U.S. Markets closed

Accuray Reports Third Quarter Fiscal 2021 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·14 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

SUNNYVALE, Calif., April 27, 2021 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported its financial results for the third quarter of fiscal 2021 ended March 31, 2021.

Accuray Incorporated (PRNewsFoto/Accuray Incorporated) (PRNewsFoto/Accuray Incorporated)
Accuray Incorporated (PRNewsFoto/Accuray Incorporated) (PRNewsFoto/Accuray Incorporated)

Third Quarter Fiscal 2021 Summary

  • Net revenue of $102.6 million including $24.9 million of system revenue in China

  • Gross orders of $87.4 million, an increase of 16 percent from the second quarter of fiscal 2021

  • GAAP operating income of $4.4 million, GAAP net loss of $0.4 million, and Adjusted EBITDA of $8.7 million

  • Received Shonin regulatory approval in Japan for ClearRT™ Helical kVCT Imaging for the Radixact® System

"Our third quarter performance continues to reflect the positive momentum our business is making despite the headwinds created by the COVID-19 environment," said Josh Levine, President and CEO of Accuray. "Highlights from our third quarter performance include the continued ramp of China Type A system revenue, excellent progress in the phased introduction of ClearRT Helical kVCT Imaging platform for the Radixact System including regulatory approval in Japan and the continued adoption of our latest innovations like Synchrony real-time motion tracking and delivery adaptation on Radixact and our latest generation Cyberknife S7 system. Additionally, as announced yesterday, we are very excited to have Dr. Jean-Phillipe Pignol join us as Chief Medical and Technology Officer as we continue to build out our executive leadership team."

Fiscal Third Quarter Results

Gross orders totaled $87.4 million compared to $106.0 million for the same prior fiscal year period. Backlog as of March 31, 2021 was $610.8 million, an increase of 7 percent compared to $569.9 million for the same prior fiscal year period.

Total net revenue was $102.6 million compared to $99.5 million in the same prior fiscal year period. Product revenue totaled $47.4 million compared to $45.5 million in the same prior fiscal year period, while service revenue totaled $55.1 million compared to $54.0 million in the same prior fiscal year period.

Total gross profit for the fiscal 2021 third quarter was $39.5 million, or 38.5 percent of net revenue, comprised of product gross margin of 41.6 percent of product revenue and service gross margin of 35.9 percent of service revenue. This compares to total gross profit of $39.1 million, or 39.3 percent of net revenue, comprised of product gross margin of 39.4 percent of product revenue and service gross margin of 39.2 percent of service revenue in the same prior fiscal year third quarter.

Operating expenses were $35.1 million, an increase of 13 percent compared to $31.2 million in the same prior fiscal year third quarter.

Net loss was $0.4 million, or $0 per share, compared to a net income of $2.6 million, or $0.3 per share, in the same prior fiscal year period.

Adjusted EBITDA for the third fiscal quarter of 2021 was $8.7 million compared to $11.3 million in the same prior fiscal year period.

Cash, cash equivalents and short-term restricted cash were $130.1 million as of March 31, 2021 compared with $116.0 million as of December 31, 2020.

Fiscal Nine Months Results

For the nine months ended March 31, 2021, gross orders totaled $213.3 million compared to $283.0 million in the same prior fiscal year period. Ending product backlog was $610.8 million, approximately 7 percent higher than backlog at the end of the prior fiscal year third quarter.

Total net revenue for the nine months ended March 31, 2021 was $285.4 million compared to $288.0 million in the same prior fiscal year period. Product revenue for the nine months ended March 31, 2021 totaled $120.5 million compared to $126.9 million, while service revenue totaled $164.9 million compared to $161.1 million in the same prior fiscal year period.

Total gross profit for the nine months ended March 31, 2021 was $115.8 million, or 40.6 percent of net revenue, comprised of product gross margin of 42.6 percent of product revenue and service gross margin of 39.1 percent of service revenue. This compares to total gross profit of $110.0 million, or 38.2 percent of net revenue, comprised of product gross margin of 41.9 percent of product revenue and service gross margin of 35.2 percent of service revenue in the same prior fiscal year period.

Operating expenses for the nine months ended March 31, 2021 were $97.7 million, a decrease of 5 percent compared with $102.7 million in the same prior fiscal year period.

Net income was $4.8 million, or $0.05 per share, for the nine months ended March 31, 2021, compared to net income of $4.0 million, or $0.04 per share, in the same prior fiscal year period. The prior year nine month period ended March 31, 2020 included a non-cash, one-off gain of $13.0 million related to the value of the Company's capital contribution to the Company's China joint venture. The gain was recorded as non-operating, other income in the prior fiscal year second quarter.

Adjusted EBITDA for the nine months ended March 31, 2021 was $31.3 million, compared to $17.4 million in the prior fiscal year period, which excludes the non-cash, one-off gain related to the Company's capital contribution to the China joint venture recorded in the prior fiscal year second quarter.

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 third quarter of fiscal 2021 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.

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: 10154473. An archived webcast will also be available at Accuray's website until Accuray announces its results for the fourth 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, gain on contribution to equity method investment in joint venture 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 (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedules below.

There are limitations in using 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 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 operating expense, gross orders, order volume and age-outs; expectations regarding the effect of the COVID-19 pandemic on the Company; expectations regarding future sales in China; expectations regarding the Company's China joint venture, including the timing of and ability to drive revenue conversion and introduce a Type B product to the market in China as well as the operating impact of the joint venture on the Company's income statement; expectations regarding the Company's product innovations and developments, including expectations related to future regulatory approvals; expectations regarding the Company's product portfolio, the clinical impact and value proposition of those products on our customers, and market adoption of such products, including with respect to the Company's Synchrony on Radixact, CyberKnife S7 System and Clear RT Helical kVCT Imaging upgrades as well as other strategic product innovations; expectations regarding the commercial launch of Clear RT Helical kVCT Imaging; expectations regarding the Company's catalysts for long-term growth; expectations regarding the executive leadership team and its ability to execute the Company's strategic growth; 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 Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on February 1, 2021 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

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)




Three Months Ended

March 31,



Nine Months Ended

March 31,




2021



2020



2021



2020


Gross Orders


$

87,365



$

105,959



$

213,258



$

283,002


Net Orders



62,826




76,652




128,843




205,537


Order Backlog



610,795




569,901




610,795




569,901


Net revenue:

















Products


$

47,439



$

45,527



$

120,502



$

126,892


Services



55,123




54,021




164,851




161,059


Total net revenue



102,562




99,548




285,353




287,951


Cost of revenue:

















Cost of products



27,709




27,573




69,237




73,661


Cost of services



35,311




32,842




100,340




104,314


Total cost of revenue



63,020




60,415




169,577




177,975


Gross profit



39,542




39,133




115,776




109,976


Operating expenses:

















Research and development



13,268




11,164




37,372




37,569


Selling and marketing



10,567




11,106




29,813




35,699


General and administrative



11,281




8,894




30,498




29,396


Total operating expenses



35,116




31,164




97,683




102,664


Income from operations



4,426




7,969




18,093




7,312


Income (loss) on equity investment, net



(68)




222




1,021




222


Other income (expense), net



(4,027)




(5,281)




(12,981)




(1,954)


Income before provision for income taxes



331




2,910




6,133




5,580


Provision for income taxes



721




285




1,352




1,601


Net income (loss)


$

(390)



$

2,625



$

4,781



$

3,979


Net income (loss) per share - basic


$

(0.00)



$

0.03



$

0.05



$

0.04


Net income (loss) per share - diluted


$

(0.00)



$

0.03



$

0.05



$

0.04


Weighted average common shares used in

computing income (loss) per share:

















Basic



93,123




90,476




92,106




89,585


Diluted



93,123




90,855




93,422




90,429


Accuray Incorporated

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)




March 31,



June 30,




2021



2020


Assets









Current assets:









Cash and cash equivalents


$

126,335



$

107,577


Restricted cash



3,811




997


Accounts receivable, net



69,914




90,599


Inventories



136,854




134,374


Prepaid expenses and other current assets



21,030




21,227


Deferred cost of revenue



1,440




2,712


Total current assets



359,384




357,486


Property and equipment, net



12,327




15,349


Investment in joint venture



16,579




13,929


Goodwill



57,909




57,717


Intangible assets, net



492




663


Operating lease right-of-use assets



24,066




28,647


Other assets



16,069




17,136


Total assets


$

486,826



$

490,927


Liabilities and equity









Current liabilities:









Accounts payable


$

17,869



$

23,126


Accrued compensation



21,217




17,963


Operating lease liabilities, current



8,455




8,224


Other accrued liabilities



22,745




27,180


Customer advances



23,231




22,571


Deferred revenue



80,677




83,207


Short-term debt



18,942





Total current liabilities



193,136




182,271


Long-term other liabilities



8,950




7,416


Deferred revenue



23,212




24,125


Operating lease liabilities, non-current



18,888




24,173


Long-term debt



164,090




189,307


Total liabilities



408,276




427,292


Equity:









Common stock



93




91


Additional paid-in capital



554,673




545,741


Accumulated other comprehensive income (loss)



716




(484)


Accumulated deficit



(476,932)




(481,713)


Total equity



78,550




63,635


Total liabilities and equity


$

486,826



$

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

March 31,



Nine Months Ended

March 31,




2021



2020



2021



2020


GAAP net income (loss)


$

(390)



$

2,625



$

4,781



$

3,979


Depreciation and amortization



1,577




1,869




4,890




5,566


Stock-based compensation



2,489




2,016




7,097




5,865


Interest expense, net



4,320




4,513




13,143




13,396


Gain on contribution to equity method investment in joint venture (a)












(12,965)


Provision for income taxes



721




285




1,352




1,601


Adjusted EBITDA


$

8,717



$

11,308



$

31,263



$

17,442

















(a) Consists of non-cash gain related to the value of the Company's capital contribution to the China joint venture.

Joe Diaz




Beth Kaplan

Investor Relations, Lytham Partners




Public Relations Director, Accuray

+1 (602) 717-7804




+1 (408) 789-4426

jdiaz@accuray.com




bkaplan@accuray.com

Cision
Cision

View original content to download multimedia:http://www.prnewswire.com/news-releases/accuray-reports-third-quarter-fiscal-2021-financial-results-301278168.html

SOURCE Accuray Incorporated