UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 4, 2014
Date of Report (date of earliest event reported)
Cutera, Inc.
(Exact name of Registrant as specified in its charter)
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Delaware |
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000-50644 |
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77-0492262 |
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(State or other jurisdiction of incorporation or organization) |
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(Commission File Number) |
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(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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02. |
Results of Operations and Financial Condition. |
On August 4, 2014, we are issuing a press release and holding a conference call regarding our financial results for the first quarter ended June 30, 2014. 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.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Cutera, Inc. dated as of August 4, 2014. |
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.
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CUTERA, INC. | ||
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Date: August 4, 2014 |
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/s/ KEVIN P. CONNORS | |
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Kevin P. Connors | ||
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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.
310-954-1105
john.mills@icrinc.com
Cutera Reports Second Quarter 2014 Results
BRISBANE, California, August 4, 2014 ─ Cutera, Inc. (NASDAQ: CUTR), 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, 2014.
Key highlights for the second quarter of 2014 were as follows:
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Commenced initial shipments of Excel HR, our dual wave length, premium laser for hair removal. |
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Net loss was $2.7 million, or $0.19 per diluted share. Non-cash expenses for stock-based compensation, depreciation, and intangible amortization totaled $1.0 million. This loss is largely attributed to ramp-up costs related to the expanded sales force and other investments in our North American commercial operations. |
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Expanded our International leadership. |
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Cash and marketable securities position: $81.6 million. |
Kevin Connors, President and CEO of Cutera, stated, “Our U.S. revenue increased by 6%, led primarily by the expansion of our sales team and the initial commercial shipments of our recently launched Excel HR product. As a result of the sales force expansion, as well as other initiatives to improve our commercial performance, we anticipate continued improvement in North America in the second half of 2014.
“Our International revenue declined by 19%, which was primarily a result of softness in Japan and other Asia Pacific distributor businesses. We continue to believe that greater focus, coupled with strategic investments in our international business are an important component of our global expansion plan. To better capture improved performance in these markets, I am pleased with the recent addition of Miguel Pardos to lead our international business operations. Miguel is an industry veteran with a proven track record in developing and expanding international sales. He has a strong technical and clinical knowledge of aesthetic products and is well connected in our industry. I am thrilled Miguel has joined our team and believe that he, along with other strategic investments in our distribution infrastructure, will be instrumental in increasing our international market share commencing in the second half of 2014.
“Product development efforts remain on schedule. Initial shipments of our Excel HR product commenced at quarter-end. Hair removal continues to be one the largest market segments in the energy-based aesthetic industry and we have expanded our portfolio of premium products for dermatologists and other core physicians. We are pleased with the early customer response to this innovative technology and are actively expanding our production efforts to meet customer demand. Turning to our picosecond technology development efforts, we expect shipments of our Enlighten product for the removal of benign pigment lesions and tattoos to commence in the fourth quarter. Enlighten has received CE Mark approval and is currently pending 510(k) clearance by the FDA. We have submitted two 510(k) applications to the FDA and both included data from clinical studies.
“We believe the market is healthy for aesthetic light and energy based systems and that our broad range of products, recently expanded sales force, and the expected market penetration of our new products, strategically positions us to capture larger share in the future.”
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 August 4, 2014. Participating in the call will be Kevin Connors, President and Chief Executive Officer, and Ron Santilli, Executive Vice President and Chief Financial Officer. The call will be broadcast live over the Internet hosted at the Investor Relations section of Cutera's website at www.cutera.com, and will be archived online within one hour of its completion through 8:59 p.m. PDT (11:59 p.m. EDT) on August 28, 2014. In addition, you may call 877-705-6003 to listen to the live broadcast.
About Cutera, Inc.
Brisbane, California-based Cutera is a leading provider of laser and other energy-based aesthetic systems for practitioners worldwide. Since 1998, Cutera has 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 increase revenue, improve cash generation from operations, improve gross and net operating margins, develop and commercialize existing and new products and applications, ability to grow the Company’s market share, realize benefits from additional investment and the expansion of its sales force, the regulatory timeline and expected launch date of planned new products, and statements regarding long-term prospects and opportunities in the laser and other energy-based equipment aesthetic market 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 those related to the Company’s efforts to improve sales productivity, hire and retain qualified sales representatives, improve revenue growth and profitability through leveraging operating expenses; the Company’s ability to successfully develop and launch new products and applications and market them to both its installed base and new customers; the length of the sales cycle process; unforeseen events and circumstances relating to the Company’s operations; government regulatory actions; 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 today- August 4, 2014. 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 financial performance for the second quarter ended June 30, 2014, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
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June 30, |
March 31, |
June 30, |
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2014 |
2014 |
2013 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 10,902 | $ | 10,743 | $ | 11,885 | ||||||
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Marketable investments |
70,696 | 73,079 | 77,741 | |||||||||
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Accounts receivable, net |
7,596 | 6,588 | 7,542 | |||||||||
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Inventories |
10,030 | 9,640 | 10,518 | |||||||||
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Deferred tax asset |
32 | 31 | 39 | |||||||||
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Other current assets and prepaid expenses |
1,772 | 2,404 | 1,429 | |||||||||
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Total current assets |
101,028 | 102,485 | 109,154 | |||||||||
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Property and equipment, net |
1,329 | 1,358 | 1,338 | |||||||||
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Deferred tax asset, net of current portion |
342 | 337 | 504 | |||||||||
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Intangibles, net |
1,632 | 1,825 | 2,218 | |||||||||
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Goodwill |
1,339 | 1,339 | 1,339 | |||||||||
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Other long-term assets |
15 | 21 | 348 | |||||||||
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Total assets |
$ | 105,685 | $ | 107,365 | $ | 114,901 | ||||||
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
$ | 2,028 | $ | 2,483 | $ | 2,430 | ||||||
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Accrued liabilities |
7,473 | 7,805 | 7,668 | |||||||||
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Deferred revenue |
8,561 | 8,058 | 6,993 | |||||||||
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Total current liabilities |
18,062 | 18,346 | 17,091 | |||||||||
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Deferred revenue, net of current portion |
4,578 | 4,324 | 2,844 | |||||||||
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Income tax liability |
144 | 118 | 325 | |||||||||
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Other long-term liabilities |
1,141 | 1,200 | 1,386 | |||||||||
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Total liabilities |
23,925 | 23,988 | 21,646 | |||||||||
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Stockholders’ equity: |
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Common stock |
14 | 14 | 15 | |||||||||
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Additional paid-in capital |
102,649 | 101,541 | 105,954 | |||||||||
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Accumulated deficit |
(20,971 | ) | (18,230 | ) | (12,674 | ) | ||||||
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Accumulated other comprehensive income (loss) |
68 | 52 | (40 | ) | ||||||||
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Total stockholders' equity |
81,760 | 83,377 | 93,255 | |||||||||
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Total liabilities and stockholders' equity |
$ | 105,685 | $ | 107,365 | $ | 114,901 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
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Three Months Ended |
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June 30, |
March 31, |
June 30, |
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2014 |
2014 |
2013 |
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Net revenue |
$ | 17,724 | $ | 16,189 | $ | 19,560 | ||||||
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Cost of revenue |
7,848 | 7,303 | 8,442 | |||||||||
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Gross profit |
9,876 | 8,886 | 11,118 | |||||||||
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Operating expenses: |
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Sales and marketing |
7,754 | 7,331 | 7,170 | |||||||||
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Research and development |
2,622 | 2,644 | 2,217 | |||||||||
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General and administrative |
2,335 | 2,564 | 2,354 | |||||||||
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Total operating expenses |
12,711 | 12,539 | 11,741 | |||||||||
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Loss from operations |
(2,835 | ) | (3,653 | ) | (623 | ) | ||||||
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Interest and other income, net |
138 | 80 | 75 | |||||||||
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Loss before income taxes |
(2,697 | ) | (3,573 | ) | (548 | ) | ||||||
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Provision for income taxes |
44 | 37 | 90 | |||||||||
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Net loss |
$ | (2,741 | ) | $ | (3,610 | ) | $ | (638 | ) | |||
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Net loss per share: |
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Basic |
$ | (0.19 | ) | $ | (0.26 | ) | $ | (0.04 | ) | |||
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Diluted |
$ | (0.19 | ) | $ | (0.26 | ) | $ | (0.04 | ) | |||
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Weighted-average number of shares used in per share calculations: |
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Basic |
14,231 | 14,021 | 14,723 | |||||||||
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Diluted |
14,231 | 14,021 | 14,723 | |||||||||
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Three Months Ended |
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June 30, |
March 31, |
June 30, |
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2014 |
2014 |
2013 |
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Cash flows from operating activities: |
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Net loss |
$ | (2,741 | ) | $ | (3,610 | ) | $ | (638 | ) | |||
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Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
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Stock-based compensation |
693 | 625 | 802 | |||||||||
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Depreciation and amortization |
329 | 331 | 326 | |||||||||
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Other |
(4 | ) | 97 | 16 | ||||||||
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Changes in assets and liabilities: |
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Accounts receivable |
(1,012 | ) | 3,091 | (728 | ) | |||||||
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Inventories |
(390 | ) | (634 | ) | 573 | |||||||
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Other current assets and prepaid expenses |
693 | (792 | ) | 182 | ||||||||
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Other long-term assets |
6 | 303 | 14 | |||||||||
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Accounts payable |
(455 | ) | 663 | 269 | ||||||||
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Accrued liabilities |
(351 | ) | (1,534 | ) | 552 | |||||||
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Other long-term liabilities |
(71 | ) | (70 | ) | (56 | ) | ||||||
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Deferred revenue |
757 | 548 | 533 | |||||||||
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Income tax liability |
26 | 10 | 5 | |||||||||
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Net cash provided by (used in) operating activities |
(2,520 | ) | (972 | ) | 1,850 | |||||||
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Cash flows from investing activities: |
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Acquisition of property, equipment and software |
(44 | ) | (239 | ) | (132 | ) | ||||||
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Proceeds from sales of marketable investments |
1,481 | 3,200 | 4,475 | |||||||||
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Proceeds from maturities of marketable investments |
11,925 | 7,240 | 5,150 | |||||||||
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Purchase of marketable investments |
(11,059 | ) | (16,791 | ) | (16,770 | ) | ||||||
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Net cash provided by (used in) investing activities |
2,303 | (6,590 | ) | (7,277 | ) | |||||||
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Cash flows from financing activities: |
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Proceeds from exercise of stock options and employee stock purchase plan |
415 | 2,096 | 64 | |||||||||
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Payments on capital lease obligations |
(39 | ) | (33 | ) | (24 | ) | ||||||
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Net cash provided by financing activities |
376 | 2,063 | 40 | |||||||||
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Net increase (decrease) in cash and cash equivalents |
159 | (5,499 | ) | (5,387 | ) | |||||||
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Cash and cash equivalents at beginning of period |
10,743 | 16,242 | 17,272 | |||||||||
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Cash and cash equivalents at end of period |
$ | 10,902 | $ | 10,743 | $ | 11,885 | ||||||
CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
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Three Months Ended |
% Change |
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Q2 |
Q1 |
Q2 |
Q2 '14 Vs. |
Q2 '14 Vs. |
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2014 |
2014 |
2013 |
Q1 '14 |
Q2 '13 |
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Revenue By Geography: |
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United States |
$ | 8,109 | $ | 6,017 | $ | 7,660 |
+35 |
% |
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+6 |
% | ||||||||||
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International |
9,615 | 10,172 | 11,900 | -5 | % | -19 | % | ||||||||||||||
| $ | 17,724 | $ | 16,189 | $ | 19,560 |
+9 |
% | -9 | % | ||||||||||||
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International as a percentage of total revenue |
54 | % | 63 | % | 61 | % | |||||||||||||||
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Revenue By Product Category: |
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Products and upgrades |
$ | 11,366 | $ | 9,484 | $ | 13,034 |
+20 |
% | -13 | % | |||||||||||
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Service |
4,553 | 4,437 | 4,507 |
+3 |
% |
+1 |
% | ||||||||||||||
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Titan and truSculpt hand piece refills |
1,005 | 1,041 | 1,106 | -3 | % | -9 | % | ||||||||||||||
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Dermal fillers and cosmeceuticals |
800 | 1,227 | 913 | -35 | % | -12 | % | ||||||||||||||
| $ | 17,724 | $ | 16,189 | $ | 19,560 |
+9 |
% | -9 | % | ||||||||||||
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Three Months Ended |
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Q2 |
Q1 |
Q2 |
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2014 |
2014 |
2013 |
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Pre-tax Stock-Based Compensation Expense: |
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Cost of revenue |
$ | 139 | $ | 132 | $ | 166 | ||||||
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Sales and marketing |
148 | 71 | 198 | |||||||||
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Research and development |
115 | 124 | 89 | |||||||||
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General and administrative |
291 | 298 | 349 | |||||||||
| $ | 693 | $ | 625 | $ | 802 | |||||||