CUTERA, INC. (Nasdaq: CUTR), a leading provider of aesthetic and
dermatology solutions, today reported financial results for the
second quarter ended June 30, 2024.
- Consolidated revenue for the second quarter of 2024 of $34.4
million
- Cash, cash equivalents, and restricted cash of $84.3
million
- AviClear growth of 41% vs prior year period driven by
international capital system sales
- Service growth of 7% vs prior year period, highlighting
improvements in field service and overall customer support
- Completion of the Q4 2023 corporate restructuring program, and
announcement of additional cost reduction initiatives, allowing for
both improved cost structure and better organization alignment
“The second quarter was challenging for Cutera and for the
aesthetics industry in general. While AviClear experienced
continued momentum internationally, and our launch of Xeo+ is off
to a promising start, our overall performance did not meet
expectations, particularly in North America,” commented Taylor
Harris, Chief Executive Officer of Cutera, Inc. “We are responding
to the challenging market environment with new commercial
leadership in North America, additional cost reductions, and
continued focus on building the AviClear franchise through training
and education, cooperative marketing, launches in new international
markets, and clinical indication expansion.”
Steve Kreider Promoted to Senior Vice President, North
America
In July 2024, Steve Kreider was promoted to Senior Vice
President (SVP), North America, with leadership responsibility for
the combined North American commercial organization, including
sales, marketing and customer excellence. Mr. Kreider joined Cutera
in 2022 as SVP, Global Marketing, and brings close to 20 years of
experience in dermatology and aesthetics, having served in prior
commercial and business development leadership roles at Ortho
Dermatologics, Merz Aesthetics, and Medicis.
Taylor Harris commented: “I am thrilled to appoint Steve to this
role, and I’m confident that he is the right leader to unify our
commercial efforts to best serve our customers. Steve brings
tremendous passion for building great teams and culture, as well as
deep experience in our space, all of which will serve Cutera
well.”
Second Quarter 2024 Financial Highlights
Consolidated revenue for the second quarter of 2024 was $34.4
million, a decrease of 44% compared to the second quarter 2023.
Revenue in the second quarter of 2023 included skincare revenue of
$9.4 million and as the skincare distribution agreement was
terminated in February 2024, the second quarter of 2024 did not
have skincare revenue. Revenue related to capital systems sales
declined 39%, while recurring sources of revenue, excluding
skincare, declined 20%.
Gross profit was $7.6 million, or 22.2% of revenue for the
second quarter of 2024, compared to a gross profit of $26.1
million, or 42.2% of revenue, for the second quarter of 2023. On a
non-GAAP basis, gross profit was $9.6 million, or 28.0% of revenue,
for the second quarter of 2024, compared to $28.8 million, or
46.6%, for the second quarter of 2023. Gross profit in the second
quarter, on a GAAP and a non-GAAP basis, was negatively affected by
approximately $2.4 million, or 6.9% of revenue, of expense related
to excess and obsolete inventory.
Operating expenses were $29.4 million for the second quarter of
2024, compared to $57.2 million in the prior year period. On a
non-GAAP basis, operating expenses were $30.9 million for the
second quarter of 2024, compared to $42.1 million for the prior
year period.
GAAP operating loss was $21.8 million and $31.2 million for the
second quarters of 2024 and 2023, respectively. Non-GAAP operating
loss was $21.3 million for the second quarter of 2024, compared to
a loss of $13.2 million for the second quarter of 2024.
Cash, cash equivalents, and restricted cash, were $84.3 million
as of June 30, 2024, compared to $105.4 million as of March 31,
2024.
Cost Restructuring
During the second quarter, the company completed the global
restructuring program that was initiated in the fourth quarter of
2023, which resulted in expense savings of approximately $20
million on an annualized basis. In addition to that program, the
company has identified an additional $10 million cost reduction
opportunity, which should be fully realized in 2025.
2024 Outlook
Management is revising full year revenue guidance to $140
million to $145 million, compared to previous revenue guidance of
$160 million to $170 million. Cash, cash equivalents, and
restricted cash guidance is updated to approximately $40 million at
December 31, 2024, from the Company’s previous guidance of a range
from $55 million to $60 million.
Conference Call
The Company’s management will host a conference call to discuss
these results and related matters today at 1:30 p.m. PT (4:30 p.m.
ET). Participating in the call will be Taylor Harris, Chief
Executive Officer, Stuart Drummond, Interim Chief Financial
Officer, and Shelby Eckerman, Vice President, Finance.
Participants can register for the conference call by following
registration link. Upon registering, a calendar booking will be
provided by email including the dial-in details and a unique PIN to
access the call. Using this process will by-pass the operator and
avoid the call queue. Registration will remain open until the end
of the live conference call.
If participants prefer to dial in and speak with an operator,
dial Canada/USA Toll Free: 1-844-763-8274 or +1-647-484-8814. It is
recommended that you call in 10 minutes prior to the scheduled
start time if you are using one of these operator-assisted phone
numbers.
The call will also be webcast and can be accessed from the
Investor Relations section of Cutera’s website at
http://www.cutera.com/. The webcast replay of the call will be
available at the same site approximately one hour after the end of
the call.
About Cutera, Inc.
Cutera is a leading provider of aesthetic and dermatology
solutions for practitioners worldwide. For over 25 years, Cutera
has strived to improve lives through medical aesthetic technologies
that are driven by science and powered through partnerships. For
more information, call 1-888-4-CUTERA or visit Cutera.com.
*Use of Non-GAAP Financial
Measures
In this press release, to supplement the Company’s condensed
consolidated financial statements presented in accordance with
Generally Accepted Accounting Principles, or GAAP, management has
disclosed certain non-GAAP financial measures for gross margin,
gross margin rate, and income or loss from operations. Non-GAAP
adjustments include depreciation and amortization including
contract acquisition costs, stock-based compensation, enterprise
resource planning (“ERP”) implementation costs, certain legal and
litigation costs, certain executive and non-recurring severance
costs, retention plan costs, gain on termination of a distribution
agreement, and certain other adjustments. From time to time in the
future, there may be other items that the Company may exclude if
the Company believes that doing so is consistent with the goal of
providing useful information to investors and management. The
Company has provided a reconciliation of each non-GAAP financial
measure used in this earnings release to the most directly
comparable GAAP financial measure.
The Company defines non-GAAP financial measure, also commonly
known as adjusted EBITDA, as operating income before depreciation
and amortization, stock-based compensation, ERP implementation
costs, certain legal and litigation costs, severance, retention
plan costs, gain on early termination of distribution agreement,
and other adjustments.
Company management uses non-GAAP measures as aids in monitoring
the Company’s ongoing financial performance from quarter to
quarter, and year to year, and for benchmarking against other
similar companies. Non-GAAP financial measures used by the Company
may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies.
These non-GAAP financial measures should be considered along with,
but not as alternatives to, the operating performance measure as
prescribed by GAAP. Non-GAAP financial measures for the statement
of operations and net income per share exclude the following:
Depreciation and amortization, including contract acquisition
costs. The Company has excluded depreciation and amortization
expense in calculating its non-GAAP operating expenses and net
income measures. Depreciation and amortization are non-cash charges
to current operations;
Stock-based compensation. The Company has excluded the
effect of stock-based compensation expenses in calculating its
non-GAAP operating expenses and net income measures. Although
stock-based compensation is a key incentive offered to the
Company's employees, the Company continues to evaluate its business
performance excluding stock-based compensation expenses. The
Company records stock-based compensation expenses related to grants
of options, employee stock purchase plans, and performance and
restricted stock. Depending upon the size, timing, and terms of the
grants, this expense may vary significantly but will recur in
future periods. The Company believes that excluding stock-based
compensation better allows for comparisons to its peer
companies;
ERP implementation costs. The Company has excluded ERP
system costs related to direct and incremental costs incurred in
connection with its multi-phase implementation of a new ERP
solution and the related technology infrastructure costs. The
Company excludes these costs because it believes that these items
do not reflect future operating expenses and will be inconsistent
in amounts and frequency, making it difficult to contribute to a
meaningful evaluation of the Company’s operating performance;
Certain legal and litigation costs. The Company has
excluded costs incurred related to its litigation against Lutronic
Aesthetics as well as the settlement of $5.8 million, which is not
part of the Company’s ordinary course of business. The Company’s
complaint against Lutronic alleges misappropriation of trade
secrets, violation of the Racketeer Influenced and Corrupt
Organizations Act (RICO), interference with contractual relations
and other claims. The Company excludes these costs as well as the
settlement because this litigation is a result of a discrete event
that was not part of the Company’s business strategy, but has a
significant effect on the results of operations. Its costs are
incidental to and do not reflect the efficiencies and effectiveness
of the Company’s core operations;
Severance. The Company has excluded costs associated with
restructuring activities and the separation of its officers and
other executives in calculating its non-GAAP operating expenses and
non-GAAP Operating Income. The Company has excluded restructuring
costs because a restructuring represents a discrete event that
signifies a change in the Company’s strategy, but its costs are not
indicative of the ongoing financial performance of the business.
The Company excludes executive separation costs because executive
separations are unpredictable and not part of the Company’s
business strategy but could have a significant impact on the
results of operation;
Retention plan costs. The Company has excluded the
expense related to a retention plan implemented in April 2023.
Approximately $11 million was made available to sales personnel and
key employees. The Company expects the final aggregate payments
under the retention plan will be approximately $7 million with the
final installment occurring in October 2024. The Company has
excluded expense related to this retention plan as such costs are
not considered part of ongoing operations; and
Gain on early termination of distribution agreement. The
Company has excluded a gain recorded in connection with the early
termination of a distribution agreement with ZO USA in calculating
its non-GAAP operating expenses and non-GAAP operating income. The
Company recorded the net gain of $9.7 million in the Company's
condensed consolidated statement of operations for the three months
ended March 31, 2024. The Company has excluded this gain as it is
not indicative of the ongoing financial performance of the
business, and not part of the Company’s business strategy.
The Company believes that excluding all of the items above
allows users of its financial statements to better review and
assess both current and historical results of operations.
Safe Harbor Statement
Certain statements in this press release, other than purely
historical information, are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
These statements include but are not limited to, Cutera’s plans,
objectives, strategies, financial performance, guidance and
outlook, product launches and performance, trends, prospects, or
future events and involve known and unknown risks that are
difficult to predict. As a result, the Company’s actual financial
results, performance, achievements, or prospects may differ
materially from those expressed or implied by these forward-looking
statements. In some cases, you can identify forward-looking
statements by the use of words such as, but not limited to, “may,”
“could,” “seek,” “guidance,” “predict,” “potential,” “likely,”
“believe,” “will,” “should,” “expect,” “anticipate,” “estimate,”
“plan,” “intend,” “forecast,” “foresee” or variations of these
terms and similar expressions or the negative of these terms or
similar expressions. 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. These
statements are not guarantees of future performance, and
stockholders should not place undue reliance on forward-looking
statements. There are several risks, uncertainties, and other
important factors, many of which are beyond the Company’s control,
that could cause its actual results to differ materially from the
forward-looking statements contained in this press release,
including those described in the “Risk Factors” section of Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and other documents filed from time to time
with the United States Securities and Exchange Commission by
Cutera.
All statements made in this release are made only as of the date
set forth at the beginning of this release. Accordingly, undue
reliance should not be placed on forward-looking statements. 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. If the Company updates one or more
forward-looking statements, no inference should be drawn that it
will make additional updates concerning those or other
forward-looking statements. Cutera's financial performance for the
second quarter ended June 30, 2024, as discussed in this release,
is preliminary and unaudited, and subject to adjustment.
CUTERA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited) June 30,
December 31,
2024
2023
Assets Current assets: Cash and cash equivalents
$
83,115
$
143,612
Accounts receivable, net
34,554
43,121
Inventories
80,353
62,600
Other current assets and prepaid expenses
12,961
19,852
Total current assets
210,983
269,185
Long-term inventories
13,825
16,283
Property and equipment, net
28,140
37,275
Deferred tax asset
508
579
Restricted cash
1,196
-
Goodwill
1,339
1,339
Operating lease right-of-use assets
11,388
10,055
Other long-term assets
8,916
11,575
Total assets
$
276,295
$
346,291
Liabilities and Stockholders' Deficit Current
liabilities: Accounts payable
$
17,617
$
19,829
Accrued liabilities
30,356
55,055
Operating leases liabilities
3,382
2,441
Deferred revenue
8,798
10,422
Total current liabilities
60,153
87,747
Deferred revenue, net of current portion
1,507
1,494
Operating lease liabilities, net of current portion
9,223
8,887
Convertible notes, net of unamortized debt issuance costs
419,841
418,695
Other long-term liabilities
1,242
1,298
Total liabilities
491,966
518,121
Stockholders’ deficit: Common stock
20
20
Additional paid-in capital
135,114
131,496
Accumulated deficit
(350,805
)
(303,346
)
Total stockholders' deficit
(215,671
)
(171,830
)
Total liabilities and stockholders' deficit
$
276,295
$
346,291
CUTERA, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share data)
(unaudited) Three Months Ended Six Months
Ended June 30, June 30, June 30,
June 30,
2024
2023
2024
2023
Products $
28,357
$
56,175
$
61,472
$
105,296
Service
6,020
5,650
11,698
11,055
Total net revenue
34,377
61,825
73,170
116,351
Products
23,765
32,051
47,054
62,110
Service
2,968
3,691
6,053
6,526
Total cost of revenue
26,733
35,742
53,107
68,636
Gross profit
7,644
26,083
20,063
47,715
Gross margin %
22.2
%
42.2
%
27.4
%
41.0
%
Operating expenses: Sales and marketing
20,664
33,271
44,341
62,783
Research and development
4,463
5,784
9,464
12,252
General and administrative
4,321
18,191
17,202
30,444
Gain on early termination of distribution agreement
-
-
(9,708
)
-
Total operating expenses
29,448
57,246
61,299
105,479
Loss from operations
(21,804
)
(31,163
)
(41,236
)
(57,764
)
Amortization of debt issuance costs
(575
)
(557
)
(1,146
)
(1,109
)
Interest on convertible notes
(2,959
)
(2,958
)
(5,898
)
(5,897
)
Interest income
1,025
2,179
2,480
4,658
Other expense, net
(387
)
(453
)
(1,703
)
(616
)
Loss before income taxes
(24,700
)
(32,952
)
(47,503
)
(60,728
)
Income tax expense (benefit)
(19
)
326
(44
)
598
Net loss $
(24,681
)
$
(33,278
)
$
(47,459
)
$
(61,326
)
Net loss per share: Basic $
(1.23
)
$
(1.68
)
$
(2.37
)
$
(3.09
)
Diluted $
(1.23
)
$
(1.68
)
$
(2.37
)
$
(3.09
)
Weighted-average number of shares used in per share
calculations: Basic
20,091
19,858
20,041
19,819
Diluted
20,091
19,858
20,041
19,819
CUTERA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (in
thousands, except percentage data) (unaudited)
Three Months Ended
% Change
Six Months Ended
% Change
June 30,
June 30,
2024 Vs
June 30,
June 30,
2024 Vs
2024
2023
2023
2024
2023
2023
Revenue By Geography: North America $ 15,980
$ 32,437
-50.7%
$ 34,371
$ 59,639
-42.4%
Japan
3,829
12,810
-70.1%
11,427
25,718
-55.6%
Rest of World 14,568
16,578
-12.1%
27,372
30,994
-11.7%
Total Net Revenue $
34,377
$
61,825
-44.4%
$
73,170
$
116,351
-37.1%
International as a percentage of
total revenue
53.5
%
47.5
%
53.0
%
48.7%
Revenue By Product Category: Systems - North America
$
9,814
$
23,598
-58.4%
$
21,673
$
42,768
-49.3%
- Rest of World (including Japan)
14,086
15,664
-10.1%
26,487
31,036
-14.7%
Total Systems
23,900
39,262
-39.1%
48,160
73,804
-34.7%
Consumables
4,457
7,491
-40.5%
9,112
13,938
-34.6%
Skincare
-
9,422
-100.0%
4,200
17,554
-76.1%
Total Products
28,357
56,175
-49.5%
61,472
105,296
-41.6%
Service
6,020
5,650
+6.5%
11,698
11,055
+5.8%
Total Net Revenue $
34,377
$
61,825
-44.4%
$
73,170
$
116,351
-37.1%
Three Months Ended Six Months Ended June
30, June 30, June 30, June 30,
2024
2023
2024
2023
Pre-tax Stock-Based Compensation Expense: Cost of revenue $
144
$
361
$
293
$
725
Sales and marketing
404
1,283
970
2,431
Research and development
264
415
569
1,108
General and administrative
781
(509
)
1,870
672
$
1,593
$
1,550
$
3,702
$
4,936
CUTERA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) (unaudited) Three
Months Ended Six Months Ended June 30, June
30, June 30, June 30,
2024
2023
2024
2023
Cash flows from operating activities: Net loss
$
(24,681
)
$
(33,278
)
$
(47,459
)
$
(61,326
)
Adjustments to reconcile net loss to net cash provided used in
operating activities: Stock-based compensation
1,593
1,550
3,702
4,936
Depreciation and amortization
1,804
1,829
3,795
3,238
Amortization of contract acquisition costs
1,378
1,891
2,769
4,069
Amortization of debt issuance costs
575
557
1,146
1,109
Deferred tax assets
26
30
71
43
Provision for credit losses
2,627
1,689
4,808
1,914
Unrealized gain on foreign exchange forward
-
623
-
-
Accretion of discount on investment securities and investment
income, net
-
180
-
146
Changes in assets and liabilities: Accounts receivable
(287
)
(3,621
)
3,634
(10,031
)
Inventories
2,879
5,627
(8,582
)
(536
)
Other current assets and prepaid expenses
6,332
1,277
6,892
(776
)
Other long-term assets
(90
)
(2,771
)
(330
)
(4,782
)
Accounts payable
4,301
(336
)
(2,212
)
(1,666
)
Accrued liabilities
(16,525
)
(5,512
)
(24,441
)
(3,806
)
Operating leases, net
(26
)
(14
)
(56
)
(30
)
Deferred revenue
(150
)
308
(1,611
)
509
Net cash used in operating activities
(20,244
)
(29,971
)
(57,874
)
(66,989
)
Cash flows from investing activities: Acquisition of
property and equipment
(882
)
(14,755
)
(1,217
)
(25,108
)
Proceeds from maturities of marketable investments
6
58,705
63
152,859
Purchases of marketable investments
-
-
-
(23,467
)
Net provided by (used in) cash used in investing activities
(876
)
43,950
(1,154
)
104,284
Cash flows from financing activities: Proceeds from
exercise of stock options and employee stock purchase plan
-
749
-
858
Taxes paid related to net share settlement of equity awards
(20
)
(789
)
(84
)
(3,186
)
Payments on finance lease obligation
7
(113
)
(189
)
(237
)
Net cash provided by (used in) financing activities
(13
)
(153
)
(273
)
(2,565
)
Net increase (decrease) in cash, cash equivalents and
restricted cash
(21,133
)
13,826
(59,301
)
34,730
Cash, cash equivalents, and restricted cash at beginning of period
105,444
167,528
143,612
146,624
Cash, cash equivalents, and restricted cash at end of period
$
84,311
$
181,354
$
84,311
$
181,354
CUTERA, INC.
Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measure
(in thousands)
Three Months Ended June 30, 2024
Gross Profit
Gross Margin
Operating
Expenses
Operating
Income
Reported
$
7,644
22.2%
29,448
$
(21,804
)
Adjustments: Depreciation and amortization including contract
acquisition costs
1,826
5.3%
1,357
3,183
Stock-based compensation
144
0.4%
1,449
1,593
Legal - Lutronic settlement
0.0%
(5,750
)
(5,750
)
Severance
4
0.0%
676
680
Retention plan costs
7
0.0%
821
828
Gain on early termination of distribution agreement
-
0.0%
-
-
Other adjustments
-
0.0%
-
-
Total adjustments
1,981
5.8%
(1,447
)
534
Non-GAAP
$
9,625
28.0%
$
30,895
$
(21,270
)
Three Months Ended June 30, 2023
Gross Profit
Gross Margin
Operating
Expenses
Operating
Income
Reported
$
26,083
42.2%
57,246
$
(31,163
)
Adjustments: Depreciation and amortization including contract
acquisition costs
1,998
3.2%
1,993
3,991
Stock-based compensation
361
0.6%
1,189
1,550
ERP implementation cost
-
0.0%
770
770
Legal - Lutronic expense
-
0.0%
394
394
Severance
-
0.0%
234
234
Retention plan costs
65
0.1%
2,907
2,972
Board of Directors legal and advisory fees
-
0.0%
7,709
7,709
Other adjustments
307
0.5%
-
307
Total adjustments
2,731
4.4%
15,196
17,927
Non-GAAP
$
28,814
46.6%
$
42,050
$
(13,236
)
Six Months Ended June 30, 2024
Gross Profit
Gross Margin
Operating
Expenses
Operating
Income
Reported
$
20,063
27.4%
61,299
$
(41,236
)
Adjustments: Depreciation and amortization including contract
acquisition costs
3,921
5.4%
2,644
6,565
Stock-based compensation
293
0.4%
3,409
3,702
Legal - Lutronic settlement
-
0.0%
(5,750
)
(5,750
)
Severance
96
0.1%
803
899
Retention plan costs
55
0.1%
3,572
3,627
Gain on early termination of distribution agreement
-
0.0%
(9,708
)
(9,708
)
Other adjustments
-
0.0%
263
263
Total adjustments
4,365
6.0%
(4,767
)
(402
)
Non-GAAP
$
24,428
33.4%
$
66,066
$
(41,638
)
Six Months Ended June 30, 2023
Gross Profit
Gross Margin
Operating
Expenses
Operating
Income
Reported
$
47,715
41.0%
105,479
$
(57,764
)
Adjustments: Depreciation and amortization including contract
acquisition costs
3,597
3.1%
3,981
7,578
Stock-based compensation
725
0.6%
4,211
4,936
ERP implementation cost
-
0.0%
1,288
1,288
Legal - Lutronic expense
-
0.0%
1,046
1,046
Severance
119
0.1%
430
549
Retention plan costs
65
0.1%
2,907
2,972
-
0.0%
7,709
7,709
Other adjustments
307
0.3%
585
892
Total adjustments
4,813
4.1%
22,157
26,970
Non-GAAP
$
52,528
45.1%
83,322
$
(30,794
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808553412/en/
Cutera Investor Relations Contact: Shelby Eckerman, VP,
Finance IR@Cutera.com
Cutera (NASDAQ:CUTR)
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부터 10월(10) 2024 으로 11월(11) 2024
Cutera (NASDAQ:CUTR)
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부터 11월(11) 2023 으로 11월(11) 2024
