ViewRay, Inc. (NASDAQ:VRAY) Q1 2023 Earnings Call Transcript May 12, 2023

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: Thank you, Kate, and welcome to ViewRay’s first quarter conference call. Joining me today are Scott Drake, our President and Chief Executive Officer; and Jake Signoriello, our Interim Chief Financial Officer. Earlier today, ViewRay issued a press release for today’s call, which is available on our website. Today’s call is being broadcast and webcast live, and a replay will be available on our website for 14 days. Before we begin, I would like to remind you that the discussion during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company’s most recent filings with the SEC. Also, the discussion may include certain non-GAAP financial measures.

Reconciliations to the most directly comparable GAAP financial measure can be found in our appendix and exhibit of our current report on Form 8-K filed today with the SEC. And with that, I will turn the call over to Scott Drake.

Scott Drake: Thanks, Matt. Good afternoon, everyone, and thank you for joining our call. Given that we preannounced our results last month, we are going to focus our remarks today around three areas: first, our strategic process; second, provide color around the steps we have taken to enact cost savings and cash preservation; and third, provide an update on our views on guidance. Regarding our strategic process, we are working diligently with the Goldman team and potentially interested parties. Understandably, investors inquire about specifics relating to who and how many have engaged, expected timing and the like. As we said in April, we will not disclose specific developments, unless and until our Board approves a transaction or action.

We will communicate with investors when we have definitive news, as we seek the path that is best for shareholders. As I mentioned on prior calls, our distributors have elongated their payment cycle to preserve cash on their balance sheets, until they have received all payments from the end users. In addition, rising construction costs have delayed installation cycles for certain customers. The net effect has been delayed revenue and increased working capital demands for the company. Our cost-saving efforts, to date, are designed to address these cash flow shortfalls, while preserving and prioritizing our R&D pipeline, clinical pipeline and customer service efforts. On the OpEx and cash preservation fronts, we have taken several important steps to reduce costs, while maintaining key research and clinical programs as well as preserving strong customer service levels.

We are enacting reductions of $19 million to $23 million, including travel, back office, commercial and other G&A expenses. We believe these actions are consistent with our strategic alternatives review process, but also maintain flexibility for the wide range of outcomes our process may yield. We want investors to know that we are clear-eyed about our need to preserve cash, yet mindful that different suitors and parties have different requirements and needs. These cost savings actions taken to date allow us to maintain that flexibility, while reducing cash burn in 2023 and beyond. As part of our announced reductions, we had to make the difficult decision to ask Bill Burke to step down as CFO. Bill joined ViewRay because of the profound patient impact of MRIdian.

In unison with our capable team, Bill has led extensive planning to prepare us for the potential pathways that lie ahead. I am grateful for his efforts and wish him well as he returns to retirement. Jake Signoriello, who has served as our VP of Finance and Investor Relations has agreed to serve as CFO in an interim capacity, as we go forward. Finally, given the range of outcomes related to our strategic review, we believe it’s appropriate to suspend our guidance for the remainder of the year. While we have not had any customer orders canceled at the current time, and we continue to advance discussions with both prospective and current customers for additional systems. We are aware that our customers may be focused on the outcome of our strategic review and may delay installations until there is greater clarity.

As such, we feel it is prudent to cancel guidance until we have determined the next steps for the company. We look forward to sharing this with investors and customers at that time. Let me leave you with a couple of thoughts. Our innovation in clinical pipelines have never been stronger. Our customers are treating patients every day that have no other therapeutic options. MRIdian has treated over 30,000 patients, thousands of them with reported clinical outcomes that according to key opinion leaders, are unmatched in the industry. Patients and customers deserve and demand proven, highly effective, short course treatment, and this is exactly what we deliver. We currently have a sizable backlog and an increasing number of customers that desire incremental MRIdian systems.

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

Q&A Session

Operator: [Operator Instructions] Our first question will be from the line of Rick Wise with Stifel. Your line is now open.

Operator: The next question will be from the line of Chris Pasquale with Nephron. Your line is now open.

Operator: The next question will be from the line of Suraj Kalia with Oppenheimer. Your line is now open.

Operator: The next question will be from the line of Marie Thibault with BTIG. Your line is now open.

Operator: The next question is from the line of Jason Bednar with Piper Sandler. Your line is now open.

Operator: The next question will be from the line of Neil Chatterji with B. Riley. Your line is now open.

Scott Drake: Thanks Brandon

Operator: That is all the questions that are in the queue. I will pass the call back over to Scott Drake for closing remarks. [Call Ends Abruptly]