Late yesterday afternoon, radiation oncology company Accuray Inc. (ARAY:NASDAQ), which develops, manufactures and markets radiotherapy systems used in cancer treatments, announced financial results for the second quarter of fiscal year 2020 ended December 31, 2019.
The company reported that gross orders totaled $98.6 million in Q2/20 including 11 orders from China, compared to $100.2 million in Q2/19. The firm indicated that its backlog grew by 12% as of December 31, 2019, to $539.4 million, compared to $482.2 million as of December 31, 20018.
Though gross orders declined, the company advised that net orders in Q2/20 increased by 30% year-over-year to $89.9 million. During the same period, operating expenses decreased by 13% to $34.3 million, compared to $39.2 million in Q2/19.
The firm indicated net income of $10.7 million, or $0.12 per share in Q2/20, compared to a net loss of $4.6 million, or ($0.05) per share for Q2/19. The company stated, "Net income included a non-cash, special gain of $13.0 million related to the value of its capital contribution to the China joint venture in exchange for the company's 49% equity interest in the joint venture."
Joshua H. Levine, president and CEO of Accuray, commented, "Financial and operational results for our second fiscal quarter and for the first half of fiscal year 2020 were solid...Gross orders for the second quarter exceeded our internal expectations heading into the quarter, including a solid order contribution from China. We expect revenue growth to improve in the second half of fiscal 2020 as we believe revenue recognition of China Type A systems will start in our fourth fiscal quarter. In addition, we have confirmed that the tariff exemption for medical linear accelerators is applicable to all of our systems. We believe that this exemption will support our commercial momentum and expand access to our innovative radiation therapy solutions for hospitals and patients in China. In light of recent events with the coronavirus outbreak in China, we do not believe that the outbreak affects the longer-term demand outlook for radiotherapy equipment in China. China remains the world's fastest growing market for radiation oncology systems where we have a highly differentiated strategy to drive significant revenue growth in the coming years."
The company reaffirmed its FY/20 revenue guidance and updated its adjusted FY/20 EBITDA guidance. Total revenue for FY/20 is expected to range between $410 and $420 million, and EBITDA for FY/20 is now expected to range between $21 and $26 million, up from the previously estimated range of $19-24 million.
Accuray, headquartered in Sunnyvale, Calif., is a developer, manufacturer and seller of personalized radiotherapy systems that says it makes cancer treatments more effective, shorter and safer. The company's radiation treatment delivery systems work in conjunction with fully integrated software solutions and cover the full range of radiation therapy and radiosurgery procedures. The firm's products include the CyberKnife precision robotic systems, the TomoTherapy radiation therapy systems and the Radixact delivery treatment platform.
Accuray has a market capitalization of around $335 million with approximately 89 million outstanding shares. ARAY shares opened higher today at $4.40 (+$0.63, +16.71%) over yesterday's $3.77 closing price. The stock has traded today between $4.26 and $4.68 per share and is currently trading at $4.30 (+$0.53, +14.06%).
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