Attached files
file | filename |
---|---|
EX-32.1 - EXHIBIT 32.1 - TomoTherapy Inc | c16769exv32w1.htm |
EX-32.2 - EXHIBIT 32.2 - TomoTherapy Inc | c16769exv32w2.htm |
EX-31.2 - EXHIBIT 31.2 - TomoTherapy Inc | c16769exv31w2.htm |
EX-31.1 - EXHIBIT 31.1 - TomoTherapy Inc | c16769exv31w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2011
or
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-33452
TomoTherapy Incorporated
(Exact name of registrant as specified in its charter)
Wisconsin (State or other jurisdiction of incorporation or organization) |
39-1914727 (I.R.S. Employer Identification No.) |
|
1240 Deming Way, Madison, Wisconsin (Address of principal executive offices) |
53717 (Zip Code) |
(608) 824-2800
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No
o
Indicate by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
Number of shares of common stock outstanding as of April 29, 2011: 56,188,986 shares.
TomoTherapy Incorporated and Subsidiaries
Index
Index
Page | ||||||||
3 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
14 | ||||||||
21 | ||||||||
22 | ||||||||
23 | ||||||||
23 | ||||||||
25 | ||||||||
26 | ||||||||
27 | ||||||||
28 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 |
2
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. | Financial Statements |
TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(unaudited)
(In thousands, except share amounts)
(unaudited)
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Cash and cash equivalents (CPAC balances of $68 and $333) |
$ | 137,362 | $ | 123,905 | ||||
Short-term investments |
| 28,150 | ||||||
Receivables, net of allowances of $827 and $340 (CPAC balances of $0 and $244) |
29,735 | 32,850 | ||||||
Inventories, net |
59,094 | 49,270 | ||||||
Prepaid expenses and other current assets (CPAC balances of $8 and $74) |
1,682 | 1,816 | ||||||
Total current assets |
227,873 | 235,991 | ||||||
Property and equipment, net (CPAC balances of $2,752 and $2,941) |
21,065 | 22,026 | ||||||
Other non-current assets, net (CPAC balances of $103 and $106) |
13,326 | 11,545 | ||||||
TOTAL ASSETS |
$ | 262,264 | $ | 269,562 | ||||
LIABILITIES AND EQUITY |
||||||||
Accounts payable (CPAC balances of $121 and $103) |
$ | 21,498 | $ | 13,405 | ||||
Notes payable (CPAC balances of $754 and $530) |
754 | 530 | ||||||
Accrued expenses (CPAC balances of $601 and $647) |
27,220 | 30,388 | ||||||
Accrued warranty |
4,354 | 5,045 | ||||||
Deferred revenue |
32,441 | 34,033 | ||||||
Customer deposits |
14,154 | 17,483 | ||||||
Total current liabilities |
100,421 | 100,884 | ||||||
Other non-current liabilities (CPAC balances of $15 and $16) |
2,049 | 2,477 | ||||||
TOTAL LIABILITIES |
102,470 | 103,361 | ||||||
Preferred stock, authorized 10,000,000 shares of $1 par value; no shares issued and outstanding |
| | ||||||
Common stock, authorized 200,000,000 shares of $0.01 par value; 56,320,391 and 56,210,249 shares
issued; 56,186,266 and 56,076,124 shares outstanding |
532 | 531 | ||||||
Additional paid-in capital |
679,135 | 677,106 | ||||||
Treasury stock, at cost; 134,125 and 134,125 shares |
(454 | ) | (454 | ) | ||||
Accumulated other comprehensive loss |
(759 | ) | (803 | ) | ||||
Accumulated deficit |
(520,952 | ) | (513,787 | ) | ||||
Total shareholders equity |
157,502 | 162,593 | ||||||
Noncontrolling interests |
2,292 | 3,608 | ||||||
TOTAL EQUITY |
159,794 | 166,201 | ||||||
TOTAL LIABILITIES AND EQUITY |
$ | 262,264 | $ | 269,562 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
(In thousands, except per share amounts)
(unaudited)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Revenue: |
||||||||
Product |
$ | 31,677 | $ | 29,229 | ||||
Service and other |
15,496 | 12,851 | ||||||
Total revenue |
47,173 | 42,080 | ||||||
Cost of revenue: |
||||||||
Product |
14,239 | 12,785 | ||||||
Service and other |
20,125 | 16,691 | ||||||
Total cost of revenue |
34,364 | 29,476 | ||||||
Gross profit |
12,809 | 12,604 | ||||||
Operating expenses: |
||||||||
Research and development |
7,441 | 7,540 | ||||||
Selling, general and administrative |
15,032 | 11,034 | ||||||
Total operating expenses |
22,473 | 18,574 | ||||||
Loss from operations |
(9,664 | ) | (5,970 | ) | ||||
Other income (expense): |
||||||||
Interest income |
215 | 531 | ||||||
Interest expense |
(29 | ) | (11 | ) | ||||
Other income (expense), net |
1,741 | (448 | ) | |||||
Total other income |
1,927 | 72 | ||||||
Loss before income tax |
(7,737 | ) | (5,898 | ) | ||||
Income tax expense (benefit) |
753 | (44 | ) | |||||
Net loss |
(8,490 | ) | (5,854 | ) | ||||
Noncontrolling interests |
1,325 | 1,176 | ||||||
Net loss attributable to shareholders |
$ | (7,165 | ) | $ | (4,678 | ) | ||
Weighted-average common shares outstanding
basic and diluted |
53,125 | 51,566 | ||||||
Loss per common share basic and diluted |
$ | (0.13 | ) | $ | (0.09 | ) | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Table of Contents
TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
(In thousands)
(unaudited)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (8,490 | ) | $ | (5,854 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
2,272 | 2,503 | ||||||
Share-based compensation |
1,611 | 1,819 | ||||||
Deferred income tax expense (benefit) |
690 | (72 | ) | |||||
Other noncash items |
(467 | ) | 2 | |||||
Changes in operating assets and liabilities: |
||||||||
Receivables, net |
3,040 | (181 | ) | |||||
Inventories, net |
(11,215 | ) | (6,136 | ) | ||||
Other assets |
142 | (1,109 | ) | |||||
Accounts payable |
8,066 | 5,548 | ||||||
Accrued expenses |
(3,826 | ) | (2,348 | ) | ||||
Accrued warranty |
(691 | ) | (594 | ) | ||||
Deferred revenue |
(2,008 | ) | (1,950 | ) | ||||
Customer deposits |
(3,328 | ) | (2,699 | ) | ||||
Net cash used in operating activities |
(14,204 | ) | (11,071 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(598 | ) | (1,239 | ) | ||||
Proceeds from sales and maturities of short-term investments |
28,333 | 21,250 | ||||||
Other investing activities |
(180 | ) | (241 | ) | ||||
Net cash provided by (used in) investing activities |
27,555 | 19,770 | ||||||
Cash flows from financing activities: |
||||||||
Payments on notes payable |
(255 | ) | (34 | ) | ||||
Proceeds from exercises of stock options and warrants |
428 | 573 | ||||||
Proceeds from issuance of CPAC notes payable |
224 | | ||||||
Proceeds from issuance of CPAC common stock |
| 6,526 | ||||||
Net cash provided by financing activities |
397 | 7,065 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(291 | ) | 199 | |||||
Increase (decrease) in cash and cash equivalents |
13,457 | 15,963 | ||||||
Cash and cash equivalents at beginning of year |
123,905 | 76,108 | ||||||
Cash and cash equivalents at end of year |
$ | 137,362 | $ | 92,071 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Table of Contents
TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(unaudited)
(In thousands)
(unaudited)
Shareholders Equity | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Additional Paid- | Comprehensive | Accumulated | Noncontrolling | |||||||||||||||||||||||||
Common Stock | in Capital | Treasury Stock | Income (Loss) | Deficit | Interests | Total Equity | ||||||||||||||||||||||
Balance at December 31, 2009 |
$ | 515 | $ | 667,177 | $ | (137 | ) | $ | (268 | ) | $ | (483,863 | ) | $ | 3,911 | $ | 187,335 | |||||||||||
Net loss |
| | | | (4,678 | ) | (1,176 | ) | (5,854 | ) | ||||||||||||||||||
Other comprehensive income (loss) |
| | | (307 | ) | | | (307 | ) | |||||||||||||||||||
Comprehensive loss |
(6,161 | ) | ||||||||||||||||||||||||||
Issuance of common stock |
| | | | | 6,526 | 6,526 | |||||||||||||||||||||
Exercise of stock options |
2 | 571 | | | | | 573 | |||||||||||||||||||||
Share-based compensation expense |
| 1,819 | | | | | 1,819 | |||||||||||||||||||||
Balance at March 31, 2010 |
$ | 517 | $ | 669,567 | $ | (137 | ) | $ | (575 | ) | $ | (488,541 | ) | $ | 9,261 | $ | 190,092 | |||||||||||
Balance at December 31, 2010 |
$ | 531 | $ | 677,106 | $ | (454 | ) | $ | (803 | ) | $ | (513,787 | ) | $ | 3,608 | $ | 166,201 | |||||||||||
Net loss |
| | | | (7,165 | ) | (1,325 | ) | (8,490 | ) | ||||||||||||||||||
Other comprehensive income (loss) |
| | | 44 | | | 44 | |||||||||||||||||||||
Comprehensive loss |
(8,446 | ) | ||||||||||||||||||||||||||
Exercise of stock options |
1 | 418 | | | | | 419 | |||||||||||||||||||||
Issuance of stock warrants |
| | | | | 9 | 9 | |||||||||||||||||||||
Share-based compensation expense |
| 1,611 | | | | | 1,611 | |||||||||||||||||||||
Balance at March 31, 2011 |
$ | 532 | $ | 679,135 | $ | (454 | ) | $ | (759 | ) | $ | (520,952 | ) | $ | 2,292 | $ | 159,794 | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
TOMOTHERAPY INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE A BACKGROUND AND BASIS OF PRESENTATION
Organization
The organization is comprised of TomoTherapy Incorporated, a Wisconsin corporation (Tomo), its
wholly-owned subsidiaries and its minority-owned affiliate (collectively, together with Tomo, the
Company). Tomo and its wholly-owned subsidiaries (TomoTherapy) develop, manufacture, market and
sell advanced radiation therapy solutions to treat a wide range of cancer types. The treatment
systems in TomoTherapys platform (collectively, the System or Systems) include: (1) the Hi Art
treatment system, which delivers CT-guided, helical intensity-modulated radiation therapy (IMRT)
treatment fractions, (2) the TomoHD treatment system, which includes both the TomoHelical and
TomoDirect treatment modalities, and (3) the TomoMobile treatment system, which is a relocatable
radiation therapy solution. TomoTherapy markets and sells its products to hospitals and cancer
treatment centers in the Americas, Europe, the Middle East and Asia-Pacific. Compact Particle
Acceleration Corporation (CPAC), Tomos controlled, minority-owned affiliate, is an enterprise
focused on the development of a proton therapy system.
Principles of Consolidation
The Companys condensed consolidated financial statements include the accounts of CPAC.
Although Tomos ownership in CPAC is less than 50%, it has consolidated CPAC, as Tomo is the
primary beneficiary of CPAC, due to its overall control of CPACs activities and Tomos ownership
interest in CPAC. CPACs outside stockholders interests are shown in the Companys condensed
consolidated financial statements as Noncontrolling interests. Intercompany balances and
transactions have been eliminated in consolidation.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have
been prepared in accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the
United States Securities and Exchange Commission (SEC) for interim financial information. Certain
information and disclosures normally included in consolidated financial statements prepared in
accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.
Accordingly, these condensed consolidated financial statements should be read in conjunction with
the audited consolidated financial statements and related notes thereto included in the Companys
Annual Report on Form 10-K for the year ended December 31, 2010 as filed with the SEC. In the
opinion of management, all adjustments, consisting of a normal recurring nature, considered
necessary for a fair presentation have been included in the condensed consolidated financial
statements. Interim results are not necessarily indicative of results for the full year ending
December 31, 2011.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the years presented. Actual results could differ
from those estimates.
Fair Value of Financial Instruments
The Companys financial instruments consist primarily of cash and cash equivalents, short-term
investments, accounts receivable, accounts payable and long-term debt. The carrying values of cash
and cash equivalents, accounts receivable, accounts payable and long-term debt approximate their
respective fair values. The fair value of short-term investments is based on quoted prices for
similar items in active markets.
7
Table of Contents
NOTE B SUPPLEMENTAL FINANCIAL INFORMATION
Short-term Investments
Investments consisted of the following (in thousands):
December 31, 2010 | ||||||||||||||||
Cost basis | Unrealized gains | Unrealized losses | Fair value | |||||||||||||
U.S. government and U.S. governmental agency securities |
$ | 20,049 | $ | 429 | $ | | $ | 20,478 | ||||||||
Corporate bonds |
7,568 | 104 | | 7,672 | ||||||||||||
$ | 27,617 | $ | 533 | $ | | $ | 28,150 | |||||||||
The remaining maturities of debt securities were as follows (in thousands):
December 31, 2010 | ||||||||
Cost basis | Fair value | |||||||
Due in one year or less |
$ | 18,658 | $ | 18,884 | ||||
Due after one year through five years |
8,959 | 9,266 | ||||||
$ | 27,617 | $ | 28,150 | |||||
The Company determines the fair value of its investments using a fair value hierarchy
based on three levels of inputs, of which the first two are considered observable and the last
unobservable, as follows:
| Level 1 Quoted prices in active markets for identical assets or liabilities. |
||
| Level 2 Inputs other than Level 1 that are observable, either directly or indirectly,
such as quoted prices for similar assets or liabilities, quoted prices in markets that are
not active, or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities. |
||
| Level 3 Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities. |
As of March 31, 2011, the Company had no short-term investments.
Inventories, net
Net inventories consisted of the following (in thousands):
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Raw materials |
$ | 46,224 | $ | 38,479 | ||||
Work-in-process |
4,946 | 4,004 | ||||||
Finished goods |
7,924 | 6,787 | ||||||
$ | 59,094 | $ | 49,270 | |||||
8
Table of Contents
Accrued Warranty
The Companys sales terms include a warranty that typically covers the first year of System
operation and is based on terms that are generally accepted in the marketplace. The Company
records a current liability for the expected cost of warranty-related claims at the time of sale.
The following table presents changes in the Companys product warranty accrual (in thousands):
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Balance, beginning of period |
$ | 5,045 | $ | 4,173 | ||||
Charged to cost of revenue |
1,550 | 1,260 | ||||||
Adjustments related to change in estimate |
(970 | ) | (373 | ) | ||||
Actual product warranty expenditures |
(1,271 | ) | (1,481 | ) | ||||
Balance, end of period |
$ | 4,354 | $ | 3,579 | ||||
Deferred Revenue
Deferred revenue is recorded on a gross basis with the corresponding costs of revenue residing
in inventory until such revenue is recognized. Deferred revenue includes amounts primarily related
to services and, to a lesser extent, amounts related to product sales, including in-transit Systems
that have shipped to the Companys customers, but are not yet installed and accepted by the
customer. The Company ultimately expects to recognize these amounts as revenue upon performance of
the services or once the Companys product has been delivered and accepted by the customer.
The costs of revenue associated with services primarily relate to spare parts inventory
along with the direct labor charges corresponding to post-warranty maintenance, which are
recognized as incurred over the term of the service contract. The costs of revenue associated with
product sales are comprised primarily of finished goods inventory, along with the corresponding
installation costs, which are recognized as incurred once the product has been accepted by the
customer.
Deferred revenue with expected recognition dates of greater than one year are classified
in the condensed consolidated financial statements as Other non-current liabilities. As of March
31, 2011 and December 31, 2010, the Companys non-current deferred revenue was $0.4 million and
$0.8 million, respectively.
Other Comprehensive Income (Loss)
Other comprehensive income (loss) refers to revenue, expenses, gains and losses that, under
U.S. GAAP, are included in other comprehensive income (loss), but are excluded from net income
(loss), as these amounts are recorded as a direct adjustment to shareholders equity, net of tax,
when applicable. The Company generated other comprehensive income of $0.04 million and other
comprehensive loss of $0.3 million for the three month periods ended March 31, 2011 and 2010,
respectively.
NOTE C NET LOSS PER COMMON SHARE
The Company calculates its loss per common share using the two-class method. The two-class
method is an earnings allocation formula that determines earnings per share for each class of
common stock and participating security according to dividends declared (or accumulated) and
participation rights in undistributed earnings. Under that method, net loss is adjusted by the
amount of dividends declared in the current period for each class of stock and by the contractual
amount of dividends that must be paid for the current period. The remaining earnings are allocated
to common stock and participating securities to the extent that each security may share in earnings
as if all of the earnings for the period had been distributed. The total earnings allocated to each
security are determined by adding together the amount allocated for dividends and the amount
allocated for a participation feature. The total earnings allocated to each security are divided by
the number of outstanding shares of the security to which the earnings are allocated to determine
the earnings per share for the security.
For the three months ended March 31, 2011 and 2010, diluted net loss per share was the
same as basic net loss per share because the effects of potentially dilutive securities are
anti-dilutive.
9
Table of Contents
Outstanding anti-dilutive securities not included in the diluted net loss per share
calculation are as follows (in thousands):
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Stock options |
4,127 | 5,028 | ||||||
Restricted stock |
2,968 | 2,436 | ||||||
7,095 | 7,464 | |||||||
NOTE D SEGMENT INFORMATION
The Company has determined that it operates in only one segment, as it only reports profit and
loss information on an aggregate basis to its chief operating decision maker.
The Company categorizes revenue by geographic region. Revenues are attributed to geographic
region based on country location of the customer site. The following table summarizes revenue by
geographic region (in thousands):
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Americas (1) |
$ | 26,908 | $ | 13,333 | ||||
Europe and Middle East |
13,924 | 19,563 | ||||||
Asia-Pacific |
6,341 | 9,184 | ||||||
$ | 47,173 | $ | 42,080 | |||||
(1) | Americas region contains revenue from the United States of $23.7 million and $12.7
million for the three months ended March 31, 2011 and 2010, respectively. |
NOTE E INCOME TAXES
The estimated annual effective tax rate is adjusted quarterly, and items discrete to a
specific quarter are reflected in tax expense for that interim period. The estimated annual
effective income tax rate includes the effect of a valuation allowance expected to be necessary at
the end of the year for deferred tax assets related to originating deductible temporary differences
and carryforwards during the year. A valuation allowance is established when necessary to reduce
deferred tax assets to an amount more-likely-than-not to be realized.
For the three months ended March 31, 2011, the Company recorded income tax expense resulting
in an effective income tax rate of (9.7)%. The effective tax rate differed significantly from the
statutory rate primarily due to maintaining a valuation allowance for deferred tax assets that are
not more-likely-than-not to be realized and recording disproportionate tax expense of $0.7 million
that, as of the end of the prior year, related to the available for sale component of accumulated
other comprehensive income. The disproportionate tax expense was not recognized in income prior to
the current period as a result of the Companys policy of clearing disproportionate tax effects
from accumulated other comprehensive income when the related component ceases to exist. Due to a
complete liquidation of its short-term investment portfolio in the current period, the related
disproportionate tax effect was recognized in income. For the three months ended March 31, 2010,
the Company recorded income tax benefit resulting in an effective income tax rate of 0.7%. There
were no material changes in unrecognized tax benefits during the three months ended March 31, 2011,
nor does the Company anticipate a material change in total unrecognized tax benefits within the
next 12 months.
NOTE F COMMITMENTS AND CONTINGENCIES
On occasion, the Company is subject to proceedings, lawsuits and other claims related to
patents, products and other matters. The Company assesses the likelihood of any adverse judgments
or outcomes with respect to these matters and determines loss contingency assessments on a gross
basis after assessing the probability of incurrence of a loss and whether a loss is reasonably
estimable. In addition, the Company considers other relevant factors that could impact its ability
to reasonably estimate a loss. A determination of the amount of reserves required, if any, for
these contingencies is made after analyzing each matter. The Companys reserves may change in the
future due to new developments or changes in strategy in handling these matters.
Securities Litigation
On May 30, 2008 and June 10, 2008, two separate complaints were filed by certain shareholders
of Tomo in the U.S. District Court for the Western District of Wisconsin (the Court) against Tomo
and certain of its officers and all of its independent directors during the period in question.
The complaints were consolidated on October 23, 2008. In the consolidated action (the 2008
Securities Litigation), the plaintiffs allege that the defendants violated the Securities Act of
1933 (the Securities Act) with respect to statements made in connection with the initial and
secondary public offerings of the Companys common stock and the Securities Exchange Act of 1934
(Exchange Act) by misrepresenting the Companys projected financial outlook during the period May
9, 2007 through April 17, 2008. The named plaintiffs, Michael Schultz, John Scala, et al., seek to
represent persons who purchased Tomos securities between those dates and who were damaged as a
result of the decline in the price of Tomos stock between those dates, allegedly attributable to
the financial misrepresentations, and seek compensatory damages in an unspecified amount.
10
Table of Contents
Tomo moved to dismiss the consolidated complaint on December 8, 2008. On July 9, 2009, the
Court ruled on the motion to dismiss the consolidated complaint by dismissing without prejudice all
claims under the Exchange Act and all but one claim under the Securities Act for failure to state a
claim upon which relief could be granted. On August 3, 2009, the plaintiffs amended the
consolidated complaint by filing their Second Amended Consolidated Complaint (the Amended
Complaint). Tomo moved to dismiss the Amended Complaint on September 3, 2009, and on December 15,
2009, the Court granted this second motion to dismiss in part and denied it in part. The
plaintiffs have moved for class certification.
However, on July 28, 2010, Tomo entered into an agreement to settle the 2008 Securities
Litigation, which was approved by the Court on March 18, 2011 after notification to purported class
members. Under the settlement, the claims against Tomo and its officers and directors were
dismissed with prejudice and released in exchange for a cash payment of $5.0 million, which has
been placed in escrow, funded by Tomos insurance carrier, a portion of which was the fee awarded
to class counsel by the Court.
Stockholder Derivative Actions
On May 28, 2010 and July 9, 2010, two separate derivative lawsuits were filed in the Circuit
Court of Dane County in Madison, Wisconsin by certain shareholders of Tomo against (a) certain
officers and all of the persons who have served as directors of Tomo since May 9, 2007
(collectively, the Individual Defendants) and (b) Tomo, as nominal defendant. In their respective
complaints (together, the Complaints), each of the named plaintiffs, The Dixon Family Living Trust
and David Huh, allege that all of the Individual Defendants breached their fiduciary duties and
engaged in abuse of control, gross mismanagement and waste of corporate assets, and that certain
Individual Defendants were unjustly enriched. The Complaints were consolidated on October 11,
2010. The allegations are substantially similar to those claims made in the 2008 Securities
Litigation. The Complaints seek damages, equitable relief, restitution and disgorgement of
profits, costs and disbursements of the action, and other relief the court deems proper.
In March 2010, Tomo received two shareholder demand letters from attorneys representing other
shareholders (together, the Demand Letters) containing allegations substantially similar to those
made in the Complaints.
However, on February 9, 2011, Tomo entered into an agreement to settle the Complaints and the
Demand Letters. Under the proposed settlement, the claims against Tomo and its officers and
directors would be dismissed with prejudice and released in exchange for implementation of a number
of governance changes and the payment of $275,000 for attorneys fees, $250,000 of which would be
funded by Tomos insurance carrier. On March 4, 2011, the Court preliminarily approved the terms
of the settlement, subject to notice to shareholders. Final approval is expected in May 2011.
Tomo and the Individual Defendants believe that there are substantial legal and factual
defenses to the allegations contained in the Complaints. Moreover, Tomo and the Individual
Defendants carry insurance for these types of claims and related defense costs. As of March 31,
2011, Tomo estimated that it would not incur any material costs in connection with these claims or
the defense thereof, given that Tomo has already paid the applicable $0.5 million insurance
deductible in connection with the 2008 Securities Litigation.
Litigation Related to the Accuray Merger
On or about March 11, 2011, an alleged Tomo shareholder, Andrew M. Storch, filed a purported
class action complaint on behalf of himself and all other similarly situated Tomo shareholders in
the Circuit Court of Dane County, Wisconsin, captioned Storch v. TomoTherapy Incorporated, et al.,
Case No. 11 CV 1183. The lawsuit relates to the Agreement and Plan of Merger, dated as of March 6,
2011, among Tomo, Accuray Incorporated, a Delaware corporation (Accuray), and Jaguar Acquisition,
Inc., a Wisconsin corporation (Merger Sub), and names as defendants Tomo and certain directors and
officers of Tomo (which, together with Tomo, we refer to as the TomoTherapy defendants).
Thereafter, four more alleged Tomo shareholders filed complaints in the same court on behalf of the
same purported class and against the same defendants, under the following captions: Janz v.
TomoTherapy Incorporated, et al., Case No. 11 CV 1184 (filed on March 11, 2011); Haselwander v.
TomoTherapy Incorporated, et al., Case No. 11 CV 1189 (filed on March 14, 2011); Reiter v.
TomoTherapy Incorporated, et al., Case No. 11 CV 1203 (filed on March 15, 2011); and Shuen v.
TomoTherapy Incorporated, et al., Case No. 11 CV 1208 (filed on March 15, 2011). The Reiter
and the Shuen complaints also named Accuray and Merger Sub as defendants (collectively, the Accuray
defendants).
11
Table of Contents
On April 4, 2011, all five actions were consolidated under the caption In re TomoTherapy
Incorporated Shareholder Litigation, Lead Case No. 11 CV 1183. Plaintiffs have moved to dismiss
Accuray as a defendant from the consolidated action. On April 18, 2011, plaintiffs filed a
consolidated complaint, which alleges, among other things, that Tomos directors breached their
fiduciary duties in connection with the negotiation, consideration and approval of the merger
agreement between Tomo and Accuray by, among other things, conducting a flawed sales process and
agreeing to sell Tomo for inadequate consideration and on otherwise inappropriate terms. The
complaint also alleges that the defendants filed with the SEC a Form S-4 Registration Statement
that misstates or omits material information regarding the proposed transaction. The complaint
further alleges that Tomo aided and abetted the alleged breaches of fiduciary duty by Tomos
directors. Based on these allegations, the consolidated complaint seeks equitable relief,
including an injunction of the merger, and costs and expenses of the litigation, including
attorneys fees.
The TomoTherapy defendants filed a motion to dismiss the consolidated complaint on April 25,
2011. A hearing on the motion to dismiss is scheduled to be held on May 12, 2011. Based on the
facts known to date, the TomoTherapy defendants consider the claims asserted to be without merit
and intend to vigorously defend against them.
Reserve for Contingency
On July 17, 2009, Hi-Art Co., Ltd. (Hi-Art), the Companys former distributor in Japan, filed
a complaint against the Company in the Tokyo District Court seeking compensation it claims is owed
by the Company. Although the Company believes it has substantial legal and factual defenses to
Hi-Arts allegations and intends to pursue these defenses vigorously, there can be no assurance
that the Company will prevail. Accordingly, the Company maintains a reserve with respect to this
matter.
Operating Leases
The Company leases six facilities under separate operating leases with various expiration
dates through 2018. The Company also leases automobiles under separate operating leases with
various expiration dates through 2014. Rent expense was $1.2 million during each of the three
months ended March 31, 2011 and 2010.
Initial terms for facility leases are up to 13 years, with renewal options at various
intervals, and may include rent escalation clauses. The total amount of the minimum rent is
expensed on a straight-line basis over the initial term of the lease unless external economic
factors exist such that renewals are reasonably assured, in which case the Company would include
the renewal period in its amortization period. Most of the leases provide that the Company pay
taxes, maintenance, insurance and certain other expenses applicable to the leased premises. The
Company expects that, in the normal course of business, leases that expire will be renewed or
replaced by other leases.
NOTE G STOCK INCENTIVE PLANS
The Company sponsors three stock incentive plans (the Plans), which allow for the grant of
incentive stock options, nonqualified stock options and restricted stock. Each option grant
entitles the holder to purchase a specified number of shares of Tomo common stock at a specified
price that may not be less than the fair market value on the grant date. Although the option grants
under the Plans have a maximum life of ten years, the majority of the grants made to date have
lives of six years and vest at various intervals. Each restricted stock grant entitles the holder
to receive a specified number of shares of Tomo common stock that vest at various intervals.
Vesting schedules are determined at the grant date by the Compensation Committee of Tomos Board of
Directors.
Under the 2007 Equity Incentive Plan (as amended in March 2009 and December 2010), Tomos
Board of Directors is authorized to grant stock-based awards to employees, directors and
consultants for up to 7,335,822 shares in the aggregate. As of March 31, 2011, two other plans
remained in effect along with the 2007 Plan; however, equity-based awards may only be granted under
the 2007 Plan.
12
Table of Contents
The following table summarizes the activity under the Plans (in thousands, except for
weighted-average exercise price and weighted-average fair value at grant date):
Stock Options | Restricted Stock | |||||||||||||||||||
Weighted- | ||||||||||||||||||||
Shares | Number of | Weighted- | Average | |||||||||||||||||
Available | Options | Average | Number of | Fair Value | ||||||||||||||||
for Grant | Outstanding | Exercise Price | Shares | at Grant Date | ||||||||||||||||
Balance at December 31, 2010 |
2,157 | 4,315 | 5.04 | 2,998 | 3.89 | |||||||||||||||
Authorized |
| | | | | |||||||||||||||
Granted |
| | | | | |||||||||||||||
Exercised |
| (136 | ) | 3.08 | (3 | ) | 2.95 | |||||||||||||
Cancelled |
32 | (52 | ) | 7.70 | (26 | ) | 3.76 | |||||||||||||
Balance at March 31, 2011 |
2,189 | 4,127 | $ | 5.07 | 2,969 | $ | 3.89 | |||||||||||||
Exercisable at March 31, 2011 |
3,897 | $ | 4.94 | | $ | | ||||||||||||||
At March 31, 2011, the Companys weighted-average remaining contractual term was 2.4
years for all outstanding stock options, 2.3 years for outstanding vested stock options and 1.9
years for restricted stock. In addition, the Companys aggregate intrinsic value was $4.0 million
for all outstanding stock options and $3.8 million for vested stock options that were outstanding
at March 31, 2011.
NOTE H INVESTMENT IN COMPACT PARTICLE ACCELERATION CORPORATION
During April 2008, TomoTherapy established a new affiliate, CPAC, to develop a compact proton
therapy system for the treatment of cancer. CPACs investors include Tomo, private investors and
potential customers.
Tomo contributed intellectual property with a fair market value of approximately $1.9
million as its investment in CPAC. CPAC raised additional capital of $6.6 million and $6.9 million
during 2010 and 2009, respectively. As of March 31, 2011 and December 31, 2010, Tomos ownership
interest in CPAC was 5.3%.
In the fourth quarter of 2010, Tomo and certain other CPAC investors purchased convertible
promissory notes from CPAC. Under the terms of the notes, Tomo paid for 50% of the notes it
purchased prior to December 31, 2010 and paid the remaining 50% in the first quarter of 2011 and
received 1,386,983 of CPACs warrants. Total consideration for the notes Tomo purchased was $0.8
million. Outside investors purchased $0.8 million of the convertible promissory notes and received
1,386,981 of CPACs warrants. The notes are due on June 3, 2011 at 12% and are convertible into
CPACs common stock at a per share conversion price as defined in the notes. The CPAC warrants are
exercisable through November 2020 at an exercise price of $0.57 per CPAC common share. At March
31, 2011, no notes had been converted and no warrants had been exercised.
On March 9, 2011, Tomo entered into a revolving promissory note with CPAC under which there
were no borrowings as of March 31, 2011. The available amount of the revolving promissory note is
$0.5 million until May 15, 2011 after which time no additional borrowings are allowed. The note
bears interest at 12% per annum compounded quarterly. The note expires and all amounts become due
on the earlier of September 1, 2011, a transaction involving a change of control, or an event of
default.
Tomo also has a contractual agreement to provide certain support and management services to
CPAC. Tomo may provide additional financial support to CPAC in the future. Settlements of CPACs
obligations are restricted to the assets of CPAC. The creditors and beneficial interest holders of
CPAC have no recourse to TomoTherapy.
NOTE I PENDING ACQUISITION
Tomo entered into an Agreement and Plan of Merger, dated as of March 6, 2011, with Accuray and
Merger Sub, which contemplates the merger of Merger Sub with and into Tomo, with Tomo surviving the
merger as a wholly owned subsidiary of Accuray. The consummation of the Merger is subject to the
satisfaction or waiver of various conditions, including the approval of our shareholders and the
receipt of certain third-party consents and regulatory approvals. Accordingly, there can be no
assurance that the Merger will be consummated.
13
Table of Contents
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion should be read together with our audited consolidated financial
statements and the notes to those financial statements, which are included in our Annual Report on
Form 10-K, and our unaudited condensed consolidated financial statements and the notes thereto
which are included in this report. This report may contain or incorporate by reference
forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the
Securities Act and Section 21E of the Exchange Act. These statements reflect managements
expectations, estimates and assumptions, based on information available at the time of the
statement or, with respect to any document incorporated by reference, available at the time that
such document was prepared. Forward-looking statements include, but are not limited to, statements
regarding future events, plans, goals, objectives, prospects and expectations. Forward-looking
statements are often, but not always, made through the use of words such as believe,
anticipate, should, intend, plan, will, likely, expect, estimate, project and
similar expressions. Forward-looking statements are not guarantees of future performance and
involve risks, uncertainties and other factors, including, but not limited to, those discussed
below under Factors Affecting Our Financial Performance, those in the section entitled Risk
Factors under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31,
2010 and those in the section entitled Risk Factors under Part II, Item 1A of this report, which
may cause our actual results, performance or achievements to differ materially from any future
results, performance or achievements expressed in or implied by those statements. We undertake no
obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking
statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events or
changes to future results over time or otherwise, except as required by law.
Overview
We develop, manufacture, market and sell advanced radiation therapy solutions to treat a wide
range of cancer types. We market and sell our products to hospitals and cancer treatment centers
in the Americas, Europe, the Middle East and Asia-Pacific and offer customer support services in
each region either directly or through distributors.
The treatment systems in our TomoTherapy product offering (collectively, the System or
Systems) operate on a ring gantry and combine integrated CT imaging with conformal radiation
therapy to deliver sophisticated radiation treatments with speed and precision while reducing
radiation exposure to surrounding healthy tissue. Our Systems include: (1) the Hi Art treatment
system; (2) the TomoHD treatment system; and (3) the TomoMobile relocatable radiation therapy
solution. The Hi Art treatment system has been used since 2003 to deliver CT-guided, helical
intensity-modulated radiation therapy (IMRT) treatment fractions. The TomoHD treatment system was
announced in October 2009, was first shipped in the fourth quarter of 2010, and includes both our
TomoHelical and TomoDirect treatment modalities to enable cancer centers to treat a broader patient
population with a single device. The TomoMobile relocatable radiation therapy solution, first
shipped in late 2009, consists of a standard TomoTherapy treatment system housed in a movable coach
and is designed to improve the access and availability of state-of-the-art cancer care.
We have entered into an Agreement and Plan of Merger, dated as of March 6, 2011 (the Merger
Agreement), with Accuray Incorporated, a Delaware corporation (Accuray), and Jaguar Acquisition,
Inc., a Wisconsin corporation and a wholly-owned subsidiary of Accuray (Merger Sub), which
contemplates the merger of Merger Sub with and into TomoTherapy, with TomoTherapy surviving the
Merger as a wholly owned subsidiary of Accuray (the Merger). The consummation of the Merger is
subject to the satisfaction or waiver of various conditions, including the approval of our
shareholders and the receipt of certain third-party consents and regulatory approvals.
Accordingly, there can be no assurance that the Merger will be consummated.
For the three months ended March 31, 2011 and 2010, our revenue was $47.2 million and $42.1
million, respectively, an increase of 12%, and our net loss attributable to shareholders was $7.2
million and $4.7 million, respectively, an increase of 53%. Included in our results for the three
months ended March 31, 2011 are $2.1 million of expenses related to the proposed Merger. Although
we experienced a net loss in the first three months of 2011, we had a working capital balance,
which is calculated by subtracting our current liabilities from our current assets, of $127.5
million, including $137.4 million of cash and cash equivalents, as of March 31, 2011. Thus, we
believe we will be able to fund ongoing operations and to invest in future product offerings for at
least the next 12 months.
Despite continued economic uncertainty in 2011, we are encouraged by our financial results and
we remain confident in the future commercial demand for our technology and product offerings due to
planned new products, product enhancements and anticipated growth in global demand for CT
image-guided radiation therapy equipment.
14
Table of Contents
Factors Affecting Our Financial Performance
Our financial performance is significantly affected by the following factors:
Incoming orders
Because we sell high-priced capital equipment with a transaction cycle that can take many
months between customer order and delivery, an important measure of our future financial
performance is the dollar value of incoming orders for equipment. Although incoming orders
decreased during the three months ended March 31, 2011 as compared to the three months ended March
31, 2010, we remain confident in the future commercial demand for our technology and product
offerings due to planned new products, product enhancements and anticipated growth in global demand
for CT image-guided radiation therapy equipment.
We still face a number of risks that could negatively impact incoming orders in the future.
Since the Systems represent a major capital expenditure, our customers may require funding through
a credit facility or lease arrangement. In the economic environment as of the date of this report,
some customers may have difficulty obtaining the necessary credit or may be subject to increased
constraints on their use of available cash. In addition, this economic environment may cause
potential new customers to delay placing capital equipment orders or to purchase equipment that is
less costly than our Systems.
We continued to experience heightened competition in the marketplace during the three months
ended March 31, 2011. To counter this competitive pressure, we continue our efforts to improve the
quality and effectiveness of our sales force, maintain our focus on group purchasing organizations
and national accounts, continue our emphasis on regional user meetings and expand our product
features. Furthermore, we believe continued innovation and expansion of our clinical capabilities
will extend our technology leadership position, increase our prospects for greater market share and
generate revenue growth.
Backlog
As of March 31, 2011, we had a backlog of $130.8 million, the majority of which we believe
should convert to revenue within the next 12 months. We define backlog as the total contractual
value of all firm orders received for Systems and related options that we believe are likely to
ship within 24 months, plus the minimum payments that are contractually required under system
rental agreements. To be included in backlog, orders must be evidenced by a signed quotation or a
purchase order from the customer or distributor. Backlog does not include any revenue from service
contracts, which represents a growing portion of our overall revenue.
On a regular basis, we review our open orders to determine if they meet our backlog definition
by evaluating various factors including site identification, requested delivery date and customer
or distributor history. If they no longer meet our backlog definition, we remove the orders from
our backlog.
Revenue
Product revenue
The majority of our product revenue is generated from sales of the Systems. We negotiate the
actual purchase price with each customer or distributor and, historically, the purchase price has
varied across geographic regions.
We are starting to see modest improvement in the market, most notably in the Americas, which
has historically been our largest market. We continue to be confident in the future commercial
demand for our technology and product offerings due to our new products, new features and
anticipated growth in demand for CT image-guided radiation therapy equipment.
15
Table of Contents
Our revenue projections can be impacted by a number of factors, including the following:
| On average, the Systems are shipped to customers within 12 months
after we receive the order. However, individual orders may take longer
than 12 months to ship. Timing of deliveries can be affected by
factors outside of our control, such as construction delays at
customer project sites and customer credit issues. For direct and
non-certified distributor sales, we recognize revenue upon end
customer acceptance of the System, which usually occurs three to four
weeks after its delivery. For certified distributor sales, we
recognize revenue upon title transfer of the System to the certified
distributor, as the Companys only remaining obligation is its
post-installation warranty services to the distributor. Each System
installation represents a significant percentage of our revenue for
the period in which it occurs. |
||
| Our geographic mix of customers may impact our average
selling prices. We intend to continue to expand our
international selling efforts, although we cannot be
certain about what, if any, impact this will have on
pricing. As of March 31, 2011, we did not have a hedging
program in place to offset foreign exchange risk and,
therefore, cannot be certain how foreign currency exchange
rates will impact our financial results in the future. |
||
| Our ability to demonstrate the clinical benefits of the
Systems compared to competing systems is an important
factor in our ability to increase market demand for the
Systems. To compete effectively, we may need to offer
additional features that could require substantial
additional resources to develop. |
||
| Our focus on sales to group purchasing organizations (GPOs)
and multi-center customers may result in lower selling
prices, as these customers tend to negotiate quantity
discounts. Orders from these customers may remain in
backlog longer than those from customers who place single
unit orders, as units sold to multi-center customers tend
to install sequentially over a longer period of time. |
||
| The Systems are major capital equipment items that
represent a significant purchase for most of our customers.
While we believe macroeconomic conditions are improving,
our customers remain cautious and, as a result, may choose
to delay some of their capital spending or may not have or
be able to obtain the funds necessary to purchase equipment
such as the Systems. These factors may have a material
adverse effect on our incoming orders and subsequent
revenue recognition. |
Also included in our product revenue are sales of optional equipment and software
enhancements. Because we plan to further develop the Systems by adding upgraded features, we
expect continued revenue growth from sales of optional equipment and software enhancements to new
and existing customers.
Service revenue
Our service revenue is generated primarily from post-warranty service contracts and the sale
of service spare parts. Our service contracts may be purchased with one- or multiple-year terms
and for a variety of service levels, giving our customers the option to contract for the level of
support they desire. As of March 31, 2011, our most popular service plan continued to be our Total
TLC Service Package (Total TLC). Under Total TLC, we provide customers with full spare parts
coverage, including installation service by our field service engineers, full scheduled maintenance
and unplanned repair service. We recognize service contract revenue ratably over the term of the
contract. We generally recognize revenue from spare parts, which are primarily sold to our
distributors, upon delivery. As the number of installed Systems continues to grow, we expect
growth in our revenue from post-warranty service contracts.
Our ability to execute our strategies to increase incoming orders, expand backlog with high
quality orders, raise sales of optional equipment and software enhancements and grow our service
revenue will have a direct impact on our ability to increase overall revenue in the future. If we
are unable to execute these strategies successfully, we may generate revenue at levels that are
lower than those we have generated in the past.
Cost of revenue
Cost of revenue includes all of our manufacturing and service costs. It consists of material,
labor and overhead costs incurred in manufacturing the Systems. It also includes the cost of
shipping the Systems to the customer site, installation costs, warranty provisions and royalty
payments to Wisconsin Alumni Research Foundation (WARF), one of our shareholders. Finally, cost of
revenue includes the customer support expenses required to service and repair the System during
both the warranty and service contract periods.
16
Table of Contents
In future periods, we expect to improve our gross margins through the following initiatives:
| Service and support expenses. We have certain individual
service contracts that produce negative gross profit
margins for which we have recorded a reserve for the
related estimated future losses. We anticipate the number
of contracts producing negative margins will decline as we
further our efforts to reduce the overall average direct
service costs per installed System. We expect to improve
service contract margins by leveraging our service
infrastructure costs over a larger installed base,
implementing remote diagnostic functionalities, outsourcing
certain tasks when cost-effective and feasible, introducing
component design changes aimed at reducing costs,
increasing longevity and improving serviceability of our
components, increasing the price for some of our older
annual service contracts, and training our personnel to
improve their problem-solving capabilities. Additionally,
we invested $2.4 million in our Fast Track program during
2010. This program targeted selected systems in the field
for upgrades of certain technology. While it increased our
cost of revenue in 2010, this program is expected to reduce
the cost to service the targeted systems in future periods.
We believe that achieving success in these initiatives
should also lead to reduced warranty costs and improved
System performance. |
||
| Component supply and cost. Our cost of revenue continues
to be impacted by high component costs and high replacement
rates. We are continuing efforts to develop alternate
components and implement enhancements to increase the
performance of components used in the System. We are also
seeking to identify lower-priced components of comparable
or improved performance and quality, as well as making
engineering improvements to the Systems in order to reduce
costs. We believe that achieving these goals will result
in reduced manufacturing, warranty and service support
costs in the long term. |
Our ability to execute on these strategies to reduce customer service and support expenses, as
well as component costs and failure rates, will have a direct impact on our ability to improve
profitability in the future. If we are unable to successfully execute these strategies, we may
experience margins that are similar to or lower than our past margins.
Research and development expenses
Research and development expenses consist primarily of salary and benefits for research and
development personnel who design and develop future products and product enhancements. Research
and development expenses also include expenses associated with product design and development, the
Compact Particle Acceleration Corporation (CPAC) proton therapy research project, customer research
collaborations and fees to third parties who furnish services related to these activities.
We expect research and development expenses to decrease during 2011 as compared to 2010,
primarily due to a decrease in CPAC spending. Additionally, we expect to capitalize more software
development costs related to ongoing product development projects in 2011 as compared to 2010.
Selling, general and administrative expenses
Selling, general and administrative expenses consist of salary and benefits for executive
management, sales, marketing and other corporate functions. Also included in these expenses are
travel, sales commissions, trade shows and marketing materials and expenses related to accounting,
legal, tax and other consulting fees.
We expect 2011 selling, general and administrative expenses to increase as compared to 2010 as
we intend to increase our selling and marketing expenses to further promote our products in
targeted markets. In addition, we expect to incur additional costs related to the proposed merger
with Accuray.
Other income (expense)
Because we conduct business in numerous foreign jurisdictions, we are exposed to changes in
foreign currency exchange rates. Foreign currency exchange rate fluctuations could materially
adversely affect our business, financial condition and results of operations. Our primary
exposures are related to foreign currency denominated sales and expenses in Europe. As of March
31, 2011, we did not have a hedging program in place to offset these risks.
Interest income
We expect interest income to decline in 2011 as compared to 2010, due to lower levels of
investable cash.
Income tax expense (benefit)
We are subject to taxation in the United States and in numerous foreign jurisdictions.
Significant judgments and estimates are required when evaluating our tax positions and determining
our worldwide provision for income taxes. As a result, our effective tax rate may fluctuate based
on a number of factors, including variations in projected taxable income, tax positions taken on
tax returns filed in the numerous geographic locations in which we operate, changes in the
valuation of our deferred tax assets, introduction of new accounting standards and changes in tax
liabilities to address potential tax exposures related to business and income tax positions we have
taken that could be challenged by taxing authorities.
When deemed necessary, we establish valuation allowances to reduce deferred tax assets to
amounts more-likely-than-not to be realized. This requires an assessment of both positive and
negative evidence when determining whether it is more-likely-than-not that deferred tax assets will
be realized. Evidence considered during the first three months of 2011 included the existence of
cumulative three-year losses, changes in backlog, current year loss and the negative impact of
economic conditions, which resulted in our continuing to record a valuation allowance to offset net
deferred tax assets in domestic and certain foreign taxing jurisdictions.
17
Table of Contents
Noncontrolling interests
Our condensed consolidated financial statements include the accounts of CPAC. Although our
ownership in CPAC is less than 50%, we are the primary beneficiary of CPAC and have consolidated
CPAC, due to our overall control of CPACs activities and our ownership interest in CPAC.
Therefore, CPACs outside stockholders interests are shown in our consolidated financial
statements as Noncontrolling interests. If CPAC obtains additional third-party funding, we
expect our ownership percentage to decline.
Results of Operations
The following table sets forth certain elements from our condensed consolidated statements of
operations as a percentage of revenue for the periods indicated:
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Revenue: |
||||||||
Product |
67.2 | % | 69.5 | % | ||||
Service and other |
32.8 | 30.5 | ||||||
Total revenue |
100.0 | 100.0 | ||||||
Cost of revenue: |
||||||||
Product |
30.2 | 30.4 | ||||||
Service and other |
42.6 | 39.6 | ||||||
Total cost of revenue |
72.8 | 70.0 | ||||||
Gross profit |
27.2 | 30.0 | ||||||
Operating expenses: |
||||||||
Research and development |
15.8 | 17.9 | ||||||
Selling, general and administrative |
31.8 | 26.2 | ||||||
Total operating expenses |
47.6 | 44.1 | ||||||
Loss from operations |
(20.4 | ) | (14.1 | ) | ||||
Other income |
4.1 | 0.2 | ||||||
Loss before income tax |
(16.3 | ) | (13.9 | ) | ||||
Income tax expense (benefit) |
1.6 | (0.1 | ) | |||||
Net loss |
(17.9) | % | (13.8) | % | ||||
Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010
Revenue
Revenue by major type for the three months ended March 31, 2011 and 2010 was as follows (in
thousands):
Three Months Ended March 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Product revenue |
$ | 31,677 | 67.2 | % | $ | 29,229 | 69.5 | % | ||||||||
Service and other revenue |
15,496 | 32.8 | 12,851 | 30.5 | ||||||||||||
$ | 47,173 | 100.0 | % | $ | 42,080 | 100.0 | % | |||||||||
Revenue by geographic region for the three months ended March 31, 2011 and 2010 was as
follows (in thousands):
Three Months Ended March 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Americas (1) |
$ | 26,908 | 57.0 | % | $ | 13,333 | 31.7 | % | ||||||||
Europe and Middle East |
13,924 | 29.5 | 19,563 | 46.5 | ||||||||||||
Asia-Pacific |
6,341 | 13.5 | 9,184 | 21.8 | ||||||||||||
$ | 47,173 | 100.0 | % | $ | 42,080 | 100.0 | % | |||||||||
(1) | Americas region contains revenue from the United States of $23.7 million and $12.7
million for the three months ended March 31, 2011 and 2010, respectively. |
18
Table of Contents
Product revenue increased $2.4 million, or 8%, between periods. This increase was
attributable to more Systems being installed and accepted as well as additional rental revenue
related to TomoMobile during the three months ended March 31, 2011 compared to the three months
ended March 31, 2010. Partially offsetting this increase, average System selling prices during the
three months ended March 31, 2011 were 9% lower than average System selling prices during the three
months ended March 31, 2010. Additionally, we sold $1.0 million fewer optional equipment and
software enhancements during the three months ended March 31, 2011 as compared to the three months
ended March 31, 2010.
Service and other revenue increased $2.6 million, or 21%, between periods. This increase was
primarily attributable to an increase in service contract revenue, as we had 17% more Systems that
were covered under service contracts at March 31, 2011 as compared to March 31, 2010. The increase
also reflected an increase in revenue related to the construction of a bunker for one of our
customers.
Cost of revenue
Cost of revenue increased to $34.4 million for the three months ended March 31, 2011 from
$29.5 million for the three months ended March 31, 2010, an increase of $4.9 million, or 17%. The
increase in cost of revenue was primarily due to higher product costs related to more Systems being
installed and accepted and higher service and other costs to support the increase in our installed
base. In addition, we recognized costs related to the construction of a bunker for one of our
customers. Our gross profit was 27.2% for the three months ended March 31, 2011 compared to 30.0%
for the three months ended March 31, 2010. The decrease in our gross profit percentage for the
three months ended March 31, 2011 was the result of a 1.2% reduction in product margin as a result
of a decrease in average selling price partially offset by increased System volume, and a shift in
the mix of revenue to service, which generates lower margins than product sales.
Product costs increased by $1.5 million, or 11%, for the three months ended March 31, 2011
compared to the three months ended March 31, 2010. This increase was primarily due to higher System
sales volume as well as higher freight and field action costs. Partially offsetting this increase
was a reduction in average warranty costs per System.
Total service and other costs increased by $3.4 million for the three months ended March 31,
2011 compared to the three months ended March 31, 2010. The increase was due to a $1.1 million
increase in employee costs, a $0.3 million increase in logistic costs and a $0.2 million increase
in travel to support the installed base. In addition, we recognized costs related to the
construction of a bunker for one of our customers.
Research and development expenses
Research and development expenses by category for the three months ended March 31, 2011 and
2010 were as follows (in thousands):
Three Months Ended March 31, | ||||||||||||||||
2011 | 2010 | $ Change | % Change | |||||||||||||
System R&D |
$ | 6,346 | $ | 6,643 | $ | (297 | ) | (4.5) | % | |||||||
Proton Project / CPAC R&D |
1,095 | 897 | 198 | 22.1 | ||||||||||||
$ | 7,441 | $ | 7,540 | $ | (99 | ) | (1.3) | % | ||||||||
Total research and development expenses decreased $0.1 million, or 1%, between periods.
System research and development activities decreased by $0.3 million, primarily due to a $0.3
million decrease in test system amortization and a $0.1 million decrease in employee costs
partially offset by a $0.2 million increase in consulting expense for the three months ended March
31, 2011 as compared to the three months ended March 31, 2010. The proton therapy research project
spending increased $0.2 million, primarily due to an increase in employee costs for the three
months ended March 31, 2011 when compared to the three months ended March 31, 2010.
Selling, general and administrative expenses
Selling, general and administrative expenses increased to $15.0 million for the three months
ended March 31, 2011 from $11.0 million for the three months ended March 31, 2010, an increase of
$4.0 million, or 36%. The increase was primarily due to $2.1 million of costs related to the
proposed Merger with Accuray. In addition, there was a $0.6 million increase in employee costs, a
$0.4 million increase in bad debt expense, a $0.3 million increase in trade show expenses, and a
$0.2 million increase in consulting for the three months ended March 31, 2011 compared to the three
months ended March 31, 2010.
19
Table of Contents
Other income (expense)
We had other income of $1.9 million and $0.1 million for the three months ended March 31, 2011
and 2010, respectively. The $1.9 million increase was primarily due to a $1.7 million favorable
impact of foreign currency exchange rates as well as a $0.5 million gain realized from the sale of
our short term investment portfolio. These increases were partially offset by a $0.3 million
decrease in interest income, as our investment balances and interest rates were lower during the
three months ended March 31, 2011 than during the three months ended March 31, 2010.
Income tax expense (benefit)
For the three months ended March 31, 2011, we recorded income tax expense of $0.8 million,
resulting in an effective income tax rate of (9.7)%. The effective tax rate differed significantly
from the statutory rate primarily due to maintaining a valuation allowance for deferred tax assets
that are not more-likely-than-not to be realized and recording disproportionate tax expense of $0.7
million that, as of the end of the prior year, related to the available for sale component of
accumulated other comprehensive income. The disproportionate tax expense was not recognized in
income prior to the current period as a result of our policy of clearing disproportionate tax
effects from accumulated other comprehensive income when the related component ceases to exist.
Due to a complete liquidation of its short-term investment portfolio in the current period, the
related disproportionate tax effect was recognized in income. For the three months ended March 31,
2010, we recorded an income tax benefit of $0.04 million, resulting in an effective income tax rate
of 0.7%.
Liquidity and Capital Resources
To date, we have funded our working capital and capital expenditure requirements using cash
generated from sales of equity securities and, to a lesser extent, borrowings. From our inception
through March 31, 2011, we obtained financing of $260.8 million primarily through public and
private placements of equity securities and the exercise of stock options.
Financial Condition
Our cash and cash equivalents and short-term investments were $137.4 million at March 31, 2011
compared to $152.1 million at December 31, 2010, a decrease of $14.7 million, or 9.7%.
Our working capital, which is calculated by subtracting our current liabilities from our
current assets, was $127.5 million at March 31, 2011 compared to $135.1 million at December 31,
2010, a decrease of $7.7 million, or 5.7%. Our shareholders equity was $157.5 million at March
31, 2011 compared to $162.6 million at December 31, 2010, a decrease of $5.1 million, or 3.1%. The
decreases in our working capital and shareholders equity were primarily related to our operating
loss during the three months ended March 31, 2011.
In 2009, we instituted a working capital management program that focused on improving cash
flow related to current assets and liabilities. This program is a significant driver behind our
ability to minimize cash used in operations. While this program has been successful, our ability
to continue to generate cash from working capital in future periods is uncertain.
Net cash used in operating activities was $14.2 million for the three months ended March 31,
2011. This included a net loss of $8.5 million, which was partially offset by the following noncash
items: $2.3 million of depreciation and amortization and $1.6 million of share-based compensation.
The net use of cash was further increased by changes in operating assets and liabilities, which
resulted in a use of cash of $9.8 million for the three months ended March 31, 2011, largely driven
by increased inventory to meet demand for expected manufacturing activity levels, offset by
increased accounts payable. Accrued expenses were lower, primarily due to the payment of the 2010
annual bonus to employees. Additionally, customer deposits decreased during the three months ended
March 31, 2011 due to the timing of advance System payments received from customers.
Net cash provided by investing activities was $27.6 million for the three months ended March
31, 2011. Net cash proceeds from the sales, maturities and purchases of short-term investments
were $28.3 million. Cash expended for additions of property and equipment was $0.6 million and for
other investing activities was $0.2 million.
Net cash provided by financing activities was $0.4 million for the three months ended March
31, 2011. Cash provided by financing activities primarily consisted of $0.4 million in proceeds
from the issuance of our common stock through our Employee Stock Purchase Plan and the exercise of
stock options and $0.2 million in proceeds from the issuance of CPAC notes payable, partially
offset by $0.3 million in payments on notes payable.
20
Table of Contents
Loans and Available Borrowings
There have been no significant changes to the loans and available borrowings we reported in
our Annual Report on Form 10-K for the year ended December 31, 2010.
Contractual Obligations and Commitments
There have been no significant changes to the contractual obligations and commitments we
reported in our Annual Report on Form 10-K for the year ended December 31, 2010.
Pending Litigation and Reserve for Contingency
See Note F to the condensed consolidated financial statements.
Operating Capital and Capital Expenditure Requirements
Our future capital requirements depend on numerous factors. These factors include, but are not
limited to, the following:
| revenue generated from sales of Systems and service contracts; |
||
| the performance of Systems operating in the field and corresponding service costs; |
||
| the level of investment required by our service and support organization; |
||
| the level of investment required for research and development activities; |
||
| costs associated with our manufacturing, sales and marketing and general and
administrative activities; and |
||
| effects of competing technological and market developments. |
The global economy remains volatile and could have potentially negative effects on our
near-term liquidity and capital resources, including slower collection of receivables, delays in
the delivery of existing orders and postponements of incoming orders. However, we believe that our
cash and cash equivalents as of March 31, 2011 will be sufficient to meet our anticipated cash
needs for working capital and capital expenditures for at least the next 12 months. As of March
31, 2011, we had $137.4 million of cash and cash equivalents. We do not expect to draw on our $30
million line of credit, and we believe our financial position will remain strong through the
remainder of 2011. Moreover, we continue to manage our cash resources and are carefully monitoring
our ongoing expenditures.
Off-Balance Sheet Arrangements
We have no off balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.
Critical Accounting Policies and Estimates
For a description of our critical accounting policies and estimates, please refer to the
Critical Accounting Policies and Estimates section of Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form
10-K for the year ended December 31, 2010.
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Our exposure to market risk is currently confined to changes in foreign currency exchange and
interest rates. Our exposure to market risk was discussed in Item 7A. Quantitative and
Qualitative Disclosures About Market Risk, of our Annual Report on Form 10-K for the year ended
December 31, 2010. There have been no material changes since December 31, 2010.
21
Table of Contents
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) promulgated under the Exchange Act) that are designed to ensure that information required
to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules and forms, and that
such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
As required by Securities and Exchange Commission Rule 13a-15(b), we carried out an
evaluation, under the supervision and with the participation of management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures as of the end of the period covered by this Quarterly Report
on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures were effective as of March 31, 2011.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter
ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
22
Table of Contents
Part II. OTHER INFORMATION
Item 1. | Legal Proceedings |
We are subject to various claims and legal proceedings arising in the ordinary course of our
business. The description of the developments with respect to the pending securities litigation,
the two pending derivative suits (and similar demand letters), the Hi-Art claim and the litigation
related to the proposed merger with Accuray is incorporated herein by reference to Note F to our
condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. We
believe that the ultimate resolution of the various claims and legal proceedings to which we are
subject will not have a material adverse effect on our business, financial condition or results of
operations.
Item 1A. | Risk Factors |
In addition to the risk factors set forth below and the other information set forth in this
report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in
our 2010 Annual Report on Form 10-K, which could materially affect our business, financial
condition or results of operations. Important factors that could cause our actual results,
performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by statements in this Quarterly Report on Form 10-Q include, but
are not limited to, the risk factors discussed below and in Part I, Item 1A. Risk Factors in our
2010 Annual Report on Form 10-K. If any of the events discussed in such risk factors occurs, our
business, financial condition and results of operations could be materially adversely affected, and
the market value of our common stock could decline.
Risks Related to the Merger
We have entered into an Agreement and Plan of Merger, dated as of March 6, 2011 (the Merger
Agreement), with Accuray Incorporated, a Delaware corporation (Accuray), and Jaguar Acquisition,
Inc., a Wisconsin corporation and a wholly-owned subsidiary of Accuray (Merger Sub), which
contemplates the merger of Merger Sub with and into TomoTherapy, with TomoTherapy surviving the
merger as a wholly owned subsidiary of Accuray (the Merger). In relation to the Merger, we are
subject to certain risks, including, without limitation, those set forth below.
The announcement and pending nature of our agreement to be acquired by Accuray could have a
material adverse effect on our business, financial condition and results of operations.
The announcement and pending nature of the Merger Agreement could cause disruptions in our
business, including by adversely affecting our relationships with customers, suppliers and
employees and diverting the attention of our management. For example, our employees may experience
uncertainty about their future role with us or Accuray, and this may adversely affect our ability
to attract and retain key personnel. In addition, potential customers may hesitate to buy our
treatment systems, and our distributors may hesitate to sell our treatment systems, due to
uncertainty as to whether or not the Merger will be completed and how we will be operated by
Accuray following the Merger. Any such disruptions could have a material adverse effect on our
business, financial condition and results of operations. Further, the Merger Agreement includes
certain restrictions on our freedom to operate our business prior to the completion of the Merger,
which could have a material adverse effect on our ability to take certain actions and pursue
certain opportunities that we might otherwise view as advisable.
The Merger will not be completed if all of the conditions to the Merger are not satisfied or
waived.
Completion of the Merger is subject to the satisfaction or waiver of various conditions,
including the approval of our shareholders and the receipt of certain third-party consents and
regulatory approvals, as well as the absence of any event, change or other circumstance
constituting a TomoTherapy or Accuray Material Adverse Effect for purposes of the Merger
Agreement. There can be no assurance that all of the conditions will be satisfied or waived within
the anticipated timeframe, or at all, and there can be no assurance as to whether, or when, the
Merger will be completed. If all of the conditions to the Merger are not satisfied or waived on or
before September 30, 2011 (or, in certain circumstances, on or before October 31, 2011), either
TomoTherapy or Accuray may terminate the Merger Agreement.
The failure to complete the Merger could have a material adverse effect on our business, financial
condition and results of operations.
There is no assurance that the Merger will occur. If the Merger or a similar transaction is
not completed, the share price of our common stock may drop, to the extent that the current market
price of our common stock reflects an assumption that a transaction will be completed. In addition,
we have incurred certain costs relating to the Merger that are payable whether or not the
transaction is completed, including legal, accounting and printing costs, and if the Merger
Agreement is terminated under certain circumstances
specified in the Merger Agreement, we may be required to pay a termination fee of $8.0 million
or pay up to $1.5 million of the costs and expenses incurred by Accuray in connection with the
Merger Agreement or the transactions contemplated thereby.
23
Table of Contents
Further, non-completion of the transaction may result in negative publicity and a negative
impression of TomoTherapy in the investment community. If the Merger Agreement is terminated and
our Board of Directors determines to seek another merger or business combination, it may not be
able to find a party willing to pay an equivalent or more attractive price than that which would
have been paid in the Merger. Finally, any disruptions to our business resulting from the
announcement and pending nature of the Merger, including any adverse changes in our relationships
with customers, suppliers and employees, could continue or accelerate in the event of a failed
transaction. There can be no assurance that, if the Merger is not completed, these relationships,
our business, financial condition and results of operations will not be adversely affected in a
material way, as compared to the condition prior to the announcement of the Merger.
The outcome of legal proceedings that have been instituted or may be instituted in the future
against us in connection with the Merger could have a material adverse effect on our business,
financial condition and results of operations.
Since the announcement of the Merger, several lawsuits have been filed in which we and certain
of our directors and officers have been named as defendants. These lawsuits allege that our
directors breached their fiduciary duties in connection with the transaction by, among other
things, agreeing to sell TomoTherapy for inadequate consideration and on otherwise inappropriate
terms. The lawsuits further allege that we failed to disclose all material information concerning
the transaction and that we aided and abetted the alleged breaches of fiduciary duty by our
directors. The lawsuits seek, among other things, injunctive relief, including the enjoining of the
transaction, damages and recovery of the costs of the action, including reasonable attorneys fees.
24
Table of Contents
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(a) Recent Sales of Unregistered Securities
None.
(b) Use of Proceeds from Public Offering of Common Stock
Our initial public offering of 13,504,933 shares of our common stock, par value $0.01 per
share, was effected through a Registration Statement on Form S-1 (Reg. No. 333-140600), which was
declared effective by the Securities and Exchange Commission on May 8, 2007. We issued 10,602,960
shares on May 9, 2007 and received gross proceeds of $201.5 million. We paid the underwriters a
commission of $14.1 million and incurred additional offering expenses of approximately $2.7
million. After deducting the underwriters commission and the offering expenses, we received net
proceeds of approximately $184.7 million. The managing underwriter of our initial public offering
was Merrill Lynch & Co. In addition, 2,901,973 shares were sold by selling shareholders, 1,761,513
of which were purchased by the underwriters exercise of their overallotment option.
No payments of underwriters commissions or offering expenses were made directly or indirectly
to (i) any of our directors, officers or their associates, (ii) any person(s) owning 10% or more of
any class of our equity securities, or (iii) any of our affiliates.
Through March 31, 2011, we had used $124.9 million of the net proceeds from our initial
public offering, as described in the following table (in millions):
Working capital |
$ | 89.3 | ||
Purchases of property and equipment |
22.3 | |||
Purchases of test systems |
5.7 | |||
Purchases of intangible assets |
4.9 | |||
Acquisition of Chengdu Twin Peak Accelerator Technology Inc. |
2.0 | |||
Repayment of debt |
0.7 | |||
Total net proceeds used |
$ | 124.9 | ||
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
25
Table of Contents
Item 6. | Exhibits |
Exhibit Number | Description | |||
2.1 | Agreement and Plan of Merger, dated as of March 6, 2011, among Accuray Incorporated, Jaguar
Acquisition, Inc. and the Company Incorporated by reference to Exhibit 2.1 to the Companys
Current Report on Form 8-K filed with the SEC on March 7, 2011, File No. 001-33452. |
|||
3.1 | Amended and Restated Articles of Incorporation of the Company Incorporated by reference to the
Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on
November 7, 2008 (File No. 001-33452). |
|||
3.2 | * | Amended and Restated Bylaws of the Company Incorporated by reference to the Companys
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7,
2008 (File No. 001-33452). |
||
10.1 | + | Second Amendment to Employment Agreement, dated as of March 6, 2011, by and between the Company
and Brenda S. Furlow Incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed with the SEC on March 7, 2011, File No. 001-33452. |
||
31.1 | * | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
31.2 | * | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
32.1 | * | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
||
32.2 | * | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
* | Filed herewith. |
|
+ | Executive compensation plan or arrangement. |
26
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, TomoTherapy Incorporated has
duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TOMOTHERAPY INCORPORATED |
||||
Date: May 10, 2011 | By: | /s/ Frederick A. Robertson | ||
Frederick A. Robertson | ||||
Chief Executive Officer and
President (Duly authorized officer and principal executive officer) |
||||
Date: May 10, 2011 | By: | /s/ Thomas E. Powell | ||
Thomas E. Powell | ||||
Chief Financial Officer and Treasurer (Duly authorized officer and principal financial officer) |
27
Table of Contents
EXHIBIT INDEX
Exhibit Number | Description | |||
2.1 | Agreement and Plan of Merger, dated as of March 6, 2011, among Accuray Incorporated, Jaguar
Acquisition, Inc. and the Company Incorporated by reference to Exhibit 2.1 to the Companys
Current Report on Form 8-K filed with the SEC on March 7, 2011, File No. 001-33452. |
|||
3.1 | Amended and Restated Articles of Incorporation of the Company Incorporated by reference to the
Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on
November 7, 2008 (File No. 001-33452). |
|||
3.2 | * | Amended and Restated Bylaws of the Company Incorporated by reference to the Companys
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7,
2008 (File No. 001-33452). |
||
10.1 | + | Second Amendment to Employment Agreement, dated as of March 6, 2011, by and between the Company
and Brenda S. Furlow Incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed with the SEC on March 7, 2011, File No. 001-33452. |
||
31.1 | * | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
31.2 | * | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
32.1 | * | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
||
32.2 | * | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
* | Filed herewith. |
|
+ | Executive compensation plan or arrangement. |
28