Form 8-K

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 2, 2004

Date of Report (date of earliest event reported)

 


 

CUTERA, INC.

(Exact name of Registrant as specified in its charter)

 


 

State of Delaware   000-50644   77-0492262

(State or other jurisdiction of

incorporation or organization)

  (Commission File Number)  

(I.R.S. Employer

Identification Number)

 

3240 Bayshore Blvd.

Brisbane, California 94005

(Address of principal executive offices)

 

(415) 657-5500

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 



Item 7. Financial Statements and Exhibits

 

(c) Exhibits

 

Exhibit No.

 

Description


99.1   Press Release, dated as of August 2, 2004.

 

Item 12. Results of Operations and Financial Condition

 

On August 2, 2004, we issued a press release announcing our second quarter 2004 results. The press release is attached hereto as Exhibit 99.1. This exhibit is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), but is instead furnished. The Exhibit is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


SIGNATURES

 

Pursuant to the requirements if 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.

By:

 

/s/ Kevin P. Connors


   

Kevin P. Connors

   

President and Chief Executive Officer

 

Date: August 2, 2004

Press Release

Exhibit 99.1

 

LOGO

 

FOR IMMEDIATE RELEASE

 

CONTACTS:

 

Cutera, Inc.

Ron Santilli

Chief Financial Officer

415-657-5500

 

Investor Relations

John Mills or Tom Ryan

Integrated Corporate Relations, Inc.

310-395-2215

jmills@icrinc.com

 

CUTERA REPORTS SECOND QUARTER 2004 RESULTS

 

•    Second Quarter Revenue Increases 36% to $12.3 Million

 

•    Six Month Revenue Increases 53% to $23.8 Million

 

Brisbane, California, August 2, 2004 – Cutera, Inc. (Nasdaq: CUTR), a leading manufacturer of laser and other light-based aesthetic systems, today reported financial results for the second quarter and six-month period ending June 30, 2004.

 

Second quarter revenue was $12.3 million, a 36% increase over the $9.0 million recorded in the same period last year. Net income for the second quarter was $591,000, or $0.05 per diluted share, compared to net income of $695,000 reported in the second quarter of 2003. Included in the second quarter 2004 results is $355,000 of pre-tax, non-cash, stock-based compensation charges, compared to charges of $242,000 in the second quarter of 2003.

 

The Company’s revenue for the six months ended June 30, 2004 was $23.8 million, a 53% increase compared to $15.6 million recorded in the same period last year. Net income for the first six months was $812,000, or $0.07 per diluted share, compared to net income of $624,000 reported in the same period last year. Included in the first six months of 2004 results was $727,000 of pre-tax, non-cash, stock-based compensation charges, compared to charges of $462,000 in the same period last year.

 

“We are pleased with our progress in the first half of 2004 as a public company,” said Kevin Connors, President and Chief Executive Officer. “Our second quarter results confirm the growing market acceptance of our versatile technology platforms and our multi-application systems. We will continue to focus on our fundamental growth initiatives, including the introduction of innovative products that expand our range of aesthetic applications and aggressive expansion of our direct global sales organization, with particular emphasis on our international sales.

 

Management believes that third quarter revenue will be approximately $12.5 million with corresponding earnings per diluted share of $0.05. For the full year, Cutera is raising guidance and now expects revenue of $50.0 to $52.0 million and earnings per diluted share of $0.16 to $0.19, up from a range of $49.5 to $50.5 million and $0.15 to $0.17, respectively, based on an average share count of approximately 12.3 million shares.


Conference Call

 

Cutera, Inc. will host a conference call today, August 2, 2004, at 2:00 p.m. Pacific (5:00 p.m. Eastern) to discuss its second quarter and six month results. The earnings call will be broadcast live over the Internet hosted at the Investor Relations section of the company’s website at http://www.cutera.com and will be archived online within one hour of the completion of the conference call. In addition, you may call 800-231-5571 or international participants may call 973-582-2703. Participating in the call will be Kevin Connors, Chief Executive Officer and President, and Ron Santilli, Chief Financial Officer.

 

A telephonic playback will be available from 3:00 p.m. PST on August 2 through 11:59 p.m. PST on August 16, 2004 by calling 877-519-4471. To access the playback; pass code is 4960807.

 

About Cutera, Inc.

 

Cutera designs, develops, manufactures and markets the CoolGlide® family of products for use in laser and other light-based aesthetic applications. The original CoolGlide CV provides permanent hair reduction on all skin types. The second generation CoolGlide Excel® incorporated features to treat a variety of vascular lesions, which include facial telangiectasia, spider and reticular leg veins. The CoolGlide Vantage added non-ablative skin therapy to the range of applications offered by the system. The CoolGlide Xeo further allows practitioners the capability to treat pigmented lesions. The new Xeo SA offers a platform for next-generation pulsed light treatment, with an upgrade path to the CoolGlide Xeo.

 

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning Cutera’s financial results for the second quarter of 2004, as well as its expectations regarding financial results for the third quarter of 2004 and for the 2004 fiscal year, are forward-looking statements within the meaning of the Safe Harbor. Forward-Looking statements are based on management’s current, preliminary expectations and are subject to risks and uncertainties, which may cause Cutera’s actual results to differ materially from the statements contained herein. Cutera’s second quarter financial results, as discussed in this release are preliminary and unaudited, and subject to adjustment. Estimates of third quarter and year-end financial results are subject to a number of assumptions regarding the future operation of our business. Further information on potential risk factors that could affect Cutera’s business and its financial results are detailed in its 10-Q as filed with the Securities and Exchange Commission on May 12, 2004. Undue reliance should not be placed on forward–looking statements, especially guidance on future financial performance, which speaks only as of the date such statements are made. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.

 

— Financial Tables Follow —

 

###


CUTERA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

    

June 30,

2004


    December 31,
2003


 

Assets

                

Current assets:

                

Cash and cash equivalents

   $ 52,652     $ 10,290  

Restricted cash

     250       250  

Short-term investments

     6,090       —    

Accounts receivable, net

     6,543       7,597  

Inventory

     2,935       2,239  

Current portion of deferred tax asset

     2,107       1,699  

Other current assets

     993       879  
    


 


Total current assets

     71,570       22,954  

Property and equipment, net

     976       734  

Intangibles, net

     426       453  

Deferred tax asset, net of current portion

     46       57  
    


 


Total assets

   $ 73,018     $ 24,198  
    


 


Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity

                

Liabilities:

                

Accounts payable

   $ 2,387     $ 1,915  

Accrued liabilities

     5,317       5,709  

Deferred revenue

     1,046       1,125  
    


 


Total current liabilities

     8,750       8,749  

Deferred rent

     424       —    

Deferred revenue, net of current portion

     592       202  
    


 


Total liabilities

     9,766       8,951  
    


 


Redeemable convertible preferred stock

     —         7,372  
    


 


Stockholders’ equity:

                

Common stock

     11       2  

Additional paid-in capital

     61,253       7,579  

Deferred stock-based compensation

     (3,002 )     (3,888 )

Retained earnings

     4,994       4,182  

Other comprehensive loss

     (4 )     —    
    


 


Total stockholders’ equity

     63,252       7,875  
    


 


Total liabilities and stockholders’ equity

   $ 73,018     $ 24,198  
    


 



CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

    

Three Months Ended

June 30,


   

Six Months Ended

June 30,


 
     2004

    2003

    2004

    2003

 

Net revenue

   $ 12,265     $ 9,018     $ 23,845     $ 15,614  

Cost of revenue(1)

     3,400       2,760       7,049       4,993  
    


 


 


 


Gross profit

     8,865       6,258       16,796       10,621  
    


 


 


 


Operating expenses:

                                

Sales and marketing

     4,623       3,049       8,901       5,537  

Research and development

     1,047       683       2,006       1,435  

General and administrative

     1,909       1,179       3,978       2,261  

Amortization of deferred stock compensation (1)

     316       196       637       373  
    


 


 


 


Total operating expenses

     7,895       5,107       15,522       9,606  
    


 


 


 


Income from operations

     970       1,151       1,274       1,015  

Interest and other income (expense), net

     (2 )     12       57       30  
    


 


 


 


Income before income taxes

     968       1,163       1,331       1,045  

Provision for income taxes

     (377 )     (468 )     (519 )     (421 )
    


 


 


 


Net income

   $ 591     $ 695     $ 812     $ 624  
    


 


 


 


Net income available to common stockholders (2)

   $ 576     $ 213     $ 648     $ 192  
    


 


 


 


Net income per share:

                                

Basic (2)

   $ 0.05     $ 0.10     $ 0.11     $ 0.09  
    


 


 


 


Diluted

   $ 0.05     $ 0.08     $ 0.07     $ 0.07  
    


 


 


 


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

                                

Basic (2)

     10,549       2,071       5,997       2,036  
    


 


 


 


Diluted

     12,960       8,799       10,921       8,711  
    


 


 


 




(1) Amortization of deferred stock compensation related to:

 

Cost of revenue

   $ 39    $ 46    $ 90    $ 89
    

  

  

  

Operating expenses:

                           

Sales and marketing

     64      45      147      73

Research and development

     105      73      204      145

General and administrative

     147      78      286      155
    

  

  

  

       316      196      637      373
    

  

  

  

Total deferred stock compensation expense

   $ 355    $ 242    $ 727    $ 462
    

  

  

  

(2) In April 2004, the Emerging Issues Task Force issued Statement No. 03-06 “Participating Securities and the Two Class Method Under FASB Statement No. 128, Earnings Per Share” (“EITF 03-06”). EITF 03-06 addresses a number of questions regarding the computation of earnings per share by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company when, and if, it declares dividends on its common stock. EITF 03-06 is effective for fiscal periods beginning after March 31, 2004 and requires retroactive adjustment of prior period earnings per share to ensure comparability. The Company adopted EITF 03-06 during the period ended June 30, 2004 and has retroactively adjusted reported basic earnings per share for the three and six month periods ended June 30, 2003. There was no effect on diluted earnings per share.


CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

    

Six Months Ended

June 30,


 
     2004

    2003

 

Cash flows from operating activities:

                

Net income

   $ 812     $ 624  

Adjustments to reconcile net income to net cash provided by operating activities:

                

Depreciation and amortization

     246       194  

Allowance for doubtful accounts

     102       —    

Stock based compensation

     727       462  

Reserve for excess and obsolete inventory

     95       —    

Change in deferred tax asset

     (397 )     —    

Tax benefit related to employee stock options

     88       —    

Change in other comprehensive income

     (4 )     —    

Loss on disposal of assets

     104       29  

Changes in assets and liabilities:

                

Accounts receivable

     952       (1,773 )

Inventory

     (791 )     (220 )

Other current assets

     (114 )     (51 )

Accounts payable

     472       433  

Accrued liabilities

     (545 )     280  

Deferred rent

     424       —    

Deferred revenue

     311       402  
    


 


Net cash provided by operating activities

     2,482       380  
    


 


Cash flows used in investing activities:

                

Acquisition of property and equipment

     (565 )     (246 )

Purchase of short-term investments

     (6,090 )     —    

Change in restricted cash

     —         (60 )
    


 


Net cash used in investing activities

     (6,655 )     (306 )
    


 


Cash flows from financing activities:

                

Proceeds from exercise of stock options and employee stock purchase plan

     199       76  

Proceeds from issuance of common stock, net

     46,336       —    
    


 


Net cash provided by financing activities

     46,535       76  
    


 


Net increase in cash and cash equivalents

     42,362       150  

Cash and cash equivalents at beginning of period

     10,290       8,276  
    


 


Cash and cash equivalents at end of period

   $ 52,652     $ 8,426  
    


 


Supplemental disclosure of cash flow information:

                

Conversion of preferred to common stock

   $ 7,372     $ —    

Deferred stock-based compensation

   $ 159     $ —    

Cash paid for taxes

   $ 1,123     $ 213