Accuray net income, work force shrink in Q2

Accuray reported an uptick in sales but a decrease in income for its fiscal 2009 second quarter, which ended Dec. 27, 2008.

For the second quarter, the company booked total revenue of $57.6 million, a 10.8 percent increase over the 2008 fiscal second quarter evenue of $52 million, and a 3.2 percent sequential increase over the first quarter of fiscal 2009.

Accuray reported a net income for the second quarter of $1.4 million, compared with net income of $2.3 million during the same period last year. The firm said this was due to a market fair-value charge of $860,000, in connection with a settlement agreement entered into with the distributor of the auction rate securities that guarantees repayment of the securities at par value beginning in June 2010.

Net loss for the first half of fiscal 2009 was $1.8 million, compared with net income of $4.6 million for the first half of fiscal 2008, driven by non- recurring costs associated with employee separation expenses and inventory write downs incurred during the first quarter of fiscal 2009, the company said.

In a cost-cutting measure, Accuray reported it has eliminated approximately 60 positions, or approximately 13 percent of its U.S. work force, with most of the affected jobs located at its Sunnyvale, Calif.-based headquarters. The company estimated that future savings in employment-related expenses will be approximately $8.7 million per year.

Due to severance pay and the timing of employment terminations, limited savings will begin in the fourth fiscal quarter of 2009; with the full benefit starting in the first quarter of fiscal 2010.

Total backlog at the end of the second fiscal quarter of 2009 was $598 million, with approximately $311 million associated with CyberKnife Robotic Radiosurgery System contracts and approximately $287 million associated with services and other recurring revenue. Contingent contracts made up $146 million of backlog.

Accuray's cash and investment balances at the end of the second quarter of 2009 totaled $154.7 million, which includes cash and cash equivalents of $29.4 million, restricted cash of $600,000, short-term investments of $80.2 million and long-term investments of $44.5 million. At the end of the second quarter of 2009, the company had zero debt.

Accuray expects total revenues for fiscal 2009 to be in the range of $230 million to $250 million, according to Euan S. Thomson, PhD, president and CEO.