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Reports $47.6 Million of Revenue; $42.5 Million of Equipment Orders

TomoTherapy Incorporated , producer of the Hi*Art  treatment system and other products for advanced radiation therapy, released financial results for the second quarter ended June 30, 2010.

Second Quarter Results

Second quarter 2010 revenue was $47.6 million, an increase of 16% from $41.1 million in the second quarter of 2009. Revenue from product sales was $34.2 million in the second quarter of 2010, up 12% compared to the same quarter last year, and revenue from service and other was $13.4 million in the second quarter of 2010, up 27% compared to the same quarter last year. The company reported a second quarter 2010 loss from operations of $8.4 million, a 14% decrease from the $9.7 million loss from operations for the same period last year.

The company incurred a net loss attributable to shareholders of $6.9 million, or $0.13 per share, for the second quarter of 2010, compared to a net loss of $7.1 million, or $0.14 per share, for the second quarter of 2009.

As of June 30, 2010, the company had $145.7 million of cash, cash equivalents and short-term investments, representing a $3.0 million decrease from March 31, 2010, and minimal debt. During the quarter, there were no borrowings against the company's credit facility.

As of June 30, 2010, the company had a revenue backlog of $139.2 million, a 4% increase from the $134.2 million backlog as of March 31, 2010. The backlog includes $42.5 million of equipment orders received during the second quarter of 2010. One order was removed from backlog during the second quarter due to uncertainty surrounding the project schedule. Backlog includes only firm orders that the company believes are likely to ship within the next two years. Backlog does not include any revenue from service contracts, which represents a growing portion of the company's overall revenue.

"Our second quarter financial results were in line with our internal expectations and represent a solid improvement over the same period last year," said Fred Robertson, TomoTherapy's CEO. "In addition, we are pleased with the 13% increase in revenue from the first quarter of 2010 and the $5.0 million net increase to our backlog since March 31, 2010. Specifically, we realized a rise in new orders, which we believe reflects the strength of our new product offerings as well as enhanced global sales and marketing efforts. On the service side, revenue increased significantly compared to the same period last year, due to continued growth in the number of service contracts, and we again achieved strong customer service rankings. We continue to take steps to enhance our financial performance and drive toward profitability while still investing in key product development initiatives. Importantly, our capital position remained strong in the quarter despite the continuing challenges in the global economy."

Six-Month Results

For the six months ended June 30, 2010, revenue was $89.7 million, a 25% increase from $71.7 million for the six months ended June 30, 2009. Revenue from product sales was $63.5 million in the first half of 2010, up 23% compared to the first half of 2009, and revenue from service and other was $26.2 million in the first half of 2010, up 31% compared to the first half of 2009.

The company reported a year-to-date 2010 loss from operations of $14.4 million, a 39% decrease from the loss from operations of $23.7 million during the first six months of 2009. The company incurred a net loss attributable to shareholders of $11.6 million, or $0.22 per share, for the six months ended June 30, 2010, compared to a net loss attributable to shareholders of $20.1 million, or $0.40 per share, for the same period last year.

During the first half of 2010, the company's cash, cash equivalents and short-term investments decreased by $8.7 million. The company's backlog increased by $3.4 million during the first half of 2010, from $135.8 as of December 31, 2009 to $139.2 million as of June 30, 2010.

Outlook

The company reaffirms its revenue and earnings guidance for full-year 2010. Management still expects 2010 revenue to be comparable to 2009 revenue of $160 million to $180 million, with a net loss attributable to shareholders in the range of $0.65 to $0.85 per share. Consistent with prior years, management is not providing specific quarterly guidance. However, similar to 2009, management anticipates that the timing of expected customer deliveries will result in 2010 second half revenues being heavily weighted toward the fourth quarter.

Robertson concluded, "Given our second quarter performance and expectations for the balance of the year, we remain on track to deliver results in line with our previously announced guidance. While there is still uncertainty with respect to macro conditions, particularly in Europe, we are encouraged by recent performance in North America and Asia. We also continue to make good progress on several key initiatives, including diversifying our product line-up and expanding our business both in North America and other global markets. With significant interest in our TomoDirect(TM) and TomoHD(TM) offerings, entry into new markets, and greater access to many hospitals through new strategic Group Purchasing Organization agreements, we believe TomoTherapy is well positioned to capitalize on the substantial opportunity in the growing global radiation therapy market."

Investor Conference Call

TomoTherapy will conduct a conference call regarding its second quarter 2010 results at 5:00 p.m. EDT today, July 29, 2010 (4:00 p.m. CDT). To hear a live Webcast or replay of the call, visit the Investor Relations page at TomoTherapy.com, where it will be archived for two weeks. To access the call via telephone, dial 1-800-260-8140 from inside the United States or 1-617-614-3672 from outside the United States, and enter pass code 35309628. The replay can be accessed by dialing 1-888-286-8010 from inside the United States or 1-617-801-6888 from outside the United States and entering pass code 64325104. The telephone replay will be available through 11:59 p.m. CDT on August 5, 2010.

Source: TomoTherapy