cutr20190808_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 8, 2019

 

 

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)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock ($0.001 par value)

CUTR

The NASDAQ Stock Market, LLC

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company   ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 



 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On August 8, 2019, Cutera, Inc. (the “Company”) issued a press release announcing financial results for the quarter ended June 30, 2019. The Company will host a live audio webcast for interested parties commencing Thursday, August 8, 2019 at 1:30 p.m. PDT (4:30 p.m. EDT), during which the Company will discuss the financial results. The conference call will be available to interested parties through a live audio webcast and accessible through the Investor Relations section of the Cutera corporate website at www.cutera.com. A copy of the Company’s press release is furnished as Exhibit 99.1 on this Current Report on Form 8-K.

 

The information in Item 2.02 of this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to General Instruction B.2 of Form 8-K, will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. 

 

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.

Description

 

 

99.1

Press Release of Cutera, Inc. dated as of August 8, 2019.

 

 

 

 

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 8, 2019

 

 

 

 /s/ SANDRA GARDINER

 

 

 

 

Sandra Gardiner

 

 

 

 

EVP and Chief Financial Officer

 

ex_153972.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

 

Cutera Reports Second Quarter 2019 Financial Results

 

Revenue Growth of 12% Over Prior Year

 

Highest Quarterly Revenue in Company History

 

Second Consecutive Quarter of Double-Digit International Revenue Growth

 

 

BRISBANE, California, August 8, 2019 ─ Cutera, Inc. (NASDAQ: CUTR) (“Cutera” or the “Company”), a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide, today reports financial results for the second quarter ended June 30, 2019.

 

Key second quarter financial and operational highlights include:

Revenue increased 12% over the prior year second quarter, to $47.8 million, the highest quarterly revenue in the Company’s history. Second quarter revenue performance driven by:

 

o

International revenue grew 36% year-over-year in the second quarter, continuing the positive momentum seen in first quarter and reflecting strong performances in Japan, Europe and Australia.

 

o

Continued demand for our body-sculpting platform as total revenue for the truSculpt portfolio grew 44% over the prior year period. Performance includes contributions from the limited launch of the Company’s new muscle sculpting technology, truSculpt flex, in June.

 

o

Continued expansion of recurring revenue, including service, skincare products and procedure related consumables. Total recurring revenue was $10.2 million, representing 41% growth over the second quarter 2018.

Gross Margin for the second quarter was 54%, compared to 53% in the prior year period and 48% in the first quarter of 2019. Increase in second quarter gross margin performance reflects leverage from revenue growth as well as product and channel mix.

Operating expenses for the second quarter were 53% of revenue as compared to 58% for the prior year period demonstrating improved leverage as the Company begins to realize benefit from investments in commercial leadership and practice development efforts.

Net Income for the second quarter was $0.6 million, or $0.04 per fully-diluted share as compared to a net loss of $1.6 million, or $0.11 per fully-diluted share in the prior year period.

 

 

 

 

“Our second quarter performance reflects the Company’s progress on commercial and operational execution,” stated President, Jason Richey. “We continue to see growth from our truSculpt body sculpting portfolio, which includes the recently launched truSculpt flex, as well as the consumable revenue stream associated with these platforms. I am also encouraged by the Company’s gross margin performance delivered through our pricing strategies implemented earlier this year and progress on operational initiatives.”

 

Mr. David Mowry, Chief Executive Officer stated, “I’m delighted to join the Cutera team and encouraged by the quality of the Company’s people, products and development pipeline. Cutera is well-positioned to shape the future of energy-based aesthetics and the second quarter performance reflects this potential. While I am new to the business and need some time to come up to full speed, I am confident there are multiple pathways to sustain above-market growth, enhance the Company’s profitability and be the supplier of choice in these exciting and growing markets.”

 

2019 Financial Outlook Reiterated:

 

 

Full year revenue to be in the range of $165 to $175 million, a 2% - 8% increase over 2018;

 

Full year 2019 gross margin is expected to improve as compared to full year 2018 gross margin; and

 

The Company’s adjusted EBITDA* is expected to be in the range of $2 million to $4 million.

 

Conference Call

 

The Company will host a live audio webcast for interested parties commencing today at 1:30 p.m. PDT (4:30 p.m. EDT). Participating in the call will be David Mowry, Chief Executive Officer, Jason Richey, President and Chief Operating Officer and Sandra Gardiner, 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 http://www.cutera.com/, and will be available online within 24 hours of its completion through September 8, 2019. In addition, you may call 1-877-705-6003 to listen to the live broadcast.

 

CONTACTS:

 

Cutera, Inc.

Matthew Scalo
Vice President, Investor Relations & Corporate Development
415-657-5500
mscalo@cutera.com

 

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 developed 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.

 

 

 

 

*Use of Non-GAAP Financial Measures

 

In this press release, in order to supplement our condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations and net income (loss) per diluted share. Non-GAAP adjustments include stock-based compensation, depreciation, amortization, executive separation costs, customer relationship management (“CRM”) and enterprise resource planning (“ERP”) system implementation costs, as well as the net tax impact of excluding these items. From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful information to investors and management. We have provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. We have not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability, limited visibility, unpredictability, or unique non-recurring nature of the items. Forward-looking non-GAAP measures include adjusted EBITDA. We define adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive separation costs, and charges related to CRM and ERP software implementation costs.

 

Company management uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter, and year to year, on a regular basis and for benchmarking against other similar companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measure as prescribed by GAAP. Non-GAAP financial measures for the statement of operations and net income per diluted share exclude the following:

 

Non-cash expenses for stock-based compensation. We have excluded the effect of stock-based compensation expenses in calculating our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We record stock-based compensation expense related to grants of options, performance and restricted stock. Depending upon the size, timing and the terms of the grants, this expense may vary significantly but will recur in future periods. We believe that excluding stock-based compensation better allows for comparisons to our peer companies;

 

 

 

 

Depreciation and amortization. We have excluded depreciation and amortization expense in calculating our non-GAAP operating expenses and net income measures. Depreciation and amortization are non-cash charges to current operations;

 

Executive separation. We have excluded costs associated with the resignation of our former Chief Executive Officer in calculating our non-GAAP operating expenses and net income measures. We exclude these non-recurring separation costs because we believe that these items do not reflect future operating expenses;

 

Customer Relationship Management. We have excluded CRM system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new CRM solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance; and

 

Enterprise Resource Planning. We have excluded ERP system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new ERP solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance.

 

We believe that excluding all of the items above allows users of our financial statements to better review and assess both current and historical results of operations.

 

Safe Harbor Statement

 

Certain statements in this press release, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, Cutera’s plans, objectives, strategies, financial performance and outlook, product launches and performance, trends, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “should,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “foresee” or variations of these terms and similar expressions, or the negative of these terms or similar expressions. 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. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, the Registration Statement on Form S-8 and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.

 

All information in this press release is as of the date of its release. Accordingly, undue reliance should not be placed on forward-looking statements. 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. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2019, 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,

   

December 31,

 
   

2019

   

2019

      2018(1)  

Assets

                       

Current assets:

                       

Cash and cash equivalents

  $ 27,668     $ 19,158     $ 26,052  

Marketable investments

    4,002       7,939       9,523  

Accounts receivable, net

    24,919       19,136       19,637  

Inventories

    26,889       26,659       28,014  

Other current assets and prepaid expenses

    4,536       4,864       3,972  

Total current assets

    88,014       77,756       87,198  
                         

Property and equipment, net

    2,834       2,407       2,672  

Deferred tax asset

    458       451       457  

Goodwill

    1,339       1,339       1,339  

Operating lease right-of-use assets

    8,990       9,442       -  

Other long-term assets

    6,311       5,960       5,971  

Total assets

  $ 107,946     $ 97,355     $ 97,637  
                         

Liabilities and Stockholders' Equity

                       

Current liabilities:

                       

Accounts payable

  $ 11,441     $ 10,337     $ 11,279  

Accrued liabilities

    27,026       21,788       23,300  

Operating leases liabilities

    1,276       1,840       -  

Extended warranty liabilities

    2,399       2,667       3,159  

Deferred revenue

    10,717       10,263       9,882  

Total current liabilities

    52,859       46,895       47,620  
                         

Deferred revenue, net of current portion

    3,142       2,828       2,684  

Income tax liability

    93       399       394  

Operating lease liabilities, net of current portion

    7,888       7,759       -  

Other long-term liabilities

    782       354       553  

Total liabilities

    64,764       58,235       51,251  
                         

Stockholders’ equity:

                       

Common stock

    14       14       14  

Additional paid-in capital

    74,870       71,399       70,451  

Accumulated deficit

    (31,642 )     (32,230 )     (24,010 )

Accumulated other comprehensive loss

    (60 )     (63 )     (69 )

Total stockholders' equity

    43,182       39,120       46,386  

Total liabilities and stockholders' equity

  $ 107,946     $ 97,355     $ 97,637  

 

(1)

As of January 1, 2019, the Company adopted the requirements of ASC 842 using the modified retrospective method, and as a result, there is a lack of comparability to the prior periods presented.

 

 

 

 

CUTERA, INC. 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited) 

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2019

   

2018

   

2019

   

2018

 
                                 

Products

  $ 41,968       37,650       72,730     $ 66,914  

Service

    5,806       4,903       11,070       9,764  

Total net revenue

    47,774       42,553       83,800       76,678  
                                 

Products

    18,393       17,045       33,935       30,967  

Service

    3,550       3,131       6,725       6,000  

Total cost of revenue

    21,943       20,176       40,660       36,967  

Gross profit

    25,831       22,377       43,140       39,711  

Gross margin %

    54 %     53 %     51 %     52 %
                                 

Operating expenses:

                               

Sales and marketing

    16,992       15,535       33,096       28,623  

Research and development

    3,273       4,095       6,979       7,651  

General and administrative

    5,267       4,902       10,792       10,341  

Total operating expenses

    25,532       24,532       50,867       46,615  

Income (loss) from operations

    299       (2,155 )     (7,727 )     (6,904 )

Interest and other income (expense), net

    46       (129 )     (33 )     (31 )

Income (loss) before income taxes

    345       (2,284 )     (7,760 )     (6,935 )

Income tax benefit

    (243 )     (712 )     (128 )     (3,331 )

Net income (loss)

  $ 588     $ (1,572 )   $ (7,632 )   $ (3,604 )
                                 

Net income (loss) per share:

                               

Basic

  $ 0.04     $ (0.11 )   $ (0.54 )   $ (0.26 )

Diluted

  $ 0.04     $ (0.11 )   $ (0.54 )   $ (0.26 )
                                 

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

                 

Basic

    14,086       13,709       14,051       13,649  

Diluted

    14,356       13,709       14,051       13,649  

 

 

 

 

CUTERA, INC. 

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except percentage data)

(unaudited) 

 

   

Three Months Ended

 

% Change

 

Six Months Ended

   

% Change

 
   

June 30,

   

June 30,

 

2019 Vs

 

June 30,

   

June 30,

   

2019 Vs

 
   

2019

   

2018

 

2018

 

2019

   

2018

   

2018

 

Revenue By Geography:

                                         

United States

  $ 28,147     $ 28,132  

+0%

  $ 48,547     $ 49,268       -1 %

International

    19,627       14,421  

+36%

    35,253       27,410    

+29

%

Total Net Revenue

  $ 47,774     $ 42,553  

+12%

  $ 83,800     $ 76,678    

+9

%

International as a percentage of total revenue

    41 %     34 %       42 %     36 %        
                                           

Revenue By Product Category:

                                         

Systems

                                         

- North America

  $ 26,491     $ 25,886  

+2%

  $ 44,071     $ 44,830       -2 %

- Rest of World

    11,048       9,405  

+17%

    20,677       17,700    

+17

%

Total Systems

    37,539       35,291  

+6%

    64,748       62,530    

+4

%

Consumables

    2,654       1,057  

+151%

    4,599       1,826    

+152

%

Skincare

    1,775       1,302  

+36%

    3,383       2,558    

+32

%

Total Products

    41,968       37,650  

+11%

    72,730       66,914    

+9

%
                                           

Service

    5,806       4,903  

+18%

    11,070       9,764    

+13

%

Total Net Revenue

  $ 47,774     $ 42,553  

+12%

  $ 83,800     $ 76,678    

+9

%

 


 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2019

   

2018

   

2019

   

2018

 

Pre-tax Stock-Based Compensation Expense:

                               

Cost of revenue

  $ 404     $ 226     $ 673     $ 380  

Sales and marketing

    997       715       1,715       1,204  

Research and development

    370       262       633       453  

General and administrative

    748       1,002       805       1856  
    $ 2,519     $ 2,205     $ 3,826     $ 3,893  

 

 

 

 

 

CUTERA, INC. 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) 

(unaudited) 

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

   

June 30,

   

June 30,

 
   

2019

   

2018

   

2019

   

2018

 

Cash flows from operating activities:

                               

Net income (loss)

  $ 588     $ (1,572 )   $ (7,632 )   $ (3,604 )

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

                         

Stock-based compensation

    2,519       2,205       3,826       3,893  

Depreciation of tangible assets

    404       290       815       544  

Amortization of contract acquisition costs

    722       449       1,412       822  

Change in deferred tax asset

    (7 )     (587 )     (1 )     (3,324 )

Provision for doubtful accounts receivable

    (117 )     300       (19 )     487  

Other

    48       137       151       (25 )

Changes in assets and liabilities:

                               

Accounts receivable

    (5,666 )     (2,747 )     (5,263 )     (1,832 )

Inventories

    (230 )     841       1,125       (1,356 )

Other current assets and prepaid expenses

    302       (2,322 )     (614 )     (569 )

Other long-term assets

    (1,073 )     572       (1,752 )     (1,578 )

Accounts payable

    1,104       2,537       162       3,741  

Accrued liabilities

    5,246       2,402       3,779       (4,325 )

Extended warranty liabilities

    (268 )     -       (760 )     -  

Other long-term liabilities

    -       35       (140 )     70  

Deferred revenue

    768       1,002       1,293       546  

Income tax liability

    (306 )     2       (301 )     7  

Net cash provided by (used in) operating activities

    4,034       3,544       (3,919 )     (6,503 )
                                 

Cash flows from investing activities:

                               

Acquisition of property, equipment and software

    (251 )     (477 )     (316 )     (581 )

Disposal of Property and equipment

    20       38       20       38  

Proceeds from sales of marketable investments

    -       -       -       13,044  

Proceeds from maturities of marketable investments

    6,400       2,500       9,600       2,500  

Purchase of marketable investments

    (2,434 )     -       (4,020 )     (4,390 )

Net cash provided by investing activities

    3,735       2,061       5,284       10,611  
                                 

Cash flows from financing activities:

                               

Proceeds from exercise of stock options and employee stock purchase plan

    1,032       2,405       1,163       3,038  

Taxes paid related to net share settlement of equity awards

    (80 )     (376 )     (570 )     (2,664 )

Payments on finance lease obligations

    (211 )     (112 )     (342 )     (234 )

Net cash provided by financing activities

    741       1,917       251       140  
                                 

Net increase in cash and cash equivalents

    8,510       7,522       1,616       4,248  

Cash and cash equivalents at beginning of period

    19,158       10,910       26,052       14,184  

Cash and cash equivalents at end of period

  $ 27,668     $ 18,432     $ 27,668     $ 18,432  

 

 

 

 

CUTERA, INC. 

RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

TO  NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited) 

 

   

Three Months Ended June 30, 2019

   

Three Months Ended June 30, 2018

 
   

GAAP

   

Depreciation
and
Amortization

   

Stock-Based
Compensation

   

CRM and ERP
Implementation

   

Taxes and
Other Adjustments

   

Non-GAAP

   

GAAP

   

Depreciation
and
Amortization

   

Stock-Based
Compensation

   

Taxes and
Other Adjustments

   

Non-GAAP

 
                                                                                         

Net revenue

  $ 47,774       -       -       -       -     $ 47,774     $ 42,553       -       -       -     $ 42,553  

Cost of revenue

    21,943       (123 )     (404 )     -       -       21,416       20,176       (76 )     (226 )     -       19,874  

Gross profit

    25,831       123       404       -       -       26,358       22,377       76       226       -       22,679  

Gross margin %

    54 %                                     55 %     53 %                             53 %
                                                                                         

Operating expenses:

                                                                                       

Sales and marketing

    16,992       (912 )     (997 )     (27 )     -       15,056       15,535       (601 )     (715 )     -       14,219  

Research and development

    3,273       (26 )     (370 )     -       -       2,877       4,095       (17 )     (262 )     -       3,816  

General and administrative

    5,267       (65 )     (748 )     (460 )     -       3,994       4,902       (45 )     (1,002 )     -       3,855  

Total operating expenses

    25,532       (1,003 )     (2,115 )     (487 )     -       21,927       24,532       (663 )     (1,979 )     -       21,890  

Income (loss) from operations

    299       1,126       2,519       487       -       4,431       (2,155 )     739       2,205       -       789  

Interest and other income (expense), net

    46       -       -       -       -       46       (129 )     -       -       -       (129 )

Loss before income taxes

    345       1,126       2,519       487       -       4,477       (2,284 )     739       2,205       -       660  

Provision (benefit) for income taxes

    (243 )     -       -       -       279       36       (712 )     -       -       (397 )     (1,109 )

Net income (loss)

  $ 588       1,126       2,519       487       (279 )   $ 4,441     $ (1,572 )     739       2,205       397     $ 1,769  
                                                                                         

Net income (loss) per share:

                                                                                       

Basic

  $ 0.04                                     $ 0.32     $ (0.11 )                           $ 0.13  

Diluted

  $ 0.04                                     $ 0.31     $ (0.11 )                           $ 0.12  
                                                                                         

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

                                                                                       

Basic

    14,086                                       14,086       13,709                               13,709  

Diluted

    14,356                                       14,356       13,709                               14,311  

 

 


 

 

Operating expenses as a % of net revenue

 

GAAP

                                   

Non-GAAP

   

GAAP

                           

Non-GAAP

 

Sales and marketing

    35.6 %                                     31.5 %     36.5 %                             33.4 %

Research and development

    6.9 %                                     6.0 %     9.6 %                             9.0 %

General and administrative

    11.0 %                                     8.4 %     11.5 %                             9.1 %
      53.4 %                                     45.9 %     57.7 %                             51.4 %

 

 

 

 

CUTERA, INC. 

RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

TO  NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited) 

 

   

Six Months Ended June 30, 2019

   

Six Months Ended June 30, 2018

 
   

GAAP

   

Depreciation
and
Amortization

   

Stock-Based
Compensation

   

CRM and ERP
Implementation

   

Taxes and
Other Adjustments

   

Non-GAAP

   

GAAP

   

Depreciation
and
Amortization

   

Stock-Based
Compensation

   

Taxes and
Other Adjustments

   

Non-GAAP

 
                                                                                         

Net revenue

  $ 83,800       -       -       -       -     $ 83,800     $ 76,678       -       -       -     $ 76,678  

Cost of revenue

    40,660       (251)       (673)       -       -       39,736       36,967       (160)       (380)       -       36,427  

Gross profit

    43,140       251       673       -       -       44,064       39,711       160       380       -       40,251  

Gross margin %

    51 %                                     53 %     52 %                             52 %
                                                                                         

Operating expenses:

                                                                                       

Sales and marketing

    33,096       (1,783)       (1,715)       (112)       -       29,486       28,623       (1,124)       (1,204)       -       26,295  

Research and development

    6,979       (46)       (633)       -       -       6,300       7,651       (32)       (453)       -       7,166  

General and administrative

    10,792       (147)       (805)       (699)       (614) (a)     8,526       10,341       (50)       (1,856)       -       8,435  

Total operating expenses

    50,867       (1,976)       (3,153)       (811)       (614)       44,313       46,615       (1,206)       (3,513)       -       41,896  

Loss from operations

    (7,727)       2,227       3,826       811       614       (249)       (6,904 )     1,366       3,893       -       (1,645)  

Interest and other income (expense), net

    (33)       -       -       -       -       (33)       (31 )     -       -       -       (31)  

Loss before income taxes

    (7,760)       2,227       3,826       811       614       (282)       (6,935 )     1,366       3,893       -       (1,676)  

Provision (benefit) for income taxes

    (128)       -       -       -       282       154       (3,331 )     -       -       169       (3,162)  

Net income (loss)

  $ (7,632)       2,227       3,826       811       332     $ (436)     $ (3,604 )     1,366       3,893       (169 )   $ 1,486  
                                                                                         

Net income (loss) per share:

                                                                                       

Basic

  $ (0.54)                                     $ (0.03)     $ (0.26)                             $ 0.11  

Diluted

  $ (0.54)                                     $ (0.03)     $ (0.26)                             $ 0.10  
                                                                                         

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

                                                                                       

Basic

    14,051                                       14,051       13,649                               13,649  

Diluted

    14,051                                       14,051       13,649                               14,298  
                                                                                         

a) Other adjustment of $614 related to Executive separation costs.

                               
                                                                                         
                                                                                         
                                                                                         
                                                                                 

Operating expenses as a % of net revenue

 

GAAP

                                   

Non-GAAP

   

GAAP

                           

Non-GAAP

 

Sales and marketing

    39.5 %                                     35.2 %     37.3 %                             34.3 %

Research and development

    8.3 %                                     7.5 %     10.0 %                             9.3 %

General and administrative

    12.9 %                                     10.2 %     13.5 %                             11.0 %
      60.7 %                                     52.9 %     60.8 %                             54.6 %

 

 

 

 

CUTERA, INC. 

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

(in thousands)

(unaudited) 

 

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30, 2019

 
                 

Net income (loss)

  $ 588     $ (7,632)  

Adjustments:

               

Stock-based compensation

    2,519       3,826  

Depreciation and amortization

    1,126       2,227  

CRM and ERP implementation costs

    487       811  

Other adjustments

    -    

   614

(a) 

Interest and other (income) expense, net

    (46)       33  

Benefit for income taxes

    (243)       (128)  

Total adjustments

  $ 3,843     $ 7,383  
                 

Adjusted EBITDA

  $ 4,431     $ (249)  

 

 

a)

 Other adjustment of $614 related to Executive separation costs.