BRISBANE, Calif., Feb. 7 /PRNewswire-FirstCall/ -- Cutera, Inc. , a leading provider of laser and other light-based aesthetic systems, today reported financial results for the fourth quarter and year ended December 31, 2004.
Fourth quarter revenue was $16.1 million, representing a 29% increase over the $12.4 million recorded in the fourth quarter of 2003. Gross margin during the fourth quarter was 74%, compared to 70% in the same period in 2003. Net income for the fourth quarter was $2.1 million, or $0.16 per diluted share, compared to a net income of $1.4 million reported in the fourth quarter of 2003. Included in the fourth quarter 2004 results is $352,000 of pre-tax, non-cash, stock-based compensation charges, compared to charges of $425,000 in the fourth quarter of 2003. Cash generated by operations was $3.8 million for the fourth quarter of 2004.
2004 revenue reached $52.6 million, representing a 35% increase over the $39.1 million reported for 2003. Gross margin for 2004 was 72% compared to 68% in 2003. Net income for 2004 was $3.8 million, or $0.31 per diluted share, compared to a net income of $3.1 million reported for 2003. Included in the 2004 results is $1,435,000 of pre-tax, non-cash, stock-based compensation charges, compared to charges of $1,424,000 for 2003. Cash generated by operations was $9.1 million in 2004. As of December 31 2004, the Company had cash, cash equivalents and investments of $66.3 million.
“We are very excited about our results for the fourth quarter and for the full-year 2004,” said Kevin Connors, President and Chief Executive Officer. “Our success is attributed to our strong business model and the positive reception our products have been receiving in the marketplace. Our innovative technology platforms allow our customers to add new applications to their Cutera products in the form of upgrades, as we have successfully demonstrated for many years. We have been able to expand our business by significantly investing in research and development and by leveraging our global sales and marketing organization. By successfully executing the strategy we articulated when the Company went public in March 2004, we have been able to experience strong revenue and earnings growth.”
Mr. Connors continued, “In 2005, we intend to continue to expand our domestic and international sales channels and to introduce more innovative products and aesthetic applications that would increase our breadth of product offerings with the goal of positioning Cutera as the leader in laser and other light-based aesthetic systems. In the first quarter of 2005, we plan on completing the roll-out of our latest product, Titan, at the American Academy of Dermatology’s Annual Meeting. In addition, we plan on introducing our Solera platform, which is a compact, table top family of products that will allow us to expand our addressable markets.”
For the first quarter of 2005, management believes revenue will be approximately $14.5 million with earnings per diluted share of approximately $0.07. Management believes full year 2005 revenue will be approximately $66.0 million, with corresponding earnings per diluted share of approximately $0.40.
Conference Call
Cutera, Inc. will host a conference call on February 7th, 2005, at 2:00 p.m. Pacific (5:00 p.m. Eastern) to discuss its fourth quarter and year-end 2004 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 800-811-8824. 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 4:00 p.m. PST on February 7, 2005 through 11:59 p.m. PST on February 21, 2005 by calling 888-203-1112. To access this playback, please enter pass code 8512246.
About Cutera, Inc.
Brisbane, Calif.-based Cutera is a leading provider of laser and other light-based aesthetic systems to the professional aesthetic market. Since 1998, Cutera has developed innovative, easy-to-use products that enable dermatologists, plastic surgeons, gynecologists, primary care physicians and other qualified practitioners to offer safe, effective and non-invasive aesthetic treatments to their patients. For more information, call 1-888-4CUTERA or visit http://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 financial results for the fourth quarter of 2004, as well as its expectations regarding financial results for the first quarter of and for the 2005 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 fourth quarter financial results, as discussed in this release, are preliminary and unaudited, and subject to adjustment. Estimates of 2005 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 November 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 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, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) December 31, 2004 2003 Assets Current assets: Cash and cash equivalents $58,239 $10,290 Restricted cash -- 250 Short-term investments 6,031 -- Accounts receivable, net 6,643 7,597 Inventory 3,004 2,239 Current portion of deferred tax asset 2,284 1,699 Other current assets 878 879 Total current assets 77,079 22,954 Property and equipment, net 1,071 734 Intangibles, net 399 453 Deferred tax asset, net of current portion -- 57 Long-term investments 2,000 -- Total assets $80,549 $24,198 Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity Liabilities: Accounts payable $1,195 $1,915 Accrued liabilities 8,194 5,709 Deferred revenue 1,171 1,125 Total current liabilities 10,560 8,749 Deferred rent 648 -- Deferred revenue, net of current portion 833 202 Deferred tax liability 52 -- Total liabilities 12,093 8,951 Redeemable convertible preferred stock -- 7,372 Stockholders’ equity: Common stock 11 2 Additional paid-in capital 62,738 7,579 Deferred stock-based compensation (2,226) (3,888) Retained earnings 7,942 4,182 Other comprehensive loss (9) -- Total stockholders’ equity 68,456 7,875 Total liabilities and stockholders’ equity $80,549 $24,198 CUTERA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Years Ended December 31, December 31, 2004 2003 2004 2003 Net revenue $16,094 $12,449 $52,641 $39,088 Cost of revenue(1) 4,235 3,711 14,689 12,317 Gross profit 11,859 8,738 37,952 26,771 Operating expenses: Sales and marketing 5,473 4,300 19,052 13,410 Research and development 1,150 922 4,136 3,097 General and administrative 2,195 846 8,344 3,916 Amortization of deferred stock compensation 313 374 1,267 1,184 Total operating expenses 9,131 6,442 32,799 21,607 Income from operations 2,728 2,296 5,153 5,164 Interest and other income, net 378 2 632 30 Income before income taxes 3,106 2,298 5,785 5,194 Provision for income taxes (1,034) (913) (2,025) (2,088) Net income $2,072 $1,385 $3,760 $3,106 Net income available to common shareholders used in basic earnings per share $2,072 $441 $3,284 $963 Net income per share Basic $0.19 $0.20 $0.38 $0.46 Diluted $0.16 $0.15 $0.31 $0.35 Weighted-average number of shares used in per share calculations: Basic 10,867 2,204 8,573 2,106 Diluted 13,167 9,025 12,222 8,835 (1) Amortization of deferred stock compensation related to: Cost of revenue $39 $51 $168 $240 Operating expenses: Sales and marketing 63 149 274 382 Research and development 104 94 413 351 General and administrative 146 131 580 451 313 374 1,267 1,184 Total deferred stock compensation expense $352 $425 $1,435 $1,424 CUTERA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Years Ended December 31, 2004 2003 Cash flows from operating activities: Net income $3,760 $3,106 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 524 443 Allowance for doubtful accounts 102 333 Reserve for excess and obsolete inventory 95 139 Change in deferred tax asset (476) (587) Stock based compensation 1,435 1,424 Tax benefit related to employee stock options 674 131 Loss on disposal of assets 47 35 Changes in assets and liabilities: Accounts receivable 852 (4,752) Inventory (860) (1,012) Other current assets 1 (578) Accounts payable (720) 990 Accrued liabilities 2,368 1,914 Deferred rent 648 -- Deferred revenue 677 999 Net cash provided by operating activities 9,127 2,585 Cash flows used in investing activities: Acquisition of property and equipment (854) (589) Purchase of short-term investments (6,040) -- Purchase of long-term investments (2,000) -- Change in restricted cash 250 (190) Net cash used in investing activities (8,644) (779) Cash flows from financing activities: Proceeds from exercise of stock options and employee stock purchase plan 1,150 108 Proceeds from exercise of warrant -- 100 Proceeds from issuance of common stock, net 46,316 -- 47,466 208 Net increase in cash and cash equivalents 47,949 2,014 Cash and cash equivalents at beginning of year 10,290 8,276 Cash and cash equivalents at end of year $58,239 $10,290 Supplemental disclosure of cash flow information: Conversion of preferred to common stock $7,372 $-- Deferred stock-based compensation, net of terminations $(227) $2,591 Cash paid for taxes $1,818 $2,295
Cutera, Inc.
CONTACT: Ron Santilli, Chief Financial Officer of Cutera, Inc.,+1-415-657-5500; or Investor Relations, John Mills, jmills@icrinc.com, orTom Ryan, both of Integrated Corporate Relations, Inc., +1-310-395-2215, forCutera, Inc.
Web site: http://www.cutera.com/
