Poor Q2 results prompt Accuray restructuring
Article Thumbnail ImageJanuary 3, 2013 -- Radiation oncology firm Accuray is projecting a decline in product revenue of between 45% and 50% in the second quarter of fiscal 2013, prompting the company to lay off some employees.

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The company's preliminary financial report estimated that consolidated revenues under generally accepted accounting principles (GAAP) will be in the range of $72 million to $75 million, compared with total GAAP revenue of $106.4 million in the second quarter of fiscal 2012.

Service revenue, however, posted an increase of approximately 14% in the second fiscal quarter, compared with the same quarter of fiscal 2012.

Accuray anticipated a net loss on a non-GAAP basis of $25 million to $30 million in the second fiscal quarter of 2013.

Because of the results, the company plans to restructure operations to enhance revenue and profitability by developing a cost structure to reallocate resources to commercial sales and marketing and enhance business processes to support revenue growth.

The restructuring is expected to reduce staff by approximately 13%, with most layoffs occurring in the U.S.

Accuray expects to take a nonrecurring charge of $3 million to $4 million in the third quarter of fiscal 2013 for the restructuring. The move could save the company approximately $40 million per year in annual operating expenses compared to fiscal 2012, with initial benefits on the book for the fourth quarter of fiscal 2013.

Accuray projects fiscal 2013 revenues on a non-GAAP basis of $320 million to $330 million, with a net loss in the range of $63 million to $69 million for fiscal 2013.