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Cutera Reports Fourth Quarter 2012 Results

BRISBANE, Calif., Feb. 11, 2013 (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 fourth quarter ended December 31, 2012.

Key financial highlights for the fourth quarter of 2012 were as follows:

  • Revenue grew 22% to $22.5 million, compared to Q4'11, and was driven primarily by truSculpt and ExcelV products.
  • Gross margin improved sequentially from 55% in Q3'12 to 57% in Q4'12.
  • Company returned to profitability and generated net income of $1.1 million, or $0.08 per diluted share, which included $1.2 million of non-cash stock-based compensation, amortization of intangibles, and depreciation.
  • Cash and marketable securities increased $4.4 million in the quarter, to $85.6 million.

Kevin Connors, President and CEO of Cutera, stated, "I am pleased with the seventh consecutive quarter of revenue growth in excess of 22%, compared to the same period in the prior year, which resulted in improved gross margin, profit, and significant cash generation. This strong performance reflects the result of various initiatives that our management team implemented during the past few years and positions us to continue our revenue and profit growth in 2013."

"We experienced growth in most of our major geographical regions. In the fourth quarter of 2012, our domestic revenue increased by 36% and our international revenue expanded by 12%, when compared to the fourth quarter of 2011. We are pleased with the early customer response of our truSculpt product and look forward to continued revenue growth from this product as we are very early in penetrating the body contouring market. Further, we continued to experience growing demand for our premier vascular system, Excel V, and strong revenue contributions from our flagship multi-application Xeo platform and GenesisPlus product used for the treatment of onychomycosis (or toe nail fungus)."

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.comSource:Cutera, Inc.