SUNNYVALE, Calif., Nov. 4, 2015 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) announced today that the International Chamber of Commerce International Court of Arbitration (ICC) issued an interim award in an arbitration filed by Cowealth Medical Holding Co., Ltd., Accuray's former distributor, alleging wrongful termination by Accuray of the parties' agreement to distribute the CyberKnife® System in China. Cowealth had originally sought damages of approximately $170 million from Accuray as well as injunctive relief. The ICC verdict awarded Cowealth damages of approximately $3.4 million, while denying Cowealth's claim for injunctive relief.
Accuray won three of its counterclaims, which are critical to its business operations in China, including the right to be assigned the existing service contracts between Cowealth and Accuray customers. In addition, Cowealth must transfer to Accuray any regulatory clearances, licenses or permits obtained and held for the purposes of selling the CyberKnife System in China and deliver any consigned parts in their possession.
The remaining issue to be finalized in the arbitration relates to the payment of attorneys' fees. Under the terms of the ICC Rules of Arbitration all awards are binding and cannot be appealed by either party.
In accordance with generally accepted accounting principles (GAAP) Accuray will record an additional $3.4 million of operating expenses in the first quarter of 2016. This expense will be incremental to the Company's financial results for the first quarter of 2016 as announced on October 29, 2015 and will be reflected in the financial statements included in the Company's quarterly report on Form 10-Q for the first quarter of 2016, to be filed no later than November 6, 2015. Accuray is not adjusting its previously issued guidance for fiscal 2016.
"As described in our most recent Form 10-K, we expected a ruling between October 2015 and February 2016. With the interim award issued, we are excited about our commercial opportunities in China and the potential to provide patients with access to precise, clinically proven, leading-edge radiation therapy," said Joshua H. Levine, president and chief executive officer of Accuray.
About Accuray
Accuray Incorporated (Nasdaq: ARAY) is a radiation oncology company that develops, manufactures and sells precise, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The company's leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments. 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, including management's expectations for fiscal 2016, Accuray's commercial opportunities and ability to operate in China. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: Accuray's selling presence in China, new order growth, market success and other risks detailed from time to time under the heading "Risk Factors" in the company's report on Form 10-K, which was filed on August 28, 2015 and as updated periodically with the company's other filings with the SEC.
Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management's good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.
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SOURCE Accuray Incorporated
Media: Beth Kaplan, Accuray, +1 (408) 789-4426, bkaplan@accuray.com or Investors: Doug Sherk, Investor Relations, EVC Group, +1 (415) 652-9100, dsherk@evcgroup.com
