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):  January 30, 2008

 


 

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))

 



 

Item 2.02. Results of Operations and Financial Condition.

 

On January 30, 2008, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the quarter ended December 29, 2007.  A copy of the Company’s press release dated January 30, 2008, titled “Accuray Reports Continued Growth in Second Quarter of Fiscal 2008” is attached hereto as Exhibit 99.1.

 

Exhibit 99.1 contains forward-looking statements within the meaning of the federal securities laws. These statements are present expectations, and are subject to the limitations listed therein and in the Company’s other SEC reports, including that actual events or results may differ materially from those in the forward-looking statements.

 

The foregoing information (including the exhibit hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” (including the exhibit hereto) 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.

 

Number

 

Description

99.1

 

Press Release dated January 30, 2008, titled “Accuray Reports Continued Growth in Second Quarter of Fiscal 2008”

 

2



 

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: January 30, 2008

By:

 /s/ Robert E. McNamara

 

 

Robert E. McNamara

 

 

Chief Financial Officer and Senior Vice President

 

3



 

EXHIBIT INDEX

 

Number

 

Description

99.1

 

Press Release dated dated January 30, 2008, titled “Accuray Reports Continued Growth in Second Quarter of Fiscal 2008”

 

4


Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

Contacts:

 

Tom Rathjen
Vice President, Investor Relations
+1 (408) 789-4458
trathjen@accuray.com

 

Stephanie Tomei
Public Relations Manager
+1 (408) 789-4234
stomei@accuray.com

 

Accuray Reports Continued Growth in Second Quarter of Fiscal 2008

Fourth Consecutive Quarter of Record Revenue and Backlog

 

SUNNYVALE, Calif., January 30, 2008– Accuray Incorporated (Nasdaq: ARAY), a global leader in the field of radiosurgery, today announced financial results for the second quarter of fiscal 2008, ended December 29, 2007.

 

For the second quarter of fiscal 2008, Accuray reported total revenue of $52.0 million, a 98 percent increase over second quarter fiscal 2007 total revenue of $26.3 million.

 

Net income for the quarter ended December 29, 2007 was $2.3 million, or $0.04 per diluted share, compared to a loss of $7.3 million, or a loss of $0.45 per share, during the same period last year.  Shares used in computing fully diluted earnings per share were 61.3 million for the second fiscal quarter of 2008.

 

Non-cash, stock-based compensation charges for the second fiscal quarter of 2008 were $4.3 million or $0.07 per diluted share.

 

For the period ended December 29, 2007, backlog increased to approximately $660 million, with approximately $365 million associated with CyberKnife® Robotic Radiosurgery System contracts and approximately $295 million associated with services and other recurring revenue.  Accuray’s backlog is composed of firm, signed contracts that the company believes have a substantially high probability of being recognized as revenue.

 

Accuray’s cash balance at the end of the quarter was $187.5 million.

 

For the six months ended December 29, 2007, total revenue was $100.7 million, a 70 percent improvement over the $59.1 million in total revenue during the same period last year.  Net income for the first half of fiscal 2008 was $4.6 million, or $0.08 per diluted share, compared to a loss of $5.3 million, or a loss of $0.33 per share, for the first half of fiscal 2007.

 

“Accuray continues to experience record-setting growth, with our fourth consecutive quarter of increasing revenue and backlog. This sustained growth is a testament to the impact that the CyberKnife System is having on meeting the demands for extracranial radiosurgery, particularly prostate and lung cancer,” said Euan S.

 

1



 

Thomson, Ph.D., president and CEO of Accuray. “While this was a positive quarter with respect to revenue and backlog growth, we believe that broader credit market issues are having a short-term impact on some of our U.S. customers’ purchase and installation timelines, as obtaining financing has become more difficult. We remain confident in the clinical demand for the CyberKnife and our ability to further build the market for extracranial radiosurgery.”

 

Outlook

 

The following statements are forward-looking and actual results may differ materially. Based upon current economic conditions, specifically the tightening of credit markets in the United States, Accuray is adjusting revenue guidance for fiscal 2008 to be in the range of $210 million to $230 million, which would represent revenue growth of 50 percent to 64 percent over fiscal 2007.

 

Earnings Call Open to Investors

 

Accuray will hold a conference call for financial analysts and investors today, January 30, 2008 at 2:00 p.m. PT / 5:00 p.m. ET.  The conference call dial-in numbers are (866) 288-0541 (USA) or (913) 312-1268 (International), Access Code: 4129411. A live webcast of the call will also be available from the Investor Relations section on the corporate Web site at http://www.accuray.com.  In addition, a recording of the call will be available by calling (888) 203-1112 (USA) or (719) 457-0820 (International), Access Code: 4129411, beginning at 5:00 p.m. PT / 8:00 p.m. ET, January 30, 2008 and will be available through February 14, 2008.  A webcast replay will also be available from the Investor Relations section of the corporate Web site at http://www.accuray.com from approximately 5:00 p.m. PT / 8:00 p.m. ET, today, through Accuray’s release of fiscal third quarter 2008 results, ending on March 29, 2008.

 

About the CyberKnife® Robotic Radiosurgery System

 

The CyberKnife Robotic Radiosurgery System is the world’s only robotic radiosurgery system designed to treat tumors anywhere in the body non-invasively. Using continual image guidance technology and computer controlled robotic mobility, the CyberKnife System automatically tracks, detects and corrects for tumor and patient movement in real-time throughout the treatment. This enables the CyberKnife System to deliver high-dose radiation with pinpoint precision, which minimizes damage to surrounding healthy tissue and eliminates the need for invasive head or body stabilization frames.

 

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About Accuray

 

Accuray Incorporated (Nasdaq: ARAY), based in Sunnyvale, Calif., is a global leader in the field of radiosurgery dedicated to providing an improved quality of life and a non-surgical treatment option for those diagnosed with cancer. Accuray develops and markets the CyberKnife Robotic Radiosurgery System, which extends the benefits of radiosurgery to include extracranial tumors, including those in the spine, lung, prostate, liver and pancreas. To date, the CyberKnife System has been used to treat more than 40,000 patients worldwide and currently more than 125 systems have been installed in leading hospitals in the Americas, Europe and Asia. For more information, please visit www.accuray.com.

 

Safe Harbor Statement

 

The foregoing may contain certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with the medical device industry. Except for the historical information contained herein, the matters set forth in this press release, as to financial guidance including realization of backlog, procedure growth, market acceptance; clinical studies, regulatory review and approval, and commercialization of products are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date the statements are made and are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. You should not put undue reliance on any forward-looking statements. Important factors that could cause actual performance and results to differ materially from the forward-looking statements we make include: market acceptance of products; variability of installation and sales cycle including customer financing and construction delays; competing products, the combination of our products with complementary technology; and other risks detailed from time to time under the heading “Risk Factors” in our report on Form 10-K for the 2007 fiscal year, as updated from time to time by our quarterly reports on Form 10-Q and our other filings with the Securities and Exchange Commission. The Company’s actual results of operations may differ significantly from those contemplated by such forward-looking statements as a result of these and other factors. We assume no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws.

 

# # #

 

3



 

Accuray Incorporated
Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

 

 

Three months ended

 

Six months ended

 

 

 

December 29,
2007

 

December 30,
2006

 

December 29,
2007

 

December 30,
2006

 

Net revenue:

 

 

 

 

 

 

 

 

 

Products

 

$

39,131

 

$

19,309

 

$

76,115

 

$

46,076

 

Shared ownership programs

 

3,044

 

2,585

 

5,356

 

4,811

 

Services

 

8,950

 

3,661

 

15,949

 

6,630

 

Other

 

913

 

792

 

3,264

 

1,601

 

Total net revenue

 

52,038

 

26,347

 

100,684

 

59,118

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Costs of products

 

16,481

 

7,363

 

32,921

 

18,080

 

Costs of shared ownership programs

 

760

 

696

 

1,472

 

1,302

 

Costs of services

 

6,391

 

2,960

 

10,849

 

4,629

 

Costs of other

 

544

 

626

 

1,669

 

1,102

 

Total cost of revenue

 

24,176

 

11,645

 

46,911

 

25,113

 

Gross profit

 

27,862

 

14,702

 

53,773

 

34,005

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling and marketing

 

11,167

 

9,764

 

21,323

 

17,294

 

Research and development

 

8,128

 

6,132

 

15,843

 

12,314

 

General and administrative

 

7,976

 

6,136

 

15,877

 

10,755

 

Total operating expenses

 

27,271

 

22,032

 

53,043

 

40,363

 

Income (loss) from operations

 

591

 

(7,330

)

730

 

(6,358

)

Interest and other income, net

 

2,197

 

103

 

4,809

 

310

 

Income (loss) before provision for income taxes and cumulative effect of change in accounting principle

 

2,788

 

(7,227

)

5,539

 

(6,048

)

Provision for income taxes

 

445

 

64

 

931

 

123

 

Income (loss) before cumulative effect of change in accounting principle

 

2,343

 

(7,291

)

4,608

 

(6,171

)

Cumulative effect of change in accounting principle, net of tax of $0

 

 

 

 

838

 

 

Net income (loss)

 

$

2,343

 

$

(7,291

)

$

4,608

 

$

(5,333

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share, basic and diluted:

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

Income (loss) before cumulative effect of change in accounting principle

 

$

0.04

 

$

(0.45

)

$

0.08

 

$

(0.38

)

Cumulative effect of change in accounting principle

 

 

 

 

0.05

 

Basic net income (loss) per share

 

$

0.04

 

$

(0.45

)

$

0.08

 

$

(0.33

)

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

Income (loss) before cumulative effect of change in accounting principle

 

$

0.04

 

$

(0.45

)

$

0.08

 

$

(0.38

)

Cumulative effect of change in accounting principle

 

 

 

 

0.05

 

Diluted net income (loss) per share

 

$

0.04

 

$

(0.45

)

$

0.08

 

$

(0.33

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

54,737

 

16,209

 

54,380

 

16,234

 

Diluted

 

61,293

 

16,209

 

61,257

 

16,234

 

Cost of revenue, selling and marketing, research and development, and general and administrative expenses include stock-based compensation charges as follows:

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

530

 

$

232

 

$

851

 

$

450

 

Selling and marketing

 

$

1,039

 

$

1,007

 

$

2,146

 

$

1,656

 

Research and development

 

$

803

 

$

471

 

$

1,478

 

$

920

 

General and administrative

 

$

1,911

 

$

1,164

 

$

4,112

 

$

2,062

 

 

4



 

Accuray Incorporated
Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

 

 

 

December 29,

 

June 30,

 

 

 

2007

 

2007

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

187,482

 

$

204,830

 

Accounts receivable

 

15,158

 

10,105

 

Inventories

 

15,432

 

16,984

 

Prepaid expenses and other current assets

 

6,798

 

7,937

 

Deferred cost of revenue—current

 

28,767

 

30,709

 

Total current assets

 

253,637

 

270,565

 

Property and equipment, net

 

28,117

 

23,937

 

Goodwill

 

4,495

 

4,495

 

Intangible assets, net

 

1,055

 

1,184

 

Deferred cost of revenue—noncurrent

 

21,939

 

30,522

 

Other assets

 

1,249

 

1,406

 

Total assets

 

$

310,492

 

$

332,109

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

9,050

 

$

14,147

 

Accrued expenses

 

13,182

 

17,240

 

Customer advances—current

 

20,712

 

12,634

 

Deferred revenue—current

 

77,003

 

78,022

 

Total current liabilities

 

119,947

 

122,043

 

Long-term liabilities:

 

 

 

 

 

Customer advances—noncurrent

 

2,850

 

8,388

 

Deferred revenue—noncurrent

 

47,332

 

76,235

 

Total liabilities

 

170,129

 

206,666

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Preferred stock, $0.001 par value; authorized: 5,000,000 shares at December 29, 2007 and June 30, 2007; no shares issued and outstanding.

 

 

 

Common stock, $0.001 par value; authorized: 100,000,000 shares at December 29, 2007 and June 30, 2007; issued and outstanding: 55,267,398 and 55,045,347 shares, respectively, at December 29, 2007 and 53,798,643 and 53,798,643 shares, respectively, at June 30, 2007.

 

55

 

53

 

Additional paid-in capital

 

262,240

 

251,637

 

Accumulated other comprehensive income (loss)

 

(31

)

10

 

Accumulated deficit

 

(121,901

)

(126,257

)

Total stockholders’ equity

 

140,363

 

125,443

 

Total liabilities and stockholders’ equity

 

$

310,492

 

$

332,109

 

 

5