Schedule 13G Additional Information
Item #
1. (a) Name of Issuer: ACCURAY, INC.
(b) Address of Issuer's Principal Executive Offices:
1310 CHESAPEAKE TERRACE
SUNNYVALE, CA 94089
2. (a) Name of Person Filing:
SAMUEL R. SHAPIRO, SHAPIRO CAPITAL MANAGEMENT LLC
(b) Address of Principal Business Office for Each of the Above:
3060 PEACHTREE ROAD, SUITE 1555 N.W., ATLANTA, GEORGIA 30305
(c) Citizenship:
SAMUEL R. SHAPIRO -- U.S. CITIZEN
SHAPIRO CAPITAL MANAGEMENT LLC -- Delaware Limited Liability Company
(d) Title of Class of Securities:
COMMON STOCK, $0.01 PAR VALUE
(e) CUSIP Number:
004397105
3. If this statement is filed pursuant to Rule 13d-1(b), or 13d-2(b). The
person filing is a:
IA
4. Ownership:
(a) Amount Beneficially Owned: 6,204,064
(b) Percent of Class: 11.40%
Accuray popped up on Shapiro’s radar screen back in September 2007 when Director Robert Weiss bought 100,000 shares at $13.82 a share. Insider buying is not their only parameter but it is one they consider very important. Shapiro is very familiar with the health care space and is well known to be meticulous in their due diligence. You can be sure that they didn’t pull the trigger on Accuray until they were confident that they understood the technology, the space, the competition and were convinced that CyberKnife really is all that we keep saying it is.
Shapiro started buying in Q1 of 2008 and had accumulated about three million shares or so by the time I contacted them in April. My pitch to them was the same as with all the large shareholders which was to ask them to take a more active role in terms of getting some leadership out of our Board of Directors. I don’t know what sort of conversations they have been having with Accuray, but I do know they have been talking and now we know that they have more or less doubled their position.
Shapiro’s general modus operandi is that of a long-term value investor. They are probably not looking to either initiate or participate in a buy out of Accuray nor is it likely that they would mount a charge, at least not as the leader, of an activist shareholder revolt. But they do now hold a large block of shares and my take is that they are well aware of what is going on at Accuray both the good as well as the not so good.
I see their involvement as nothing but positive. It’s a good indicator that our research and analysis of this company is on track. It’s a good stabilizing force for the share price and it does tend to put the right sort of pressure on management. If we do have issues coming up for a shareholder vote, like last year’s management compensation bonanza, I see Shapiro as a natural ally of the shareholders. And if we find that we do we need to round up a majority, at least we now know where to find better than a fifth of the votes required.
As far as the specifics of what I was trying to get across back in April, most of you already know my agenda but for anyone new to the conversation, I’ll recap it for you below exactly as I communicated it to the Accuray Board of Directors and large investors:
1. Take a more aggressive and effective approach to technology explanation and differentiation.
We're in the SRS business. Most analysts still don't even know that. They think we're in the radiotherapy business. Verbal explanations are not getting it done. We need a compelling animated video now followed up with Dr. Thomson’s presence and participation at any and all credible investor conferences that will have us. Sending in the CFO without the CEO sends the wrong message. We need our best spokesperson to work this problem aggressively and persistently until the market gets the difference between CyberKnife SRS and gantry-mounted SRS pretenders. As CEO, Dr. Thomson needs to take personal responsibility to get this done now.
2. Take a more transparent approach to financial disclosures.
We need to disclose all orders and their status. We need to answer any and all questions concerning revenues, margins, orders, etc. We have nothing to hide. We gain nothing by acting like we do. Wall Street needs to know exactly what is going on with orders and backlog. Management’s antagonistic approach to working with the analyst community has not produced a positive result. We need to clear the air and get off to a fresh start. And in order to do that, we must also address the following…
3. Take a hard look at and have a come-to-Jesus talk with your CFO Robert McNamara.
He may (or may not) be the greatest boardroom CFO in history but if he can’t handle an earnings call without shuffling through his notes, sounding evasive and irresponsive and in general doing everything humanly possible to scare off every analyst in attendance, he’s not getting the job done.
Shapiro started buying in Q1 of 2008 and had accumulated about three million shares or so by the time I contacted them in April. My pitch to them was the same as with all the large shareholders which was to ask them to take a more active role in terms of getting some leadership out of our Board of Directors. I don’t know what sort of conversations they have been having with Accuray, but I do know they have been talking and now we know that they have more or less doubled their position.
Shapiro’s general modus operandi is that of a long-term value investor. They are probably not looking to either initiate or participate in a buy out of Accuray nor is it likely that they would mount a charge, at least not as the leader, of an activist shareholder revolt. But they do now hold a large block of shares and my take is that they are well aware of what is going on at Accuray both the good as well as the not so good.
I see their involvement as nothing but positive. It’s a good indicator that our research and analysis of this company is on track. It’s a good stabilizing force for the share price and it does tend to put the right sort of pressure on management. If we do have issues coming up for a shareholder vote, like last year’s management compensation bonanza, I see Shapiro as a natural ally of the shareholders. And if we find that we do we need to round up a majority, at least we now know where to find better than a fifth of the votes required.
As far as the specifics of what I was trying to get across back in April, most of you already know my agenda but for anyone new to the conversation, I’ll recap it for you below exactly as I communicated it to the Accuray Board of Directors and large investors:
1. Take a more aggressive and effective approach to technology explanation and differentiation.
We're in the SRS business. Most analysts still don't even know that. They think we're in the radiotherapy business. Verbal explanations are not getting it done. We need a compelling animated video now followed up with Dr. Thomson’s presence and participation at any and all credible investor conferences that will have us. Sending in the CFO without the CEO sends the wrong message. We need our best spokesperson to work this problem aggressively and persistently until the market gets the difference between CyberKnife SRS and gantry-mounted SRS pretenders. As CEO, Dr. Thomson needs to take personal responsibility to get this done now.
2. Take a more transparent approach to financial disclosures.
We need to disclose all orders and their status. We need to answer any and all questions concerning revenues, margins, orders, etc. We have nothing to hide. We gain nothing by acting like we do. Wall Street needs to know exactly what is going on with orders and backlog. Management’s antagonistic approach to working with the analyst community has not produced a positive result. We need to clear the air and get off to a fresh start. And in order to do that, we must also address the following…
3. Take a hard look at and have a come-to-Jesus talk with your CFO Robert McNamara.
He may (or may not) be the greatest boardroom CFO in history but if he can’t handle an earnings call without shuffling through his notes, sounding evasive and irresponsive and in general doing everything humanly possible to scare off every analyst in attendance, he’s not getting the job done.
Sentiment : Strong Buy
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