Knobias Clip Report (10-29-2008) TOMO
Submitted By Knobias ClipReport
TOMO: CEO Comments on Weak Q3 Results; Expects Profitability in Q4
By Fain Hughes, fhughes@knobias.com
Shares of TomoTherapy, Inc. (TOMO) fell to a new 52-week low on Wednesday after the Company reported financial results for the third quarter ended September 30, 2008.
The Company reported revenue of $27.4 million, a decrease of 54% from $59.2 million in the third quarter of 2007. The Company incurred a net loss of $13.0 million, or $0.26 per share, compared to net income of $2.6 million, or $0.05 per share, for the third quarter of 2007. Gross margins were negative 3.3% in the third quarter of 2008, compared to 37.3% in the prior year period.
For the fourth quarter of fiscal 2008, the Company currently anticipates revenue of $70 million to $90 million and earnings per share in the range of $0.09 to $0.15. This would result in full year revenue in the range of $190 million to $210 million and a loss in the range of $0.36 to $0.43 per share.
Frederick A. Robertson, MD, CEO of TomoTherapy, commented in a conference call, Our Q3 financial results were expected to be weak, and our performance was consistent with these expectations. We have also expected that our year would be beck-end loaded, and we expect our Q4 results to be stronger than each of the first three quarters. Similar to last year, we expect to finish the year on a strong note. Our current shipment schedule supports this, and we expect to be profitable in Q4.”
He continued, “We will continue to invest in startegic initiatives to deliver profitable growth in the future. These initiatives are focused on driving high-value innovation, expanding our gloabal market presence and enhancing quality and reliability. However, we are being cautious about those investments as we closely monitor the current global economic uncertainty. Worldwide economic concerns are having an impact on our customers’ purchasing decisions. Some of them have todl us that it is becoming more difficult to fine the necessary financing in this credit environment to purchase or lease treatment systems. This is also lengthening the buying cycle. How this will affect us remains to be seen, however, we believe that the radiation oncology space may be less affected that other segments of the healthcare market due to strong reimbursement and fast payback from the purchase of radiation equipment.”
Dr. Robertson noted, “We recently signed a prliminary agreement with Hitachi medical for distribution of the Hi-Art(R) treatment system in Japan. We expect the benifits of this arrangement to begin to be ralized in 2009. We have also signed a supply agreement with Novation which will give us access to 1,400 not-for-profit community hospitals and 13,000 healthcare education customers.”
He concluded, “We believe that we have the most advanced and effective system for high-quality cancer care. Innovation and expansion of our clinical capabilities will extend our technology leadership position and increase our prospects for greater market share and continued growth.”
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