Accuray Incorporated

Good day and welcome to the AccuRay First Quarter Fiscal 2020 Financial Results Conference Call. All participants will be in listen-only mode. Since you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please also note today's event is being recorded. I would now like to turn the conference over to Joe Diaz with Liftham Partners. Please go ahead, Seth.

Thank you, Rocco, and good afternoon to everyone. Welcome to AccuRay's conference call to review financial results for the first quarter of fiscal year 2021, which ended on September 30, 2020. During our call this afternoon, management will review recent corporate developments. Joining us on today's call are Josh Levine, Accurate's President and Chief Executive Officer, and Shane Hamamatsu, Accurate's Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind you that our call today includes forward-looking statements. Actual results may differ materially from those contemplated or implied by these forward-looking statements. Factors that could cause these results to differ materially are set forth in the press release we issued just after the market closed this afternoon, as well as in our filings with the Security and Exchange Commission. Forward-looking statements on this call are based on information available to us as of today's date, and we assume no obligation to update any forward-looking statements as a result of new information or future results, except to the extent required by applicable securities law. Accordingly, you should not put undue reliance on any forward-looking statements. Two housekeeping items for today's call. First, during the Q&A session, we request that participants limit themselves to questions and then re-queue with any follow-ups. Second, all references we make to a specific quarter in the prepared remarks are to our fiscal year quarters. For example, statements regarding our first quarter refer to our fiscal first quarter ended September 30, 2020. With that, let me turn the call over to Accurate's President and Chief Executive Officer, Josh Levine. Josh.

Thanks, Joe. And thank you everyone for joining us on today's call. I'm joined today by Shig Hamamatsu, our Chief Financial Officer, and Suzanne Winter, our Chief Commercial Officer and Head of R&D. Accurate's fiscal 2021 first quarter performance continues to reflect the positive momentum our business is making despite the headwinds created by the COVID-19 environment. Our commercial team around the world continues to adapt and make the necessary adjustments to successfully compete at a high level even in the face of a number of key markets continuing to be impacted by travel and customer access restrictions as well as bunker construction and related installation delays. Validating our ability to execute in these challenging times Revenue for the quarter came in at $85.3 million and we generated positive operating income of $5.5 million. This represents the fourth consecutive quarter that the company has generated a positive operating profit as we continue to demonstrate operating leverage that we expect to position us well in a post-COVID environment. Gross order volume for the quarter was $51 million, which was substantially down globally versus Q1 of the prior fiscal year. Although at the regional level, our EMEA and Japan regions both showed solid order growth during the quarter. The overall order result in Q1 was not unexpected. As we had communicated in our year-end FY20 earnings call in August, we highlighted the tough comparisons to the prior year driven by the realization of the first phase of Type A orders in China in the first half and a large multi-system order from our Latin American business. Going forward, We are focused on ensuring the safety of our employees and meeting our customers' needs to ensure that we maintain our overall customer responsiveness. I want to thank the entire Accurate team for their individual and collective dedication to supporting our customers and their patients under continuously evolving conditions. Their efforts are making a difference as we focus on revenue conversion, growing operating income, and improving free cash flow during this fiscal year. Our continued focus on aggressive working capital management and Cash Preservation will help ensure we successfully navigate through the current global economic conditions. We finished fiscal Q1 with $95 million in cash and illustrated our commitment to reducing overall debt by prepaying 10 million of our term loan during the quarter. Given the current macro operating environment, we are very pleased with this outcome. SHIG will provide you with greater detail on the quarterly financial results later in the call. On the operational front, Our joint venture with China Isotope and Radiation Corp. continues to make significant progress with the Tianjin China Training Center opening in September and in-person class instruction for customers which started earlier this month. This will be an important hub to enable medical professionals throughout China to learn about our products and how to successfully incorporate them into their practices. As far as establishing our local manufacturing presence, we are still on schedule to have the Tianjin-produced Thank you for joining us. The China National Health Commission announced the second tranche of type A radiotherapy license awards, and we are pleased to report that AccuRay systems were named in 24 of the additional 32 type A licenses awarded to end-user hospitals. Given the late timing of this announcement from the National Health Commission, we are still evaluating the impact of this announcement on our future order activity. Earlier this week, our commercial team participated in the 2020 ASCRO Annual Meeting. While it was conducted on a virtual basis for the first time given the COVID environment, this was a great opportunity for us to launch several important strategic product innovations from our R&D pipeline. During ASTRO, we had high-quality interactions with clinicians and leading institutions who showed great interest in our RADIS Act and CyberKnife platforms, particularly with the technology enhancements that we've recently introduced both preceding and during ASTRO on both product platforms. These include the new CyberKnife S7 with Volo treatment planning, our synchrony motion synchronization and real-time delivery adaptation on the Radizak platform, and our new helical KVCT imaging capability for the Radizak platform called ClearRT. We expect that these technology innovations will help to further advance our radiation therapy planning and delivery capabilities and will have a meaningful impact to our overall product functionality and strategic positioning. We see growing clinical experience in adoption of Synchrony and the introduction of the Synchrony technology on the RataZak platform in combination with our ClearRT imaging upgrade creates a uniquely versatile and powerful treatment platform. Additionally, and most importantly, we believe that the advanced ultra-precise treatment capabilities of both of our product platforms are well aligned with the new alternative payment model and reimbursement fee schedule recently announced by the Centers for Medicare and Medicaid Services, which is now planned to go into effect in July 2021. Accuray has been a pioneer in high-precision technologies that enable hypo and ultra-hyperfractionation, and we believe that the innovations we are bringing to the market will be a catalyst for long-term growth and ensure that our delivery platforms maintain their position as the gold standard choice for hyperfractionated SBRT treatments. At this week's Astro Conference, 44 clinical abstracts shared by AccuRay users reinforce the clinical value of tomotherapy and CyberKnife for delivering moderately or ultra-hyper fractionated treatments. The experience of global healthcare providers during the COVID pandemic has highlighted and reinforced the need for expeditious and effective treatment options and AccuRay's position as a pioneer in precise, Image-guided platforms that safely deliver hypofractionated treatments with excellent long-term results is driving clinical confidence in the radiotherapy community and creating a broader market opportunity for our products. We are launching important technology upgrades across both of our platforms that are designed to further enhance their current treatment capabilities in delivering hypo- and ultra-hyperfractionated SRS and SBRT more effectively, safely, and efficiently. As discussed during our Astro Investor Day presentation earlier this week, we are excited about the momentum and progress we see occurring with our business today, as well as the long-term growth opportunities we have in front of us. One of the opportunities that we are most excited about is the neuroradiosurgery market. Yesterday, we announced a collaboration with BrainLab, who is the market leader in treatment planning, surgical navigation, and an innovator in radiosurgery solutions. that will focus on expanding CyberKnife treatment capabilities for the neuroradiosurgery market. Our BrainLab collaboration will create a development path that addresses three distinct areas of focus. First, to provide the neuroradiosurgery community with access to optimized dose contouring capabilities to improve the accuracy of dose delivery. to provide improved interoperability between BrainLab's Element software and the Accurate Precision Treatment Planning software to ensure optimized neuroradiosurgery workflows. And last, through BrainLab's Quentry patient registry platform to provide accurate customers with the ability to add CyberKnife treatment data to neurosurgery registries to help clinicians improve patient outcomes. We believe this collaboration will be a strong catalyst for future market penetration and NeuroRadio Surgery. And with that, I'll turn the call over to Shig to review our Q1 financial results. Shig?