8-K
ACCURAY INC (ARAY)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): August 10, 2022 |
|---|
ACCURAY INCORPORATED
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-33301 | 20-8370041 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 1310 Chesapeake Terrace | ||
| Sunnyvale, California | 94089 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 408 716-4600 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value per share | ARAY | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 10, 2022, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended June 30, 2022. A copy of the Company’s press release dated August 10, 2022, titled “Accuray Reports Fourth Quarter and Fiscal 2022 Financial Results” is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The foregoing information (including the exhibit hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
Spokespersons of the Company plan to present the information in the presentation attached hereto as Exhibit 99.2 to analysts and investors from time to time on or after August 10, 2022. The presentation will be available on the Company’s Investor Relations website at: http://investors.accuray.com.
The furnishing of the attached presentation is not an admission as to the materiality of any information therein. The information contained in the presentation is summary information that is intended to be considered in the context of more complete information included in the Company’s filings with the U.S. Securities and Exchange Commission and other public announcements that the Company has made and may make from time to time by press release or otherwise. The Company undertakes no duty or obligation to update or revise the information contained in this report. For important information about forward looking statements, see the slide titled “Forward-Looking Statements” in Exhibit 99.2 attached hereto.
The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
The information contained in this Item 7.01 disclosure, including Exhibit 99.1 and Exhibit 99.2, is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated August 10, 2022, titled “Accuray Reports Fourth Quarter and Fiscal 2022 Financial Results” |
| 99.2 | Accuray Fourth Quarter and Fiscal 2022 Earnings Call Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ACCURAY INCORPORATED | |||
|---|---|---|---|
| Date: | August 10, 2022 | By: | /s/ Ali Pervaiz |
| Ali Pervaiz<br>Senior Vice President & Chief Financial Officer |
EX-99.1
Exhibit 99.1
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<br>June 30, | Twelve Months Ended<br>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<br> 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<br>June 30, | Twelve Months Ended<br>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<br>June 30, | Twelve Months Ended<br>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<br>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.
Q4’FY22 Earnings Call August 10, 2022
Proprietary and Confidential Property of Accuray Safe Harbor Statement Statements in this presentation (including the oral commentary that accompanies it) 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 presentation relate, but are not limited, to: expectations regarding fiscal 2023 full-year adjusted EBITDA and revenue; our positioning and strategy for accelerating revenue growth and market share; expectations regarding our strategic pillars; expectations regarding continued momentum in investment in R&D; expectations regarding market growth rates and market trends; expectations regarding new product enhancements or offerings and partnerships; our ability to expand addressable markets; and expectations related to our revenue growth and market share going forward. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may,” “will be,” “will continue,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to: the effects of the COVID-19 pandemic on our business, financial condition, results of operations or cash flows; disruptions to our supply chain, including increased logistics costs; our ability to achieve widespread market acceptance of our products, including new product offerings and improvements; our ability to develop new products or enhance existing products to meet customers’ needs and compete favorably in the market; our ability to realize the expected benefits of the joint-venture and other partnerships; risks inherent in international operations; our ability to effectively manage our growth; our ability to maintain or increase our gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; our ability to meet the covenants under our credit facilities; our ability to convert backlog to revenue; and other risks identified under the heading “Risk Factors” in our quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on April 29, 2022, and as updated periodically with our 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 Accuray at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Accuray 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 place undue reliance on any forward-looking statements. Non-GAAP Financial Measures This presentation also contains non-GAAP financial measures. Management believes that non-GAAP financial measures provide 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. Additionally, these non-GAAP financial measures assist management in analyzing future trends, making strategic and business decisions, and establishing internal budgets and forecasts. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in the Appendix. 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. Medical Advice Disclaimer Accuray Incorporated as a medical device manufacturer cannot and does not recommend specific treatment approaches. Individual results may vary. Forward-looking statements This presentation is intended exclusively for investors. It is not intended for use in Sales or Marketing.
Executive Team Suzanne Winter President and CEO Ali Pervaiz Senior Vice President, Chief Financial Officer Sandeep Chalke Senior Vice President, Chief Commercial Officer Jean-Philippe Pignol Senior Vice President, Chief Medical and Technology Officer Jesse Chew Senior Vice President, General Counsel Mike Hoge Senior Vice President, Global Operations Patrick Spine Senior Vice President, Chief Administrative Officer Jim Dennison Senior Vice President, Global Quality & Regulatory Affairs
FY22 Highlights More than 160 new clinical and physics abstracts presented at major conferences worldwide CyberKnife® System gained momentum capitalizing on rapidly growing use of “5 fractions or less” ClearRT™ Imaging won “Best New Technology Solution for Oncology” MedTech Breakthrough Award Introduced VOLO™ Ultra to enhance Radixact® System treatment planning speed and quality Highest revenue performance in the company’s history; YoY growth rate >2x estimated worldwide market growth
Ultra-Hypofractionation is Ready for Prime-Time 20% Adoption0 growing with Phase II-III clinical evidence 70%5 Breast, prostate, lung cancer, and metastases Patient Mix Phase II-III Trials Fast-Forward PACE-B STARS SABR-COMET Adoption 20% HF UHF0 HF: hypofractionation UHF: ultra-hypofractionation Fast-Forward Trial Local control and toxicity after ultra-hypofractionated is comparable to standard treatment for early-stage breast cancer1 PACE-B Trial Long-term toxicity after SBRT is comparable to hypofractionated for localized prostate cancer2 STARS Trial Long-term survival after SBRT comparable to surgery for early-stage lung cancer3 SABR-COMET Trial SBRT is associated with an improvement in overall survival for oligometastatic disease4 Growing Clinical Evidence Supports UltraHF Treatments 0 Hypofractionated radiotherapy in the real-world setting: An international ESTRO-GIRO survey 1 Brunt et al. Lancet. 2020;395(10237):1613-1626. doi:10.1016/S0140-6736(20)30932-6 2 Van As et al. Journal of Clinical Oncology 37, no. 7_suppl (March 01, 2019) 1-1. DOI: 10.1200/JCO.2019.37.7_suppl. 3 Murray Brunt et al. Lancet. 2020 May 23;395(10237):1613-1626. doi: 10.1016/S0140-6736(20)30932-6. 4 Harrow et al. International Journal of Radiation Oncology, Biology, Physics. 2022, doi: https://doi.org/10.1016/j.ijrobp.2022.05.004 5 Incidence based model (Globocan data), Fractionation (The Lancet Oncology), Metastatic percentage (Rosenblatt et al.)
Positive Press Showcasing Impact of the CyberKnife® System on Patients’ Lives 1 Printed June 30, 2022; https://www.futureofpersonalhealth.com/prostate-and-urological-health/making-prostate-cancer-easier-for-patients-and-their-families/ Coverage in Multiple Media Outlets USA Today Insert1 Owner of Arkansas Derby & Haskell Stakes winner named horse after the life-changing CyberKnife System used to treat his cancer Features Rear Admiral Garry Hall sharing his CyberKnife System treatment story Photo credit: EQUI-PHOTO Unique Robotic Platform Moving or Stationary Targets Submillimeter Accuracy 5 or Fewer Treatment Sessions CyberKnife System
ClearRT™: Rapid Adoption of New Standard of Imaging for Radixact® CT-Linac Helical fan-beam kVCT imaging 115 orders and 73 shipments since introduction 18 months ago MedTech Breakthrough Award: “Best New Oncology Technology Solution” Highlights
FY23 Strategic Pillars Four Growth Catalysts: Drive Disruptive Innovation Expand Financial Margins Build a More Durable Business Implement Transformational Corporate Strategies 1 2 3 4
Q4’FY22 and FY22 Financials Strong financial performance Gross orders $88.3M (22%) $332.3M 2% Revenues $110.0M (1%) $429.9M 8% Product $58.0M 3% $214.7M 22% Service $52.0M (5%) $215.2M (2%) Op. Expenses $41.0M 3% $151.8M 11% R&D $14.6M (5%) $57.7M 10% SG&A $26.4M 9% $94.1M 11% Adj. EBITDA 1 $5.2M (23%) $22.8M (40%) KEY FINANCIAL METRICS $M Q4 Y/Y Highlights Record revenue year with 8% YoY growth Product revenue 22% YoY growth 2% YoY orders growth primarily due to strong demand in Americas region at 31% and China at 12% Beat FY22 full year adjusted EBITDA guidance of $15M to $20M1 1 Adjusted EBITDA is a non-GAAP measure. Please see Slides 13 and 14 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure. FY22 Y/Y
FY23 Guidance Takes into account expectations regarding uncertainty and impact from macro environmental climate, FX and China lock downs Revenue Adjusted EBITDA1 $429.9M $22.8M FY23 Guidance Range FY22 Actual $ in millions % = YoY Growth $447M - $455M +4% - 6% $26M - $30M +14% - 32% 1 Adjusted EBITDA is a non-GAAP measure. Please see Slides 14 and 15 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.
In Summary Growing Momentum with Record Revenue Strongest Product Portfolio and Pipeline in Company’s History Multiple Growth Catalysts and Global Commercial Execution Focused on Margin Expansion and Free Cash Flow Positioned for Growth Faster Than the Market and Share Gain
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GAAP to Adjusted EBITDA Q4 FY2022 and Q4 FY2021 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) $K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Three Months Ended June 30 Three Months Ended June 30 2021 2022 $ $ $ $ (3,452) 1,275 2,694 2,028 2,027 5,166 (11,092) 1,498 2,236 3,734 400 6,724 SAP related cost 594 One-time charge related to debt refinance and convertible exchange 0 0 9,948
GAAP to Adjusted EBITDA FY2022 and FY2021 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) $K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Twelve Months Ended June 30 Twelve Months Ended June 30 2021 2022 $ $ $ $ (5,347) 5,522 10,600 8,109 3,345 22,823 ($6,311) 6,389 9,332 16,877 1,752 37,987 SAP related cost 594 One-time charge related to debt refinance and convertible exchange 0 0 9,948
GAAP to Adjusted EBITDA FY2023 – Forward Looking Guidance Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) $K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Twelve Months Ended June 30, 2023 To From $ $ $ $ (3,500) 6,300 11,600 8,000 2,000 26,000 500 6,300 11,600 8,000 2,000 30,000 SAP related cost 1,600 1,600