Cutera Announces Second Quarter 2022 Financial Results

Record second-quarter revenue driven by ongoing momentum in Capital Equipment and Consumable Product segments

Over one hundred new patients treated during the first quarter of AviClear’s availability

Management reiterates full-year revenue guidance despite $15 million of annual foreign exchange headwinds

BRISBANE, Calif.--()--Cutera, Inc. (Nasdaq: CUTR) (“Cutera” or the “Company”), a leading provider of aesthetic and dermatology solutions, today reported financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial and Operational Highlights

  • Consolidated revenue of $64.2 million driven by strength in capital equipment and consumable product demand.
  • Over 50 AviClear devices were placed and activated during the first quarter of the product’s limited commercial release.
  • Gross margin of 54.6% in the quarter, compared to 57.7% in the prior-year period.
    • Excluding the 190 basis point impact from the AviClear program and foreign exchange headwinds of approximately 180 basis points, the gross margin would have been 58.3%.
  • Operating expenses were $45.1 million in the quarter, compared to $31.7 million in the prior-year period. Operating expenses during the period included $7.0 million in AviClear program spending in addition to $2.4 million of ERP implementation expenses.
  • GAAP Net loss was $47.3M, inclusive of a non-recurring charge of $34.4 million for the extinguishment of 50% of the 2026 convertible notes.
  • Adjusted EBITDA was a loss of $1.6 million, compared to a gain of $6.8 million in the prior-year period.
    • Excluding AviClear program impacts of $7.5 million in the quarter and foreign exchange headwinds of $2.4 million over the prior year period, comparable adjusted EBITDA would have been $8.3 million.
  • Completed $240 million in convertible debt financing, ending the quarter with $278.2 million in cash, cash equivalents, and marketable securities on the balance sheet after retiring $69.1 million in convertible notes due 2026.

Key Revenue Metrics

Three Months Ended
June 30,
2022

% Change 2022

Vs 2021

Constant

Currency

 

Key Profit Metrics

Three Months

Ended
June 30,
2022

Constant

Currency

Capital Equipment

$43.7

23

%

27

%

GAAP Margin %

54.6

%

56.4

%

Skincare

$9.6

 

-18

%

-6

%

Non-GAAP Margin %

55.6

%

57.4

%

Consumables

$5.3

 

20

%

23

%

Adjusted EBITDA

($1.6

)

$0.7

 

Service

$5.6

 

-17

%

-13

%

Adjusted EBITDA Margin %

-2.5

%

1.2

%

Recurring

$20.6

 

-11

%

-2

%

Total Revenue

$64.2

 

10

%

15

%

 

Key Revenue Metrics

Six Months Ended
June 30, 2022

% Change 2022

Vs 2021

Constant

Currency

 

Key Profit Metrics

Six Months

Ended
June 30,
2022

Constant

Currency

Capital Equipment

$80.2

25

%

29

%

GAAP Margin %

54.7

%

56.3

%

Skincare

$21.3

 

-12

%

-1

%

Non-GAAP Margin %

55.7

%

57.2

%

Consumables

$9.2

 

25

%

28

%

Adjusted EBITDA

($5.4

)

($1.5

)

Service

$11.6

 

-10

%

-7

%

Adjusted EBITDA Margin %

-4.5

%

-1.2

%

Recurring

$42.1

 

-5

%

2

%

Total Revenue

$122.2

 

13

%

18

%

“I am excited by the momentum we continue to see in our core business, as prior investments in our sales force drove strong results in capital and consumables product segments in North America, Europe, and Australia/New Zealand in particular. Our team is further encouraged by the resiliency and strength of underlying demand trends in the marketplace,” commented Dave Mowry, Chief Executive Officer of Cutera, Inc. “During the quarter, our team achieved the successful launch of AviClear, our first-mover product for the treatment of acne. In the first three months of our limited commercial release of AviClear, we were able to validate successful clinical outcomes in the hands of our customers, verify patient satisfaction with AviClear post-treatment patient survey data, and onboard dozens of practices in the use of the AviClear Laser as they look to provide their patients with a drug-free solution for acne while enhancing the profitability of their practices. We are looking forward to expanding the footprint of new AviClear practices during the next phase of the limited commercial release and significantly ramping the utilization of the device.”

2022 Outlook

Management is reiterating its 2022 revenue guidance of $255 million to $260 million, entirely absorbing the impact of the unprecedented foreign exchange headwinds of $15 million, implying constant currency growth of 17% to 19%. This guidance does not include revenue from our AviClear device as we continue with its limited commercial release. The company plans to add over 100 new AviClear devices into the market during the course of the third quarter of 2022. Based on current AviClear trends, management expects to move into a full commercial launch by the end of the current calendar year.

Conference Call

The Company’s management will host a conference call to discuss these results and related matters today at 1:15 p.m. PT (4:15 p.m. ET). Participating in the call will be Dave Mowry, Chief Executive Officer, and Rohan Seth, Chief Financial Officer.

To participate in the conference call, dial 1-800-319-4610 (domestic) or + 1-631-891-4304 (international).

The call will also be a 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.

Brisbane, California-based Cutera is a leading provider of aesthetic and dermatology solutions for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that harness the power of science and nature to enable medical practitioners to offer safe and effective treatments to their patients. For more information, call +1-415-657-5500 or 1-888-4CUTERA or visit www.cutera.com.

*Use of Non-GAAP Financial Measures

In this press release, in order to supplement the Companys condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations and net income (loss) per diluted share. Non-GAAP adjustments include stock-based compensation, depreciation, amortization, executive and other non-recurring severance costs, customer relationship management (CRM) and enterprise resource planning (ERP) system costs, non-recurring legal and litigation costs, and the loss on extinguishment of convertible notes. From time to time in the future, there may be other items that we 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 has not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability, limited visibility, unpredictability, or unique non-recurring nature of the items. Forward-looking non-GAAP measures include adjusted EBITDA. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive and other non-recurring separation costs, customer relationship management and enterprise resource planning system costs, non-recurring legal and litigation costs, and losses on the extinguishment of convertible notes.

Company management uses these measurements as aids in monitoring the Companys ongoing financial performance from quarter to quarter, and year to year, regularly 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 diluted share exclude the following:

Non-cash expenses for 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;

Depreciation and amortization. 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;

Executive and other non-recurring severance costs. We have excluded costs associated with the resignation of our former Executive Officers in calculating our non-GAAP operating expenses and net income measures. We exclude these and other non-recurring employee separation costs because we believe that these items do not reflect future operating expenses;

Customer Relationship Management. We have excluded CRM system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new CRM solution and the related technology infrastructure costs. We exclude these costs because we believe 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 our operating performance;

Enterprise Resource Planning. We have excluded ERP system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new ERP solution and the related technology infrastructure costs. We exclude these costs because we believe 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 our operating performance;

Non-recurring legal and litigation costs. We have excluded costs incurred related to third-party litigation and disputes, that are non-recurring; and

Loss on extinguishment of convertible notes. We have excluded the loss on extinguishment of convertible notes. We excluded this loss because we believe it is non-recurring.

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, Cuteras plans, objectives, strategies, financial performance 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 Companys 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 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 Companys 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, the Registration Statement on Form S-8 and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.

All information in this press release is as of the date of its 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 with respect to those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2022, 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,

2022

 

 

2021

Assets
Current assets:
Cash and cash equivalents

$

75,050

 

$

164,164

 

Marketable investments

 

203,126

 

 

-

 

Accounts receivable, net

 

32,148

 

 

31,449

 

Inventories, net

 

45,410

 

 

39,503

 

Other current assets and prepaid expenses

 

17,579

 

 

14,545

 

Total current assets

 

373,313

 

 

249,661

 

 
Property and equipment, net

 

24,470

 

 

3,019

 

Deferred tax asset

 

698

 

 

778

 

Goodwill

 

1,339

 

 

1,339

 

Operating lease right-of-use assets

 

13,771

 

 

14,627

 

Other long-term assets

 

9,801

 

 

10,169

 

Restricted cash

 

700

 

 

700

 

Total assets

$

424,092

 

$

280,293

 

 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$

25,365

 

$

7,891

 

Accrued liabilities

 

47,539

 

 

54,100

 

Operating leases liabilities

 

2,714

 

 

2,419

 

Deferred revenue

 

10,098

 

 

9,490

 

Total current liabilities

 

85,716

 

 

73,900

 

 
Deferred revenue, net of current portion

 

1,429

 

 

1,335

 

Operating lease liabilities, net of current portion

 

12,368

 

 

13,483

 

Convertible notes, net of unamortized debt issuance costs

 

299,856

 

 

134,243

 

Other long-term liabilities

 

849

 

 

763

 

Total liabilities

 

400,218

 

 

223,724

 

 
Stockholders’ equity:
Common stock

 

20

 

 

18

 

Additional paid-in capital

 

144,628

 

 

114,724

 

Accumulated other comprehensive loss

 

(183

)

 

-

 

Accumulated deficit

 

(120,591

)

 

(58,173

)

Total stockholders' equity

 

23,874

 

 

56,569

 

Total liabilities and stockholders' equity

$

424,092

 

$

280,293

 

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,

2022

 

 

2021

 

 

2022

 

 

2021

 

 
Products $

58,589

 

$

51,812

 

$

110,655

 

$

95,363

 

Service

5,635

 

6,777

 

11,583

 

12,894

 

Total net revenue

64,224

 

58,589

 

122,238

 

108,257

 

 
Products

25,899

 

20,892

 

48,811

 

39,224

 

Service

3,281

 

3,908

 

6,595

 

7,534

 

Total cost of revenue

29,180

 

24,800

 

55,406

 

46,758

 

Gross profit

35,044

 

33,789

 

66,832

 

61,499

 

Gross margin %

54.6

%

57.7

%

54.7

%

56.8

%

 
Operating expenses:
Sales and marketing

27,001

 

18,410

 

51,945

 

33,478

 

Research and development

6,859

 

4,850

 

13,358

 

8,962

 

General and administrative

11,248

 

8,461

 

24,750

 

15,826

 

Total operating expenses

45,108

 

31,721

 

90,053

 

58,266

 

(Loss) income from operations

(10,064

)

2,068

 

(23,221

)

3,233

 

Interest and other (expense) income, net
Amortization of debt issuance costs

(298

)

(215

)

(517

)

(267

)

Interest on convertible notes

(1,149

)

(778

)

(1,927

)

(969

)

Loss on extinguishment of convertible notes

(34,423

)

-

 

(34,423

)

-

 

Gain on extinguishment of PPP loan

-

 

7,185

 

-

 

7,185

 

Other expense, net

(1,528

)

(392

)

(2,283

)

(1,415

)

(Loss) income before income taxes

(47,462

)

7,868

 

(62,371

)

7,767

 

Income tax (benefit) expense

(186

)

122

 

47

 

380

 

Net (loss) income $

(47,276

)

$

7,746

 

$

(62,418

)

$

7,387

 

 
Net (loss) income per share:
Basic $

(2.53

)

$

0.43

 

$

(3.39

)

$

0.41

 

Diluted $

(2.53

)

$

0.39

 

$

(3.39

)

$

0.40

 

 
Weighted-average number of shares used in per share calculations:
Basic

18,700

 

17,862

 

18,392

 

17,815

 

Diluted

18,700

 

22,453

 

18,392

 

20,855

 

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,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:
Net (loss) income

$

(47,276

)

$

7,746

 

$

(62,418

)

$

7,387

 

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Stock-based compensation

 

4,733

 

 

2,919

 

 

8,776

 

 

4,765

 

Depreciation and amortization

 

502

 

 

346

 

 

929

 

 

707

 

Amortization of contract acquisition costs

 

567

 

 

458

 

 

1,219

 

 

1,003

 

Amortization of debt issuance costs

 

298

 

 

215

 

 

517

 

 

267

 

Impairment of capitalized cloud computing costs

 

-

 

 

-

 

 

-

 

 

182

 

Change in deferred tax asset

 

39

 

 

6

 

 

80

 

 

51

 

Provision for excess and obsolete inventories

 

200

 

 

506

 

 

558

 

 

699

 

Provision for credit losses

 

217

 

 

274

 

 

409

 

 

492

 

Loss (gain) on sale of property and equipment

 

49

 

 

(23

)

 

63

 

 

(82

)

PPP loan forgiveness

 

-

 

 

(7,185

)

 

-

 

 

(7,185

)

Change in right-of-use asset

 

670

 

 

-

 

 

1,308

 

 

604

 

Loss on extinguishment of convertible notes

 

34,423

 

 

-

 

 

34,423

 

 

-

 

Changes in assets and liabilities:
Accounts receivable, net

 

804

 

 

(2,026

)

 

(1,108

)

 

(4,433

)

Inventories, net

 

(5,524

)

 

(443

)

 

(18,059

)

 

(6,657

)

Other current assets and prepaid expenses

 

2,577

 

 

1,483

 

 

(3,034

)

 

(77

)

Other long-term assets

 

(686

)

 

(1,220

)

 

(1,071

)

 

(1,720

)

Accounts payable

 

9,016

 

 

1,179

 

 

14,771

 

 

(474

)

Accrued liabilities

 

(889

)

 

(369

)

 

(6,878

)

 

9,653

 

Operating lease liabilities

 

(664

)

 

33

 

 

(1,272

)

 

(530

)

Deferred revenue

 

463

 

 

(334

)

 

702

 

 

166

 

Net cash provided by (used in) operating activities

 

(481

)

 

3,565

 

 

(30,085

)

 

4,818

 

 
Cash flows from investing activities:
Acquisition of property and equipment

 

(7,917

)

 

(269

)

 

(8,238

)

 

(370

)

Disposal of property and equipment

 

-

 

 

19

 

 

-

 

 

71

 

Purchase of marketable securities and long-term investments

 

(129,251

)

 

-

 

 

(203,309

)

 

-

 

Net cash used in investing activities

 

(137,168

)

 

(250

)

 

(211,547

)

 

(299

)

 
Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan

 

1,288

 

 

1,501

 

 

1,439

 

 

1,897

 

Purchase of capped call

 

(31,671

)

 

-

 

 

(31,671

)

 

(16,134

)

Proceeds from issuance of convertible notes

 

240,000

 

 

-

 

 

240,000

 

 

138,250

 

Payment of issuance costs of convertible notes

 

(6,956

)

 

-

 

 

(6,956

)

 

(4,717

)

Extinguishment of convertible notes

 

(45,777

)

 

-

 

 

(45,777

)

 

-

 

Taxes paid related to net share settlement of equity awards

 

(1,784

)

 

(452

)

 

(4,234

)

 

(1,451

)

Payments on capital lease obligation

 

(133

)

 

(96

)

 

(283

)

 

(211

)

Net cash provided by financing activities

 

154,967

 

 

953

 

 

152,518

 

 

117,634

 

 
Net increase (decrease) in cash, cash equivalents and restricted cash

 

17,318

 

 

4,268

 

 

(89,114

)

 

122,153

 

Cash, cash equivalents, and restricted cash at beginning of period

 

58,432

 

 

164,932

 

 

164,864

 

 

47,047

 

Cash, cash equivalents, and restricted cash at end of period

$

75,750

 

$

169,200

 

$

75,750

 

$

169,200

 

 
CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
 

Three Months Ended

 

% Change

 

Six Months Ended

 

% Change

June 30,

 

June 30,

 

2022 Vs

 

June 30,

 

June 30,

 

2022 Vs

2022

 

2021

 

2021

 

2022

 

2021

 

2021

Revenue By Geography:
North America $

32,239

 

$

26,786

 

+20.4% $

61,092

 

$

49,084

 

+24.5%
Japan

15,174

 

17,421

 

-12.9%

32,677

 

33,976

 

-3.8%

Rest of World

16,811

 

14,382

 

+16.9%

28,469

 

25,197

 

+13.0%
Total Net Revenue $

64,224

 

$

58,589

 

+9.6% $

122,238

 

$

108,257

 

+12.9%
International as a percentage of total revenue

49.8

%

54.3

%

50.0

%

54.7

%

 
Revenue By Product Category:
Systems
- North America $

25,232

 

$

19,888

 

+26.9% $

47,939

 

$

36,673

 

+30.7%
- Rest of World (including Japan)

18,421

 

15,680

 

+17.5%

32,228

 

27,215

 

+18.4%
Total Systems

43,653

 

35,568

 

+22.7%

80,167

 

63,888

 

+25.5%
Consumables

5,298

 

4,432

 

+19.5%

9,201

 

7,357

 

+25.1%
Skincare

9,638

 

11,812

 

-18.4%

21,287

 

24,118

 

-11.7%

Total Products

58,589

 

51,812

 

+13.1%

110,655

 

95,363

 

+16.0%
Service

5,635

 

6,777

 

-16.9%

11,583

 

12,894

 

-10.2%

Total Net Revenue $

64,224

 

$

58,589

 

+9.6% $

122,238

 

$

108,257

 

+12.9%
 
 
 
 

Three Months Ended

 

 

 

Six Months Ended

June 30,

 

June 30,

 

 

 

June 30,

 

June 30,

2022

 

2021

 

 

 

2022

 

2021

Pre-tax Stock-Based Compensation Expense:
Cost of revenue $

500

 

$

434

 

$

959

 

$

578

 

Sales and marketing

1,638

 

522

 

2,214

 

1,243

 

Research and development

1,067

 

307

 

2,047

 

608

 

General and administrative

1,528

 

1,656

 

3,556

 

2,336

 

$

4,733

 

$

2,919

 

$

8,776

 

$

4,765

 

 
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 June 30, 2022 Three Months Ended June 30, 2021
GAAP Depreciation
and
Amortization
Stock-Based
Compensation
ERP
Implementation
Legal - Lutronic Loss on Extinguishment of Convertible Notes Non-GAAP GAAP Depreciation
and
Amortization
Stock-Based
Compensation
CRM and ERP
Implementation
Severance (RIF) Legal - Lutronic Other
Adjustments
Non-GAAP
 
Net revenue

$

64,224

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

$

64,224

 

$

58,589

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

$

58,589

 

Cost of revenue

 

29,180

 

 

(161

)

 

(500

)

 

-

 

 

-

 

 

-

 

28,519

 

 

24,800

 

 

(138

)

 

(434

)

 

-

 

 

-

 

 

-

 

 

346

 

 

24,574

 

Gross profit

 

35,044

 

 

161

 

 

500

 

 

-

 

 

-

 

 

-

 

35,705

 

 

33,789

 

 

138

 

 

434

 

 

-

 

 

-

 

 

-

 

 

(346

)

 

34,015

 

Gross margin %

 

54.6

%

 

55.6

%

 

57.7

%

 

58.1

%

 
Operating expenses:
Sales and marketing

 

27,001

 

 

(793

)

 

(1,638

)

 

-

 

 

-

 

 

-

 

24,570

 

 

18,410

 

 

(600

)

 

(522

)

 

-

 

 

(638

)

 

-

 

 

-

 

 

16,650

 

Research and development

 

6,859

 

 

(68

)

 

(1,067

)

 

-

 

 

-

 

 

-

 

5,724

 

 

4,850

 

 

(45

)

 

(307

)

 

-

 

 

-

 

 

-

 

 

-

 

 

4,498

 

General and administrative

 

11,248

 

 

(46

)

 

(1,528

)

 

(2,385

)

 

(242

)

 

-

 

7,047

 

 

8,461

 

 

(21

)

 

(1,656

)

 

(407

)

 

-

 

 

(290

)

 

-

 

 

6,087

 

Total operating expenses

 

45,108

 

 

(907

)

 

(4,233

)

 

(2,385

)

 

(242

)

 

-

 

37,341

 

 

31,721

 

 

(666

)

 

(2,485

)

 

(407

)

 

(638

)

 

(290

)

 

-

 

 

27,235

 

(Loss) income from operations

 

(10,064

)

 

1,068

 

 

4,733

 

 

2,385

 

 

242

 

 

-

 

(1,636

)

 

2,068

 

 

804

 

 

2,919

 

 

407

 

 

638

 

 

290

 

 

(346

)

 

6,780

 

Interest and other expense, net

 

-

 

Amortization of debt issuance costs

 

(298

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(298

)

 

(215

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(215

)

Interest on convertible notes

 

(1,149

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(1,149

)

 

(778

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(778

)

Loss on extinguishment of convertible notes

 

(34,423

)

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Gain on extinguishment of PPP loan

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

 

7,185

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

-

 

Other expense

 

(1,528

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(1,528

)

 

(392

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(392

)

Total interest and other (expense) income, net

 

(37,398

)

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

(2,975

)

 

5,800

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

(1,385

)

(Loss) income before income taxes

 

(47,462

)

 

1,068

 

 

4,733

 

 

2,385

 

 

242

 

 

34,423

 

(4,611

)

 

7,868

 

 

804

 

 

2,919

 

 

407

 

 

638

 

 

290

 

 

(7,531

)

 

5,395

 

Income tax (benefit) expense

 

(186

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(186

)

 

122

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

122

 

Net (loss) income

$

(47,276

)

$

1,068

 

$

4,733

 

$

2,385

 

$

242

 

$

34,423

$

(4,425

)

$

7,746

 

$

804

 

$

2,919

 

$

407

 

$

638

 

$

290

 

$

(7,531

)

$

5,273

 

 
Net (loss) income per share:
Basic

$

(2.53

)

$

(0.24

)

$

0.43

 

$

0.30

 

 
Weighted-average number of shares used in per share calculations:
Basic

 

18,700

 

 

18,700

 

 

17,862

 

 

17,862

 

 
 
 
 
Operating expenses as a % of net revenue
 
GAAP Non-GAAP GAAP Non-GAAP
Sales and marketing

 

42.0

%

 

38.3

%

 

31.4

%

 

28.4

%

Research and development

 

10.7

%

 

8.9

%

 

8.3

%

 

7.7

%

General and administrative

 

17.5

%

 

11.0

%

 

14.4

%

 

10.4

%

 

70.2

%

 

58.2

%

 

54.1

%

 

46.5

%

 
 
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)
 
 
Six Months Ended June 30, 2022 Six Months Ended June 30, 2021
GAAP Depreciation
and
Amortization
Stock-Based
Compensation
ERP
Implementation
Legal - Lutronic Loss on Extinguishment of Convertible Notes Non-GAAP GAAP Depreciation
and
Amortization
Stock-Based
Compensation
CRM and ERP
Implementation
Severance (RIF) Legal - Lutronic Other
Adjustments
Non-GAAP
 
Net revenue

$

122,238

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

$

122,238

 

$

108,257

 

 

-

 

 

-

 

 

-

 

 

-

 

$

108,257

 

Cost of revenue

 

55,406

 

 

(237

)

 

(959

)

 

-

 

 

-

 

 

-

 

54,210

 

 

46,758

 

 

(300

)

 

(578

)

 

-

 

 

-

 

 

-

 

 

346

 

 

46,226

 

Gross profit

 

66,832

 

 

237

 

 

959

 

 

-

 

 

-

 

 

-

 

68,028

 

 

61,499

 

 

300

 

 

578

 

 

-

 

 

-

 

 

-

 

 

(346

)

 

62,031

 

Gross margin %

 

54.7

%

 

55.7

%

 

56.8

%

 

57.3

%

 
Operating expenses:
Sales and marketing

 

51,945

 

 

(1,613

)

 

(2,214

)

 

-

 

 

-

 

 

-

 

48,118

 

 

33,478

 

 

(1,278

)

 

(1,243

)

 

(182

)

 

(638

)

 

-

 

 

-

 

 

30,137

 

Research and development

 

13,358

 

 

(113

)

 

(2,047

)

 

-

 

 

-

 

 

-

 

11,198

 

 

8,962

 

 

(84

)

 

(608

)

 

-

 

 

-

 

 

-

 

 

-

 

 

8,270

 

General and administrative

 

24,750

 

 

(184

)

 

(3,556

)

 

(6,361

)

 

(496

)

 

-

 

14,153

 

 

15,826

 

 

(48

)

 

(2,336

)

 

(477

)

 

-

 

 

(691

)

 

-

 

 

12,274

 

Total operating expenses

 

90,053

 

 

(1,910

)

 

(7,817

)

 

(6,361

)

 

(496

)

 

-

 

73,469

 

 

58,266

 

 

(1,410

)

 

(4,187

)

 

(659

)

 

(638

)

 

(691

)

 

-

 

 

50,681

 

(Loss) income from operations

 

(23,221

)

 

2,147

 

 

8,776

 

 

6,361

 

 

496

 

 

-

 

(5,441

)

 

3,233

 

 

1,710

 

 

4,765

 

 

659

 

 

638

 

 

691

 

 

(346

)

 

11,350

 

Interest and other expense, net
Amortization of debt issuance costs

 

(517

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(517

)

 

(267

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(267

)

Interest on convertible notes

 

(1,927

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(1,927

)

 

(969

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(969

)

Loss on extinguishment of convertible notes

 

(34,423

)

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Gain on extinguishment of PPP loan

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

 

7,185

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

-

 

Other expense

 

(2,283

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(2,283

)

 

(1,415

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,415

)

Total interest and other (expense) income, net

 

(39,150

)

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

(4,727

)

 

4,534

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

(2,651

)

(Loss) income before income taxes

 

(62,371

)

 

2,147

 

 

8,776

 

 

6,361

 

 

496

 

 

34,423

 

(10,168

)

 

7,767

 

 

1,710

 

 

4,765

 

 

659

 

 

638

 

 

691

 

 

(7,531

)

 

8,699

 

Income tax expense

 

47

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

47

 

 

380

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

380

 

Net (loss) income

$

(62,418

)

$

2,147

 

$

8,776

 

$

6,361

 

$

496

 

$

34,423

$

(10,215

)

$

7,387

 

$

1,710

 

$

4,765

 

$

659

 

$

638

 

$

691

 

$

(7,531

)

$

8,319

 

 
Net (loss) income per share:
Basic

$

(3.39

)

$

(0.56

)

$

0.41

 

$

0.47

 

 
Weighted-average number of shares used in per share calculations:
Basic

 

18,392

 

 

18,392

 

 

17,815

 

 

17,815

 

 
 
 
 
Operating expenses as a % of net revenue
 
GAAP Non-GAAP GAAP Non-GAAP
Sales and marketing

 

42.5

%

 

39.4

%

 

30.9

%

 

27.8

%

Research and development

 

10.9

%

 

9.2

%

 

8.3

%

 

7.6

%

General and administrative

 

20.2

%

 

11.6

%

 

14.6

%

 

11.3

%

 

73.6

%

 

60.2

%

 

53.8

%

 

46.7

%

 
CUTERA, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands)
(unaudited)
 
 
Three Months
Ended
  Six Months
Ended
June 30, 2022
 
Net loss

$

(47,276

)

$

(62,418

)

Adjustments:
Stock-based compensation

 

4,733

 

 

8,776

 

ERP implementation cost

 

2,385

 

 

6,361

 

Interest and other expense, net

 

37,398

 

 

39,150

 

Depreciation and amortization

 

1,068

 

 

2,147

 

Legal - Lutronic

 

242

 

 

496

 

Income tax (benefit) expense

 

(186

)

 

47

 

Total adjustments

 

45,640

 

 

56,977

 

Adjusted EBITDA

$

(1,636

)

$

(5,441

)

 

 

Contacts

Cutera, Inc.
Greg Barker
VP, Corporate FP&A
415-657-5500
IR@cutera.com

Contacts

Cutera, Inc.
Greg Barker
VP, Corporate FP&A
415-657-5500
IR@cutera.com