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) | (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 8, 2023, Cutera, Inc. (“Cutera” or the “Company”) issued a press release announcing its financial results for the first quarter ended June 30, 2023. Cutera hereby incorporates by reference herein the information set forth in its press release dated August 8, 2023, 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 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 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 8, 2023 | /s/ Stuart Drummond | ||||
| Stuart Drummond | |||||
| Interim Chief Financial Officer | |||||
Exhibit 99.1
Cutera Announces Second Quarter 2023 Financial Results along with 2023 Outlook
BRISBANE, California, August 8, 2023 ─ Cutera, Inc. (Nasdaq: CUTR) (“Cutera” or the “Company”), a leading provider
of aesthetic and dermatology solutions, today reported financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Financial and Operational Highlights
•Consolidated revenue of $61.2 million, a decrease of 5% as reported and a decrease of 2% in constant currency from the prior-year period, primarily driven by a decline in capital equipment revenue, partially offset by AviClear revenue.
•AviClear Q2 2023 new bookings of just under 200 units, vs. over 350 in Q1 2023, in line with our strategy to drive a more measured pace of new bookings.
•GAAP Gross margin of 45.8% in the quarter, compared to 54.6% in the prior-year period.
•Non-GAAP Gross Margin of 50.3% in the quarter, compared to 55.6% in the prior-year period.
•GAAP Operating expenses were $57.6 million in the quarter, compared to $45.1 million in the prior-year period. Operating expenses during the period included $10.6 million in AviClear spending, up $3.6 million from the prior-year period.
•GAAP Net loss was $31.6 million, compared to a GAAP Net loss of $47.3 million in the prior-year period.
•Adjusted EBITDA was a loss of $11.6 million, compared to a loss of $1.6 million in the prior-year period.
◦Core adjusted EBITDA was a loss of $4.3 million
◦AviClear adjusted EBITDA was a loss of $7.3 million
Key Revenue Metrics | Three Months Ended June 30, 2023 | % Change vs Three Months Ended June 30, 2022 | Key Profit Metrics | Three Months Ended June 30, 2023 | ||||||||||||||||
| Reported | Constant Currency | |||||||||||||||||||
| Capital Equipment | $ | 37.9 | -13 | % | -11 | % | GAAP Margin % | 45.8 | % | |||||||||||
| Skincare | $ | 9.4 | -2 | % | 5 | % | Non-GAAP Margin % | 50.3 | % | |||||||||||
| Consumables | $ | 4.3 | -18 | % | -16 | % | Adjusted EBIDTA-Core | $ | (4.3) | |||||||||||
| Service | $ | 5.7 | — | % | 2 | % | Adjusted EBIDTA- AviClear | $ | (7.3) | |||||||||||
| AviClear | $ | 4.0 | nm | nm | Adjusted EBIDTA - Total | $ | (11.6) | |||||||||||||
| Recurring | $ | 23.3 | 13 | % | 18 | % | Adjusted EBIDTA - Margin % | -19.0 | % | |||||||||||
| Total Revenue | $ | 61.2 | -5 | % | -2 | % | ||||||||||||||
Key Revenue Metrics | Six Months Ended June 30, 2023 | % change vs Six Months Ended June 30, 2022 | Key Profit Metrics | Six Months Ended June 30, 2023 | ||||||||||||||||
| Reported | Constant Currency | |||||||||||||||||||
| Capital Equipment | $ | 71.2 | -11 | % | -9 | % | GAAP Margin % | 45.6 | % | |||||||||||
| Skincare | $ | 17.6 | -18 | % | -8 | % | Non-GAAP Margin % | 49.7 | % | |||||||||||
| Consumables | $ | 8.0 | -12 | % | -9 | % | Adjusted EBIDTA-Core | $ | (12.9) | |||||||||||
| Service | $ | 11.1 | -5 | % | -2 | % | Adjusted EBIDTA- AviClear | $ | (13.3) | |||||||||||
| AviClear | $ | 8.4 | nm | nm | Adjusted EBIDTA - Total | $ | (26.1) | |||||||||||||
| Recurring | $ | 45.0 | 7 | % | 13 | % | Adjusted EBIDTA - Margin % | -22.5 | % | |||||||||||
| Total Revenue | $ | 116.2 | -5 | % | -1 | % | ||||||||||||||
“Second quarter results reflect that our business faces more operational and market challenges than were apparent when I stepped in as interim CEO. While we succeeded in refocusing our selling organization on Core Capital, business performance in this area has been negatively impacted by continued parts-driven service delays, and a tightening credit environment which have made deal closing more difficult, and placed pressure on our ASP’s. Addressing these challenges is a top priority for the company and we are working diligently to get Core Capital back on track,” commented Sheila Hopkins former interim Chief Executive Officer of Cutera Inc.
Hopkins continued, “On AviClear we have more work to do to increase utilization and the percent of installed offices that are contributing. We are working expeditiously on the playbook for that. This will be a process, however, I am encouraged by progress made in the quarter on AviClear. We moved forward with a more measured pace of device bookings, and drove treatment volume that was in-line with our expectations. Finally, AviClear became the first acne therapy to obtain FDA clearance as a long-term treatment for mild to severe acne vulgaris.”
“I continue to believe in the potential of Cutera, fueled by excellent technologies, and a dedicated and talented team. The challenges before us can and will be addressed, particularly with Taylor at the helm given his deep industry experience. This will place the Company firmly on the path to un-lock inherent upside value not only on AviClear, but also Core Capital. Cutera’s future remains bright,” concluded Hopkins
“I am very excited about the platform, the team, and the opportunity ahead at Cutera. While we face a set of near-term challenges, which our team will address, we have significant potential to drive growth and profitability over time, not only with our AviClear, our revolutionary solution for acne, but across our entire portfolio,” commented Taylor Harris, Chief Executive Officer of Cutera, Inc.
2023 Outlook
The company expects full-year 2023 revenue in the range of $220 million to $230 million.
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 in the call will be Taylor Harris, Chief Executive Officer, Sheila Hopkins, former Interim Chief Executive Officer, Stuart Drummond, Interim Chief Financial Officer, and Greg Barker, Vice President of FP&A and Investor Relations.
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, 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 gross margin, gross margin rate, and operating income. Non-GAAP adjustments include depreciation and amortization including contract acquisition costs, stock-based compensation, enterprise resource planning (“ERP”) implementation costs, certain legal and litigation costs, executive and other non-recurring severance costs, costs related to a retention plan, and legal and advisory fees related to litigation and shareholder activism. From time to time in the future, there may be other items that the Company 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 defines adjusted EBITDA as operating income before depreciation and amortization, stock-based compensation, ERP implementation costs, costs related to certain litigation, executive and non-recurring severance costs, retention plan costs,, and legal and advisory fees related to litigation and shareholder activism.
Company management uses non-GAAP measures as aids in monitoring the Company’s ongoing financial performance from quarter to quarter, and year to year, 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:
Depreciation and amortization, including contract acquisition costs. 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;
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 expenses related to grants of options, employee stock purchase plans, and performance and restricted stock. Depending upon the size, timing, and 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;
ERP implementation costs. The Company has excluded ERP system costs related to direct and incremental costs incurred in connection with its multi-phase implementation of a new ERP solution and the related technology infrastructure costs. The Company excludes these costs because it believes 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 the Company’s operating performance;
Certain legal and litigation costs. The Company has excluded costs incurred related to its litigation against Lutronic Aesthetics, which is not part of the Company’s ordinary course of business. The Company’s complaint against Lutronic alleges misappropriation of trade secrets, violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), interference with contractual relations and other claims. The Company excludes these costs because this litigation is a result of a discrete event that was not part of the Company’s business strategy but has a significant effect on the results of operations. Its costs are incidental to and do not reflect the efficiencies and effectiveness of the Company’s core operations;
Executive and other non-recurring severance costs. The Company has excluded costs associated with restructuring activities and the separation of its officers and other executives in calculating its non-GAAP operating expenses and non-GAAP Operating Income. The Company has excluded restructuring costs because a restructuring represents a discrete event that signifies a change in the Company’s strategy, but its costs are not indicative of the ongoing financial performance of the business. The Company excludes executive separation costs because executive separations are unpredictable and not part of the Company’s business strategy but could have a significant impact on the results of operation;
Retention plan costs. The Company has excluded the expense related to a retention plan implemented in April 2023. Approximately $11 million was made available to sales personnel and key employees and will be paid in quarterly installments through October 2024. The Company has excluded expense related to this retention plan as such costs are not considered part of ongoing operations.
Board of Director legal and advisory fees. The Company has excluded costs associated with the litigation and shareholder activism related to its 2023 annual meeting of shareholders. The Company has excluded these costs as the costs do not relate to ongoing operations. 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.
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 several 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, 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 concerning those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2023, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
Cutera, Inc.
Greg Barker
VP, Corporate FP&A and Investor Relations
415-657-5500
IR@cutera.com
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| June 30, 2023 | December 31, 2022 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 180,654 | $ | 145,924 | ||||||||||
| Marketable investments | 41,949 | 171,390 | ||||||||||||
| Accounts receivable, net | 53,079 | 45,562 | ||||||||||||
| Inventories, net | 68,668 | 63,628 | ||||||||||||
| Other current assets and prepaid expenses | 24,900 | 24,036 | ||||||||||||
| Restricted cash | 700 | 700 | ||||||||||||
| Total current assets | 369,950 | 451,240 | ||||||||||||
| Property and equipment, net | 65,511 | 40,368 | ||||||||||||
| Deferred tax assets | 547 | 590 | ||||||||||||
| Goodwill | 1,339 | 1,339 | ||||||||||||
| Operating lease right-of-use assets | 11,370 | 12,831 | ||||||||||||
| Other long-term assets | 15,113 | 14,620 | ||||||||||||
| Total assets | $ | 463,830 | $ | 520,988 | ||||||||||
| Liabilities and Stockholders' Deficit | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 34,240 | $ | 33,736 | ||||||||||
| Accrued liabilities | 53,764 | 57,452 | ||||||||||||
| Operating leases liabilities | 2,602 | 2,810 | ||||||||||||
| Deferred revenue | 12,457 | 11,841 | ||||||||||||
| Total current liabilities | 103,063 | 105,839 | ||||||||||||
| Deferred revenue, net of current portion | 1,690 | 1,657 | ||||||||||||
| Operating lease liabilities, net of current portion | 10,069 | 11,352 | ||||||||||||
| Convertible notes, net of unamortized debt issuance costs | 417,568 | 416,459 | ||||||||||||
| Other long-term liabilities | 575 | 862 | ||||||||||||
| Total liabilities | 532,965 | 536,169 | ||||||||||||
| Stockholders’ deficit: | ||||||||||||||
| Common stock | 20 | 20 | ||||||||||||
| Additional paid-in capital | 128,014 | 125,406 | ||||||||||||
| Accumulated other comprehensive income (loss) | 4 | (94) | ||||||||||||
| Accumulated deficit | (197,173) | (140,513) | ||||||||||||
| Total stockholders' deficit | (69,135) | (15,181) | ||||||||||||
| Total liabilities and stockholders' deficit | $ | 463,830 | $ | 520,988 | ||||||||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||||||||||||
| Products | $ | 55,568 | $ | 58,589 | $ | 105,156 | $ | 110,655 | ||||||||||||||||||
| Service | 5,650 | 5,635 | 11,055 | 11,583 | ||||||||||||||||||||||
| Total net revenue | 61,218 | 64,224 | 116,211 | 122,238 | ||||||||||||||||||||||
| Products | 29,473 | 25,899 | 56,704 | 48,811 | ||||||||||||||||||||||
| Service | 3,691 | 3,281 | 6,526 | 6,595 | ||||||||||||||||||||||
| Total cost of revenue | 33,164 | 29,180 | 63,230 | 55,406 | ||||||||||||||||||||||
| Gross profit | 28,054 | 35,044 | 52,981 | 66,832 | ||||||||||||||||||||||
| Gross margin % | 45.8 | % | 54.6 | % | 45.6 | % | 54.7 | % | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Sales and marketing | 33,271 | 27,001 | 62,783 | 51,945 | ||||||||||||||||||||||
| Research and development | 5,784 | 6,859 | 12,252 | 13,358 | ||||||||||||||||||||||
| General and administrative | 18,528 | 11,248 | 31,044 | 24,750 | ||||||||||||||||||||||
| Total operating expenses | 57,583 | 45,108 | 106,079 | 90,053 | ||||||||||||||||||||||
| Loss from operations | (29,529) | (10,064) | (53,098) | (23,221) | ||||||||||||||||||||||
| Interest and other expense, net: | ||||||||||||||||||||||||||
| Amortization of debt issuance costs | (557) | (298) | (1,109) | (517) | ||||||||||||||||||||||
| Interest on Convertible notes | (2,958) | (1,149) | (5,897) | (1,927) | ||||||||||||||||||||||
| Loss on extinguishment of convertible notes | — | (34,423) | — | (34,423) | ||||||||||||||||||||||
| Interest income | 2,179 | 382 | 4,658 | 395 | ||||||||||||||||||||||
| Other expense, net | (453) | (1,910) | (616) | (2,678) | ||||||||||||||||||||||
| Total interest and other expense, net | (1,789) | (37,398) | (2,964) | (39,150) | ||||||||||||||||||||||
| Loss before income taxes | (31,318) | (47,462) | (56,062) | (62,371) | ||||||||||||||||||||||
| Income tax expense (benefit) | 326 | (186) | 598 | 47 | ||||||||||||||||||||||
| Net loss | $ | (31,644) | $ | (47,276) | $ | (56,660) | $ | (62,418) | ||||||||||||||||||
| Net income (loss) per share: | ||||||||||||||||||||||||||
| Basic | $ | (1.59) | $ | (2.53) | $ | (2.86) | $ | (3.39) | ||||||||||||||||||
| Diluted | $ | (1.59) | $ | (2.53) | $ | (2.86) | $ | (3.39) | ||||||||||||||||||
| Weighted-average number of shares used in per share calculations: | ||||||||||||||||||||||||||
| Basic | 19,858 | 18,700 | 19,819 | 18,392 | ||||||||||||||||||||||
| Diluted | 19,858 | 18,700 | 19,819 | 18,392 | ||||||||||||||||||||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||||||||
| Net income (loss) | $ | (31,644) | $ | (47,276) | $ | (56,660) | $ | (62,418) | |||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||||||||||||||||||||
| Stock-based compensation | 1,550 | 4,733 | 4,936 | 8,776 | |||||||||||||||||||||||||
| Depreciation and amortization | 1,829 | 502 | 3,238 | 929 | |||||||||||||||||||||||||
| Amortization of contract acquisition costs | 1,891 | 567 | 4,069 | 1,219 | |||||||||||||||||||||||||
| Amortization of debt issuance costs | 557 | 298 | 1,109 | 517 | |||||||||||||||||||||||||
| Deferred tax assets | 30 | 39 | 43 | 80 | |||||||||||||||||||||||||
| Provision for credit losses | 2,026 | 217 | 2,514 | 409 | |||||||||||||||||||||||||
| Loss on sale of property and equipment | — | 49 | — | 63 | |||||||||||||||||||||||||
| Loss on extinguishment of convertible notes | — | 34,423 | — | 34,423 | |||||||||||||||||||||||||
| Unrealize gain on foreign exchange forward | 623 | — | — | — | |||||||||||||||||||||||||
| Non-cash interest income | (1,115) | — | (1,995) | — | |||||||||||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||||||||||
| Accounts receivable | (2,967) | 804 | (10,031) | (1,108) | |||||||||||||||||||||||||
| Inventories, net | 3,151 | (5,324) | (5,040) | (17,501) | |||||||||||||||||||||||||
| Other current assets and prepaid expenses | 1,175 | 2,577 | (878) | (3,034) | |||||||||||||||||||||||||
| Other long-term assets | (2,771) | (686) | (4,782) | (1,071) | |||||||||||||||||||||||||
| Accounts payable | (336) | 9,016 | (1,666) | 14,771 | |||||||||||||||||||||||||
| Accrued liabilities | (5,512) | (889) | (3,806) | (6,878) | |||||||||||||||||||||||||
| Operating leases, net | (14) | 6 | (30) | 36 | |||||||||||||||||||||||||
| Deferred revenue | 261 | 463 | 649 | 702 | |||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | (31,266) | (481) | (68,330) | (30,085) | |||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||||||||
| Acquisition of property and equipment | (14,755) | (7,917) | (25,908) | (8,238) | |||||||||||||||||||||||||
| Proceeds from maturities of marketable investments | 60,000 | — | 155,000 | — | |||||||||||||||||||||||||
| Purchase of marketable investments | — | (129,251) | (23,467) | (203,309) | |||||||||||||||||||||||||
| Net cash provided by (used in) investing activities | 45,245 | (137,168) | 105,625 | (211,547) | |||||||||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 749 | 1,288 | 858 | 1,440 | |||||||||||||||||||||||||
| Purchase of capped call | — | (31,671) | — | (31,671) | |||||||||||||||||||||||||
| Proceeds from issuance of convertible notes | — | 240,000 | — | 240,000 | |||||||||||||||||||||||||
| Payment of issuance costs of convertible notes | — | (6,956) | — | (6,956) | |||||||||||||||||||||||||
| Extinguishment of convertible notes | — | (45,777) | — | (45,777) | |||||||||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (789) | (1,784) | (3,186) | (4,234) | |||||||||||||||||||||||||
| Payments on finance lease obligations | (113) | (133) | (237) | (284) | |||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | (153) | 154,967 | (2,565) | 152,518 | |||||||||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 13,826 | 17,318 | 34,730 | (89,114) | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 167,528 | 58,432 | 146,624 | 164,864 | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 181,354 | $ | 75,750 | $ | 181,354 | $ | 75,750 | |||||||||||||||||||||
CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
| Three Months Ended | % Change | Six Months Ended | % Change | ||||||||||||||||||||||||||||||||
| June 30, 2023 | June 30, 2022 | 2023 Vs 2022 | June 30, 2023 | June 30, 2022 | 2023 Vs 2022 | ||||||||||||||||||||||||||||||
| Revenue By Geography: | |||||||||||||||||||||||||||||||||||
| North America | $ | 31,830 | $ | 32,239 | -1.3 | % | $ | 59,499 | $ | 61,092 | -2.6 | % | |||||||||||||||||||||||
| Japan | 12,810 | 15,174 | -15.6 | % | 25,718 | 32,677 | -21.3 | % | |||||||||||||||||||||||||||
| Rest of World | 16,578 | 16,811 | -1.4 | % | 30,994 | 28,469 | +8.9 | % | |||||||||||||||||||||||||||
| Total Net Revenue | $ | 61,218 | $ | 64,224 | -4.7 | % | $ | 116,211 | $ | 122,238 | -4.9 | % | |||||||||||||||||||||||
| International as a percentage of total revenue | 48.0 | % | 49.8 | % | 48.8 | % | 50.0 | % | |||||||||||||||||||||||||||
| Revenue By Product Category: | |||||||||||||||||||||||||||||||||||
| Systems | |||||||||||||||||||||||||||||||||||
–North America | $ | 22,243 | $ | 25,232 | -11.8 | % | $ | 40,203 | $ | 47,939 | -16.1 | % | |||||||||||||||||||||||
–Rest of World (including Japan) | 15,652 | 18,421 | -15.0 | % | 31,010 | 32,228 | -3.8 | % | |||||||||||||||||||||||||||
| Total Systems | 37,895 | 43,653 | -13.2 | % | 71,213 | 80,167 | -11.2 | % | |||||||||||||||||||||||||||
| AviClear | 3,996 | 136 | nm | 8,391 | 136 | nm | |||||||||||||||||||||||||||||
| Consumables | 4,255 | 5,162 | -17.6 | % | 7,998 | 9,065 | -11.8 | % | |||||||||||||||||||||||||||
| Skincare | 9,422 | 9,638 | -2.2 | % | 17,554 | 21,287 | -17.5 | % | |||||||||||||||||||||||||||
| Total Products | 55,568 | 58,589 | -5.2 | % | 105,156 | 110,655 | -5.0 | % | |||||||||||||||||||||||||||
| Service | 5,650 | 5,635 | +0.3 | % | 11,055 | 11,583 | -4.6 | % | |||||||||||||||||||||||||||
| Total Net Revenue | $ | 61,218 | $ | 64,224 | -4.7 | % | $ | 116,211 | $ | 122,238 | -4.9 | % | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||||||||||
| Pre-tax Stock-Based Compensation Expense: | |||||||||||||||||||||||
| Cost of revenue | $ | 361 | $ | 500 | $ | 725 | $ | 959 | |||||||||||||||
| Sales and marketing | 1,283 | 1,638 | 2,431 | 2,214 | |||||||||||||||||||
| Research and development | 415 | 1,067 | 1,108 | 2,047 | |||||||||||||||||||
| General and administrative | (509) | 1,528 | 672 | 3,556 | |||||||||||||||||||
| $ | 1,550 | $ | 4,733 | $ | 4,936 | $ | 8,776 | ||||||||||||||||
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, 2023 | |||||||||||||||||
| Gross Profit | Gross Margin | Operating Income | |||||||||||||||
| Reported | $ | 28,054 | 45.8 | % | $ | (29,529) | |||||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization including contract acquisition costs | 1,998 | 3.3 | % | 3,991 | |||||||||||||
| Stock-based compensation | 361 | 0.6 | % | 1,550 | |||||||||||||
| ERP implementation costs | — | — | 770 | ||||||||||||||
| Legal | — | — | 394 | ||||||||||||||
| Severance | — | — | 234 | ||||||||||||||
| Retention plan costs | 65 | 0.1 | % | 2,972 | |||||||||||||
| Board of Director legal and advisory fees | — | — | 7,709 | ||||||||||||||
| Other adjustments | 307 | 0.5 | % | 307 | |||||||||||||
| Total adjustments | 2,731 | 4.5 | % | 17,927 | |||||||||||||
| Adjusted | $ | 30,785 | 50.3 | % | $ | (11,602) | |||||||||||
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 | |||||||||||||||||
| Gross Profit | Gross Margin | Operating Income | |||||||||||||||
| Reported | $ | 35,044 | 54.6 | % | $ | (10,064) | |||||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization including contract acquisition costs | 161 | 0.3 | % | 1,068 | |||||||||||||
| Stock-based compensation | 500 | 0.8 | % | 4,733 | |||||||||||||
| ERP implementation costs | — | — | 2,385 | ||||||||||||||
| Legal | — | — | 242 | ||||||||||||||
| Total adjustments | 661 | 1.0 | % | 8,428 | |||||||||||||
| Adjusted | $ | 35,705 | 55.6 | % | $ | (1,636) | |||||||||||
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, 2023 | |||||||||||||||||
| Gross Profit | Gross Margin | Operating Income | |||||||||||||||
| Reported | $ | 52,981 | 45.6 | % | $ | (53,098) | |||||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization including contract acquisition costs | 3,597 | 3.1 | % | 7,578 | |||||||||||||
| Stock-based compensation | 725 | 0.6 | % | 4,936 | |||||||||||||
| ERP implementation costs | — | — | 1,288 | ||||||||||||||
| Legal | — | — | 1,046 | ||||||||||||||
| Severance | 119 | 0.1 | % | 549 | |||||||||||||
| Retention plan costs | 65 | 0.1 | % | 2,972 | |||||||||||||
| Board of Director legal and advisory fees | — | — | % | 7,709 | |||||||||||||
| Other adjustments | 307 | 0.3 | % | 892 | |||||||||||||
| Total adjustments | 4,813 | 4.1 | % | 26,970 | |||||||||||||
| Adjusted | $ | 57,794 | 49.7 | % | $ | (26,128) | |||||||||||
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 | |||||||||||||||||
| Gross Profit | Gross Margin | Operating Income | |||||||||||||||
| Reported | $ | 66,832 | 54.7 | % | $ | (23,221) | |||||||||||
| Adjustments: | |||||||||||||||||
| Depreciation and amortization including contract acquisition costs | 237 | 0.2 | % | 2,147 | |||||||||||||
| Stock-based compensation | 959 | 0.8 | % | 8,776 | |||||||||||||
| ERP implementation costs | — | — | 6,361 | ||||||||||||||
| Legal | — | — | 496 | ||||||||||||||
| Total adjustments | 1,196 | 1.0 | % | 17,780 | |||||||||||||
| Adjusted | $ | 68,028 | 55.7 | % | $ | (5,441) | |||||||||||