Accuray made the announcement upon releasing its preliminary 2nd quarter 2013 financial results, in which the company noted a 45%-50% decline in product revenue.
The news sent ARAY shares down more than 20% to trade at $5.40, compared with last night’s close at $6.78.
Accuray expects to report 2nd quarter sales in the range of $72-$75 million, compared with $106.4 million in revenue reported for the same period last year. Net losses were projected in the range of $24-$30 million for Q2 2013.
The device maker attributed the shortfall to "manufacturing and supply related issues" which kept the company from realizing sales from new products as well as to "commercial focus and salesforce transitional issues," according to a press release.
In response Accuray launched a restructuring initiative aimed at directing resources to sales and marketing, resulting in layoffs for about 13% of the company’s workers.
The mass layoff is among new president & CEO Joshua Levine’s biggest moves since taking over the corner office October 12, 2012.
Accuray named Levine its new leader after former CEO Euan Thomson abruptly left his post, saying that a change in the company’s leadership was "healthy for the organization."
"In my first 90 days at Accuray, I have spent considerable time evaluating the strategic and operational activities at the company, and have found many reasons to be highly enthusiastic and confident in the future prospects and success of the company," Levine said in the company’s Q2 2012 preliminary release. "However, we have identified challenges that have pressured results operationally and distinct areas that require improvement – and we have a clearly defined path to address these."
Levine likely had much to consider. Accuray’s 1st quarter 2013 earnings report wasn’t much to celebrate either.
Accuray’s Q1 2013 revenues sank 17.6% compared with the same period in 2012. The company attributed the difference to the previous year’s spike in sales of Tomotherapy systems following a merger that closed in June 2011.