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Cutera Announces Third Quarter 2022 Financial Results

Continued momentum in Capital equipment sales, posting 27% growth as reported and 32% in constant currency;

Strong Consumable product growth reflecting robust underlying treatment volumes;

Moving to full North American AviClear launch following successful limited commercial release;

Reiterating full-year revenue guidance despite foreign exchange headwinds, implying year-over-year constant currency growth of approximately 20%

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

Third Quarter 2022 Financial and Operational Highlights

  • Consolidated revenue of $62.8 million driven by capital equipment and consumable product demand.
  • During Q3 2022, over 100 new active placements of AviClear devices, up from the over 50 in Q2 and slightly ahead of the previous 100 device Q3 commitment.
  • Strong Consumable Product Revenue, up 66% as reported and 74% on a constant currency basis, reflecting robust underlying treatment volumes and the inclusion of AviClear patient procedure revenue.
  • GAAP Gross margin of 54.5% in the quarter, compared to 58.2% in the prior-year period.
    • Excluding the 170 basis point impact from AviClear investments and foreign exchange headwinds of approximately 250 basis points, gross margin would have been 58.7%.
  • GAAP Operating expenses were $43.7 million in the quarter, compared to $32.8 million in the prior-year period. Operating expenses during the period included $8.1 million in AviClear spending in addition to $1.4 million in ERP implementation expenses.
  • GAAP Net loss was $12.1 million, compared to a Net loss of $1.4 million in the prior-year period.
  • Adjusted EBITDA was a loss of $2.0 million, compared to a gain of $5.1 million in the prior-year period.
    • Excluding AviClear impacts of $7.9 million in the quarter and foreign exchange headwinds of $3.1 million over the prior year period comparable adjusted EBITDA would have been $9.1 million.
Key Revenue Metrics Three Months Ended Sep 30, 2022 % Change 2022 Vs 2021 Constant Currency Key Profit Metrics Three Months Ended Sep 30, 2022 Constant Currency
Capital Equipment

$41.0

27%

32%

GAAP Margin %

54.5%

57.0%

Skincare

$9.4

-36%

-21%

Non-GAAP Margin %

55.4%

57.8%

Consumables

$6.1

66%

74%

Adjusted EBITDA

($2.0)

$1.2

Service

$6.3

-6%

-1%

Adjusted EBITDA Margin %

-3.1%

1.9%

Recurring

$21.8

-13%

-2%

Total Revenue

$62.8

9%

17%

 
Key Revenue Metrics Nine Months Ended Sep 30, 2021 % Change 2022 Vs 2021 Constant Currency Key Profit Metrics Nine Months Ended Sep 30, 2021 Constant Currency
Capital Equipment

$121.2

26%

30%

GAAP Margin %

54.6%

56.5%

Skincare

$30.7

-21%

-8%

Non-GAAP Margin %

55.6%

57.4%

Consumables

$15.3

39%

44%

Adjusted EBITDA

($7.4)

($0.3)

Service

$17.9

-9%

-5%

Adjusted EBITDA Margin %

-4.0%

-0.2%

Recurring

$63.9

-8%

1%

Total Revenue

$185.0

12%

18%

“I am pleased by the momentum we continue to see in our core business, as prior investments in sales force expansion deliver strong results in both our capital and consumables product segments across North America and other direct-sales markets. We remain watchful to the global macroeconomic conditions and are prepared to respond quickly if warranted. Based upon our current view, the strength of our third quarter performance, and our capital equipment pipeline, we remain encouraged by the resilience of our core markets,” commented Dave Mowry, Chief Executive Officer of Cutera, Inc.

“During the quarter, in addition to setting an all-time high for 3Q capital sales in North America, our sales team executed the second phase of our Limited Commercial Release, placing over 100 additional active AviClear devices into the field. These efforts enabled us to validate several new processes and as a result in November we will move to a full launch of this revolutionary product and procedure in North America, slightly ahead of our previous plans.

2022 Outlook

Based upon our results year-to-date, despite unprecedented foreign exchange volatility Cutera expects to finish 2022 at the upper end of revenue guidance of $255 million to $260 million, fully absorbing the impact of approximately $17 million of currency headwinds. This implies constant currency growth of roughly 18% to 20% over the prior year.

Management now anticipates the placement and activation of an additional 200 AviClear devices during the fourth quarter of 2022, bringing the total number of active AviClear platforms entering FY 2023 to approximately 350.

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 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, 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 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 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 concerning those or other forward-looking statements. Cutera's financial performance for the third quarter ended September 30, 2022, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

CUTERA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 
September 30, December 31,

2022

2021

Assets
Current assets:
Cash and cash equivalents

$

45,880

 

$

164,164

 

Marketable investments

 

204,946

 

 

-

 

Accounts receivable, net

 

35,876

 

 

31,449

 

Inventories, net

 

55,938

 

 

39,503

 

Other current assets and prepaid expenses

 

23,672

 

 

14,545

 

Total current assets

 

366,312

 

 

249,661

 

 
Property and equipment, net

 

34,479

 

 

3,019

 

Deferred tax assets

 

626

 

 

778

 

Goodwill

 

1,339

 

 

1,339

 

Operating lease right-of-use assets

 

13,033

 

 

14,627

 

Other long-term assets

 

11,668

 

 

10,169

 

Restricted cash

 

700

 

 

700

 

Total assets

$

428,157

 

$

280,293

 

 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$

34,176

 

$

7,891

 

Accrued liabilities

 

50,791

 

 

54,100

 

Operating leases liabilities

 

2,712

 

 

2,419

 

Deferred revenue

 

10,579

 

 

9,490

 

Total current liabilities

 

98,258

 

 

73,900

 

 
Deferred revenue, net of current portion

 

1,822

 

 

1,335

 

Operating lease liabilities, net of current portion

 

11,642

 

 

13,483

 

Convertible notes, net of unamortized debt issuance costs

 

300,256

 

 

134,243

 

Other long-term liabilities

 

685

 

 

763

 

Total liabilities

 

412,663

 

 

223,724

 

 
Stockholders’ equity:
Common stock

 

20

 

 

18

 

Additional paid-in capital

 

148,535

 

 

114,724

 

Accumulated other comprehensive loss

 

(336

)

 

-

 

Accumulated deficit

 

(132,725

)

 

(58,173

)

Total stockholders' equity

 

15,494

 

 

56,569

 

Total liabilities and stockholders' equity

$

428,157

 

$

280,293

 

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

September 30,

 

September 30,

2022

 

2021

 

2022

 

2021

 
Products $

56,540

 

$

50,694

 

$

167,195

 

$

146,056

 

Service

6,268

 

6,690

 

17,851

 

19,585

 

Total net revenue

62,808

 

57,384

 

185,046

 

165,641

 

 
Products

25,255

 

20,259

 

74,066

 

59,483

 

Service

3,305

 

3,700

 

9,900

 

11,234

 

Total cost of revenue

28,560

 

23,959

 

83,966

 

70,717

 

Gross profit

34,248

 

33,425

 

101,080

 

94,924

 

Gross margin %

54.5

%

58.2

%

54.6

%

57.3

%

 
Operating expenses:
Sales and marketing

26,488

 

19,190

 

78,433

 

52,668

 

Research and development

6,389

 

5,802

 

19,747

 

14,764

 

General and administrative

10,804

 

7,807

 

35,554

 

23,633

 

Total operating expenses

43,681

 

32,799

 

133,734

 

91,065

 

(Loss) income from operations

(9,433

)

626

 

(32,654

)

3,859

 

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

(400

)

(225

)

(917

)

(492

)

Interest on convertible notes

(1,739

)

(768

)

(3,666

)

(1,737

)

Loss on extinguishment of convertible notes

-

 

-

 

(34,423

)

-

 

Gain on extinguishment of PPP loan

-

 

-

 

-

 

7,185

 

Other income (expense), net

265

 

(561

)

(2,018

)

(1,976

)

(Loss) income before income taxes

(11,307

)

(928

)

(73,678

)

6,839

 

Income tax expense

827

 

462

 

874

 

842

 

Net (loss) income $

(12,134

)

$

(1,390

)

$

(74,552

)

$

5,997

 

 
Net (loss) income per share:
Basic $

(0.62

)

$

(0.08

)

$

(3.95

)

$

0.34

 

Diluted $

(0.62

)

$

(0.08

)

$

(3.95

)

$

0.33

 

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

19,593

 

17,945

 

18,897

 

17,860

 

Diluted

19,593

 

17,945

 

18,897

 

18,327

 

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Three Months Ended Nine Months Ended
 

September 30,

 

September 30,

 

September 30,

 

September 30,

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:
Net (loss) income

$

(12,134

)

$

(1,390

)

$

(74,552

)

$

5,997

 

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

 

4,245

 

 

3,742

 

 

13,021

 

 

8,507

 

Depreciation and amortization

 

674

 

 

307

 

 

1,603

 

 

1,014

 

Amortization of contract acquisition costs

 

596

 

 

427

 

 

1,815

 

 

1,430

 

Amortization of debt issuance costs

 

400

 

 

225

 

 

917

 

 

492

 

Unrealized gain on foreign exchange forward

 

(292

)

 

-

 

 

(292

)

 

-

 

Impairment of capitalized cloud computing costs

 

-

 

 

-

 

 

-

 

 

182

 

Change in deferred tax assets

 

72

 

 

3

 

 

152

 

 

54

 

Provision for excess and obsolete inventories

 

(448

)

 

636

 

 

110

 

 

1,335

 

Provision for credit losses

 

268

 

 

(391

)

 

677

 

 

101

 

Loss (gain) on sale of property and equipment

 

23

 

 

37

 

 

86

 

 

(45

)

PPP loan forgiveness

 

-

 

 

-

 

 

-

 

 

(7,185

)

Change in right-of-use asset

 

668

 

 

1,077

 

 

1,976

 

 

1,681

 

Loss on extinguishment of convertible notes

 

-

 

 

-

 

 

34,423

 

 

-

 

Changes in assets and liabilities:
Accounts receivable

 

(3,996

)

 

(4,466

)

 

(5,104

)

 

(8,899

)

Inventories, net

 

(10,666

)

 

(1,604

)

 

(28,725

)

 

(8,261

)

Other current assets and prepaid expenses

 

(5,801

)

 

(4,494

)

 

(8,835

)

 

(4,571

)

Other long-term assets

 

(2,573

)

 

(1,767

)

 

(3,644

)

 

(3,487

)

Accounts payable

 

5,671

 

 

1,049

 

 

20,442

 

 

575

 

Accrued liabilities

 

3,194

 

 

2,129

 

 

(3,684

)

 

11,782

 

Operating lease liabilities

 

(658

)

 

(1,043

)

 

(1,930

)

 

(1,573

)

Deferred revenue

 

874

 

 

(723

)

 

1,576

 

 

(557

)

Net cash used in operating activities

 

(19,883

)

 

(6,246

)

 

(49,968

)

 

(1,428

)

 
Cash flows from investing activities:
Acquisition of property and equipment

 

(5,869

)

 

(12

)

 

(14,107

)

 

(382

)

Disposal of property and equipment

 

-

 

 

-

 

 

-

 

 

71

 

Proceeds from maturities of marketable investments

 

47,000

 

 

-

 

 

47,000

 

 

-

 

Purchase of marketable securities and long-term investments

 

(48,973

)

 

-

 

 

(252,282

)

 

-

 

Net cash used in investing activities

 

(7,842

)

 

(12

)

 

(219,389

)

 

(311

)

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

 

248

 

 

158

 

 

1,687

 

 

2,056

 

Taxes paid related to net share settlement of equity awards

 

(586

)

 

(511

)

 

(4,820

)

 

(1,963

)

Purchase of capped call

 

-

 

 

-

 

 

(31,671

)

 

(16,134

)

Payment of issuance costs of capped call

 

(353

)

 

-

 

 

(353

)

 

-

 

Proceeds from issuance of convertible notes

 

-

 

 

-

 

 

240,000

 

 

138,250

 

Payment of issuance costs of convertible notes

 

(646

)

 

-

 

 

(7,602

)

 

(4,717

)

Extinguishment of convertible notes

 

-

 

 

-

 

 

(45,777

)

 

-

 

Payments on capital lease obligation

 

(108

)

 

(103

)

 

(391

)

 

(314

)

Net cash (used in) provided by financing activities

 

(1,445

)

 

(456

)

 

151,073

 

 

117,178

 

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

 

(29,170

)

 

(6,714

)

 

(118,284

)

 

115,439

 

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

 

75,750

 

 

169,200

 

 

164,864

 

 

47,047

 

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

$

46,580

 

$

162,486

 

$

46,580

 

$

162,486

 

CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)
 
Three Months Ended % Change Nine Months Ended % Change

September 30,

 

September 30,

 

2022 Vs

 

September 30,

 

September 30,

 

2022 Vs

2022

 

2021

 

2021

 

2022

 

2021

 

2021

Revenue By Geography:
North America $

33,258

 

$

26,710

 

+24.5% $

94,350

 

$

75,794

 

+24.5%
Japan

15,263

 

19,335

 

-21.1%

47,940

 

53,311

 

-10.1%

Rest of World

14,287

 

11,339

 

+26.0%

42,756

 

36,536

 

+17.0%
Total Net Revenue $

62,808

 

$

57,384

 

+9.5% $

185,046

 

$

165,641

 

+11.7%
International as a percentage of total revenue

47.0

%

53.5

%

49.0

%

54.2

%

 
Revenue By Product Category:
Systems
- North America $

25,359

 

$

20,680

 

+22.6% $

73,298

 

$

57,353

 

+27.8%
- Rest of World (including Japan)

15,626

 

11,511

 

+35.7%

47,854

 

38,726

 

+23.6%
Total Systems

40,985

 

32,191

 

+27.3%

121,152

 

96,079

 

+26.1%
Consumables

6,119

 

3,684

 

+66.1%

15,320

 

11,040

 

+38.8%
Skincare

9,436

 

14,819

 

-36.3%

30,723

 

38,937

 

-21.1%

Total Products

56,540

 

50,694

 

+11.5%

167,195

 

146,056

 

+14.5%
Service

6,268

 

6,690

 

-6.3%

17,851

 

19,585

 

-8.9%

Total Net Revenue $

62,808

 

$

57,384

 

+9.5% $

185,046

 

$

165,641

 

+11.7%
 
 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

September 30,

 

September 30,

2022

 

2021

 

2022

 

2021

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

471

$

330

$

1,430

$

908

Sales and marketing

1,641

711

3,855

1,954

Research and development

466

1,020

2,513

1,628

General and administrative

1,667

1,681

5,223

4,017

$

4,245

$

3,742

$

13,021

$

8,507

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, 2022 Three Months Ended September 30, 2021
GAAP Depreciation

and

Amortization
Stock-Based

Compensation
ERP

Implementation
Legal - Lutronic Severance Other Adjustments Non-GAAP GAAP Depreciation

and

Amortization
Stock-Based

Compensation
CRM and ERP

Implementation
Legal - Lutronic Other

Adjustments
Non-GAAP
 
Net revenue

$

62,808

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

$

62,808

 

$

57,384

 

 

-

 

 

-

 

 

-

 

 

-

 

$

57,384

 

Cost of revenue

 

28,560

 

 

(359

)

 

(471

)

 

-

 

 

-

 

 

(26

)

 

290

 

 

27,994

 

 

23,959

 

 

(132

)

 

(330

)

 

-

 

 

-

 

 

445

 

 

23,942

 

Gross profit

 

34,248

 

 

359

 

 

471

 

 

-

 

 

-

 

 

26

 

 

(290

)

 

34,814

 

 

33,425

 

 

132

 

 

330

 

 

-

 

 

-

 

 

(445

)

 

33,442

 

Gross margin %

 

54.5

%

 

55.4

%

 

58.2

%

 

58.3

%

 
Operating expenses:
Sales and marketing

 

26,488

 

 

(715

)

 

(1,641

)

 

-

 

 

-

 

 

(262

)

 

-

 

 

23,870

 

 

19,190

 

 

(549

)

 

(711

)

 

-

 

 

-

 

 

-

 

 

17,930

 

Research and development

 

6,389

 

 

(67

)

 

(466

)

 

-

 

 

-

 

 

(88

)

 

-

 

 

5,768

 

 

5,802

 

 

(49

)

 

(1,020

)

 

-

 

 

-

 

 

-

 

 

4,733

 

General and administrative

 

10,804

 

 

(54

)

 

(1,667

)

 

(1,351

)

 

(566

)

 

(39

)

 

-

 

 

7,127

 

 

7,807

 

 

(8

)

 

(1,681

)

 

(128

)

 

(288

)

 

-

 

 

5,702

 

Total operating expenses

 

43,681

 

 

(836

)

 

(3,774

)

 

(1,351

)

 

(566

)

 

(389

)

 

-

 

 

36,765

 

 

32,799

 

 

(606

)

 

(3,412

)

 

(128

)

 

(288

)

 

-

 

 

28,365

 

(Loss) income from operations

 

(9,433

)

 

1,195

 

 

4,245

 

 

1,351

 

 

566

 

 

415

 

 

(290

)

 

(1,951

)

 

626

 

 

738

 

 

3,742

 

 

128

 

 

288

 

 

(445

)

 

5,077

 

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

 

(400

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(400

)

 

(225

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(225

)

Interest on convertible notes

 

(1,739

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,739

)

 

(768

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(768

)

Other income (expense)

 

265

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

265

 

 

(561

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(561

)

Total interest and other expense, net

 

(1,874

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,874

)

 

(1,554

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,554

)

(Loss) income before income taxes

 

(11,307

)

 

1,195

 

 

4,245

 

 

1,351

 

 

566

 

 

415

 

 

(290

)

 

(3,825

)

 

(928

)

 

738

 

 

3,742

 

 

128

 

 

288

 

 

(445

)

 

3,523

 

Income tax expense

 

827

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

827

 

 

462

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

462

 

Net (loss) income

$

(12,134

)

$

1,195

 

$

4,245

 

$

1,351

 

$

566

 

$

415

 

$

(290

)

$

(4,652

)

$

(1,390

)

$

738

 

$

3,742

 

$

128

 

$

288

 

$

(445

)

$

3,061

 

 
Net (loss) income per share:
Basic

$

(0.62

)

$

(0.24

)

$

(0.08

)

$

0.17

 

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

 

19,593

 

 

19,593

 

 

17,945

 

 

17,945

 

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

 

42.2

%

 

38.0

%

 

33.4

%

 

31.2

%

Research and development

 

10.2

%

 

9.2

%

 

10.1

%

 

8.2

%

General and administrative

 

17.2

%

 

11.3

%

 

13.6

%

 

9.9

%

 

69.6

%

 

58.5

%

 

57.1

%

 

49.3

%

 

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)
 
Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021
GAAP Depreciation

and

Amortization
Stock-Based

Compensation
ERP

Implementation
Legal - Lutronic Severance Other Adjustments Loss on Extinguishment of Convertible Notes Non-GAAP GAAP Depreciation

and

Amortization
Stock-Based

Compensation
CRM and ERP

Implementation
Legal - Lutronic Severance (RIF) Other

Adjustments
Non-GAAP
 
Net revenue

$

185,046

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

$

185,046

 

$

165,641

 

 

-

 

 

-

 

 

-

 

 

-

 

$

165,641

 

Cost of revenue

 

83,966

 

 

(596

)

 

(1,430

)

 

-

 

 

-

 

 

(26

)

 

290

 

 

-

 

82,204

 

 

70,717

 

 

(432

)

 

(908

)

 

-

 

 

-

 

 

-

 

 

791

 

 

70,168

 

Gross profit

 

101,080

 

 

596

 

 

1,430

 

 

-

 

 

-

 

 

26

 

 

(290

)

 

-

 

102,842

 

 

94,924

 

 

432

 

 

908

 

 

-

 

 

-

 

 

-

 

 

(791

)

 

95,473

 

Gross margin %

 

54.6

%

 

55.6

%

 

57.3

%

 

57.6

%

 
Operating expenses:
Sales and marketing

 

78,433

 

 

(2,328

)

 

(3,855

)

 

-

 

 

-

 

 

(262

)

 

-

 

 

-

 

71,988

 

 

52,668

 

 

(1,827

)

 

(1,954

)

 

(182

)

 

-

 

 

(638

)

 

-

 

 

48,067

 

Research and development

 

19,747

 

 

(180

)

 

(2,513

)

 

-

 

 

-

 

 

(88

)

 

-

 

 

-

 

16,966

 

 

14,764

 

 

(133

)

 

(1,628

)

 

-

 

 

-

 

 

-

 

 

-

 

 

13,003

 

General and administrative

 

35,554

 

 

(238

)

 

(5,223

)

 

(7,712

)

 

(1,062

)

 

(39

)

 

-

 

 

-

 

21,280

 

 

23,633

 

 

(56

)

 

(4,017

)

 

(605

)

 

(979

)

 

-

 

 

-

 

 

17,976

 

Total operating expenses

 

133,734

 

 

(2,746

)

 

(11,591

)

 

(7,712

)

 

(1,062

)

 

(389

)

 

-

 

 

-

 

110,234

 

 

91,065

 

 

(2,016

)

 

(7,599

)

 

(787

)

 

(979

)

 

(638

)

 

-

 

 

79,046

 

(Loss) income from operations

 

(32,654

)

 

3,342

 

 

13,021

 

 

7,712

 

 

1,062

 

 

415

 

 

(290

)

 

-

 

(7,392

)

 

3,859

 

 

2,448

 

 

8,507

 

 

787

 

 

979

 

 

638

 

 

(791

)

 

16,427

 

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

 

(917

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(917

)

 

(492

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(492

)

Interest on convertible notes

 

(3,666

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(3,666

)

 

(1,737

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,737

)

Loss on extinguishment of convertible notes

 

(34,423

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Gain on extinguishment of PPP loan

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

 

7,185

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

-

 

Other expense

 

(2,018

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

(2,018

)

 

(1,976

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,976

)

Total interest and other (expense) income, net

 

(41,024

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

34,423

 

(6,601

)

 

2,980

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(7,185

)

 

(4,205

)

(Loss) income before income taxes

 

(73,678

)

 

3,342

 

 

13,021

 

 

7,712

 

 

1,062

 

 

415

 

 

(290

)

 

34,423

 

(13,993

)

 

6,839

 

 

2,448

 

 

8,507

 

 

787

 

 

979

 

 

638

 

 

(7,976

)

 

12,222

 

Income tax expense

 

874

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

874

 

 

842

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

842

 

Net (loss) income

$

(74,552

)

$

3,342

 

$

13,021

 

$

7,712

 

$

1,062

 

$

415

 

$

(290

)

$

34,423

$

(14,867

)

$

5,997

 

$

2,448

 

$

8,507

 

$

787

 

$

979

 

$

638

 

$

(7,976

)

$

11,380

 

 
Net (loss) income per share:
Basic

$

(3.95

)

$

(0.79

)

$

0.34

 

$

0.64

 

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

 

18,897

 

 

18,897

 

 

17,860

 

 

17,860

 

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

 

42.4

%

 

38.9

%

 

31.8

%

 

29.0

%

Research and development

 

10.7

%

 

9.2

%

 

8.9

%

 

7.9

%

General and administrative

 

19.2

%

 

11.5

%

 

14.3

%

 

10.9

%

 

72.3

%

 

59.6

%

 

55.0

%

 

47.8

%

 
CUTERA, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands)
(unaudited)
 
Three Months

Ended
Nine Months

Ended
September 30, 2022
 
Net loss

$

(12,134

)

$

(74,552

)

Adjustments:
Depreciation and amortization

 

1,195

 

 

3,342

 

Stock-based compensation

 

4,245

 

 

13,021

 

ERP implementation cost

 

1,351

 

 

7,712

 

Legal - Lutronic

 

566

 

 

1,062

 

Severance

 

415

 

 

415

 

Other adjustments

 

(290

)

 

(290

)

Interest and other expense, net

 

1,874

 

 

41,024

 

Income tax expense

 

827

 

 

874

 

Total adjustments

 

10,183

 

 

67,160

 

Adjusted EBITDA

$

(1,951

)

$

(7,392

)

 

Contacts

Cutera, Inc.

Greg Barker

VP, Corporate FP&A

415-657-5500

IR@cutera.com

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