TomoTherapy Reports First Quarter Financial Results
Earnings Call to be Held at 8:30 a.m. EDT on Wednesday, May 13, 2009
Madison, Wis. – May 12, 2009 – TomoTherapy Incorporated (NASDAQ: TOMO), producer of the Hi·Art® treatment system for advanced radiation therapy, today released financial results for the fourth quarter ended March 31, 2009.
First Quarter Results
First quarter 2009 revenue was $30.6 million, a decrease of 21% from $38.9 million in the first quarter of 2008. The company reported a first quarter 2009 operating loss of $14.0 million, a 17% increase from a $12.0 million operating loss for the same period last year. The company incurred a net loss attributable to shareholders of $13.0 million, or $0.26 per share, for the first quarter of 2009, compared to a net loss attributable to shareholders of $6.2 million, or $0.12 per share, for the first quarter of 2008. In the fourth quarter of 2008, the company recorded a valuation allowance against its deferred tax assets; therefore, the 2009 results do not include any federal income tax benefit.
The company continues to maintain a strong financial position, closing the first quarter of 2009 with $158 million of cash, cash equivalents and short-term investments.
As of March 31, 2009, TomoTherapy had a revenue backlog of $157 million, an 11% decrease from its $176 million backlog as of December 31, 2008. Backlog only includes firm orders that have installation sites identified and that the company believes are likely to ship within the next two years. The company added $4 million of equipment orders during the first quarter of 2009, but its backlog does not include any revenue from service contracts, which due to the growing installed base, represents a growing portion of the company’s overall revenue.
The value of new sales orders received during the fourth quarter of 2008 was $37 million. As of December 31, 2008, TomoTherapy had a revenue backlog of $176 million, a 29% decrease from the $248 million backlog as of December 31, 2007. However, the two figures are not comparable, because the company modified its backlog definition during the second quarter of 2008. Backlog now only includes firm orders that have installation sites identified and that the company believes are likely to ship within the next two years. Backlog does not include any revenue from service contracts, which represent a growing portion of the company’s revenue.
“Our first quarter financial results were in line with our internal expectations,” said Fred Robertson, TomoTherapy’s CEO. “Despite a continued weak sales environment resulting primarily from tighter capital spending in the U.S. hospital sector, the company increased its cash position in the quarter and maintains a strong balance sheet. Given the current economic environment, we have closely managed costs, with operating expenses down 18% from the first quarter of last year. Importantly, we continue to report improved performance in our service organization. The average cost per service contract declined 11% from the same quarter a year ago, and we reported strong uptime of 97.8% across our installed base during the first quarter of 2009.”
Robertson added, “New orders continue to be impacted by concerns about the economy, especially in the U.S. While we are intently focused on initiatives to drive orders, it is a challenging environment, and we continue to see customers delay their purchasing decisions. Despite the near-term challenges, we remain confident in TomoTherapy’s technology and its future potential. We firmly believe that ours is the most advanced and effective system to deliver high-quality cancer care.”
Outlook
Management is lowering its 2009 revenue guidance to $170 million to $190 million from the previously announced $180 million to $210 million. There is no change to the prior earnings guidance – management still expects a 2009 loss in the range of $0.60 to $0.85 per share. The company remains committed to strong cash management and continues to believe that it will be marginally cash flow negative in 2009.
The company’s quarterly revenue is driven by the installation of a relatively small number of units. Thus, if a few customers defer installation of a Hi·Art system for even a short period of time, recognition of a significant amount of revenue may be deferred to a subsequent period. Even though the company has improved its ability to project its conversion of backlog into revenue, it is particularly difficult to predict the effects of certain external factors such as construction delays and credit issues, which can affect the timing of deliveries. Thus, management is not providing specific quarterly guidance. However, management continues to anticipate 30% to 40% of the company’s revenue will be generated in the first half of the year.
Form 10-Q Filing
The company will also file its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009 on or before May 15, 2009. Although the original due date for the Form 10-Q was May 11, 2009, it will be filed within the time frame allowed by Rule 12b-25, which provides that the Form 10-Q may be filed no later than the fifth calendar day following the original due date.
Investor Conference Call
TomoTherapy will conduct a conference call regarding its first quarter 2009 results at 8:30 a.m. EDT tomorrow, May 13, 2009 (7:30 a.m. CDT). To hear a live Webcast or replay of the call, visit the Investor Relations page at TomoTherapy.com, where it will be archived for two weeks. To access the call via telephone, dial 1-866-578-5788 from inside the United States or 1-617-213-8057 from outside the United States, and enter passcode 24871094. The replay can be accessed by dialing 1-888-286-8010 from inside the United States or 1-617-801-6888 from outside the United States and entering passcode 82822912. The telephone replay will be available through 10:59 p.m. CDT on Saturday, May 16, 2009.
| TOMOTHERAPY INCORPORATED AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| (In thousands, except per share amounts) | |||||
| Three months ended March 31, | |||||
| 2009 | 2008 | ||||
| (unaudited) | |||||
| Revenue | $ 30,623 | $ 38,900 | |||
| Cost of revenue | 28,084 | 30,682 | |||
| Gross profit | 2,539 | 8,218 | |||
| Operating expenses: | |||||
| Research and development | 5,849 | 9,525 | |||
| Selling, general and administrative | 10,652 | 10,668 | |||
| Total operating expenses | 16,501 | 20,193 | |||
| Loss from operations | (13,962 | ) | (11,975 | ) | |
| Other income (expense): | |||||
| Interest income | 697 | 1,774 | |||
| Interest expense | (14 | ) | (11 | ) | |
| Other expense, net | (256 | ) | (74 | ) | |
| Total other income | 427 | 1,689 | |||
| Loss before income tax and noncontrolling interests | (13,535 | ) | (10,286 | ) | |
| Income tax benefit | (100 | ) | (4,114 | ) | |
| Net loss | (13,435 | ) | (6,172 | ) | |
| Noncontrolling interests | 436 | - | |||
| Net loss attributable to shareholders | (12,999 | ) | (6,172 | ) | |
| Loss per common share - basic and diluted | $ (0.26 | ) | $ (0.12 | ) | |
| TOMOTHERAPY INCORPORATED AND SUBSIDIARIES | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| (In thousands) | |||
| March 31, | December 31, | ||
| 2009 | 2008 | ||
| (unaudited) | |||
| ASSETS | |||
| Cash and equivalents | $ 66,629 | $ 65,967 | |
| Short-term investments | 91,055 | 88,825 | |
| Receivables, net | 32,599 | 41,259 | |
| Inventories, net | 64,558 | 63,983 | |
| Deferred tax assets | - | 496 | |
| Prepaid expenses and other current assets | 2,557 | 1,890 | |
| Total current assets | 257,398 | 262,420 | |
| Property and equipment, net | 21,894 | 22,157 | |
| Other non-current assets, net | 11,023 | 11,851 | |
| TOTAL ASSETS | $ 290,315 | $ 296,428 | |
| LIABILITIES AND EQUITY | |||
| Accounts payable | $ 11,060 | $ 7,804 | |
| Accrued expenses | 16,129 | 18,324 | |
| Accrued warranty | 5,833 | 7,431 | |
| Deferred revenue | 30,110 | 28,139 | |
| Customer deposits | 14,742 | 15,494 | |
| Total current liabilities | 77,874 | 77,192 | |
| Other non-current liabilities | 2,699 | 3,487 | |
| TOTAL LIABILITIES | 80,573 | 80,679 | |
| Total shareholders' equity | 201,659 | 213,594 | |
| Noncontrolling interests | 8,083 | 2,155 | |
| TOTAL EQUITY | 209,742 | 215,749 | |
| TOTAL LIABILITIES AND EQUITY | $ 290,315 | $ 296,428 | |
About TomoTherapy Incorporated
TomoTherapy Incorporated develops, markets and sells advanced radiation therapy solutions that can be used to treat a wide variety of cancers, from the most common to the most complex. The ring gantry-based TomoTherapy® platform combines integrated CT imaging with conformal radiation therapy to deliver sophisticated radiation treatments with speed and precision while reducing radiation exposure to surrounding healthy tissue. TomoTherapy’s suite of solutions include its flagship Hi·Art® treatment system, which has been used to deliver more than three million CT-guided, helical intensity-modulated radiation therapy (IMRT) treatment fractions; the TomoHD™ treatment system, designed to enable cancer centers to treat a broader patient population with a single device; and the TomoMobile™ relocatable radiation therapy solution, designed to improve access and availability of state-of-the-art cancer care. TomoTherapy’s stock is traded on the NASDAQ Global Select Market under the symbol TOMO. To learn more about TomoTherapy, please visit TomoTherapy.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning market acceptance of the company’s technology; growth drivers; the company’s orders, revenue, backlog or earnings growth; future financial results and any statements using the terms “should,” “believe,” “outlook,” “expect,” “anticipate” or similar statements are forward-looking statements that involve risks and uncertainties that could cause the company’s actual results to differ materially from those anticipated. Such risks and uncertainties include: demand for the company’s products; impact of sales cycles and competitive products and pricing; the effect of economic conditions and currency exchange rates; the company’s ability to develop and commercialize new products; its reliance on sole or limited-source suppliers; its ability to increase gross margins; the company’s ability to meet U.S. Food and Drug Administration (FDA) and other regulatory agency product clearance and compliance requirements; the possibility that material product liability claims could harm future revenue or require the company to pay uninsured claims; the company’s ability to protect intellectual property; the impact of managed care initiatives, other health care reforms and/or third-party reimbursement levels for cancer care; potential loss of key distributors or key personnel; risk of interruptions to its operations due to terrorism, disease or other events beyond the company’s control; and the other risks listed from time to time in the company’s filings with the U.S. Securities and Exchange Commission, which by this reference are incorporated herein. TomoTherapy assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events or otherwise.
12 May 2009
| Investor Contact: Thomas E. Powell Chief Financial Officer 608.824.2800 tpowell@tomotherapy.com |
Media Contact: Kevin O’Malley Manager Corporate Communications 608.824.2800 komalley@tomotherapy.com |
