Earnings call transcript Q1 2023

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Operator

Good afternoon, and thank you for joining the ViewRay First Quarter Earnings Call. My name is Kate, and I will be the moderator for today's call.

All lines will be muted during the presentation portion of the call, with an opportunity for question and answers at the end.

I would now like to pass the call over to our host, Matt Harrison, Director of Investor Relations.

You may proceed.

Matt Harrison

welcome first and conference Kate, you, to quarter ViewRay's call. Thank

our today our Chief Officer. are me President Interim Scott Financial Signoriello, Joining Jake Drake, and and Executive Chief Officer;

which press is call broadcast XX available and a for a on website. and being issued live, will ViewRay on our today, today's Earlier days. call, replay is webcast our available Today's for release be website

of that would discussion discussion the include current most I begin, in X-K like Form today cause Factors during forward-looking financial Also, conference to we you can discussed the report the to with to non-GAAP directly Before filed the may that SEC. exhibit financial measure recent results will measures. our Reconciliations this our call statements. are include the differ could actual certain in be remind filings on materially GAAP comparable with found SEC. company's the most and appendix

Scott turn And with will I that, over the Drake. to call

Scott Drake

afternoon, Thanks, for everyone, joining Matt. and Good call. our you thank

that first, and cost update month, guidance. our taken three our steps enact preannounced have around are cash second, and today remarks going an to areas: focus we Given results strategic color we around our to provide third, the on process; provide savings preservation; our last on we views

engaged, inquire our process, specifics have to and about timing investors potentially relating working many we parties. diligently are interested with and the Regarding Understandably, strategic expected and the Goldman like. team who how

Board As a action. disclose developments, transaction we specific unless and said in approves until our we April, not will or

is we we best news, that seek path with communicate when investors as will definitive We for shareholders. the have

have elongated until prior cycle calls, payment on preserve all end from As I the they payments their to their users. balance on distributors cash our have sheets, received mentioned

capital cycles installation The In and working effect increased delayed certain delayed customers. rising construction costs for net demands the has have been for revenue addition, company.

prioritizing our flow these and pipeline R&D date, customer and while designed pipeline, to service shortfalls, to preserving efforts, cost-saving address efforts. clinical are cash Our

important service steps research programs levels. the preservation On customer and costs, key cash as OpEx reduce clinical preserving to have taken well strong as while several maintaining fronts, we and

We to We actions know travel, with review other these million are and $XX including our maintain reductions are $XX commercial process, office, expenses. believe strategic back flexibility consistent G&A also enacting but for of alternatives the and million, suitors outcomes about different wide need may range cash, of are process preserve We that different have clear-eyed to investors needs. yield. parties want to we mindful our requirements yet our that and

to and flexibility, date to burn while in that cash cost savings us allow actions maintain taken reducing XXXX These beyond.

As to part step pathways ask team, the profound and of as retirement. Burke reductions, well our wish to prepare to planning to led capable patient lie had MRIdian. down for the I we make our grateful In joined ViewRay am extensive Bill because that him decision for Bill of as returns has potential the announced CFO. unison Bill ahead. of to impact with us his efforts he difficult

CFO as our has has serve we forward. served capacity, go VP as Investor of and agreed an in Jake Relations Signoriello, Finance to interim who as

outcomes of remainder given review, the appropriate strategic year. guidance related Finally, range of to for suspend the believe to our the we it's our

systems. prospective the current While we advance and had canceled both any we customer have orders to customers discussions current not at with continue time, additional and for

aware outcome of may are customers and strategic on greater clarity. focused review there installations until may the be our our We that delay is

next time. have to investors the determined We As such, look and guidance to steps the cancel that customers feel we it we forward until with is sharing for company. prudent this at

of couple you thoughts. leave me Let a with

been never in Our pipelines have clinical innovation stronger.

to them with key patients options. opinion has patients, that according MRIdian therapeutic that treated unmatched industry. thousands other clinical customers over every XX,XXX are day Our leaders, no in of the treating outcomes are have reported

Patients course incremental We that sizable exactly deliver. have treatment, short what highly backlog this a is deserve MRIdian and systems. effective, we customers proven, number currently desire of and customers and demand and an increasing

focused speed a impact Board clarity to to are our technology. time. acting is bringing this What and on is leading and improve value one importance challenging market, the optimize change of with but that all our macro This to the will the of over list we life-enhancing provide patient investors environment of Our growing a will for product due is customers. reality,

for you the please joining operator, today. line us open questions. with And Thank that, for

Operator

Wise [Operator Instructions] Our with first question will the Rick line Stifel. of be from

open. is line Your now

Rick Wise

couple A of Scott. afternoon, me. for questions Good

some cash given kind mind, as does work what out of be Just you do come wanted conclusion what conservation your along expecting? that kind burn and to I timeline to your extending reducing to success G&A, in you strategic mentioned, there? you're cash of your initiatives, of review year with cetera, think the you clear, And into next in give et some

this part on part. didn't just mention just of SVB financial you as maybe us, that, And your of credit. line Remind

to to was if credit you. certain I against think, the Thank available draw $XX was there I milestones. that recall get to some color. agreement? does would Where Are great now? achieving tied that company you million stand be all correctly, which That still able

Scott Drake

you, Thank Yes. Rick.

quarter at I'll over astray ended here things Jake So end top, and to $XX we of -- somewhere I $XX invite in would Rick, share, if million all. of the million at I the QX. at between a go come couple

our utilization. incredibly are being about cash We careful

As and cash to you taken have runway. our today actions elongate mentioned, preserve we expenses

And that. us, of from Many different is this through and to most focus is get taking we the of between. potential of it have that through on time, we're in to outcomes get capital whatever to the This the may Our strategic yield. and everything to there company sale process, capitalization company Goldman XXX% runway process this we our with have partnering importantly on.

Rick Wise

Okay. And the line of credit?

Scott Drake

stop going I'm to Rick, Yes. there.

We have guide don't we suspended guidance, and cash. the

what we at on runway the that the critically which have commentary to we're get there important focused process this moment. leave to going I'm through So and is

Rick Wise

intrigued seemed backlog follow-up -- as just removing and And know emphatic years, over Okay. of the the that Scott. no orders several orders. I canceled, last and up saying, you're a have actually, some uncertain your think, little went quality new And you've right still been the I'm I that backlog been bit. orders that in a custom on working about question, I'm emphasizing you're

Thanks year? Can terms, you you in you customers How current happen give Do it? and on are about going to install backlog you? prior there. What much. to I'll us is concerned customer levels at reactions? expanding like rate, more color are feel this the rough saying sustaining your so still stop

Scott Drake

thank have just out be at customers and to commercial have of to front, the some order things we share appreciate in that some XX, not down on the see Yes, to plays middle I days. And forward. lost any pausing pushing Yes. next how that. backlog. clear, your do fair, you, orders success we had our Rick. Rick, it's XX point, want I here, No, this the out this right to say, to I are think over point

think, They've of past with be during think, that their times ordering We looking difficult a had a might years, They're moving forward their process the -- seen an over conditioned, system. is system. buy incremental customer right seem be to I customer to Rick word. last our partnership week, the with go somewhat several second ViewRay and conversation through I they

clinical different it's are taking say would in any things I and approach close going, still on a Other see the we with customers, company and And midst data, they even dialogue is are happens customers in am frankly, are have time. what process reacting very ways. and whether doing front, those to here, the move so, is of to customers how to the a waiting I challenging various in understandably, communication happy the cautiously that various we're like. are pleased, forward and But able how

Operator

with will be from Chris line of question The the Pasquale next Nephron.

is now open. line Your

Chris Pasquale

do on to of the think you're to ground taking a of at my there recapitalization. for for questions. the you're that your how other the How solid words, that timeline the something do it's gap more Thanks change the to attempting facing normalize? a review, before extent bridge about and you isn't think you're back about event akin again? In control to headwinds you conclusion Scott, time

Scott Drake

as the Chris, is strategic process. our this our are we questions, review pedaled And said literally. XXX% prior form down focus, of of Yes. I facet and answering every on

to We are I Very But keenly our friend. quickly. resolve not tell can again, looking that XXX% time aware is, precise project focus, is situation this we're difficult and timing. it of our you, to

Chris Pasquale

Okay.

You characterize coming cost-cutting the primarily G&A. from measures is

level of at perhaps pursue sales to And the to moment? of hesitant to the the piece for play the business? have sales some given being current the comments and is the business the uncertainty about trigger, the that is right Given of new at organization still resourced customers moment, offense the resourcing pull

Scott Drake

impact I Yes. would Chris, there. some share there that is

very in commercial very with consistent but need mentioned preserve and we midst that this the expenses of, process remarks, I there prudent carefully think, where my feel rightsized to cash. we've decisions it's organizationally. strategic as we're also we we're are our are And I though -- manage that today, for in but we cognizant prepared made think of

Chris Pasquale

Thanks.

Operator

next will Oppenheimer. the with question Suraj Kalia The from be of line

is now open. line Your

Suraj Kalia

you can alright. Scott, hear me

Scott Drake

Thank you. Suraj. can I

Suraj Kalia

me of least has you've process, enough Perfect. couple almost Scott, just than this Scott, questions. XX% pre-announcement our your I to to ask disclosure just this -- go and let XX kind a of this your and public basics question. Since answer have least, lost you talked, try to more the and this of time at in me back at so let forum, times, offline, value. of the its -- been stock

disclose a was on that to the was So disclosing going legal it foundation dots, what for necessary are process. Scott, suitor we -- I to Scott, going understand still everyone, us connected because is as is potential doing to what this haven't process look now presumably, requirement at. hey, on this you're actually any to weaker the help

Scott Drake

hey, for with doing and confronted investors and be were whether we Goldman do about We choice ask right to with And questions nothing we that about, pre-announcement. be engaged thought Suraj, to the debated pretty situation made the to was rapidly. you're investors. with you forthcoming we that investors do the understand correct share open were would it. you're at or thing Yes. we a where have And it it changed

at that's Suraj, transparency, with say, of I where debate, pleased understand just our your would question, partners we very have We we path the Goldman. chose are the landed. And and

Suraj Kalia

process, in do I'm will this expect Because the capitalized. end? prepared when process and -- you said of at remarks at we Scott, you to end the your be least paraphrasing,

Thank minimum? to do How of you of process? for Forgive you my define me as envision process guess this at capitalized a the that I bare duration the what understand do trying being I you end wrong. got I'm if at taking questions. the

Scott Drake

Yes, things project very has does processes a or Look, of is course. everybody Suraj. either that think thank either binary this difficult I most enough you, ebb from it something around very timing to to perspective, strategic on And -- and been they're call flow a happens game, not. and and M&A probably know

I focus, capitalizing the be company timeframe. prudent a and So for we XXX% runway try project has what for have we work overall part is path it are the that we of to should don't But and that our to best think consider are me doing the of shareholders. specific that's And the it's doing. to

Operator

will the line of Marie Thibault with The BTIG. be next from question

now open. is line Your

Marie Thibault

here, Rick's ask you April, cash told that hosting to runway. to Scott, reiterate the a the questions. year. cash Hi, how the wanted sure to runway? balance and you not Are you that timeline, quick on In follow-up that that able you expense appreciate or taking I mentioned confirm us impacts should quarter reduction you question call exactly next get of cash first to

Scott Drake

process. Yes. get just I the reiterate to what on. focused cash Thank have that on this we're of kind That's you, we hand Marie. would through

we that taken what to to for on decision get we I than runway appropriate say Given think we're suspend don't and through the have it. put other have us focused to the to down it's guidance. markers new

I'd where for to So hopefully, leave now. the that's commentary like can appreciate you that. And

Marie Thibault

Or cost mentioned was make million OpEx? number? that basis. working annual I number that Certainly, just clarification also Is things. numbers it some okay. $XX to sure OpEx XXXX does capital a sort on Understand. an on us? is also to And of reduction comparison include the that to million million coming all want of then $XX to that a that just given is it and $XX the quick coming million or to efficiencies $XX you've on I prior rightsize off of. what wanted And out

Scott Drake

it in frame believe well. state, midst me are Marie. we would the and that we're to And question, I cuts the cost Great Yes. as process over up, of. Jake I'll let complementary to turn just it the Again,

possible We maximum are to preserving the degree.

customer R&D pipeline, efforts. and service Our clinical our pipeline

more impact little just bit in are as mentioned ago. We a to deeply cutting G&A, some commercial, travel, we

that And we we look that's NRE largely of or to question. cut to be compare if 'XX, make 'XX which $XX were down, the cost your would if forward about through non-recurring because to debated larger part we engineering will the million of work look

Jake, how about Marie bits you there? question of other help out the tie if her

Jake Signoriello

we year in note that that In XX% of And of $XX $XX It reflected said Scott. we'll million Sure, about to the your basis include will million on way the was a expenses. working to about that the realize $XX that's run the I were this and for current think a million is, and fiscal throughout Marie, $XX full-year reduction to is question. the the that exiting savings a $XX into not reduction part of rate capital. we that the the year. million $XX does it. so impact first operating believe to be rate million run in is year entering the the million

Marie Thibault

Scott and of All right. That’s you, very helpful. And Thank Jake. best luck.

Operator

question Bednar Jason from next with Sandler. is line Piper of The the

now is open. line Your

Jason Bednar

to unfolded Goldman. a a wanted since past over -- afternoon. start with in follow-up preannounced a Good you on just I I hired guess the prior adviser maybe indicated with month and strategic question. here what's

that this put conversion Are also are would that some orders their in in risk? call, customers process they planning systems say at Would or paused. orders prospective said You you being current cases -- have earlier in that backlog site on prospective prep backlog? pausing

now? is are then with ViewRay And forward. easy topics walls you going right the not an in conversation, I of these the speak important finally, just can know to what like business the maybe state but sentiment the here of

Scott Drake

candid don't I order and Yes, Zig difficult, invite be part? to. Yes. you. customer to with on It's Why happy in chime flip to the the Jason,

very We our about team. transparent mission deeply We are as care and an our about organization.

forward At taken. on a the having of our They fervently difficult the inspired time data tell we're clinical cancer by customers is our it team challenging patients impact would believes to the things every same I the to have the you, are on So environment. patient day. so time, that of a we in bunch that positive generate, that midst there's and actions a look taking cost-cutting whole of

time. years perspective, over looking buy I take say customers make a period just From exceptions to gone a generally would system. customer doing of broadly, has speaking, our diligence customers that, at But it MRIdian faster. decision generally are our are couple to a a to year There and

And have technology every might there. that very it and have and out So very and to don't on compared we say, it they is we're they're they though decision, likely this they're that here, -- you not think base. what turning other MRIdian deep customers our even in doesn't virtually -- and in do research the with done customer at contact decision appear moment, very that seen tail the talking about quickly close instances we're that take

Let and to if top. come me pause wants see over Zig

Paul Ziegler

reality spending timelines. some us of a agree had right Scott, guidance. shipment is installation lost We're that. the In working with think forecast, certainly customers difficult within for or their in now, aware haven't cancellations our us any with on line bit them is -- Jason, that's backlog. I no with we and I our again, closely facing the timing to instances, to

Jason Bednar

That's point. picking that Maybe right. on up All just Okay. helpful.

and in of just no to just I not But doesn't understand with. guidance an missed revised like guidance changed possible. to like or mean, is it just to anything complete and further EBITDA guidance pull begin few indication from weeks -- totally entirely today pulling go last deterioration why process the the I of in I'd the caused It backlog. to whatsoever. recognition Maybe With sound revenue the revenue what's guidance. that us on

begin over, would and guidance, pulling rather process down So pulled I than entirely? like if stage of to then it have you through going guiding this do could you guess, with, it

Scott Drake

of totally question. year, last changed pretty working happened we very things rapidly, quickly, them have year, cash spirit which capital distributors' led the I on what changing, that, of costs share I they end of to behavior would and was a prior you really in ship your that If business. Jason, pre-announcement. that would get Yes. And the the to requirements the relieving look this signal is inflated just customarily saw quickly to saw a right? send system our our Then how at we these early we construction would how

Monday with we period contemplated But many the very we of that. and the could how at circumstances, right the suspend we and it morning lost measured different. very in that quarterback, facts orders. move the not you prudent fact -- intervening we can't is tell today, had thoughtfully, have this the things and any But with had some that move we of done to in have again, we conversations I'm made certain think decision customers a hand, have and the guidance. was whether appropriate light I here in with time the facts

Jason Bednar

Okay. I'm in squeeze going to more here. one

Just interested one in asking more, sorry.

-- know talk a cycle -- challenge, I here about since receivables were you management Can you a rising here, going Do challenge. there. your those, customers has is, around going been Just or here bad revenue you been you question real distributors just collections forward? the talking the -- the They've the guess do I write-offs and forward? risk level debts about from anticipate

Scott Drake

answer, and anything. if it a last from think in change I that give shot current well. environment add probably here a don't our that. know track see bad Jason, the want relative I question and to I'll you Jake, debt perspective, To record after you others you Yes. a I to

always to a aware, our we gain have as would from And been business, able of timely to. you're this like is this always company. phase It our pretty as doesn't We payment at current as well come customers. it lumpy

front change things see don't here any as that today. So I on see we

Jake Signoriello

are you our had past, Yes, would Scott, I We've all do I going debt collectible that forward. and in well. that receivables said minimal agree, we think believe bad of

Operator

from be B. will question next Chatterji The line with Neil Riley. the of

Your is now line open.

Unidentified Analyst

for for Brandon strategic towards our on Goldman, I are trying question. with focus on questions for Like Thanks alternative think mentioned being just if headwinds. understand directed for if those trouble still to address put headwinds. being Neil. I This ask on I'm think for customers any a taking the instance, options to those the headwinds? having efforts but any some helping customer-related is on efforts I you're And if the financing, I alternatives maybe you wanted wondering those towards are find instance, the and financing, or financing, other there's getting

Scott Drake

share Brandon, we with that have identify customers financing our would worked Yes, third-party to partners. I

looked to our have We backlog. monetize

working of there. the modest months on over of in candidly, variety have that the needs success to efforts of I past we worked have ways capital would any many very We reduce say had business. the front,

It has point. at significant we significant So have forward effort. not relief this put provided

Unidentified Analyst

construction any And but take with right. hasn't instance, outsized just with factor that construction? if is also Obviously, particular these there's alternatives. there's costs, there's any I strategic have any there, try to be the wondering you on still of I to aspect the or particular some can factors? Right, materials I'm steps a to efforts ask ongoing, really those like, for labor about understand effects that going mitigate even if are significant if Yes, can still provided. it focus if

Scott Drake

-- a part are we've the cost goods that of highest talked question of on of our project this, the one it That's out intent both it's priority and with doing Yes. other project Brandon, a linacs and the calls. of pursuing, commensurate of $X cost make and follow-up big of publicly speed we and concurrently company. things the with we future company, The installation is a of take The high-end you, great know our cost-down about to about I that conventional are as of out MRIdian, is that there. million and

we the time cost-down That challenges we in is That that meaningfully project opportunity expand takes commercially, project. and one it some timeframe project. launch has will been that the put very and system is early is for we XXXX the estimate. is time, the and to face ready best is expense currently a the that with we our underway It think in big somewhere ground, think the a a be we of project to that MRIdian

And of estimate, investors software it's do difficult timing know what but a we're about So I we it. difficult to for also that's perspective. thinking from is how think is some incredibly important to

work. we company. Dempsey to think we're to barriers very ability for his in a market, that's on the things data, the component-based the we changes and of engineering it taking are way, we marvel the just and have going have where those materially team clinical adding that, the Jim sit. that is that And in doing is engineering don't trivialize of all work. the but think that our to down, This capability all from compete impact I difficulty I straightforward and work and time mean its any

Unidentified Analyst

side. implemented Maybe if in the levers if immediately cash just that quarters. there's that that more the can the the further can I'm conservation are to be $XX million one levers the $XX pulled pulled million wondering Okay. be levers any you on coming all

Scott Drake

needs various strategic on the Yes. management the are and preservation believe, We time, between need for very and that that would Brandon, acknowledging that expense taken, the of. cash the the and think can focused have be different at to be different the and in parties it But right levers recognize balance here redundancy. say strikes to company and the suitors requirements. same interested forgive midst the that are actions There we process we're we pulled, complementary other have certainly I

are have other striking We So we facts change, If we always can we a take. struck it. there circumstances that there. and believe actions balance are

facts planning, those We circumstances we're poised have as again, decisions, though and that feel I and if done scenario to warrant. make

Unidentified Analyst

Thanks for question. the Yes. taking

Scott Drake

Thanks Brandon

Operator

That remarks. all Scott back over to pass for are the will that questions in Drake is the I the queue. call closing

Abruptly] Ends [Call

ViewRay (VRAYQ) 10 May 232023 Q1 Earnings call transcript