Biotech Values

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ARAY: 2nd quarter earnings and guidance

( I have comparatively more skin in this game now that the rest of my portfolio has wilted. Today's news and guidance just might finally call the bottom for ARAY. Let's hope mgmt seizes the opportunity to grow share value)

http://finance.yahoo.com/news/Accuray-Announces-Results-for-prnews-14200570.html

SUNNYVALE, Calif., Jan. 29 /PRNewswire-FirstCall/ -- Accuray Incorporated (Nasdaq: ARAY - News), a global leader in the field of radiosurgery, announced today financial results for the second quarter of fiscal 2009, ended December 27, 2008.

For the second quarter of fiscal 2009, Accuray reported total revenue of $57.6 million, a 10.8 percent increase over second quarter of fiscal 2008 total revenue of $52.0 million and a 3.2 percent sequential increase over the first quarter of fiscal 2009.

In the second quarter of fiscal 2009, Accuray recorded a market fair value charge of $860,000, or $0.02 per share, 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. As a result net income for the second quarter of fiscal 2009 was $1.4 million, or $0.02 per diluted share, compared to net income of $2.3 million, or $0.04 per diluted share, during the same period last year. Non-cash, stock based compensation charges for the second quarter of fiscal 2009 were $3.6 million.

For the six months ended December 27, 2008, total revenue was $113.5 million, a 12.7 percent increase over total revenue of $100.7 million for the same period last year. Net loss for the first half of fiscal 2009 was $1.8 million, or a loss of $0.03 per diluted share, compared to net income of $4.6 million, or $0.08 per diluted share, for the first half of fiscal 2008. The net loss in the first six months of fiscal 2009 was primarily driven by non- recurring costs associated with employee separation expenses and inventory write downs incurred during the fiscal first quarter of 2009.

"We are encouraged by the year-over-year revenue growth plus strong installation and shipment numbers for the quarter, reflecting an expanding demand for our CyberKnife® Robotic Radiosurgery System," said Euan S. Thomson Ph.D., Accuray's president and chief executive officer.

In an effort to contain costs, Accuray has eliminated approximately 60 positions or approximately 13 percent of its U.S. workforce. The Company is focused on improving processes and cross-company collaboration with the goal of raising efficiency, and has taken these actions to enhance the Company's success in the long term and position itself to weather the potential impact of the current global downturn. The Company estimates that the 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. Most of the affected jobs are located at Accuray's Sunnyvale, Calif. headquarters.

At December 27, 2008, non-contingent contracts, for which all contractual obligations have been satisfied, accounted for approximately $452 million or 76 percent of total backlog. Accuray's backlog is composed of signed contracts that the company believes have a substantially high probability of being recognized as revenue in future periods. 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 $0.6 million, 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 continued to have zero debt.

Outlook

The following statement is forward-looking and actual results may differ materially. Accuray expects total revenues for fiscal 2009 to be in the range of $230 million to $250 million.