cutr20150804_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 5, 2015

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 5, 2015, we are issuing a press release and holding a conference call regarding our financial results for the second quarter ended June 30, 2015. 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 5, 2015.


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 5, 2015

 

 

 

/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.

646-277-1254

john.mills@icrinc.com

 

Cutera Reports Second Quarter 2015 Results

Revenue Grew 27%- Fourth Consecutive Quarter of Double-Digit Growth

 

BRISBANE, California, August 5, 2015 ─ 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, 2015.

 

Key highlights for the second quarter of 2015 were as follows:

 

 

Revenue increased 27% to $22.6 million, compared to the same period last year, driven primarily by our recently launched new products—enlightenTM and excel HRTM— as well as continued strong contributions from excel VTM and xeoTM;

 

Product revenue grew 56% in North America and 36% from Rest of the World (“ROW”), compared to the same period in the prior year;

 

Gross margin increased to 57%, from 53% in the first quarter of 2015, reflecting a favorable product mix and product cost reductions;

 

Net loss was $1.9 million, or $0.13 per diluted share. This includes $1.3 million of non-cash expenses related to stock-based compensation, depreciation and intangible amortization;

 

Operations generated $1.4 million of cash during the quarter;

 

Cash and investments balance as of June 30, 2015 was $66.3 million;

 

Share repurchases during the second quarter and first-half of 2015 were $12.5 million and $17.7 million, respectively;

 

Launched enlighten product extension: added low-energy 532 nm enhancement, which significantly extends treatment settings enabling even more effective treatment of benign pigmented lesions.

 

 
 

 

 

Kevin Connors, President and Chief Executive Officer of Cutera, stated, “I am pleased with the continuing momentum and favorable trend of our revenue growth. The 27% revenue growth in the second quarter of 2015 represents our fourth consecutive quarter of accelerated double-digit revenue growth, compared to the respective periods in the prior year, and the highest second quarter revenue since 2008. This resulted from strong market acceptance of our new products as well as the effectiveness of our industry-experienced commercial leadership team.

 

Our North American team, led by Larry Laber, delivered particularly impressive 56% product revenue growth as his team continues to develop and gain momentum in the marketplace. Further, our sales team in the Rest of the World, under the leadership of Miguel Pardos, also delivered compelling 36% product revenue growth despite currency headwinds from the strengthening US Dollar that had an adverse revenue impact in the range of $1.0 - $2.0 million in the current quarter.

 

“Revenue from enlighten, our picosecond and nanosecond tattoo removal and benign pigmented lesion treatment laser, continues to be a core contributor to our revenue growth and is becoming a mainstay platform that will showcase additional functionalities in the future. Our R&D team completed our first enlighten product enhancement that provides even more effective benign pigmented lesion treatments by extending low fluence treatment parameters. This enhancement has been received favorably by our Asian customers, and gives enlighten a performance edge and better versatility over other picosecond systems.

 

“Our second quarter gross margin of 57% exceeded our guidance due to a favorable product mix and faster than expected realization of manufacturing product cost reductions. We generated $1.4 million of cash from operations during the quarter and reduced our operating loss by almost $1.0 million, compared to the same quarter a year ago, reflecting the leverage in our operating model.

 

“While there are unpredictable factors that may impact our global business, including the negative effect on our business of the strengthened U.S. Dollar, we believe the market for aesthetic light-and-energy-based-systems is healthy and expanding and that we have the commercial team and product portfolio to continue to expand our share of the market,” concluded Mr. Connors.

 

 

Conference Call

The conference call to discuss these results is scheduled to begin at 2:00 p.m. PST (5:00 p.m. EST) on August 5, 2015. 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, and will be archived online within one hour of its completion through 8:59 p.m. PST (11:59 p.m. EST) on August 19, 2015. In addition, you may call 1-877-705-6003 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, reduce expenses, make productivity improvements, develop and commercialize existing and new products and applications, grow the Company’s market share, and realize benefits from additional investment 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, gross margins 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; 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 August 5th, 2015. 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, 2015, 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,

 
   

2015

   

2015

   

2014

 

Assets

                       

Current assets:

                       

Cash and cash equivalents

  $ 11,627     $ 13,462     $ 10,902  

Marketable investments

    54,708       62,595       70,696  

Cash, cash equivalents and marketable investments

    66,335       76,057       81,598  
                         

Accounts receivable, net

    8,919       10,400       7,596  

Inventories

    13,521       11,855       10,030  

Deferred tax asset

    27       26       32  

Other current assets and prepaid expenses

    1,625       1,699       1,772  

Total current assets

    90,427       100,037       101,028  
                         

Property and equipment, net

    1,512       1,545       1,329  

Deferred tax asset, net of current portion

    283       291       342  

Intangibles, net

    332       450       1,632  

Goodwill

    1,339       1,339       1,339  

Other long-term assets

    351       362       15  

Total assets

  $ 94,244     $ 104,024     $ 105,685  
                         

Liabilities and Stockholders' Equity

                       

Current liabilities:

                       

Accounts payable

  $ 3,597     $ 2,855     $ 2,028  

Accrued liabilities

    10,308       8,946       7,473  

Deferred revenue

    8,659       8,971       8,561  

Total current liabilities

    22,564       20,772       18,062  
                         

Deferred revenue, net of current portion

    3,107       3,714       4,578  

Income tax liability

    180       167       144  

Other long-term liabilities

    699       798       1,141  

Total liabilities

    26,550       25,451       23,925  
                         

Stockholders' equity

    67,694       78,573       81,760  

Total liabilities and stockholders' equity

  $ 94,244     $ 104,024     $ 105,685  

 

 
 

 

 

CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

   

Three Months Ended

 
   

June 30,

   

June 30,

 
   

2015

   

2014

 

Net revenue

  $ 22,563     $ 17,724  

Cost of revenue

    9,687       7,848  

Gross profit

    12,876       9,876  

Gross margin %

    57 %     56 %
                 

Operating expenses:

               

Sales and marketing

    9,066       7,754  

Research and development

    2,728       2,622  

General and administrative

    3,014       2,335  

Total operating expenses

    14,808       12,711  

Loss from operations

    (1,932 )     (2,835 )

Interest and other income, net

    96       138  

Loss before income taxes

    (1,836 )     (2,697 )

Provision for income taxes

    53       44  

Net loss

  $ (1,889 )   $ (2,741 )
                 

Net loss per share:

               

Basic and diluted

  $ (0.13 )   $ (0.19 )
                 
                 

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

               

Basic and diluted

    14,441       14,231  

 

 
 

 

 

CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

   

Three Months Ended

 
   

June 30,

   

June 30,

 
   

2015

   

2014

 

Cash flows from operating activities:

               

Net loss

  $ (1,889 )   $ (2,741 )

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

               

Stock-based compensation

    982       693  

Depreciation and amortization

    295       329  

Other

    139       (4 )

Changes in assets and liabilities:

               

Accounts receivable

    1,481       (1,012 )

Inventories

    (1,666 )     (390 )

Accounts payable

    742       (455 )

Accrued liabilities

    2,095       (351 )

Deferred revenue

    (919 )     757  

Other

    120       654  

Net cash provided by (used in) operating activities

    1,380       (2,520 )
                 

Cash flows from investing activities:

               

Acquisition of property, equipment and software

    (271 )     (44 )

Net change in marketable investments

    7,778       2,347  

Net cash provided by investing activities

    7,507       2,303  
                 

Cash flows from financing activities:

               

Repurchases of common stock

    (13,194 )      

Proceeds from exercise of stock options and employee stock purchase plan

    2,506       415  

Payments on capital lease obligations

    (34 )     (39 )

Net cash provided by (used in) financing activities

    (10,722 )     376  
                 

Net increase (decrease) in cash and cash equivalents

    (1,835 )     159  

Cash and cash equivalents at beginning of period

    13,462       10,743  

Cash and cash equivalents at end of period

  $ 11,627     $ 10,902  

 

 
 

 

 

CUTERA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except percentage data)

(unaudited)

 

   

Three Months Ended

 

% Change

   

Q2

   

Q2

 

Q2 '15 Vs

   

2015

   

2014

 

Q2 '14

Revenue By Geography:

                       

United States

  $ 11,036     $ 8,109    

+36

International

    11,527       9,615    

+20

    $ 22,563     $ 17,724    

+27

%

International as a percentage of total revenue

    51%       54%          
                         

Revenue By Product Category:

                       

Products

                       

-North America

  $ 8,973     $ 5,734    

+56

%

-Rest of the World

    7,646       5,632    

+36

Service

    4,521       4,553       -1 %

Hand Piece Refills

    769       1,005       -23 %

Skincare

    654       800       -18 %
    $ 22,563     $ 17,724    

+27%

 

 

 


 

 

   

Three Months Ended

 
   

Q2

   

Q2

 
   

2015

   

2014

 

Pre-tax Stock-Based Compensation Expense:

               

Cost of revenue

  $ 114     $ 139  

Sales and marketing

    231       148  

Research and development

    180       115  

General and administrative

    457       291  
    $ 982     $ 693