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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 13, 2020

 

 

ACCURAY INCORPORATED

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-33301		20-8370041
(Commission File Number)		(IRS Employer Identification No.)

 

1310 Chesapeake Terrace
Sunnyvale, California 94089

(Address of principal executive offices, including Zip Code)

 

Registrant’s telephone number, including area code: (408) 716-4600

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		ARAY		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02. Results of Operations and Financial Condition.

 

On August 13, 2020, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the fourth quarter and fiscal year ended June 30, 2020. A copy of the Company’s press release dated August 13, 2020, titled “Accuray Reports Fourth Quarter and Fiscal 2020 Financial Results” is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The foregoing information (including the exhibit hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)  Exhibits.

 

 

Exhibit No.		Description
99.1		Press release dated August 13, 2020, titled “Accuray Reports Fourth Quarter and Fiscal 2020 Financial Results”
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	ACCURAY INCORPORATED
Dated: August 13, 2020	By:	/s/ Shig Hamamatsu
		Shig Hamamatsu
		Senior Vice President & Chief Financial Officer

 

3

Exhibit 99.1

 

 

 

 

Accuray Reports Fourth Quarter and Fiscal 2020 Financial Results

 

SUNNYVALE, Calif., August 13, 2020 — Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the fourth quarter and fiscal year ended June 30, 2020.

 

Q4 Fiscal 2020 and Recent Operating Highlights

 

Fiscal Year 2020 Highlights

 

“Despite the circumstances and the uncertainties associated with the COVID-19 pandemic, we finished fiscal 2020 with a solid performance and grew our gross orders by 10 percent year over year,” said Josh Levine, president and chief executive officer of Accuray. “I am proud of the team's execution during the quarter, especially given the challenging operating environment created by the pandemic. We saw strong operating cash flow generation during the quarter and exited the quarter with $108.6 million of cash and short-term restricted cash as we continue to focus on operating efficiencies and working capital management.  We believe that our operational focus, joint venture strategy in China, and continued investments in our value creating R&D pipeline projects, positions Accuray strongly for the future.”

 

Q4 Fiscal 2020 Financial Highlights

Gross product orders totaled $94.3 million for the fourth quarter of fiscal 2020 compared to $97.2 million for the prior fiscal year fourth quarter. Ending order backlog was $602.7 million, approximately 22 percent higher than at the end of the prior fiscal year.

Total revenue was $95.0 million for the fourth quarter of fiscal 2020 compared to $117.4 million for the prior fiscal year fourth quarter. Product revenue totaled $40.4 million compared to $60.6 million for the prior fiscal year fourth quarter, while service revenue totaled $54.6 million compared to $56.8 million for the prior fiscal year fourth quarter.

Total gross profit for the fourth quarter of fiscal 2020 was $39.9 million or approximately 42.0 percent of sales, comprised of product gross margin of 45.0 percent and service gross margin of 39.8 percent. This compares to total gross profit of $45.9 million or 39.1 percent of sales, comprised of product gross margin of 40.7 percent and service gross margin of 37.4 percent for the prior fiscal year fourth quarter.

Net loss was $0.8 million, or $0.01 per share, for the fourth quarter of fiscal 2020, compared to a net loss of $1.4 million, or $0.02 per share, for the prior fiscal year fourth quarter.

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Adjusted EBITDA for the fourth quarter of fiscal 2020 was $9.3 million, compared to $8.9 million for the prior fiscal year fourth quarter.

Cash, cash equivalents, and short-term restricted cash were $108.6 million as of June 30, 2020, an increase of $17.0 million from March 31, 2020.

Fiscal Year 2020 Highlights

For the fiscal year ended June 30, 2020, gross product orders totaled $377.3 million, representing growth of 10.2 percent compared to the prior fiscal year period.

Total revenue was $382.9 million for the fiscal year ended June 30, 2020 compared to $418.8 million for the prior fiscal year period. Product revenue totaled $167.3 million compared to $196.7 million for the prior fiscal year period, while service revenue totaled $215.6 million compared to $222.1 million for the prior fiscal year period.

Total gross profit for the year ended June 30, 2020 was $149.9 million or 39.1 percent of sales, comprised of product gross margin of 42.7 percent and service gross margin of 36.4 percent. This compares to total gross profit of $162.7 million or 38.8 percent of sales, comprised of product gross margin of 40.7 percent and service gross margin of 37.2 percent for the prior fiscal year period.

Operating expenses were $138.0 million, a decrease of 14.9 percent compared to $162.1 million for the prior fiscal year period.

Net income was $3.2 million, or $0.04 per share, basic, for the fiscal year ended June 30, 2020, compared to a net loss of $16.4 million, or $0.19 per share, basic, for the prior fiscal year period. Net income included a non-cash, special gain of $13.0 million related to the value of the company’s capital contribution to its China joint venture in exchange for the company’s 49% equity interest in the joint venture. This gain was recorded as non-operating, other income in the second quarter of fiscal 2020.

Adjusted EBITDA for the fiscal year ended June 30, 2020 was $26.8 million, compared to $23.7 million for the prior fiscal year period.

Financial Guidance

The impact of the COVID-19 pandemic on Accuray’s fiscal 2021 results remains uncertain. Given the continued evolution of the COVID-19 pandemic and the uncertainty surrounding its impact on the global economy and the healthcare industry, Accuray believes it is prudent to refrain from providing revenue and adjusted EBITDA guidance for fiscal year 2021. The company is carefully monitoring the pandemic and the impact on its business; however, given the uncertainty regarding the pandemic's spread, duration, and impact, the company is currently unable to predict the extent to which the COVID-19 pandemic will impact its future operations and financial results.

 

Conference Call Information

Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss results for the fourth quarter and fiscal 2020 as well as recent corporate developments. Conference call dial-in information is as follows:

Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Investor Relations section of Accuray’s website, www.accuray.com. There will be a slide presentation accompanying today’s event which can also be accessed on the Company’s Investor Relations page at www.accuray.com.

 

In addition, a taped replay of the conference call will be available beginning approximately one hour after the call’s conclusion and available for seven days. The replay telephone number is (877) 344-7529 (USA) or (412) 317-0088 (International), Conference ID:10146316. An archived webcast will also be available at Accuray’s website until Accuray announces its results for the first quarter of fiscal 2021.

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Use of Non-GAAP Financial Measures

 

Accuray has supplemented its GAAP net loss with a non-GAAP measure of adjusted earnings before interest, taxes, depreciation, amortization and stock-based compensation (“adjusted EBITDA”).  The calculation of adjusted EBITDA also excludes certain non-recurring, irregular and one-time items, including the non-cash, special gain related to Accuray’s capital contribution to the China joint venture, an accounts receivable impairment charge, costs associated with reduction of staff and a non-cash reversal of deferred rent related to a lease termination. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the company and facilitates a meaningful comparison of results for current periods with previous operating results.  A reconciliation of GAAP net income (loss) (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedules below.

 

There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.  These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures.  Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

 

About Accuray

 

Accuray Incorporated (Nasdaq: ARAY) develops, manufactures and sells radiotherapy systems that are intended to make cancer treatments shorter, safer, personalized and more effective, ultimately enabling patients to live longer, better lives. Our radiation treatment delivery systems in combination with fully-integrated software solutions set the industry standard for precision and cover the full range of radiation therapy and radiosurgery procedures. For more information, please visit www.accuray.com.

 

Safe Harbor Statement

 

Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements in this press release relate, but are not limited, to the company's future results of operations; expectations regarding the effect of the COVID-19 pandemic on the company and the company’s position after the pandemic; the company’s ability to realize the benefits of its operational focus, joint venture strategy in China, and continued investments in R&D pipeline projects; the company’s ability to capitalize on operating efficiencies and working capital management; expectations regarding future sales in China; expectations regarding our Chinese joint venture, including the timing of revenue recognition and the manufacture and shipment of a joint venture manufactured product; expectations regarding the company’s product portfolio, including with respect to the company’s new Synchrony upgrade; expectations regarding the future of radiotherapy treatment; and the company's leadership position in radiation oncology innovation and technologies.  These forward-looking statements involve risks and uncertainties.  If any of these risk or uncertainties materialize, or if any of the company's assumptions prove incorrect, actual results could differ materially from the results express or implied by these forward-looking statements.  These risks and uncertainties include, but are not limited to, the effect of the COVID-19 pandemic on the operations of the company and those of its customers and suppliers; the company's ability to achieve widespread market acceptance of its products, including new product and software offerings; the company’s ability to develop new products or enhance existing products to meet customers’ needs and compete favorably in the market, the company’s ability to effectively integrate and execute the joint venture, the company’s ability to realize the expected benefits of the joint venture; the ability of customers in China to obtain Class or B user licenses to purchase radiotherapy systems; risks inherent in international operations, the company's ability to effectively manage its growth, the company's ability to maintain or increase its gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; the company's ability to meet the covenants under its credit facilities; the company's ability to convert backlog to revenue; and such other risks identified under the heading "Risk Factors" in the company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on May 8, 2020 and as updated periodically with the company's other filings with the SEC.

 

Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management's good faith belief as of that time with respect to

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future events.  The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.

 

 

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Financial Tables to Follow

 

 

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 Accuray Incorporated

Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

 

 

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Accuray Incorporated

Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

 

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Accuray Incorporated

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

Amortization and Stock-Based Compensation (Adjusted EBITDA)

(in thousands)

(Unaudited)

 

 

 

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

(b) consists of an accounts receivable impairment charge related to one customer in the first quarter of 2019.

(c) consists of costs associated with reduction of staff.

(d) consists of a non-cash reversal of deferred rent related to a facility lease that was terminated.