Cutera Reports Third Quarter 2012 Results

Revenue Grew 28% Year-Over-Year

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| Source: Cutera, Inc.

BRISBANE, Calif., Nov. 5, 2012 (GLOBE NEWSWIRE) -- Cutera, Inc. (Nasdaq:CUTR), a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide, today reported financial results for the third quarter ended September 30, 2012.

Key financial highlights for the third quarter of 2012, compared to same period last year, are as follows:

  • Revenue grew 28%, to $19.4 million.
  • Net loss was $892,000, or $0.06 per diluted share, which included $1.2 million of non-cash stock-based compensation, amortization of intangibles, and depreciation.
  • truSculpt product commenced shipments mid-quarter and contributed to revenue growth
  • Board of Directors approved a stock repurchase program for up to $10 million pursuant to a 10b5-1 plan.

Kevin Connors, president and CEO of Cutera, stated, "This is our sixth consecutive quarter of revenue growth in excess of 22%, compared to the same period one year ago. We continue to see growth in most of our major geographical regions and are pleased with the initial customer response to our mid-quarter truSculpt product launch as we enter the body contouring market. In addition, we continue to experience growing demand for Excel V, our premier vascular system." 

"In the third quarter of 2012, our domestic revenue increased by 29% and our international revenue expanded by 26%, when compared to the third quarter of 2011. In addition, our gross margin improved in the third quarter of 2012, compared to the second quarter of 2012. These improvements reflect the leverage in our model and resulted in positive net income after excluding non-cash items."

Mr. Connors concluded, "We believe the market outlook for aesthetic laser and other energy-based equipment continues to expand and we are well positioned to capitalize on the improving market. We remain focused on many initiatives in order to continue delivering revenue growth, improved gross and operating margins, and cash generation in the fourth quarter and beyond."

Conference Call

The conference call to discuss these results is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET) on November 5, 2012. Participating in the call will be Kevin Connors, President and Chief Executive Officer, and Ron Santilli, Executive Vice President and Chief Financial Officer. The call will be broadcast live over the Internet hosted at the Investor Relations section of Cutera's website at www.cutera.com, and will be archived online within one hour of its completion through 8:59 p.m. PT (11:59 p.m. ET) on November 21, 2012. In addition, you may call 877-407-3982 to listen to the live broadcast.

About Cutera, Inc.

Brisbane, California-based Cutera is a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that enable physicians and other qualified practitioners to offer safe and effective aesthetic treatments to their patients. For more information, call 1-888-4CUTERA or visit www.cutera.com.

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning Cutera's ability to leverage its business model, increase revenue, generate additional cash, increase profitability, develop and commercialize existing and new products and applications, experience market adoption for its products, realize benefits from additional investment, and statements regarding long-term prospects and opportunities as well as the timing and expected benefits of integration activities are forward-looking statements within the meaning of the Safe Harbor. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause Cutera's actual results to differ materially from the statements contained herein. Potential risks and uncertainties that could affect Cutera's business and cause its financial results to differ materially from those contained in the forward-looking statements include those related to the Company's efforts to improve sales productivity, revenue growth and profitability improvement through the leverage of its operating expenses; the Company's ability to successfully develop and launch new products and applications and market them to both its installed base and new customers; the length of the sales cycle process; unforeseen events and circumstances relating to the Company's operations; government regulatory actions; and those other factors described in the section entitled, "Risk Factors" in its most recent Form 10-Q as filed with the Securities and Exchange Commission on November 5, 2012. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events. Cutera's financial performance for the third quarter ended September 30, 2012, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

CUTERA, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
(unaudited) 
       
  September 30,
2012
June 30,
2012
September 30,
2011
Assets      
Current assets:      
Cash and cash equivalents  $ 24,334  $ 17,788  $ 13,874
Marketable investments  55,795  62,794  74,502
Accounts receivable, net  7,845  6,203  4,085
Inventories  12,477  12,722  9,659
Deferred tax asset  49  52  17
Other current assets and prepaid expenses  1,443  1,443  1,841
Total current assets  101,943  101,002  103,978
       
Property and equipment, net  885  946  643
Long-term investments  1,050  840  3,014
Deferred tax asset, net of current portion  470  463  345
Intangibles, net  2,876  3,186  493
Goodwill  1,339  1,339  --
Other long-term assets  517  539  493
Total assets  $ 109,080  $ 108,315  $ 108,966
       
 Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable  $ 2,297  $ 2,199  $ 2,151
Accrued liabilities  9,486  9,382  7,339
Deferred revenue  6,299  6,285  5,447
       
Total current liabilities  18,082  17,866  14,937
       
Deferred rent  1,347  1,400  1,432
Deferred revenue, net of current portion  1,411  905  775
Income tax liability  471  469  489
Total liabilities  21,311  20,640  17,633
       
Stockholders' equity:      
Common stock  14  14  14
Additional paid-in capital  98,865  98,044  94,594
Retained earnings (Accumulated deficit)  (10,950)  (10,058)  (2,438)
Accumulated other comprehensive loss  (160)  (325)  (837)
Total stockholders' equity  87,769  87,675  91,333
Total liabilities and stockholders' equity  $ 109,080  $ 108,315  $ 108,966
 
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) 
 
   Three Months Ended
  September 30,
2012
June 30,
2012
September 30,
2011
Net revenue  $ 19,426  $ 19,591  $ 15,232
Cost of revenue  8,828  9,274  6,772
Gross profit  10,598  10,317  8,460
       
Operating expenses:      
Sales and marketing  7,014  7,112  6,426
Research and development  2,217  1,872  2,352
General and administrative  2,475  2,854  2,310
Total operating expenses  11,706  11,838  11,088
Loss from operations  (1,108)  (1,521)  (2,628)
Interest and other income, net  152  144  91
Loss before income taxes  (956)  (1,377)  (2,537)
Provision (benefit) for income taxes  (64)  89  326
Net loss   $ (892)  $ (1,466)  $ (2,863)
       
Net loss per share:      
Basic and Diluted  $ (0.06)  $ (0.10)  $ (0.21)
       
Weighted-average number of shares used in per share calculations:    
Basic and Diluted  14,127  14,095  13,862
 
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 
(unaudited) 
 
  Three Months Ended
  September 30,
2012
June 30,
2012
September 30,
2011
Cash flows from operating activities:      
Net loss  $ (892)  $ (1,466)  $ (2,863)
Adjustments to reconcile net loss to net cash used in operating activities:  
Stock-based compensation  809  787  894
Tax benefit from stock-based compensation  --  --  5
Excess tax benefit related to stock-based compensation  --  --  (5)
Depreciation and amortization  418  425  164
Other  (113)  (14)  270
Changes in assets and liabilities:      
Accounts receivable  (1,641)  (1,697)  (830)
Inventories  245  712  (1,358)
Other current assets and prepaid expenses  214  59  512
Other long-term assets  22  (81)  (493)
Accounts payable  98  (475)  (29)
Accrued liabilities  78  420  411
Deferred rent  (27)  (24)  (4)
Deferred revenue  520  503  (150)
Income tax liability  2  --  (5)
Net cash used in operating activities  (267)  (851)  (3,481)
       
Cash flows from investing activities:      
Acquisition of property and equipment  (47)  (34)  (24)
Disposal of property and equipment  --  --  36
Proceeds from sales of marketable and long-term investments  8,566  7,066  7,156
Proceeds from maturities of marketable investments  14,610  8,700  6,649
Purchase of marketable investments  (16,328)  (10,094)  (14,130)
Net cash provided by (used in) investing activities  6,801  5,638  (313)
       
Cash flows from financing activities:      
Proceeds from exercise of stock options and employee stock purchase plan  12  214  180
Excess tax benefit related to stock-based compensation  --  --  5
Net cash provided by financing activities  12  214  185
       
Net increase (decrease) in cash and cash equivalents  6,546  5,001  (3,609)
Cash and cash equivalents at beginning of period  17,788  12,787  17,483
Cash and cash equivalents at end of period  $ 24,334  $ 17,788  $ 13,874
 
 
CUTERA, INC. 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited) 
 
  Three Months Ended 
  September 30,
2012
% of 
Revenue
June 30,
2012
% of 
Revenue
September 30,
2011
% of 
Revenue
Revenue By Geography:            
United States  $ 7,796 40%  $ 7,834 40%  $ 6,037 40%
International  11,630 60%  11,757 60%  9,195 60%
   $ 19,426    $ 19,591    $ 15,232  
             
Revenue By Product Category:            
Products  $ 12,047 62%  $ 11,690 60%  $ 8,975 59%
Upgrades  487 3%  797 4%  687 4%
Service   4,298 22%  4,435 23%  3,227 21%
Titan hand piece refills  1,226 6%  1,216 6%  1,031 7%
Dermal fillers and cosmeceuticals  1,368 7%  1,453 7%  1,312 9%
   $ 19,426    $ 19,591    $ 15,232  
             
 
             
  Three Months Ended   
  September 30,
2012
  June 30,
2012
  September 30,
2011
 
Pre-tax Stock-Based Compensation Expense:            
Cost of revenue  $ 169    $ 168    $ 179  
Sales and marketing  177    159    210  
Research and development  126    147    184  
General and administrative  337    313    321  
   $ 809    $ 787    $ 894  
Cutera, Inc.
Ron Santilli
Chief Financial Officer
415-657-5500

Investor Relations
John Mills
Integrated Corporate Relations, Inc.
310-954-1105