BRISBANE, Calif., Nov. 2, 2009 (GLOBE NEWSWIRE) -- Cutera, Inc. (Nasdaq:CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the third quarter ended September 30, 2009.
Financial Highlights for the third quarter of 2009 include:
-- Revenue increased by 4% to $12.2 million, compared to $11.7
million in the second quarter of 2009.
-- Gross margin improved to 60%, compared to 56% in the second
quarter of 2009.
-- Cash from operations was approximately breakeven.
-- Net loss was $13.5 million, or $1.01 per diluted share, which
included a $12.3 million, or $0.92 per diluted share, non-cash
tax charge, to establish a valuation allowance against our U.S.
deferred tax assets.
Kevin Connors, President and CEO of Cutera, stated, "We experienced an improvement in our third quarter 2009 revenue. It is important to note that, in our industry, traditionally the third quarter is seasonally softer than the second quarter. Our customers continue to experience demand for our products from end users, however, many of our current and prospective customers remain reluctant to make major capital equipment purchases or are unable to obtain financing during these challenging economic times. In the current market environment, we believe that the core market of dermatologists, plastic surgeons and other established medical offices provides us with the best opportunities in our industry. Therefore, we are actively refocusing our sales, marketing and new product development efforts on this market segment.
"We have significantly improved our gross margin and operating expenses, when compared to the second quarter of 2009. We believe these improvements are resulting from our first half restructuring efforts, which incorporated many cost reduction measures. We remain focused on increasing revenue levels and to leverage our business model, which we expect will result in increased profits. As a result of the recent restructuring activities, we believe our current operating model will result in breakeven profit performance when revenue is in the $14.0 - $15.0 million range."
Mr. Connors concluded, "While the near-term prospects for our industry are difficult to predict due to the continuing economic uncertainty, we believe that our worldwide distribution network, strong balance sheet with $104.2 million in cash and investments -- with no debt, a broad portfolio of products, and various research and development projects underway -- offer continuing, long-term opportunities for our company."
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 2, 2009. 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 and continue through 8:59 p.m. PT (11:59 p.m. ET) on November 16, 2009. In addition, you may call (877) 941-1427 to listen to the live broadcast. Participating in the call will be Kevin Connors, President and Chief Executive Officer, and Ron Santilli, Executive Vice President and Chief Financial Officer.
About Cutera, Inc.
Brisbane, California-based Cutera is a leading provider of laser and other light-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 grow its business, increase revenue, manage costs and expenses, generate additional cash, regain profitability, develop and commercialize existing and new products and applications, improve the performance of its worldwide sales and distribution network, and statements regarding long-term prospects and opportunities 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 the global economic crisis, which may reduce consumer demand for its products, cause potential customers to delay their purchase decisions and make it more difficult for some potential customers to obtain credit financing; its ability to increase revenue, manage costs and expenses and improve sales productivity and performance worldwide; its ability to successfully develop and acquire 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 its 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 2, 2009. 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 third quarter ended September 30, 2009 financial performance, 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, December 31,
2009 2009 2008
------------- ------------- -------------
Assets
Current assets:
Cash and cash
equivalents $ 34,302 $ 35,445 $ 36,540
Marketable
investments 62,572 61,857 60,653
Accounts
receivable, net 2,635 2,828 5,792
Inventories 7,884 8,702 9,927
Deferred tax asset 244 4,652 4,257
Other current
assets and
prepaid expenses 2,644 4,548 1,771
------------- ------------- -------------
Total current
assets 110,281 118,032 118,940
Property and
equipment, net 939 1,101 1,357
Long-term
investments 7,339 7,640 9,627
Intangibles, net 877 926 1,025
Deferred tax asset,
net of current
portion -- 6,165 6,527
------------- ------------- -------------
Total assets $ 119,436 $ 133,864 $ 137,476
============= ============= =============
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 1,212 $ 1,127 $ 1,690
Accrued liabilities
7,281 7,737 8,848
Deferred revenue
6,295 6,506 6,758
------------- ------------- -------------
Total current
liabilities 14,788 15,370 17,296
Deferred rent 1,548 1,603 1,713
Deferred revenue,
net of current
portion 2,331 3,134 4,907
Income tax
liability 882 1,367 1,452
------------- ------------- -------------
Total
liabilities 19,549 21,474 25,368
------------- ------------- -------------
Stockholders' equity:
Common stock 13 13 13
Additional
paid-in capital 84,148 82,985 80,318
Retained earnings 17,247 30,741 31,410
Accumulated other
comprehensive
income (loss) (1,521) (1,349) 367
------------- ------------- -------------
Total
stockholders'
equity 99,887 112,390 112,108
------------- ------------- -------------
Total liabilities
and stockholders'
equity $ 119,436 $ 133,864 $ 137,476
============= ============= =============
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
---------------------------------------------
September 30, June 30, September 30,
2009 2009 2008
------------- ------------- -------------
Net revenue $ 12,171 $ 11,665 $ 19,110
Cost of revenue 4,910 5,130 7,823
------------- ------------- -------------
Gross profit 7,261 6,535 11,287
------------- ------------- -------------
Operating expenses:
Sales and marketing 5,112 6,071 8,076
Research and
development 1,684 1,495 1,828
General and
administrative 2,121 3,616 2,583
------------- ------------- -------------
Total operating
expenses 8,917 11,182 12,487
------------- ------------- -------------
Loss from operations (1,656) (4,647) (1,200)
Interest and other
income, net 288 511 733
Other-than-temporary
impairments on
long-term
investments -- -- (2,372)
------------- ------------- -------------
Loss before income
taxes (1,368) (4,136) (2,839)
Provision (benefit)
for income taxes 12,126 (1,772) (86)
------------- ------------- -------------
Net loss (13,494) (2,364) (2,753)
============= ============= =============
Net loss per share:
Basic $ (1.01) $ (0.18) $ (0.22)
============= ============= =============
Diluted $ (1.01) $ (0.18) $ (0.22)
============= ============= =============
Weighted-average
number of shares
used in per share
calculations:
Basic 13,382 13,317 12,780
============= ============= =============
Diluted 13,382 13,317 12,780
============= ============= =============
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
---------------------------------------------
September 30, June 30, September 30,
2009 2009 2008
------------- ------------- -------------
Cash flows from
operating activities:
Net loss $ (13,494) $ (2,364) $ (2,753)
Adjustments to
reconcile net loss
to net cash used
in operating
activities:
Stock-based
compensation 895 1,456 1,326
Tax benefit
(deficit) from
stock-based
compensation 111 (86) 100
Depreciation and
amortization 211 225 220
Provision for
excess and
obsolete
inventories (256) 130 (78)
Other-than-
temporary
impairments on
long-term
investments -- -- 2,372
Change in
allowance for
doubtful accounts (3) 498 60
Change in
deferred tax
asset and
deferred tax
liability 10,506 139 168
Changes in assets
and liabilities:
Accounts receivable 196 1,936 2,611
Inventories 1,074 1,014 (66)
Other current
assets and
prepaid expenses 2,539 (1,054) 173
Accounts payable 85 (408) 206
Accrued liabilities (575) (429) (1,634)
Deferred rent 64 (55) 19
Deferred revenue (1,014) (957) 336
Income tax
liability (485) (54) (191)
------------- ------------- -------------
Net cash
provided by
(used in)
operating
activities (146) (9) 2,869
------------- ------------- -------------
Cash flows from
investing
activities:
Acquisition of
property and
equipment -- (36) (317)
Proceeds from sales
of marketable and
long-term
investments 4,442 9,774 8,774
Proceeds from
maturities of
marketable
investments 8,315 1,100 8,480
Purchase of
marketable and
long-term
investments (13,911) (11,342) (13,590)
------------- ------------- -------------
Net cash
provided by
(used in)
investing
activities (1,154) (504) 3,347
------------- ------------- -------------
Cash flows from
financing activities:
Proceeds from
exercise of stock
options and employee
stock purchase plan 157 165 3
------------- ------------- -------------
Net cash provided
by financing
activities 157 165 3
------------- ------------- -------------
Net increase
(decrease) in cash
and cash equivalents (1,143) (348) 6,219
Cash and cash
equivalents at
beginning of period 35,445 35,793 20,464
------------- ------------- -------------
Cash and cash
equivalents at end
of period $ 34,302 $ 35,445 $ 26,683
============= ============= =============
CUTERA, INC.
CONSOLIDATED REVENUE HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
Three Months Ended
---------------------------------------------
September 30, June 30, September 30,
2009 2009 2008
------------- ------------- -------------
Revenue By Geography:
United States $ 4,825 40% $ 4,551 39% $ 9,498 50%
International 7,346 60% 7,114 61% 9,612 50%
-------- -------- --------
$ 12,171 $ 11,665 $ 19,110
======== ======== ========
Revenue By Product
Category:
Products $ 6,322 52% $ 5,664 49% $ 12,920 68%
Product upgrades 1,352 11% 1,201 10% 1,948 10%
Service 3,210 26% 3,397 29% 2,920 15%
Titan refills 1,287 11% 1,403 12% 1,322 7%
-------- -------- --------
$ 12,171 $ 11,665 $ 19,110
======== ======== ========