Accuray CEO Discusses F1Q2011 Results - Earnings Call Transcript
Accuray Inc. (
)
F1Q2011 (09/30/2010) Earnings Call
November 8, 2010 5:00 pm ET
Executives
Tom Rathjen - VP of IR
Euan Thomson - President and CEO
Derek Bertocci - SVP and CFO
Analysts
Mark Arnold - Piper Jaffray
Bob Labick - CJS Securities
Matthew Weiss - Jefferies
Presentation
Operator
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Good evening, ladies and gentlemen, and welcome to the first quarter of fiscal 2011 Accuray Incorporated earnings conference call. (Operator Instructions)
I would now like to turn the conference over to your host for today, Mr. Tom Rathjen, Vice President of Investor Relations.
T
om
Rathjen
Thank you, Keith. Hello and thank you for joining us this afternoon for Accuray's conference call for the first quarter fiscal year 2011. Joining us today are Dr. Euan Thomson, Accuray's President and Chief Executive Officer; and Derek Bertocci, Accuray's Senior Vice President and Chief Financial Officer.
As we have done in the past quarters, we will again be referring to revenue and backlog data, which are found in PDF files on the Investor Relations page of the Accuray website at accuray.com. Please log on to this site to view this information.
Before we begin, I need to remind you that except for the historical information, the information that follows contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, revenue guidance, installations, gross margins, operating expenses, profitability, clinical acceptance, and regulatory approvals. These and other risks are more fully described in the Risk Factors section of our Annual Report on Form 10-K, as updated from time to time by our quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission.
And now, I would like to turn the call over to our President and Chief Executive Officer, Dr. Euan Thomson.
Euan Thomson
Thank you, Tom, and thanks to everyone for joining us on today's conference to review our first quarter of fiscal 2011. I'll start with the recap of the business highlights of the quarter. Then I'll comment on the current sales environment for the CyberKnife, provide brief clinical and reimbursement updates and review our experience from the recent ASTRO convention in San Diego.
During the first quarter, we added seven orders to backlog, increasing total backlog by approximately 2% from the fourth quarter. Nine CyberKnife systems were installed and six were shipped during the quarter, maintaining a positive book to bill ratio, which we believe is a continued indicator of future growth. During the past four quarters, a net of 53 CyberKnife orders have been added to backlog. 38 units have been shipped and 36 units have been installed for customers around the world.
I'll now provide a brief review of the business highlights of the first quarter of our fiscal year 2011. I'll then turn the call over to Derek for a detailed financial review.
During the quarter, Accuray's total revenue was $38.1 million, within the guidance range provided last quarter. Revenue from sources excluding previously deferred platinum revenue was $36.1 million during the first quarter. We recorded a net loss of $4.6 million or $0.08 per share.
Seven CyberKnife systems were added to backlog during the quarter, contributing a total value of $33.8 million. In addition, service and ancillary orders with a value of $16.8 million were also signed. Of the seven orders added to backlog, two are from the Americas and five orders from the European region.
While we added seven orders to backlog in the first quarter ending September 30, four additional orders that were anticipated in Q1 ended up closing during the first two weeks of October. Three of these were from the Americas region and one was from the European region.
The delays experienced related to obtaining and completing the contract documentation necessary to enter an order into backlog rather than customer negotiations. While these orders cannot be included in our Q1 backlog, they indicate that we are maintaining positive sales momentum. These orders will be included in our Q2 and annual total.
We had one cancellation of an order in backlog during Q1. This cancellation was a result of the dissolution of the business partnership purchasing the system. Derek will provide a more detailed analysis of backlog in a few minutes.
During the first quarter, nine CyberKnife systems were installed, of which four were in the Americas region, four in the European region and one in Japan. The worldwide install base as of September 30, 2010, was 216 systems.
As in past years, the first quarter of the fiscal year has typically been our slowest period from an order shipment and revenue perspective. Nonetheless, worldwide interest in the CyberKnife remains strong and we anticipate significantly stronger quarters as the fiscal year progresses.
The Americas sales team reports a steadily improving hospital spending environment with budgets becoming increasingly available. The team reports that sales pipeline continues to expand with growing interest in CyberKnife radiosurgery among leading hospital customers as well as academic centers. We've seen little impact on the radiosurgery business from recent competitive product releases.
The European region remains particularly strong, and our outside of specific impacted areas report no sign of slowing down. Of the five orders coming from the region in the first quarter, three were from academic centers, reflecting the expanding demand for CyberKnife technology among the region's key opinion leaders. Italy's Vicenza Hospital became the first European hospital to be equipped with two CyberKnife systems.
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