Revenue increased 26%, to a record $38.2 million, primarily due to 57% growth in North America Systems revenue.
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Generates Record Quarterly Revenue of $38.2 Million; Increase of 26% North America System Revenue Grows by 57% truSculpt(R) Leads North American Product Platform Revenue; Initial International Introduction in 3rd Quarter 2017 with Further Geographic Expansion Expected in 4th Quarter 2017 Achieves 13th Consecutive Quarter of Year-over-Year Double-Digit Revenue Growth BRISBANE, CA -- (Marketwired) -- Nov 07, 2017 -- Cutera, Inc. ( James Reinstein, President and Chief Executive Officer stated, "We are pleased with our third quarter financial and operational performance and the continued progress of our commercial teams. Our 26% revenue growth in the third quarter was again driven primarily by North American product sales. In addition, our International team produced systems revenue of $10 million - a single quarter record for this team. Much of our growth was fueled by recent product launches, including enlighten III and truSculpt 3D, however we continue to see growth in some of our legacy platforms such as xeo. We expect this momentum to continue throughout the fourth quarter." Key operating highlights for the third quarter of 2017, compared to the third quarter of 2016:
Product Updates Sandra Gardiner, Consultant Chief Financial Officer, commented, "Our continued quarterly success allows us to invest in new product platform opportunities, as reflected in our increased research and development investments. We also continue to purchase our stock in the open market and have now repurchased $13.8 million of stock through the nine months ended September 30, 2017. We ended the third quarter with over $50 million in cash, cash equivalents and investments. Based on our strong third quarter results, we are reiterating our guidance ranges for the full year." Full-Year 2017 Outlook
Conference Call About Cutera, Inc. Use of Non-GAAP Financial Measures Safe Harbor Statement 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 third quarter ended September 30, 2017, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, June 30, September 30,
2017 2017 2016
------------- ------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 14,784 $ 18,679 $ 11,275
Marketable investments 35,692 32,270 35,108
Restricted investments - 2,290 -
------------- ------------- -------------
Cash, cash equivalents and
investments 50,476 53,239 46,383
------------- ------------- -------------
Accounts receivable, net 19,604 18,191 11,680
Inventories 23,728 16,913 16,478
Other current assets and prepaid
expenses 2,894 2,840 2,507
------------- ------------- -------------
Total current assets 96,702 91,183 77,048
------------- ------------- -------------
Property and equipment, net 1,842 1,867 1,720
Deferred tax asset 384 381 410
Intangibles, net - - 16
Goodwill 1,339 1,339 1,339
Other long-term assets 381 381 444
------------- ------------- -------------
Total assets $ 100,648 $ 95,151 $ 80,977
============= ============= =============
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $ 5,805 $ 4,293 $ 3,283
Accrued liabilities 22,203 18,973 14,786
Deferred revenue 8,801 8,901 8,312
------------- ------------- -------------
Total current liabilities 36,809 32,167 26,381
------------- ------------- -------------
Deferred revenue, net of current
portion 1,950 1,982 1,426
Income tax liability 171 170 164
Other long-term liabilities 505 604 597
------------- ------------- -------------
Total liabilities 39,435 34,923 28,568
------------- ------------- -------------
Stockholders' equity 61,213 60,228 52,409
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 100,648 $ 95,151 $ 80,977
============= ============= =============
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2017 2016 2017 2016
----------- ----------- ----------- -----------
Net revenue $ 38,173 $ 30,281 $ 103,861 $ 80,181
Cost of revenue 15,963 12,538 45,084 33,959
----------- ----------- ----------- -----------
Gross profit 22,210 17,743 58,777 46,222
----------- ----------- ----------- -----------
Gross margin % 58% 59% 57% 58%
Operating expenses:
Sales and marketing 13,148 10,574 36,708 30,002
Research and
development 3,467 2,914 9,393 8,335
General and
administrative 3,379 2,716 10,143 9,933
Lease termination (4,000) - (4,000) -
----------- ----------- ----------- -----------
Total operating
expenses 15,994 16,204 52,244 48,270
----------- ----------- ----------- -----------
Income (loss) from
operations 6,216 1,539 6,533 (2,048)
Interest and other
income, net 197 166 746 527
----------- ----------- ----------- -----------
Income (loss) before
income taxes 6,413 1,705 7,279 (1,521)
Provision for income
taxes 225 61 166 115
----------- ----------- ----------- -----------
Net income (loss) $ 6,188 $ 1,644 $ 7,113 $ (1,636)
=========== =========== =========== ===========
Net income (loss) per
share:
Basic $ 0.44 $ 0.12 $ 0.51 $ (0.12)
=========== =========== =========== ===========
Diluted $ 0.42 $ 0.12 $ 0.48 $ (0.12)
=========== =========== =========== ===========
Weighted-average number
of shares
used in per share
calculations:
Basic and diluted 13,973 13,163 13,917 13,102
=========== =========== =========== ===========
Diluted 14,767 13,544 14,733 13,102
=========== =========== =========== ===========
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 September 30,
2017
GAAP Adjustments* Non-GAAP*
--------- ------------------------
Net revenue $ 38,173 $ - $ 38,173
Cost of revenue 15,963 (188) (a) 15,775
--------- --------- ---------
Gross profit 22,210 188 22,398
Gross margin % 58% 59%
Operating expenses:
Sales and marketing 13,148 (560) (b) 12,588
Research and development 3,467 (162) (c) 3,305
General and administrative 3,379 (345) (d) 3,034
Lease termination (4,000) 4,000 (e) -
--------- --------- ---------
Total operating expenses 15,994 2,933 18,927
--------- --------- ---------
Income from operations 6,216 (2,745) 3,471
Interest and other income, net 197 - 197
--------- --------- ---------
Income before income taxes 6,413 (2,745) 3,668
Provision for income taxes 225 (92) (f) 133
--------- --------- ---------
Net income $ 6,188 $ (2,653) $ 3,535
========= ========= =========
-
Net income per share:
Basic $ 0.44 $ (0.19) $ 0.25
========= ========= =========
Diluted $ 0.42 $ (0.18) $ 0.24
========= ========= =========
Weighted-average number of shares used
in per share calculations:
Basic: 13,973 13,973 13,973
========= ========= =========
Diluted 14,767 14,767 14,767
========= ========= =========
* Fiscal third quarter 2017 Non-GAAP results exclude the effect of the below
mentioned adjustments ($000s):
----------------------------------------------------------------------------
(a) Adjustment of $188 included non-cash expenses of $87 related to
depreciation and $101 of stock based compensation.
(b) Adjustment of $560 included a non-cash expenses of $166 related to
depreciation and $394 of stock based compensation.
(c) Adjustment of $162 included a non-cash expenses of $5 related to
depreciation and $157 of stock based compensation.
(d) Adjustment of $345 related to stock based compensation.
(e) Adjustment of $4,000 represents non-recurring lease termination income
(f) Adjustment of $92 for income tax benefit relates to the net impact of
excluding the Non-GAAP adjustments from our year-to-date tax provision.
CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September September September September
30, 30, 30, 30,
2017 2016 2017 2016
----------- ----------- ----------- -----------
Cash flows from
operating activities:
Net income (loss) $ 6,188 $ 1,644 $ 7,113 $ (1,636)
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Stock-based
compensation 997 570 3,623 2,652
Depreciation and
amortization 258 249 750 733
Other (22) 18 (67) (45)
Changes in assets and
liabilities:
Accounts receivable (1,407) (525) (3,048) (61)
Inventories (6,815) (1,776) (8,751) (4,400)
Accounts payable 1,512 531 3,207 1,324
Accrued liabilities 3,223 1,659 4,757 886
Deferred revenue (132) (866) 652 (1,187)
Other (87) 99 (631) (1,015)
----------- ----------- ----------- -----------
Net cash provided by
(used in) operating
activities 3,715 1,603 7,605 (2,749)
----------- ----------- ----------- -----------
Cash flows from
investing activities:
Acquisition of property,
equipment and software (233) (174) (443) (311)
Disposal of property and
equipment 13 11 53 17
Net change in marketable
investments (1,093) 711 4,610 2,344
----------- ----------- ----------- -----------
Net cash provided by
(used in) investing
activities (1,313) 548 4,220 2,050
----------- ----------- ----------- -----------
Cash flows from
financing activities:
Repurchases of common
stock (6,735) (2,008) (13,776) (4,873)
Proceeds from exercise
of stock options and
employee stock purchase
plan 695 3,848 4,566 6,798
Taxes paid related to
net share settlement of
equity awards (165) (45) (1,332) (601)
Payments on capital
lease obligations (92) (91) (274) (218)
----------- ----------- ----------- -----------
Net cash provided by
(used in) financing
activities (6,297) 1,704 (10,816) 1,106
----------- ----------- ----------- -----------
Net increase (decrease)
in cash and cash
equivalents (3,895) 3,855 1,009 407
Cash and cash
equivalents at
beginning of period 18,679 7,420 13,775 10,868
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period $ 14,784 $ 11,275 $ 14,784 $ 11,275
=========== =========== =========== ===========
CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
Three Months % Nine Months
Ended Change Ended % Change
--------------- ------ ---------------- --------
Q3 '17 YTD Q3
Q3 Q3 Vs Q3 Q3 '17 Vs
YTD Q3
2017 2016 Q3 '16 2017 2016 '16
------- ------- ------ -------- ------- --------
Revenue By Geography:
United States $23,275 $15,356 +52% $ 64,058 $42,216 +52%
Rest of World 14,898 14,925 - 39,803 37,965 +5%
------- ------- ------ -------- ------- --------
$38,173 $30,281 +26% $103,861 $80,181 +30%
======= ======= ====== ======== ======= ========
Rest of World as a
percentage of total
revenue 39% 49% 38% 47%
Revenue By Product
Category:
Systems
- North America $21,869 $13,896 +57% $ 58,955 $36,808 +60%
- International 9,993 9,983 - 26,014 24,448 +6%
------- ------- ------ -------- ------- --------
Total Systems 31,862 23,879 +33% 84,969 61,256 +39%
Service 4,687 4,788 -2% 14,173 14,278 -1%
Hand Piece Refills 595 602 -1% 1,743 1,886 -8%
Skincare 1,029 1,012 +2% 2,976 2,761 +8%
------- ------- ------ -------- ------- --------
$38,173 $30,281 +26% $103,861 $80,181 +30%
======= ======= ====== ======== ======= ========
---------------------------------------------------------------------------
Three Months
Ended Nine Months Ended
----------------- -----------------
Q3 Q3 Q3 Q3
2017 2016 2017 2016
-------- -------- -------- --------
Pre-tax Stock-Based Compensation
Expense:
Cost of revenue $ 101 $ 73 $ 377 $ 254
Sales and marketing 394 239 1,215 844
Research and development 157 131 633 416
General and administrative 345 127 1,398 1,138
-------- -------- -------- --------
$ 997 $ 570 $ 3,623 $ 2,652
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CONTACTS:
Cutera, Inc.
Sandra Gardiner
Consultant Chief Financial Officer
415-657-5500
Investor Relations
John Mills
Partner, ICR, Inc.
646-277-1254
john.mills@icrinc.com
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