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
May 6, 2008
Date of Report (date of earliest event reported)
Cutera, Inc.
(Exact name of Registrant as specified in its charter)
| Delaware | 000-50644 | 77-0492262 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer Identification Number) |
3240 Bayshore Blvd.
Brisbane, California 94005
(Address of principal executive offices)
(415) 657-5500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On May 6, 2008, we are issuing a press release and holding a conference call regarding our financial results for the first quarter ended March 31, 2008. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or 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.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 | Press Release of Cutera, Inc. dated as of May 6, 2008. |
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: May 6, 2008 | /s/ KEVIN P. CONNORS | |||||
| Kevin P. Connors | ||||||
| President and Chief Executive Officer | ||||||
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
Cutera, Inc.
Ron Santilli
Chief Financial Officer
415-657-5500
Investor Relations
John Mills
Integrated Corporate Relations, Inc.
310-954-1100
john.mills@icrinc.com
Cutera® Reports First Quarter 2008 Results
BRISBANE, Calif., May 6, 2008 — Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the first quarter ended March 31, 2008.
First quarter 2008 revenue was $21.6 million, compared to $23.3 million in the same period last year. Net loss for the first quarter of 2008 was $542,000, or $0.04 per diluted share, compared to net income of $1.8 million, or $0.12 per diluted share, in the first quarter of 2007.
“We are pleased with the continuing improvement in our international revenue, which grew 25% when comparing the first quarter of 2008 to the first quarter of 2007, and with the overall increase in Upgrade, Service, and Titan refill revenue. However, continued low performance levels from our North American business, caused in part by a slower domestic industry growth rate, resulted in a decline in US revenue for the quarter,” said Kevin Connors, President and Chief Executive Officer.
“U.S. revenue declined 22% in the first quarter of 2008 compared to the first quarter of 2007. We believe we have a seasoned sales management team and a stable workforce, however, it is taking longer than expected to achieve our targeted performance levels. While we believe consumer demand for elective procedures remains healthy, this soft economic market is causing physicians to delay their decisions to make significant capital equipment purchases. We are closely monitoring our performance in this challenging market and will continue our focus on improving our results.”
“International revenue increased 25% when comparing the first quarter of 2008 to the first quarter of 2007. We are experiencing strength in many of our overseas markets, particularly in Japan, Australia, and many emerging global markets. We believe the significant investments we have made during the past few years have us positioned for continued growth in the international markets.”
“We are excited about the increasing number of positive clinical results and patient reports with our Pearl product, and believe we will experience increased market penetration. Additionally, the responses surrounding the recent preview of our fractional ablative technology have been very favorable. This new device, designed to improve wrinkles by targeting the deep dermal layer, would enable us to compete in the expanding fractional ablative market and is expected to contribute to our revenue in the second half of 2008. Historically, new clinical applications have been a catalyst for significant revenue growth in the quarters following their introduction.”
Mr. Connors concluded, “Cutera remains focused on capturing a greater position in what we see is a growing worldwide market for aesthetic laser and light-based equipment. We remain confident in the long term prospects of this market, and are looking forward to our planned new product launch later this year.”
Conference Call:
The conference call to discuss these results is scheduled to begin at 2:00 p.m. PDT (5:00 p.m. EDT) on May 6, 2008. The call will be broadcast live over the Internet hosted at the Investor Relations section of the Company’s website at www.cutera.com and will be archived online within one hour of its completion. In addition, you may call 1-800-762-8973 to listen to the live broadcast. Participating in the call will be Kevin Connors, President and Chief Executive Officer, and Ron Santilli, Chief Financial Officer.
A telephonic playback will be available from 5:00 p.m. PDT (8:00 p.m. EDT) on May 6, 2008, through 8:59 p.m. PDT (11:59 p.m. EDT) on May 20, 2008 by calling 1-800-406-7325. To access this playback, please enter pass code 3868069.
About Cutera, Inc.
Brisbane, California-based Cutera is a leading provider of laser and other light-based aesthetic systems for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that enable physicians and other qualified practitioners to offer safe and effective aesthetic treatments to their patients. For more information, call 1-888-4CUTERA or visit www.cutera.com
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 ability to grow its business, expectations regarding new products and applications, plans to improve the performance of its worldwide sales and distribution network and outlook regarding long-term prospects 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. Potential risks and uncertainties that could affect Cutera’s business and cause its financial results to differ materially from those contained in the forward-looking statements include its ability to improve sales productivity and performance worldwide; its ability to successfully develop and acquire new products and applications and market them to both its installed based and new customers; unforeseen events and circumstances relating to its operations; government regulatory actions; general economic conditions; and those other factors described in the section entitled, “Risk Factors,” in its most recent Form 10-Q as filed with the Securities and Exchange Commission on May 6, 2008. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they 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. Cutera’s first quarter March 31, 2008 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| March 31, 2008 |
December 31, 2007 | ||||||
| Assets |
|||||||
| Current assets: |
|||||||
| Cash and cash equivalents |
$ | 38,110 | $ | 11,054 | |||
| Marketable investments |
54,877 | 88,510 | |||||
| Accounts receivable, net |
8,273 | 10,692 | |||||
| Inventories |
9,384 | 7,533 | |||||
| Deferred tax asset |
7,905 | 8,058 | |||||
| Other current assets |
2,395 | 1,955 | |||||
| Total current assets |
120,944 | 127,802 | |||||
| Property and equipment, net |
1,374 | 1,361 | |||||
| Marketable Investments, long term portion |
11,503 | 7,429 | |||||
| Intangibles, net |
1,177 | 1,227 | |||||
| Deferred tax asset, net of current portion |
1,002 | 834 | |||||
| Total assets |
$ | 136,000 | $ | 138,653 | |||
| Liabilities and Stockholders' Equity |
|||||||
| Current liabilities: |
|||||||
| Accounts payable |
$ | 2,418 | $ | 2,350 | |||
| Accrued liabilities |
10,504 | 13,587 | |||||
| Deferred revenue |
5,601 | 4,971 | |||||
| Total current liabilities |
18,523 | 20,908 | |||||
| Deferred rent |
1,673 | 1,639 | |||||
| Deferred revenue, net of current portion |
5,751 | 5,593 | |||||
| Income tax liability |
1,519 | 1,160 | |||||
| Total liabilities |
27,466 | 29,300 | |||||
| Stockholders’ equity: |
|||||||
| Common stock |
13 | 13 | |||||
| Additional paid-in capital |
76,236 | 74,871 | |||||
| Retained earnings |
33,737 | 34,279 | |||||
| Accumulated other comprehensive income (loss) |
(1,452 | ) | 190 | ||||
| Total stockholders’ equity |
108,534 | 109,353 | |||||
| Total liabilities and stockholders’ equity |
$ | 136,000 | $ | 138,653 | |||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, | |||||||
| 2008 | 2007 | ||||||
| Net revenue |
$ | 21,618 | $ | 23,257 | |||
| Cost of revenue |
8,219 | 7,781 | |||||
| Gross profit |
13,399 | 15,476 | |||||
| Operating expenses: |
|||||||
| Sales and marketing |
10,349 | 9,063 | |||||
| Research and development |
1,785 | 1,747 | |||||
| General and administrative |
2,941 | 3,018 | |||||
| Total operating expenses |
15,075 | 13,828 | |||||
| Income (loss) from operations |
(1,676 | ) | 1,648 | ||||
| Interest and other income, net |
901 | 1,002 | |||||
| Income (loss) before income taxes |
(775 | ) | 2,650 | ||||
| Provision (benefit) for income taxes |
(233 | ) | 895 | ||||
| Net income (loss) |
$ | (542 | ) | $ | 1,755 | ||
| Net income (loss) per share: |
|||||||
| Basic |
$ | (0.04 | ) | $ | 0.13 | ||
| Diluted |
$ | (0.04 | ) | $ | 0.12 | ||
| Weighted-average number of shares used in per share calculations: |
|||||||
| Basic |
12,740 | 13,216 | |||||
| Diluted |
12,740 | 14,629 | |||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2008 | 2007 | |||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | (542 | ) | $ | 1,755 | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
223 | 226 | ||||||
| Change in deferred tax asset/liability |
(15 | ) | 60 | |||||
| Stock-based compensation |
1,330 | 1,342 | ||||||
| Tax benefit from employee stock options |
— | 710 | ||||||
| Excess tax benefit related to stock-based compensation expense |
— | (288 | ) | |||||
| Other |
76 | 80 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
2,343 | 974 | ||||||
| Inventories |
(1,851 | ) | (1,314 | ) | ||||
| Other current assets |
(240 | ) | (786 | ) | ||||
| Accounts payable |
68 | (319 | ) | |||||
| Accrued liabilities |
(3,083 | ) | (1,605 | ) | ||||
| Deferred rent |
34 | 54 | ||||||
| Deferred revenue |
788 | 200 | ||||||
| Income tax liability |
359 | (26 | ) | |||||
| Net cash provided by (used in) operating activities |
(510 | ) | 1,063 | |||||
| Cash flows from investing activities: |
||||||||
| Acquisition of property and equipment |
(186 | ) | (341 | ) | ||||
| Acquisition of intangibles |
— | (20 | ) | |||||
| Proceeds from sales of marketable investments |
37,360 | 15,149 | ||||||
| Proceeds from maturities of marketable investments |
2,562 | 7,630 | ||||||
| Purchase of marketable investments |
(12,205 | ) | (20,844 | ) | ||||
| Net cash provided by investing activities |
27,531 | 1,574 | ||||||
| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of stock options and employee stock purchase plan |
35 | 2,151 | ||||||
| Excess tax benefit related to stock-based compensation expense |
— | 288 | ||||||
| Net cash provided by financing activities |
35 | 2,439 | ||||||
| Net increase in cash and cash equivalents |
27,056 | 5,076 | ||||||
| Cash and cash equivalents at beginning of period |
11,054 | 11,800 | ||||||
| Cash and cash equivalents at end of period |
$ | 38,110 | $ | 16,876 | ||||
| Non-cash disclosure of cash flow information: |
||||||||
| Change in deferred stock-based compensation, net of terminations |
$ | — | $ | (8 | ) | |||
CUTERA, INC.
CONSOLIDATED REVENUE HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
| Three Months Ended December 31, | |||||||||
| 2008 | 2007 | Change | |||||||
| Revenue By Geography: |
|||||||||
| United States |
$ | 12,384 | $ | 15,845 | -22 | % | |||
| International |
9,234 | 7,412 | +25 | % | |||||
| $ | 21,618 | $ | 23,257 | -7 | % | ||||
| Revenue By Product Category: |
|||||||||
| Products |
$ | 15,327 | $ | 18,316 | -16 | % | |||
| Product upgrades |
2,232 | 1,922 | +16 | % | |||||
| Service |
2,704 | 1,917 | +41 | % | |||||
| Titan refills |
1,355 | 1,102 | +23 | % | |||||
| $ | 21,618 | $ | 23,257 | -7 | % | ||||