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
Date of Report (date of earliest event reported)
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
(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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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, 2022, Cutera, Inc. (“Cutera” or the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2022. Cutera hereby incorporates by reference herein the information set forth in its press release dated August 4, 2022, 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 Tuesday, August 4, 2022 at 1:15 p.m. PDT (4:15 p.m. EDT), during which the Company will discuss the financial results. To participate in the conference call, dial 1-800-319-4610 (domestic) or +1-631-891-4304 (international). 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, 2022 | /s/ ROHAN SETH | ||||
| Rohan Seth | |||||
| Chief Financial Officer | |||||
Exhibit 99.1
Cutera Announces Second Quarter 2022 Financial Results
Record second-quarter revenue driven by ongoing momentum in Capital Equipment and Consumable Product segments
Over one hundred new patients treated during the first quarter of AviClear’s availability
Management reiterates full-year revenue guidance despite $15 million of annual foreign exchange headwinds
BRISBANE, California, August 4, 2022 ─ 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, 2022.
Second Quarter 2022 Financial and Operational Highlights
•Consolidated revenue was $64.2 million, driven by strength in capital equipment and consumable product demand.
•Over 50 AviClear devices were placed and activated during the first quarter of the product’s limited commercial release.
•Gross Margin of 54.6% in the quarter, compared to 57.7% in the prior-year period.
◦Excluding the 190 basis point impact from the AviClear program and foreign exchange headwinds of approximately 180 basis points, the gross margin would have been 58.3%.
•Operating expenses were $45.1 million in the quarter, compared to $31.7 million in the prior-year period. Operating expenses during the period included $7.0 million in AviClear program spending in addition to $2.4 million of ERP implementation expenses.
•GAAP Net loss was $47.3 million, inclusive of an non-recurring charge of $34.4 million for the extinguishment of 50% of the 2026 convertible notes.
•Adjusted EBITDA was a loss of $1.6 million compared to a gain of $6.8 million in the prior-year period.
◦Excluding the non-GAAP AviClear program impacts of $7.5 million in the quarter and foreign exchange headwinds of $2.4 million over the prior year period, comparable adjusted EBITDA would have been $8.3 million.
•Completed $240 million convertible debt financing, ending the quarter with $278.2 million in cash, cash equivalents, and marketable securities on the balance sheet after retiring $69.1 million in convertible notes due 2026.
Key Revenue Metrics | Three Months Ended June 30, 2022 | % Change 2022 Vs 2021 | Constant Currency | ||||||||
| Capital Equipment | $ | 43.7 | 23 | % | 27 | % | |||||
| Skincare | $ | 9.6 | -18 | % | -6 | % | |||||
| Consumables | $ | 5.3 | 20 | % | 23 | % | |||||
| Service | $ | 5.6 | -17 | % | -13 | % | |||||
| Recurring | $ | 20.6 | -11 | % | -2 | % | |||||
| Total Revenue | $ | 64.2 | 10 | % | 15 | % | |||||
Key Profit Metrics | Three Months Ended June 30, 2022 | Constant Currency | ||||||
| GAAP Margin % | 54.6% | 56.4% | ||||||
| Non-GAAP Margin % | 55.6% | 57.4% | ||||||
| Adjusted EBITDA | ($1.6) | $0.7 | ||||||
| % Margin | -2.5 | % | 1.2% | |||||
Key Revenue Metrics | Six Months Ended June 30, 2022 | % Change 2022 Vs 2021 | Constant Currency | ||||||||
| Capital Equipment | $ | 80.2 | 25 | % | 29 | % | |||||
| Skincare | $ | 21.3 | -12 | % | -1 | % | |||||
| Consumables | $ | 9.2 | 25 | % | 28 | % | |||||
| Service | $ | 11.6 | -10 | % | -7 | % | |||||
| Recurring | $ | 42.1 | -5 | % | 2 | % | |||||
| Total Revenue | $ | 122.2 | 13 | % | 18 | % | |||||
Key Profit Metrics | Six Months Ended June 30, 2022 | Constant Currency | ||||||
| GAAP Margin % | 54.7% | 56.3% | ||||||
| Non-GAAP Margin % | 55.7% | 57.2% | ||||||
| Adjusted EBITDA | ($5.4) | ($1.5) | ||||||
| % Margin | -4.5% | -1.2% | ||||||
“I am excited by the momentum we continue to see in our core business, as prior investments in our sales force drove strong results in capital and consumables product segments in North America, Europe, and Australia/New Zealand in particular. Our team is further encouraged by the resiliency and strength of underlying demand trends in the marketplace,” commented Dave Mowry, Chief Executive Officer of Cutera, Inc. “During the quarter, our team achieved the successful launch of AviClear, our first-mover product for the treatment of acne. In the first three months of our limited commercial release of AviClear, we were able to validate successful clinical outcomes in the hands of our customers, verify patient satisfaction with AviClear post-treatment patient survey data, and onboard dozens of practices in the use of the AviClear Laser as they look to provide their patients with a drug-free solution for acne while enhancing the profitablilty of their practices. We are looking forward to expanding the footprint of new AviClear practices during the next phase of the limited commercial release and significantly ramping the utilization of the device.”
2022 Outlook
Management is reiterating its 2022 revenue guidance of $255 million to $260 million, entirely absorbing the impact of the unprecedented foreign exchange headwinds of $15 million, implying constant currency growth of 17% to 19%. This guidance does not include revenue from our AviClear device as we continue with its limited commercial release. The company plans to add over 100 new AviClear devices into the market during the course of the third quarter of 2022. Based on current AviClear trends, management expects to move into a full commercial launch by the end of the current calendar year.
Conference Call
The Company’s management will host a conference call to discuss these results and related matters today at 1:15 p.m. PT (4:15 p.m. ET). Participating in the call will be Dave Mowry, Chief Executive Officer, and Rohan Seth, Chief Financial Officer.
To participate in the conference call, dial 1-800-319-4610 (domestic) or +1-631-891-4304 (international).
The call will also be a 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 aesthetic and dermatology solutions for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that harness the power of science and nature to enable medical practitioners to offer safe and effective treatments to their patients. For more information, call +1 415-657-5500 or 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 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, 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 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 our 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; and
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.
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, 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 first quarter ended March 31, 2022, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
Cutera, Inc.
Greg Barker
VP, Corporate FP&A
415-657-5500
IR@cutera.com
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| June 30, 2022 | December 31, 2021 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 75,050 | $ | 164,164 | |||||||
| Marketable investments | 203,126 | — | |||||||||
| Accounts receivable, net | 32,148 | 31,449 | |||||||||
| Inventories, net | 45,410 | 39,503 | |||||||||
| Other current assets and prepaid expenses | 17,579 | 14,545 | |||||||||
| Total current assets | 373,313 | 249,661 | |||||||||
| Property and equipment, net | 24,470 | 3,019 | |||||||||
| Deferred tax asset | 698 | 778 | |||||||||
| Goodwill | 1,339 | 1,339 | |||||||||
| Operating lease right-of-use assets | 13,771 | 14,627 | |||||||||
| Other long-term assets | 9,801 | 10,169 | |||||||||
| Restricted cash | 700 | 700 | |||||||||
| Total assets | $ | 424,092 | $ | 280,293 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 25,365 | $ | 7,891 | |||||||
| Accrued liabilities | 47,539 | 54,100 | |||||||||
| Operating leases liabilities | 2,714 | 2,419 | |||||||||
| Deferred revenue | 10,098 | 9,490 | |||||||||
| Total current liabilities | 85,716 | 73,900 | |||||||||
| Deferred revenue, net of current portion | 1,429 | 1,335 | |||||||||
| Operating lease liabilities, net of current portion | 12,368 | 13,483 | |||||||||
| Convertible notes, net of unamortized debt issuance costs | 299,856 | 134,243 | |||||||||
| Other long-term liabilities | 849 | 763 | |||||||||
| Total liabilities | 400,218 | 223,724 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 20 | 18 | |||||||||
| Additional paid-in capital | 144,628 | 114,724 | |||||||||
| Accumulated other comprehensive loss | (183) | — | |||||||||
| Accumulated deficit | (120,591) | (58,173) | |||||||||
| Total stockholders' equity | 23,874 | 56,569 | |||||||||
| Total liabilities and stockholders' equity | $ | 424,092 | $ | 280,293 | |||||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | ||||||||||||||||||||
| Products | $ | 58,589 | $ | 51,812 | $ | 110,655 | $ | 95,363 | |||||||||||||||
| Service | 5,635 | 6,777 | 11,583 | 12,894 | |||||||||||||||||||
| Total net revenue | 64,224 | 58,589 | 122,238 | 108,257 | |||||||||||||||||||
| Products | 25,899 | 20,892 | 48,811 | 39,224 | |||||||||||||||||||
| Service | 3,281 | 3,908 | 6,595 | 7,534 | |||||||||||||||||||
| Total cost of revenue | 29,180 | 24,800 | 55,406 | 46,758 | |||||||||||||||||||
| Gross profit | 35,044 | 33,789 | 66,832 | 61,499 | |||||||||||||||||||
| Gross margin % | 54.6 | % | 57.7 | % | 54.7 | % | 56.8 | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Sales and marketing | 27,001 | 18,410 | 51,945 | 33,478 | |||||||||||||||||||
| Research and development | 6,859 | 4,850 | 13,358 | 8,962 | |||||||||||||||||||
| General and administrative | 11,248 | 8,461 | 24,750 | 15,826 | |||||||||||||||||||
| Total operating expenses | 45,108 | 31,721 | 90,053 | 58,266 | |||||||||||||||||||
| (Loss) income from operations | (10,064) | 2,068 | (23,221) | 3,233 | |||||||||||||||||||
| Interest and other income expense, net | |||||||||||||||||||||||
| Amortization of debt issuance costs | (298) | (215) | (517) | (267) | |||||||||||||||||||
| Interest on convertible notes | (1,149) | (778) | (1,927) | (969) | |||||||||||||||||||
| Loss on extinguishment of convertible notes | (34,423) | — | (34,423) | — | |||||||||||||||||||
| Gain on extinguishment of PPP loan | — | 7,185 | — | 7,185 | |||||||||||||||||||
| Other expense, net | (1,528) | (392) | (2,283) | (1,415) | |||||||||||||||||||
| Loss before income taxes | (47,462) | 7,868 | (62,371) | 7,767 | |||||||||||||||||||
| Income tax expense | (186) | 122 | 47 | 380 | |||||||||||||||||||
| Net loss | $ | (47,276) | $ | 7,746 | $ | (62,418) | $ | 7,387 | |||||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||
| Basic | $ | (2.53) | $ | 0.43 | $ | (3.39) | $ | 0.41 | |||||||||||||||
| Diluted | $ | (2.53) | $ | 0.39 | $ | (3.39) | $ | 0.40 | |||||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||
| Basic | 18,700 | 17,862 | 18,392 | 17,815 | |||||||||||||||||||
| Diluted | 18,700 | 22,453 | 18,392 | 20,855 | |||||||||||||||||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||||||||
| Net loss | $ | (47,276) | $ | 7,746 | $ | (62,418) | $ | 7,387 | |||||||||||||||||||||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||||||||||||||||||||||
| Stock-based compensation | 4,733 | 2,919 | 8,776 | 4,765 | |||||||||||||||||||||||||
| Depreciation and amortization | 502 | 346 | 929 | 707 | |||||||||||||||||||||||||
| Amortization of contract acquisition costs | 567 | 458 | 1,219 | 1,003 | |||||||||||||||||||||||||
| Amortization of debt issuance costs | 298 | 215 | 517 | 267 | |||||||||||||||||||||||||
| Impairment of capitalized cloud computing costs | — | — | — | 182 | |||||||||||||||||||||||||
| Change in deferred tax asset | 39 | 6 | 80 | 51 | |||||||||||||||||||||||||
| Provision for excess and obsolete inventories | 200 | 506 | 558 | 699 | |||||||||||||||||||||||||
| Provision for credit losses | 217 | 274 | 409 | 492 | |||||||||||||||||||||||||
| Loss (gain) on sale of property and equipment | 49 | (23) | 63 | (82) | |||||||||||||||||||||||||
| PPP loan forgiveness | — | (7,185) | — | (7,185) | |||||||||||||||||||||||||
| Change in right-of-use asset | 670 | — | 1,308 | 604 | |||||||||||||||||||||||||
| Loss on extinguishment of convertible notes | 34,423 | — | 34,423 | — | |||||||||||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||||||||||
| Accounts receivable, net | 804 | (2,026) | (1,108) | (4,433) | |||||||||||||||||||||||||
| Inventories, net | (5,524) | (443) | (18,059) | (6,657) | |||||||||||||||||||||||||
| Other current assets and prepaid expenses | 2,577 | 1,483 | (3,034) | (77) | |||||||||||||||||||||||||
| Other long-term assets | (686) | (1,220) | (1,071) | (1,720) | |||||||||||||||||||||||||
| Accounts payable | 9,016 | 1,179 | 14,771 | (474) | |||||||||||||||||||||||||
| Accrued liabilities | (889) | (369) | (6,878) | 9,653 | |||||||||||||||||||||||||
| Operating lease liabilities | (664) | 33 | (1,272) | (530) | |||||||||||||||||||||||||
| Deferred revenue | 463 | (334) | 702 | 166 | |||||||||||||||||||||||||
| Net cash (used in) provided by operating activities | (481) | 3,565 | (30,085) | 4,818 | |||||||||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||||||||
| Acquisition of property, equipment and software | (7,917) | (269) | (8,238) | (370) | |||||||||||||||||||||||||
| Disposal of property and equipment | — | 19 | — | 71 | |||||||||||||||||||||||||
| Purchase of marketable investments | (129,251) | — | (203,309) | — | |||||||||||||||||||||||||
| Net cash used in investing activities | (137,168) | (250) | (211,547) | (299) | |||||||||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 1,288 | 1,501 | 1,440 | 1,897 | |||||||||||||||||||||||||
| Purchase of capped call | (31,671) | — | (31,671) | (16,134) | |||||||||||||||||||||||||
| Proceeds from issuance of convertible notes | 240,000 | — | 240,000 | 138,250 | |||||||||||||||||||||||||
| Payment of issuance costs of convertible notes | (6,956) | — | (6,956) | (4,717) | |||||||||||||||||||||||||
| Extinguishment of convertible notes | (45,777) | — | (45,777) | — | |||||||||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (1,784) | (452) | (4,234) | (1,451) | |||||||||||||||||||||||||
| Payments on finance lease obligations | (133) | (96) | (284) | (211) | |||||||||||||||||||||||||
| Net cash (used in) provided by financing activities | 154,967 | 953 | 152,518 | 117,634 | |||||||||||||||||||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | 17,318 | 4,268 | (89,114) | 122,153 | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 58,432 | 164,932 | 164,864 | 47,047 | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 75,750 | $ | 169,200 | $ | 75,750 | $ | 169,200 | |||||||||||||||||||||
CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
| Three Months Ended | % Change | Six Months Ended | % Change | ||||||||||||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | 2022 Vs 2021 | June 30, 2022 | June 30, 2021 | 2022 Vs 2021 | ||||||||||||||||||||||||||||||
| Revenue By Geography: | |||||||||||||||||||||||||||||||||||
| North America | $ | 32,239 | $ | 26,786 | +20.4 | % | $ | 61,092 | $ | 49,084 | +24.5 | % | |||||||||||||||||||||||
| Japan | 15,174 | 17,421 | (12.9) | % | 32,677 | 33,976 | (3.8) | % | |||||||||||||||||||||||||||
| Rest of World | 16,811 | 14,382 | +16.9 | % | 28,469 | 25,197 | +13.0 | % | |||||||||||||||||||||||||||
| Total Net Revenue | $ | 64,224 | $ | 58,589 | +9.6 | % | $ | 122,238 | $ | 108,257 | +12.9 | % | |||||||||||||||||||||||
| Rest of World (including Japan) as a percentage of total revenue | 49.8 | % | 54.3 | % | 50.0 | % | 54.7 | % | |||||||||||||||||||||||||||
| Revenue By Product Category: | |||||||||||||||||||||||||||||||||||
| Systems | |||||||||||||||||||||||||||||||||||
–North America | $ | 25,232 | $ | 19,888 | +26.9 | % | $ | 47,939 | $ | 36,673 | +30.7 | % | |||||||||||||||||||||||
–Rest of World (including Japan) | 18,421 | 15,680 | +17.5 | % | 32,228 | 27,215 | +18.4 | % | |||||||||||||||||||||||||||
| Total Systems | 43,653 | 35,568 | +22.7 | % | 80,167 | 63,888 | +25.5 | % | |||||||||||||||||||||||||||
| Consumables | 5,298 | 4,432 | +19.5 | % | 9,201 | 7,357 | +25.1 | % | |||||||||||||||||||||||||||
| Skincare | 9,638 | 11,812 | (18.4) | % | 21,287 | 24,118 | (11.7) | % | |||||||||||||||||||||||||||
| Total Products | 58,589 | 51,812 | +13.1 | % | 110,655 | 95,363 | +16.0 | % | |||||||||||||||||||||||||||
| Service | 5,635 | 6,777 | (16.9) | % | 11,583 | 12,894 | (10.2) | % | |||||||||||||||||||||||||||
| Total Net Revenue | $ | 64,224 | $ | 58,589 | +9.6 | % | $ | 122,238 | $ | 108,257 | +12.9 | % | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | ||||||||||||||||||||
| Pre-tax Stock-Based Compensation Expense: | |||||||||||||||||||||||
| Cost of revenue | $ | 500 | $ | 434 | $ | 959 | $ | 578 | |||||||||||||||
| Sales and marketing | 1,638 | 522 | 2,214 | 1,243 | |||||||||||||||||||
| Research and development | 1,067 | 307 | 2,047 | 608 | |||||||||||||||||||
| General and administrative | 1,528 | 1,656 | 3,556 | 2,336 | |||||||||||||||||||
| $ | 4,733 | $ | 2,919 | $ | 8,776 | $ | 4,765 | ||||||||||||||||
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, 2022 | |||||||||||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | ERP Implementation | Legal - Lutronic | Loss on Extinguishment of Convertible Notes | Non-GAAP | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 64,224 | — | — | — | — | — | $ | 64,224 | ||||||||||||||||||||||||||||||||
| Cost of revenue | 29,180 | (161) | (500) | — | — | — | 28,519 | ||||||||||||||||||||||||||||||||||
| Gross profit | 35,044 | 161 | 500 | — | — | — | 35,705 | ||||||||||||||||||||||||||||||||||
| Gross margin % | 54.6 | % | 55.6 | % | |||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 27,001 | (793) | (1,638) | — | — | — | 24,570 | ||||||||||||||||||||||||||||||||||
| Research and development | 6,859 | (68) | (1,067) | — | — | — | 5,724 | ||||||||||||||||||||||||||||||||||
| General and administrative | 11,248 | (46) | (1,528) | (2,385) | (242) | — | 7,047 | ||||||||||||||||||||||||||||||||||
| Total operating expenses | 45,108 | (907) | (4,233) | (2,385) | (242) | — | 37,341 | ||||||||||||||||||||||||||||||||||
| (Loss) income from operations | (10,064) | 1,068 | — | 2,385 | 242 | — | (1,636) | ||||||||||||||||||||||||||||||||||
| Interest and other expense, net | |||||||||||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | (298) | — | — | — | — | — | (298) | ||||||||||||||||||||||||||||||||||
| Interest on convertible notes | (1,149) | — | — | — | — | — | (1,149) | ||||||||||||||||||||||||||||||||||
| Loss on extinguishment of convertible notes | (34,423) | — | — | — | — | 34,423 | — | ||||||||||||||||||||||||||||||||||
| Other expense | (1,528) | — | — | — | — | — | (1,528) | ||||||||||||||||||||||||||||||||||
| Total interest and other expense, net | (37,398) | — | — | — | — | 34,423 | (2,975) | ||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | (47,462) | 1,068 | 4,733 | 2,385 | 242 | 34,423 | (4,611) | ||||||||||||||||||||||||||||||||||
| Provision for income taxes | (186) | — | — | — | — | — | (186) | ||||||||||||||||||||||||||||||||||
| Net (loss) income | $ | (47,276) | $ | 1,068 | $ | 4,733 | $ | 2,385 | $ | 242 | $ | 34,423 | $ | (4,425) | |||||||||||||||||||||||||||
| Net (loss) income per share: | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | (2.53) | $ | (0.24) | |||||||||||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||||||||||
| Basic | 18,700 | 18,700 | |||||||||||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | |||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 42.0 | % | 38.3 | % | |||||||||||||||||||||||||||||||||||||
| Research and development | 10.7 | % | 8.9 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 17.5 | % | 11.0 | % | |||||||||||||||||||||||||||||||||||||
| 70.2 | % | 58.2 | % | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation | Severance (RIF) | Legal - Lutronic | Other Adjustments | Non-GAAP | ||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 58,589 | — | — | — | — | — | — | $ | 58,589 | |||||||||||||||||||||||||||||||||||||
| Cost of revenue | 24,800 | (138) | (434) | — | — | — | 346 | 24,574 | |||||||||||||||||||||||||||||||||||||||
| Gross profit | 33,789 | 138 | 434 | — | — | — | (346) | 34,015 | |||||||||||||||||||||||||||||||||||||||
| Gross margin % | 57.7 | % | 58.1 | % | |||||||||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 18,410 | (600) | (522) | — | (638) | — | — | 16,650 | |||||||||||||||||||||||||||||||||||||||
| Research and development | 4,850 | (45) | (307) | — | — | — | — | 4,498 | |||||||||||||||||||||||||||||||||||||||
| General and administrative | 8,461 | (21) | (1,656) | (407) | — | (290) | — | 6,087 | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 31,721 | (666) | (2,485) | (407) | (638) | (290) | — | 27,235 | |||||||||||||||||||||||||||||||||||||||
| (Loss) income from operations | 2,068 | 804 | 2,919 | 407 | 638 | 290 | (346) | 6,780 | |||||||||||||||||||||||||||||||||||||||
| Interest and other 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 expense, net | 5,800 | — | — | — | — | (7,185) | (1,385) | ||||||||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | 7,868 | 804 | 2,919 | 407 | 638 | 290 | (7,531) | 5,395 | |||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 122 | — | — | — | — | — | — | 122 | |||||||||||||||||||||||||||||||||||||||
| Net (loss) income | $ | 7,746 | $ | 804 | $ | 2,919 | $ | 407 | $ | 638 | $ | 290 | $ | (7,531) | $ | 5,273 | |||||||||||||||||||||||||||||||
| Net (loss) income per share: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.43 | $ | 0.30 | |||||||||||||||||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 17,862 | 17,862 | |||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 31.4 | % | 28.4 | % | |||||||||||||||||||||||||||||||||||||||||||
| Research and development | 8.3 | % | 7.7 | % | |||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 14.4 | % | 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)
| Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | ERP Implementation | Legal - Lutronic | Loss on Extinguishment of Convertible Notes | Non-GAAP | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 122,238 | — | — | — | — | — | $ | 122,238 | ||||||||||||||||||||||||||||||||
| Cost of revenue | 55,406 | (237) | (959) | — | — | — | 54,210 | ||||||||||||||||||||||||||||||||||
| Gross profit | 66,832 | 237 | 959 | — | — | — | 68,028 | ||||||||||||||||||||||||||||||||||
| Gross margin % | 54.7 | % | 55.7 | % | |||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 51,945 | (1,613) | (2,214) | — | — | — | 48,118 | ||||||||||||||||||||||||||||||||||
| Research and development | 13,358 | (113) | (2,047) | — | — | — | 11,198 | ||||||||||||||||||||||||||||||||||
| General and administrative | 24,750 | (184) | (3,556) | (6,361) | (496) | — | 14,153 | ||||||||||||||||||||||||||||||||||
| Total operating expenses | 90,053 | (1,910) | (7,817) | (6,361) | (496) | — | 73,469 | ||||||||||||||||||||||||||||||||||
| (Loss) income from operations | (23,221) | 2,147 | 8,776 | 6,361 | 496 | — | (5,441) | ||||||||||||||||||||||||||||||||||
| Interest and other expense, net | |||||||||||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | (517) | — | — | — | — | — | (517) | ||||||||||||||||||||||||||||||||||
| Interest on Convertible notes | (1,927) | — | — | — | — | — | (1,927) | ||||||||||||||||||||||||||||||||||
| Loss on extinguishment of convertible notes | (34,423) | — | — | — | — | — | 34,423 | — | |||||||||||||||||||||||||||||||||
| Other expense | (2,283) | — | — | — | — | — | (2,283) | ||||||||||||||||||||||||||||||||||
| Total interest and other expense, net | (39,150) | — | — | — | — | 34,423 | (4,727) | ||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | (62,371) | 2,147 | 8,776 | 6,361 | 496 | 34,423 | (10,168) | ||||||||||||||||||||||||||||||||||
| Provision for income taxes | 47 | — | — | — | — | — | 47 | ||||||||||||||||||||||||||||||||||
| Net (loss) income | $(62,418) | $2,147 | $8,776 | $6,361 | $496 | $34,423 | $(10,215) | ||||||||||||||||||||||||||||||||||
| Net (loss) income per share: | |||||||||||||||||||||||||||||||||||||||||
| Basic | $(3.39) | $(0.56) | |||||||||||||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||||||||||
| Basic | 18,392 | 18,392 | |||||||||||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | |||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 42.5 | % | 39.4 | % | |||||||||||||||||||||||||||||||||||||
| Research and development | 10.9 | % | 9.2 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 20.2 | % | 11.6 | % | |||||||||||||||||||||||||||||||||||||
| 73.6 | % | 60.2 | % | ||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP | Depreciation and Amortization | Stock-Based Compensation | CRM and ERP Implementation | Severance (RIF) | Legal - Lutronic | Other Adjustments | Non-GAAP | ||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 108,257 | — | — | — | — | — | — | $ | 108,257 | |||||||||||||||||||||||||||||||||||||
| Cost of revenue | 46,758 | (300) | (578) | — | — | — | 346 | 46,226 | |||||||||||||||||||||||||||||||||||||||
| Gross profit | 61,499 | 300 | 578 | — | — | — | (346) | 62,031 | |||||||||||||||||||||||||||||||||||||||
| Gross margin % | 56.8 | % | 57.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 33,478 | (1,278) | (1,243) | (182) | (638) | — | — | 30,137 | |||||||||||||||||||||||||||||||||||||||
| Research and development | 8,962 | (84) | (608) | — | — | — | — | 8,270 | |||||||||||||||||||||||||||||||||||||||
| General and administrative | 15,826 | (48) | (2,336) | (477) | — | (691) | — | 12,274 | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 58,266 | (1,410) | (4,187) | (659) | (638) | (691) | — | 50,681 | |||||||||||||||||||||||||||||||||||||||
| (Loss) income from operations | 3,233 | 1,710 | 4,765 | 659 | 638 | 691 | (346) | 11,350 | |||||||||||||||||||||||||||||||||||||||
| Interest and other 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 expense, net | 4,534 | — | — | — | — | — | (7,185) | (2,651) | |||||||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | 7,767 | 1,710 | 4,765 | 659 | 638 | 691 | (7,531) | 8,699 | |||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 380 | — | — | — | — | — | — | 380 | |||||||||||||||||||||||||||||||||||||||
| Net (loss) income | $ | 7,387 | $ | 1,710 | $ | 4,765 | $ | 659 | $ | 638 | $ | 691 | $ | (7,531) | $ | 8,319 | |||||||||||||||||||||||||||||||
| Net (loss) income per share: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.41 | $ | 0.47 | |||||||||||||||||||||||||||||||||||||||||||
| Weighted-average number of shares used in per share calculations: | |||||||||||||||||||||||||||||||||||||||||||||||
| 17,815 | 17,815 | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses as a % of net revenue | GAAP | Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 30.9 | % | 27.8 | % | |||||||||||||||||||||||||||||||||||||||||||
| Research and development | 8.3 | % | 7.6 | % | |||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 14.6 | % | 11.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| 53.8 | % | 46.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
CUTERA, INC.
RECONCILIATION OF LOSS TO ADJUSTED EBITDA
(in thousands)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, 2022 | |||||||||||
| Net Income | $ | (47,276) | $ | (62,418) | |||||||
| Adjustments: | |||||||||||
| Stock-based compensation | 4,733 | 8,776 | |||||||||
| ERP implementation cost | 2,385 | 6,361 | |||||||||
| Interest and other expense, net | 37,398 | 39,150 | |||||||||
| Depreciation and amortization | 1,068 | 2,147 | |||||||||
| Legal -Lutronic | 242 | 496 | |||||||||
| Income tax (benefit) expense | (186) | 47 | |||||||||
| Total adjustments | 45,640 | 56,977 | |||||||||
| Adjusted EBITDA | $ | (1,636) | $ | (5,441) | |||||||