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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 market."
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."
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 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.
About Cutera, Inc.
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.
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
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
========= =========
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
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
======== ======== ======== ========
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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%
======== ======== ======== ========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Cutera, Inc.
Cutera, Inc. Ron Santilli, Chief Financial Officer 415-657-5500 Integrated Corporate Relations, Inc. Investor Relations John Mills 310-954-1100 john.mills@icrinc.com
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