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Cutera Reports Fourth Quarter 2012 Results

Stocks in this article: CUTR

Mr. Connors concluded, "We believe the market outlook for the aesthetic laser and other energy-based equipment continues to expand and we are well positioned to capitalize on the improving market and to take advantage of our business model. We remain focused on many initiatives in order to continue delivering revenue growth, improved gross and operating margins, and cash generation in 2013 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 February 11, 2013. 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 February 25, 2013. 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, maintain profitability, develop and commercialize existing and new products and applications, experience market adoption for its products, realize benefits from additional investment, continue to penetrate the body contouring market, and statements regarding long-term prospects and opportunities as well as the timing and expected benefits of initiatives undertaken by management 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 fourth quarter ended December 31, 2012, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

 
CUTERA, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
(unaudited) 
       
  December 31, September 30, December 31,
  2012 2012 2011
Assets      
Current assets:      
Cash and cash equivalents  $ 23,546  $ 24,334  $ 14,020
Marketable investments  62,026  55,795  74,666
Accounts receivable, net  8,841  7,845  5,193
Inventories  11,114  12,477  10,729
Deferred tax asset  40  49  55
Other current assets and prepaid expenses  1,439  1,443  1,432
Total current assets  107,006  101,943  106,095
       
Property and equipment, net  933  885  853
Long-term investments  --  1,050  3,027
Deferred tax asset, net of current portion  553  470  446
Intangibles, net  2,566  2,876  446
Goodwill  1,339  1,339  --
Other long-term assets  397  517  486
Total assets  $ 112,794  $ 109,080  $ 111,353
       
 Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable  $ 2,107  $ 2,297  $ 2,573
Accrued liabilities  9,493  9,486  9,262
Deferred revenue  6,618  6,299  5,185
Total current liabilities  18,218  18,082  17,020
       
Deferred rent  1,288  1,347  1,448
Deferred revenue, net of current portion  2,102  1,411  840
Income tax liability  412  471  478
Total liabilities  22,020  21,311  19,786
       
Stockholders' equity:      
Common stock  14  14  14
Additional paid-in capital  100,552  98,865  95,719
Accumulated deficit  (9,873)  (10,950)  (3,325)
Accumulated other comprehensive income (loss)  81  (160)  (841)
Total stockholders' equity  90,774  87,769  91,567
Total liabilities and stockholders' equity  $ 112,794  $ 109,080  $ 111,353
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) 
       
  Three Months Ended
  December 31, September 30, December 31,
  2012 2012 2011
Net revenue  $ 22,533  $ 19,426  $ 18,542
Cost of revenue  9,790  8,828  7,506
Gross profit  12,743  10,598  11,036
       
Operating expenses:      
Sales and marketing  7,101  7,014  6,779
Research and development  2,122  2,217  2,313
General and administrative  2,452  2,475  2,878
Total operating expenses  11,675  11,706  11,970
Income (loss) from operations  1,068  (1,108)  (934)
Interest and other income, net  105  152  140
Income (loss) before income taxes  1,173  (956)  (794)
Provision (benefit) for income taxes  96  (64)  93
Net income (loss)   $ 1,077  $ (892)  $ (887)
       
Net income (loss) per share:      
Basic   $ 0.08  $ (0.06)  $ (0.06)
Diluted  $ 0.08  $ (0.06)  $ (0.06)
Weighted-average number of shares used in per share calculations:      
Basic  14,173  14,127  13,930
Diluted  14,272  14,127  13,930
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 
(unaudited) 
       
  Three Months Ended
  December 31, September 30, December 31,
  2012  2012 2011
Cash flows from operating activities:      
Net income (loss)  $ 1,077  $ (892)  $ (887)
Adjustments to reconcile net loss to net cash used in operating activities:      
Stock-based compensation  826  809  802
Tax benefit from stock-based compensation  6  --  8
Excess tax benefit related to stock-based compensation  (6)  --  (1)
Depreciation and amortization  420  418  154
Other  26  (113)  (128)
Changes in assets and liabilities:      
Accounts receivable  (992)  (1,641)  (1,106)
Inventories  1,363  245  (1,070)
Other current assets and prepaid expenses  142  214  653
Other long-term assets  120  22  7
Accounts payable  (190)  98  422
Accrued liabilities  (14)  78  1,884
Deferred rent  (38)  (27)  55
Deferred revenue  1,010  520  (197)
Income tax liability  (59)  2  (11)
Net cash provided by (used in) operating activities  3,691  (267)  585
       
Cash flows from investing activities:      
Acquisition of property and equipment  (158)  (47)  (330)
Proceeds from sales of marketable and long-term investments  5,203  8,566  3,601
Proceeds from maturities of marketable investments  8,564  14,610  12,850
Purchase of marketable investments  (18,949)  (16,328)  (16,876)
Net cash provided by (used in) investing activities  (5,340)  6,801  (755)
       
Cash flows from financing activities:      
Proceeds from exercise of stock options and employee stock purchase plan  855  12  315
Excess tax benefit related to stock-based compensation  6  --  1
Net cash provided by financing activities  861  12  316
       
Net increase (decrease) in cash and cash equivalents  (788)  6,546  146
Cash and cash equivalents at beginning of period  24,334  17,788  13,874
Cash and cash equivalents at end of period  $ 23,546  $ 24,334  $ 14,020
 
CUTERA, INC. 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited) 
             
  Three Months Ended 
  December 31,  % of  September 30, % of  December 31,  % of 
  2012 Revenue 2012 Revenue 2011 Revenue
Revenue By Geography:            
United States  $ 10,008 44%  $ 7,796 40%  $ 7,372 40%
International  12,525 56%  11,630 60%  11,170 60%
   $ 22,533    $ 19,426    $ 18,542  
             
Revenue By Product Category:          
Products  $ 14,592 65%  $ 12,047 62%  $ 11,241 61%
Upgrades  734 3%  487 3%  1,141 6%
Service   4,614 20%  4,298 22%  3,262 18%
Titan hand piece refills  1,235 6%  1,226 6%  1,349 7%
Dermal fillers and cosmeceuticals  1,358 6%  1,368 7%  1,549 8%
   $ 22,533    $ 19,426    $ 18,542  
             
             
             
  Three Months Ended   
  December 31, 2012   September 30, 2012   December 31,  2011  
Pre-tax Stock-Based Compensation Expense:        
Cost of revenue  $ 178    $ 169    $ 154  
Sales and marketing  181    177    163  
Research and development  95    126    174  
General and administrative  372    337    311  
   $ 826    $ 809    $ 802  
CONTACT: Cutera, Inc.
         Ron Santilli
         Chief Financial Officer
         415-657-5500
         
         Investor Relations
         John Mills
         Integrated Corporate Relations, Inc.
         310-954-1105
         john.mills@icrinc.com

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