Accuray Reports First Quarter Fiscal 2021 Financial Results
Accuray Incorporated (NASDAQ: ARAY) reported its Q1 fiscal 2021 results, ending September 30, 2020, with net revenue of $85.3 million and operating income of $5.5 million. Adjusted EBITDA increased to $9 million from a loss of $1 million year-over-year. Gross orders were $50.5 million, and the backlog rose to $597.3 million, marking a 21% increase compared to the previous year. Notably, revenue from products decreased from $37.6 million to $31.3 million, while service revenue grew slightly to $54.1 million. The company refrained from providing fiscal 2021 guidance due to COVID-19 uncertainty.
- Adjusted EBITDA increased to $9 million from a loss of $1 million YoY.
- Gross orders totaled $50.5 million, backlog rose 21% to $597.3 million.
- Net revenue decreased from $89.6 million in Q1 FY20 to $85.3 million in Q1 FY21.
- Product revenue fell from $37.6 million to $31.3 million YoY.
SUNNYVALE, Calif., Oct. 29, 2020 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported its financial results for the first quarter of fiscal 2021 ended September 30, 2020.
First Quarter Fiscal 2021 Summary
- Net revenue of
$85.3 million , operating income of$5.5 million - Adjusted EBITDA grew to
$9 million from a loss of$1 million in the prior year first quarter - Gross orders of
$50.5 million , ending backlog of$597.3 million , an increase of 21 percent from September 30, 2019
Other Recent Operational Highlights
- Expect revenue recognition for China Type A systems previously awarded in October 2019 to start in the second quarter of fiscal 2021
- Introduced ClearRT™ Helical kVCT Imaging for the Radixact System at ASTRO 2020
- 44 clinical abstracts related to customer clinical experience on CyberKnife and TomoTherapy/Radixact exhibited at ASTRO 2020 Scientific Sessions
"We are off to a solid start in fiscal 2021 despite the headwinds created by the COVID-19 environment. Our global team continues to adapt and make the necessary adjustments to compete and operate effectively given the current market conditions and delivered the fourth consecutive quarter of operating profit, said Joshua H. Levine, President and CEO of Accuray. "Looking ahead, we will be focused on driving the revenue conversion process related to the China Type A systems beginning in the second quarter. Concurrent with this year's recent ASTRO meeting, we have received very positive customer feedback related to the introduction of our ClearRT™ Helical kVCT imaging upgrade for the Radixact System as we drive our long-term strategic commitment to continued innovation."
Q1 Fiscal 2021 Financial Highlights
Gross product orders totaled
Total net revenue was
Total gross profit for the first quarter of fiscal 2021 was
Net income was
Adjusted EBITDA for the first quarter of fiscal 2021 was a positive
Cash, cash equivalents, and short-term restricted cash were
Financial Guidance
The impact of the COVID-19 pandemic on Accuray's fiscal 2021 results remains uncertain. Given the continued evolution of the COVID-19 pandemic and the uncertainty surrounding its impact on the global economy and the healthcare industry, Accuray believes it is prudent to refrain from providing financial guidance for fiscal year 2021.
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 first quarter of fiscal 2021 as well as recent corporate developments. Conference call dial-in information is as follows:
- U.S. callers: (877) 270-2148
- International callers: (412) 902-6510
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.
In addition, a taped replay of the conference call will be available beginning approximately one hour after the call's conclusion and available for seven days. The replay telephone number is (877) 344-7529 (USA) or (412) 317-0088 (International), Conference ID:10148905. An archived webcast will also be available at Accuray's website until Accuray announces its results for the second quarter of fiscal 2021.
Use of Non-GAAP Financial Measures
Accuray has supplemented its GAAP net income (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 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.
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) develops, manufactures and sells radiotherapy systems that are intended to make cancer treatments shorter, safer, personalized and more effective, ultimately enabling patients to live longer, better lives. Our radiation treatment delivery systems in combination with fully-integrated software solutions set the industry standard for precision and cover the full range of radiation therapy and radiosurgery procedures. 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; expectations regarding the effect of the COVID-19 pandemic on the company and the company's position in a post-COVID-19 environment; the company's ability to adapt and make the necessary adjustments to compete and operate effectively; the company's ability to realize the benefits of working capital management and cash preservation activities; expectations regarding future sales in China; expectations regarding the company's Chinese joint venture, including the timing of revenue conversion and the manufacture and shipment of a joint venture manufactured product; expectations regarding the company's product portfolio, including with respect to the company's Synchrony and Clear RT Helical kVCT imaging upgrades as well as other strategic product innovations; expectations regarding the new Centers for Medicare and Medicaid Services alternative payment model and reimbursement schedule; expectations regarding gross orders, revenue and product mix; expectations regarding the future of radiotherapy treatment; and the company's leadership position in radiation oncology innovation and technologies. 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 COVID-19 pandemic on the operations of the company and those of its customers and suppliers; the company's ability to achieve widespread market acceptance of its products, including new product and software offerings; the company's ability to develop new products or enhance existing products to meet customers' needs and compete favorably in the market, the company's ability to effectively integrate and execute the joint venture, the company's ability to realize the expected benefits of the joint venture; the ability of customers in China to obtain Class A or B user licenses to purchase radiotherapy systems; risks inherent in international operations; the company's ability to effectively manage its growth; 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 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on August 25, 2020 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 September 30, | ||||||||
2020 | 2019 | |||||||
Gross Orders | $ | 50,528 | $ | 78,487 | ||||
Net Orders | 23,554 | 38,981 | ||||||
Order Backlog | 597,276 | 495,029 | ||||||
Net revenue: | ||||||||
Products | $ | 31,258 | $ | 37,605 | ||||
Services | 54,074 | 51,972 | ||||||
Total net revenue | 85,332 | 89,577 | ||||||
Cost of revenue: | ||||||||
Cost of products | 18,426 | 21,570 | ||||||
Cost of services | 31,503 | 35,064 | ||||||
Total cost of revenue | 49,929 | 56,634 | ||||||
Gross profit | 35,403 | 32,943 | ||||||
Operating expenses: | ||||||||
Research and development | 12,148 | 13,341 | ||||||
Selling and marketing | 8,898 | 13,266 | ||||||
General and administrative | 8,889 | 10,616 | ||||||
Total operating expenses | 29,935 | 37,223 | ||||||
Income (loss) from operations | 5,468 | (4,280) | ||||||
Loss on equity investment, net | (28) | — | ||||||
Other expense, net | (4,694) | (4,439) | ||||||
Income (loss) before provision for income taxes | 746 | (8,719) | ||||||
Provision for income taxes | 344 | 637 | ||||||
Net income (loss) | $ | 402 | $ | (9,356) | ||||
Net income (loss) per share - basic | $ | 0.00 | $ | (0.11) | ||||
Net income (loss) per share - diluted | $ | 0.00 | $ | (0.11) | ||||
Weighted average common shares used in computing income (loss) per share: | ||||||||
Basic | 91,194 | 88,772 | ||||||
Diluted | 91,681 | 88,772 | ||||||
Accuray Incorporated | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
(Unaudited) | ||||||||
September 30, | June 30, | |||||||
2020 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 89,955 | $ | 107,577 | ||||
Restricted cash | 5,531 | 997 | ||||||
Accounts receivable, net | 75,034 | 90,599 | ||||||
Inventories, net | 141,017 | 134,374 | ||||||
Prepaid expenses and other current assets | 18,139 | 21,227 | ||||||
Deferred cost of revenue | 2,800 | 2,712 | ||||||
Total current assets | 332,476 | 357,486 | ||||||
Property and equipment, net | 14,540 | 15,349 | ||||||
Investment in joint venture | 15,591 | 13,929 | ||||||
Goodwill | 57,834 | 57,717 | ||||||
Intangible assets, net | 606 | 663 | ||||||
Operating lease right-of-use assets | 27,377 | 28,647 | ||||||
Other assets | 16,286 | 17,136 | ||||||
Total assets | $ | 464,710 | $ | 490,927 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 6,162 | $ | — | ||||
Accounts payable | 17,841 | 23,126 | ||||||
Accrued compensation | 19,618 | 17,963 | ||||||
Operating lease liabilities, current | 8,381 | 8,224 | ||||||
Other accrued liabilities | 19,047 | 27,180 | ||||||
Customer advances | 16,712 | 22,571 | ||||||
Deferred revenue | 81,344 | 83,207 | ||||||
Total current liabilities | 169,105 | 182,271 | ||||||
Long-term other liabilities | 7,644 | 7,416 | ||||||
Deferred revenue | 24,406 | 24,125 | ||||||
Operating lease liabilities, non-current | 22,588 | 24,173 | ||||||
Long-term debt | 173,527 | 189,307 | ||||||
Total liabilities | 397,270 | 427,292 | ||||||
Equity: | ||||||||
Common stock | 91 | 91 | ||||||
Additional paid-in capital | 547,651 | 545,741 | ||||||
Accumulated other comprehensive income (loss) | 1,009 | (484) | ||||||
Accumulated deficit | (481,311) | (481,713) | ||||||
Total equity | 67,440 | 63,635 | ||||||
Total liabilities and equity | $ | 464,710 | $ | 490,927 | ||||
Accuray Incorporated | ||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, | ||||||||
Amortization and Stock-Based Compensation (Adjusted EBITDA) | ||||||||
(in thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
GAAP net income (loss) | $ | 402 | $ | (9,356) | ||||
Depreciation and amortization | 1,650 | 1,851 | ||||||
Stock-based compensation | 2,244 | 1,700 | ||||||
Interest expense, net | 4,393 | 4,200 | ||||||
Provision for income taxes | 344 | 637 | ||||||
Adjusted EBITDA | $ | 9,033 | $ | (968) | ||||
Joe Diaz | Beth Kaplan |
Investor Relations, Lytham Partners | Public Relations Director, Accuray |
+1 (602) 889-9700 | +1 (408) 789-4426 |
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SOURCE Accuray Incorporated
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