EX-99.1 2 aray-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

 

img235950492_0.jpg 

 

 

 

 

Accuray Reports Fourth Quarter and Fiscal 2022 Financial Results

 

8.5% FY22 revenue growth; Company issues guidance for FY23

 

 

SUNNYVALE, Calif., August 10, 2022 — Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the fourth quarter and fiscal 2022 ended June 30, 2022.

 

Q4 Fiscal 2022 and Recent Operating Highlights

Gross orders of $88.3 million
Net revenue of $110.0 million
GAAP net loss of $3.5 million. Adjusted EBITDA of $5.2 million
Accuray ClearRT™ Helical Fan-Beam kVCT Imaging wins "Best New Technology Solution for Oncology" MedTech Breakthrough Award

 

Fiscal Year 2022 Highlights

Gross orders of $332.3 million and ending backlog of $563.7 million
Net revenue of $429.9 million, an increase of 8.5% from fiscal 2021
GAAP net loss of $5.3 million improved from GAAP net loss of $6.3 million in the prior year. Adjusted EBITDA of $22.8 million as compared to adjusted EBITDA of $38.0 million in the prior year
Accuray CyberKnife® System real world data and clinical studies presented at the International Stereotactic Radiosurgery Society congress reinforce benefits experienced by people with neurological indications treated over the last two decades

 

“The Accuray team delivered a solid fourth quarter beating consensus despite supply chain disruption and impacts from the COVID-19 lock downs in China. For the year, we delivered historic revenue levels demonstrating strong customer adoption of our latest product innovation. We continue to build a stronger business and invest in areas that are expected to deliver value to our customers to advance patient care,” said Suzanne Winter, President and Chief Executive Officer.

 

Fiscal Fourth Quarter Results

Gross orders totaled $88.3 million for the fourth quarter of fiscal 2022 compared to $112.7 million for the prior fiscal year fourth quarter. Ending order backlog was $563.7 million, approximately 8.6 percent lower than at the end of the prior fiscal year as we experienced age-outs in the fourth quarter primarily driven by delayed installations in our China and EIMEA regions.

Total revenue was $110.0 million for the fourth quarter of fiscal 2022 compared to $110.9 million for the prior fiscal year fourth quarter. Product revenue totaled $58.0 million compared to $56.1 million for the prior fiscal year fourth quarter, while service revenue totaled $52.0 million compared to $54.8 million for the prior fiscal year fourth quarter.

Total gross profit for the fourth quarter of fiscal 2022 was $43.0 million, or approximately 39.1 percent of sales, comprised of product gross margin of 45.1 percent and service gross margin of 32.5 percent. This compares to total gross profit of $43.7 million, or 39.4 percent of sales, comprised of product gross margin of 41.5 percent and service gross margin of 37.3 percent for the prior fiscal year fourth


quarter.

Operating expenses were $41.0 million, as compared to $39.6 million for the prior fiscal year fourth quarter.

 

Net loss was $3.5 million, or $0.04 per share, for the fourth quarter of fiscal 2022, compared to a net loss of $11.1 million, or $0.12 per share, for the prior fiscal year fourth quarter. Net loss for the fourth quarter of fiscal 2021 included a one-time charge of $9.9 million related to the exchange of a significant portion of the Company’s existing 3.75% Convertible Senior Notes due July 2022 for newly issued 3.75% Convertible Senior Notes due May 2026 and the refinancing of the Company’s senior secured revolving credit facility and term loan with new lenders. This one-time charge was recorded as non-operating, other expense in the fourth quarter of fiscal 2021.

Adjusted EBITDA for the fourth quarter of fiscal 2022 was $5.2 million, compared to $6.7 million for the prior fiscal year fourth quarter.


Cash, cash equivalents, and short-term restricted cash were $88.9 million as of June 30, 2022, a decrease of $9.1 million from March 31, 2022.


Fiscal Year 2022 Highlights

For the fiscal year ended June 30, 2022, gross orders totaled $332.3 million, representing an increase of 1.9 percent compared to the prior fiscal year.

Total revenue was $429.9 million for the fiscal year ended June 30, 2022 compared to $396.3 million for the prior fiscal year period. Product revenue totaled $214.7 million compared to $176.7 million for the prior fiscal year period, while service revenue totaled $215.2 million compared to $219.6 million for the prior fiscal year.

Total gross profit for the year ended June 30, 2022 was $160.0 million, or 37.2 percent of sales, comprised of product gross margin of 40.7 percent and service gross margin of 33.7 percent. This compares to total gross profit of $159.5 million, or 40.3 percent of sales, comprised of product gross margin of 42.2 percent and service gross margin of 38.7 percent for the prior fiscal year.

Operating expenses were $151.8 million, as compared to $137.3 million for the prior fiscal year period.

Net loss was $5.3 million, or $0.06 per share, for the fiscal year ended June 30, 2022, compared to a net loss of $6.3 million, or $0.07 per share, for the prior fiscal year period.

 

Prior fiscal year net loss included a one-time charge interest expense of $9.9 million related to the exchange of a significant portion of the Company’s existing 3.75% Convertible Senior Notes due July 2022 for newly issued 3.75% Convertible Senior Notes due May 2026 and the refinancing of the Company’s senior secured revolving credit facility and term loan with new lenders. The loss was recorded as non-operating, other expense in the fourth quarter of fiscal 2021.


Adjusted EBITDA for the fiscal year ended June 30, 2022 was $22.8 million, compared to $38.0 million for the prior fiscal year period
.

 

Fiscal Year 2023 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, the impact of the COVID-19 pandemic, supply chain disruption, and the factors set forth under “Safe Harbor Statement” below.

 

The Company is introducing guidance for fiscal year 2023 as follows:

Total revenue is expected in the range of $447 million to $455 million, representing a year-over-year growth range of 4% to 6%.
 
Adjusted EBITDA is expected in the range of $26 million to $30 million.

 

 

“While supply chain constraints, foreign exchange headwinds, and COVID-19 related lock downs in China are expected to create near term pressure, we believe our new product introductions will serve as catalysts for growth in FY23. We remain focused on margin expansion plans and investments in research and development to drive innovation and create shareholder value in the long term," said Ali Pervaiz, Chief Financial Officer.

 

Guidance for Adjusted EBITDA, a non-GAAP financial measures excludes depreciation and amortization, stock-based compensation expense, Enterprise Resource Planning (ERP) and ERP related expenditures, interest expense and provision for income taxes. 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 fourth quarter of fiscal 2022 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: 4554339. An archived webcast will also be available on Accuray’s website until Accuray announces its results for the first quarter of fiscal 2023.

 

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, ERP and ERP related expenditures, depreciation, amortization and stock-based compensation (“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.

 

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 Sunnyvale, California, 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; expectations regarding the effect of the COVID-19 pandemic, supply chain and logistics challenges on the company and the market in general; expectations regarding the company’s commercial strategy and execution as well as long-term growth opportunities and catalysts; expectations regarding demand for the company’s products, adoption of new products and the company’s order growth; the company’s innovation-driven growth strategy and its ability to continue to build a stronger business, deliver value to its customers and create shareholder value and return on investment in the long term; expectations regarding the company’s China joint venture and other partnerships; expectations regarding the company’s products and new product innovations and developments; expectations regarding the company’s product portfolio and its ability to position the company for growth; the impact of the company’s products on its customers and its business, and market adoption of such products, including with respect to the company’s VOLO Ultra enhancement and Clear RT Helical kVCT Imaging upgrades as well as other strategic product innovations; expectations regarding the future of radiotherapy treatment and the company’s addressable market; 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; disruptions to our supply chain, including increased logistics costs; 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 realize the expected benefits of the China joint venture and other partnerships; 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 Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on April 29, 2022 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.

 

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
June 30,

 

 

Twelve Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

58,037

 

 

$

56,145

 

 

$

214,715

 

 

$

176,647

 

Services

 

 

51,986

 

 

 

54,791

 

 

 

215,194

 

 

 

219,642

 

Total net revenue

 

 

110,023

 

 

 

110,936

 

 

 

429,909

 

 

 

396,289

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products

 

 

31,887

 

 

 

32,863

 

 

 

127,287

 

 

 

102,100

 

Cost of services

 

 

35,116

 

 

 

34,342

 

 

 

142,667

 

 

 

134,682

 

Total cost of revenue

 

 

67,003

 

 

 

67,205

 

 

 

269,954

 

 

 

236,782

 

Gross profit

 

 

43,020

 

 

 

43,731

 

 

 

159,955

 

 

 

159,507

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

14,569

 

 

 

15,357

 

 

 

57,752

 

 

 

52,729

 

Selling and marketing

 

 

14,362

 

 

 

13,007

 

 

 

49,664

 

 

 

42,820

 

General and administrative

 

 

12,041

 

 

 

11,225

 

 

 

44,391

 

 

 

41,723

 

Total operating expenses

 

 

40,972

 

 

 

39,589

 

 

 

151,807

 

 

 

137,272

 

Income from operations

 

 

2,048

 

 

 

4,142

 

 

 

8,148

 

 

 

22,235

 

Income (loss) on equity investment, net

 

 

(533

)

 

 

(149

)

 

 

241

 

 

 

872

 

Other expense, net

 

 

(2,940

)

 

 

(14,685

)

 

 

(10,391

)

 

 

(27,666

)

Loss before provision for income taxes

 

 

(1,425

)

 

 

(10,692

)

 

 

(2,002

)

 

 

(4,559

)

Provision for income taxes

 

 

2,027

 

 

 

400

 

 

 

3,345

 

 

 

1,752

 

Net loss

 

$

(3,452

)

 

$

(11,092

)

 

$

(5,347

)

 

$

(6,311

)

Net loss per share - basic

 

$

(0.04

)

 

$

(0.12

)

 

$

(0.06

)

 

$

(0.07

)

Net loss per share - diluted

 

$

(0.04

)

 

$

(0.12

)

 

$

(0.06

)

 

$

(0.07

)

Weighted average common shares used in
   computing loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

93,047

 

 

 

91,613

 

 

 

92,095

 

 

 

92,031

 

Diluted

 

 

93,047

 

 

 

91,613

 

 

 

92,095

 

 

 

92,031

 

 

 


Accuray Incorporated

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

88,737

 

 

$

116,369

 

Restricted cash

 

 

204

 

 

 

560

 

Accounts receivable, net

 

 

94,442

 

 

 

85,360

 

Inventories

 

 

142,254

 

 

 

125,929

 

Prepaid expenses and other current assets

 

 

23,794

 

 

 

21,547

 

Deferred cost of revenue

 

 

1,459

 

 

 

3,008

 

Total current assets

 

 

350,890

 

 

 

352,773

 

Property and equipment, net

 

 

12,685

 

 

 

12,332

 

Investment in joint venture

 

 

13,879

 

 

 

15,935

 

Operating lease right-of-use assets

 

 

16,798

 

 

 

22,522

 

Goodwill

 

 

57,840

 

 

 

57,960

 

Intangible assets, net

 

 

250

 

 

 

435

 

Restricted cash

 

 

1,213

 

 

 

1,272

 

Other assets

 

 

19,294

 

 

 

16,869

 

Total assets

 

$

472,849

 

 

$

480,098

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

31,337

 

 

$

19,467

 

Accrued compensation

 

 

29,441

 

 

 

26,865

 

Operating lease liabilities, current

 

 

8,567

 

 

 

8,169

 

Other accrued liabilities

 

 

30,285

 

 

 

27,471

 

Customer advances

 

 

25,290

 

 

 

24,937

 

Deferred revenue

 

 

75,375

 

 

 

81,660

 

Short-term debt

 

 

8,563

 

 

 

3,790

 

Total current liabilities

 

 

208,858

 

 

 

192,359

 

Long-term other liabilities

 

 

10,453

 

 

 

7,766

 

Deferred revenue

 

 

3,748

 

 

 

23,685

 

Operating lease liabilities, non-current

 

 

24,694

 

 

 

17,441

 

Long-term debt

 

 

171,907

 

 

 

170,007

 

Total liabilities

 

 

419,660

 

 

 

411,258

 

Equity:

 

 

 

 

 

 

Common stock

 

 

94

 

 

 

91

 

Additional paid-in capital

 

 

543,211

 

 

 

554,680

 

Accumulated other comprehensive income

 

 

2,406

 

 

 

2,093

 

Accumulated deficit

 

 

(492,522

)

 

 

(488,024

)

Total equity

 

 

53,189

 

 

 

68,840

 

Total liabilities and equity

 

$

472,849

 

 

$

480,098

 

 


Accuray Incorporated

Summary of Orders and Backlog

(in thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended
June 30,

 

 

Twelve Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Gross Orders

 

$

88,342

 

 

$

112,672

 

 

$

332,268

 

 

$

325,929

 

Net Orders

 

 

42,828

 

 

 

63,038

 

 

 

167,316

 

 

 

191,881

 

Order Backlog

 

 

563,684

 

 

 

616,399

 

 

 

563,684

 

 

 

616,399

 

 

 

 

 

 

 

Accuray Incorporated

Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation,

Amortization, Stock-Based Compensation and Other (Adjusted EBITDA)

(in thousands)

 

 

 

 

Three Months Ended
June 30,

 

 

Twelve Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP net loss

 

$

(3,452

)

 

$

(11,092

)

 

$

(5,347

)

 

$

(6,311

)

Depreciation and amortization (a)

 

 

1,275

 

 

 

1,498

 

 

 

5,522

 

 

 

6,389

 

Stock-based compensation

 

 

2,694

 

 

 

2,236

 

 

 

10,600

 

 

 

9,332

 

Interest expense, net (b)

 

 

2,028

 

 

 

3,734

 

 

 

8,109

 

 

 

16,877

 

ERP and ERP related expenditures

 

 

594

 

 

 

 

 

 

594

 

 

 

 

One-time charge related to debt refinance and convertible exchange

 

 

 

 

 

9,948

 

 

 

 

 

 

9,948

 

Provision for income taxes

 

 

2,027

 

 

 

400

 

 

 

3,345

 

 

 

1,752

 

Adjusted EBITDA

 

$

5,166

 

 

$

6,724

 

 

$

22,823

 

 

$

37,987

 

 

(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 Net Loss to Projected Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, Stock-Based Compensation and Other (Adjusted EBITDA)

(in thousands)

 

 

 

 

 

Twelve Months Ending
June 30, 2023

 

 

 

From

 

 

To

 

GAAP net income (loss)

 

$

(3,500

)

 

$

500

 

Depreciation and amortization (a)

 

 

6,300

 

 

 

6,300

 

Stock-based compensation

 

 

11,600

 

 

 

11,600

 

Interest expense, net (b)

 

 

8,000

 

 

 

8,000

 

Provision for income taxes

 

 

2,000

 

 

 

2,000

 

ERP and ERP related expenditures

 

 

1,600

 

 

 

1,600

 

Adjusted EBITDA

 

$

26,000

 

 

$

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.