3203995.
Use of Non-GAAP Financial Measures
Accuray has supplemented its GAAP net 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 more meaningful comparison of results for current periods with previous operating results. A reconciliation of GAAP net loss (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedule below.
Accuray presents certain measures, such as period-over-period revenue growth, on a constant currency basis, which excludes the effects of foreign currency translation. Due to the continuing strengthening of the U.S. dollar against foreign currencies and the overall variability of foreign exchange rates from period to period, management uses these measures on a constant currency basis to evaluate period-over-period operating performance. Measures presented on a constant currency basis are calculated by translating current period results at prior period monthly average exchange rates.
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 a radiation oncology company that develops, manufactures and sells precise, 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 deliver the full range of radiation therapy and radiosurgery treatments. 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, including management's expectations for revenue and adjusted EBITDA in fiscal 2016. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: the company's ability to convert backlog to revenue; the success of the adoption of our CyberKnife and TomoTherapy Systems; the company's ability to manage its expenses; continuing uncertainty in the global economic environment; and other risks detailed from time to time under the heading "Risk Factors" in the company's report on Form 10-K, which was filed on August 29, 2014, the company's reports on Form 10-Q which were filed on November 7, 2014, February 6, 2015 and May 7, 2015, 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 June
30, Years Ended June 30,
------------------------ --------------------
2015 2014 2015 2014
---- ---- ---- ----
Gross Orders $84,862 $74,492 $267,777 $263,352
Net Orders 79,304 62,967 188,997 221,018
Order Backlog 375,028 364,742 375,028 364,742
Net revenue:
Products $51,684 $51,846 $178,710 $173,607
Services 50,066 50,154 201,091 195,812
------ ------
Total net revenue 101,750 102,000 379,801 369,419
Cost of revenue:
Cost of products 29,381 28,756 104,549 97,592
Cost of services 31,917 34,797 129,850 129,027
Total cost of revenue 61,298 63,553 234,399 226,619
------ ------ ------- -------
Gross profit 40,452 38,447 145,402 142,800
Operating expenses:
Research and development 14,850 13,576 55,752 53,724
Selling and marketing 15,677 17,859 62,440 61,885
General and administrative 11,403 11,679 46,379 45,335
Total operating expenses 41,930 43,114 164,571 160,944
------ ------ ------- -------
Loss from operations (1,478) (4,667) (19,169) (18,144)
Other expense, net (4,014) (4,669) (18,621) (14,216)
Loss before provision for
income taxes (5,492) (9,336) (37,790) (32,360)
Provision for income taxes 108 473 2,419 3,088
--- ---
Net loss $(5,600) $(9,809) $(40,209) $(35,448)
======= ======= ======== ========
Net loss per share -basic and
diluted $(0.07) $(0.13) $(0.51) $(0.47)
====== ====== ====== ======
Weighted average common shares
used in computing loss per
share:
Basic and diluted 79,170 76,879 78,277 75,804
====== ====== ====== ======
Accuray Incorporated
Consolidated Balance Sheets
(in thousands)
(Unaudited)
June 30, June 30,
2015 2014
---- ----
Assets
Current assets:
Cash and cash
equivalents $79,551 $92,346
Investments 64,306 79,553
Restricted cash 3,734 1,492
Accounts
receivable, net 77,727 72,152
Inventories 106,151 87,752
Prepaid expenses
and other
current assets 15,991 17,873
Deferred cost of
revenue 6,869 13,302
----- ------
Total current
assets 354,329 364,470
Property and
equipment, net 31,829 34,391
Goodwill 58,054 58,091
Intangible
assets, net 15,564 23,517
Deferred cost of
revenue 1,500 2,899
Other assets 8,695 11,820
----- ------
Total assets $469,971 $495,188
======== ========
Liabilities and equity
Current liabilities:
Accounts payable $13,096 $15,639
Accrued
compensation 21,934 32,569
Other accrued
liabilities 18,720 24,464
Customer advances 19,385 19,804
Deferred revenue 96,780 92,093
------ ------
Total current
liabilities 169,915 184,569
Long-term liabilities:
Long-term other
liabilities 10,934 6,593
Deferred revenue 10,489 9,866
Long-term debt 202,853 195,612
------- -------
Total liabilities 394,191 396,640
Commitment and contingencies
Equity:
Common stock 79 77
Additional paid-
in capital 471,430 451,750
Accumulated other
comprehensive
income (loss) (426) 1,815
Accumulated
deficit (395,303) (355,094)
-------- --------
Total equity 75,780 98,548
------ ------
Total liabilities
and equity $469,971 $495,188
-------- --------
Accuray Incorporated
Reconciliation of GAAP Net Loss to Adjusted Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation (Adjusted EBITDA)
(in thousands)
(Unaudited)
Three Months Ended
June 30, Years Ended June 30,
------------------- --------------------
2015 2014 2015 2014
---- ---- ---- ----
GAAP net loss $(5,600) $(9,809) $(40,209) $(35,448)
Amortization of
intangibles (a) 1,989 1,989 7,954 8,380
Depreciation (b) 2,640 3,029 11,539 12,184
Stock-based
compensation (c) 3,426 3,070 13,930 11,313
Interest expense, net
(d) 4,096 3,746 16,158 13,759
Provision for income
taxes 108 473 2,419 3,088
Adjusted EBITDA $6,659 $2,498 $11,791 $13,276
====== ====== ======= =======
(a) consists of amortization of
intangibles -developed technology
and distributor licenses
(b) consists of depreciation,
primarily on property and equipment
(c) consists of stock-based
compensation in accordance with ASC
718
(d) consists primarily of interest
income from available-for-sale
securities and interest expense
associated with our convertible
notes
Accuray Incorporated
Forward-Looking Guidance
Reconciliation of Projected Net Loss to Projected Adjusted Earnings Before
Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation (Adjusted EBITDA)
(in thousands)
(Unaudited)
Twelve Months Ending
June 30, 2016
---------------------
From To
---- ---
GAAP net loss $(29,200) $(19,300)
Amortization of
intangibles (a) 7,950 7,950
Depreciation (b) 10,850 10,850
Stock-based
compensation (c) 15,100 15,100
Interest expense, net
(d) 17,300 17,300
Provision for income
taxes 3,000 3,100
Adjusted EBITDA $25,000 $35,000
======= =======
(a) consists of amortization of
intangibles -developed technology
(b) consists of depreciation,
primarily on property and equipment
(c) consists of stock-based
compensation in accordance with ASC
718
(d) consists primarily of interest
income from available-for-sale
securities and interest expense
associated with our convertible
notes
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SOURCE Accuray Incorporated
