updated 5/2/2011 4:17:08 PM ET 2011-05-02T20:17:08

BRISBANE, Calif., May 2, 2011 (GLOBE NEWSWIRE) -- Cutera, Inc. (Nasdaq:CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the first quarter ended March 31, 2011.

First quarter 2011 revenue was $11.6 million, compared to $13.7 million in the same period last year. Net loss for the first quarter of 2011 was $3.9 million, or $0.28 per diluted share.

Kevin Connors, President and CEO of Cutera, stated, "In our first quarter we launched our Excel V vascular laser system at the American Academy of Dermatology meeting. Beginning in April 2011, we initiated commercial shipments of this product and we look forward to a continued ramp up of sales and marketing activities. The unfortunate disaster in Japan resulted in a delay in product deliveries to certain customers, as well as our ability to solicit new orders in the latter part of March. We will continue to monitor the business conditions in Japan closely."

"We believe that the following initiatives will put us on a stronger performance trajectory beginning in the second quarter of 2011:

  • The commencement of commercial shipments of our Excel V laser system;
  • The recent FDA clearance of our GenesisPlus product for onychomycosis (toenail fungus). We had been unable to initiate sales and marketing activities in our domestic market for this indication prior to receiving this clearance in April;
  • Our confidence in the leadership of our recently hired North American sales management team and the new growth strategies we put in place. We believe both will result in stronger performance for the balance of the year; and
  • Strengthening our research and development leadership with the addition of Len DeBenedictis as our Chief Technology Officer, who was hired in the first quarter of 2011."

Mr. Connors concluded, "We remain focused on key initiatives to increase future revenue levels and leverage our business model, which we expect will result in improved performance and cash flows in 2011, compared to 2010. We believe that our worldwide distribution network, strong balance sheet with approximately $96 million in cash and investments – with no debt – a broad portfolio of products, and various research and development projects underway, offer continuing, long-term opportunities for our company."

Conference Call:

The conference call to discuss these results is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET) on May 2, 2011. Participating in the call will be Kevin Connors, 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 www.cutera.com , and will be archived online within one hour of its completion through 8:59 p.m. PT (11:59 p.m. ET) on May 16, 2011. In addition, you may call (877) 407-0789 to listen to the live broadcast.

About Cutera, Inc.

Brisbane, California-based Cutera is a leading provider of laser and other light-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 ability to leverage its business model, increase revenue, generate additional cash, increase profitability, realize benefits from changes in management, develop and commercialize existing and new products and applications, and statements regarding long-term prospects and opportunities 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 the current uncertainty related to the Japanese economy and infrastructure, which may reduce demand for the company's products and cause potential customers to delay their purchase decisions; the Company may not be successful in its efforts to improve sales productivity and revenue performance; its ability to successfully develop and launch new products and applications and market them to both its installed base and new customers; the length of the sales cycle process; unforeseen events and circumstances relating to its 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 May 2, 2011. 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 first quarter ended March 31, 2011 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

CUTERA, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
(unaudited) 
 
  March 31, December 31, March 31,
  2011 2010 2010
Assets      
Current assets:      
Cash and cash equivalents $13,164 $12,519 $22,519
Marketable investments  75,934  77,484  73,733
Accounts receivable, net  3,334  4,208  3,488
Inventories, net  7,268  6,448  6,953
Deferred tax asset  14  63  178
Other current assets and prepaid expenses  1,665  2,740  3,190
Total current assets  101,379  103,462  110,061
       
Property and equipment, net  668  597  796
Long-term investments  6,492  6,784  7,153
Intangibles, net  589  637  781
Deferred tax asset, net of current portion  321  325  97
Total assets $109,449 $111,805 $118,888
       
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable $1,545 $1,296 $1,898
Accrued liabilities  5,861  6,194  7,328
Deferred revenue  5,671  5,633  6,270
Total current liabilities  13,077  13,123  15,496
       
Deferred rent  1,478  1,501  1,398
Deferred revenue, net of current portion  1,045  1,287  1,594
Income tax liability  479  477  729
Total liabilities  16,079  16,388  19,217
       
Stockholders' equity:      
Common stock  14  14  13
Additional paid-in capital  92,051  90,423  86,150
Retained earnings  2,881  6,736  15,236
Accumulated other comprehensive loss  (1,576)  (1,756)  (1,728)
Total stockholders' equity  93,370  95,417  99,671
Total liabilities and stockholders' equity $109,449 $111,805 $118,888
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) 
 
   
  Three Months Ended    
  March 31, December 31, March 31,
  2011 2010 2010
Net revenue $11,621 $15,216 $13,749
Cost of revenue  5,224  6,233  5,829
Gross profit  6,397  8,983  7,920
       
Operating expenses:      
Sales and marketing  5,946  6,123  6,361
Research and development  2,130  2,173  1,454
General and administrative  2,328  2,238  2,242
Total operating expenses  10,404  10,534  10,057
Loss from operations  (4,007)  (1,551)  (2,137)
Interest and other income, net  184  144  166
Loss before income taxes  (3,823)  (1,407)  (1,971)
Provision (benefit) for income taxes  32  (127)  47
Net loss  $(3,855)  $(1,280)  $(2,018)
       
Net loss per share:      
Basic and Diluted  $(0.28)  $(0.09)  $(0.15)
       
Weighted-average number of shares used in per share calculations:      
Basic and Diluted  13,667  13,622  13,438
 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 
(unaudited) 
 
  Three Months Ended
  March 31, December 31, March 31,
  2011 2010 2010
Cash flows from operating activities:      
Net loss  $(3,855)  $(1,280)  $(2,018)
Adjustments to reconcile net loss to net cash used in operating activities:      
Stock-based compensation  886  980  828
Tax benefit from stock-based compensation  --  8  --
Excess tax deficit related to stock-based compensation  --  (8)  --
Depreciation and amortization  157  157  194
Provision for excess and obsolete inventories  (45)  18  (23)
Provision for doubtful accounts receivable  (9)  (31)  (82)
Gain on sale of marketable investments, net  --  --  (43)
Change in deferred tax asset   53  (87)  (3)
Changes in assets and liabilities:      
Accounts receivable  883  (1,153)  (79)
Inventories  (775)  678  (522)
Other current assets and prepaid expenses  1,509  553  338
Accounts payable  249  (405)  817
Accrued liabilities  (353)  412  (1,760)
Deferred rent  (3)  (42)  (55)
Deferred revenue  (204)  (139)  (264)
Income tax liability  2  (89)  (20)
Net cash used in operating activities  (1,505)  (428)  (2,692)
       
Cash flows from investing activities:      
Acquisition of property and equipment  (180)  (82)  (95)
Proceeds from sales of marketable and long-term investments  4,241  4,030  14,990
Proceeds from maturities of marketable investments  12,125  8,370  14,125
Purchase of marketable investments  (14,778)  (21,220)  (26,712)
Net cash provided by (used in) investing activities  1,408  (8,902)  2,308
       
Cash flows from financing activities:      
Proceeds from exercise of stock options and employee stock purchase plan  742  138  74
Excess tax benefit related to stock-based compensation  --  8  --
Net cash provided by financing activities  742  146  74
       
Net increase/(decrease) in cash and cash equivalents  645  (9,184)  (310)
Cash and cash equivalents at beginning of period  12,519  21,703  22,829
Cash and cash equivalents at end of period $13,164 $12,519 $22,519
 
CUTERA, INC. 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited) 
 
  Three Months Ended 
  March 31, % of  December 31, % of  March 31, % of 
  2011 Revenue 2010 Revenue 2010 Revenue
Revenue By Geography:            
United States $4,207 36% $5,793 38% $4,547 33%
International  7,414 64%  9,423 62%  9,202 67%
  $11,621   $15,216   $13,749  
             
Revenue By Product Category:            
Products $5,345 46% $8,920 58% $7,445 54%
Upgrades  821 7%  869 6%  1,203 9%
Service   3,328 29%  3,314 22%  3,314 24%
Titan hand piece refills  1,057 9%  934 6%  1,322 10%
Dermal fillers and cosmeceuticals  1,070 9%  1,179 8%  465 3%
  $11,621   $15,216   $13,749  
             
             
             
  Three Months Ended   
  March 31,   December 31,   March 31,  
  2011   2010   2010  
Pre-tax Stock-Based Compensation Expense:            
Cost of revenue $143   $158   $147  
Sales and marketing 238   286   231  
Research and development 143   152   96  
General and administrative  362    384    354  
  $886   $980   $828  
CONTACT: Cutera, Inc.
         Ron Santilli
         Chief Financial Officer
         415-657-5500
         
         Investor Relations
         John Mills
         Integrated Corporate Relations, Inc.
         310-954-1100
         john.mills@icrinc.com

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