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One Year After TomoTherapy Acquisition, Accuray On Track To Meet Or Exceed Integration Success Metrics And Expecting Near-term Return To Profitability

Stocks in this article: ARAY





SUNNYVALE, Calif., June 21, 2012 /PRNewswire/ --  Accuray Incorporated (Nasdaq: ARAY), the premier radiation oncology company, announced today the company's successes since its acquisition of TomoTherapy Incorporated one year ago and its vision for growth and profitability in the future, as part of a presentation by the company's chief financial officer Derek Bertocci at the Wells Fargo Healthcare Conference in Boston.

As part of Accuray's transformative acquisition of TomoTherapy Incorporated on June 10, 2011, the company set forth success metrics. Through the first three quarters of FY2012, Accuray has consistently met or exceeded these goals.

In addition to reiterating the company's plans to return to profitability by the end of fiscal year 2013, which ends June 30, 2013, Accuray provided additional milestones for its fiscal year 2013. These included enhanced revenue growth, beyond the maintained or modestly increased revenue the company committed to for fiscal 2012. Specific guidance for fiscal year 2013 will be announced during Accuray's earnings call for the results for 4th quarter of fiscal 2012, but the company intends to focus on maximizing product sales through continued product innovation and market penetration. 

Accuray also anticipates further service gross margin improvements reaching 20-22 percent for the full fiscal year 2013, which is higher than originally announced. This continues the significant achievement of three consecutive quarters of strong service gross margin improvements during fiscal 2012, climbing to 16.1 percent in Q3 of fiscal 2012, surpassing the company's original goal of 10 percent by the end of fiscal 2012. Service gross margin improvements stemmed primarily from improvement in the reliability of TomoTherapy® Systems, which has enhanced customer confidence and helped drive system sales.

"At the one year anniversary of Accuray's acquisition of TomoTherapy Incorporated, we look back with pride on what we've accomplished to date, but most importantly reaffirm our commitment not only to achieving, but surpassing, our integration and growth goals," said Derek Bertocci, senior vice president, chief financial officer of Accuray. "We are realizing the strategic benefits we outlined when we announced the acquisition of TomoTherapy Incorporated through installed base expansion, revenue growth and improvement of service gross margins. The dramatic progress we've made means a lot of forward momentum as we start into our next fiscal year and work to return to profitability."

Customers continue to recognize the value of Accuray's technologies – the CyberKnife® and TomoTherapy Systems – which are not only well differentiated but also best-in-class at delivering stereotactic radiosurgery/stereotactic body radiation therapy and image guided-intensity modulated radiation therapy. While cross selling multiple products to customers and the associated revenue synergies remain a significant future benefit of the acquisition, the majority of Accuray's growth continues to come from taking market share from its competitors, with 90 percent of the company's more than 600 units installed in rooms previously occupied by competitive products or newly constructed vaults. Therefore, unlike its competitors, the majority of installations for Accuray are to new customers that grow the company's market position and fuel the growth of its installed base, and in turn grow the company's service business.

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