Accuray Amends Announcement of its Fiscal Third Quarter 2007 Financial Results

May 14, 2007 at 4:11 PM EDT

Click here for PDF version of this release

Revenue, Operating Expenses, Cash Flows and Backlog Unaffected

SUNNYVALE, Calif., May 14 /PRNewswire-FirstCall/ -- Accuray Incorporated (Nasdaq: ARAY), a global leader in the field of radiosurgery, today issued an amended announcement of its fiscal third quarter 2007 financial results originally issued in a press release on May 1, 2007. The amended announcement of financial results reflects an additional $904,000 in costs of goods sold related to services. The amendment was identified by the Company during its quarterly review in preparation of its 10-Q for the quarter ended March 31, 2007. This amendment does not impact previously announced revenue, operating expenses, cash flows, or backlog but results in lower gross margins and a net loss for the quarter.

The Company is now announcing gross margin for the fiscal third quarter 2007 of 56.6 percent. The Company had previously announced gross margin for the fiscal third quarter 2007 of 59.0 percent.

The Company is now announcing a net loss for the fiscal third quarter 2007 of $0.8 million, or $0.02 per share. Previously, the Company had announced net income for the fiscal third quarter 2007 of $0.1 million.

For the nine months ended March 31, 2007, the Company is now announcing gross margin of 57.1 percent. The Company had previously announced gross margin of 58.1 percent for the nine-month period.

For the nine months ended March 31, 2007 the Company is now announcing a net loss of $6.1 million, or $0.26 per share. The Company previously announced a net loss of $5.2 million, or $0.23 per share for the nine-month period.

Conference Call

Accuray will hold a conference call for financial analysts and investors to discuss the corrections to the Company's previously announced results of operations for the third fiscal quarter today, May 14, 2007, at 2:00 p.m. PT / 5:00 p.m. ET. The conference call dial-in numbers are (800) 289-0533 (USA) or +1 (913) 981-5525 (International), Access Code: 7594903. A live webcast of the call will also be available from the Investor Relations section on the corporate Web site at http://www.accuray.com. In addition, a recording of the call will be available by calling (888) 203-1112 (USA) or +1 (719) 457-0820 (International), Access Code: 7594903, beginning at 3:00 p.m. PT / 6:00 p.m. ET, on May 14, 2007. A webcast replay will also be available from the Investor Relations section of the corporate Web site at http://www.accuray.com beginning at approximately 3:00 p.m. PT / 6:00 p.m. ET, on May 14, 2007. The telephone and webcast replays will remain available for 10 days following the live event.

About Accuray

Accuray Incorporated (Nasdaq: ARAY) based in Sunnyvale, Calif., is a global leader in the field of radiosurgery. Its CyberKnife System is the world's first and only commercially available intelligent robotic radiosurgery system designed to treat tumors anywhere in the body, typically with sub- millimeter accuracy. To date, it is estimated that the CyberKnife System has been used by physicians to treat more than 30,000 patients worldwide. 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 31, 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.

(C)2007 Accuray Incorporated. All rights reserved. Accuray, the Accuray logo, CyberKnife, Synchrony, Xsight and RoboCouch are among trademarks or registered trademarks of Accuray Incorporated.


                             Accuray Incorporated
          Unaudited Condensed Consolidated Statements of Operations
                    (in thousands, except per share data)

                                         Three months ended  Nine months ended
                                              March 31,          March 31,
                                            2007     2006     2007      2006
    Net revenue:
     Products                             $29,515  $12,261  $75,591   $20,350
     Shared ownership programs              2,437    2,145    7,248     5,860
     Services                               4,579    1,134   11,209     3,063
     Other                                    809      760    2,410     2,224
     Total net revenue                     37,340   16,300   96,458    31,497
    Cost of revenue:
     Costs of products                     12,183    7,086   30,263    10,323
     Costs of shared ownership programs       663      620    1,965     1,852
     Costs of services                      2,859    1,310    7,488     2,874
     Costs of other                           517      506    1,619     1,466
     Total cost of revenue                 16,222    9,522   41,335    16,515
     Gross profit                          21,118    6,778   55,123    14,982
    Operating expenses:
     Selling and marketing                  9,830    6,319   27,124    17,271
     Research and development               6,951    4,141   19,265    13,051
     General and administrative             6,100    3,852   16,855    10,239
     Total operating expenses              22,881   14,312   63,244    40,561
    Loss from operations                   (1,763)  (7,534)  (8,121)  (25,579)
    Other income (expense)                  1,040      (40)   1,350       (61)
    Loss before provision for income
     taxes and cumulative effect of
     change in accounting principle          (723)  (7,574)  (6,771)  (25,640)
    Provision for income taxes                 62      116      185       196
    Loss before cumulative effect of
     change in accounting principle          (785)  (7,690)  (6,956)  (25,836)
    Cumulative effect of change in
     accounting principle, net                 --       --      838        --
     of tax of $0
    Net loss                                $(785) $(7,690) $(6,118) $(25,836)

    Net loss per common share, basic and
     diluted:
      Loss before cumulative effect of
       change in accounting principle      $(0.02)  $(0.48)  $(0.30)   $(1.62)
      Cumulative effect of change in
       accounting principle                    --       --     0.04        --
      Basic and diluted net loss
       per share                           $(0.02)  $(0.48)  $(0.26)   $(1.62)

    Weighted average common shares
     outstanding used in computing net
     loss per share:
     Basic and diluted                     37,018   16,100   23,137    15,953

    Cost of revenue, selling and
     marketing, research and development,
     and general and administrative
     expenses include stock-based
     compensation charges as follows:
     Cost of revenue                         $398     $222     $848      $641
     Selling and marketing                 $1,247     $627   $2,903    $1,918
     Research and development                $689     $407   $1,609    $1,220
     General and administrative            $1,350     $767   $3,412    $2,457


                             Accuray Incorporated
               Unaudited Condensed Consolidated Balance Sheets
                     (in thousands, except share amounts)

                                                  March 31,          June 30,
                                                    2007               2006
                                                 (unaudited)
    Assets
    Current assets:
     Cash and cash equivalents                    $193,354           $27,856
     Restricted cash                                    --                 1
     Accounts receivable, net of allowance
      for doubtful accounts of $20
      at March 31, 2007 and June 30, 2006           15,285            11,698
     Inventories                                    14,694            10,100
     Prepaid expenses and other current
      assets                                         6,004             3,512
     Deferred cost of revenue -- current            25,066             4,810
       Total current assets                        254,403            57,977
    Property and equipment, net                     24,657            21,945
    Goodwill                                         4,495             4,495
    Intangible assets, net                           1,252             1,446
    Deferred cost of revenue and other
     noncurrent assets                              36,235            52,760
       Total assets                               $321,042          $138,623
    Liabilities, temporary equity and
     stockholders' equity (deficiency)
    Current liabilities:
     Accounts payable                              $13,012            $4,726
     Accrued expenses                               14,623            15,055
     Customer advances and deferred
      revenue                                       62,200            41,979
       Total current liabilities                    89,835            61,760
    Long-term liabilities:
    Customer advances and deferred
     revenue                                       111,359           130,214
       Total liabilities                           201,194           191,974
    Commitments and contingencies
    (Note 6)

    Temporary equity
     Redeemable convertible preferred
      stock, no par value  Authorized:
      30,000,000 shares; issued and outstanding:
      none and 17,419,331 at March 31, 2007 and
      June 30, 2006, respectively; liquidation
      amount: none and $40,354 at March 31, 2007
      and June 30, 2006, respectively.                  --            27,504
    Stockholders' equity (deficiency)
     Preferred stock, $0.001 par value;
      Authorized: 5,000,000 shares and
      none at March 31, 2007 and June 30,
      2006, respectively; no shares
      outstanding.                                      --                --

     Common stock, $0.001 par value and no
      par value at March 31, 2007 and June
      30, 2006, respectively; authorized:
      100,000,000 and 70,000,000 shares at
      March 31, 2007 and June 30, 2006,
      respectively; issued and outstanding:
      53,438,922 and 16,243,150 shares at
      March 31, 2007 and June 30, 2006,
      respectively.                                     53            13,276
     Additional paid-in capital                    246,571            43,988
     Notes receivable from stockholders                 --              (206)
     Deferred stock-based compensation                  --           (17,272)
     Accumulated other comprehensive loss              (17)               --
     Accumulated deficit                          (126,759)         (120,641)
      Total stockholders' equity
       (deficiency)                                119,848           (80,855)

      Total liabilities, temporary equity
       and stockholders' equity (deficiency)      $321,042          $138,623

SOURCE Accuray Incorporated
05/14/2007
CONTACT:
investors, Robert McNamara, Senior Vice President and CFO, +1-408-789-4264, or
investorrelations@accuray.com, or Stephanie Tomei, Accuray PR Manager,
+1-408-789-4234, or stomei@accuray.com, both of Accuray Incorporated
Web site: http://www.accuray.com