Cutera Reports Fourth Quarter and Full-Year 2016 R
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BRISBANE, Calif., Feb. 13, 2017 (GLOBE NEWSWIRE) -- Cutera, Inc. (NASDAQ: CUTR ) (“Cutera” or the “Company”), a leading provider of laser and energy-based aesthetic systems for practitioners worldwide, today reported financial results for the fourth quarter ended December 31, 2016.
Key operating highlights and financial performance for the fourth quarter and full year of 2016, when compared to the fourth quarter and full year of 2015, were as follows:
- Revenue: - Increased 26% for the fourth quarter to a record $37.9 million, due primarily to a 45% growth in North American product revenue - Tenth consecutive quarter of double-digit revenue growth - Increased 25% for the full year of 2016 to a record $118.1 million - Two consecutive years of 20%+ year-over-year growth
- Gross Margin of 58% was slightly lower than previous expectations due primarily to higher initial manufacturing costs and seeding of key opinion leader transactions to build reference sites with its enlighten III launch for PicoGenesis TM and tattoo removal treatments
- Achieved $0.30 EPS and $4.7 million of operating cash flow in the fourth quarter
- Cash, cash equivalents and marketable investments were $54.1 million, and no debt
- Hired James Reinstein as its new President, CEO and eighth board member
Ron Santilli, Executive Vice President and Chief Financial Officer of Cutera, stated, “We are pleased with our tenth consecutive quarter of double-digit revenue growth, full year profitability and solid operating cash flow, illustrating the leverage in our business model. In the fourth quarter of 2016, our 26% revenue growth was driven by the breadth of our product portfolio throughout North America, with particular growth coming from our enlighten TM product.”
In December 2016, the Company commenced shipments of its enlighten III platform that provides a new third visible “true red” 670nm wavelength, in addition to the 1064nm and 532nm wavelengths presently available. Initial market acceptance has been very positive and many practitioners believe it is the best-in-class three wavelength pico-laser in the market and will allow practitioners the ability to remove all tattoo ink colors, and provide PicoGenesis skin revitalization with improved efficacy and faster speeds than any products on the market.
Additionally, in December of 2016, the Company received 510(k) clearance from the Food and Drug Administration (FDA) to market its RF energy-based truSculpt TM system for the temporary reduction in circumference of the abdomen. truSculpt is based on the Company’s proprietary RF technology, which selectively heats subcutaneous adipose tissue making it ideally suited for treating fat. truSculpt will enable the company to participate in the fast growing body-sculpting market as well as adding a consumable revenue stream. In 2017 the company will work with key opinion leaders to gather additional clinical data to demonstrate superior fat burning capabilities.
Mr. James Reinstein, Chief Executive Officer stated, “We remain committed to advancing our technologies and providing our customers with an attractive path for upgrading their current systems to the new capabilities. Our financial performance in the fourth quarter, and overall trajectory, has the Company positioned well for continued growth in revenue, profits and cash generation.”
Guidance:
The Company expects:
- Revenue of $26.0 - $27.0 million in the first quarter of 2017 and $135.0 - $140.0 million for the full-year of 2017.
- Earnings (Loss) Per Share of ($0.06) – ($0.08) for the first quarter 2017, given the seasonality of our business, and $0.45 - $0.50 for the full-year of 2017.
- To Repurchase shares to a level that maintains the fully diluted share count at approximately 14.0 million for the full-year of 2017.
Conference Call
The conference call to discuss these results is scheduled to begin at 2:00 p.m. PST (5:00 p.m. EST) on February 13, 2017. Participating in the call will be James Reinstein, 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 http://ir.cutera.com/phoenix.zhtml?c=130892&a...Id=5247490 , and will be archived online within one hour of its completion through 8:59 p.m. PST (11:59 p.m. EST) on February 27, 2017. In addition, you may call 1-877-705-6003 if you wish to participate on the live call.
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 plans to introduce and commercialize new products, ability to increase revenue, reduce expenses, improve financial results, grow the Company’s market share, realize benefits from additional investment, achieve financial guidance, expand market penetration, generate cash from operations, plans for stock repurchase, 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, gross margins 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; 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 on November 7 th , 2016. 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 fourth quarter ended December 31, 2016, as discussed in this release, is preliminary and unaudited, and subject to adjustment.
| CUTERA, INC. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Net revenue | $ | 37,875 | $ | 30,042 | $ | 118,056 | $ | 94,761 | |||||||||||
| Cost of revenue | 15,962 | 12,145 | 49,921 | 40,478 | |||||||||||||||
| Gross profit | 21,913 | 17,897 | 68,135 | 54,283 | |||||||||||||||
| Gross margin % | 58 | % | 60 | % | 58 | % | 57 | % | |||||||||||
| Operating expenses: | |||||||||||||||||||
| Sales and marketing | 11,561 | 9,899 | 41,563 | 35,942 | |||||||||||||||
| Research and development | 2,897 | 2,812 | 11,232 | 10,733 | |||||||||||||||
| General and administrative | 3,010 | 3,189 | 12,943 | 12,129 | |||||||||||||||
| Total operating expenses | 17,468 | 15,900 | 65,738 | 58,804 | |||||||||||||||
| Income (loss) from operations | 4,445 | 1,997 | 2,397 | (4,521 | ) | ||||||||||||||
| Interest and other income, net | (204 | ) | 105 | 323 | 293 | ||||||||||||||
| Income (loss) before income taxes | 4,241 | 2,102 | 2,720 | (4,228 | ) | ||||||||||||||
| Provision for income taxes | 28 | 52 | 143 | 212 | |||||||||||||||
| Net income (loss) | $ | 4,213 | $ | 2,050 | $ | 2,577 | $ | (4,440 | ) | ||||||||||
| Net income (loss) per share: | |||||||||||||||||||
| Basic | $ | 0.31 | $ | 0.16 | $ | 0.19 | $ | (0.32 | ) | ||||||||||
| Diluted | $ | 0.30 | $ | 0.15 | $ | 0.19 | $ | (0.32 | ) | ||||||||||
| Weighted-average number of shares | |||||||||||||||||||
| used in per share calculations: | |||||||||||||||||||
| Basic and diluted | 13,591 | 12,978 | 13,225 | 13,960 | |||||||||||||||
| Diluted | 14,201 | 13,591 | 13,753 | 13,960 | |||||||||||||||
| CUTERA, INC. | ||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| (in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| December 31, | September 30, | December 31, | ||||||||||||
| 2016 | 2016 | 2015 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 13,775 | $ | 11,275 | $ | 10,868 | ||||||||
| Marketable investments | 40,299 | 35,108 | 37,539 | |||||||||||
| Cash, cash equivalents and marketable investments | 54,074 | 46,383 | 48,407 | |||||||||||
| Accounts receivable, net | 16,547 | 11,680 | 11,669 | |||||||||||
| Inventories | 14,977 | 16,478 | 12,078 | |||||||||||
| Other current assets and prepaid expenses | 2,251 | 2,507 | 1,675 | |||||||||||
| Total current assets | 87,849 | 77,048 | 73,829 | |||||||||||
| Property and equipment, net | 1,907 | 1,720 | 1,473 | |||||||||||
| Deferred tax asset, net of current portion | 377 | 410 | 350 | |||||||||||
| Intangibles, net | 2 | 16 | 143 | |||||||||||
| Goodwill | 1,339 | 1,339 | 1,339 | |||||||||||
| Other long-term assets | 380 | 444 | 384 | |||||||||||
| Total assets | $ | 91,854 | $ | 80,977 | $ | 77,518 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 2,598 | $ | 3,283 | $ | 1,959 | ||||||||
| Accrued liabilities | 17,397 | 14,786 | 13,834 | |||||||||||
| Deferred revenue | 8,394 | 8,312 | 8,638 | |||||||||||
| Total current liabilities | 28,389 | 26,381 | 24,431 | |||||||||||
| Deferred revenue, net of current portion | 1,705 | 1,426 | 2,287 | |||||||||||
| Income tax liability | 168 | 164 | 182 | |||||||||||
| Other long-term liabilities | 582 | 597 | 584 | |||||||||||
| Total liabilities | 30,844 | 28,568 | 27,484 | |||||||||||
| Stockholders' equity | 61,010 | 52,409 | 50,034 | |||||||||||
| Total liabilities and stockholders' equity | $ | 91,854 | $ | 80,977 | $ | 77,518 | ||||||||
| CUTERA, INC. | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||
| Net income (loss) | $ | 4,213 | $ | 2,050 | $ | 2,577 | $ | (4,440 | ) | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||
| Stock-based compensation | 1,061 | 1,097 | 3,713 | 4,084 | |||||||||||||||
| Depreciation and amortization | 249 | 274 | 982 | 1,186 | |||||||||||||||
| Other | 60 | 14 | 15 | 227 | |||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||
| Accounts receivable | (4,838 | ) | (2,660 | ) | (4,899 | ) | (536 | ) | |||||||||||
| Inventories | 1,501 | 1,401 | (2,899 | ) | (1,090 | ) | |||||||||||||
| Accounts payable | (685 | ) | (700 | ) | 639 | (1,124 | ) | ||||||||||||
| Accrued liabilities | 2,575 | 2,143 | 3,461 | 2,687 | |||||||||||||||
| Deferred revenue | 361 | (40 | ) | (826 | ) | (2,319 | ) | ||||||||||||
| Other | 244 | 310 | (771 | ) | (34 | ) | |||||||||||||
| Net cash provided by (used in) operating activities | 4,741 | 3,889 | 1,992 | (1,359 | ) | ||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||
| Acquisition of property, equipment and software | (226 | ) | (43 | ) | (537 | ) | (746 | ) | |||||||||||
| Disposal of property and equipment | 3 | - | 20 | - | |||||||||||||||
| Net change in marketable investments | (5,219 | ) | (16 | ) | (2,875 | ) | 33,392 | ||||||||||||
| Net cash provided by (used) in investing activities | (5,442 | ) | (59 | ) | (3,392 | ) | 32,646 | ||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||
| Repurchases of common stock | — | (3,469 | ) | (4,873 | ) | (40,085 | ) | ||||||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 3,296 | 507 | 9,493 | 10,061 | |||||||||||||||
| Payments on capital lease obligations | (95 | ) | (55 | ) | (313 | ) | (198 | ) | |||||||||||
| Net cash provided by (used in) financing activities | 3,201 | (3,017 | ) | 4,307 | (30,222 | ) | |||||||||||||
| Net increase in cash and cash equivalents | 2,500 | 813 | 2,907 | 1,065 | |||||||||||||||
| Cash and cash equivalents at beginning of period | 11,275 | 10,055 | 10,868 | 9,803 | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 13,775 | $ | 10,868 | $ | 13,775 | $ | 10,868 | |||||||||||
| CUTERA, INC. | |||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||
| (in thousands, except percentage data) | |||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | % Change | Twelve Months Ended | % Change | ||||||||||||||||||||||||
| Q4 | Q4 | Q4 '16 Vs | FY | FY | FY '16 Vs | ||||||||||||||||||||||
| 2016 | 2015 | Q4 '15 | 2016 | 2015 | FY '15 | ||||||||||||||||||||||
| Revenue By Geography: | |||||||||||||||||||||||||||
| United States | $ | 23,297 | $ | 16,882 | +38 | % | $ | 65,513 | $ | 48,916 | +34 | % | |||||||||||||||
| International | 14,578 | 13,160 | +11 | % | 52,543 | 45,845 | +15 | % | |||||||||||||||||||
| $ | 37,875 | $ | 30,042 | +26 | % | $ | 118,056 | $ | 94,761 | +25 | % | ||||||||||||||||
| International as a percentage of total revenue | 38 | % | 44 | % | 45 | % | 48 | % | |||||||||||||||||||
| Revenue By Product Category: | |||||||||||||||||||||||||||
| Products | |||||||||||||||||||||||||||
| -North America | $ | 21,787 | $ | 15,048 | +45 | % | $ | 58,595 | $ | 40,528 | +45 | % | |||||||||||||||
| -International | 9,678 | 8,926 | +8 | % | 34,126 | 30,695 | +11 | % | |||||||||||||||||||
| Total Products | 31,465 | 23,974 | +31 | % | 92,721 | 71,223 | +30 | % | |||||||||||||||||||
| Service | 4,750 | 4,562 | +4 | % | 19,028 | 17,739 | +7 | % | |||||||||||||||||||
| Hand Piece Refills | 612 | 706 | -13 | % | 2,498 | 2,910 | -14 | % | |||||||||||||||||||
| Skincare | 1,048 | 800 | +31 | % | 3,809 | 2,889 | +32 | % | |||||||||||||||||||
| $ | 37,875 | $ | 30,042 | +26 | % | $ | 118,056 | $ | 94,761 | +25 | % | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| Q4 | Q4 | FY | FY | ||||||||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
| Pre-tax Stock-Based Compensation Expense: | |||||||||||||||||||||||||||
| Cost of revenue | $ | 87 | $ | 118 | $ | 341 | $ | 447 | |||||||||||||||||||
| Sales and marketing | 335 | 327 | 1,179 | 1,054 | |||||||||||||||||||||||
| Research and development | 180 | 152 | 596 | 662 | |||||||||||||||||||||||
| General and administrative | 459 | 500 | 1,597 | 1,921 | |||||||||||||||||||||||
| $ | 1,061 | $ | 1,097 | $ | 3,713 | $ | 4,084 | ||||||||||||||||||||
CONTACTS: Cutera, Inc. Ron Santilli Chief Financial Officer 415-657-5500 Investor Relations John Mills ICR, Inc. 646-277-1254 john.mills@icrinc.com
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