Accuray Incorporated · NASDAQ:ARAY
Accuray — Investor Presentation (January 2017)
30 slides from Accuray's investor presentation, Jan 10, 2017
Slide 1: Safe Harbor Statement
Safe Harbor Statement Statements in this presentation (including the oral commentary that accompanies it) that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
Slide 2: Accuray At-A-Glance
LTM Gross Orders: $269 million LTM Revenue: $396 million LTM Product Revenue: $189 million LTM Service Revenue: $207 million LTM Adjusted EBITDA(b): $31 million Backlog(c): $407 million; 7% increase YoY Recent Financial Performance(a) Technology Platforms: CyberKnife® and TomoTherapy® Systems Headqu
Slide 3: Accuray Poised for Growth in 2H FY 2017 and Beyond
Accuray Poised for Growth in 2H FY 2017 and Beyond 4 CyberKnife® SBRT growth, Radixact™ and Onrad™ full commercial launch Growth outside the U.S.: Europe, China, Japan Improving financial performance Growing global demand for radiation therapy Customer focus and enhanced commercial execution Strateg
Slide 4: Radiation Therapy: Capacity Gap
Radiation Therapy: Capacity Gap 5 21,800 13,100 *Source: The Lancet Oncology Commission – “Expanding Global Access to Radiotherapy, Volume 16 September 2015 Edition.
Slide 5: Radiation Therapy: Opportunity for Growth
Radiation Therapy: Opportunity for Growth 6 Source: “Expanding global access to radiotherapy,” published in The Lancet Oncology in September 2015 $2T Global Economic Burden in 2010 10% of patients have access to RT in low income countries 50% of cancer patients would benefit from radiation therapy R
Slide 6: Improved Product Portfolio Focused on Fastest Growing RT Markets
Improved Product Portfolio Focused on Fastest Growing RT Markets 7 IG-IMRT CT scanner-based; ring gantry platform Designed for low-dose imaging on a daily basis as a standard part of the workflow Fast MLC delivers thousands of “beamlets” with continuous 360° rotation of the ring gantry IMRT 5-year g
Slide 7: Clinically Differentiating Our Products
Improved Product Portfolio Clinically Differentiating Our Products 8 Five-year multi-institutional prostate cancer study 97% disease-free, very low toxicity, 5-day treatment Phase I study of 5-session treatment of partial breast after lumpectomy no recurrences or distant metastases with minimal toxi
Slide 8: CyberKnife Positioned for SBRT Growth
CyberKnife® Positioned for SBRT Growth Multi-Institutional Prostate SBRT Study - Long-term treatment results 9 Only CyberKnife continually tracks and automatically corrects for movement of the prostate in real-time with sub-millimeter precision 97% of low- and intermediate-risk patients had excellen
Slide 9: Radixact System: Faster, Leading-Edge
High Treatment Precision for Broader Case Mix Treatment of simple and complex cases Adaptive treatment and retreatment planning Unique helical delivery and integrated imaging Radixact™ System: Faster, Leading-Edge 10 Faster, More Efficient, Reliable Delivery Increased reliability and serviceability
Slide 10: Onrad System
Onrad™ System A new TomoTherapy® configuration for the value market segment 11 Goal Meet growing demand in a market segment new to Accuray Our Solution: fast, easy to use; treats extensive range of cases Based upon TomoH™ platform IG-IMRT and 3DCRT system using fixed beam angles Streamlined and prod
Slide 11: Innovation Through Partnerships
Innovation Through Partnerships 12 Accuray - RaySearch Partnership: Developing innovative and user-friendly OIS and treatment planning software solutions for CyberKnife® and TomoTherapy® System customers Leveraging partnerships to bring critical solutions to market faster Accuray - medPhoton Partner
Slide 12: Focus on Customer Satisfaction
Focus on Customer Satisfaction 13 System Performance Factors System uptime meets expectations Reliability System ease of use Value of system upgrades Ease of treatment planning integration Accuray Rated #1 In Overall System Performance Year-Over-Year Comparison Net Promoter Score ServiceTrak™ Radiat
Slide 13: Capitalize on Global Replacement Opportunity
Capitalize on Global Replacement Opportunity 14 Installed base replacement opportunities 75-80% win rate for replacement units ~200 total systems will reach 10 year mark in the next 3 years
Slide 14: Recent Commercial Execution
Hong Kong Sanatorium & Hospital order for 3 Radixact™ Systems Strong mix of CyberKnife® orders >50%(a) of TomoTherapy® / Radixact™ System orders were in single and dual vault settings >80%(a) of CyberKnife M6 System orders included MLC Multiple sites in the US and Europe now equipped and treating pa
Slide 15: Growth Outside the U.S.
Growth Outside the U.S. 16 Europe Largest growth region in FY 2016 gross orders Multi-system orders continue to drive growth- NHS order in Q4 2016, largest in Accuray history Japan Accuray’s largest market share region Radixact launch expected in 2H FY 2017 China Significant unmet radiotherapy gap A
Slide 16: China Market Opportunity
China Market Opportunity 17 Cancer incidence and mortality rates continue to rise, fueled by the aging population, environmental and lifestyle factors China is estimated to need ~5,000 radiation therapy systems in the next decade ~55-65% of the total market opportunity is from the mid-tier Only Type
Slide 17: Improving Financial Performance
Improving Financial Performance 18 aEBITDA FY’13 aEBITDA(b) $ millions Revenue and OpEx Gross Margin $13 $23 $25 $35(c) FY’15 data based on constant currency as compared to FY’14 due to significant currency impact on aEBITDA in FY’15. For reconciliation of aEBITDA please refer to appendices A-D for
Slide 18: Key Financial Metrics
Key Financial Metrics Significant growth in orders and backlog 19 $ millions +30% +28% Gross orders drive backlog Backlog drives revenue $ millions +30% growth FY’16/’13 +28% growth FY’17Q1/FY’13 $219 $263 $268 $284 FY'13 FY'14 FY'15 FY'16 Gross Orders $317 $365 $375 $406 FY'13 FY'14 FY'15 FY'16 Bac
Slide 19: FY17 Q2 Update and FY17 Guidance
FY17 Q2 Update and FY17 Guidance 20 FY2017 Guidance as presented on August 17, 2016 and not updated today. Full fiscal year guidance will be issued with Q2 fiscal year 2017 results. Gross Orders: ~$298 million +5% YoY Revenue: $410 - $420 million +5% YoY Operating Expenses: ~$164 million Flat YoY Ad
Slide 20: A Path to Profitability
A Path to Profitability Where we were, where we are and where we are heading 21 Revenue Gross Margin Operating Margin EBITDA Where we were (past): represents FY 2013 financials. Where we are (present): represents FY 2016 financials. Past Present Future Goals 100% 31% (26%) (18%) 100% 40% 0% 6% 100%
Slide 21: Drivers of Future Value
Recent system launches create potential for double digit growth in 2H Fiscal 2017 order growth Expanded product portfolio addresses long-term opportunities Industry-leading precision and reliability are keys to replacement wins Significant operating expense leverage Cash generation and debt retireme
Slide 22: Drivers of Future Value
Drivers of Future Value + Recent system launches create potential for double digit growth in 2H Fiscal 2017 order growth + Expanded product portfolio addresses long-term opportunities + Industry-leading precision and reliability are keys to replacement wins + Significant operating expense leverage *
Slide 23: Thank You
CONFIDENCE IN THE OUTCOMES THAT MATTER MOST TO YOU rr _ a Thank You SrarccurAy Precise, innovative tumor treatments (© Accuray andlor its affliates. lights reserved, 2
Slide 24: Appendix A: Reconciliation of GAAP Net Loss to Adjusted EBITDA
Appendix A Reconciliation of GAAP Net Loss to Adjusted EBITDA 25 Net Income Amortization of intangibles (a) Depreciation (b) Adjusted EBITDA Stock-based comp (c) Interest expense, net (d) Provision for income taxes $ (35,448) $ (40,209) $ (25,504) 8,380 7,954 7,953 12,184 11,539 10,343 11,313 13,930
Slide 25: Appendix B: Reconciliation of GAAP Net Loss to Constant Currency Net Loss (FY'15)
Appendix B Reconciliation of GAAP Net Loss to Constant Currency Net Loss (FY’15) 26 Revenue Cost of Revenue OpEx Other Income / Expense Income Tax Expense Net Loss $ 379,801 $ 14,264 $ 394,065 (234,399) (2,737) (237,136) (164,571) (2,717) (167,288) (18,621) 2,445 (16,176) (2,419) 0 (2,419) (40,209)
Slide 26: Appendix C: Reconciliation of Constant Currency Net Loss to Adjusted EBITDA (FY'15)
Appendix C Reconciliation of Constant Currency Net Loss to Adjusted EBITDA (FY’15) 27 Net Income Amortization of intangibles (a) Depreciation (b) Adjusted EBITDA Stock-based comp (c) Interest expense, net (d) Provision for income taxes $ (28,954) 7,954 11,539 13,930 16,158 2,419 23,046 FY’15 Consist
Slide 27: Appendix D: Reconciliation of Projected GAAP Net Loss to Adjusted EBITDA (FY'17)
Appendix D Reconciliation of Projected GAAP Net Loss to Adjusted EBITDA (FY’17) 28 Net Income Amortization of intangibles (a) Depreciation (b) Adjusted EBITDA Stock-based comp (c) Interest expense, net (d) Provision for income taxes $ (17,800) $ (11,000) 7,950 7,950 10,100 10,100 14,400 14,400 13,75
Slide 28: Appendix E: Clinical References Bibliography
Appendix E Clinical References Bibliography 29 Five-year multi-institutional prostate cancer study - CyberKnife Source: Meier R et al. Five-Year Outcomes From a Multicenter Trial of Stereotactic Body Radiation Therapy for Low- and Intermediate-Risk Prostate Cancer. American Society for Radiation Onc
Slide 29: Appendix E: Clinical References Bibliography (cont.)
Appendix E Clinical References Bibliography (cont.) 30 Precision software, PrecisionRTX and PrecisionART - Radixact Sources: Lim SN et al. Automated Dose Deformation for Re-Irradiation. American Association of Medical Physics 58th Annual Meeting, July 31-Aug 4, 2016, Washington DC. Kainz . et al. Au
Slide 30: Appendix E: Clinical References Bibliography (cont.)
Appendix E Clinical References Bibliography (cont.) Precision software, PrecisionRTX and PrecisionART - Radixact Sources: Lim SN et al. Automated Dose Deformation for Re-Irradiation. American Association of Medical Physics 58" Annual Meeting, July 31-Aug 4, 2016, Washington DC. Kainz . et al. Automa