Accuray Incorporated

Good afternoon and welcome to the Accuray Report's fourth quarter fiscal 2021 financial results conference call. All participants will be in a listen-only mode. Should 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 your telephone keypad. Please note, this event is being recorded. I would now like to turn the conference over to Ken Mobeck, VP Finance and Investor Relations. Please go ahead.

Thank you, Chad, and good afternoon, everyone. Welcome to Accurate's conference call to review financial results for the fourth quarter and fiscal year 2021, which ended June 30, 2021. During our call this afternoon, management will review recent corporate developments, Joining us on today's call are Josh Levine, Accuray's Chief Executive Officer, Suzanne Winter, Accuray's President, and Sheik Hamamatsu, Accuray'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 Securities and Exchange Commission. The 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 events. except to the extent required by applicable securities laws. Accordingly, you should not put undue reliance on any forward-looking statements. A few housekeeping items for today's call. First, during the Q&A session, we request that participants limit themselves to two 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 fourth quarter refer to our fiscal fourth quarter ended June 30, 2021. Finally, there will be a supplemental slide deck to accompany this call, which can be accessed by going directly to Accuray's investor page at accuray.com. With that, let me turn the call over to Accuray's Chief Executive Officer, Josh Levine. Josh? Thanks, Ken.

And thank you to everyone joining us today. 2021 highlights and our outlook for this coming year. I'm pleased to report that despite the challenging environment caused by COVID-19, we finished the fiscal year 2021 on a strong note with 17% year over year revenue growth in the fourth quarter, along with 19% year over year gross order growth, both of which were ahead of our expectations. Given the external environment, we are encouraged with our full fiscal year 2021 performance that resulted in positive 3.5% year-over-year revenue growth. In addition to the positive revenue growth, we aggressively managed expenses and working capital, refinanced our debt with favorable terms, and believe that we have positioned the business for future growth through the successful commercial launch of high-impact technology upgrades. Other fiscal 21 highlights include the beginning of type A system revenue recognition in China, which totaled $54 million for the full year, as well as construction completion of our China JV manufacturing facility and training center, which will support the market launch of our China type B platform in the second half of fiscal year 2022. Additionally, during the fourth quarter, we improved our capital structure, through successful refinancing of both our convertible notes and bank debt for an additional five years to 2026. With respect to the new bank debt, we reduced interest costs significantly over the old facility and expect to save more than $2 million in cash interest costs in fiscal year 2022. In summary, despite the challenging operating environment, we executed well both operationally and financially and showed resiliency in our business model while continuing the cadence of meaningful technology innovation to help drive future growth. Revenue for the quarter came in at $110.9 million, which was an increase of 17% from the prior year fourth quarter. Overall fiscal Q4 revenue included strong contribution from all of our regions, especially EMEA and APAC, with approximately 16 million of China-related system revenue, consisting of five Type A and two Type B systems. Gross order volume for the quarter was $112.7 million, which is the highest quarterly order volume in our history, consisting of 51 systems and represented 29% sequential quarter-to-quarter growth from our fiscal third quarter. Driving Q4 order growth was strong system demand across both of our platforms and strong performance from our Americas region, which grew 8% year over year. During the quarter, we received additional market clearance for our ClearRT imaging upgrade with CE Mark certification, which allowed us to expand our broader global commercial launch. We continued to see early order momentum from ClearRT during the fourth quarter, and we have received a total of 44 orders for ClearRT as an option or upgrade to existing installed based systems in the short period of time since its introduction. We believe the strong uptake of ClearRT shows that its improved imaging capability, which allows clinicians to deliver the highest quality treatment plans with confidence and precision, is resonating with our customers. As for synchrony on RATIS Act, approximately 62% of new RATIS Act orders during the quarter included synchrony as an option. which is a significant increase from the prior year and we believe demonstrates the growing clinical value of Synchrony's proprietary real-time motion tracking and delivery adaptation capability. With respect to the CyberKnife platform, approximately 70% of the quarter CyberKnife orders and 73% for the full year consist of our latest generation S7 platform indicating continued strong customer uptake related to this latest generation product. Additionally, we continue to see solid performance in trade-in, trade-up orders, representing 27% of global orders in Q4, with a strong percentage of the order mix in our developed markets, like the Americas and EMEA regions, where we are targeting our older systems for upgrade to our latest generation CyberKnife and Radizak platforms. With that, I'll turn the call over to Suzanne Winter, our newly appointed president, who will cover additional commercial and innovation highlights. Suzanne?