BRISBANE, Calif., Feb. 13, 2017 (GLOBE NEWSWIRE) -- Cutera, Inc. (NASDAQ:CUTR) (“Cutera” or the “Company”), a leading provider of laser and energy-based aesthetic systems for practitioners worldwide, today reported financial results for the fourth quarter ended December 31, 2016. 

Key operating highlights and financial performance for the fourth quarter and full year of 2016, when compared to the fourth quarter and full year of 2015, were as follows:

  • Revenue:
    - Increased 26% for the fourth quarter to a record $37.9 million, due primarily to a 45% growth in North American product revenue
    - Tenth consecutive quarter of double-digit revenue growth
    - Increased 25% for the full year of 2016 to a record $118.1 million
    - Two consecutive years of 20%+ year-over-year growth
  • Gross Margin of 58% was slightly lower than previous expectations due primarily to higher initial manufacturing costs and seeding of key opinion leader transactions to build reference sites with its enlighten III launch for PicoGenesisTM and tattoo removal treatments
  • Achieved $0.30 EPS and $4.7 million of operating cash flow in the fourth quarter
  • Cash, cash equivalents and marketable investments were $54.1 million, and no debt
  • Hired James Reinstein as its new President, CEO and eighth board member

Ron Santilli, Executive Vice President and Chief Financial Officer of Cutera, stated, “We are pleased with our tenth consecutive quarter of double-digit revenue growth, full year profitability and solid operating cash flow, illustrating the leverage in our business model.  In the fourth quarter of 2016, our 26% revenue growth was driven by the breadth of our product portfolio throughout North America, with particular growth coming from our enlightenTM product.”

In December 2016, the Company commenced shipments of its enlighten III platform that provides a new third visible “true red” 670nm wavelength, in addition to the 1064nm and 532nm wavelengths presently available.  Initial market acceptance has been very positive and many practitioners believe it is the best-in-class three wavelength pico-laser in the market and will allow practitioners the ability to remove all tattoo ink colors, and provide PicoGenesis skin revitalization with improved efficacy and faster speeds than any products on the market.

Additionally, in December of 2016, the Company received 510(k) clearance from the Food and Drug Administration (FDA) to market its RF energy-based truSculptTM system for the temporary reduction in circumference of the abdomen.  truSculpt is based on the Company’s proprietary RF technology, which selectively heats subcutaneous adipose tissue making it ideally suited for treating fat. truSculpt will enable the company to participate in the fast growing body-sculpting market as well as adding a consumable revenue stream.  In 2017 the company will work with key opinion leaders to gather additional clinical data to demonstrate superior fat burning capabilities. 

Mr. James Reinstein, Chief Executive Officer stated, “We remain committed to advancing our technologies and providing our customers with an attractive path for upgrading their current systems to the new capabilities. Our financial performance in the fourth quarter, and overall trajectory, has the Company positioned well for continued growth in revenue, profits and cash generation.”

Guidance:

The Company expects:

  • Revenue of $26.0 - $27.0 million in the first quarter of 2017 and $135.0 - $140.0 million for the full-year of 2017.
  • Earnings (Loss) Per Share of ($0.06) – ($0.08) for the first quarter 2017, given the seasonality of our business, and $0.45 - $0.50 for the full-year of 2017.   
  • To Repurchase shares to a level that maintains the fully diluted share count at approximately 14.0 million for the full-year of 2017.

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 February 13, 2017. Participating in the call will be James Reinstein, 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 http://ir.cutera.com/phoenix.zhtml?c=130892&p=irol-EventDetails&EventId=5247490, and will be archived online within one hour of its completion through 8:59 p.m. PST (11:59 p.m. EST) on February 27, 2017.  In addition, you may call 1-877-705-6003 if you wish to participate on the live call.

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 plans to introduce and commercialize new products, ability to increase revenue, reduce expenses, improve financial results, grow the Company’s market share, realize benefits from additional investment, achieve financial guidance, expand market penetration, generate cash from operations, plans for stock repurchase, 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, gross margins 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; 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 7th, 2016. 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 fourth  quarter ended December 31, 2016, as discussed in this release, is preliminary and unaudited, and subject to adjustment.


 CUTERA, INC. 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 (unaudited) 
      
     Three Months Ended Twelve Months Ended
     December 31, December 31, December 31, December 31,
     2016
 2015
 2016
 2015
 Net revenue $37,875  $30,042  $118,056  $94,761 
 Cost of revenue  15,962   12,145   49,921   40,478 
   Gross profit  21,913   17,897   68,135   54,283 
   Gross margin %  58%  60%  58%  57%
                
 Operating expenses:            
  Sales and marketing  11,561   9,899   41,563   35,942 
  Research and development  2,897   2,812   11,232   10,733 
  General and administrative  3,010   3,189   12,943   12,129 
   Total operating expenses 17,468   15,900   65,738   58,804 
 Income (loss) from operations  4,445   1,997   2,397   (4,521)
 Interest and other income, net  (204)  105   323   293 
 Income (loss) before income taxes 4,241   2,102   2,720   (4,228)
 Provision for income taxes  28   52   143   212 
 Net income (loss) $4,213  $2,050  $2,577  $(4,440)
                
 Net income (loss) per share:            
  Basic $0.31  $0.16  $0.19  $(0.32)
  Diluted $0.30  $0.15  $0.19  $(0.32)
                
 Weighted-average number of shares         
 used in per share calculations:           
  Basic and diluted  13,591   12,978   13,225   13,960 
  Diluted  14,201   13,591   13,753   13,960 
                

 

 CUTERA, INC.  
 CONDENSED CONSOLIDATED BALANCE SHEETS 
 (in thousands)  
 (unaudited)  
   
       December 31,  September 30,  December 31, 
       2016  2016  2015 
 Assets           
 Current assets:          
  Cash and cash equivalents $13,775 $11,275 $10,868 
  Marketable investments  40,299  35,108  37,539 
   Cash, cash equivalents and marketable investments  54,074  46,383  48,407 
               
  Accounts receivable, net  16,547  11,680  11,669 
  Inventories  14,977  16,478  12,078 
  Other current assets and prepaid expenses  2,251  2,507  1,675 
   Total current assets  87,849  77,048  73,829 
               
 Property and equipment, net  1,907  1,720  1,473 
 Deferred tax asset, net of current portion  377  410  350 
 Intangibles, net  2  16  143 
 Goodwill   1,339  1,339  1,339 
 Other long-term assets  380  444  384 
    Total assets $91,854 $80,977 $77,518 
               
 Liabilities and Stockholders' Equity          
 Current liabilities:          
  Accounts payable $2,598 $3,283 $1,959 
  Accrued liabilities  17,397  14,786  13,834 
  Deferred revenue  8,394  8,312  8,638 
   Total current liabilities  28,389  26,381  24,431 
               
 Deferred revenue, net of current portion  1,705  1,426  2,287 
 Income tax liability  168  164  182 
 Other long-term liabilities  582  597  584 
   Total liabilities  30,844  28,568  27,484 
               
 Stockholders' equity  61,010  52,409  50,034 
    Total liabilities and stockholders' equity $91,854 $80,977 $77,518 
               

 

 CUTERA, INC.  
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
 (in thousands)  
 (unaudited)  
                
    Three Months Ended Twelve Months Ended 
    December 31, December 31, December 31, December 31, 
    2016
 2015
 2016
 2015
 
 Cash flows from operating activities:            
 Net income (loss)$4,213  $2,050  $2,577  $(4,440) 
 Adjustments to reconcile net income (loss) to net cash provided by operating activities:            
  Stock-based compensation 1,061   1,097   3,713   4,084  
  Depreciation and amortization 249   274   982   1,186  
  Other 60   14   15   227  
 Changes in assets and liabilities:            
  Accounts receivable (4,838)  (2,660)  (4,899)  (536) 
  Inventories 1,501   1,401   (2,899)  (1,090) 
  Accounts payable (685)  (700)  639   (1,124) 
  Accrued liabilities 2,575   2,143   3,461   2,687  
  Deferred revenue 361   (40)  (826)  (2,319) 
  Other 244   310   (771)  (34) 
   Net cash provided by (used in) operating activities 4,741   3,889   1,992   (1,359) 
                
 Cash flows from investing activities:            
 Acquisition of property, equipment and software (226)  (43)  (537)  (746) 
 Disposal of property and equipment 3   -   20   -  
 Net change in marketable investments (5,219)  (16)  (2,875)  33,392  
   Net cash provided by (used) in investing activities (5,442)  (59)  (3,392)  32,646  
                
 Cash flows from financing activities:            
 Repurchases of common stock    (3,469)  (4,873)  (40,085) 
 Proceeds from exercise of stock options and employee stock purchase plan3,296   507   9,493   10,061  
 Payments on capital lease obligations (95)  (55)  (313)  (198) 
   Net cash provided by (used in) financing activities 3,201   (3,017)  4,307   (30,222) 
                
 Net increase in cash and cash equivalents 2,500   813   2,907   1,065  
 Cash and cash equivalents at beginning of period 11,275   10,055   10,868   9,803  
 Cash and cash equivalents at end of period$13,775  $10,868  $13,775  $10,868  
                

 

 CUTERA, INC. 
 CONSOLIDATED FINANCIAL HIGHLIGHTS
 (in thousands, except percentage data)
 (unaudited) 
             
     Three Months Ended  % Change Twelve Months Ended  % Change
     Q4  Q4 Q4 '16 Vs FY  FY FY '16 Vs
     2016
  2015
 Q4 '15 2016
  2015
 FY '15
 Revenue By Geography:                  
   United States $23,297   $16,882  +38% $65,513   $48,916  +34%
   International  14,578    13,160  +11%  52,543    45,845  +15%
     $37,875   $30,042  +26% $118,056   $94,761  +25%
   International as a percentage of total revenue  38%   44%    45%   48%  
                      
 Revenue By Product Category:                  
  Products                  
   -North America $21,787   $15,048  +45% $58,595   $40,528  +45%
   -International  9,678    8,926  +8%  34,126    30,695  +11%
     Total Products  31,465    23,974  +31%  92,721    71,223  +30%
  Service  4,750    4,562  +4%  19,028    17,739  +7%
  Hand Piece Refills  612    706  -13%  2,498    2,910  -14%
  Skincare  1,048    800  +31%  3,809    2,889  +32%
     $37,875   $30,042  +26% $118,056   $94,761  +25%
                      
                      
                      
    Three Months Ended    Twelve Months Ended   
     Q4  Q4   FY  FY  
     2016
  2015
   2016
  2015
  
 Pre-tax Stock-Based Compensation Expense:                  
   Cost of revenue $87   $118    $341   $447   
   Sales and marketing  335    327     1,179    1,054   
   Research and development  180    152     596    662   
   General and administrative  459    500     1,597    1,921   
     $1,061   $1,097    $3,713   $4,084   
                      
CONTACTS: 

Cutera, Inc.
Ron Santilli
Chief Financial Officer
415-657-5500

Investor Relations 
John Mills
ICR, Inc. 	
646-277-1254
john.mills@icrinc.com