Accuray CEO Discusses F1Q2011 Results - Earnings Call Transcript

| About: Accuray Incorporated (ARAY)

Accuray Inc. (NASDAQ:ARAY)

F1Q2011 (09/30/2010) Earnings Call

November 8, 2010 5:00 pm ET


Tom Rathjen - VP of IR

Euan Thomson - President and CEO

Derek Bertocci - SVP and CFO


Mark Arnold - Piper Jaffray

Bob Labick - CJS Securities

Matthew Weiss - Jefferies


Good evening, ladies and gentlemen, and welcome to the first quarter of fiscal 2011 Accuray Incorporated earnings conference call. (Operator Instructions)

I would now like to turn the conference over to your host for today, Mr. Tom Rathjen, Vice President of Investor Relations.

Tom Rathjen

Thank you, Keith. Hello and thank you for joining us this afternoon for Accuray's conference call for the first quarter fiscal year 2011. Joining us today are Dr. Euan Thomson, Accuray's President and Chief Executive Officer; and Derek Bertocci, Accuray's Senior Vice President and Chief Financial Officer.

As we have done in the past quarters, we will again be referring to revenue and backlog data, which are found in PDF files on the Investor Relations page of the Accuray website at Please log on to this site to view this information.

Before we begin, I need to remind you that except for the historical information, the information that follows contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, revenue guidance, installations, gross margins, operating expenses, profitability, clinical acceptance, and regulatory approvals. These and other risks are more fully described in the Risk Factors section of our Annual Report on Form 10-K, as updated from time to time by our quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission.

And now, I would like to turn the call over to our President and Chief Executive Officer, Dr. Euan Thomson.

Euan Thomson

Thank you, Tom, and thanks to everyone for joining us on today's conference to review our first quarter of fiscal 2011. I'll start with the recap of the business highlights of the quarter. Then I'll comment on the current sales environment for the CyberKnife, provide brief clinical and reimbursement updates and review our experience from the recent ASTRO convention in San Diego.

During the first quarter, we added seven orders to backlog, increasing total backlog by approximately 2% from the fourth quarter. Nine CyberKnife systems were installed and six were shipped during the quarter, maintaining a positive book to bill ratio, which we believe is a continued indicator of future growth. During the past four quarters, a net of 53 CyberKnife orders have been added to backlog. 38 units have been shipped and 36 units have been installed for customers around the world.

I'll now provide a brief review of the business highlights of the first quarter of our fiscal year 2011. I'll then turn the call over to Derek for a detailed financial review.

During the quarter, Accuray's total revenue was $38.1 million, within the guidance range provided last quarter. Revenue from sources excluding previously deferred platinum revenue was $36.1 million during the first quarter. We recorded a net loss of $4.6 million or $0.08 per share.

Seven CyberKnife systems were added to backlog during the quarter, contributing a total value of $33.8 million. In addition, service and ancillary orders with a value of $16.8 million were also signed. Of the seven orders added to backlog, two are from the Americas and five orders from the European region.

While we added seven orders to backlog in the first quarter ending September 30, four additional orders that were anticipated in Q1 ended up closing during the first two weeks of October. Three of these were from the Americas region and one was from the European region.

The delays experienced related to obtaining and completing the contract documentation necessary to enter an order into backlog rather than customer negotiations. While these orders cannot be included in our Q1 backlog, they indicate that we are maintaining positive sales momentum. These orders will be included in our Q2 and annual total.

We had one cancellation of an order in backlog during Q1. This cancellation was a result of the dissolution of the business partnership purchasing the system. Derek will provide a more detailed analysis of backlog in a few minutes.

During the first quarter, nine CyberKnife systems were installed, of which four were in the Americas region, four in the European region and one in Japan. The worldwide install base as of September 30, 2010, was 216 systems.

As in past years, the first quarter of the fiscal year has typically been our slowest period from an order shipment and revenue perspective. Nonetheless, worldwide interest in the CyberKnife remains strong and we anticipate significantly stronger quarters as the fiscal year progresses.

The Americas sales team reports a steadily improving hospital spending environment with budgets becoming increasingly available. The team reports that sales pipeline continues to expand with growing interest in CyberKnife radiosurgery among leading hospital customers as well as academic centers. We've seen little impact on the radiosurgery business from recent competitive product releases.

The European region remains particularly strong, and our outside of specific impacted areas report no sign of slowing down. Of the five orders coming from the region in the first quarter, three were from academic centers, reflecting the expanding demand for CyberKnife technology among the region's key opinion leaders. Italy's Vicenza Hospital became the first European hospital to be equipped with two CyberKnife systems.

In Japan, the 22nd CyberKnife system was installed during the quarter, providing increased opportunity for full body radiosurgery treatment for the nation's expanding cancer population.

As recently announced, the eighth CyberKnife system was installed in South Korea. This installation was the second CyberKnife at Korea Cancer Care Hospital, marking it as the first hospital in Asia to have two CyberKnife systems in use.

Also, Accuray has hired a new general manager for the APAC region, which is expected to have a favorable impact in this important territory. Last week, Accuray attended the annual convention of the American Society for Radiation Oncology, or ASTRO in San Diego. ASTRO was very successful for us this year, with considerable activity and the Accuray boost and a record number of visitors obtaining information and receiving demonstrations of the latest CyberKnife technology.

As a result, the sales leads generated were more than double the number from last year. We will now spend time analyzing these enquiries to evaluate their sales potential.

We announced a number of exciting products at this year's ASTRO meeting, including a suite of products to enhance CyberKnife efficiencies and to improve its ease-of-use for clinicians and physicists. Recognizing the immense growth in the field of CyberKnife lung radiosurgery, and the CyberKnife unique ability to track and correct for respiratory motion, combined with the three dimensional delivery system, we announced the Lung Optimized Treatment product.

This product is pending 510(k) clearance, and is intended to provide clinicians the ability to offer every lung radiosurgery patient the option to have a non-invasive fiducial-free CyberKnife treatment and the ability to choose the optimal accuracy for specific lung tumor regardless of location.

Expanding clinical demand is a key driver in generating sales results. At this year's ASTRO convention, 40 abstracts were accepted for presentation, highlighting the use of the CyberKnife Robotic Radiosurgery system. Presentations covered an array of growing clinical indications, including lung, prostate, intracranial, renal, pancreas, spine and breast.

Three of these abstracts were from ongoing Accuray-sponsored multi-center lung and prostate clinical studies, continuing to support positive outcomes for each of these clinical applications. Of particular note was the release of five-year clinical data for CyberKnife prostate treatments by Dr. Chris King's Group documenting excellent local control and minimal long term toxicity.

Also presented at ASRO were two abstracts on the use of CyberKnife for the treatment of breast cancer, the most common form of cancer in women. Two new studies from the University of Texas Southwestern Medical Center and Fox Chase Cancer Center, both highlighted the significant advantages that CyberKnife treatment may provide by (inaudible) lung and heart for breast cancer patients as compared to standard gantry-based radiation therapy systems and invasive brachytherapy treatments.

CyberKnife offers a unique benefit of providing patients with a non-invasive treatment option with radiosurgical precision due to its ability to track and automatically correct for motion of the breast as the patient breathes normally. There is enthusiasm among clinicians regarding the use of CyberKnife for breast cancer, and we are excited by the benefits it could bring for breast cancer patients.

Finally, before I turn the call over to Derek, I wanted to provide a brief update on the recent release of Medicare fee schedule for 2011.

The G codes which hospitals use to build for CyberKnife treatment are as expected, they're maintained. Medicare payments under the outpatient prospective payment system for typical three to five fraction CyberKnife treatments are essentially unchanged from the prior year.

Accuray's business is focused on improving the lives of cancer patients worldwide. During the first quarter, we were very pleased to announce that over 100,000 patients have now been treated with the CyberKnife.

With that, I'll now turn the call over to Derek for the financial review.

Derek Bertocci

Thank you, Euan. Revenue of $38.1 million for the first quarter of fiscal 2011 was in the middle of our guidance range as it was down from $50.6 million in the first quarter of the prior year. Excluding revenue previously differed for system sold with legacy Platinum service agreements revenue was $36.1 million, a decline of approximately 14% from the comparable $42.2 million in the first quarter of the prior year.

In past years we have observed a pattern of relatively low revenue and new orders in the first quarter of the fiscal year. And this pattern has continued in the current fiscal year. Gross profit margin of 47.9% was up 5.2 percentage points from the 42.7% gross profit margin in the first quarter of the prior year. This reflects improved profitability on both system and service revenue.

We continue to manage operating expenses effectively, holding them to $24.4 million for the quarter, which is approximately 3.5% below the level from the prior year's first quarter. The overall result was a net loss of $4.6 million or $0.08 per share from the first quarter, compared to a net loss of $3.3 million or $0.06 per share for the first quarter of the prior year.

Net orders added to backlog totaled $44.6 million in the first quarter of fiscal 2011, which includes the value of service orders entered into by our customers as well as other ancillary purchases.

During the first quarter seven new orders for CyberKnife systems were added to backlog, two of our customers within the Americas region and five from European region. One of this quarter's orders were shipped and converted to revenue within the quarter. We received one cancellation during the quarter, due to dissolution of the purchasing group. Including this quarter cancellation, net orders to backlog totaled six systems in the first quarter.

Comparing net orders for CyberKnife systems to shipments of five systems indicates 1.2 book-to-bill ratio. As Euan mentioned, orders for an additional four systems were added to backlog in the first half of October. Orders as well as significant customer interest in CyberKnife expressed at ASTRO demonstrate ongoing customer demand for the CyberKnife which will help support our continued growth in the future.

At the end of the first quarter, backlog was $381 million, a 2% increase from last quarter's ending backlog of $374 million. Ending backlog was comprised of $136 million of contracts for CyberKnife Systems, $16 million for CyberKnife shared ownership programs and $229 million associated with long term service agreements.

The (fifth) international modeling efforts, we anticipate that order backlog for CyberKnife systems would generally convert to revenue over a 12 month period. So this period can range from as low as one quarter to well beyond four quarters due to customer schedules.

CyberKnife shared ownership programs entail a five year usage period, therefore backlogs, lease orders are expected to convert to revenue over a five-year period unless the systems are bought out early.

Service orders cover from one to five years of service therefore service backlog is expected to convert to revenue over a period of up to five years. Charts reflecting our backlog have been placed on the Investor Relations page of the Accuray website.

CyberKnife product revenue totaled $19.3 million, down 36% from $30.3 million in the first quarter of the prior year. Service and other revenue totaled $18.2 million, down 8% from $19.7 million in the first quarter of the prior year.

Excluding revenue previously deferred for systems sold with Platinum service agreements, product revenue totaled $18.1 million, down 27% from $24.9 million in the first quarter of the prior year, while services revenue totaled $16.9 million, up 1% from $16.7 million in the first quarter of the prior year.

This decline in product revenue was due to fewer revenue systems. This increase in service revenue was due to a $1 million increase in system service revenue resulting from an increase in the install base under-service contracts, offset by a $0.8 million decline in revenue earned for training and other services.

We installed nine CyberKnife systems in the first quarter, four in the Americas region, one European region and one in Japan. This brings worldwide CyberKnife install base to 216 units at the end of the first quarter, with 136 systems in the Americas region, 33 in the European region, 25 in the Asia-Pacific region and 22 in Japan.

Prior to fiscal 2006, we sold CyberKnife systems in the U.S. with Platinum service agreements which entitle customers to specified upgrades over the term of their Platinum service agreements. All revenue and cost to sales were deferred when such systems were sold. After all required upgrades were installed, we began to recognize revenue and cost of sales evenly over the period of service coverage that remained under the original Platinum service agreement.

Final upgrades under Platinum agreements were usually requested by customers, and installed several years after the installation of the system. As a result, revenue and cost of sales for systems and services have usually been recognized over the last one to two years, on a normal five-year Platinum service term. All upgrades have been installed by the end of the first quarter of fiscal 2010, on each of the thirty systems sold through Platinum service agreements.

We have fully recognized revenue on 26 of these arrangements, and are recognizing revenue over the remaining service term on the final four systems. In fiscal 2009, we recognized $60 million of revenue for systems sold through Platinum service agreements, and in fiscal 2010, we recognized $29 million of Platinum revenue.

We expect to recognize approximately $5 million of revenue for systems still covered by Platinum service agreements in fiscal 2011. During the first quarter of fiscal 2011, we recognized approximately $2.7 million of revenue for systems still covered by Platinum service agreements, of which $1.2 million were system revenue.

Platinum service revenue recognized during the first quarter totaled $1.5 million, and was comprised of $0.7 million of service work provided during the first quarter, and $0.8 million for service work deferred from prior quarters. Our gross profit margin improved for both products and service revenues. Product margins improved to 62% from 51.7% in the first quarter of the prior year due to the shipment of VSI Systems in the first quarter of fiscal 2011.

The additional features and capabilities enabled VSI Systems to garner higher average price in earlier models. Service margins improved to 33.4% from 29.2% in the first quarter of the prior year due to greater efficiency provided from increases in the number of systems covered by service contracts.

During the first quarter, operating expenses totaled approximately $24.4 million, down $0.7 million from the fourth quarter and down $0.8 million from the $25.2 million in the first quarter of the prior year. The overall reductions in operating expenses reflect our ongoing efforts to prudently manage these costs.

Accuray's balance sheet remains strong with cash and investments ending the quarter at $140.9 million, which includes $42.6 million of cash and cash equivalents and $98.3 million of short term securities.

We are reconfirming the guidance announced last quarter, and expect total annual revenue to be in a range of $210 million to $225 million. Total revenue, excluding amounts related to platinum contracts is expected to be in the range of $205 million to $220 million in fiscal 2011, up from $193 million in fiscal 2010.

Product revenue is dependant on our customers' construction schedules, as they build or renovate facilities housed in new CyberKnife systems. Based upon the number of orders placed into backlog over the last four quarters and ongoing sales activity, we expect quarterly inflations on revenue in the second half of fiscal 2011 to be considerably stronger than in the first half.

We continue to expect our gross profit margin will be in the range 48% to 51% in fiscal 2011, up from 46.9% in fiscal 2010, due to improved margins on product and service revenue.

In addition, we believe that we have opportunities to further enhance the lead role of the CyberKnife in radiosurgery, with continued investment in R&D. We also believe that we have opportunities to increase market awareness, the benefits of treating cancer patients with CyberKnife radiosurgery. We believe that progress towards these goals will be critical to maximizing the long term growth in revenue and profitability of Accuray for our shareholders.

Accordingly, we plan to increase our efforts in R&D, including development of next generation CyberKnife technology. In addition, we plan to pursue sales and marketing activities to increase awareness of the CyberKnife for radiosurgery.

To support these programs, we plan increases in spending in fiscal 2011 principally on R&D and also on sales and marketing. We have continued careful management and control of expenses.

We anticipate a modest reduction in general and administrative expenses in fiscal 2011. We anticipate that we will operate at approximately breakeven for the full year of fiscal 2011, with the second half of the fiscal year being significantly stronger than the first half. Based on the strong order flow we achieved over the last four quarters and ongoing sales activity, plus the developments in R&D and market awareness we plan to pursue fiscal 2011, our longer term goals are to grow annual revenues while maintaining solid gross profit margins and prudent management of operating expenses.

We believe these are the elements essential to generate pre-tax profits of 10% or possibly more.

Now I would like to turn the call back to Euan.

Euan Thomson

Thanks, Derek. We'll now be happy to take questions.

Question-and-Answer Session


(Operator Instructions) Your first question is from the line of Mark Arnold.

Mark Arnold - Piper Jaffray

I guess just to start with, can you just walk us through the math on the system side? And I think you explained this a little bit in the prepared remarks but I just would like a little more commentary if you could, where you placed nine systems for about $19 million in revenue but you booked seven new systems for $34 million in revenue.

I think you mentioned the VSI contribution there in the quarter in terms of those shipments. But can you just talk a little bit more about that big differential in revenue per system between your placements and your new orders?

Derek Bertocci

The installations were nine systems, but as you know oftentimes especially when systems are sold through a distributor, once we have completed our obligations, which is to ship the product to the distributor, if the distributor is responsible for installation, we take revenue at the time we ship, not at installations. We do report installations just because many of our investors want to follow that.

So in this quarter, the number of systems that were revenue systems was five as opposed to the nine that were installed. So the seven units were of new orders compared to the five systems that were revenue systems in the quarter.

Mark Arnold - Piper Jaffray

That's helpful. And then just a follow up to that. The VSI product mix in the quarter, is that a mix that we should expect will be approximately the same? Should it increase going forward? How should we think about the contribution there and the impact it has on margins going forward for the rest of the year?

Euan Thomson

The VSI product, as we had indicated when we introduced it, we anticipated selling it for a higher price which is in fact what we saw this quarter. I think that from quarter-to-quarter there will be some variability as to the mix of customers. So you should expect that the VSI will become an increasingly important part of the mix. But from quarter-to-quarter there will be some variability on it.

Derek Bertocci

This quarter, there was a relatively small number of units shipped, and most all of them were VSI units. So it helped to accentuate the improvement in margin this quarter.

Mark Arnold - Piper Jaffray

At ASTRO last week, I was particularly impressed with the lung optimization improvement. I think people often overlook how big that opportunity is. Can you just remind me how big you view the lung opportunity in terms of number of patients and then how many you've treated in the past year?

Euan Thomson

I think we treated last year about 6,000 lung patients, which is a worldwide number? The primary lung tumors represent about 130,000 patients a year in the U.S. It's a big opportunity. Obviously, lung cancer is the most common form of cancer. And there was actually interestingly a data which may have been relevant from the test meeting which is taking place last week as well. There was a study presented there indicating some progress with lung screening studies.

The study has 50,000 patients who have followed randomized into CT screening or plain radiography screening. And it was found that those who went through CT screening program, survival was about 20% improved. So they were less likely to die of lung cancer. And those types of early detected primary lung tumors are exactly the type of tumors that we feel long term with CyberKnife will add most value for. So we definitely see lung as a continuously improving and expanding market for us.

Mark Arnold - Piper Jaffray

And metastatic disease is about twice that number, somewhere in that range?

Euan Thomson

It's only about 500,000 actually. It's a little more than twice.


(Operator Instructions) Your next question is from the line of Bob Labick.

Bob Labick - CJS Securities

You recently announced some enhancements to your service offering. I was wondering if you could just tell us a little more about that and expand on it and tell us what are the things you're doing to maintain customers on the Diamond service plan?

Euan Thomson

The additional things we included on Diamond were really related to services we can provide as a company. So things like marketing support services and consultancy services, treatment planning and support as opposed to just simple product offerings and upgrades, which is right down to the same position in the past.

In the past, Diamond customers probably realized most benefit a year or two after they install in their system, because the point of installation that had the most modern CyberKnife system, a year or so later, there were new upgrades offered and they wanted to enhance the system. The services they used, they used upfront. So the point of sale of the CyberKnife is attractive too. It makes a more attractive proposition for customers. And generally, it's been well received.

Bob Labick - CJS Securities

How many of the systems were under service plans during the quarter?

Derek Bertocci

We don't have that right off the top of my head. It is in the Q. So we'll try and get that for you.


(Operator Instructions) And your next question is from the line of Josh Jennings.

Matthew Weiss - Jefferies

This is actually Matthew Weiss in for Josh. I was wondering if you talked in the prepared remarks about Dr. King's data he had presented at ASTRO with respect to the prostate cancer out to five years. I was wondering if you can maybe speak to any other prostate data that you maybe coming out in calendar '11. And how meaningful it is, I guess, for the radiation oncology community in general, in terms of accelerating adoption of SRS for prostate cancer. And I guess what that five year data can mean for the market in general.

Euan Thomson

I can answer the second one more easily than the first. It's a little hard for us to predict exactly what data will be published during the year. And we do know, generally that the studies are clearly aging to rule the five-year mark and would expect certainly over the next 18 months or so for the other two studies to approach the five-year mark. Now how soon that will get into print is a little bit hard for us to say.

At ASTRO, the Winthrop study reached about the five-year mark and the Naples was somewhere in the four to five year range. So certainly in the next year to 18 months, the data should mature to the point where it includes a sizable proportion of five-year data. Again, how soon it gets into print is a little bit hard for us to judge.

The impact question I think is relatively simple to assess. I think the first thing we would expect to see is increased confidence amongst our existing CyberKnife users to start prostate treatments, and certainly a long way from having 100% adoption of prostate treatment throughout the CyberKnife world. And that will be the first impact. And clearly the next one then is the strengthening of the performers we put it into the sales process.

Matthew Weiss - Jefferies

You talked about your sales funnel coming out of ASTRO. I was wondering if you could provide just a little more color on the current overall hospitals purchasing environment in North America, specifically for radiation oncology systems, and maybe as a benchmark compared to where it was at this time last year.

Euan Thomson

That's little bit hard to give data on that. But I can say that we feel like things are improving slowly. We don't see any dramatic changes and certainly no dramatic changes in either direction. We have seen continued strengthening on some international markets. Europe in particular remains very, very strong for us, and we're getting very good growth there. The U.S. market I think is strong, but not necessarily expanding at the rate as some of the international markets.

Matthew Weiss - Jefferies

In Europe, is there any noteworthy country-by-country specific activity where it may be harder in one country or region than the other specific dynamics in Europe, or just the overall strength?

Euan Thomson

I think there are changes country-by-country. In France, we saw the results of the initial assessment of CyberKnife that was funded by the National Cancer Institute that led to reimbursement in France. And France has a good and strong and expanding pipeline for us.

We've seen things driving along nicely in the U.K. and well in Germany as well. So the big markets in Europe appear to be strong and strengthening for us. Italy remains strong for us. It's always been a good country for us. In other countries such as Turkey, we have pockets where we're extremely successful.

Other markets are growing. And in some cases, we're establishing a foothold there. One thing is important to remember worldwide is that in each country it's very important that we launch a CyberKnife program in a very methodical way. Selling one system doesn't necessarily mean that you've got a whole program. You have to address issues of reimbursement, of clinical acceptance, clinical adoption, awareness of patients and awareness of physicians and start to change referral patterns.

So that remains a continued investment for us to engage each new site and each new country and build a program independently.

Matthew Weiss - Jefferies

Moving across the globe to Japan, can you speak on some of your success there, specifically with the Shonin approval and you've mentioned that you have the new general manager coming into that region? Maybe you could talk about what kind of favorable impact you think that will have on sort of returning Japan back to growth region in terms of orders, because obviously I think there were two installations, but no specific orders out of that region?

Euan Thomson

Japan, we did launch of our G4 product on October 5. The initial response is very good. We had good media coverage and good media presence. We also had immediate customer interest. And it's a little bit early to talk about the impact on sales, but certainly in terms of the sales pipeline and the sales funnel, we definitely feel that it may grab people's attention. We've had a lot of inquiries from both new potential users and people that have some of the last generation CyberKnife are looking to maybe upgrade their systems to the G4. It's a market with considerable potential.

One of the challenges we have there was still moving out of the environment of intracranial treatment towards being a full body treatment. And Japan is a market similar to those that I mentioned just now where you really need to build a clinical program, an in-country clinical program where there is lot of interest and a lot of interest in CyberKnife and a lot of interest in G4. We know that in order to build the business long term, we also need to build clinical programs in Japan around such treatments as lung cancer treatment.

So we have a lot of work there to go, but we nevertheless have a lot activity and lot of sales interest and a lot of enthusiastic and supportive customers.

Matthew Weiss - Jefferies

It's still obviously pretty early on the Siemens collaboration, but if you could just remind us when you believe that you're going to see some incremental systems sales. Is that more of a 2012 event?

Derek Bertocci

We would remain consistent with what we said up till now that we're not expecting revenue particularly in this year. We would expect to make some progress with distribution channels and would expect to make some progress perhaps with generating some orders into backlog. But those will probably be towards the end of the year, if they happen.

It takes a long time to bring on any new distribution channel. And Siemens is clearly a large company with a large infrastructure, and it takes a while to get it moving to get it engaged.


Your next question is from line of Mark Arnold.

Mark Arnold - Piper Jaffray

Japan, is there any update there in terms of how fast you expect to see some of those?

Euan Thomson

I am reluctant to give a sales forecast there, but I can say that we've actually been very encouraged. The in-country team was extremely pleased, and I think the launch exceeded their expectations. And so we're actually very positive about the Japanese market.

But with (Arita), as I mentioned just now, we do need to build clinical programs outside of the brain in Japan. And it will not need to be as extensive as we've run already, but certainly some local experience, perhaps some local endorsement of the CyberKnife as a lung treatment machine will certainly go a long way into rapidly expanding the market.


I'd now like to turn the call back over to Mr. Euan Thomson.

Euan Thomson

Thank you. Accuray remains dedicated to expanding the use of CyberKnife Radiosurgery, as we change the way in which cancer is treated around the world. As always, I want to take a moment to acknowledge Accuray employees and the tremendous contribution they make everyday.

Thank you for joining us today, and we look forward to speaking with you on our next call.


Ladies and gentlemen, that concludes today's conference. Thank you for participating. You may now disconnect.

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