Accuray(US:ARAY)2024-11-06 21:20Financial Performance - Total net revenue for the three months ended September 30, 2024, was $101,545,000, a decrease of 2.3% from $103,892,000 in the same period of 2023[5] - Product revenue decreased to $48,369,000, down 9.3% from $53,350,000 year-over-year, while service revenue increased to $53,176,000, up 5.1% from $50,542,000[5] - Gross profit for the quarter was $34,469,000, representing a gross margin of approximately 33.9%, down from $39,493,000 in the prior year[5] - The net loss for the quarter was $3,954,000, compared to a net loss of $2,969,000 in the same quarter of the previous year[5] - Cash used in operating activities was $7,294 million for the three months ended September 30, 2024, an improvement from $8,591 million in the prior year[9] - The company reported a net deferred gross profit on sales to the joint venture of $3,619 million, up from $1,576 million in the previous year[9] - The company recognized revenue of $27.5 million during the three months ended September 30, 2024, compared to $30.0 million for the same period in 2023, reflecting a decrease of 8.3%[26] - The company reported a net loss of $3.954 million for the three months ended September 30, 2024, compared to a net loss of $2.969 million for the same period in 2023[74] - Basic and diluted net loss per share for the three months ended September 30, 2024, was $(0.04), compared to $(0.03) for the same period in 2023[74] Cash and Liquidity - Cash and cash equivalents decreased to $59,209,000 from $68,570,000 as of June 30, 2024[4] - Cash and cash equivalents at the end of the period were $61,132 million, down from $78,691 million at the end of the previous year[9] - Cash and cash equivalents stood at $59.2 million as of September 30, 2024, with expectations of sufficient resources to fund operations for at least the next 12 months[125] - The company anticipates that its current cash and cash equivalents will be sufficient to meet anticipated cash needs for at least the next 12 months[135] Assets and Liabilities - Total assets increased to $473,078,000 from $468,627,000 as of June 30, 2024[4] - Total liabilities rose to $427,855,000, up from $423,543,000 in the previous quarter[4] - The total debt as of September 30, 2024, was $170.240 million, a decrease from $172.156 million as of June 30, 2024[66] - Total consolidated liabilities as of September 30, 2024, amounted to $427.9 million, including long-term liabilities of $100.0 million from Convertible Senior Notes[187] Revenue Recognition and Orders - The company anticipates that reduced budgets for radiotherapy equipment will continue to negatively impact net revenue through fiscal year 2026[17] - Gross orders decreased by $8.4 million to $55.365 million in Q3 2024, primarily due to a $9.2 million decrease in CyberKnife System orders[106] - The book-to-bill ratio was 1.1 in Q3 2024, down from 1.2 in Q3 2023, indicating a decline in demand for products[110] - Orders and backlog are reported quarterly and annually, but they are not reliable predictors of future revenues due to potential cancellations and delays[196] Operating Expenses - Total operating expenses decreased to $36,618,000, down from $37,280,000, with research and development expenses at $12,116,000, a reduction from $14,013,000[5] - Operating expenses totaled $36.618 million in Q3 2024, a slight decrease of 2% from $37.280 million in Q3 2023[118] Foreign Currency and Exchange - The company reported a foreign currency translation adjustment of $1,740,000 for the quarter[6] - The company recorded a foreign currency exchange gain of $2.17 million for the three months ended September 30, 2024, compared to a loss of $956,000 in the same period of 2023[44] - The foreign currency exchange gain on forward contracts for the three months ended September 30, 2024, was $1,436,000, compared to a loss of $818,000 for the same period in 2023[53] Market and Competitive Environment - The company faces risks related to the global economic environment, which could adversely affect its financial condition and results of operations[164] - The company is subject to intense competition and rapid technological change, which may impact its product relevance and operating results[164] - The company competes with established radiation therapy systems from larger companies like Varian Medical Systems and Elekta, which have greater market share and resources[199] - The company must demonstrate the advantages of its products over traditional and alternative cancer treatment methods to maintain market relevance[198] Future Outlook and Challenges - The company expects ongoing supply chain challenges and inflation to adversely impact gross margins and net income through fiscal year 2025[17] - The company expects gross margins and net income to continue to be adversely affected by increased material costs and freight expenses in fiscal year 2025[137] - Delays in customer financing and construction have negatively impacted net revenue since fiscal year 2024, with expectations for continued impact through fiscal year 2026[175] - The company faces potential delays in operations due to supply chain issues, regulatory requirements, and unexpected manufacturing difficulties, which can significantly impact quarterly operating results[195] Internal Controls and Compliance - As of June 30, 2024, the company identified two material weaknesses in its internal control over financial reporting[153] - The implementation of the SAP S/4HANA ERP system on August 1, 2023, contributed to these material weaknesses[154] - The company has ongoing remediation measures overseen by the Audit Committee to address identified weaknesses[160] - Management concluded that the consolidated financial statements fairly present the company's financial position despite the identified weaknesses[157]