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In a release on May 12, the company reported that first quarter 2009 revenue was $30.6 million, a decrease of 21 percent from $38.9 million in the first quarter of 2008. The company reported a first quarter 2009 operating loss of $14.0 million, a 17 percent increase from a $12.0 million operating loss for the same period last year. The company incurred a net loss attributable to shareholders of $13.0 million, or $0.26 per share, for the first quarter of 2009, compared to a net loss attributable to shareholders of $6.2 million, or $0.12 per share, for the first quarter of 2008. In the fourth quarter of 2008, the company recorded a valuation allowance against its deferred tax assets; therefore, the 2009 results do not include any federal income tax benefit.
According to the company, it continues to maintain a strong financial position, closing the first quarter of 2009 with $158 million of cash, cash equivalents and short-term investments.
As of March 31, TomoTherapy had a revenue backlog of $157 million, an 11 percent decrease from its $176 million backlog as of December 31, 2008. Backlog only includes firm orders that have installation sites identified and that the company believes are likely to ship within the next two years. The company added $4 million of equipment orders during the first quarter of 2009, but its backlog does not include any revenue from service contracts, which due to the growing installed base, represents a growing portion of the company's overall revenue.
"Our first quarter financial results were in line with our internal expectations," said Fred Robertson, TomoTherapy's CEO. "Despite a continued weak sales environment resulting primarily from tighter capital spending in the U.S. hospital sector, the company increased its cash position in the quarter and maintains a strong balance sheet. Given the current economic environment, we have closely managed costs, with operating expenses down 18 percent from the first quarter of last year. Importantly, we continue to report improved performance in our service organization. The average cost per service contract declined 11 percent from the same quarter a year ago, and we reported strong uptime of 97.8 percent across our installed base during the first quarter of 2009."
Robertson added, "New orders continue to be impacted by concerns about the economy, especially in the U.S. While we are intently focused on initiatives to drive orders, it is a challenging environment, and we continue to see customers delay their purchasing decisions. Despite the near-term challenges, we remain confident in TomoTherapy's technology and its future potential. We firmly believe that ours is the most advanced and effective system to deliver high-quality cancer care."
Outlook
Management is lowering its 2009 revenue guidance to $170 million to $190 million from the previously announced $180 million to $210 million. There is no change to the prior earnings guidance - management still expects a 2009 loss in the range of $0.60 to $0.85 per share. The company remains committed to strong cash management and continues to believe that it will be marginally cash flow negative in 2009.
The company's quarterly revenue is driven by the installation of a relatively small number of units. Thus, if a few customers defer installation of a Hi-Artsystem for even a short period of time, recognition of a significant amount of revenue may be deferred to a subsequent period. Even though the company has improved its ability to project its conversion of backlog into revenue, it is particularly difficult to predict the effects of certain external factors such as construction delays and credit issues, which can affect the timing of deliveries. Thus, management is not providing specific quarterly guidance. However, management continues to anticipate 30 percent to 40 percent of the company's revenue will be generated in the first half of the year.
((Comments on this story may be sent to health@closeupmedia.com))
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