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Accuray Announces Results for Fourth Quarter and Fiscal Year 2013

August 27, 2013

Continued Momentum in New Order Activity and Backlog Provides Guidance for Fiscal 2014

SUNNYVALE, Calif., Aug. 27, 2013 /PRNewswire/ — Accuray Incorporated (Nasdaq: ARAY) announced today financial results for the fourth quarter and fiscal year ended June 30, 2013. Non-GAAP results are provided to enhance understanding of Accuray’s ongoing core results of operations.

Accuray announced continued strength in new orders booked in the fourth quarter and first patients treated in the United States with the new CyberKnife® M6(TM) and TomoTherapy® H(TM) Series Systems as well as continued financial discipline, operating expense control and decreased operating losses.

“This was the second quarter in which we have shown growth and improvement in new order volume, driven by the actions we have taken to improve the commercial focus and execution of our business. I am encouraged that while we have seen improved commercial momentum, at the same time we have also reduced operating expenses, resulting in significantly lower operating losses and cash usage,” said Joshua H. Levine, president and chief executive officer of Accuray.

Accuray also announced that based on final results from extensive durability testing, the Company is pursuing alternative manufacturing strategies for the InCise(TM) multileaf collimator (MLC) option on the CyberKnife M6 System. “Despite delays surrounding the initial shipment of our MLC, we are encouraged by feedback that the expanded feature set and functionality of our CyberKnife M6 System is driving improved clinical benefits for patients and economic value for our customers,” said Joshua H. Levine, president and chief executive officer of Accuray.

Financial Highlights
Gross new product orders totaled $71.6 million during the fourth quarter of fiscal 2013, up $17.8 million or 33% from $53.8 million during the third quarter of fiscal 2013. Net new product orders totaled $58.1 million during the fourth quarter of fiscal 2013, up $14.0 million or 32% from $44.1 million during the third quarter of fiscal 2013. Ending product backlog of $317.4 million was 7% higher than $297.9 million at the end of the previous quarter, and 12% higher than $283.6 million at the end of the prior year fourth quarter.

During the fourth quarter of fiscal 2013, 14 units were shipped and 15 were installed, increasing Accuray’s worldwide installed base to 700 systems.

For the fourth quarter of fiscal 2013 Accuray reported total consolidated GAAP and non-GAAP revenue of $84.9 million. By comparison, for the fourth quarter of fiscal 2012, total GAAP revenue was $100.5 million and total non-GAAP revenue was $101.1 million. On a non-GAAP basis, product revenue was down by 36.6 percent from the same quarter of the prior year.

The consolidated GAAP gross margin for the fourth quarter of fiscal 2013 was 36.4 percent for products and 28.6 percent for services, compared to 46.2 percent for products and 21.6 percent for services, respectively, for the fourth quarter of the prior year. The consolidated non-GAAP gross margin for the fourth quarter of fiscal 2013 was 41.7 percent for products and 28.7 percent for service, compared to 52.8 percent and 19.9 percent, respectively, for the fourth quarter of the prior year. While we expect the underlying positive trend in our service gross margin to continue, we are likely to experience quarterly fluctuations as in past quarters.

During the second, third and fourth quarters of fiscal 2013, operating expenses included $4.0 million, $4.9 million, and $0.2 million, respectively, of severance and facilities consolidation costs related to our restructuring. Excluding these charges related to our restructuring, ongoing non-GAAP operating expenses totaled $39.4 million in the fourth quarter compared to $50.1 million in the fourth quarter of the prior year which demonstrates significant progress towards our goal of reducing non-GAAP operating expenses to approximately $40 million per quarter during fiscal year 2014 with some expected quarterly fluctuations.

Consolidated GAAP net loss attributable to stockholders for the fourth quarter of fiscal 2013 was $18.7 million, or $0.25 per share, compared to $20.3 million or $0.28 per share for the fourth quarter of the prior year. Non-GAAP net loss for the fourth quarter of fiscal 2013 was $15.1 million or $0.20 per share compared to $14.2 million or $0.20 per share for the fourth quarter of the prior year.

Accuray’s cash, cash equivalents, investments and restricted cash totaled $177.1 million as of June 30, 2013.

Outlook
Accuray management projects total revenue for fiscal 2014 of $325 million to $345 million on both a GAAP and non-GAAP basis.

Additional Information
Additional information including slides of fourth quarter and year end highlights, which will be discussed during the conference call, is available in the Investor Relations section of the company’s website at www.accuray.com/investors.

Earnings Call Open to Investors
Accuray will hold a conference call for financial analysts and investors on Tuesday, August 27, 2013 at 2:00 p.m. PDT/5:00 p.m. EDT. The conference call dial-in numbers are 1-877-415-3183 (USA) or 1-857-244-7326 (International), Conference ID: 43627074. A live webcast of the call will also be available from the Investor Relations section of the corporate website at www.accuray.com/investors. In addition, a recording of the call will be available by calling 1-888-286-8010 (USA) or 1-617-801-6888 (International), Conference ID: 49814037, beginning at 4:00 p.m. PDT/7:00 p.m. EDT on August 27, 2013 and will be available through September 3, 2013. A webcast replay will also be available from the Investor Relations section of the Company’s website at www.accuray.com/investors from approximately 5:00 p.m. PDT/8:00 p.m. EDT today through Accuray’s release of its results for the first quarter of fiscal 2014, ending September 30, 2013.

About Accuray
Accuray Incorporated (Nasdaq: ARAY), is a radiation oncology company that develops, manufactures and sells personalized, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The Company’s leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments. For more information, please visit www.accuray.com.

Safe Harbor Statement
Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release relate, but are not limited, to total revenue and operating expenses; delays in the shipment of the MLC options; and expectation of the continuation of the positive trend in our service gross margin. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: the company’s ability to convert backlog to revenue; the success of its worldwide sales and marketing efforts; the success of the introduction of our CyberKnife and TomoTherapy Systems; the extent of market acceptance for the company’s products and services; the company’s ability to manage its expenses; continuing uncertainty in the global economic environment; and other risks detailed from time to time under the heading “Risk Factors” in the company’s report on Form 10-K to be filed on or before September 13,( )2013, and our other filings with the SEC.

Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.

Financial Tables to Follow

                                    Accuray Incorporated

                           Consolidated Statements of Operations

                           (in thousands, except per share data)

                                                 Three Months Ended             Years Ended June 30,
                                                      June 30,
                                                      --------

                                                      2013            2012            2013          2012
                                                      ----            ----            ----          ----

                                              (unaudited)      (unaudited)

    Net revenue:

    Products                                       $38,582         $60,621        $137,403      $240,472

    Services                                        46,318          39,463         178,571       166,681

    Other                                                -             449               -         2,070
                                                       ---             ---

    Total net revenue                               84,900         100,533         315,974       409,223

    Cost of revenue:

    Cost of products                                24,522          32,606          85,498       136,180

    Cost of services                                33,093          30,936         132,836       134,562

    Cost of other                                        -             501               -         1,209
                                                       ---             ---

    Total cost of
     revenue                                        57,615          64,043         218,334       271,951
                                                    ------          ------         -------       -------

    Gross profit                                    27,285          36,490          97,640       137,272

    Operating expenses:

    Selling and
     marketing                                      13,076          14,500          54,372        54,547

    Research and
     development                                    14,687          21,488          66,197        81,287

    General and
     administrative                                 12,247          15,625          57,726        57,672

    Total operating
     expenses                                       40,010          51,613         178,295       193,506
                                                    ------          ------         -------       -------

    Loss from
     operations                                    (12,725)        (15,123)        (80,655)      (56,234)

    Other expense,
     net                                            (4,284)         (4,447)        (13,133)      (12,521)

    Loss before
     provision for
     income taxes                                  (17,009)        (19,570)        (93,788)      (68,755)

    Provision for
     income taxes                                    1,706             443           3,573         2,595
                                                     -----             ---

    Loss from
     continuing
     operations                                    (18,715)        (20,013)        (97,361)      (71,350)
                                                   -------         -------         -------       -------

    Loss from discontinued operations:

    Loss from
     operations of a
     discontinued
     variable
     interest entity                                     -          (1,633)         (3,505)       (7,103)

    Impairment of
     indefinite lived
     intangible asset
     of discontinued
     variable
     interest entity                                     -               -         (12,200)            -

    Loss from
     deconsolidation
     of a variable
     interest entity                                     -               -          (3,442)            -

    Loss from
     discontinued
     operations, net
     of tax                                              -          (1,633)        (19,147)       (7,103)

    Loss from
     discontinued
     operations
     attributable to
     non-controlling
     interest                                            -          (1,382)        (13,289)       (6,411)

    Loss from
     discontinued
     operations
     attributable to
     stockholders                                        -            (251)         (5,858)         (692)
                                                       ---            ----          ------          ----

    Net loss
     attributable to
     stockholders                                 $(18,715)       $(20,264)      $(103,219)     $(72,042)
                                                  ========        ========       =========      ========

    Loss per share attributable to
     stockholders

    Basic and diluted
     -continuing
     operations                                     $(0.25)         $(0.28)         $(1.33)       $(1.01)

    Basic and diluted
     -discontinued
     operations                             $            -          $(0.00)         $(0.08)       $(0.01)

    Basic and diluted
     -net loss                                      $(0.25)         $(0.28)         $(1.41)       $(1.02)

    Weighted average common shares used in
     computing loss per share

    Basic and diluted                               74,270          71,473          73,281        70,887
                                                    ======          ======          ======        ======

    Cost of revenue, selling and marketing, research and development, and general and administrative expenses include
     stock-based compensation

    charges as follows:

    Cost of revenue                                   $455            $401          $1,498        $1,672

    Selling and
     marketing                                        $318            $184          $1,121          $729

    Research and
     development                                      $494            $667          $1,949        $2,340

    General and
     administrative                                   $830            $905          $3,648        $3,717



                                      Accuray Incorporated

                                   Consolidated Balance Sheets

                              (in thousands, except share amounts)

                                        June 30,                                   June 30,

                                                      2013                                       2012
                                                      ----                                       ----

     Assets                           (unaudited)                                (unaudited)

     Current assets:

     Cash,
      cash
      equivalents
      and
      investments                                 $174,397                                   $143,504

      Restricted
      cash                                           2,728                                      1,560

      Accounts
      receivable,
      net
      of
      allowance
      for
      doubtful
      accounts                                      55,458                                     67,890

     Inventories                                    81,592                                     81,693

      Prepaid
      expenses
      and
      other
      current
      assets                                        12,595                                     16,715

      Deferred
      cost
      of
      revenue
      -
      current                                        9,165                                      4,896

            Total
             current
             assets                                335,935                                    316,258

      Property
      and
      equipment,
      net                                           34,733                                     37,458

     Goodwill                                       59,368                                     59,215

      Intangible
      assets,
      net                                           31,896                                     49,819

      Deferred
      cost
      of
      revenue
      -
      noncurrent                                     2,149                                      2,433

     Other
      assets                                        11,848                                      7,987

            Total
             assets                               $475,929                                   $473,170
                                                  ========                                   ========

     Liabilities and equity

     Current liabilities:

      Accounts
      payable                                      $15,920                                    $18,209

      Accrued
      compensation                                  12,461                                     23,071

     Other
      accrued
      liabilities                                   22,893                                     31,646

      Customer
      advances
      -
      current                                       17,692                                     18,177

      Deferred
      revenue
      -
      current                                       86,893                                     83,071

            Total
             current
             liabilities                           155,859                                    174,174

     Long-term liabilities:

     Long-
      term
      other
      liabilities                                    5,382                                      5,988

      Deferred
      revenue
      -
      noncurrent                                     9,085                                      9,675

     Long-
      term
      debt                                         198,768                                     79,466

            Total
             liabilities                           369,094                                    269,303

     Equity:

      Preferred
      stock,                  and
      $0.001                  outstanding
      par
      value;
      authorized:
      5,000,000
      shares;
      no
      shares
      issued                                             -                                          -

     Common
     stock,                  30,                             74,587,231 respectively
     $0.001                  2013                            and
     par                     and                             71,864,268
     value;                  June                            shares
     authorized:             30,                             at
     200,000,000             2012,                           June
     and                     respectively;                   30,
     100,000,000             issued                          2013
     shares                  and                             and
     June                                               75                                         72

      Additional
      paid-
      in
      capital                                      424,524                                    409,143

      Accumulated
      other
      comprehensive
      income                                         1,882                                      2,837

      Accumulated
      deficit                                     (319,646)                                  (216,427)

            Total
             stockholders'
             equity                                106,835                                    195,625

     Non-
      controlling
      interest                                           -                                      8,242

            Total
             equity                                106,835                                    203,867

                Total
                 liabilities
                 and
                 equity                           $475,929                                   $473,170
                                                  ========                                   ========


            Revenue                                    Three months ended June 30,                              Three months ended June 30,                                 Year ended June 30,                            Years ended June 30,
                                                       ---------------------------                              ---------------------------                                 -------------------                            --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

            Products                                  $38,582               $30     (A)          $38,612        $60,621              $315      (A)        $60,936        $137,403             $378  (A)  $137,781       $240,472            $2,141  (A)   $242,613

            Services                                   46,318                (4)    (B)           46,314         39,463               244      (B)         39,707         178,571             (113) (B)   178,458        166,681           (10,065) (B)    156,616

            Other                                           -                 -                        -            449                 -                     449               -                -              -          2,070                 -           2,070

            Total                                     $84,900               $26                  $84,926       $100,533              $559                $101,092        $315,974             $265       $316,239       $409,223           $(7,924)       $401,299

    (A)      As of the close of the acquisition, TomoTherapy's deferred product revenue related to products shipped but not yet installed was written down to the fair value
             of goods and services remaining to be delivered. As a result, during the three months ended June 30, 2013 and 2012, product revenue recorded by Accuray for
             the sale of TomoTherapy products was less than $0.1 million and $0.3 million lower than product revenue that would have been recorded by TomoTherapy if the
             acquisition had not occurred. For the years ended June 30, 2013 and 2012, product revenue recorded by Accuray for the sale of TomoTherapy products was $0.4
             million and $2.1 million lower than product revenue that would have been recorded by TomoTherapy if the acquisition had not occurred.

    (B)      As of the close of the acquisition, TomoTherapy's deferred service revenue was written up to fair value. As a result, deferred service revenue recognized by
             Accuray during the three months ended June 30, 2013 and 2012 was less than $0.1 million and $0.8 million higher than the amount that would have been
             recognized by TomoTherapy if the acquisition had not occurred. Partially offsetting this deferred revenue adjustment for the three months ended June 30, 2012,
             Accuray recorded a reserve for returns of $1.0 million to reflect the expected return of spare parts from TomoTherapy distributors who will cease servicing
             TomoTherapy systems once the integration is complete and Accuray personnel begin to provide service directly to these customers. For the years ended June 30,
             2013 and 2012, deferred service revenue recognized was $0.1 million and $11.5 million higher than the amount that would have been recognized by TomoTherapy if
             the acquisition had not occurred. Partially offsetting the $11.5 million deferred revenue adjustment for the year ended June 30, 2012, Accuray recorded a
             reserve for returns of $1.4 million to reflect the expected return of spare parts from TomoTherapy distributors who will cease servicing TomoTherapy systems
             once the integration is complete and Accuray personnel begin to provide service directly to these customers.

            Cost of Revenue

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

            Products                                  $24,522           $(2,023)     (C)         $22,499        $32,606           $(3,818)     (C)        $28,788         $85,498          $(9,649) (C)   $75,849       $136,180          $(23,796) (C)   $112,384

            Services                                   33,093               (48)    (D)           33,045         30,936               875      (D)         31,811         132,836              (55) (D)   132,781        134,562            (1,655) (D)    132,907

            Other                                           -                 -                        -            501                 -                     501               -                -              -          1,209                 -           1,209

            Total                                     $57,615           $(2,071)                 $55,544        $64,043           $(2,943)                $61,100        $218,334          $(9,704)      $208,630       $271,951          $(25,451)       $246,500

        (C)  Products cost of revenue included the following charges arising from the acquisitions of TomoTherapy and Morphormics: $2.0 million and $3.8 million,
             respectively, during the three months ended June 30, 2013 and 2012 and $9.6 million and $15.3 million for the years ended June 30, 2013 and 2012 respectively,
             for the amortization of intangible assets created by the acquisitions. For the year ended June 30, 2012, products cost of revenue also included $8.3 million
             due to the write up of finished goods and work-in-process inventory on hand at the time of the acquisition of TomoTherapy from cost basis to fair value and
             $0.2 million due to employee severance and retention expenses.

        (D)  Services cost of revenue included the following adjustments to expenses arising from the acquisition of TomoTherapy during the three and twelve months ended
             June 30, 2013: less than $0.1 million and $0.3 million charges for property, plant and equipment revaluation; less than $(0.1) million and $(0.4) million
             reductions in expenses due to the roll out of fair value increases in warranty and loss contracts reserves, both of which were related to service provided
             during the periods. Service cost of revenues also included $0.1 million and $0.2 million of charges during the three and twelve months ended June 30, 2013 due
             to employee severance and retention. For the three and twelve months ended June 30, 2012: $-0-and $3.6 million charge due to the write up of service related
             inventory on hand at the time of the acquisition of TomoTherapy from cost basis to fair value, $(0.4) million and $(3.5) million reductions in expenses due to
             the roll out of fair value increases in warranty and loss contracts reserves for the periods of service consumed, $0.1 million and $0.4 million charges for
             property, plant and equipment revaluation, less than $0.1 million and $1.9 million charges due to employee severance, integration and retention expenses, and
             $(0.6) million and $(0.8) million of credits to reflect the cost of spare parts expected to be returned by TomoTherapy distributors who will cease servicing
             TomoTherapy systems once the integration is complete and Accuray personnel begin to provide service directly to these customers.

            Gross Profit

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

            Products                                  $14,060            $2,053                  $16,113        $28,015            $4,133                 $32,148         $51,905          $10,027        $61,932       $104,292           $25,937        $130,229

            Services                                   13,225                44                   13,269          8,527              (631)                  7,896          45,735              (58)        45,677         32,119            (8,410)         23,709

            Other                                           -                 -                        -            (52)                -                     (52)              -                -              -            861                 -             861

            Total                                     $27,285            $2,097                  $29,382        $36,490            $3,502                 $39,992         $97,640           $9,969       $107,609       $137,272           $17,527        $154,799

            Gross Profit Margin

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

            Products                                     36.4%              5.3%                    41.7%          46.2%              6.6%                   52.8%           37.8%             7.1%          44.9%          43.4%             10.3%           53.7%

            Services                                     28.6%              0.1%                    28.7%          21.6%            (1.7)%                   19.9%           25.6%             0.0%          25.6%          19.3%            (4.2)%           15.1%

            Other                                           -                 -                        -         (11.6)%              0.0%                 (11.6)%              -                -              -           41.6%              0.0%           41.6%

            Total                                        32.1%              2.5%                    34.6%          36.3%              3.3%                   39.6%           30.9%             3.1%          34.0%          33.5%              5.1%           38.6%

            Operating Expenses

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

             Selling and Marketing                    $13,076                $7      (E)         $13,083        $14,500             $(498)     (E)        $14,002         $54,372              $(4) (E)   $54,368        $54,547           $(2,335) (E)    $52,212

             Research and Development                  14,687              (128)     (F)          14,559         21,488              (163)     (F)         21,325          66,197             (612) (F)    65,585         81,287            (1,387)  (F)    79,900

             General and Administrative                12,247              (288)     (G)          11,959         15,625              (867)     (G)         14,758          57,726           (2,112) (G)    55,614         57,672            (5,598)  (G)    52,074

            Total                                     $40,010             $(409)                 $39,601        $51,613           $(1,528)                $50,085        $178,295          $(2,728)      $175,567       $193,506           $(9,320)       $184,186

    (E)      For the three and twelve months ended June 30, 2013, less than $0.1 million charge for property, plant and equipment revaluation. For the three and twelve
             months ended June 30, 2012, $0.5 million and $2.3 million, respectively, of charges primarily due to employee severance, integration and retention expenses.

    (F)      For the three and twelve months ended June 30, 2013: less than $0.1 million and $0.3 million due to retention expenses from the acquisition of Morphormics, and
             $0.1 million and $0.3 million due to property, plant and equipment revaluation from acquisition of TomoTherapy. For the three and twelve months ended June 30,
             2012, less than $0.1 million and $1.2 million charges due to employee severance, integration and retention expenses and $0.1 million and $0.2 million due to
             property, plant and equipment revaluation from acquisition of TomoTherapy.

    (G)      For the three and twelve months ended June 30, 2013: $-0-and $0.3 million charge primarily due to employee severance from the acquisition of Morphormics, $-0-
             and $0.5 million related to employee severance and retention due to consolidation of European offices, and $0.3 million and $1.3 million due to property,
             plant and equipment revaluation due to the acquisition of TomoTherapy. For the three and twelve months ended June 30, 2012, $0.2 million and $2.4 million
             charge due to employee severance and retention expenses, $0.2 million and $1.3 million charge related to preparation for integration of work forces and
             operations, and $0.5 million and $1.9 million charge for property, plant and equipment revaluation.

             Net loss attributable
              to Stockholders

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

            Loss From Operations                     $(12,725)           $2,506      (H)        $(10,219)      $(15,123)           $5,030      (H)       $(10,093)       $(80,655)         $12,697  (H)  $(67,958)      $(56,234)          $26,847   (H)  $(29,387)

            Other Expense, net                         (4,284)            1,110     (I)           (3,174)        (4,447)            1,007      (I)         (3,440)        (13,133)           3,640  (J)    (9,493)       (12,521)            3,596  (I)     (8,925)

            Provision For Income Taxes                  1,706                 -                    1,706            443                 -                     443           3,573                -          3,573          2,595                 -           2,595
            --------------------------

            Loss from Continuing Operations          $(18,715)           $3,616                 $(15,099)      $(20,013)           $6,037                $(13,976)       $(97,361)         $16,337       $(81,024)      $(71,350)          $30,443        $(40,907)

             Loss from operations of a
             discontinued variable interest
             entity                                         -                 -                        -         (1,633)                                   (1,633)         (3,505)               -         (3,505)        (7,103)                -          (7,103)

             Impairment of indefinite lived
             intangible asset of
             discontinued variable interest
             entity                                         -                 -                        -              -                 -                       -         (12,200)          12,200  (K)         -              -                 -               -

             Loss from deconsolidation of a
             variable interest entity                       -                 -                        -              -                 -                       -          (3,442)           3,442  (L)         -              -                 -               -
            -------------------------------

             Loss from discontinued
             operations, net of tax              $          -     $           -             $          -        $(1,633)    $           -                 $(1,633)       $(19,147)         $15,642        $(3,505)       $(7,103)    $           -         $(7,103)

             Loss from discontinued
             operations attributable to
             noncontrolling interest                        -                 -                        -         (1,382)                -                  (1,382)        (13,289)          10,323  (M)    (2,966)        (6,411)                -          (6,411)
            ---------------------------

             Loss from discontinued
             operations attributable to
             stockholders                        $          -     $           -             $          -          $(251)    $           -                   $(251)        $(5,858)          $5,319          $(539)         $(692)    $           -           $(692)

                                                                                                                                                                                                                               -                 -               -

             Net Loss Attributable to
             Stockholders                            $(18,715)           $3,616                 $(15,099)      $(20,264)           $6,037                $(14,227)      $(103,219)         $21,656       $(81,563)      $(72,042)          $30,443        $(41,599)

    (H)     Represents impact of all adjustments (A) through (G) on loss from operations.

    (I)     Represents non-cash interest expense arising from the accretion of interest expense on the long-term debt.

    (J)      Includes $4.3 million of non-cash interest expense arising from the accretion of interest expense on the long-term debt, offset by $0.7 million gain on
             previously held equity interest due to the acquisition of Morphormics.

    (K)      Represents the impairment charges related to the write-down of the in-process research and development (IPR&D) asset based on results of research and
             development work carried out by CPAC, a variable interest entity deconsolidated by the Company during the three months ended December 31, 2012.

    (L)     Represents loss from deconsolidation of CPAC.

    (M)      Represents the noncontrolling portion of the $12.2 million impairment charge related to the write-down of the IPR&D asset based on results of research and
             development work carried out by CPAC, a variable interest entity deconsolidated by the Company during the three months ended December 31, 2012.

             Loss per share
             attributable to
             stockholders

                                                       Three months ended June 30,                            Three months ended June 30,                             Year ended June 30,                         Years ended June 30,
                                                       ---------------------------                            ---------------------------                             -------------------                         --------------------

                                                         2013              2013                     2013           2012              2012                    2012            2013             2013           2013           2012              2012            2012
                                                         ----              ----                     ----           ----              ----                    ----            ----             ----           ----           ----              ----            ----

                                                     GAAP         Adjustments                 Non-GAAP          GAAP        Adjustments                 Non-GAAP          GAAP        Adjustments       Non-GAAP         GAAP        Adjustments         Non-GAAP
                                                     ----         -----------                 --------          ----        -----------                 --------          ----        -----------       --------         ----        -----------         --------

             Basic and diluted -continuing
             operations                                $(0.25)            $0.05                   $(0.20)        $(0.28)            $0.08                  $(0.20)         $(1.33)           $0.23         $(1.11)        $(1.01)            $0.43          $(0.58)

             Basic and diluted -discontinued
             operations                          $          -     $           -             $          -         $(0.00)            $0.00                   $0.00          $(0.08)           $0.07         $(0.01)        $(0.01)    $           -          $(0.01)

            Basic and diluted - net loss               $(0.25)            $0.05                   $(0.20)        $(0.28)            $0.08                  $(0.20)         $(1.41)           $0.30         $(1.12)        $(1.02)            $0.43          $(0.59)

             Weighted average common shares
             used in computing loss per
             share                                     74,270                 -                   74,270         71,473                 -                  71,473          73,281                          73,281         70,887                            70,887

SOURCE Accuray Incorporated


Source: PR Newswire