Full Press Release Details
Cutera, Inc. Announces Third Quarter 2021 Financial Results with Record Revenue and Issues 2021 Guidance
BRISBANE, California, November 3, 2021 Cutera, Inc. (NASDAQ CUTR) ("Cutera" or the "Company"), a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide, today reported financial results for the second quarter ended September 30, 2021.
Third Quarter 2021 Financial and Operational Highlights
Revenue was $57.4 million, an increase of 47% from the prior-year period, driven by robust performance across the business, with strength in both capital equipment and recurring revenue segments.
Capital Equipment revenue of $32.2 million increased 33% over the prior-year period.
Recurring revenue, defined as the combination of Skincare, Consumable Products, and Service, was $25.2 million, an increase of 68% over the prior-year period
Skin Care revenue of $14.8 million increased 117% over prior-year period
Consumable Product revenue of $3.7 million grew 60% over prior-year period, and
Service revenue of $6.7 million increased 14% over prior-year period.
Gross Margin was 58.2%, compared to 55.6% in the prior-year period, driven by capital equipment and consumable volumes, reduced fixed overhead expenses and the continual progression of our margin expansion efforts
Operating Expenses were $32.8 million in the quarter, as compared to $23.0 million in prior-year period driven by higher selling expenses and increased R D spending associated with new products
Net loss was $1.4 million, or ($0.08) per fully diluted share, compared to a net loss of $2.3 million, or ($0.13) per fully diluted share, in the prior-year period and
Adjusted EBITDA more than doubled to $5.1 million in the period as compared to $2.4 million in the prior-year period.
"I am pleased with the strong results achieved by our team during the third quarter, as we expand our commercial team, drive improved profitability, and maintain our laser-focus on our vital few initiatives," commented Dave Mowry, Chief Executive Officer of Cutera, Inc. "We are encouraged by the positive momentum in capital equipment demand and the continuing improvement in global treatment volumes, despite the anticipated seasonality. Looking to the balance of 2021 and into early 2022, we are confident in the strength of our business as we continue onboarding new members of our commercial team and executing on our robust pipeline of capital equipment deals as patient volumes trend above pre-COVID levels."
Given the strength of our results in the third quarter of 2021 and management's confidence in our fourth quarter outlook, management is raising full-year 2021 revenue guidance to be in the range of $224 million to $228 million, up from our prior expectation of $215 million to $221 million.
The Company's management will host a conference call to discuss these results and related matters today at 1 30 p.m. PT (4 30 p.m. ET). Participating on the call will be Dave Mowry, Chief Executive Officer and Rohan Seth, Chief Financial Officer.
To participate in the conference call, dial 1-877-705-6003 (domestic) or + 1-201-493-6725 (international) and refer to the Conference Code 13723851.
The call will also be webcast and can be accessed from the Investor Relations section of Cutera's website at http www.cutera.com . The webcast replay of the call will be available at the same site approximately one hour after the end of the call.
Brisbane, California-based Cutera is a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide. Since 1998, Cutera has developed 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.
*Use of Non-GAAP Financial Measures
In this press release, in order to supplement the Company's condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations and net income (loss) per diluted share. Non-GAAP adjustments include stock-based compensation, depreciation, amortization, executive and other non-recurring separation costs, customer relationship management ("CRM") and enterprise resource planning ("ERP") system costs, non-recurring legal and litigation costs, as well as the net tax impact of excluding these items. From time to time in the future, there may be other items that we may exclude if the Company believes that doing so is consistent with the goal of providing useful information to investors and management. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The Company has not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability, limited visibility, unpredictability, or unique non-recurring nature of the items. Forward-looking non-GAAP measures include adjusted EBITDA. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive and other non-recurring separation costs, Gain on extinguishment of PPP loan, customer relationship management and enterprise resource planning system costs, and non-recurring legal and litigation costs.
Company management uses these measurements as aids in monitoring the Company's ongoing financial performance from quarter to quarter, and year to year, on a regular basis and for benchmarking against other similar companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measure as prescribed by GAAP. Non-GAAP financial measures for the statement of operations and net income per diluted share exclude the following
Non-cash expenses for stock-based compensation. The Company has excluded the effect of stock-based compensation expenses in calculating its non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to the Company's employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expense related to grants of options, employee stock purchase plan, and performance and restricted stock. Depending upon the size, timing and the terms of the grants, this expense may vary significantly but will recur in future periods. The Company believes that excluding stock-based compensation better allows for comparisons to its peer companies
Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net income measures. Depreciation and amortization are non-cash charges to current operations
Executive and other non-recurring separation costs. We have excluded costs associated with the resignation of former Executive Officers in calculating our non-GAAP operating expenses and net income measures. We exclude these and other non-recurring employee separation costs because we believe that these items do not reflect future operating expenses
Customer Relationship Management. We have excluded CRM system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new CRM solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance
Enterprise Resource Planning. We have excluded ERP system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new ERP solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance
Non-recurring legal and litigation costs. We have excluded costs incurred related to third party litigation and disputes, that are of a non-recurring nature and
The Company believes that excluding all of the items above allows users of its financial statements to better review and assess both current and historical results of operations.
Safe Harbor Statement
Certain statements in this press release, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements include, but are not limited to, Cutera's plans, objectives, strategies, financial performance and outlook, CFO and other senior leadership searches, product launches and performance, trends, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, the Company's actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "seek," "guidance," "predict," "potential," "likely," "believe," "will," "should," "expect," "anticipate," "estimate," "plan," "intend," "forecast," "foresee" or variations of these terms and similar expressions, or the negative of these terms or similar expressions. 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. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond the Company's control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the "Risk Factors" section of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, the Registration Statement on Form S-,8 and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.
All information in this press release is as of the date of its release. Accordingly, undue reliance should not be placed on forward-looking statements. 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. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Cutera's financial performance for the third quarter ended September 30, 2021, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
Director, Corporate Communications
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2021 | June 30, 2021 | December 31, 2020 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 162,486 | $ | 169,200 | $ | 47,047 | |||||
| Accounts receivable, net | 30,760 | 25,903 | 21,962 | ||||||||
| Inventories | 35,493 | 34,591 | 28,508 | ||||||||
| Other current assets and prepaid expenses | 13,350 | 8,856 | 8,779 | ||||||||
| Total current assets | 242,089 | 238,550 | 106,296 | ||||||||
| Property and equipment, net | 2,205 | 2,148 | 2,299 | ||||||||
| Deferred tax asset | 589 | 592 | 643 | ||||||||
| Operating lease right-of-use assets | 15,269 | 15,919 | 17,076 | ||||||||
| Goodwill | 1,339 | 1,339 | 1,339 | ||||||||
| Other long-term assets | 6,955 | 5,615 | 5,080 | ||||||||
| Total assets | $ | 268,446 | $ | 264,163 | $ | 132,733 | |||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 7,259 | $ | 6,210 | $ | 6,684 | |||||
| Accrued liabilities | 44,295 | 41,995 | 32,295 | ||||||||
| Operating leases liabilities | 2,394 | 2,422 | 2,260 | ||||||||
| PPP loan payable | - | - | 3,630 | ||||||||
| Deferred revenue | 9,188 | 9,695 | 9,489 | ||||||||
| Total current liabilities | 63,136 | 60,322 | 54,358 | ||||||||
| Deferred revenue, net of current portion | 1,492 | 1,708 | 1,748 | ||||||||
| Operating lease liabilities, net of current portion | 14,117 | 14,705 | 15,950 | ||||||||
| PPP loan payable, net of current portion | - | - | 3,555 | ||||||||
| Convertible notes, net of unamortized debt issuance costs | 134,025 | 133,800 | - | ||||||||
| Other long-term liabilities | 333 | 285 | 242 | ||||||||
| Total liabilities | 213,103 | 210,820 | 75,853 | ||||||||
| Stockholders' equity | |||||||||||
| Common stock | 18 | 18 | 18 | ||||||||
| Additional paid-in capital | 109,563 | 106,173 | 117,097 | ||||||||
| Accumulated deficit | (54,238) | (52,848) | (60,235) | ||||||||
| Total stockholders' equity | 55,343 | 53,343 | 56,880 | ||||||||
| Total liabilities and stockholders' equity | $ | 268,446 | $ | 264,163 | $ | 132,733 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||
| Products | $ | 50,694 | $ | 33,254 | $ | 146,056 | $ | 81,390 | |||||||
| Service | 6,690 | 5,878 | 19,585 | 16,350 | |||||||||||
| Total net revenue | 57,384 | 39,132 | 165,641 | 97,740 | |||||||||||
| Products | 20,259 | 14,017 | 59,483 | 40,326 | |||||||||||
| Service | 3,700 | 3,369 | 11,234 | 9,708 | |||||||||||
| Total cost of revenue | 23,959 | 17,386 | 70,717 | 50,034 | |||||||||||
| Gross profit | 33,425 | 21,746 | 94,924 | 47,706 | |||||||||||
| Gross margin % | 58.2 | % | 55.6 | % | 57.3 | % | 48.8 | % | |||||||
| Operating expenses | |||||||||||||||
| Sales and marketing | 19,190 | 12,286 | 52,668 | 38,109 | |||||||||||
| Research and development | 5,802 | 3,432 | 14,764 | 10,294 | |||||||||||
| General and administrative | 7,807 | 7,239 | 23,633 | 23,575 | |||||||||||
| Total operating expenses | 32,799 | 22,957 | 91,065 | 71,978 | |||||||||||
| Income (loss) from operations | 626 | (1,211) | 3,859 | (24,272) | |||||||||||
| Interest and other income (expense), net | |||||||||||||||
| Amortization of debt issuance costs | (225) | - | (492) | - | |||||||||||
| Interest on convertible notes | (768) | - | (1,737) | - | |||||||||||
| Gain on extinguishment of PPP loan | - | - | 7,185 | - | |||||||||||
| Other expense, net | (561) | (382) | (1,976) | (586) | |||||||||||
| Income (loss) before income taxes | (928) | (1,593) | 6,839 | (24,858) | |||||||||||
| Income tax expense | 462 | 664 | 842 | 1,207 | |||||||||||
| Net income (loss) | $ | (1,390) | $ | (2,257) | $ | 5,997 | $ | (26,065) | |||||||
| Net income (loss) per share | |||||||||||||||
| Basic | $ | (0.08) | $ | (0.13) | $ | 0.34 | $ | (1.59) | |||||||
| Diluted | $ | (0.08) | $ | (0.13) | $ | 0.33 | $ | (1.59) | |||||||
| Weighted-average number of shares used in per share calculations | |||||||||||||||
| Basic | 17,945 | 17,603 | 17,860 | 16,368 | |||||||||||
| Diluted | 17,945 | 17,603 | 18,327 | 16,368 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||
| Cash flows from operating activities | |||||||||||||||
| Net income (loss) | $ | (1,390) | $ | (2,257) | $ | 5,997 | $ | (26,065) | |||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||||||||||||
| Stock-based compensation | 3,742 | 1,982 | 8,507 | 8,057 | |||||||||||
| Depreciation and amortization | 307 | 341 | 1,014 | 1,056 | |||||||||||
| Amortization of contract acquisition costs | 427 | 625 | 1,430 | 2,017 | |||||||||||
| Amortization of debt issuance costs | 225 | - | 492 | - | |||||||||||
| Impairment of capitalized cloud computing costs | - | - | 182 | 805 | |||||||||||
| Change in deferred tax asset | 3 | (81) | 54 | (77) | |||||||||||
| Provision for credit losses | (391) | 54 | 101 | 1,750 | |||||||||||
| Loss on sale of property and equipment | 37 | - | (45) | - | |||||||||||
| PPP loan forgiveness | - | - | (7,185) | - | |||||||||||
| Change in right-of-use asset | 1,077 | 249 | 1,681 | 250 | |||||||||||
| Other | - | 129 | - | 327 | |||||||||||
| Changes in assets and liabilities | |||||||||||||||
| Accounts receivable | (4,466) | (5,064) | (8,899) | 2,209 | |||||||||||
| Inventories | (968) | 1,907 | (6,926) | 4,588 | |||||||||||
| Other current assets and prepaid expenses | (4,494) | (350) | (4,571) | (1,273) | |||||||||||
| Other long-term assets | (1,767) | (1,182) | (3,487) | (1,701) | |||||||||||
| Accounts payable | 1,049 | (4,882) | 575 | (5,886) | |||||||||||
| Accrued liabilities | 2,129 | 5,033 | 11,782 | (5,061) | |||||||||||
| Operating lease liabilities | (1,043) | - | (1,573) | - | |||||||||||
| Deferred revenue | (723) | 45 | (557) | (2,398) | |||||||||||
| Net cash provided by (used in) operating | (6,246) | (3,451) | (1,428) | (21,402) | |||||||||||
| Cash flows from investing activities | |||||||||||||||
| Acquisition of property, equipment and software | (12) | (339) | (382) | (774) | |||||||||||
| Disposal of property and equipment | - | - | 71 | - | |||||||||||
| Proceeds from sales of marketable investments | - | 8,100 | - | 19,000 | |||||||||||
| Purchase of marketable investments | - | (8,244) | - | (24,411) | |||||||||||
| Net cash used in investing activities | (12) | (483) | (311) | (6,185) | |||||||||||
| Cash flows from financing activities | |||||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 158 | 8 | 2,056 | 856 | |||||||||||
| Proceeds from PPP loan | - | 18 | - | 7,167 | |||||||||||
| Proceeds from equity offering | - | (1) | - | 28,798 | |||||||||||
| Offering costs on the equity offering | - | - | - | (2,303) | |||||||||||
| Purchase of capped call | - | - | (16,134) | - | |||||||||||
| Proceeds from issuance of convertible notes | - | - | 138,250 | - | |||||||||||
| Payment of issuance costs of convertible notes | - | - | (4,717) | - | |||||||||||
| Taxes paid related to net share settlement of equity awards | (511) | (223) | (1,963) | (3,340) | |||||||||||
| Payments on finance lease obligations | (103) | (133) | (314) | (513) | |||||||||||
| Net cash provided by (used in) financing activities | (456) | (331) | 117,178 | 30,665 | |||||||||||
| Net increase (decrease) in cash and cash equivalents | (6,714) | (4,265) | 115,439 | 3,078 | |||||||||||
| Cash and cash equivalents at beginning of period | 169,200 | 33,659 | 47,047 | 26,316 | |||||||||||
| Cash and cash equivalents at end of period | $ | 162,486 | $ | 29,394 | $ | 162,486 | $ | 29,394 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
| Three Months Ended | % Change | Nine Months Ended | % Change | ||||||||||||||||||
| September 30, 2021 | September 30, 2020 | 2021 Vs 2020 | September 30, 2021 | September 30, 2020 | 2021 Vs 2020 | ||||||||||||||||
| Revenue By Geography | |||||||||||||||||||||
| North America | $ | 26,710 | $ | 18,488 | +44.5 | % | $ | 75,794 | $ | 45,483 | +66.6 | % | |||||||||
| Japan | 19,335 | 11,497 | +68.2 | % | 53,311 | 27,176 | +96.2 | % | |||||||||||||
| Rest of World | 11,339 | 9,147 | +24.0 | % | 36,536 | 25,081 | +45.7 | % | |||||||||||||
| Total Net Revenue | $ | 57,384 | $ | 39,132 | +46.6 | % | $ | 165,641 | $ | 97,740 | +69.5 | % | |||||||||
| Rest of World (including Japan) as a percentage of total revenue | 53.5 | % | 52.8 | % | 54.2 | % | 53.5 | % | |||||||||||||
| Revenue By Product Category | |||||||||||||||||||||
| Systems | |||||||||||||||||||||
| - North America | $ | 20,680 | $ | 13,700 | +50.9 | % | $ | 57,353 | $ | 32,296 | +77.6 | % | |||||||||
| - Rest of World (including Japan) | 11,511 | 10,421 | +10.5 | % | 38,726 | 28,325 | +36.7 | % | |||||||||||||
| Total Systems | 32,191 | 24,121 | +33.5 | % | 96,079 | 60,621 | +58.5 | % | |||||||||||||
| Consumables | 3,684 | 2,304 | +59.9 | % | 11,040 | 6,263 | +76.3 | % | |||||||||||||
| Skincare | 14,819 | 6,829 | +117.0 | % | 38,937 | 14,506 | +168.4 | % | |||||||||||||
| Total Products | 50,694 | 33,254 | +52.4 | % | 146,056 | 81,390 | +79.5 | % | |||||||||||||
| Service | 6,690 | 5,878 | +13.8 | % | 19,585 | 16,350 | +19.8 | % | |||||||||||||
| Total Net Revenue | $ | 57,384 | $ | 39,132 | +46.6 | % | $ | 165,641 | $ | 97,740 | +69.5 | % |
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||
| Pre-tax Stock-Based Compensation Expense | |||||||||||||||
| Cost of revenue | $ | 330 | $ | 326 | $ | 908 | $ | 1,359 | |||||||
| Sales and marketing | 711 | 648 | 1,954 | 2,618 | |||||||||||
| Research and development | 1,020 | 254 | 1,628 | 1,344 | |||||||||||
| General and administrative | 1,681 | 754 | 4,017 | 2,736 | |||||||||||
| $ | 3,742 | $ | 1,982 | $ | 8,507 | $ | 8,057 |
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation Cost | Severance (RIF) | Legal - Lutronic | Other Adjustments | Non-GAAP | |||||||||||||||||||||||||
| Net revenue | $ | 57,384 | - | - | - | - | - | - | $ | 57,384 | ||||||||||||||||||||||
| Cost of revenue | 23,959 | (132) | (330) | - | - | - | 445 | 23,942 | ||||||||||||||||||||||||
| Gross profit | 33,425 | 132 | 330 | - | - | - | (445) | 33,442 | ||||||||||||||||||||||||
| Gross margin % | 58.2 | % | 58.3 | % | ||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Sales and marketing | 19,190 | (549) | (711) | - | - | - | - | 17,930 | ||||||||||||||||||||||||
| Research and development | 5,802 | (49) | (1,020) | - | - | - | - | 4,733 | ||||||||||||||||||||||||
| General and administrative | 7,807 | (8) | (1,681) | (128) | - | (288) | - | 5,702 | ||||||||||||||||||||||||
| Total operating expenses | 32,799 | 32799 | (606) | (3,412) | (128) | - | (288) | - | 28,365 | |||||||||||||||||||||||
| Income (loss) from operations | 626 | 738 | 3,742 | 128 | - | 288 | (445) | 5,077 | ||||||||||||||||||||||||
| Interest and other income (expense), net | ||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | (225) | - | - | - | - | - | - | (225) | ||||||||||||||||||||||||
| Interest on convertible notes | (768) | - | - | - | - | - | - | (768) | ||||||||||||||||||||||||
| Other expense | (561) | - | - | - | - | - | - | (561) | ||||||||||||||||||||||||
| Total interest and other income (expense), net | (1,554) | - | - | - | - | - | - | (1,554) | ||||||||||||||||||||||||
| Income (loss) before income taxes | (928) | 738 | 3,742 | 128 | - | 288 | (445) | 3,523 | ||||||||||||||||||||||||
| Income tax expense | 462 | - | - | - | - | - | - | 462 | ||||||||||||||||||||||||
| Net income (loss) | $ | (1,390) | $ | 738 | $ | 3,742 | $ | 128 | $ | - | $ | 288 | $ | (445) | $ | 3,061 | ||||||||||||||||
| Net income (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | $ | (0.08) | $ | 0.17 | ||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations | ||||||||||||||||||||||||||||||||
| Basic | 17,945 | 17,945 | ||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | ||||||||||||||||||||||||||||||
| Sales and marketing | 33.4 | % | 31.2 | % | ||||||||||||||||||||||||||||
| Research and development | 10.1 | % | 8.2 | % | ||||||||||||||||||||||||||||
| General and administrative | 13.6 | % | 9.9 | % | ||||||||||||||||||||||||||||
| 57.2 | % | 49.4 | % |
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation write-off | Severance (RIF) | Legal Former CFO Settlement Lutronic | Other Adjustments | Non-GAAP | |||||||||||||||||||||||||
| Net revenue | $ | 39,132 | - | - | - | - | - | - | $ | 39,132 | ||||||||||||||||||||||
| Cost of revenue | 17,387 | (140) | (326) | - | (186) | - | - | 16,735 | ||||||||||||||||||||||||
| Gross profit | 21,745 | 140 | 326 | - | 186 | - | - | 22,398 | ||||||||||||||||||||||||
| Gross margin % | 55.6 | % | 57.2 | % | ||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Sales and marketing | 12,286 | (756) | (648) | - | (25) | - | - | 10,857 | ||||||||||||||||||||||||
| Research and development | 3,432 | (39) | (254) | - | (67) | - | - | 3,072 | ||||||||||||||||||||||||
| General and administrative | 7,239 | (28) | (754) | - | (27) | (341) | - | 6,089 | ||||||||||||||||||||||||
| Total operating expenses | 22,957 | (823) | (1,656) | - | (119) | (341) | - | 20,018 | ||||||||||||||||||||||||
| Income (loss) from operations | (1,211) | 963 | 1,982 | - | 305 | 341 | - | 2,380 | ||||||||||||||||||||||||
| Interest and other expense, net | (382) | - | 0 | - | - | - | - | - | (382) | |||||||||||||||||||||||
| Income (loss) before income taxes | (1,593) | 963 | 1,982 | - | 305 | 341 | - | 1,998 | ||||||||||||||||||||||||
| Income tax expense | 664 | - | - | - | - | - | 2 | 666 | ||||||||||||||||||||||||
| Net income (loss) | $ | (2,257) | $ | 963 | $ | 1,982 | $ | - | $ | 305 | $ | 341 | $ | (2) | $ | 1,332 | ||||||||||||||||
| Net income (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | $ | (0.13) | $ | 0.08 | ||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations | ||||||||||||||||||||||||||||||||
| Basic | 17,603 | 17,603 | ||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | ||||||||||||||||||||||||||||||
| Sales and marketing | 31.4 | % | 27.7 | % | ||||||||||||||||||||||||||||
| Research and development | 8.8 | % | 7.9 | % | ||||||||||||||||||||||||||||
| General and administrative | 18.5 | % | 15.6 | % | ||||||||||||||||||||||||||||
| 58.7 | % | 51.2 | % |
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation Cost | Severance (RIF) | Legal - Lutronic | Other Adjustments | Non-GAAP | |||||||||||||||||||||||||
| Net revenue | 165,641 | - | - | - | - | - | - | $ | 165,641 | |||||||||||||||||||||||
| Cost of revenue | 70,717 | (432) | (908) | - | - | - | 791 | 70,168 | ||||||||||||||||||||||||
| Gross profit | 94,924 | 432 | 908 | - | - | - | (791) | 95,473 | ||||||||||||||||||||||||
| Gross margin % | 57.3 | % | 57.6 | % | ||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Sales and marketing | 52,668 | (1,827) | (1,954) | (182) | (638) | - | - | 48,067 | ||||||||||||||||||||||||
| Research and development | 14,764 | (133) | (1,628) | - | - | - | - | 13,003 | ||||||||||||||||||||||||
| General and administrative | 23,633 | (56) | (4,017) | (605) | - | (979) | - | 17,976 | ||||||||||||||||||||||||
| Total operating expenses | 91,065 | 91065 | (2,016) | (7,599) | (787) | (638) | (979) | - | 79,046 | |||||||||||||||||||||||
| Income (loss) from operations | 3,859 | 2,448 | 8,507 | 787 | 638 | 979 | (791) | 16,427 | ||||||||||||||||||||||||
| Interest and other income (expense), net | ||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | (492) | - | - | - | - | - | - | (492) | ||||||||||||||||||||||||
| Interest on convertible notes | (1,737) | - | - | - | - | - | - | (1,737) | ||||||||||||||||||||||||
| Gain on extinguishment of PPP loan | 7,185 | - | - | - | - | - | (7,185) | - | ||||||||||||||||||||||||
| Other expense | (1,976) | - | - | - | - | - | - | (1,976) | ||||||||||||||||||||||||
| Total interest and other income (expense), net | 2,980 | - | - | - | - | - | (7,185) | (4,205) | ||||||||||||||||||||||||
| Income (loss) before income taxes | 6,839 | 2,448 | 8,507 | 787 | 638 | 979 | (7,976) | 12,222 | ||||||||||||||||||||||||
| Income tax expense | 842 | - | - | - | - | - | - | 842 | ||||||||||||||||||||||||
| Net income (loss) | $ | 5,997 | $ | 2,448 | $ | 8,507 | $ | 787 | $ | 638 | $ | 979 | $ | (7,976) | $ | 11,380 | ||||||||||||||||
| Net income (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | $ | 0.34 | $ | 0.64 | ||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations | ||||||||||||||||||||||||||||||||
| Basic | 17,860 | 17,860 | ||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | ||||||||||||||||||||||||||||||
| Sales and marketing | 31.8 | % | 29.0 | % | ||||||||||||||||||||||||||||
| Research and development | 8.9 | % | 7.9 | % | ||||||||||||||||||||||||||||
| General and administrative | 14.3 | % | 10.9 | % | ||||||||||||||||||||||||||||
| 55.0 | % | 47.7 | % |
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation write-off | Severance (RIF) | Legal Former CFO Settlement Lutronic | Other Adjustments | Non-GAAP | |||||||||||||||||||||||||
| Net revenue | $ | 97,740 | - | - | - | - | - | - | $ | 97,740 | ||||||||||||||||||||||
| Cost of revenue | 50,034 | (417) | (1,359) | - | (318) | - | - | 47,940 | ||||||||||||||||||||||||
| Gross profit | 47,706 | - | 1 | - | - | - | - | 49,800 | ||||||||||||||||||||||||
| Gross margin % | 48.8 | % | 51.0 | % | ||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||
| Sales and marketing | 38,109 | (2,454) | (2,617) | - | (274) | - | - | 32,765 | ||||||||||||||||||||||||
| Research and development | 10,294 | (115) | (1,344) | - | (130) | - | - | 8,704 | ||||||||||||||||||||||||
| General and administrative | 23,575 | (84) | (2,736) | (1,139) | (101) | (1,359) | (324) | 17,831 | ||||||||||||||||||||||||
| Total operating expenses | 71,978 | (2,653) | (6,698) | (1,139) | (505) | (1,359) | (324) | 59,300 | ||||||||||||||||||||||||
| Income (loss) from operations | (24,272) | 3,070 | 8,057 | 1,139 | 823 | 1,359 | 324 | (9,500) | ||||||||||||||||||||||||
| Interest and other expense, net | (586) | - | - | - | - | - | - | (586) | ||||||||||||||||||||||||
| Income (loss) before income taxes | (24,858) | 3,070 | 8,057 | 1,139 | 823 | 1,359 | 324 | (10,086) | ||||||||||||||||||||||||
| Income tax expense | 1,207 | - | - | - | - | - | 9 | 1,216 | ||||||||||||||||||||||||
| Net income (loss) | $ | (26,065) | $ | 3,070 | $ | 8,057 | $ | 1,139 | $ | 823 | $ | 1,359 | $ | 315 | $ | (11,302) | ||||||||||||||||
| Net income (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | $ | (1.59) | $ | (0.69) | ||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations | ||||||||||||||||||||||||||||||||
| Basic | 16,368 | 16,368 | ||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | ||||||||||||||||||||||||||||||
| Sales and marketing | 39.0 | % | 33.5 | % | ||||||||||||||||||||||||||||
| Research and development | 10.5 | % | 8.9 | % | ||||||||||||||||||||||||||||
| General and administrative | 24.1 | % | 18.2 | % | ||||||||||||||||||||||||||||
| 73.6 | % | 60.7 | % |
RECONCILIATION OF LOSS TO ADJUSTED EBITDA
| Three Months Ended | Nine Months Ended | ||||||
| September 30, 2021 | |||||||
| Net Income | $ | (1,390) | $ | 5,997 | |||
| Adjustments | |||||||
| Stock-based compensation | 3,742 | 8,507 | |||||
| Depreciation and amortization | 738 | 2,448 | |||||
| ERP implementation cost | 128 | 787 | |||||
| Severance | - | 638 | |||||
| Legal - Lutronic | 288 | 979 | |||||
| Other adjustments | (445) | (791) | |||||
| Gain on extinguishment of PPP loan | - | (7,185) | |||||
| Other expense | 1,554 | 4,205 | |||||
| Income tax expense | 462 | 842 | |||||
| Total adjustments | 6,467 | 10,430 | |||||
| Adjusted EBITDA | $ | 5,077 | $ | 16,427 |