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Cutera Reports Fourth Quarter 2012 Results



Cutera Reports Fourth Quarter 2012 Results

Strong Revenue Growth Returns Company to Profitability

BRISBANE, Calif., Feb. 11, 2013 (GLOBE NEWSWIRE) -- Cutera, Inc.
(Nasdaq:CUTR), a leading provider of laser and other energy-based aesthetic
systems for practitioners worldwide, today reported financial results for the
fourth quarter ended December 31, 2012.

Key financial highlights for the fourth quarter of 2012 were as follows:

  * Revenue grew 22% to $22.5 million, compared to Q4'11, and was driven
    primarily by truSculpt and ExcelV products.
  * Gross margin improved sequentially from 55% in Q3'12 to 57% in Q4'12.
  * Company returned to profitability and generated net income of $1.1
    million, or $0.08 per diluted share, which included $1.2 million of
    non-cash stock-based compensation, amortization of intangibles, and
    depreciation.
  * Cash and marketable securities increased $4.4 million in the quarter, to
    $85.6 million.

Kevin Connors, President and CEO of Cutera, stated, "I am pleased with the
seventh consecutive quarter of revenue growth in excess of 22%, compared to
the same period in the prior year, which resulted in improved gross margin,
profit, and significant cash generation. This strong performance reflects the
result of various initiatives that our management team implemented during the
past few years and positions us to continue our revenue and profit growth in
2013."

"We experienced growth in most of our major geographical regions. In the
fourth quarter of 2012, our domestic revenue increased by 36% and our
international revenue expanded by 12%, when compared to the fourth quarter of
2011. We are pleased with the early customer response of our truSculpt product
and look forward to continued revenue growth from this product as we are very
early in penetrating the body contouring market. Further, we continued to
experience growing demand for our premier vascular system, Excel V, and strong
revenue contributions from our flagship multi-application Xeo platform and
GenesisPlus product used for the treatment of onychomycosis (or toe nail
fungus)."

Mr. Connors concluded, "We believe the market outlook for the aesthetic laser
and other energy-based equipment continues to expand and we are well
positioned to capitalize on the improving market and to take advantage of our
business model. We remain focused on many initiatives in order to continue
delivering revenue growth, improved gross and operating margins, and cash
generation in 2013 and beyond."

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 February 11, 2013. 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 February 25,
2013. In addition, you may call 877-407-3982 to listen to the live broadcast.

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 ability to leverage its business model,
increase revenue, generate additional cash, maintain profitability, develop
and commercialize existing and new products and applications, experience
market adoption for its products, realize benefits from additional investment,
continue to penetrate the body contouring market, and statements regarding
long-term prospects and opportunities as well as the timing and expected
benefits of initiatives undertaken by management 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, revenue growth and profitability improvement through the
leverage of its 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; the length of the sales cycle process;
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 5, 2012. 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, 2012, as discussed in this release, is preliminary and unaudited, and
subject to adjustment.

 
CUTERA, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) 
(unaudited) 
                                                                   
                                       December 31, September 30, December 31,
                                       2012         2012          2011
Assets                                                             
Current assets:                                                    
Cash and cash equivalents               $ 23,546     $ 24,334      $ 14,020
Marketable investments                  62,026       55,795        74,666
Accounts receivable, net                8,841        7,845         5,193
Inventories                             11,114       12,477        10,729
Deferred tax asset                      40           49            55
Other current assets and prepaid        1,439        1,443         1,432
expenses
Total current assets                    107,006      101,943       106,095
                                                                   
Property and equipment, net             933          885           853
Long-term investments                   --           1,050         3,027
Deferred tax asset, net of current      553          470           446
portion
Intangibles, net                        2,566        2,876         446
Goodwill                                1,339        1,339         --
Other long-term assets                  397          517           486
Total assets                            $ 112,794    $ 109,080     $ 111,353
                                                                   
 Liabilities and Stockholders' Equity                              
Current liabilities:                                               
Accounts payable                        $ 2,107      $ 2,297       $ 2,573
Accrued liabilities                     9,493        9,486         9,262
Deferred revenue                        6,618        6,299         5,185
Total current liabilities               18,218       18,082        17,020
                                                                   
Deferred rent                           1,288        1,347         1,448
Deferred revenue, net of current        2,102        1,411         840
portion
Income tax liability                    412          471           478
Total liabilities                       22,020       21,311        19,786
                                                                   
Stockholders' equity:                                              
Common stock                            14           14            14
Additional paid-in capital              100,552      98,865        95,719
Accumulated deficit                     (9,873)      (10,950)      (3,325)
Accumulated other comprehensive income  81           (160)         (841)
(loss)
Total stockholders' equity              90,774       87,769        91,567
Total liabilities and stockholders'     $ 112,794    $ 109,080     $ 111,353
equity

 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited) 
                                                                   
                                       Three Months Ended
                                       December 31, September 30, December 31,
                                       2012         2012          2011
Net revenue                             $ 22,533     $ 19,426      $ 18,542
Cost of revenue                         9,790        8,828         7,506
Gross profit                            12,743       10,598        11,036
                                                                   
Operating expenses:                                                
Sales and marketing                     7,101        7,014         6,779
Research and development                2,122        2,217         2,313
General and administrative              2,452        2,475         2,878
Total operating expenses                11,675       11,706        11,970
Income (loss) from operations           1,068        (1,108)       (934)
Interest and other income, net          105          152           140
Income (loss) before income taxes       1,173        (956)         (794)
Provision (benefit) for income taxes    96           (64)          93
Net income (loss)                       $ 1,077      $ (892)       $ (887)
                                                                   
Net income (loss) per share:                                       
Basic                                   $ 0.08       $ (0.06)      $ (0.06)
Diluted                                 $ 0.08       $ (0.06)      $ (0.06)
Weighted-average number of shares used                             
in per share calculations:
Basic                                   14,173       14,127        13,930
Diluted                                 14,272       14,127        13,930

 
CUTERA, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) 
(unaudited) 
                                                                   
                                       Three Months Ended
                                       December 31, September 30, December 31,
                                       2012         2012          2011
Cash flows from operating activities:                              
Net income (loss)                       $ 1,077      $ (892)       $ (887)
Adjustments to reconcile net loss to                               
net cash used in operating activities:
Stock-based compensation                826          809           802
Tax benefit from stock-based            6            --            8
compensation
Excess tax benefit related to           (6)          --            (1)
stock-based compensation
Depreciation and amortization           420          418           154
Other                                   26           (113)         (128)
Changes in assets and liabilities:                                 
Accounts receivable                     (992)        (1,641)       (1,106)
Inventories                             1,363        245           (1,070)
Other current assets and prepaid        142          214           653
expenses
Other long-term assets                  120          22            7
Accounts payable                        (190)        98            422
Accrued liabilities                     (14)         78            1,884
Deferred rent                           (38)         (27)          55
Deferred revenue                        1,010        520           (197)
Income tax liability                    (59)         2             (11)
Net cash provided by (used in)          3,691        (267)         585
operating activities
                                                                   
Cash flows from investing activities:                              
Acquisition of property and equipment   (158)        (47)          (330)
Proceeds from sales of marketable and   5,203        8,566         3,601
long-term investments
Proceeds from maturities of marketable  8,564        14,610        12,850
investments
Purchase of marketable investments      (18,949)     (16,328)      (16,876)
Net cash provided by (used in)          (5,340)      6,801         (755)
investing activities
                                                                   
Cash flows from financing activities:                              
Proceeds from exercise of stock
options and employee stock purchase     855          12            315
plan
Excess tax benefit related to           6            --            1
stock-based compensation
Net cash provided by financing          861          12            316
activities
                                                                   
Net increase (decrease) in cash and     (788)        6,546         146
cash equivalents
Cash and cash equivalents at beginning  24,334       17,788        13,874
of period
Cash and cash equivalents at end of     $ 23,546     $ 24,334      $ 14,020
period

 
CUTERA, INC. 
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited) 
                                                              
               Three Months Ended 
               December  % of    September % of    December  % of 
               31,               30,               31, 
               2012      Revenue 2012      Revenue 2011      Revenue
Revenue By                                                    
Geography:
United States   $ 10,008 44%      $ 7,796  40%      $ 7,372  40%
International   12,525   56%      11,630   60%      11,170   60%
                $ 22,533          $ 19,426          $ 18,542  
                                                              
Revenue By Product                                            
Category:
Products        $ 14,592 65%      $ 12,047 62%      $ 11,241 61%
Upgrades        734      3%       487      3%       1,141    6%
Service         4,614    20%      4,298    22%      3,262    18%
Titan hand      1,235    6%       1,226    6%       1,349    7%
piece refills
Dermal fillers
and             1,358    6%       1,368    7%       1,549    8%
cosmeceuticals
                $ 22,533          $ 19,426          $ 18,542  
                                                              
                                                                                
                                                              
               Three Months Ended                             
               December          September         December
               31,               30,               31,        
               2012              2012              2011
Pre-tax
Stock-Based                                 
Compensation
Expense:
Cost of         $ 178             $ 169             $ 154     
revenue
Sales and       181               177               163       
marketing
Research and    95                126               174       
development
General and     372               337               311       
administrative
                $ 826             $ 809             $ 802     

CONTACT: Cutera, Inc.
         Ron Santilli
         Chief Financial Officer
         415-657-5500
        
         Investor Relations
         John Mills
         Integrated Corporate Relations, Inc.
         310-954-1105
         john.mills@icrinc.com
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