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cutr-20210804
0001162461FALSE00011624612021-08-042021-08-04

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, 2021
Date of Report (date of earliest event reported)
https://cdn.kscope.io/857ba80d69585ec93f3eb5b201265343-cutr-20210804_g1.jpg
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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock ($0.001 par value)CUTRThe 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))
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 4, 2021, Cutera, Inc. (“Cutera” or the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2021. Cutera hereby incorporates by reference herein the information set forth in its press release dated August 4, 2021, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and it shall not create any implication that the affairs of Cutera have continued unchanged since such date.
The Company will host a conference call for interested parties commencing Wednesday, August 4, 2021 at 1:30 p.m. PDT (4:30 p.m. EDT), during which the Company will discuss the financial results. To participate in the conference call, dial 1-877-705-6003 (domestic) or +1-201-493-6725 (international) and refer to the Conference Code: 13721584. The conference call will be also 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.
The information provided pursuant to this Item 2.02 is to be considered “furnished” pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, nor shall it be deemed incorporated by reference into any of Cutera’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.
Except for the historical information contained in this report, the statements made by Cutera are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Cutera’s future financial performance could differ significantly from the expectations of management and from results expressed or implied in the press release. Please refer to the last paragraph of the text portion of the press release for further discussion about forward-looking statements. For further information on risk factors, please refer to “Risk Factors” contained in Cutera’s most recently filed Form 10-K and its subsequent filings with the Securities and Exchange Commission, as well as in the press release attached as Exhibit 99.1 hereto. Cutera disclaims any obligation or duty to update or modify these forward-looking statements.
Item 9.01.  Financial Statements and Exhibits. 
(d)Exhibits.
Exhibit No.
 Description
99.1 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



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, 2021
 /s/ ROHAN SETH
 Rohan Seth
 Chief Financial Officer
Document

Exhibit 99.1
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Cutera, Inc. Announces Second Quarter 2021 Financial Results with Record Revenue and Issues 2021 Guidance
 
BRISBANE, California, August 4, 2021 ─ Cutera, Inc. (NASDAQ: CUTR) (“Cutera” or the “Company”), 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, 2021.
 
Second Quarter 2021 Financial and Operational Highlights

•Revenue was $58.6 million, an increase of 122% from the prior-year period, driven by robust performance across the business, with strength in both capital equipment and recurring revenue segments.

◦Capital Equipment revenue of $35.6 million increased 129% over the prior-year period.
◦Recurring revenue was $23.0 million, an increase of 113% over the prior-year period:

▪Skin Care revenue of $11.8 million increased 147% over prior-year period;
▪Consumable Product revenue of $4.4 million grew 211% over prior-year period, and
▪Service revenue of $6.8 million increased 47% over prior-year period.

•Gross Margin was 57.7% for the quarter, an improvement of 13.6 points versus prior-year period, driven by further leverage of manufacturing volumes over a reduced fixed overhead expense base, resulting in the natural progression of our margin expansion efforts.
•Adjusted EBITDA was $6.8 million in the period as compared to ($3.5) million in the prior-year period, a $10.3 million improvement over FY2020.

“I am proud of our team’s performance during the second quarter, as our focus on our Vital Few initiatives and operational execution aligned with improving trends in our end markets, resulting in solid financial performance across the board,” commented Dave Mowry, Chief Executive Officer of Cutera, Inc. “During the quarter, we saw steady global procedure volume growth, and we began to benefit from the early stages of increasing appetite for capital equipment purchases. We expect to deliver strong revenue performance in the latter half of the year, despite some slight and temporary deceleration from patient and practitioner vacations in 3Q21. We view a resumption of the historical practitioner vacation patterns in the third quarter favorably, as it reflects both restored customer confidence in the sustainability of patient traffic and proof of renewed financial health of the practice. Based upon the continuing recovery in our end markets, positive capital trends, and continued execution of our strategic priorities, we anticipate delivering steady performance in second half of 2021, with normal seasonal acceleration in the fourth quarter of 2021.”

 
2021 Outlook
Given improved volumes through the first half of the year and better visibility into the second half of the year, management is issuing full-year 2021 revenue guidance. Full-year 2021 revenue is expected to be in the range of $215 million to $221 million, an increase of 46% to 50% over 2020 and 18% to 22% over pre-COVID 2019 levels.

 
Conference Call
The Company’s management will host a conference call to discuss these results and related matters today at 1:30 p.m. PT (4:30 p.m. ET). Participating on the call will be Dave Mowry, Chief Executive Officer and Rohan Seth, Chief Financial Officer.

To participate in the conference call, dial 1-877-705-6003 (domestic) or + 1-201-493-6725 (international) and refer to the Conference Code: 13721584.

The call will also be webcast and can be accessed from the Investor Relations section of Cutera’s website at http://www.cutera.com/. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.





 
 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 the Company’s 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 and other non-recurring separation costs, customer relationship management (“CRM”) and enterprise resource planning (“ERP”) system costs, non-recurring legal and litigation 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 the Company believes that doing so is consistent with the goal of providing useful information to investors and management. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The Company has 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. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive and other non-recurring separation costs, Gain on extinguishment of PPP loan, customer relationship management and enterprise resource planning system costs, and non-recurring legal and litigation 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. The Company has excluded the effect of stock-based compensation expenses in calculating its non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to the Company's employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expense related to grants of options, employee stock purchase plan, and 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. The Company believes that excluding stock-based compensation better allows for comparisons to its peer companies;
 
Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net income measures. Depreciation and amortization are non-cash charges to current operations;
 
Executive and other non-recurring separation costs. We have excluded costs associated with the resignation of former Executive Officers in calculating our non-GAAP operating expenses and net income measures. We exclude these and other non-recurring employee 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; 
 
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;
 
Non-recurring legal and litigation costs. We have excluded costs incurred related to third party litigation and disputes, that are of a non-recurring nature; and

Other Adjustments. We have excluded certain other amounts that we believe are non-recurring in nature. In the three months ended June 30, 2021, we recorded a gain on the extinguishment of our PPP loan. This gain has been excluded from the calculation of our non-GAAP operating net income.

The Company believes that excluding all of the items above allows users of its 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, CFO and other senior leadership searches, product launches and performance, trends, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, the Company’s 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 the Company’s control, that could cause its 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 the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2021, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
 
 
 
Cutera, Inc.
Anne Werdan
Director, Corporate Communications
415-657-5500
awerdan@cutera.com
 
 


CUTERA, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
(unaudited) 
June 30,
2021		March 31,
2021		December 31,
2020
Assets
Current assets:
Cash and cash equivalents$169,200 $164,932 $47,047 
Accounts receivable, net25,903 24,151 21,962 
Inventories34,591 34,578 28,508 
Other current assets and prepaid expenses8,856 10,339 8,779 
Total current assets$238,550 $234,000 $106,296 
Property and equipment, net2,148 2,373 2,299 
Deferred tax asset592 598 643 
Goodwill1,339 1,339 1,339 
Operating lease right-of-use assets15,919 16,570 17,076 
Other long-term assets5,615 4,853 5,080 
Total assets$264,163 $259,733 $132,733 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$6,210 $5,031 $6,684 
Accrued liabilities41,346 41,329 31,079 
Operating leases liabilities2,422 2,351 2,260 
PPP loan payable— 6,352 3,630 
Extended warranty liabilities649 1,039 1,216 
Deferred revenue9,695 10,019 9,489 
Total current liabilities60,322 66,121 54,358 
Deferred revenue, net of current portion1,708 1,718 1,748 
PPP loan payable, net of current portion— 851 3,555 
Operating lease liabilities, net of current portion14,705 15,394 15,950 
Convertible notes, net of unamortized debt issuance costs 133,800 133,585 — 
Other long-term liabilities285 434 242 
Total liabilities210,820 218,103 75,853 
Stockholders’ equity:
Common stock18 18 18 
Additional paid-in capital106,173 102,206 117,097 
Accumulated deficit(52,848)(60,594)(60,235)
Total stockholders' equity53,343 41,630 56,880 
Total liabilities and stockholders' equity$264,163 $259,733 $132,733 



CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) 
 
 Three Months EndedSix Months Ended
June 30,
2021		June 30,
2020		June 30,
2021		June 30,
2020
Products$51,811 $21,745 $95,362 $48,136 
Service6,778 4,624 12,895 10,472 
Total net revenue58,589 26,369 108,257 58,608 
Products20,892 12,206 39,224 26,309 
Service3,908 2,539 7,534 6,339 
Total cost of revenue24,800 14,745 46,758 32,648 
Gross profit33,789 11,624 61,499 25,960 
Gross margin %57.7 %44.1 %56.8 %44.3 %
Operating expenses:
Sales and marketing18,410 11,035 33,478 25,823 
Research and development4,850 2,991 8,962 6,862 
General and administrative8,461 8,529 15,826 16,336 
Total operating expenses31,721 22,555 58,266 49,021 
Income (loss) from operations2,068 (10,931)3,233 (23,061)
Interest and other income (expense), net
Amortization of debt issuance costs(215)— (267)— 
Interest on convertible notes(778)— (969)— 
Gain on extinguishment of PPP loan7,185 — 7,185 — 
Other income (expense), net(392)3 (1,415)(204)
Income (loss) before income taxes7,868 (10,928)7,767 (23,265)
Income tax expense122 466 380 543 
Net income (loss)$7,746 $(11,394)$7,387 $(23,808)
Net income (loss) per share:
Basic$0.43 $(0.67)$0.41 $(1.51)
Diluted$0.39 $(0.67)$0.40 $(1.51)
Weighted-average number of shares used in per share calculations:
Basic17,862 17,055 17,815 15,744 
Diluted22,453 17,055 20,855 15,744 




 CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands) 
(unaudited) 
Three Months Ended
June 30		Six Months Ended
 June 30
2021202020212020
Cash flows from operating activities:
Net income (loss)$7,746 $(11,394)$7,387 $(23,808)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation2,919 4,095 4,765 6,075 
Depreciation and amortization346 355 707 715 
Amortization of contract acquisition costs458 675 1,003 1,392 
Amortization of debt issuance costs215 — 267 — 
Impairment of capitalized cloud computing costs— 805 182 805 
Change in deferred tax asset6 (11)51 4 
Provision for credit losses274 1,106 492 1,696 
Loss on sale of Property and Equipment(23)— (82)— 
PPP loan forgiveness(7,185)— (7,185)— 
Change in right-of-use asset— — 604 — 
Other— 163 — 198 
Changes in assets and liabilities:
Accounts receivable(2,026)728 (4,433)6,034 
Inventories63 5,701 (5,958)2,681 
Other current assets and prepaid expenses1,483 (491)(77)316 
Other long-term assets(1,220)(312)(1,720)(519)
Accounts payable1,179 (2,923)(474)(1,004)
Accrued liabilities21 (3,187)10,220 (9,754)
Extended warranty liabilities(390)(105)(567)(339)
Operating lease liabilities33 — (530)— 
Deferred revenue(334)(1,190)166 (2,443)
Net cash provided by (used in) operating activities3,565 (5,985)4,818 (17,951)
Cash flows from investing activities:
Acquisition of property, equipment and software(269)(205)(370)(435)
Disposal of property and equipment19 — 71 — 
Proceeds from sales of marketable investments— 4,100 — 10,900 
Purchase of marketable investments— (12,237)— (16,167)
Net cash used in investing activities(250)(250)(8,342)(299)(5,702)
Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan1,501 647 1,897 848 
Proceeds from PPP loan— 7,149 — 7,149 
Proceeds from equity offering— 26,496 — 26,496 
Purchase of capped call— — (16,134)— 
Proceeds from issuance of convertible notes— — 138,250 — 
Payment of issuance costs of convertible notes— — (4,717)— 
Taxes paid related to net share settlement of equity awards(452)(883)(1,451)(3,117)
Payments on finance lease obligations(96)(197)(211)(380)
Net cash provided by financing activities953 33,212 117,634 30,996 
Net increase in cash and cash equivalents4,268 18,885 122,153 7,343 
Cash and cash equivalents at beginning of period164,932 14,774 47,047 26,316 
Cash and cash equivalents at end of period$169,200 $33,659 $169,200 $33,659 


 CUTERA, INC. 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited) 
 Three Months Ended June 30,% ChangeSix Months Ended June 30,% Change
202120202021 Vs
2020		202120202021 Vs
2020
Revenue By Geography:   
North America$26,786 $11,622 +130.5 %$49,084 $26,995 +81.8 %
Japan17,421 8,517 +104.5 %33,976 15,679 +116.7 %
Rest of World14,382 6,230 +130.9 %25,197 15,934 +58.1 %
Total Net Revenue$58,589 $26,369 +122.2 %$108,257 $58,608 +84.7 %
Rest of World (including Japan) as a percentage of total revenue54.3 %55.9 %54.7 %53.9 %
Revenue By Product Category:
Systems
–North America
$19,888 $8,214 +142.1 %$36,673 $18,596 +97.2 %
–Rest of World (including Japan)
15,680 7,328 +114.0 %27,215 17,904 +52.0 %
Total Systems35,568 15,542 +128.9 %63,888 36,500 +75.0 %
Consumables4,432 1,425 +211.0 %7,357 3,958 +85.9 %
Skincare11,812 4,778 +147.2 %24,118 7,678 +214.1 %
Total Products51,812 21,745 +138.3 %95,363 48,136 +98.1 %
Service6,777 4,624 +46.6 %12,894 10,472 +23.1 %
Total Net Revenue$58,589 $26,369 +122.2 %$108,257 $58,608 +84.7 %
 

 
 Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Pre-tax Stock-Based Compensation Expense:  
Cost of revenue$434 $743 $578 $1,033 
Sales and marketing522 1,251 1,243 1,970 
Research and development307 769 608 1,090 
General and administrative1,656 1,332 2,336 1,982 
 $2,919 $4,095 $4,765 $6,075 

 


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, 2021
 GAAPDepreciation
and
Amortization		Stock-Based
Compensation		CRM and ERP Implementation CostSeverance (RIF)Legal - Lutronic
Other Adjustments		Non-GAAP
Net revenue$58,589 — — — — — — $58,589 
Cost of revenue24,800 (138)(434)— — — 346 24,574 
Gross profit33,789 138 434 — — — (346)34,015 
Gross margin %57.7 %     58.1 %
Operating expenses:       
Sales and marketing18,410 (600)(522)— (638)— — 16,650 
Research and development4,850 (45)(307)— — — — 4,498 
General and administrative8,461 (21)(1,656)(407)— (290)— 6,087 
Total operating expenses31,721 31721(666)(2,485)(407)(638)(290)— 27,235 
Income (loss) from operations2,068 804 2,919 407 638 290 (346)6,780 
Interest and other income (expense), net       
 Amortization of debt issuance costs(215)— — — — — — (215)
 Interest on convertible notes(778)— — — — — — (778)
 Gain on extinguishment of PPP loan 7,185 — — — — — (7,185)— 
 Other expense(392)— — — — — — (392)
   Total interest and other income (expense), net5,800 — — — — — (7,185)(1,385)
Income (loss) before income taxes7,868 804 2,919 407 638 290 (7,531)5,395 
Income tax expense122 — — — — — — 122 
Net income (loss)$7,746 $804 $2,919 $407 $638 $290 $(7,531)$5,273 
Net income (loss) per share:       
Basic$0.43      $0.30 
Diluted$0.39      $0.28 
Weighted-average number of shares used in per share calculations:       
Basic17,862      17,862 
Diluted22,453      22,453 
Operating expenses as a % of net revenueGAAP     Non-GAAP
Sales and marketing31.4 %     28.4 %
Research and development8.3 %     7.7 %
General and administrative14.4 %     10.4 %
 54.1 %     46.5 %


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, 2020
 GAAPDepreciation
and
Amortization		Stock-Based
Compensation		CRM and ERP
Implementation/
write-off		Severance (RIF)Legal/Former CFO Settlement/Lutronic
Other Adjustments		Non-GAAP
Net revenue$26,369 — — — — — — $26,369 
Cost of revenue14,745 (136)(743)— (132)— — 13,734 
Gross profit11,624 136 743 — 132 — — 12,635 
Gross margin %44.1 %    47.9 %
Operating expenses:      
Sales and marketing11,035 (827)(1,251)— (249)— — 8,708 
Research and development2,991 (38)(769)— (63)— — 2,121 
General and administrative8,529 (29)(1,332)(729)(74)(1,018)— 5,347 
Total operating expenses22,555 (894)(3,352)(729)(386)(1,018)— 16,176 
Income (loss) from operations(10,931)1,030 4,095 729 518 1,018 — (3,541)
Interest and other income, net      
 Other income 3 — — — — 3 
   Total interest and other income, net3 — — — — — — 3 
Income (loss) before income taxes(10,928)1,030 4,095 729 518 1,018 — (3,538)
Income tax expense466 — — — — — 2 468 
Net income (loss)$(11,394)$1,030 $4,095 $729 $518 $1,018 $(2)$(4,006)
Net income (loss) per share:      
Basic$(0.67)    $(0.23)
Diluted$(0.67)    $(0.23)
Weighted-average number of shares used in per share calculations:      
Basic17,055     17,055 
Diluted17,055     17,055 
Operating expenses as a % of net revenueGAAP    Non-GAAP
Sales and marketing41.8 %    33.0 %
Research and development11.3 %    8.0 %
General and administrative32.3 %    20.3 %
 85.5 %    61.3 %


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, 2021
 GAAPDepreciation
and
Amortization		Stock-Based
Compensation		CRM and ERP Implementation CostSeverance (RIF)Legal - LutronicOther AdjustmentsNon-GAAP
Net revenue108,257 — — — — — — $108,257 
Cost of revenue46,758 (300)(578)— — — 346 46,226 
Gross profit61,499 300 578 — — — (346)62,031 
Gross margin %56.8 %     57.3 %
Operating expenses:       
Sales and marketing33,478 (1,278)(1,243)(182)(638)— — 30,137 
Research and development8,962 (84)(608)— — — — 8,270 
General and administrative15,826 (48)(2,336)(477)— (691)— 12,274 
Total operating expenses58,266 58266(1,410)(4,187)(659)(638)(691)— 50,681 
Income (loss) from operations3,233 1,710 4,765 659 638 691 (346)11,350 
Interest and other income (expense), net       
 Amortization of debt issuance costs(267)— — — — — — (267)
 Interest on convertible notes(969)— — — — — — (969)
 Gain on extinguishment of PPP loan 7,185 — — — — — (7,185)— 
 Other expense(1,415)— — — — — — (1,415)
   Total interest and other income (expense), net4,534 — — — — — (7,185)(2,651)
Income (loss) before income taxes7,767 1,710 4,765 659 638 691 (7,531)8,699 
Income tax expense380 — — — — — — 380 
Net income (loss)$7,387 $1,710 $4,765 $659 $638 $691 $(7,531)$8,319 
Net income (loss) per share:       
Basic$0.41      $0.47 
Diluted$0.40      $0.44 
Weighted-average number of shares used in per share calculations:       
Basic17,815      17,815 
Diluted20,855      20,855 
Operating expenses as a % of net revenueGAAP     Non-GAAP
Sales and marketing30.9 %     27.8 %
Research and development8.3 %     7.6 %
General and administrative14.6 %     11.3 %
 53.8 %     46.8 %


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, 2020
 GAAPDepreciation
and
Amortization		Stock-Based
Compensation		CRM and ERP
Implementation/
write-off		Severance (RIF)Legal/Former CFO Settlement/Lutronic
Other Adjustments		Non-GAAP
Net revenue$58,608 — — — — — — $58,608 
Cost of revenue32,648 (277)(1,033)— (132)— — 31,206 
Gross profit25,960 277 1,033 — 132 — — 27,402 
Gross margin %44.3 %    46.8 %
Operating expenses:      
Sales and marketing25,823 (1,698)(1,969)— (249)— — 21,908 
Research and development6,862 (76)(1,090)— (63)— — 5,632 
General and administrative16,336 (56)(1,982)(1,139)(74)(1,018)(324)11,742 
Total operating expenses49,021 (1,830)(5,042)(1,139)(386)(1,018)(324)39,282 
Income (loss) from operations(23,061)2,107 6,075 1,139 518 1,018 324 (11,880)
Interest and other expense, net      
 Other expense(204)— — — — (204)
   Total interest and other expense, net(204)— — — — — — (204)
Income (loss) before income taxes(23,265)2,107 6,075 1,139 518 1,018 324 (12,084)
Income tax expense543 — — — — — 7 550 
Net income (loss)$(23,808)$2,107 $6,075 $1,139 $518 $1,018 $317 $(12,634)
Net income (loss) per share:      
Basic$(1.51)    $(0.80)
Diluted$(1.51)    $(0.80)
Weighted-average number of shares used in per share calculations:      
Basic15,744     15,744 
Diluted15,744     15,744 
Operating expenses as a % of net revenueGAAP    Non-GAAP
Sales and marketing44.1 %    37.4 %
Research and development11.7 %    9.6 %
General and administrative27.9 %    20.0 %
 83.6 %    67.0 %


CUTERA, INC. 
RECONCILIATION OF LOSS TO ADJUSTED EBITDA
(in thousands)
(unaudited) 
 Three Months
Ended		Six Months Ended
 June 30, 2021
  
Net Income $7,746 $7,387 
Adjustments: 
Stock-based compensation2,919 4,765 
Depreciation and amortization8041,710 
ERP implementation cost407 659 
Severance638 638 
Legal - Lutronic290 691 
Other adjustments(346)(346)
Gain on extinguishment of PPP loan(7,185)(7,185)
Other expense1,385 2,651 
Income tax expense122 380 
Total adjustments(966)3,963 
  
Adjusted EBITDA$6,780 $11,350