0001104659-12-075938 | 10-Q | XBRL Viewer

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2012	Oct. 26, 2012
Document and Entity Information
Entity Registrant Name	ACCURAY INC
Entity Central Index Key	0001138723
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		72,273,072
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2012	Jun. 30, 2012
Current assets:
Cash and cash equivalents	$ 121,861	$ 143,504
Restricted cash	2,611	1,560
Accounts receivable, net of allowance for doubtful accounts of $1,773 and $1,700, respectively	57,620	67,890
Inventories	81,739	81,693
Prepaid expenses and other current assets	17,619	16,715
Deferred cost of revenue - current	4,078	4,896
Total current assets	285,528	316,258
Property and equipment, net	39,536	37,458
Goodwill	59,344	59,215
Intangible assets, net	39,122	49,819
Deferred cost of revenue - noncurrent	3,575	2,433
Other assets	10,912	7,987
Total assets	438,017	473,170
Current liabilities:
Accounts payable	28,025	18,209
Accrued compensation	16,226	23,071
Other accrued liabilities	27,025	31,646
Customer advances - current	21,173	18,177
Deferred revenue - current	77,797	83,071
Total current liabilities	170,246	174,174
Long-term liabilities:
Long-term other liabilities	5,592	5,988
Deferred revenue - noncurrent	12,582	9,675
Long-term debt	80,507	79,466
Total liabilities	268,927	269,303
Commitment and contingencies (Note 5)
Equity:
Preferred stock, $0.001 par value; authorized: 5,000,000 shares; no shares issued and outstanding
Common stock, $0.001 par value; authorized: 100,000,000 shares; issued and outstanding: 72,143,926 and 71,864,268 shares at September 30 and June 30, 2012, respectively	72	72
Additional paid-in capital	411,136	409,143
Accumulated other comprehensive income	2,302	2,837
Accumulated deficit	(240,557)	(216,427)
Total stockholders' equity	172,953	195,625
Non-controlling interest	(3,863)	8,242
Total equity	169,090	203,867
Total liabilities and equity	$ 438,017	$ 473,170

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2012	Jun. 30, 2012
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,773	$ 1,700
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	72,143,926	71,864,268
Common stock, outstanding shares	72,143,926	71,864,268

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Net revenue:
Products	$ 40,628	$ 56,174
Services	42,120	43,401
Other		876
Total net revenue	82,748	100,451
Cost of revenue:
Cost of products	24,009	38,373
Cost of services	35,063	37,349
Cost of other		301
Total cost of revenue	59,072	76,023
Gross profit	23,676	24,428
Operating expenses:
Selling and marketing	12,889	13,581
Research and development	20,209	20,565
General and administrative	13,269	14,969
Impairment of indefinite lived intangible asset	12,200
Total operating expenses	58,567	49,115
Loss from operations	(34,891)	(24,687)
Other income (expense), net	(747)	(2,858)
Loss before provision for income taxes	(35,638)	(27,545)
Provision for income taxes	597	538
Net loss	(36,235)	(28,083)
Net loss attributable to non-controlling interest	(12,105)	(1,573)
Net loss attributable to stockholders	$ (24,130)	$ (26,510)
Net loss per share attributable to stockholders
Basic and diluted (in dollars per share)	$ (0.34)	$ (0.38)
Weighted average common shares used in computing net loss per share
Basic (in shares)	71,995	70,263
Diluted (in shares)	71,995	70,263
Net loss attributable to stockholders	$ (24,130)	$ (26,510)
Foreign currency translation adjustment	(535)	835
Comprehensive loss	$ (24,665)	$ (25,675)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities
Net loss	$ (36,235)	$ (28,083)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	7,827	8,319
Impairment of indefinite lived intangible asset	12,200
Share-based compensation	1,755	2,609
Accretion of interest on long-term debt	1,041	639
Provision for (recovery of) bad debt	73	(454)
Provision for write-down of inventories	375	1,578
Gain on previously held equity interest in Morphormics	(662)
Changes in assets and liabilities:
Restricted cash	(1,050)	(112)
Accounts receivable	10,769	(16,659)
Inventories	(320)	11,545
Prepaid expenses and other current assets	(3,673)	2,579
Deferred cost of revenue	(322)	(3,726)
Accounts payable	9,805	(14,010)
Accrued liabilities	(14,872)	(19,657)
Customer advances	2,834	(1,647)
Deferred revenue	(2,707)	7,763
Net cash used in operating activities	(13,162)	(49,316)
Cash Flows From Investing Activities
Purchases of property and equipment, net	(5,319)	(995)
Purchase of intangible asset	(232)
Acquisition of business, net of cash acquired	(3,861)	(1,384)
Net cash used in investing activities	(9,412)	(2,379)
Cash Flows From Financing Activities
Proceeds from issuance of common stock	251	911
Proceeds from debt, net of costs		96,100
Net cash Provided by financing activities	251	97,011
Effect of exchange rate changes on cash and cash equivalents	680	(1,072)
Net increase (decrease) in cash and cash equivalent	(21,643)	44,244
Cash and cash equivalents at beginning of period	143,504	95,906
Cash and cash equivalents at end of period	$ 121,861	$ 140,150

Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Description of Business

Accuray Incorporated (together with its subsidiaries, the “Company”) is incorporated in Delaware. The Company designs, develops and sells advanced radiosurgery and radiation therapy systems for the treatment of tumors throughout the body.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and a variable interest entity, Compact Particle Acceleration Corporation (“CPAC”) (for further information, see “Note 9, Investment in CPAC”). All significant inter-company transactions and balances have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. The results for the three months ended September 30, 2012 are not necessarily indicative of the results to be expected for the year ending June 30, 2013, for any other interim period or for any future year.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures at the date of the financial statements. Key estimates and assumptions made by the Company relate to revenue recognition, business combination and intangible asset impairment, inventories, share-based compensation expense, income taxes, loss contingencies and corporate bonus expenses and accruals. Actual results could differ materially from those estimates.

Concentration of Credit and Other Risks

The Company’s cash and cash equivalents are mainly deposited with several major financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances.

For the three months ended September 30, 2012 and 2011, there were no customers that represented 10% or more of total net revenue. At September 30, 2012 and June 30, 2012, there were no customers and two customers, respectively, whose accounts receivable balance was 10% or more of the Company’s total accounts receivable.

Accounts receivable are typically not collateralized. The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. Accounts are charged against the allowance for doubtful accounts once collection efforts are unsuccessful. Historically, such losses have been within management’s expectations.

Single source suppliers presently provide the Company with several components. In most cases, if a supplier was unable to deliver these components, the Company believes that it would be able to find other sources for these components subject to any regulatory qualifications, if required.

Revenue Recognition

The Company earns revenue from the sale of products, the operation of its shared ownership program, and the provision of related services, which include installation services, post-contract customer support (“PCS”), training and other professional services. The Company records its revenues net of any value added or sales tax. For arrangements with multiple elements, the Company allocates arrangement fees to product and services based upon Vendor Specific Objective Evidence (“VSOE”) of fair value of the respective elements, or Third-Party Evidence (“TPE”), or Best Estimate of Selling Price (“BESP”), using the relative selling price method.

Product Revenue

The majority of product revenue is generated from sales of CyberKnife and TomoTherapy systems. The Company sells its systems with PCS contracts, training, and at times, professional services. PCS contracts provide planned and corrective maintenance services, software updates, bug fixes, as well as call-center support. If the Company is responsible for installation, the Company recognizes revenue after installation and acceptance of the system. Otherwise, revenue is recognized upon delivery.

Service Revenue

Service revenue is generated primarily from PCS (warranty period services and post warranty services), installation services, training, and professional services. PCS revenue is deferred and recognized over the service period. Installation service revenue is recognized concurrent with system revenue. Training and professional service revenues that are not deemed essential to the functionality of the systems are recognized as such services are performed.

Costs associated with service revenue are expensed when incurred, except when those costs are related to system upgrades where revenue recognition has been deferred. In those cases, the costs are deferred and are recognized over the period of revenue recognition.

Shared ownership program

The Company also enters into arrangements under its shared ownership program with certain customers. These arrangements typically have a term of five years and provide the customer an option to purchase the system during the contractual term at pre-determined prices. Under the terms of this program, the Company retains title to its system, while the customer has use of the system. The Company generally receives a minimum monthly payment and earns additional revenues from the customer based upon its use of the system which are included in product revenue in the condensed consolidated statements of operations and comprehensive loss.

Other revenue

Other revenue primarily consists of research and development and construction contract revenues.

Long-term construction and manufacturing contracts

The Company recognizes revenue and cost of revenue related to long-term construction and manufacturing contracts using contract accounting on the percentage-of-completion or the completed contract method. The Company records such revenue under other revenue and cost of such revenue under cost of other revenue in the condensed consolidated statements of operations and comprehensive loss. Any loss provision identified from the total contract in the period is recorded as an increase to cost of revenue.

Net Loss Per Common Share

Basic and diluted net loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of common shares outstanding during the period. The potential dilutive shares of the Company’s common stock resulting from the assumed exercise of outstanding stock options, the vesting of Restricted Stock Units (RSUs) and Performance-based Stock Units (PSUs), and the purchase of shares under the Employee Stock Purchase Plan (ESPP), as determined under the treasury stock method, are excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended
	September 30,
	2012			2011
Numerator:
Net loss used in computing basic and diluted net loss per share	$	(24,130	)	$	(26,510	)
Denominator:
Weighted average shares used in computing basic net loss per share	71,995			70,263
Add: Dilutive stock options and awards outstanding	—			—
Weighted average shares used in computing diluted net loss per share	71,995			70,263

The following table sets forth all potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):

	As at
	September 30,
	2012	2011
Stock options	7,703	8,191
RSUs and PSUs	2,007	1,591
	9,710	9,782

The 3.75% Convertible Senior Notes due August 1, 2016 (the “Convertible Notes”) are included in the calculation of diluted net income per share if their inclusion is dilutive under the if-converted method. For the three months ended September 30, 2012, the potential dilutive shares under the Convertible Notes were excluded from the calculation of diluted net loss per share as their inclusion would be anti-dilutive.

Segment Information

The Company has determined that it operates in only one segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker. The Company’s long-lived assets maintained outside the United States are not material. Revenue by geographic region is based on the shipping addresses of the Company’s customers. The following summarizes revenue by geographic region (in thousands):

	Three Months Ended
	September 30,
	2012		2011
Americas	$	35,811	$	48,849
Europe, Middle East, India and Africa	25,118		28,615
Asia (excluding Japan)	15,121		16,157
Japan	6,698		6,830
Total	$	82,748	$	100,451

Balance Sheet Components

3 Months Ended

Sep. 30, 2012

Balance Sheet Components

Balance Sheet Components

2. Balance Sheet Components

Accounts receivable, net

Accounts receivable, net consisted of the following (in thousands):

	September 30,			June 30,
	2012			2012
Accounts receivable	$	59,167		$	69,285
Unbilled fees and services	226			305
	59,393			69,590
Less: Allowance for doubtful accounts	(1,773		)	(1,700		)
Accounts receivable, net	$	57,620		$	67,890

Financing receivables

A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset in the creditor’s balance sheet. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year, was $5.6 million and $2.5 million at September 30, 2012 and June 30, 2012, respectively and are included in Other Assets in the condensed consolidated balance sheets. There was no balance in the allowance for doubtful financing receivable accounts as of September 30 and June 30, 2012.

Inventories

Inventories consisted of the following (in thousands):

	September 30,		June 30,
	2012		2012
Raw materials	$	34,719	$	34,579
Work-in-process	16,541		16,547
Finished goods	30,479		30,567
Inventories	$	81,739	$	81,693

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	September 30,			June 30,
	2012			2012
Furniture and fixtures	$	5,966		$	5,921
Computer and office equipment	9,452			9,126
Software	9,409			9,429
Leasehold improvements	16,340			16,065
Machinery and equipment	33,536			33,493
Shared ownership systems	4,979			4,979
Construction in progress	8,794			3,787
	88,476			82,800
Less: Accumulated depreciation and amortization	(48,940		)	(45,342		)
Property and equipment, net	$	39,536		$	37,458

Depreciation expense related to property and equipment for the three months ended September 30, 2012 and 2011 was $4.1 million and $4.2 million, respectively.

Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

Goodwill

Activity related to goodwill consisted of the following (in thousands):

	Three Months
	Ended		Year Ended
	September 30,		June 30,
	2012		2012
Balance at the beginning of the period	$	59,215	$	54,474
Addition related to acquisition	77		—
Currency translation and other adjustments	52		—
Adjustments related to prior year acquisition (1)	—		4,741
Balance at the end of the period	$	59,344	$	59,215

(1) Primarily represents liabilities related to the TomoTherapy acquisition.

Intangible Assets

The Company’s intangible assets associated with completed acquisitions at September 30, 2012 and June 30, 2012 are as follows (in thousands):

		September 30, 2012										June 30, 2012
		Gross										Gross
		Carrying		Impairment			Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Charges			Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	48,556	$	—		$	(11,136	)	$	37,420	$	43,455	$	(9,161	)	$	34,294
Backlog	1.25	10,500		—			(10,500		)	—		10,500		(8,867		)	1,633
Distributor license	1.5 - 2.5	2,091		—			(989		)	1,102		1,860		(768		)	1,092
In-process research and development (CPAC)	Indefinite	12,800		(12,200		)	—			600		12,800		—			12,800
		$	73,947	$	(12,200	)	$	(22,625	)	$	39,122	$	68,615	$	(18,796	)	$	49,819

At September 30, 2012, the Company noted certain impairment triggers based on results of research and development work carried out by CPAC. As a result, based on projected future usage of the in-process research and development (“IPR&D”) technology by CPAC, an impairment charge of $12.2 million was recorded during the three months ended September 30, 2012. The Company did not identify any impairment triggers on goodwill or any of its definite intangible and long-lived assets.

Amortization expense related to intangible assets was $3.8 million and $4.1 million for the three months ended September 30, 2012 and 2011, respectively.

The estimated future amortization expense of purchased intangible assets, excluding in-process research and development, as of September 30, 2012 is as follows (in thousands):

Year Ending June 30,	Amount
2013 (remaining 9 months)	$	6,610
2014	8,395
2015	7,953
2016	7,953
2017	7,568
Thereafter	43
	$	38,522

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Financial Instruments

3 Months Ended

Sep. 30, 2012

Financial Instruments

Financial Instruments

4. Financial Instruments

The following tables summarize the fair value of assets measured on a recurring basis as of September 30, 2012 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in condensed consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total balance

Assets at September 30, 2012
Money market funds - included in cash and cash equivalents	$	20,080	$	—	$	—	$	20,080
Certificate of deposits - included in cash and cash equivalents	$	9,775	$	—	$	—	$	9,775

Assets at June 30, 2012
Money market funds - included in cash and cash equivalents	$	40,068	$	—	$	—	$	40,068
Certificate of deposits - included in cash and cash equivalents	$	6,742	$	—	$	—	$	6,742

The following tables summarize the fair value of financial instruments that are not measured on a recurring basis as of September 30, 2012 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in condensed consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total balance

At September 30, 2012
Long-term debt	$	—	$	103,900	$	—	$	103,900

At June 30, 2012
Long-term debt	$	—	$	101,400	$	—	$	101,400

The long-term debt is measured on a non-recurring basis using Level 2 inputs based upon observable inputs of the Company’s underlying stock price and the time value of the conversion option, since an observable quoted price of the Convertible Notes is not readily available.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Contingencies

3 Months Ended

Sep. 30, 2012

Contingencies

Contingencies

5. Contingencies

Litigation

From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. Currently, management believes the Company does not have any probable and estimable loss related to any current legal proceedings and claims that would individually or in the aggregate materially adversely affect its financial condition or operating results. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control. Should any of these estimates and assumptions change or prove to have been incorrect, the Company could incur significant charges related to legal matters which could have a material impact on its results of operations, financial position and cash flows.

Best Medical Trade Secret Litigation

On September 3, 2009, Best Medical International, Inc. (“Best Medical”) filed a lawsuit against the Company in the U.S. District Court for the Western District of Pennsylvania, claiming that the Company induced certain individuals to leave the employment of Best Medical and join the Company in order to gain access to Best Medical’s confidential information and trade secrets. Best Medical is seeking monetary damages and other relief. The Company filed a motion for summary judgment on May 20, 2011, Best Medical filed its response on June 21, 2011, and the Company filed a response to their response on July 8, 2011. On October 25, 2011, the court granted summary judgment in favor of the Company on all counts. On November 21, 2011 Best Medical filed a notice of appeal, and the parties await a ruling by the appellate court. At this time, the Company does not have enough information to estimate what, if any, financial impact this claim will have.

Best Medical Patent Litigation

On August 6, 2010, Best Medical filed an additional lawsuit against the Company in the U.S. District Court for the Western District of Pennsylvania, claiming that the Company has infringed U.S. Patent No. 5,596,619, a patent that Best Medical alleges protects a method and apparatus for conformal radiation therapy. On December 2, 2010, the Court granted the Company’s motion to dismiss, with leave to amend. On December 16, 2010, Best Medical filed an amended complaint, claiming that the Company also infringed U.S. Patent Nos. 6,038,283 and 7,266,175, both of which Best Medical alleges cover methods and apparatus for conformal radiation therapy. On March 9, 2011, the Court dismissed with prejudice all counts against the Company, except for two counts of alleged willful infringement of two of the patents. The Court issued a Scheduling Order on May 12, 2011 appointing a special master for claim construction, and setting a claim construction hearing on January 10, 2012. Best Medical moved to voluntarily dismiss one of the two remaining patent claims on June 28, 2011, which the court granted on June 30, 2011, leaving only one patent (U.S. Patent No. 6,038,283) at issue in the case. The Court held a claim construction hearing on May 16, 2012, and the Company believes the court will issue a claim construction order sometime in December 2012 or January 2013. Best Medical is seeking declaratory and injunctive relief, as well as unspecified compensatory and treble damages and other relief. At this time, the Company does not have enough information to estimate what, if any, financial impact this claim will have.

Rotary Systems

On April 28, 2011, a former supplier to TomoTherapy, Rotary Systems Incorporated, filed suit in Minnesota state court, Tenth Judicial District, Anoka County, against TomoTherapy alleging misappropriation of trade secrets, as well as several other counts alleging various theories of injury. Rotary Systems alleges TomoTherapy misappropriated Rotary Systems’ trade secrets pertaining to a component previously purchased from Rotary Systems, which component TomoTherapy now purchases from a different supplier. The suit alleges TomoTherapy improperly supplied the alleged trade secrets to its present supplier, Dynamic Sealing Technologies Inc. (also a named defendant in the suit). Rotary Systems has made an unspecified claim for damages of greater than $50,000. TomoTherapy moved to dismiss the case on May 19, 2011, and on August 29, 2011, the court granted the motion to dismiss with respect to all counts other than the count alleging misappropriation of trade secrets. On May 21, 2012, the court granted the Company’s motion for sanctions, in part, and gave Rotary Systems sixty days to identify the alleged trade secrets with specificity or face dismissal of its claim with prejudice. The court held a hearing on September 20, 2012, and the Company awaits the court’s ruling. At this time, the Company does not have enough information to estimate what, if any, financial impact this claim will have.

Radiation Stabilization Solutions Patent Litigation

On September 15, 2011, Radiation Stabilization Solutions LLC (“RSS”) filed a patent infringement complaint in the United States District Court for the Northern District of Illinois, Eastern Division. The complaint, alleged the Company’s sale of the TomoHD product induces infringement of or contributorily infringes U.S. Patent No. 6,118,848, or the ‘848 Patent, and sought unspecified monetary damages for the alleged infringement. The complaint also named Varian Medical Systems, Inc., BrainLab AG, BrainLab, Inc., Elekta AB and Elekta, Inc. as defendants, alleging that certain of their products also infringe the ‘848 patent. On October 27, 2011, the Court dismissed the complaint without prejudice because non-resident defendants had been improperly named in the complaint.

On October 28, 2011, RSS filed a new complaint against the Company and a customer of the Company in the United States District Court for the Northern District of Illinois, Eastern Division. The new complaint repeats the original complaint’s allegations against the Company and seeks unspecified monetary damages for the alleged infringement. The complaint further alleges that the customer directly and indirectly infringes the ‘848 patent, and seeks unspecified monetary damages for the alleged infringement. RSS also filed individual suits against each of Varian and Elekta and several of their respective customers. RSS served the complaint on Accuray and its customer on December 7, 2011. On January 30, 2012 the Company filed a motion to dismiss the complaint, and the Court heard oral argument for the motion on June 29, 2012. On August 21, 2012, the court granted the Company’s motion in part and gave RSS leave to amend the complaint. On September 21, 2012, RSS filed an amended complaint. On November 2, 2012, the Company and RSS entered into a settlement agreement, under which the Company will pay $150,000 to resolve all outstanding claims.

Accuray Securities Complaint

On November 1, 2012, a complaint was filed in Santa Clara County Superior Court purportedly on behalf of a class of shareholders seeking to enjoin the shareholder vote to be held at our annual meeting scheduled for November 30, 2012. The complaint names as defendants the Company and the members of the board of directors and alleges that the disclosures in the proxy statement for the annual meeting concerning the advisory vote on executive compensation and the proposal to amend the certificate of incorporation to increase the number of authorized shares are inadequate and constitute a breach of fiduciary duty. In addition to an injunction, the complaint seeks unspecified monetary damages and other relief. At this time, the Company does not have enough information to estimate what, if any, financial impact this complaint will have.

Software License Indemnity

Under the terms of the Company’s software license agreements with its customers, the Company agrees that in the event the software sold infringes upon any patent, copyright, trademark, or any other proprietary right of a third party, it will indemnify its customer licensees against any loss, expense, or liability from any damages that may be awarded against its customer. The Company includes this infringement indemnification in all of its software license agreements and selected managed services arrangements. In the event the customer cannot use the software or service due to infringement and the Company cannot obtain the right to use, replace or modify the license or service in a commercially feasible manner so that it no longer infringes, then the Company may terminate the license and provide the customer a refund of the fees paid by the customer for the infringing license or service. The Company has not recorded any liability associated with this indemnification, as it is not aware of any pending or threatened actions that represent probable losses as of September 30, 2012.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name FASB Interpretation (FIN)
-Number 14
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Acquisition

3 Months Ended

Sep. 30, 2012

Acquisition

Acquisition

6. Acquisition

On July 16, 2012, the Company acquired the remaining 90% of the outstanding shares of Morphormics, Inc. (“Morphormics”), a privately-held developer of medical imaging software based in North Carolina. The purpose of this acquisition was to enable the Company to extend auto-contouring capabilities for both the CyberKnife and TomoTherapy systems to improve disease specific workflows. The Company previously held 10% of the outstanding shares of Morphormics which was carried at zero value prior to the acquisition and re-measured to its acquisition-date fair value of $0.7 million based on the fair value of the consideration transferred. As a result, the Company recognized a gain of $0.7 million in other income (expense), net, during the three months ended September 30, 2012. The acquisition has been accounted for as a business combination using purchase accounting and Morphormics’ results of operations are included in the condensed consolidated financial statements from July 16, 2012. The acquisition was not considered a material business combination and was funded through cash on-hand. As per the acquisition agreement, $0.9 million of the purchase consideration is to be paid on April 16, 2013 and is included in other accrued liabilities in the condensed consolidated balance sheet at September 30, 2012. The Company has not incurred material severance or acquisition-related costs.

The fair value of total purchase consideration paid and payable for 100% of Morphormics’ equity interest as of the acquisition date was as follows (in thousands):

Cash paid and payable	$	5,385
Fair value of pre-existing investment in Morphormics	662
Total	$	6,047

The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date as follows (in thousands):

Cash and cash equivalents	$	668
Accounts receivable	283
Other current assets	7
Amortizable intangible assets - developed technology	5,100
Goodwill	77
Accrued compensation	(88		)
Total purchase price	$	6,047

Developed technology represents the fair value of Morphormics’ imaging software product which is being amortized on a straight-line basis over an estimated life of 5 years.

Pro forma results of operations for the acquisition have not been presented because it is not material to the Company’s condensed consolidated statements of operations and comprehensive loss, balance sheets, or cash flows.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph F4
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Share-Based Compensation

3 Months Ended

Sep. 30, 2012

Share-Based Compensation

Share-Based Compensation

7. Share-Based Compensation

The following table summarizes the share-based compensation charges included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):

	Three Months Ended September 30,
	2012		2011
Cost of revenue	$	247	$	558
Selling and marketing	220		229
Research and development	516		602
General and administrative	772		1,220
	$	1,755	$	2,609

At September 30, 2012 and June 30, 2012, capitalized share-based compensation expenses of $0.4 million were included as a component of inventories.

Performance-Based Awards

During fiscal 2012, the Compensation Committee of the Board of Directors of the Company approved the granting of PSUs to employees of the Company which vest only upon meeting certain financial performance criteria during the performance period commencing on the first day of the Company’s 2012 fiscal year and ending on the last day of the Company’s 2013 fiscal year. If the PSUs do not become vested as a result of the Company’s performance during the performance period, all PSUs are automatically forfeited by the participants effective as of the last day of the performance period. During fiscal 2012, approximately 1.0 million PSUs were granted to employees valued at approximately $3.9 million which was based on the fair value of the Company’s common stock on the grant date and will be recognized over the requisite performance period based on management’s assessment of the probability of achieving the performance criteria. Approximately 0.9 million PSUs are outstanding as of September 30, 2012.

As of September 30, 2012, management assessed that it was not probable that the performance criteria would be met during the performance period and accordingly, no compensation cost has been recognized for the PSUs to date or during the three months ended September 30, 2012. If in a future period management revises its assessment and concludes that it is probable that the performance criteria will be met, the Company will record a cumulative catch up compensation charge for the PSUs in that period. Remaining compensation charges would be recognized ratably over the remaining performance period.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Position (SOP)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Debt

3 Months Ended

Sep. 30, 2012

Debt

Debt

8. Debt

On August 1, 2011, the Company issued the Convertible Notes to certain qualified institutional buyers or QIBs. The Convertible Notes were offered and sold to the QIBs pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the $100 million offering, after deducting the initial purchaser’s discount and commission and the related offering costs, were approximately $96.1 million. The offering costs and the initial purchaser’s discount and commission (which are recorded in Other Assets) are both being amortized to interest expense using the effective interest method over five years. The Convertible Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears in cash on February 1 and August 1 of each year, beginning on February 1, 2012. The Convertible Notes will mature on August 1, 2016, unless earlier repurchased, redeemed or converted.

The Convertible Notes were issued under an Indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Holders of the Convertible Notes may convert their Convertible Notes at any time on or after May 1, 2016 until the close of business on the business day immediately preceding the maturity date. Prior to May 1, 2016, holders of the Convertible Notes may convert their Convertible Notes only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending September 30, 2011, and only during such calendar quarter, if the closing sale price of the Company’s common stock for each of 20 or more trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading-day period (such five consecutive trading-day period, the “Note Measurement Period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of that Note Measurement Period was equal to or less than 98% of the product of the closing sale price of shares of the Company’s common stock and the applicable conversion rate for such trading day; (3) if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions as described in the Indenture. Upon conversion by holders of the Convertible Notes, the Company will have the right to pay or deliver, as the case may be, cash, shares of common stock of the Company or a combination thereof, at the Company’s election. At any time on or prior to the 33rd business day immediately preceding the maturity date, the Company may irrevocably elect to (a) deliver solely shares of common stock of the Company in respect of the Company’s conversion obligation or (b) pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock of the Company or a combination thereof in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. The initial conversion rate is 105.5548 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes (which represents an initial conversion price of approximately $9.47 per share of the Company’s common stock). The conversion rate, and thus the conversion price, are subject to adjustment as further described below.

Holders of the Convertible Notes who convert their Convertible Notes in connection with a “make-whole fundamental change”, as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a fundamental change, as defined in the Indenture, holders of the Convertible Notes may require the Company to purchase all or a portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

On or after August 1, 2014 and prior to the maturity date, the Company may redeem for cash all or a portion of the Convertible Notes if the closing sale price of its common stock exceeds 130% of the applicable conversion price (the initial conversion price is approximately $9.47 per share of common stock) of such Convertible Notes for at least 20 trading days during any consecutive 30 trading-day period (including the last trading day of such period).

In accordance with Accounting Standards Codification (“ASC”) 470-20 Debt with Conversion and Other Options, the Company separately accounts for the liability and equity conversion components of the Convertible Notes. The principal amount of the liability component of the Convertible Notes was $75.9 million as of the date of issuance based on the present value of its cash flows using a discount rate of 10%, our approximate borrowing rate at the date of the issuance for a similar debt instrument without the conversion feature. The carrying value of the equity conversion component was $24.1 million. A portion of the initial purchaser’s discount and commission and the offering costs totaling $0.9 million was allocated to the equity conversion component. The liability component will be accreted to the principal amount of the Convertible Notes using the effective interest method over five years.

The following table presents the carrying value of the Convertible Notes as of September 30, 2012 (in thousands):

Carrying amount of the equity conversion component	$	23,189

Principal amount of the Convertible Notes	$	100,000
Unamortized debt discount (1)	(19,493		)
Net carrying amount	$	80,507

(1)As of September 30, 2012, the remaining period over which the unamortized debt discount will be amortized is 46 months.

A summary of interest expense and effective interest rate on the liability component related to the Convertible Notes for the three months ended September 30, 2012 and 2011 was as follows (in thousands):

	Three months ended			Three months ended
	September 30, 2012			September 30, 2011
Effective interest rate	10.0		%	10.0		%
Interest expense related to contractual interest coupon	$	938		$	625
Interest expense related to amortization of debt discount	1,041			639
Total interest expense recognized	$	1,979		$	1,264

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Investment in CPAC

3 Months Ended

Sep. 30, 2012

Investment in CPAC

Investment in CPAC

9. Investment in CPAC

In April 2008, TomoTherapy established a new affiliate, CPAC, to develop a compact proton therapy system for the treatment of cancer. As its initial investment in CPAC, TomoTherapy contributed intellectual property with a fair market value of approximately $1.9 million. Since then, CPAC has raised additional funds from TomoTherapy, the Company and other investors through the sale of stock and issuance of promissory notes. As of September 30, 2012, the Company and its wholly owned subsidiary, TomoTherapy, together own approximately 15.4% of the outstanding stock of CPAC and approximately 16.3% on a fully diluted basis. Although TomoTherapy’s and the Company’s combined ownership in CPAC is less than 50%, the Company includes CPAC in its condensed consolidated financial statements because the Company and TomoTherapy are the primary beneficiaries of CPAC (a variable interest entity, or VIE). The Company and TomoTherapy were involved in the design of CPAC, from which CPAC cannot depart due to restrictions that are part of its financing arrangements. The Company also provided intellectual property, which is the basis of CPAC and also holds influence over the VIE through representation on CPAC’s board of directors. Further, the Company has an option to either acquire CPAC or enter into a distribution arrangement for the technology developed by CPAC as further described below. CPAC’s outside stockholders’ interests are shown in the Company’s condensed consolidated financial statements as “Non-controlling interest.” The liabilities of the VIE do not represent additional claims on the Company’s general assets; rather they represent claims against the specific assets of the VIE. Likewise, the assets of the VIE consolidated by the Company do not represent additional assets available to satisfy claims against the Company’s general assets. The creditors of the VIE do not have recourse to the Company. Total assets and liabilities of CPAC were $2.4 million and $2.2 million, respectively, as of September 30, 2012 and $15.0 million and $0.6 million, respectively, as of June 30, 2012, which are included within the Company’s condensed consolidated balance sheets. See Note 3, Goodwill and Intangible Assets for details of the impairment charge recorded for CPAC’s in-process research and development intangible asset in the three months ended September 30, 2012.

From December 2010 through March 2012, the Company, TomoTherapy and certain other CPAC investors purchased convertible promissory notes from CPAC. Total consideration for the notes that the Company and TomoTherapy purchased was $1.2 million. Under the terms of the December 2010 notes, TomoTherapy received warrants for 1,386,981 common shares of CPAC. Other participating investors also purchased $3.3 million of the convertible notes which were included in “other accrued liabilities” in the Company’s condensed consolidated balance sheets prior to their conversion to equity in April 2012. The other investors also received warrants under the terms of the December 2010 notes for an aggregate of 1,386,983 shares of CPAC, which were equity classified. The notes bore interest at 12% and were convertible based on a per share conversion price as defined in the notes. The CPAC warrants described above are exercisable through November 2020 at an exercise price of $0.57 per CPAC common share. At September 30, 2012, none of these warrants had been exercised.

On March 9, 2011, TomoTherapy entered into a revolving promissory note with CPAC. On May 10, 2011, the revolving note was amended to increase the maximum amount available to borrow to $1.9 million. As of September 30, 2012, $2.3 million of principal and accrued interest was outstanding under the revolving note. The revolving note bears interest at 12% per annum compounded quarterly. This note and related interest is eliminated in consolidation.

On April 20, 2012, the Company entered into various transactions with CPAC and its other stockholders pursuant to which the Company invested $1.1 million and also converted the outstanding principal and accrued interest on its convertible promissory notes, amounting to $1.3 million, into preferred stock. The other note holders also converted their outstanding principal and accrued interest, amounting to $3.6 million into preferred stock. Certain other investors also participated in the financing. In connection with such transactions, the Company received warrants for 338,839 common shares of CPAC. These warrants are exercisable through April 2017 at an exercise price of $0.8725 per CPAC common share. At September 30, 2012, none of these warrants had been exercised. The $1.9 million principal amount revolving promissory note remains outstanding but its maturity date was extended from December 31, 2011 to December 31, 2012 as part of the April 2012 transaction.

In connection with the April 2012 transactions, the Company modified the option it previously held to purchase a portion of the CPAC stock held by other CPAC investors. The Company now has the option, upon the occurrence of certain events, to elect to either acquire CPAC at the then-determined fair value or enter into a non-exclusive supply and distribution agreement for CPAC’s compact proton therapy products. The triggers for the option becoming exercisable include CPAC achieving certain technical milestones or the CPAC board approving a proposal for the acquisition of CPAC.

The Company and CPAC also amended certain licensing relationships for the DWA technology by and between the Company, CPAC and Lawrence Livermore National Security, LLC (“LLNS”) and terminated a previous arrangement pursuant to which the Company had provided CPAC with certain accounting and back office support and management services.

In July 2012, some of the participating investors of CPAC purchased convertible notes from CPAC for $1.3 million. The notes bear interest at 12% per annum and mature on May 31, 2013. The outstanding notes at September 30, 2012 are included in “other accrued liabilities” in the Company’s condensed consolidated balance sheets.

At September 30, 2012, the Company’s equity investment in CPAC was $4.3 million and the outstanding receivables from CPAC were $2.6 million, which includes $1.9 million of the principal portion of the revolving promissory note issued by CPAC. The equity investment and the outstanding receivables are eliminated in consolidation. If CPAC is not successful in raising additional funds to continue its development efforts, or if it is not successful in development of the compact proton accelerator technology, or if it is not successful in commercialization of the technology, or if the Company is not in a position to finance its option to purchase CPAC or to become a supplier or distributor of its technology, the Company may need to write down or write off the equity investment and outstanding receivables.

Subsequent Events

3 Months Ended

Sep. 30, 2012

Subsequent Events

Subsequent Events

10. Subsequent Events

Change in Chief Executive Officer

On October 11, 2012, Dr. Euan S. Thomson, Ph.D. resigned from his positions as President and Chief Executive Officer of the Company. In addition, on October 11, 2012, Dr. Thomson also resigned as a member of the Board of Directors of the Company. In connection with his resignation and separation from the Company in October 2012, the Company and Dr. Thomson entered into a General Release and Separation Agreement (the “Separation Agreement”) on October 27, 2012, in accordance with the terms of his employment letter agreement. Dr. Thomson received approximately $1.2 million of severance related compensation and accelerated vesting of equity awards of approximately $0.5 million under the Separation Agreement. In addition, the Company and Dr. Thomson entered into a Consulting Services Agreement on October 27, 2012, whereby Dr. Thomson would provide the Company with consulting services in exchange for a monthly consulting fee of $20,500 for a period of six months.

Effective October 12, 2012, Joshua H. Levine was appointed President and Chief Executive Officer of the Company. Mr. Levine was also appointed as a director of the Company by the Company’s Board of Directors effective October 12, 2012 to fill the vacancy created by Dr. Thomson’s resignation.

Market Stock Unit (“MSU”) program

In October 2012, the Compensation Committee approved a new performance equity program, referred to as the market stock unit program (“MSU Program”). The program uses the Russell 2000 index as a performance benchmark and requires that the Company’s total stockholder return exceed that of the Russell 2000. Based on a sliding scale of how much the Russell 2000 benchmark is exceeded, participating executives can earn up to a maximum of 150% of the target number of shares over two measurement periods, one at the end of fiscal 2014 and another at the end of fiscal 2015.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

Use of Estimates

Use of Estimates

Concentration of Credit and Other Risks

Concentration of Credit and Other Risks

Revenue Recognition

Revenue Recognition

Product Revenue

Service Revenue

Shared ownership program

Other revenue

Other revenue primarily consists of research and development and construction contract revenues.

Long-term construction and manufacturing contracts

Net Loss Per Common Share

Net Loss Per Common Share

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended
	September 30,
	2012			2011
Numerator:
Net loss used in computing basic and diluted net loss per share	$	(24,130	)	$	(26,510	)
Denominator:
Weighted average shares used in computing basic net loss per share	71,995			70,263
Add: Dilutive stock options and awards outstanding	—			—
Weighted average shares used in computing diluted net loss per share	71,995			70,263

The following table sets forth all potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):

	As at
	September 30,
	2012	2011
Stock options	7,703	8,191
RSUs and PSUs	2,007	1,591
	9,710	9,782

Segment Information

Segment Information

	Three Months Ended
	September 30,
	2012		2011
Americas	$	35,811	$	48,849
Europe, Middle East, India and Africa	25,118		28,615
Asia (excluding Japan)	15,121		16,157
Japan	6,698		6,830
Total	$	82,748	$	100,451

- Definition

Disclosure of accounting policy for credit risk.

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Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

- Definition

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

+ References + Details

- Definition

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

+ References + Details

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies

Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended
	September 30,
	2012			2011
Numerator:
Net loss used in computing basic and diluted net loss per share	$	(24,130	)	$	(26,510	)
Denominator:
Weighted average shares used in computing basic net loss per share	71,995			70,263
Add: Dilutive stock options and awards outstanding	—			—
Weighted average shares used in computing diluted net loss per share	71,995			70,263

Schedule of all potentially dilutive securities excluded from the computation of net loss per share

The following table sets forth all potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):

	As at
	September 30,
	2012	2011
Stock options	7,703	8,191
RSUs and PSUs	2,007	1,591
	9,710	9,782

Schedule of revenue by geographic region

The following summarizes revenue by geographic region (in thousands):

	Three Months Ended
	September 30,
	2012		2011
Americas	$	35,811	$	48,849
Europe, Middle East, India and Africa	25,118		28,615
Asia (excluding Japan)	15,121		16,157
Japan	6,698		6,830
Total	$	82,748	$	100,451

Balance Sheet Components (Tables)

3 Months Ended

Sep. 30, 2012

Balance Sheet Components

Schedule of accounts receivable, net

Accounts receivable, net consisted of the following (in thousands):

	September 30,			June 30,
	2012			2012
Accounts receivable	$	59,167		$	69,285
Unbilled fees and services	226			305
	59,393			69,590
Less: Allowance for doubtful accounts	(1,773		)	(1,700		)
Accounts receivable, net	$	57,620		$	67,890

Schedule of inventories

Inventories consisted of the following (in thousands):

	September 30,		June 30,
	2012		2012
Raw materials	$	34,719	$	34,579
Work-in-process	16,541		16,547
Finished goods	30,479		30,567
Inventories	$	81,739	$	81,693

Schedule of property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	September 30,			June 30,
	2012			2012
Furniture and fixtures	$	5,966		$	5,921
Computer and office equipment	9,452			9,126
Software	9,409			9,429
Leasehold improvements	16,340			16,065
Machinery and equipment	33,536			33,493
Shared ownership systems	4,979			4,979
Construction in progress	8,794			3,787
	88,476			82,800
Less: Accumulated depreciation and amortization	(48,940		)	(45,342		)
Property and equipment, net	$	39,536		$	37,458

Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets

Schedule of activity related to goodwill

Activity related to goodwill consisted of the following (in thousands):

	Three Months
	Ended		Year Ended
	September 30,		June 30,
	2012		2012
Balance at the beginning of the period	$	59,215	$	54,474
Addition related to acquisition	77		—
Currency translation and other adjustments	52		—
Adjustments related to prior year acquisition (1)	—		4,741
Balance at the end of the period	$	59,344	$	59,215

(1) Primarily represents liabilities related to the TomoTherapy acquisition.

Schedule of intangible assets associated with completed acquisitions

The Company’s intangible assets associated with completed acquisitions at September 30, 2012 and June 30, 2012 are as follows (in thousands):

		September 30, 2012										June 30, 2012
		Gross										Gross
		Carrying		Impairment			Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Charges			Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	48,556	$	—		$	(11,136	)	$	37,420	$	43,455	$	(9,161	)	$	34,294
Backlog	1.25	10,500		—			(10,500		)	—		10,500		(8,867		)	1,633
Distributor license	1.5 - 2.5	2,091		—			(989		)	1,102		1,860		(768		)	1,092
In-process research and development (CPAC)	Indefinite	12,800		(12,200		)	—			600		12,800		—			12,800
		$	73,947	$	(12,200	)	$	(22,625	)	$	39,122	$	68,615	$	(18,796	)	$	49,819

Schedule of estimated future amortization expense of purchased intangible assets, excluding in-process research and development

The estimated future amortization expense of purchased intangible assets, excluding in-process research and development, as of September 30, 2012 is as follows (in thousands):

Year Ending June 30,	Amount
2013 (remaining 9 months)	$	6,610
2014	8,395
2015	7,953
2016	7,953
2017	7,568
Thereafter	43
	$	38,522

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References + Details

Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2012

Financial Instruments

Schedule of fair value of assets measured on a recurring basis

The following tables summarize the fair value of assets measured on a recurring basis as of September 30, 2012 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in condensed consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total balance

Assets at September 30, 2012
Money market funds - included in cash and cash equivalents	$	20,080	$	—	$	—	$	20,080
Certificate of deposits - included in cash and cash equivalents	$	9,775	$	—	$	—	$	9,775

Assets at June 30, 2012
Money market funds - included in cash and cash equivalents	$	40,068	$	—	$	—	$	40,068
Certificate of deposits - included in cash and cash equivalents	$	6,742	$	—	$	—	$	6,742

Schedule of fair value of financial instruments that are not measured on a recurring basis

The following tables summarize the fair value of financial instruments that are not measured on a recurring basis as of September 30, 2012 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in condensed consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total balance

At September 30, 2012
Long-term debt	$	—	$	103,900	$	—	$	103,900

At June 30, 2012
Long-term debt	$	—	$	101,400	$	—	$	101,400

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References + Details

Acquisition (Tables)

3 Months Ended

Sep. 30, 2012

Acquisition

Schedule of components of purchase price

The fair value of total purchase consideration paid and payable for 100% of Morphormics’ equity interest as of the acquisition date was as follows (in thousands):

Cash paid and payable	$	5,385
Fair value of pre-existing investment in Morphormics	662
Total	$	6,047

Schedule of purchase price allocation

The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date as follows (in thousands):

Cash and cash equivalents	$	668
Accounts receivable	283
Other current assets	7
Amortizable intangible assets - developed technology	5,100
Goodwill	77
Accrued compensation	(88		)
Total purchase price	$	6,047

Share-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2012

Share-Based Compensation

Summary of share-based compensation charges

The following table summarizes the share-based compensation charges included in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):

	Three Months Ended September 30,
	2012		2011
Cost of revenue	$	247	$	558
Selling and marketing	220		229
Research and development	516		602
General and administrative	772		1,220
	$	1,755	$	2,609

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

+ References + Details

Debt (Tables)

3 Months Ended

Sep. 30, 2012

Debt

Schedule of carrying value of the Convertible Notes

The following table presents the carrying value of the Convertible Notes as of September 30, 2012 (in thousands):

Carrying amount of the equity conversion component	$	23,189

Principal amount of the Convertible Notes	$	100,000
Unamortized debt discount (1)	(19,493		)
Net carrying amount	$	80,507

(1)As of September 30, 2012, the remaining period over which the unamortized debt discount will be amortized is 46 months.

Summary of interest expense and effective interest rate on the liability component related to the Convertible Notes

	Three months ended			Three months ended
	September 30, 2012			September 30, 2011
Effective interest rate	10.0		%	10.0		%
Interest expense related to contractual interest coupon	$	938		$	625
Interest expense related to amortization of debt discount	1,041			639
Total interest expense recognized	$	1,979		$	1,264

Summary of Significant Accounting Policies (Details) - customer	3 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012
Total net revenue \| Customer concentration risk \| Minimum
Concentration of Credit Risk and Other Risks and Uncertainties
Threshold percentage of concentration risk	10.00%	10.00%
Total accounts receivable \| Customer concentration risk \| Major customer two
Concentration of Credit Risk and Other Risks and Uncertainties
Percentage of concentration risk			10.00%
Total accounts receivable \| Credit concentration risk \| Major customer two
Concentration of Credit Risk and Other Risks and Uncertainties
Number of significant customers			2

Summary of Significant Accounting Policies (Details 2)	3 Months Ended
Summary of Significant Accounting Policies (Details 2)	Sep. 30, 2012
Revenue recognition
Term of agreements under the shared ownership program	5 years

Summary of Significant Accounting Policies (Details 3) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Numerator:
Net loss used in computing basic and diluted net loss per share	$ (24,130)	$ (26,510)
Denominator:
Weighted average shares used in computing basic net loss per share	71,995	70,263
Weighted average shares used in computing diluted net loss per share	71,995	70,263
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	9,710	9,782
Convertible Notes
Anti-dilutive securities excluded from computation of earnings per share
Interest rate (as a percent)	3.75%
Stock options
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	7,703	8,191
RSUs and PSUs
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	2,007	1,591

Summary of Significant Accounting Policies (Details 4) $ in Thousands	3 Months Ended
	Sep. 30, 2012 USD ($) segment	Sep. 30, 2011 USD ($)
Summary of Significant Accounting Policies
Number of operating segments \| segment	1
Revenue by geographic region
Total	$ 82,748	$ 100,451
Americas
Revenue by geographic region
Total	35,811	48,849
Europe, Middle East, India and Africa
Revenue by geographic region
Total	25,118	28,615
Asia (excluding Japan)
Revenue by geographic region
Total	15,121	16,157
Japan
Revenue by geographic region
Total	$ 6,698	$ 6,830

Balance Sheet Components (Details) - USD ($) $ in Thousands	3 Months Ended
Balance Sheet Components (Details) - USD ($) $ in Thousands	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012
Accounts receivable, net
Accounts receivable	$ 59,167		$ 69,285
Unbilled fees and services	226		305
Accounts and other receivable, gross	59,393		69,590
Less: Allowance for doubtful accounts	(1,773)		(1,700)
Accounts receivable, net	57,620		67,890
Financing receivables
Accounts receivable with contractual maturities of more than one year	5,600		2,500
Inventories
Raw materials	34,719		34,579
Work-in-process	16,541		16,547
Finished goods	30,479		30,567
Total inventories	81,739		81,693
Property and Equipment, net
Property and equipment, gross	88,476		82,800
Less: Accumulated depreciation and amortization	(48,940)		(45,342)
Property and equipment, net	39,536		37,458
Depreciation and amortization expense	4,100	$ 4,200
Furniture and fixtures
Property and Equipment, net
Property and equipment, gross	5,966		5,921
Computer and office equipment
Property and Equipment, net
Property and equipment, gross	9,452		9,126
Software
Property and Equipment, net
Property and equipment, gross	9,409		9,429
Leasehold improvements
Property and Equipment, net
Property and equipment, gross	16,340		16,065
Machinery and equipment
Property and Equipment, net
Property and equipment, gross	33,536		33,493
CyberKnife shared ownership systems
Property and Equipment, net
Property and equipment, gross	4,979		4,979
Construction in progress
Property and Equipment, net
Property and equipment, gross	$ 8,794		$ 3,787

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 59,215	$ 54,474	$ 54,474
Goodwill resulting from acquisition of TomoTherapy	77
Currency translation and other adjustment	52
Adjustments related to acquisition of TomoTherapy			4,741
Balance at the end of the period	59,344		59,215
Intangible Assets
Total gross carrying amount	73,947		68,615
Impairment Charges	(12,200)
Accumulated Amortization	(22,625)		(18,796)
Net Amount, Finite Lived Intangibles	38,522
Total net carrying amount	39,122		49,819
Amortization expense	3,800	$ 4,100
Estimated future amortization expense of purchased intangible assets
2013 (remaining 9 months)	6,610
2014	8,395
2015	7,953
2016	7,953
2017	7,568
Thereafter	43
Net Amount, Finite Lived Intangibles	38,522
In-process research and development (CPAC)
Intangible Assets
Gross Carrying Amount, Indefinite Lived Intangibles	12,800		12,800
Impairment Charges	(12,200)
Net Amount, Indefinite Lived Intangibles	600		12,800
Developed technology
Intangible Assets
Gross Carrying Amount, Finite Lived Intangibles	48,556		43,455
Accumulated Amortization	(11,136)		(9,161)
Net Amount, Finite Lived Intangibles	37,420		34,294
Estimated future amortization expense of purchased intangible assets
Net Amount, Finite Lived Intangibles	$ 37,420		34,294
Developed technology \| Minimum
Intangible Assets
Useful Lives	5 years
Developed technology \| Maximum
Intangible Assets
Useful Lives	6 years
Backlog
Intangible Assets
Useful Lives	1 year 3 months
Gross Carrying Amount, Finite Lived Intangibles	$ 10,500		10,500
Accumulated Amortization	(10,500)		(8,867)
Net Amount, Finite Lived Intangibles			1,633
Estimated future amortization expense of purchased intangible assets
Net Amount, Finite Lived Intangibles			1,633
Distributor license
Intangible Assets
Gross Carrying Amount, Finite Lived Intangibles	2,091		1,860
Accumulated Amortization	(989)		(768)
Net Amount, Finite Lived Intangibles	1,102		1,092
Estimated future amortization expense of purchased intangible assets
Net Amount, Finite Lived Intangibles	$ 1,102		$ 1,092
Distributor license \| Minimum
Intangible Assets
Useful Lives	1 year 6 months
Distributor license \| Maximum
Intangible Assets
Useful Lives	2 years 6 months

Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2012	Jun. 30, 2012
Recurring basis \| Quoted Prices in Active Markets for Identical Instruments (Level 1) \| Money market funds
Fair value measurement
Fair value of assets	$ 20,080	$ 40,068
Recurring basis \| Quoted Prices in Active Markets for Identical Instruments (Level 1) \| Certificates of deposits
Fair value measurement
Fair value of assets	9,775	6,742
Recurring basis \| Total balance \| Money market funds
Fair value measurement
Fair value of assets	20,080	40,068
Recurring basis \| Total balance \| Certificates of deposits
Fair value measurement
Fair value of assets	9,775	6,742
Non-recurring basis \| Significant Other Observable Inputs (Level 2) \| Convertible Notes
Fair value measurement
Long term debt	103,900	101,400
Non-recurring basis \| Total balance \| Convertible Notes
Fair value measurement
Long term debt	$ 103,900	$ 101,400

Contingencies (Details)		1 Months Ended
Contingencies (Details)	May 21, 2012	Jun. 30, 2011 claim counts	Apr. 30, 2011 USD ($)	Nov. 02, 2012 USD ($)	Mar. 09, 2011 counts patent
Best Medical Patent Litigation
Contingencies
Number of counts of alleged willful infringement of patents \| counts					2
Number of patents against which lawsuit is not dismissed		1			2
Number of patent claims dismissed \| claim		1
Rotary Systems
Contingencies
Period to Identify Alleged Trade Secrets with Specificity or Face Dismissal of Claim with Prejudice	60 days
Rotary Systems \| Minimum
Contingencies
Claim for damages			$ 50,000
Radiation Stabilization Solutions Patent Litigation [Member]
Contingencies
Amount paid to resolve outstanding claims				$ 150,000

Acquisition (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
Acquisition (Details) - USD ($) $ in Thousands	Jul. 31, 2012	Sep. 30, 2012	Jul. 16, 2012	Jun. 30, 2012
Acquisition
Gain recognized on pre existing outstanding shares		$ 662
Developed technology \| Minimum
Purchase price allocation
Estimated useful life		5 years
Developed technology \| Maximum
Purchase price allocation
Estimated useful life		6 years
Morphormics
Acquisition
Acquisition of remaining outstanding shares (as a percent)			90.00%
Outstanding shares held prior to acquisition (as a percent)			10.00%
Fair value of outstanding shares prior to acquisition			$ 700	$ 0
Purchase consideration payable on April 16, 2013		$ 900
Gain recognized on pre existing outstanding shares	$ 662
Total acquired equity interest (as a percent)			100.00%
Purchase price
Cash paid and payable			$ 5,385
Total purchase price			6,047
Purchase price allocation
Cash and cash equivalents			668
Accounts receivable			283
Other current assets			7
Goodwill			77
Accrued compensation			(88)
Total purchase price			6,047
Morphormics \| Developed technology
Purchase price allocation
Amortizable intangible assets - developed technology			$ 5,100
Estimated useful life		5 years

Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Share-Based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012
Share-based compensation charges
Share-based compensation expense	$ 1,755	$ 2,609
Capitalized share-based compensation costs	400		$ 400
Cost of revenue
Share-based compensation charges
Share-based compensation expense	247	558
Selling and marketing
Share-based compensation charges
Share-based compensation expense	220	229
Research and development
Share-based compensation charges
Share-based compensation expense	516	602
General and administrative
Share-based compensation charges
Share-based compensation expense	$ 772	$ 1,220

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References + Details

Share-Based Compensation (Details 2) - PSUs - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Jun. 30, 2012	Sep. 30, 2012
Performance-Based Awards
Number of awards granted to employees (in shares)	1.0
Total fair value of awards granted to employees	$ 3.9
Number of awards at the end of the period		0.9

Debt (Details)	1 Months Ended	3 Months Ended
Debt (Details)	Aug. 31, 2011 USD ($)	Sep. 30, 2012 USD ($) shares $ / shares	Sep. 30, 2011 USD ($)	Jun. 30, 2012 USD ($)	Aug. 02, 2011 USD ($)
Debt
Proceeds from debt, net of costs			$ 96,100,000
Net carrying amount		$ 80,507,000		$ 79,466,000
3.75% Convertible Senior Notes
Debt
Aggregate principal amount of debt issued	$ 100,000,000
Interest rate (as a percent)		3.75%
Proceeds from debt, net of costs	$ 96,100,000
Debt issuance costs, amortization period	5 years
Conversion rate, number of shares to be issued per $1000 of principal amount (in shares) \| shares		105.5548
Principal amount used for debt instrument conversion ratio		$ 1,000
Conversion price (in dollars per share) \| $ / shares		$ 9.47
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible into common stock		30 days
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period		5 days
Number of consecutive trading days before five consecutive business days during the note measurement period		5 days
Number of working days preceding maturity date for delivery of shares or payment of cash		33 days
Repurchase price, as percentage of principal amount, if company undergoes change of control		100.00%
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable		30 days
Discount rate on liability component (as a percent)	10.00%
Debt issuance costs and discount allocated to equity conversion component					$ 900,000
Carrying amount of the equity conversion component		$ 23,189,000			24,100,000
Principal amount of the Notes		100,000,000			$ 75,900,000
Unamortized debt discount		(19,493,000)
Net carrying amount		$ 80,507,000
Amortization period	5 years	46 months
Effective interest rate (as a percent)		10.00%	10.00%
Interest expense related to contractual interest coupon		$ 938,000	$ 625,000
Interest expense related to amortization of debt discount		1,041,000	639,000
Total interest expense recognized		$ 1,979,000	$ 1,264,000
3.75% Convertible Senior Notes \| Minimum
Debt
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible into common stock		20 days
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be convertible		130.00%
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be redeemable		130.00%
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable		20 days
3.75% Convertible Senior Notes \| Maximum
Debt
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate		98.00%

Investment in CPAC (Details) $ in Millions	1 Months Ended		3 Months Ended	16 Months Ended
Investment in CPAC (Details) $ in Millions	Jul. 31, 2012 USD ($)	Apr. 30, 2008 USD ($)	Sep. 30, 2012 USD ($) $ / shares shares	Mar. 31, 2012 USD ($) shares	Jun. 30, 2012 USD ($)	Apr. 20, 2012 USD ($)	May 10, 2011 USD ($)
TomoTherapy \| Convertible Promissory Notes
Investment in CPAC
Principal and accrued interest outstanding			$ 1.3
Other participating investors \| Convertible Promissory Notes
Investment in CPAC
Principal and accrued interest outstanding			$ 3.6
CPAC
Investment in CPAC
Ownership interest (as a percent)			15.40%
Ownership interest on fully diluted basis (as a percent)			16.30%
Total assets			$ 2.4		$ 15.0
Total liabilities			$ 2.2		$ 0.6
Exercise price of warrants \| $ / shares			0.8725
Common shares of CPAC for which warrants received \| shares			338,839
CPAC \| Convertible Promissory Notes
Investment in CPAC
Consideration paid to acquire promissory notes from variable interest entity	$ 1.3
Interest rate (as a percent)	12.00%		12.00%
Exercise price of warrants \| $ / shares			0.57
CPAC \| Revolving Promissory Note
Investment in CPAC
Interest rate (as a percent)			12.00%
Principal and accrued interest outstanding			$ 2.3			$ 1.9
CPAC \| TomoTherapy
Investment in CPAC
Fair market value of intellectual property investment contributed by the primary beneficiary		$ 1.9
CPAC \| TomoTherapy \| Maximum
Investment in CPAC
Ownership interest (as a percent)			50.00%
CPAC \| TomoTherapy \| Convertible Promissory Notes
Investment in CPAC
Warrants issued by VIE for consideration received \| shares				1,386,981
Consideration paid to acquire promissory notes from variable interest entity				$ 1.2
CPAC \| TomoTherapy \| Revolving Promissory Note
Investment in CPAC
Maximum amount available to borrow							$ 1.9
CPAC \| Other participating investors
Investment in CPAC
Investment in exchange for preferred stock of VIE and warrants to purchase common stock						$ 1.1
CPAC \| Other participating investors \| Convertible Promissory Notes
Investment in CPAC
Warrants issued by VIE for consideration received \| shares				1,386,983
Consideration paid to acquire promissory notes from variable interest entity				$ 3.3

Subsequent Events (Details)		1 Months Ended
Subsequent Events (Details)	Oct. 28, 2012 USD ($)	Oct. 31, 2012 USD ($) item	Sep. 30, 2012 USD ($)	Jun. 30, 2012 USD ($)
Subsequent Events
Outstanding receivables			$ 57,620,000	$ 67,890,000
CPAC
Subsequent Events
Equity investments			4,300,000
Outstanding receivables			2,600,000
Principal portion of the revolving promissory note			$ 1,900,000
Subsequent events
Subsequent Events
Severance related compensation	$ 1,200,000
Accelerated vesting of equity awards	$ 500,000
Subsequent events \| Scenario forecast
Subsequent Events
Consulting fee		$ 20,500
Percentage of target number of shares that participating executives can earn		150.00%
Number of measurement periods \| item		2