We believe the CyberKnife platform offers clinicians and patients significant benefits over other vendors' radiation therapy systems in the market.
The long-term success of the CyberKnife platform is dependent on a number of factors including the following:
Continued adoption of our CyberKnife platform, including the CyberKnife M6 System and CyberKnife S7 System, in markets where they are available;
Change in medical practice leading to utilization of stereotactic body radiation therapy more regularly as an alternative to surgery or other treatments;
Continued advances in our technology that improve the quality of treatments and ease of use of the CyberKnife platform;
Receipt of regulatory approvals in various countries which are expected to improve access to radiosurgery with the CyberKnife S7 System in such countries;
Medical insurance reimbursement policies that cover CyberKnife platform treatments; and
Our ability to expand sales of CyberKnife M6 and S7 Systems in countries throughout the world where we do not currently sell or have not historically sold a significant number of any CyberKnife platform configurations.
The Radixact System, the Next-Generation TomoTherapy Platform
We believe the TomoTherapy platform offers clinicians and patients significant benefits over other vendors' radiation therapy systems in the market. The long-term success of the TomoTherapy platform is dependent on a number of factors including the following:
Continued adoption of our TomoTherapy platform, including the Radixact System, in markets where it is available;
Advances in our technology that improve the quality of treatments and ease of use of TomoTherapy platform;
Greater awareness among doctors of the now-established reliability of TomoTherapy platform; and
actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold.
As of June 30, 2022, backlog totaled $563.7 million, of which $0.2 million represented upgrades sold through service contracts. As of June 30, 2021, backlog totaled $616.4 million.
In order for the product portion of a system sales agreement to be counted as backlog, it must meet the following criteria:
The contract is properly executed by both the customer and us. A customer purchase order that incorporates the terms of our contract quote will be considered equivalent to a signed and executed contract. The contract has either cleared all its contingencies or contained no contingencies when signed;
The specific end customer site has been identified by the customer in the written contract or written amendment; and
Less than 2.5 years have passed since the contract met all the criteria above.
Order backlog at the end of the period $ 563,684 $ 616,399 $ 602,713
Gross Orders and Book to Bill Ratio
Net orders are defined as gross orders less cancellations, age-outs, foreign exchange and other adjustments during the period.
There were $11.3 million of cancellations in year ended June 30, 2022 as compared to $15.1 million of cancellations in the year ended June 30, 2021. Cancellations are outside of our control and are difficult to
forecast; however, we continue to work closely with our customers to minimize the impact of cancellations on our business.
Foreign currency impacts and other adjustments decreased net orders by $4.7 million for the year ended June 30, 2022 compared to an increase in net orders by $3.2 million for the year ended June 30, 2021.
There were $15.1 million of cancellations in year ended June 30, 2021 as compared to $13.9 million of cancellations in the year ended June 30, 2020. Cancellations are outside of our control and are difficult to forecast; however, we continue to work closely with our customers to minimize the impact of cancellations on our business.
Foreign currency impacts and other adjustments increased net orders by $3.2 million for the year ended June 30, 2021 compared to a decrease in net orders by $1.7 million for the year ended June 30, 2020.
Fiscal 2022 results compared to 2021 (in thousands, except percentages)
(*) Expressed as a percentage of total net revenue, except for product and services gross profits which are expressed as a percentage of related product and services revenue.
Includes sales to the JV, an equity method investment of $55,877 and $24,393 for fiscal years ended June 30, 2022 and 2021, respectively. See Note 13.
Net revenue by geographic region, based on the shipping location of our customer, is as follows (in thousands, except percentages):
Income on equity method investment, net
Income (loss) on equity method investment was an income of $0.2 million as compared to an income of $0.9 million during the year ended June 30, 2021.
Fiscal 2021 results compared to 2020 (in thousands, except percentages)
(*) Expressed as a percentage of total net revenue, except for product and services gross profits which are expressed as a percentage of related product and services revenue.
Net revenue by geographic region, based on the shipping location of our customer, is as follows (in thousands, except percentages):
Income on equity method investment, net
Income (loss) on equity method investment was an income of $0.9 million as compared to a loss of $0.1 million during the year ended June 30, 2020.
In addition, the long sales cycle, together with delays in the shipment of CyberKnife and TomoTherapy platforms or customer cancellations that have increased in light of the COVID-19 pandemic have affected our ability to recognize revenue, which could adversely affect our cash flows.
Cash Flows From Operating Activities
Net cash provided by operating activities was $38.5 million in fiscal 2021, resulting primarily from non cash items of $39.4 million and changes in working capital of $7.6 million offset by, a net loss of $6.3 million.
Cash Flows From Investing Activities
Net cash used in investing activities was $4.7 million in fiscal 2022, which primarily related to the purchase of property and equipment of $4.7 million.
Net cash used in investing activities was $3.7 million in fiscal 2020, which primarily consisted of purchases of property and equipment.
Cash Flows From Financing Activities
Operating Capital and Capital Expenditure Requirements
Our future capital requirements depend on numerous factors. These factors include but are not limited to the following:
Revenue generated by sales of our products and service plans;
Our ability to generate cash flows from operations;
Costs associated with our sales and marketing initiatives and manufacturing activities;
Facilities, equipment and IT systems required to support current and future operations;
Rate of progress and cost of our research and development activities;
Costs of obtaining and maintaining FDA and other regulatory clearances of our products;
Effects of competing technological and market developments;
Number and timing of acquisitions and other strategic transactions;
Servicing and maturity of our current future indebtedness;
The impact of inflation of our expenses; and
The unpredictable impact of the COVID-19 pandemic, including on collections, supply chains and logistics.
Operating and Capital Expenditure Requirements and Contractual Obligations
Concentration of Credit and Other Risks
Assessment of Recoverability of Goodwill
impairment, and we make appropriate reductions in carrying value if we determine that an impairment charge is required, based primarily on the financial condition or near term prospects of the investee.
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