Accuray Inc ARAY

Accuray reports record revenue

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Accuray Reports Record Revenue in Fiscal Fourth Quarter and Fiscal Year Ended 2007 - Revenue Growth of 166 Percent Year Over Year - - Total Backlog Reaches Record Level of $619 Million - Sunnyvale, California, August 16, 2007 – Accuray Incorporated (Nasdaq: ARAY), the global leader in radiosurgery throughout the body, today announced financial results for the fiscal fourth quarter and full fiscal year ended June 30, 2007. For the fiscal fourth quarter of 2007, Accuray reported total revenue of $44.0 million, compared to fiscal fourth quarter 2006 total revenue of $21.4 million. Revenue for the fiscal year ending June 30, 2007 was $140.5 million, a 166 percent increase over total revenue of $52.9 million for fiscal year 2006. On a generally accepted accounting principles (GAAP) basis, net income for fiscal fourth quarter 2007 was $0.5 million or $0.01 per basic and diluted share, compared to a net loss of $7.9 million, or a loss of $0.49 per basic and diluted share during the same period in 2006. Net loss for the fiscal year ended June 30, 2007 was $5.6 million, or a loss of $0.18 per basic and diluted share, compared to a net loss of $33.7 million, or a loss of $2.11 per basic and diluted share for fiscal year 2006. On a non-GAAP basis, which excludes non-cash stock-based compensation charges, net income for the fourth quarter of fiscal 2007 was $3.3 million, or $0.05 per diluted share. Non-GAAP net income for the fiscal year ended June 30, 2007 was $2.6 million, or $0.05 per diluted share. On a GAAP basis, operating loss for the fourth quarter 2007 was $419,000 and for the fiscal year ended June 30, 2007 was $8.5 million. On a non-GAAP basis which excludes non-cash stock-based compensation charges, operating income was $3.4 million for the fourth quarter of fiscal 2007 and $4.1 million for the fiscal year ended June 30, 2007. At the end of fiscal 2007, backlog increased to approximately $619 million, with approximately $321 million associated with CyberKnife(R) System contracts and approximately $298 million associated with services and other recurring revenue. Backlog is defined as signed contracts that the Company believes have a substantially high probability of being booked as revenue. Services revenue for the fiscal fourth quarter of 2007 was $5.7 million compared with $1.8 million during the fourth quarter in 2006, a 217 percent increase. Full fiscal year 2007 services revenue was $16.9 million, a 248 percent increase over the $4.8 million reported for fiscal year 2006. "The Accuray team and I are very pleased with our strong financial performance, including record revenue, fourth quarter profitability and record backlog. Accuray's clinical programs and R&D efforts are rapidly expanding utilization of the CyberKnife System, fueling the impressive momentum that Accuray is experiencing today," said Euan S. Thomson, Ph.D., president and chief executive officer of Accuray, Incorporated. "The CyberKnife System is the established brand leader in the rapidly expanding radiosurgery market. Its dramatic growth in extracranial usage, particularly for lung and prostate tumors, is driving greater acceptance among the medical community. Our strong fourth quarter provides solid momentum as we start an exciting new fiscal year." At the end of fiscal 2007, the Company had increased its cash position to $204.8 million. As of June 30, 2007, there were 109 CyberKnife systems installed worldwide, with 71 in the Americas, 12 in Europe, 15 in Japan and 11 in the remainder of the Asia Pacific region. Non-GAAP Financial Information The Company presents information regarding net income and operating income on a non-GAAP basis. In computing non-GAAP operating income and net income, the Company has excluded non-cash stock-based compensation charges. The Company believes that the presentation of net income and operating income excluding non-cash stock-based compensation charges is relevant information that may be used by analysts, investors and other interested parties in assessing the Company's financial performance. The Company's management also uses this information to evaluate the operational performance of the Company. The non-GAAP financial information presented in this release may vary from non-GAAP financial measures used by other companies. In addition, non-GAAP financial information should not be viewed as a substitute for financial data prepared in accordance with GAAP. Conference Call Information Accuray will hold a conference call for financial analysts and investors today, August 16, 2007 at 2:00 p.m. PT / 5:00 p.m. ET. During the conference call, Accuray management will discuss fiscal 2007 results and comment on fiscal 2008 revenue outlook. The conference call dial-in numbers are [phone] (USA) or [phone] (International), Access Code: 6562437. A live webcast of the call will also be available from the Investor Relations section on the corporate website at https://www.accuray.com. In addition, a recording of the call will be available by calling [phone] (USA) or [phone] (International), Access Code: 6562437, beginning at 6:00 p.m. PT / 9:00 p.m. ET, August 16, 2007 and will be available through August 30, 2007. A webcast replay will also be available from the Investor Relations section of the corporate website at https://www.accuray.com from approximately 5:30 p.m. PT / 8:30 p.m. ET, today, through Accuray's release of fiscal first quarter 2008 results, ending on September 29, 2007. About the CyberKnife® Robotic Radiosurgery System The CyberKnife Robotic Radiosurgery System is the world's only robotic radiosurgery system cleared by the FDA to treat tumors anywhere in the body non-invasively and with sub-millimeter accuracy. 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 precise, high-dose radiation, minimizing damage to surrounding healthy tissue and eliminating the need for invasive head or body stabilization frames. About Accuray Accuray Incorporated (Nasdaq: ARAY) based in Sunnyvale, Calif., is the global leader in the field of radiosurgery throughout the body, 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. The CyberKnife System has been used to treat more than 35,000 patients worldwide and as of June 30, 2007, 109 systems had been installed in leading hospitals in the Americas, Europe and Asia. For more information, please visit www.accuray.com Forward-Looking Statements Except for the historical information contained herein, the matters set forth in this press release, including statements as to financial guidance including realization of backlog, procedure growth and market acceptance, product development, clinical studies, regulatory review and approval, and commercialization of products, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date the statements are made and are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events. You should not put undue reliance on any forward-looking statements. Important factors that could cause actual performance and results to differ materially from the forward-looking statements we make include: fluctuations in results of operations; reimbursement for the CyberKnife procedure; market acceptance of our products; government approvals of our products; intellectual property protection for our products; competing products; funding requirements; and other risks detailed from time to time under the heading "Risk Factors" in our report on Form 10-Q for the quarterly period ended March 30, 2007 as may be updated from time to time by our other filings with the Securities and Exchange Commission. If one or more of these risks or uncertainties materialize, or if any underlying assumptions prove incorrect, our actual performance or results may vary materially from any future performance or results expressed or implied by these forward-looking statements. We assume 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. ©2007 Accuray Incorporated. All rights reserved. Accuray, the Accuray logo, CyberKnife, Synchrony, Xsight and RoboCouch are among trademarks or registered trademarks of Accuray . Contacts: Investor Contact: Tom Rathjen Vice President, Investor Relations [phone] [e-mail] Media Contact: Stephanie Tomei Public Relations Manager [phone] [e-mail] Accuray Incorporated Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share data) Three months ended Years ended June 30, June 30, 2007 2006 2007 2006 Net revenue: Products $34,729 $15,739 $110,320 $ 36,089 Shared ownership programs 2,842 2,285 10,090 8,145 Services 5,651 1,785 16,860 4,848 Other 772 1,591 3,182 3,815 Total net revenue 43,994 21,400 140,452 52,897 Cost of revenue: Costs of products 13,100 8,208 43,363 18,531 Costs of shared ownership programs 672 661 2,637 2,513 Costs of services 4,781 1,074 12,269 3,948 Costs of other 525 1,034 2,144 2,500 Total cost of revenue 19,078 10,977 60,413 27,492 Gross profit 24,916 10,423 80,039 25,405 Operating expenses: Selling and marketing 10,765 7,915 37,889 25,186 Research and development 7,510 4,737 26,775 17,788 General and administrative 7,060 5,684 23,915 15,923 Total operating expenses 25,335 18,336 88,579 58,897 Loss from operations (419) (7,913) (8,540) (33,492) Interest and other income, net 2,180 117 3,530 56 Income (loss) before provision for income taxes and cumulative effect of change in accounting principle 1,761 (7,796) (5,010) (33,436) Provision for income taxes 1,259 62 1,444 258 Income (loss) before cumulative effect of change in accounting principle 502 (7,858) (6,454) (33,694) Cumulative effect of change in accounting principle, net of tax of $0 - - 838 - Net income (loss) $ 502 $(7,858) $ (5,616) $(33,694) Net income (loss) per common share, basic and diluted: Basic Income (loss) before cumulative effect of change in accounting principle $ 0.01 $ (0.49) $ (0.21) $ (2.11) Cumulative effect of change in accounting principle - - 0.03 - Basic net income (loss) per share $ 0.01 $ (0.49) $ (0.18) $ (2.11) Diluted Income (loss) before cumulative effect of change in accounting principle $ 0.01 $ (0.49) $ (0.21) $ (2.11) Cumulative effect of change in accounting principle - - 0.03 - Diluted net income (loss) per share $ 0.01 $ (0.49) $ (0.18) $ (2.11) Weighted average common shares outstanding used in computing net income (loss) per share: Basic 53,732 16,141 30,764 15,997 Diluted 62,553 16,141 30,764 15,997 Cost of revenue, selling and marketing, research and development, and general and administrative expenses include stock-based compensation charges as follows: Cost of revenue $357 $ 222 $ 1,205 $863 Selling and marketing $ 1,055 $ 651 $ 3,958 $ 2,569 Research and development $839 $ 354 $ 2,448 $ 1,574 General and administrative $ 1,604 $ 780 $ 5,016 $ 3,237 Accuray Incorporated Unaudited Reconciliation of GAAP to Non-GAAP Consolidated Statement of Operations (in thousands, except per share data) Three months ended June 30, 2007 2006 FAS 123R As GAAP Effects Non-GAAP reported Net revenue: Products $34,729 $ - $34,729 $15,739 Shared ownership programs 2,842 - 2,842 2,285 Services 5,651 - 5,651 1,785 Other 772 - 772 1,591 Total net revenue 43,994 - 43,994 21,400 Cost of revenue: Costs of products 13,100 (357) 12,743 8,208 Costs of shared ownership programs 672 - 672 661 Costs of services 4,781 - 4,781 1,074 Costs of other 525 - 525 1,034 Total cost of revenue 19,078 (357) 18,721 10,977 Gross profit 24,916 357 25,273 10,423 % of total revenue 56.6% 0.8% 57.4% 48.7% Operating expenses: . Selling and marketing 10,765 (1,055) 9,710 7,915 Research and development 7,510 (839) 6,671 4,737 General and administrative 7,060 (1,604) 5,456 5,684 Total operating expenses 25,335 (3,498) 21,837 18,336 Income (loss) from operations (419) 3,855 3,436 (7,913) % of total revenue -1.0% 8.8% 7.8% -37.0% Interest and other income, net 2,180 - 2,180 117 Income before provision for income taxes 1,761 3,855 5,616 (7,796) Provision for income taxes 1,259 1,101 2,360 62 Net income 502 2,754 3,256 (7,858) Net income per common share, basic and diluted: Basic net income per share $ 0.01 $ 0.05 $ 0.06 $ (0.49) Diluted net income per share $ 0.01 $ 0.04 $ 0.05 $ (0.49) Weighted average common shares outstanding used in computing net income per share: Basic 53,732 53,732 16,141 Diluted 62,553 62,553 16,141 Accuray Incorporated Unaudited Reconciliation of GAAP to Non-GAAP Consolidated Statement of Operations (in thousands, except per share data) Years ended June 30, 2007 2006 FAS 123R As GAAP Effects Non-GAAP reported Net revenue: Products $110,320 $ - $110,320 $ 36,089 Shared ownership programs 10,090 - 10,090 8,145 Services 16,860 - 16,860 4,848 Other 3,182 - 3,182 3,815 Total net revenue 140,452 - 140,452 52,897 Cost of revenue: Costs of products 43,363 (1,205) 42,158 18,531 Costs of shared ownership programs 2,637 - 2,637 2,513 Costs of services 12,269 - 12,269 3,948 Costs of other 2,144 - 2,144 2,500 Total cost of revenue 60,413 (1,205) 59,208 27,492 Gross profit 80,039 1,205 81,244 25,405 % of total revenue 57.0% 0.9% 57.8% 48.0% Operating expenses: Selling and marketing 37,889 (3,958) 33,931 25,186 Research and development 26,775 (2,448) 24,327 17,788 General and administrative 23,915 (5,016) 18,899 15,923 Total operating expenses 88,579 (11,422) 77,157 58,897 Income (loss) from operations (8,540) 12,627 4,087 (33,492) % of total revenue -6.1% 9.0% 2.9% -63.3% Interest and other income, net 3,530 - 3,530 56 Income (loss) before provision for income taxes and cumulative effect of change in accounting principle (5,010) 12,627 7,617 (33,436) Provision for income taxes 1,444 3,606 5,050 258 Income (loss) before cumulative effect of change in accounting principle (6,454) 9,021 2,567 (33,694) Cumulative effect of change in accounting principle, net of tax of $0 838 (838) - - Net income (loss) $ (5,616) $ 8,183 $ 2,567 $(33,694) Net income (loss) per common share, basic and diluted: Basic Income (loss) before cumulative effect of change in accounting principle $ (0.21) $ 0.29 $ 0.08 $ (2.11) Cumulative effect of change in accounting principle 0.03 (0.03) - - Basic net income (loss) per share $ (0.18) $ 0.26 $ 0.08 $ (2.11) Diluted Income (loss) before cumulative effect of change in accounting principle $ (0.21) $ 0.26 $ 0.05 $ (2.11) Cumulative effect of change in accounting principle 0.03 (0.03) - - Diluted net income (loss) per share $ (0.18) $ 0.23 $ 0.05 $ (2.11) Weighted average common shares outstanding used in computing net income (loss) per share: Basic 30,764 30,764 15,997 Diluted 30,764 55,611 15,997 Accuray Incorporated Unaudited Condensed Consolidated Balance Sheets (in thousands, except share amounts) June 30, June 30, 2007 2006 Assets Current assets: Cash and cash equivalents $204,830 $ 27,856 Restricted cash - 1 Accounts receivable, net of allowance for doubtful accounts of $20 at both June 30, 2007 and 2006 10,105 11,698 Inventories 16,984 10,100 Prepaid expenses and other current assets 7,937 3,512 Deferred cost of revenue-- - -current 30,709 4,810 Total current assets 270,565 57,977 Property and equipment, net 23,937 21,945 Goodwill 4,495 4,495 Intangible assets, net 1,184 1,446 Deferred cost of revenue and other noncurrent assets 31,928 52,760 Total assets $332,109 $138,623 Liabilities, temporary equity and stockholders' equity (deficiency) Current liabilities: Accounts payable $ 14,147 $ 4,726 Accrued expenses 17,240 15,055 Customer advances and deferred revenue 90,656 41,979 Total current liabilities 122,043 61,760 Long-term liabilities: Customer advances and deferred revenue 84,623 130,214 Total liabilities 206,666 191,974 Temporary equity Redeemable convertible preferred stock, no par value; Authorized: 30,000,000 shares; issued and outstanding: none and 17,419,331 at June 30, 2007 and 2006, respectively; liquidation amount: none and $40,354 at June 30, 2007 and 2006, respectively. - 27,504 Stockholders' equity (deficiency) Preferred stock, $0.001 par value; Authorized: 5,000,000 shares and none at June 30, 2007 and 2006, respectively; no shares issued and outstanding. - - Common stock, $0.001 par value and no par value at June 30, 2007 and 2006, respectively; Authorized: 100,000,000 and 70,000,000 shares at June 30, 2007 and 2006, respectively; issued and outstanding: 53,798,643 and 16,243,150 shares at June 30, 2007 and 2006, respectively. 53 13,276 Additional paid-in capital 251,637 43,988 Notes receivable from stockholders - (206) Deferred stock-based compensation - (17,272) Accumulated other comprehensive loss 10 - Accumulated deficit (126,257) (120,641) Total stockholders' equity (deficiency) 125,443 (80,855) Total liabilities, temporary equity and stockholders' equity (deficiency) $332,109 $138,623 Contacts: Investor Contact: Tom Rathjen Vice President, Investor Relations [phone] [e-mail] Media Contact: Stephanie Tomei Public Relations Manager [phone] [e-mail]