TomoTherapy Announces Second Quarter Financial Results

Reports $41.1 Million of Revenue; $34 Million of Equipment Orders
MADISON, Wis.--(Business Wire)--
TomoTherapy Incorporated (NASDAQ: TOMO), producer of the Hi·Art® treatment
system for advanced radiation therapy, today released financial results for the
second quarter ended June 30, 2009.

Second Quarter Results

Second quarter 2009 revenue was $41.1 million, a decrease of 21% from $52.0
million in the second quarter of 2008. The company incurred a net loss
attributable to shareholders of $7.1 million, or $0.14 per share, for the second
quarter of 2009, compared to a net loss of $6.9 million, or $0.14 per share, for
the second quarter of 2008. As of June 30, 2009, the company had $149 million of
cash, cash equivalents and short-term investments and minimal debt. During the
quarter, there were no borrowings against the company`s $50 million credit line.

As of June 30, 2009, TomoTherapy had a revenue backlog of $145 million, a 7%
decrease from its $157 million backlog as of March 31, 2009. The backlog
includes $34 million of equipment orders received during the second quarter of
2009, a significant increase from $4 million of orders added in the first
quarter. However, the company also removed $18 million of orders from backlog
during the quarter due to the age of the orders and the lack of site progress
with respect to such orders. None of the orders removed were for competitive
reasons. Backlog only includes firm orders that the company believes are likely
to ship within the next two years. It does not include any revenue from service
contracts, which represents a growing portion of the company`s overall revenue.

"Despite continued tough economic conditions in the second quarter, we made
progress against key performance initiatives," said Fred Robertson,
TomoTherapy`s CEO. "In particular, we experienced improved order flow and
reported a 34% increase in revenue as compared to the first quarter. We believe
that our focus on initiatives to drive order closure is starting to pay off.
Additionally, we continue to show improved performance in our service
organization as the average direct cost of servicing a unit declined by 15%
year-over-year, while year-to-date uptime remains strong at 97.9%. The positive
service results along with the higher revenue levels brought second quarter 2009
gross margins up to 21%, a substantial improvement over the first quarter 2009
gross margin of 8%. Finally, we continue our efforts to carefully manage costs,
with operating expenses down 23% from the second quarter of last year."

Robertson added, "Despite marked improvements in certain areas, we recognize
that we still have work to do in this challenging economic environment,
especially in the U.S. We remain focused on further sharpening and enhancing our
sales efforts, while at the same time maintaining strict discipline on the cost
side. We are confident in the current benefits of our technology which we firmly
believe offers the most advanced and effective system to deliver high-quality
cancer care and are committed to realizing our company`s longer-term potential."

Six-Month Results

For the six months ended June 30, 2009, revenue was $71.7 million, a 21%
decrease from $90.9 million for the six months ended June 30, 2008. The company
incurred a net loss attributable to shareholders of $20.1 million, or $0.40 per
share, for the six months ended June 30, 2009, compared to a net loss of $13.0
million, or $0.26 per share, for the same period last year.

Outlook

Primarily due to the uncertain economic environment, especially as it relates to
the timing of new orders, management is lowering its 2009 guidance. Revenue is
now expected to be in the range of $155 million to $175 million from the
previously announced range of $170 million to $190 million. Management now
expects a loss in the range of $0.65 to $0.90 per share in 2009, from the
previously announced range of $0.60 to $0.85 per share. The company continues to
take a disciplined approach to cash management.

Investor Conference Call

TomoTherapy will conduct a conference call regarding its second quarter 2009
results at 5:00 p.m. ET today, July 30, 2009 (4:00 p.m. CT). To hear a live
Webcast or replay of the call, visit the Investor Relations page at
TomoTherapy.com, where it will be archived for two weeks. To access the call via
telephone, dial 1-866-788-0539 from inside the United States or 1-857-350-1677
from outside the United States, and enter passcode 22586470. The replay can be
accessed by dialing 1-888-286-8010 from inside the United States or
1-617-801-6888 from outside the United States and entering passcode 97602768.
The telephone replay will be available through 10:59 p.m. CT on Monday, August
3, 2009.

About TomoTherapy Incorporated

TomoTherapy Incorporated has developed, manufactures and sells the TomoTherapy®
Hi·Art ® treatment system, an advanced radiation therapy system for the
treatment of a wide variety of cancers. The Hi·Art treatment system combines
integrated CT imaging with radiation therapy to deliver radiation treatment with
speed and precision while reducing radiation exposure to surrounding healthy
tissue, which can lead to improved patient outcomes. The company`s stock is
traded on the NASDAQ Global Select Market under the symbol "TOMO." To learn more
about TomoTherapy, please visit TomoTherapy.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Statements concerning market
acceptance of the company`s technology; growth drivers; the company`s orders,
revenue, backlog or earnings growth; future financial results and any statements
using the terms "should," "believe," "outlook," "expect," "anticipate" or
similar statements are forward-looking statements that involve risks and
uncertainties that could cause the company`s actual results to differ materially
from those anticipated. Such risks and uncertainties include: demand for the
company`s products; impact of sales cycles and competitive products and pricing;
the effect of economic conditions and currency exchange rates; the company`s
ability to develop and commercialize new products; its reliance on sole or
limited-source suppliers; its ability to increase gross margins; the company`s
ability to meet U.S. Food and Drug Administration (FDA) and other regulatory
agency product clearance and compliance requirements; the possibility that
material product liability claims could harm future revenue or require the
company to pay uninsured claims; the company`s ability to protect intellectual
property; the impact of managed care initiatives, other health care reforms
and/or third-party reimbursement levels for cancer care; potential loss of key
distributors or key personnel; risk of interruptions to its operations due to
terrorism, disease or other events beyond the company`s control; and the other
risks listed from time to time in the company`s filings with the U.S. Securities
and Exchange Commission, which by this reference are incorporated herein.
TomoTherapy assumes no obligation to update or revise the forward-looking
statements in this release because of new information, future events or
otherwise.

TOMOTHERAPY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)

Three months ended June 30, Six months ended June 30,
2009 2008 2009 2008

Revenue $ 41,080 $ 52,021 $ 71,703 $ 90,921
Cost of revenue 32,565 39,496 60,649 70,178
Gross profit 8,515 12,525 11,054 20,743
Operating expenses:
Research and development 7,020 10,044 12,869 19,569
Selling, general and administrative 11,224 13,635 21,876 24,303
Total operating expenses 18,244 23,679 34,745 43,872
Loss from operations (9,729 ) (11,154 ) (23,691 ) (23,129 )
Other income (expense):
Interest income 695 1,090 1,392 2,864
Interest expense (15 ) (6 ) (29 ) (17 )
Other expense, net (107 ) (82 ) (363 ) (156 )
Total other income 573 1,002 1,000 2,691
Loss before income tax and noncontrolling interests (9,156 ) (10,152 ) (22,691 ) (20,438 )
Income tax benefit (318 ) (1,806 ) (418 ) (5,920 )
Net loss (8,838 ) (8,346 ) (22,273 ) (14,518 )
Noncontrolling interests 1,715 1,485 2,151 1,485
Net loss attributable to shareholders (7,123 ) (6,861 ) (20,122 ) (13,033 )

Loss per common share - basic and diluted $ (0.14 ) $ (0.14 ) $ (0.40 ) $ (0.26 )

TOMOTHERAPY INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)

June 30, December 31,
2009 2008

ASSETS
Cash and equivalents $ 69,207 $ 65,967
Short-term investments 79,362 88,825
Receivables, net 29,863 41,259
Inventories, net 61,580 63,983
Deferred tax assets - 496
Prepaid expenses and other current assets 2,811 1,890
Total current assets 242,823 262,420
Property and equipment, net 20,604 22,157
Other non-current assets, net 12,162 11,851
TOTAL ASSETS $ 275,589 $ 296,428

LIABILITIES AND EQUITY
Accounts payable $ 9,239 $ 7,804
Accrued expenses 17,512 18,324
Accrued warranty 4,907 7,431
Deferred revenue 22,689 28,139
Customer deposits 15,842 15,494
Total current liabilities 70,189 77,192
Other non-current liabilities 2,353 3,487
TOTAL LIABILITIES 72,542 80,679

Total shareholders' equity 196,180 213,594
Noncontrolling interests 6,867 2,155
TOTAL EQUITY 203,047 215,749

TOTAL LIABILITIES AND EQUITY $ 275,589 $ 296,428

TomoTherapy Incorporated
Tom Powell, CFO
608-824-2800

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