cutr20140802_8k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 


FORM 8-K

 


CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

August 4, 2014

Date of Report (date of earliest event reported)

 

 


Cutera, Inc.

(Exact name of Registrant as specified in its charter)

 


 

Delaware

 

000-50644

 

77-0492262

(State or other jurisdiction of

incorporation or organization)

 

(Commission File Number)

 

(I.R.S. Employer

Identification Number)

 

3240 Bayshore Blvd. 

Brisbane, California 94005

(Address of principal executive offices)

 

(415) 657-5500

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

  


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On August 4, 2014, we are issuing a press release and holding a conference call regarding our financial results for the first quarter ended June 30, 2014. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

 

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

     

Exhibit No.

  

Description

   

99.1

  

Press Release of Cutera, Inc. dated as of August 4, 2014.

 


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

         
 

 

 

 

CUTERA, INC.

     

Date: August 4, 2014

 

 

 

/s/ KEVIN P. CONNORS

 

 

 

 

Kevin P. Connors

 

 

 

 

President and Chief Executive Officer

 

ex99-1.htm

EXHIBIT 99.1

 

FOR IMMEDIATE RELEASE

 

CONTACTS:

 

Cutera, Inc.

Ron Santilli

Chief Financial Officer

415-657-5500

 

Investor Relations

John Mills

Integrated Corporate Relations, Inc.

310-954-1105

john.mills@icrinc.com

 

Cutera Reports Second Quarter 2014 Results

 

BRISBANE, California, August 4, 2014 ─ Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide, today reported financial results for the second quarter ended June 30, 2014.

 

Key highlights for the second quarter of 2014 were as follows:

 

Commenced initial shipments of Excel HR, our dual wave length, premium laser for hair removal.

 

Net loss was $2.7 million, or $0.19 per diluted share. Non-cash expenses for stock-based compensation, depreciation, and intangible amortization totaled $1.0 million. This loss is largely attributed to ramp-up costs related to the expanded sales force and other investments in our North American commercial operations.

 

Expanded our International leadership.

 

Cash and marketable securities position: $81.6 million.

 

Kevin Connors, President and CEO of Cutera, stated, “Our U.S. revenue increased by 6%, led primarily by the expansion of our sales team and the initial commercial shipments of our recently launched Excel HR product. As a result of the sales force expansion, as well as other initiatives to improve our commercial performance, we anticipate continued improvement in North America in the second half of 2014.

 

“Our International revenue declined by 19%, which was primarily a result of softness in Japan and other Asia Pacific distributor businesses. We continue to believe that greater focus, coupled with strategic investments in our international business are an important component of our global expansion plan. To better capture improved performance in these markets, I am pleased with the recent addition of Miguel Pardos to lead our international business operations. Miguel is an industry veteran with a proven track record in developing and expanding international sales. He has a strong technical and clinical knowledge of aesthetic products and is well connected in our industry. I am thrilled Miguel has joined our team and believe that he, along with other strategic investments in our distribution infrastructure, will be instrumental in increasing our international market share commencing in the second half of 2014.

 

 
 

 

 

“Product development efforts remain on schedule. Initial shipments of our Excel HR product commenced at quarter-end. Hair removal continues to be one the largest market segments in the energy-based aesthetic industry and we have expanded our portfolio of premium products for dermatologists and other core physicians. We are pleased with the early customer response to this innovative technology and are actively expanding our production efforts to meet customer demand. Turning to our picosecond technology development efforts, we expect shipments of our Enlighten product for the removal of benign pigment lesions and tattoos to commence in the fourth quarter. Enlighten has received CE Mark approval and is currently pending 510(k) clearance by the FDA. We have submitted two 510(k) applications to the FDA and both included data from clinical studies.

 

“We believe the market is healthy for aesthetic light and energy based systems and that our broad range of products, recently expanded sales force, and the expected market penetration of our new products, strategically positions us to capture larger share in the future.”

 

Conference Call

The conference call to discuss these results is scheduled to begin at 2:00 p.m. PDT (5:00 p.m. EDT) on August 4, 2014. 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. PDT (11:59 p.m. EDT) on August 28, 2014. In addition, you may call 877-705-6003 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 increase revenue, improve cash generation from operations, improve gross and net operating margins, develop and commercialize existing and new products and applications, ability to grow the Company’s market share, realize benefits from additional investment and the expansion of its sales force, the regulatory timeline and expected launch date of planned new products, and statements regarding long-term prospects and opportunities in the laser and other energy-based equipment aesthetic market 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, hire and retain qualified sales representatives, improve revenue growth and profitability through leveraging 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 today- August 4, 2014. 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 second quarter ended June 30, 2014, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

 

 
 

 

 

CUTERA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

   

June 30,

   

March 31,

   

June 30,

 
   

2014

   

2014

   

2013

 

Assets

                       

Current assets:

                       

Cash and cash equivalents

  $ 10,902     $ 10,743     $ 11,885  

Marketable investments

    70,696       73,079       77,741  

Accounts receivable, net

    7,596       6,588       7,542  

Inventories

    10,030       9,640       10,518  

Deferred tax asset

    32       31       39  

Other current assets and prepaid expenses

    1,772       2,404       1,429  

Total current assets

    101,028       102,485       109,154  
                         

Property and equipment, net

    1,329       1,358       1,338  

Deferred tax asset, net of current portion

    342       337       504  

Intangibles, net

    1,632       1,825       2,218  

Goodwill

    1,339       1,339       1,339  

Other long-term assets

    15       21       348  

Total assets

  $ 105,685     $ 107,365     $ 114,901  
                         

Liabilities and Stockholders' Equity

                       

Current liabilities:

                       

Accounts payable

  $ 2,028     $ 2,483     $ 2,430  

Accrued liabilities

    7,473       7,805       7,668  

Deferred revenue

    8,561       8,058       6,993  

Total current liabilities

    18,062       18,346       17,091  
                         

Deferred revenue, net of current portion

    4,578       4,324       2,844  

Income tax liability

    144       118       325  

Other long-term liabilities

    1,141       1,200       1,386  

Total liabilities

    23,925       23,988       21,646  
                         

Stockholders’ equity:

                       

Common stock

    14       14       15  

Additional paid-in capital

    102,649       101,541       105,954  

Accumulated deficit

    (20,971 )     (18,230 )     (12,674 )

Accumulated other comprehensive income (loss)

    68       52       (40 )

Total stockholders' equity

    81,760       83,377       93,255  

Total liabilities and stockholders' equity

  $ 105,685     $ 107,365     $ 114,901  

 

 
 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

   

Three Months Ended

 
   

June 30,

   

March 31,

   

June 30,

 
   

2014

   

2014

   

2013

 

Net revenue

  $ 17,724     $ 16,189     $ 19,560  

Cost of revenue

    7,848       7,303       8,442  

Gross profit

    9,876       8,886       11,118  
                         

Operating expenses:

                       

Sales and marketing

    7,754       7,331       7,170  

Research and development

    2,622       2,644       2,217  

General and administrative

    2,335       2,564       2,354  
                         

Total operating expenses

    12,711       12,539       11,741  

Loss from operations

    (2,835 )     (3,653 )     (623 )

Interest and other income, net

    138       80       75  

Loss before income taxes

    (2,697 )     (3,573 )     (548 )

Provision for income taxes

    44       37       90  

Net loss

  $ (2,741 )   $ (3,610 )   $ (638 )

Net loss per share:

                       

Basic

  $ (0.19 )   $ (0.26 )   $ (0.04 )

Diluted

  $ (0.19 )   $ (0.26 )   $ (0.04 )
                         

Weighted-average number of shares used in per share calculations:

                       

Basic

    14,231       14,021       14,723  

Diluted

    14,231       14,021       14,723  

 

 
 

 

 

CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

   

Three Months Ended

 
   

June 30,

   

March 31,

   

June 30,

 
   

2014

   

2014

   

2013

 

Cash flows from operating activities:

                       

Net loss

  $ (2,741 )   $ (3,610 )   $ (638 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

                       

Stock-based compensation

    693       625       802  

Depreciation and amortization

    329       331       326  

Other

    (4 )     97       16  

Changes in assets and liabilities:

                       

Accounts receivable

    (1,012 )     3,091       (728 )

Inventories

    (390 )     (634 )     573  

Other current assets and prepaid expenses

    693       (792 )     182  

Other long-term assets

    6       303       14  

Accounts payable

    (455 )     663       269  

Accrued liabilities

    (351 )     (1,534 )     552  

Other long-term liabilities

    (71 )     (70 )     (56 )

Deferred revenue

    757       548       533  

Income tax liability

    26       10       5  

Net cash provided by (used in) operating activities

    (2,520 )     (972 )     1,850  
                         

Cash flows from investing activities:

                       

Acquisition of property, equipment and software

    (44 )     (239 )     (132 )

Proceeds from sales of marketable investments

    1,481       3,200       4,475  

Proceeds from maturities of marketable investments

    11,925       7,240       5,150  

Purchase of marketable investments

    (11,059 )     (16,791 )     (16,770 )

Net cash provided by (used in) investing activities

    2,303       (6,590 )     (7,277 )
                         

Cash flows from financing activities:

                       

Proceeds from exercise of stock options and employee stock purchase plan

    415       2,096       64  

Payments on capital lease obligations

    (39 )     (33 )     (24 )

Net cash provided by financing activities

    376       2,063       40  
                         

Net increase (decrease) in cash and cash equivalents

    159       (5,499 )     (5,387 )

Cash and cash equivalents at beginning of period

    10,743       16,242       17,272  

Cash and cash equivalents at end of period

  $ 10,902     $ 10,743     $ 11,885  

 

 
 

 

 

CUTERA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except percentage data)

(unaudited)

 

   

Three Months Ended

 

% Change

   

Q2

   

Q1

   

Q2

 

Q2 '14 Vs.

 

Q2 '14 Vs.

   

2014

   

2014

   

2013

 

Q1 '14

 

Q2 '13

Revenue By Geography:

                                         

United States

  $ 8,109     $ 6,017     $ 7,660    

+35

%

 

 

+6

%

International

    9,615       10,172       11,900       -5 %       -19 %
    $ 17,724     $ 16,189     $ 19,560    

+9

%       -9 %

International as a percentage of total revenue

    54  %     63  %     61  %                  

Revenue By Product Category:

                                         

Products and upgrades

  $ 11,366     $ 9,484     $ 13,034    

+20

%       -13 %

Service

    4,553       4,437       4,507    

+3

%    

+1

%

Titan and truSculpt hand piece refills

    1,005       1,041       1,106       -3 %       -9 %

Dermal fillers and cosmeceuticals

    800       1,227       913       -35 %       -12 %
    $ 17,724     $ 16,189     $ 19,560    

+9

%       -9 %

 

 


 

   

Three Months Ended

 
   

Q2

   

Q1

   

Q2

 
   

2014

   

2014

   

2013

 

Pre-tax Stock-Based Compensation Expense:

                       

Cost of revenue

  $ 139     $ 132     $ 166  

Sales and marketing

    148       71       198  

Research and development

    115       124       89  

General and administrative

    291       298       349  
    $ 693     $ 625     $ 802