BRISBANE, Calif., Nov. 3, 2014 (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, 2014.
Key highlights for the third quarter of 2014 were as follows:
- Revenue increased by 11% to 18.7 million, compared to the same period last year, which was driven by 9% growth in the US and 13% growth in International;
- Gross Margin increased to 58% compared to 55% in the same period last year;
- Net Results were a $2.6 million net loss, or $0.18 per share. Non-cash expenses for stock-based compensation, depreciation, and intangible assets amortization totaled $1.3 million. This result reflects ramp-up expenses related to investments in our expanded global commercial operations, as well as higher than normal R&D spending associated with our planned enLIGHTen product shipments in the fourth quarter;
- Cash and Investments position remains strong at $80.7 million;
- New Product- commercially launched enLIGHTen and accepted customer orders, with shipments expected to commence in the fourth quarter of 2014;
- Commercial Sales Leadership- we augmented our North American sales leadership during the third quarter.
Kevin Connors, President and Chief Executive Officer of Cutera, stated, "We are pleased that the investments we are making in expanding our commercial operations have enabled us to return to year-over-year revenue growth – both in the U.S. and International. This growth was driven by both the impact of sales force expansion and as a result of our recently launched Excel HR, our premier hair removal product, and Excel V, our gold standard vascular product that continues to gain momentum.
"In 2014, we have made several important investments in our global commercial organization including sales leadership positions. I am pleased to announce that Larry Laber joined us as Executive Vice President of North American Sales in September to lead our recently expanded sales team. Larry brings 20 years of sales and sales management experience, the majority of which was within the aesthetic medical device industry. Larry has demonstrated an ability to develop cohesive, high-performance sales organizations and we look forward to working with Larry to raise our performance metrics. Along with the previously announced hiring of Miguel Pardos as Executive Vice President of International, we believe we are well-poised for our future global business expansion plans. Having joined early in the third quarter, Miguel has been able to immediately leverage his twenty years of experience in building and leading international sales and marketing organizations in the global medical device industry.
"During the third quarter we received our first FDA clearance for our proprietary picosecond product, enLIGHTen. This important achievement allowed us to initiate domestic marketing efforts for enLIGHTen. Although the clearance occurred mid-quarter and our commercial activities are early stage, we have received strong initial customer interest for the product and we established a backlog in the third quarter. We expect to commence shipments in the fourth quarter of 2014.
Mr. Connors concluded, "We believe the market for aesthetic light-and-energy-based-systems is healthy and that our broad range of products, recently assembled commercial leadership team, expanding global sales team, and the expected market penetration of our new products, strategically positions us to capture larger market share in an expanding market."
Conference Call
The conference call to discuss these results is scheduled to begin at 2:00 p.m. PST (5:00 p.m. EST) on November 3, 2014. 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. PST (11:59 p.m. EST) on November 17, 2014. In addition, you may call 1-877-705-6003 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 increase revenue, improve cash generation from operations, improve gross and net operating margins, develop and commercialize existing and new products and applications, expected shipment date of planned new products, ability to grow the Company's market share, realize benefits from additional investment and the expansion of its sales force and statements regarding long-term prospects and opportunities in the laser and other energy-based equipment aesthetic market 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, hire and retain qualified sales representatives, improve revenue growth and profitability through leveraging 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 3rd, 2014. 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, 2014, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
| CUTERA, INC. | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| (in thousands) | |||
| (unaudited) | |||
| September 30, | June 30, | September 30, | |
| 2014 | 2014 | 2013 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 11,377 | $ 10,902 | $ 15,160 |
| Marketable investments | 69,321 | 70,696 | 67,121 |
| Accounts receivable, net | 8,736 | 7,596 | 7,494 |
| Inventories | 11,106 | 10,030 | 10,421 |
| Deferred tax asset | 29 | 32 | 38 |
| Other current assets and prepaid expenses | 1,947 | 1,772 | 1,583 |
| Total current assets | 102,516 | 101,028 | 101,817 |
| Property and equipment, net | 1,301 | 1,329 | 1,461 |
| Deferred tax asset, net of current portion | 316 | 342 | 503 |
| Intangibles, net | 1,438 | 1,632 | 2,044 |
| Goodwill | 1,339 | 1,339 | 1,339 |
| Other long-term assets | 13 | 15 | 348 |
| Total assets | $ 106,923 | $ 105,685 | $ 107,512 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 2,718 | $ 2,028 | $ 2,100 |
| Accrued liabilities | 8,975 | 7,473 | 7,784 |
| Deferred revenue | 8,745 | 8,561 | 7,195 |
| Total current liabilities | 20,438 | 18,062 | 17,079 |
| Deferred revenue, net of current portion | 4,596 | 4,578 | 3,395 |
| Income tax liability | 151 | 144 | 69 |
| Other long-term liabilities | 1,029 | 1,141 | 1,353 |
| Total liabilities | 26,214 | 23,925 | 21,896 |
| Stockholders' equity: | |||
| Common stock | 14 | 14 | 14 |
| Additional paid-in capital | 104,284 | 102,649 | 99,899 |
| Accumulated deficit | (23,607) | (20,971) | (14,342) |
| Accumulated other comprehensive income | 18 | 68 | 45 |
| Total stockholders' equity | 80,709 | 81,760 | 85,616 |
| Total liabilities and stockholders' equity | $ 106,923 | $ 105,685 | $ 107,512 |
| CUTERA, INC. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| (in thousands, except per share data) | |||
| (unaudited) | |||
| Three Months Ended | |||
| September 30, | June 30, | September 30, | |
| 2014 | 2014 | 2013 | |
| Net revenue | $ 18,726 | $ 17,724 | $ 16,828 |
| Cost of revenue | 7,935 | 7,848 | 7,651 |
| Gross profit | 10,791 | 9,876 | 9,177 |
| Operating expenses: | |||
| Sales and marketing | 7,805 | 7,754 | 6,554 |
| Research and development | 2,628 | 2,622 | 2,440 |
| General and administrative | 2,897 | 2,335 | 2,160 |
| Total operating expenses | 13,330 | 12,711 | 11,154 |
| Loss from operations | (2,539) | (2,835) | (1,977) |
| Interest and other income, net | — | 138 | 140 |
| Loss before income taxes | (2,539) | (2,697) | (1,837) |
| Provision (benefit) for income taxes | 97 | 44 | (169) |
| Net loss | $ (2,636) | $ (2,741) | $ (1,668) |
| Net loss per share: | |||
| Basic | $ (0.18) | $ (0.19) | $ (0.11) |
| Diluted | $ (0.18) | $ (0.19) | $ (0.11) |
| Weighted-average number of shares used in per share calculations: | |||
| Basic | 14,334 | 14,231 | 14,541 |
| Diluted | 14,334 | 14,231 | 14,541 |
| CUTERA, INC. | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| (in thousands) | |||
| (unaudited) | |||
| Three Months Ended | |||
| September 30, | June 30, | September 30, | |
| 2014 | 2014 | 2013 | |
| Cash flows from operating activities: | |||
| Net loss | $ (2,636) | $ (2,741) | $ (1,668) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||
| Stock-based compensation | 980 | 693 | 748 |
| Depreciation and amortization | 329 | 329 | 327 |
| Other | 129 | (4) | (7) |
| Changes in assets and liabilities: | |||
| Accounts receivable | (1,234) | (1,012) | 48 |
| Inventories | (1,076) | (390) | 97 |
| Other current assets and prepaid expenses | (82) | 693 | (30) |
| Other long-term assets | 2 | 6 | — |
| Accounts payable | 690 | (455) | (330) |
| Accrued liabilities | 1,500 | (351) | 75 |
| Other long-term liabilities | (73) | (71) | (51) |
| Deferred revenue | 202 | 757 | 753 |
| Income tax liability | 7 | 26 | (256) |
| Net cash used in operating activities | (1,262) | (2,520) | (294) |
| Cash flows from investing activities: | |||
| Acquisition of property, equipment and software | (107) | (44) | (187) |
| Proceeds from sales of marketable investments | 6,820 | 1,481 | 7,133 |
| Proceeds from maturities of marketable investments | 3,095 | 11,925 | 10,115 |
| Purchase of marketable investments | (8,689) | (11,059) | (6,658) |
| Net cash provided by investing activities | 1,119 | 2,303 | 10,403 |
| Cash flows from financing activities: | |||
| Repurchases of common stock | — | — | (7,623) |
| Proceeds from exercise of stock options and employee stock purchase plan | 655 | 415 | 819 |
| Payments on capital lease obligations | (37) | (39) | (30) |
| Net cash provided by (used in) financing activities | 618 | 376 | (6,834) |
| Net increase in cash and cash equivalents | 475 | 159 | 3,275 |
| Cash and cash equivalents at beginning of period | 10,902 | 10,743 | 11,885 |
| Cash and cash equivalents at end of period | $ 11,377 | $ 10,902 | $ 15,160 |
| CUTERA, INC. | |||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||
| (in thousands, except percentage data) | |||||
| (unaudited) | |||||
| Three Months Ended | % Change | ||||
| Q3 | Q2 | Q3 | Q3 '14 Vs. | Q3 '14 Vs | |
| 2014 | 2014 | 2013 | Q2 '14 | Q3 '13 | |
| Revenue By Geography: | |||||
| United States | $ 7,607 | $ 8,109 | $ 7,001 | -6% | +9% |
| International | 11,119 | 9,615 | 9,827 | +16% | +13% |
| $ 18,726 | $ 17,724 | $ 16,828 | +6% | +11% | |
| International as a percentage of total revenue | 59% | 54% | 58% | ||
| Revenue By Product Category: | |||||
| Products and upgrades | $ 12,922 | $ 11,366 | $ 10,440 | +14% | +24% |
| Service | 4,317 | 4,553 | 4,348 | -5% | -1% |
| Titan and truSculpt hand piece refills | 824 | 1,005 | 927 | -18% | -11% |
| Dermal fillers and cosmeceuticals | 663 | 800 | 1,113 | -17% | -40% |
| $ 18,726 | $ 17,724 | $ 16,828 | +6% | +11% | |
| Three Months Ended | |||||
| Q3 | Q2 | Q3 | |||
| 2014 | 2014 | 2013 | |||
| Pre-tax Stock-Based Compensation Expense: | |||||
| Cost of revenue | $ 145 | $ 139 | $ 159 | ||
| Sales and marketing | 195 | 148 | 182 | ||
| Research and development | 167 | 115 | 103 | ||
| General and administrative | 473 | 291 | 304 | ||
| $ 980 | $ 693 | $ 748 | |||