TomoTherapy Incorporated (TOMO)
Q1 2010 Earnings Call Transcript
April 27, 2010 5:00 pm ET
Tom Powell – CFO and Treasurer
Fred Robertson – President and CEO
Ben Andrew – William Blair & Company
Jeff Johnson – Robert W. Baird
Josh Jennings – Jefferies & Company
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Good day, ladies and gentlemen, and welcome to the first quarter 2010 TomoTherapy Incorporated earnings conference call. My name is Dominique and I will be your operator for today. (Operator instructions)
I would now like to turn the conference over to Tom Powell, Chief Financial Officer. Please proceed, sir.
Thank you and good afternoon. Joining me on today's call is Fred Robertson, TomoTherapy's President and CEO. Before we begin, I'd like to preface our remarks with a customary Safe Harbor statement.
Today's conference call contains certain forward-looking statements. These statements are based on the current estimates and assumptions of TomoTherapy's management, and are subject to uncertainty, risks, and changes in circumstances. Given these uncertainties and risks, you should not place undue reliance on these forward-looking statements. Actual results may vary from the expectations contained in today's call, and those differences may be material.
Important factors that could cause such differences include, among others, those described under the heading, "Risk Factors" in our most recent 10-K and 10-Q filings.
I would now like to turn the call over to Fred for an overview of the quarter and some key highlights. Then, I'll review our first quarter performance in more detail before turning it back over to Fred for a review of our outlook for the balance of 2010. Fred?
Thank you, Tom, and good afternoon, everyone. For the first quarter of 2010, we reported revenue of $42.1 million, a 37% increase compared to the first quarter of 2009, and a net loss attributable to shareholders of $4.7 million or $0.09 per share. We also maintained a strong financial position, ending the quarter with $148.7 million in cash and investments.
Our revenue backlog at March 31 was $134.2 million, which includes $32.1 million in new equipment orders. Combined with one order removal from backlog due to a cancellation, our backlog decreased a slight 1% from $135.8 million backlog as of December 31, 2009. While the first-quarter results are in line with our expectations and reflect a modest improvement versus the same period last year, we recognize that we still have significant work ahead of us.
With the goal of improving our overall performance and driving towards profitability, we have been and continue to focus on six key areas. First, maintaining a strong capital position. Second, diversifying our product offering. Third, retaining customer service leadership. Fourth, continuing global expansion. Fifth, reducing supplier risk. And sixth, continuing technology innovations.
First, as I mentioned, I am pleased to say that we have successfully maintained a strong capital position. Given the continued volatility in the economic environment, we sought to manage our cash resources. To that end we have carefully monitored our expenditures with tight cost control throughout the organization. Of course, we understand the importance of investing for the future, but are doing so as a carefully targeted approach.
Second, with respect to product development we have taken key steps to diversify our lineup, and believe that we have very strong offering with our core Hi-Art platform, plus TomoDirect, TomoHD, and TomoMobile. During the first quarter, market demand for TomoDirect remained strong with more than 30% of this year's orders, including the TomoDirect software.
Clinical sites have been using TomoDirect to effectively treat a variety of less complex cases such as tangential breast cancer treatments, and our customers are really beginning to see the benefits of TomoDirect simplicity and speed. As we receive feedback from TomoDirect, we are continuing to refine this product to even further enhance usability.
As you will recall, TomoHD is our premium product combining the best features of our helical and direct treatments. Early indicators of interest are strong for TomoHD and we remain on track to deliver this product in the second half of 2010.
Finally TomoMobile, our relocatable radiation therapy option continues to garner strong interest. We are confident that our growing suite of advanced radiotherapy solutions addresses the needs of the market, and importantly advances cancer care for patients.
On the commercial side, in addition to the product development initiatives, we are also continuing to strengthen our sales and marketing effort. Specifically, we added several resources to both our US and European sales teams in order to take advantage of the gradual improvement in the economic environment in the first quarter. It is important to note that while we have taken key steps to broaden our product line, and effectively get that product to market, we are also steadfast in our commitment to customer service, and this is another of our areas of focus.
Our system uptime remained high in the quarter at 98%, and based on MD Buyline’s first quarter rankings, our reliability continues to improve and we received high marks for customer satisfaction. We have also made good progress in our efforts to drive strategic global expansion. Our agreement with Hitachi in Japan is yielding positive results because we have seen good order flow from that important market.
We are also pleased to have entered the Australian market with a recent order from Royal Brisbane & Women's Hospital. We believe that there is substantial untapped market potential, and we continue to explore attractive, new international opportunities including in Latin America.