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Accuray touts new orders, updated Siemens agreement

by Brendon Nafziger, DOTmed News Associate Editor | February 10, 2012
Siemens and Accuray's two-year-old strategic alliance has been updated, and Siemens can now sell Accuray's CT-guided TomoTherapy equipment, DOTmed News has learned.

Accuray also saw its orders go up over the past quarter, the company revealed in an earnings announcement released after trading Wednesday, even as it recorded a nearly $10 million loss.

Still, the Sunnyvale, Calif.-based company managed to turn around service margins and achieve positive cash flow, and says it "remains on track" to a return to profitability. The company also sketched its vision of what the business would look like once it reaches the milestone of 1,000 installed units from its two divisions.

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Updated agreement

Siemens dropped out of the linear accelerator manufacturing business starting this year, but the company struck a deal with Accuray to sell its CyberKnife radiosurgery platform in June 2010. Now, Siemens can sell TomoTherapy equipment, Accuray said. Accuray acquired TomoTherapy last year.

The amendment to the earlier deal was made in January, an Accuray spokeswoman told DOTmed News by e-mail. Accuray said further details weren't available as the deal was so new.

Kelly Londy, Accuray's senior vice president and chief commercial officer, told DOTmed News by phone Thursday the company sees the primary benefits of the alliance in sales outside the U.S. (When contacted by DOTmed News, Siemens said it had no comment at this time.)

Q2 earnings

Accuray had sales of $106.4 million in its second quarter for fiscal 2012, the three-month period ending Dec. 31, compared with sales of $54 million the year before. However, those earlier sales numbers were recorded before Accuray acquired TomoTherapy last summer. Joint sales for both companies in the second quarter for the last fiscal year totaled $116.3 million on a pro forma basis, although in a release Accuray credited that to TomoTherapy's "historically high" quarter revenue due to "calendar year-end shipment and installation activity."

Accuray also posted a loss of $10.4 million, or 15 cents a share, for the second quarter, compared with $4 million profit, or 7 cents a share, in the same period last year. (On a pro forma basis, net losses for both Accuray and TomoTherapy totaled $1.9 million, Accuray said.)

Nonetheless, Accuray also recorded a 2.2 percent increase in orders over the same period last year, with about $70.3 million added to a total backlog of $276.8 million. The company also said it achieved positive cash flow and improved service margins (now standing at consolidated GAAP of 21.2 percent and non-GAAP of 12.3 percent), and is ahead of its plan to reach at least 10 percent service margins by the last quarter of this fiscal year.

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