Full Press Release Details
Chief Financial Officer
Integrated Corporate Relations, Inc.
Cutera Reports Second Quarter 2009 Results
BRISBANE, Calif., August 3, 2009 -- Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the second quarter ended June 30, 2009.
Second quarter 2009 revenue was $11.7 million, compared to $24.8 million in the same period last year. Net loss for the second quarter of 2009 was $2.4 million, or $0.18 per diluted share, compared to net profit of $0.7 million, or $0.05 per diluted share, in the second quarter of 2008. Our cash
flow from operations was break-even in the second quarter as our net loss was offset primarily by reductions in our accounts receivable and inventory balances.
Kevin Connors, President and CEO of Cutera, stated, "Our prospects continue to experience demand for our products from the end user; however, many of these prospects are currently reluctant to make major capital equipment purchases during these unstable economic times. To better capitalize on the
opportunities we are seeing in this challenging market and to better position our sales force for long-term positive results, we recently promoted Chris West to Vice President of North American Sales."
"During the second quarter of 2009, we recorded certain operating expenses associated with restructuring charges, bad debt expense, and higher than normal non-cash stock-based compensation charges, that are not expected to recur in the second half of 2009. As our restructuring efforts improve our operating
efficiencies, we expect our quarterly operating expenses to decline in the second half of 2009, compared to the second quarter of 2009, and assuming revenue of approximately $15.0 million, we believe we will become profitable."
"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 focusing our sales, marketing and new product development efforts on this segment of our
Mr. Connors concluded, "While the near-term prospects for our industry are difficult to predict due to the current economic uncertainty, we believe that our worldwide distribution network, strong balance sheet with $104.9 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."
The conference call to discuss these results is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET) on August 3, 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 August 17, 2009. In addition, you may call (866) 225-8754 to listen to the live broadcast. Participating in the call will be Kevin Connors, President and Chief Executive Officer, and Ron Santilli, Chief Financial Officer.
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 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 August 3, 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 second quarter ended June 30, 2009 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2009 | 2008 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 35,445 | $ | 36,540 | ||||
| Marketable investments | 61,857 | 60,653 | ||||||
| Accounts receivable, net | 2,828 | 5,792 | ||||||
| Inventories | 8,702 | 9,927 | ||||||
| Deferred tax asset | 4,652 | 4,257 | ||||||
| Other current assets and prepaid expenses | 4,548 | 1,771 | ||||||
| Total current assets | 118,032 | 118,940 | ||||||
| Property and equipment, net | 1,101 | 1,357 | ||||||
| Long-term investments | 7,640 | 9,627 | ||||||
| Intangibles, net | 926 | 1,025 | ||||||
| Deferred tax asset, net of current portion | 6,165 | 6,527 | ||||||
| Total assets | $ | 133,864 | $ | 137,476 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,127 | $ | 1,690 | ||||
| Accrued liabilities | 7,737 | 8,848 | ||||||
| Deferred revenue | 6,506 | 6,758 | ||||||
| Total current liabilities | 15,370 | 17,296 | ||||||
| Deferred rent | 1,603 | 1,713 | ||||||
| Deferred revenue, net of current portion | 3,134 | 4,907 | ||||||
| Income tax liability | 1,367 | 1,452 | ||||||
| Total liabilities | 21,474 | 25,368 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 13 | 13 | ||||||
| Additional paid-in capital | 82,985 | 80,318 | ||||||
| Retained earnings | 30,741 | 31,410 | ||||||
| Accumulated other comprehensive income (loss) | (1,349 | ) | 367 | |||||
| Total stockholders' equity | 112,390 | 112,108 | ||||||
| Total liabilities and stockholders' equity | $ | 133,864 | $ | 137,476 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Net revenue | $ | 11,665 | $ | 24,754 | $ | 26,095 | $ | 46,372 | ||||||||
| Cost of revenue | 5,130 | 9,271 | 11,066 | 17,490 | ||||||||||||
| Gross profit | 6,535 | 15,483 | 15,029 | 28,882 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 6,071 | 10,361 | 13,074 | 20,710 | ||||||||||||
| Research and development | 1,495 | 2,004 | 3,238 | 3,789 | ||||||||||||
| General and administrative | 3,616 | 3,023 | 6,136 | 5,964 | ||||||||||||
| Litigation settlement | - | - | 850 | - | ||||||||||||
| Total operating expenses | 11,182 | 15,388 | 23,298 | 30,463 | ||||||||||||
| Income (loss) from operations | (4,647 | ) | 95 | (8,269 | ) | (1,581 | ) | |||||||||
| Interest and other income, net | 511 | 857 | 1,110 | 1,758 | ||||||||||||
| Income (loss) before income taxes | (4,136 | ) | 952 | (7,159 | ) | 177 | ||||||||||
| Provision (benefit) for income taxes | (1,772 | ) | 291 | (2,967 | ) | 58 | ||||||||||
| Net income (loss) | $ | (2,364 | ) | $ | 661 | $ | (4,192 | ) | $ | 119 | ||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | (0.18 | ) | $ | 0.05 | $ | (0.32 | ) | $ | 0.01 | ||||||
| Diluted | $ | (0.18 | ) | $ | 0.05 | $ | (0.32 | ) | $ | 0.01 | ||||||
| Weighted-average number of shares used in per share calculations: | ||||||||||||||||
| Basic | 13,317 | 12,764 | 13,219 | 12,753 | ||||||||||||
| Diluted | 13,317 | 13,465 | 13,219 | 13,457 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | (2,364 | ) | $ | 661 | $ | (4,192 | ) | $ | 119 | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||
| Stock-based compensation | 1,456 | 1,327 | 2,501 | 2,657 | ||||||||||||
| Tax deficit from stock-based compensation | (87 | ) | (51 | ) | (113 | ) | (51 | ) | ||||||||
| Depreciation and amortization | 225 | 228 | 453 | 451 | ||||||||||||
| Change in deferred tax asset | 139 | (13 | ) | 34 | (28 | ) | ||||||||||
| Change in allowance for doubtful accounts | 498 | 13 | 553 | 89 | ||||||||||||
| Provision for excess and obsolete inventories | 130 | 17 | 503 | 17 | ||||||||||||
| Other | 32 | - | - | - | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||
| Accounts receivable | 1,936 | (897 | ) | 2,411 | 1,446 | |||||||||||
| Inventories | 1,014 | 758 | 722 | (1,093 | ) | |||||||||||
| Other current assets and prepaid expenses | (1,085 | ) | 288 | (1,967 | ) | 48 | ||||||||||
| Accounts payable | (408 | ) | (504 | ) | (563 | ) | (436 | ) | ||||||||
| Accrued liabilities | (429 | ) | 1,160 | (1,111 | ) | (1,923 | ) | |||||||||
| Deferred rent | (55 | ) | 3 | (110 | ) | 37 | ||||||||||
| Deferred revenue | (957 | ) | 482 | (2,025 | ) | 1,270 | ||||||||||
| Income tax liability | (54 | ) | 39 | (85 | ) | 398 | ||||||||||
| Net cash provided by (used in) operating activities | (9 | ) | 3,511 | (2,989 | ) | 3,001 | ||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Acquisition of property and equipment | (36 | ) | (35 | ) | (98 | ) | (221 | ) | ||||||||
| Proceeds from sales of marketable investments | 9,774 | 3,835 | 16,352 | 41,195 | ||||||||||||
| Proceeds from maturities of marketable investments | 1,100 | 7,108 | 2,245 | 9,670 | ||||||||||||
| Purchase of marketable investments | (11,342 | ) | (32,290 | ) | (16,884 | ) | (44,495 | ) | ||||||||
| Net cash provided by (used in) investing activities | (504 | ) | (21,382 | ) | 1,615 | 6,149 | ||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 165 | 225 | 279 | 260 | ||||||||||||
| Net cash provided by financing activities | 165 | 225 | 279 | 260 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | (348 | ) | (17,646 | ) | (1,095 | ) | 9,410 | |||||||||
| Cash and cash equivalents at beginning of period | 35,793 | 38,110 | 36,540 | 11,054 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 35,445 | $ | 20,464 | $ | 35,445 | $ | 20,464 |
| CUTERA, INC. | ||||||||||||||||||||||||
| CONSOLIDATED REVENUE HIGHLIGHTS | ||||||||||||||||||||||||
| (in thousands, except percentage data) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2009 | 2008 | Change | 2009 | 2008 | Change | |||||||||||||||||||
| Revenue By Geography: | ||||||||||||||||||||||||
| United States | $ | 4,551 | $ | 12,383 | -63% | $ | 10,896 | $ | 24,768 | -56% | ||||||||||||||
| International | 7,114 | 12,371 | -42% | 15,199 | 21,604 | -30% | ||||||||||||||||||
| $ | 11,665 | $ | 24,754 | -53% | $ | 26,095 | $ | 46,372 | -44% | |||||||||||||||
| Revenue By Product Category: | ||||||||||||||||||||||||
| Products | $ | 5,664 | $ | 18,364 | -69% | $ | 13,702 | $ | 33,690 | -59% | ||||||||||||||
| Product upgrades | 1,201 | 2,154 | -44% | 2,955 | 4,385 | -33% | ||||||||||||||||||
| Service | 3,397 | 2,686 | +26% | 6,650 | 5,391 | +23% | ||||||||||||||||||
| Titan refills | 1,403 | 1,550 | -9% | 2,788 | 2,906 | -4% | ||||||||||||||||||
| $ | 11,665 | $ | 24,754 | -53% | $ | 26,095 | $ | 46,372 | -44% |