TomoTherapy Announces Revised Third Quarter Financial Results

MADISON, WI--(Marketwire - November 09, 2010) - TomoTherapy Incorporated (NASDAQ: TOMO), maker of advanced radiation therapy solutions for cancer care, today released revised financial results for the third quarter ended September 30, 2010. Subsequent to the Company’s earnings release and investor call on October 27, 2010, management determined that adjustments related to an agent commission were necessary. The effect was to increase the net loss attributable to shareholders to $11.9 million, or $0.23 per share, from the previously reported result of $10.9 million, or $0.21 per share, for the third quarter ended September 30, 2010. For the nine months ended September 30, 2010, the net loss attributable to shareholders increased to $23.5 million, or $0.45 per share, from the previously reported amount of $22.5 million, or $0.43 per share.

These revisions will be reflected in the Company’s 10-Q for the third quarter ended September 30, 2010, which is being filed with the SEC today.

The Company reaffirms previously released expectations for full-year 2010 revenue of $175 million to $185 million and net loss attributable to shareholders of $0.65 to $0.75 per share.

About TomoTherapy Incorporated

TomoTherapy Incorporated develops, markets and sells advanced radiation therapy solutions that can be used to efficiently treat a wide variety of cancers, from the most common to the most complex. The ring gantry-based TomoTherapy® platform combines integrated CT imaging with conformal radiation therapy to deliver sophisticated radiation treatments with speed and precision while reducing radiation exposure to surrounding healthy tissue. TomoTherapy’s suite of solutions includes its flagship Hi-Art® treatment system, which has been used to deliver more than three million CT-guided, helical intensity-modulated radiation therapy (IMRT) treatment fractions; the TomoHD™ treatment system, designed to enable cancer centers to treat a broader patient population with a single device; and the TomoMobile™ relocatable radiation therapy solution, designed to improve access and availability of state-of-the-art cancer care. TomoTherapy’s stock is traded on the NASDAQ Global Select Market under the symbol “TOMO.” To learn more about TomoTherapy, please visit TomoTherapy.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning market acceptance of the company’s technology; growth drivers; the company’s orders, revenue, backlog or earnings growth; future financial results and any statements using the terms “should,” “believe,” “outlook,” “expect,” “anticipate” or similar statements are forward-looking statements that involve risks and uncertainties that could cause the company’s actual results to differ materially from those anticipated. Such risks and uncertainties include: demand for the company’s products; impact of sales cycles and competitive products and pricing; the effect of economic conditions and currency exchange rates; the company’s ability to develop and commercialize new products; its reliance on sole or limited-source suppliers; its ability to increase gross margins; the company’s ability to meet U.S. Food and Drug Administration (FDA) and other regulatory agency product clearance and compliance requirements; the possibility that material product liability claims could harm future revenue or require the company to pay uninsured claims; the company’s ability to protect its intellectual property; the impact of managed care initiatives, other health care reforms and/or third-party reimbursement levels for cancer care; potential loss of key distributors or key personnel; risk of interruptions to the company’s operations due to terrorism, disease or other events beyond the company’s control; and the other risks listed from time to time in the company’s filings with the U.S. Securities and Exchange Commission, which by this reference are incorporated herein. TomoTherapy assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events or otherwise.

 TOMOTHERAPY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, -------------------- -------------------- 2010 2009 2010 2009 --------- --------- --------- --------- Revenue: Product $ 29,759 $ 24,252 $ 93,230 $ 75,937 Service and other 13,823 10,126 40,062 30,144 --------- --------- --------- --------- Total revenue 43,582 34,378 133,292 106,081 --------- --------- --------- --------- Cost of revenue: Product 16,233 13,782 46,372 39,779 Service and other 20,339 17,038 54,848 51,690 --------- --------- --------- --------- Total cost of revenue 36,572 30,820 101,220 91,469 --------- --------- --------- --------- Gross profit 7,010 3,558 32,072 14,612 --------- --------- --------- --------- Operating expenses: Research and development 8,228 7,218 24,728 20,086 Selling, general and administrative 14,390 12,470 37,334 34,347 --------- --------- --------- --------- Total operating expenses 22,618 19,688 62,062 54,433 --------- --------- --------- --------- Loss from operations (15,608) (16,130) (29,990) (39,821) Other income (expense): Interest income 342 617 1,289 2,009 Interest expense (4) (18) (27) (47) Other income (expense), net 1,539 105 513 (258) --------- --------- --------- --------- Total other income (expense) 1,877 704 1,775 1,704 --------- --------- --------- --------- Loss before income tax and noncontrolling interests (13,731) (15,426) (28,215) (38,117) Income tax expense (benefit) 47 256 13 (162) --------- --------- --------- --------- Net loss (13,778) (15,682) (28,228) (37,955) Noncontrolling interests 1,842 1,802 4,691 3,953 --------- --------- --------- --------- Net loss attributable to shareholders $ (11,936) $ (13,880) $ (23,537) $ (34,002) ========= ========= ========= ========= Weighted-average common shares outstanding - basic and diluted 51,934 50,748 51,739 50,645 ========= ========= ========= ========= Loss per common share - basic and diluted $ (0.23) $ (0.27) $ (0.45) $ (0.67) ========= ========= ========= ========= TOMOTHERAPY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) September 30, December 31, 2010 2009 ------------- ------------- ASSETS Cash and cash equivalents $ 110,424 $ 76,108 Short-term investments 29,612 78,225 Receivables, net 34,047 33,559 Inventories, net 53,014 47,669 Prepaid expenses and other current assets 3,352 3,633 ------------- ------------- Total current assets 230,449 239,194 Property and equipment, net 21,305 18,628 Other non-current assets, net 11,168 12,429 ------------- ------------- TOTAL ASSETS $ 262,922 $ 270,251 ============= ============= LIABILITIES AND EQUITY Accounts payable $ 14,095 $ 6,269 Accrued expenses 24,056 19,588 Accrued warranty 4,115 4,173 Deferred revenue 30,877 34,145 Customer deposits 14,801 13,266 ------------- ------------- Total current liabilities 87,944 77,441 Other non-current liabilities 3,213 5,475 ------------- ------------- TOTAL LIABILITIES 91,157 82,916 Total shareholders’ equity 165,959 183,424 Noncontrolling interests 5,806 3,911 ------------- ------------- TOTAL EQUITY 171,765 187,335 ------------- ------------- TOTAL LIABILITIES AND EQUITY $ 262,922 $ 270,251 ============= =============