Full Press Release Details
Chief Financial Officer
Integrated Corporate Relations, Inc.
Cutera Reports Fourth Quarter 2011 Results
Revenue, EPS and Cash Flow from Operations Improved Year-Over-Year
BRISBANE, Calif., February 13, 2012 Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the fourth quarter ended December 31, 2011.
Key financial highlights for the fourth quarter of 2011, compared to the fourth quarter of 2010, are as follows:
Kevin Connors, president and CEO of Cutera, stated, "This is our third consecutive quarter of revenue growth in excess of 22%, compared to the same periods in 2010. In the fourth quarter of 2011, our US revenue increased 27% year over year. The improved performance, relative to 2010, was driven primarily by the effective execution of our domestic sales organization, coupled with recent successful product introductions. International revenue expanded by 19% during the fourth quarter of 2011, compared to the same period in 2010. We experienced particular strength in Canada, Australia, Japan, as well as in our Pacific Rim distribution network."
"We are pleased with the customer acceptance and the revenue impact to-date of our GenesisPlus and Excel V products, which made significant contributions to our growth in the fourth quarter of 2011. We are continuing to expand our marketing focus of these products globally and are excited about the long-term potential. Additionally, at the end of the quarter, we launched MyQ in Japan for deep dermal pigmentation and melasma and are pleased with the early market adoption."
"We have made significant investments in our research and development program and believe it is vital to have innovative products in our future. We plan to enter the non-invasive body contouring segment with the launch of TruSculpt at the American Academy of Dermatology meeting in March of 2012. The TruSculpt system is a proprietary radio frequency technology that enables large volumetric deep tissue treatment without discomfort or adverse side effects. The core technology and early research of our product was published in Lasers in Surgery and Medicine' as the feature article. This product recently received a CE Mark clearance for body contouring and cellulite. In addition, it also has a 510(K) clearance for cellulite. Our extended research to develop this technology, now allows us to enter the fast growing body contouring market."
"We closed the acquisition of Iridex' aesthetic assets on February 2, 2012 We expect to incur non-recurring expenses and limited revenue in the first quarter of 2012 as we integrate this global vascular business. Beginning in the second quarter of 2012, we expect this business to be fully integrated into Cutera and to contribute incremental profitability."
Mr. Connors concluded, "We remain focused on key initiatives to improve our performance in 2012. We believe that our worldwide distribution network, strong cash position, with no debt and an expanded portfolio of products offer continued, 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 February 13, 2012. 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 27, 2012. In addition, you may call 877-407-3982 to listen to the live broadcast.
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 leverage its business model, increase revenue, generate additional cash, increase profitability, develop and commercialize existing and new products and applications, experience market adoption for its products, realize benefits from additional investment, and statements regarding long-term prospects and opportunities as well as the timing and expected benefits of integration activities 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 Company may not be successful in its 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 7, 2011. 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 fourth quarter ended December 31, 2011 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | September 30, | December 31, | ||||||||||
| 2011 | 2011 | 2010 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 14,020 | $ | 13,874 | $ | 12,519 | ||||||
| Marketable investments | 74,666 | 74,502 | 77,484 | |||||||||
| Accounts receivable, net | 5,193 | 4,085 | 4,208 | |||||||||
| Inventories | 10,729 | 9,659 | 6,448 | |||||||||
| Deferred tax asset | 55 | 17 | 63 | |||||||||
| Other current assets and prepaid expenses | 1,432 | 1,841 | 2,740 | |||||||||
| Total current assets | 106,095 | 103,978 | 103,462 | |||||||||
| Property and equipment, net | 853 | 643 | 597 | |||||||||
| Long-term investments | 3,027 | 3,014 | 6,784 | |||||||||
| Intangibles, net | 446 | 493 | 637 | |||||||||
| Deferred tax asset, net of current portion | 446 | 345 | 325 | |||||||||
| Other long-term assets | 486 | 493 | - | |||||||||
| Total assets | $ | 111,353 | $ | 108,966 | $ | 111,805 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 2,573 | $ | 2,151 | $ | 1,296 | ||||||
| Accrued liabilities | 9,262 | 7,339 | 6,194 | |||||||||
| Deferred revenue | 5,185 | 5,447 | 5,633 | |||||||||
| Total current liabilities | 17,020 | 14,937 | 13,123 | |||||||||
| Deferred rent | 1,448 | 1,432 | 1,501 | |||||||||
| Deferred revenue, net of current portion | 840 | 775 | 1,287 | |||||||||
| Income tax liability | 478 | 489 | 477 | |||||||||
| Total liabilities | 19,786 | 17,633 | 16,388 | |||||||||
| Stockholders' equity: | ||||||||||||
| Common stock | 14 | 14 | 14 | |||||||||
| Additional paid-in capital | 95,719 | 94,594 | 90,423 | |||||||||
| Retained earnings (accumulated deficit) | (3,325 | ) | (2,438 | ) | 6,736 | |||||||
| Accumulated other comprehensive loss | (841 | ) | (837 | ) | (1,756 | ) | ||||||
| Total stockholders' equity | 91,567 | 91,333 | 95,417 | |||||||||
| Total liabilities and stockholders' equity | $ | 111,353 | $ | 108,966 | $ | 111,805 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2011 | 2011 | 2010 | ||||||||||
| Net revenue | $ | 18,542 | $ | 15,232 | $ | 15,216 | ||||||
| Cost of revenue | 7,506 | 6,772 | 6,233 | |||||||||
| Gross profit | 11,036 | 8,460 | 8,983 | |||||||||
| Operating expenses: | ||||||||||||
| Sales and marketing | 6,779 | 6,426 | 6,123 | |||||||||
| Research and development | 2,313 | 2,352 | 2,173 | |||||||||
| General and administrative | 2,878 | 2,310 | 2,238 | |||||||||
| Total operating expenses | 11,970 | 11,088 | 10,534 | |||||||||
| Loss from operations | (934 | ) | (2,628 | ) | (1,551 | ) | ||||||
| Interest and other income, net | 140 | 91 | 144 | |||||||||
| Loss before income taxes | (794 | ) | (2,537 | ) | (1,407 | ) | ||||||
| Provision (benefit) for income taxes | 93 | 326 | (127 | ) | ||||||||
| Net loss | $ | (887 | ) | $ | (2,863 | ) | $ | (1,280 | ) | |||
| Net loss per share: | ||||||||||||
| Basic and Diluted | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.09 | ) | |||
| Weighted-average number of shares used in per share calculations: | ||||||||||||
| Basic and Diluted | 13,930 | 13,862 | 13,622 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2011 | 2011 | 2010 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (887 | ) | $ | (2,863 | ) | $ | (1,280 | ) | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Stock-based compensation | 802 | 894 | 980 | |||||||||
| Tax benefit from stock-based compensation | 8 | 5 | 8 | |||||||||
| Excess tax benefit related to stock-based compensation | (1 | ) | (5 | ) | (8 | ) | ||||||
| Depreciation and amortization | 154 | 164 | 157 | |||||||||
| Provision for excess and obsolete inventroies | - | - | 18 | |||||||||
| Provision for doubtful accounts receivable | (2 | ) | 24 | (31 | ) | |||||||
| Change in deferred tax asset net of valuation allowance | (139 | ) | (14 | ) | (87 | ) | ||||||
| Gain on sale of marketable investments, net | (3 | ) | (2 | ) | - | |||||||
| Tax on unrealized gains on marketable and long term investments | 3 | 262 | - | |||||||||
| Other | 13 | - | - | |||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivable | (1,106 | ) | (830 | ) | (1,153 | ) | ||||||
| Inventories | (1,070 | ) | (1,358 | ) | 678 | |||||||
| Other current assets and prepaid expenses | 653 | 512 | 553 | |||||||||
| Other long-term assets | 7 | (493 | ) | - | ||||||||
| Accounts payable | 422 | (29 | ) | (405 | ) | |||||||
| Accrued liabilities | 1,884 | 411 | 412 | |||||||||
| Deferred rent | 55 | (4 | ) | (42 | ) | |||||||
| Deferred revenue | (197 | ) | (150 | ) | (139 | ) | ||||||
| Income tax liability | (11 | ) | (5 | ) | (89 | ) | ||||||
| Net cash provided by (used in) operating activities | 585 | (3,481 | ) | (428 | ) | |||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of property and equipment | (330 | ) | (24 | ) | (82 | ) | ||||||
| Disposal of property and equipment | - | 36 | - | |||||||||
| Proceeds from sales of marketable and long-term investments | 3,601 | 7,156 | 4,030 | |||||||||
| Proceeds from maturities of marketable investments | 12,850 | 6,649 | 8,370 | |||||||||
| Purchase of marketable investments | (16,876 | ) | (14,130 | ) | (21,220 | ) | ||||||
| Net cash used in investing activities | (755 | ) | (313 | ) | (8,902 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 315 | 180 | 138 | |||||||||
| Excess tax benefit related to stock-based compensation | 1 | 5 | 8 | |||||||||
| Net cash provided by financing activities | 316 | 185 | 146 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 146 | (3,609 | ) | (9,184 | ) | |||||||
| Cash and cash equivalents at beginning of period | 13,874 | 17,483 | 21,703 | |||||||||
| Cash and cash equivalents at end of period | $ | 14,020 | $ | 13,874 | $ | 12,519 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
| Three Months Ended | |||||||||||||||
| December 31, | % of | September 30, | % of | December 31, | % of | ||||||||||
| 2011 | Revenue | 2011 | Revenue | 2010 | Revenue | ||||||||||
| Revenue By Geography: | |||||||||||||||
| United States | $ | 7,372 | 40% | $ | 6,037 | 40% | $ | 5,793 | 38% | ||||||
| International | 11,170 | 60% | 9,195 | 60% | 9,423 | 62% | |||||||||
| $ | 18,542 | $ | 15,232 | $ | 15,216 | ||||||||||
| Revenue By Product Category: | |||||||||||||||
| Products | $ | 11,241 | 61% | $ | 8,975 | 59% | $ | 8,920 | 58% | ||||||
| Upgrades | 1,141 | 6% | 687 | 4% | 869 | 6% | |||||||||
| Service | 3,262 | 18% | 3,227 | 21% | 3,314 | 22% | |||||||||
| Titan hand piece refills | 1,349 | 7% | 1,031 | 7% | 934 | 6% | |||||||||
| Dermal fillers and cosmeceuticals | 1,549 | 8% | 1,312 | 9% | 1,179 | 8% | |||||||||
| $ | 18,542 | $ | 15,232 | $ | 15,216 |
| Three Months Ended | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2011 | 2011 | 2010 | ||||||||||
| Pre-tax Stock-Based Compensation Expense: | ||||||||||||
| Cost of revenue | $ | 154 | $ | 179 | $ | 158 | ||||||
| Sales and marketing | 163 | 210 | 286 | |||||||||
| Research and development | 174 | 184 | 152 | |||||||||
| General and administrative | 311 | 321 | 384 | |||||||||
| $ | 802 | $ | 894 | $ | 980 |