Cutera, Inc. (Nasdaq: CUTR) (“Cutera” or the “Company”), a
leading provider of aesthetic and dermatology solutions, today
provided preliminary financial results for the third quarter ended
September 30, 2023, as well as recent business updates. Some
Company highlights:
- Consolidated revenue for the third quarter of 2023 of $46.5
million, a decrease of 26% compared to the third quarter of
2022
- Cash and marketable securities of $179.5 million as of the end
of the third quarter
- Announcement of an enhanced AviClear offering, including the
option to purchase the device upfront with a corresponding
reduction in treatment costs
- Initiation of a global restructuring program, expected to save
over $20 million in annualized personnel-related expenses
Preliminary Third Quarter 2023 Financial Results
Consolidated revenue for the third quarter of 2023 was $46.5
million, a decrease of 26% compared to the third quarter of 2022.
Revenue related to capital equipment systems declined 36%, while
recurring sources of revenue declined 7%. On a year-to-date basis,
consolidated revenue of $162.7 million decreased 12%, consisting of
a 20% decline in capital equipment system revenue and a 12% decline
in recurring revenue. The Company ended the third quarter with cash
and marketable securities of $179.5 million.
The Company will provide full third quarter financial results at
a later date, pending resolution of an issue related to inventory
accounting described below. The third quarter results are therefore
preliminary and subject to adjustment.
“Third quarter results were disappointing, as we faced more
significant macroeconomic and Company-specific headwinds than
anticipated,” commented Taylor Harris, Chief Executive Officer of
Cutera, Inc. “However, we are taking decisive steps to address
these challenges and to build the foundation for future growth at
Cutera. Our operations team has made solid progress in remediating
our field service challenges. We have also initiated a global
restructuring that will reduce our headcount by close to 25%,
helping both to right-size our cost structure and optimize our
business performance. Additionally, just this past weekend at the
Cutera University Clinical Forum (CUCF), we introduced an enhanced
AviClear product offering, which we believe will drive growth and
cash generation for the Company in the coming years.”
Global Restructuring Program
In October 2023, the Company initiated a global restructuring
program across all functions and geographies. The goals of this
program are to align and structure the business to better serve
customers, improve communication and coordination across the
Company, and gain operational efficiencies in support of long-term
financial health. The changes made in the organizational
restructuring have been carefully planned to ensure that customers
will not experience disruptions in the service they receive. The
restructuring program is expected to result in personnel-related
savings of over $20 million on an annualized basis. In connection
with the restructuring, Cutera expects to incur approximately $2
million in one-time expenses, primarily in the fourth quarter.
AviClear
At CUCF this past weekend, Cutera introduced an enhanced
AviClear offering, which provides greater flexibility, reliability
and support for this innovative, first-to-market technology. The
Company will offer a new business model for AviClear, providing the
option to purchase the device upfront, with a corresponding
reduction in ongoing treatment costs. The Company will also be
offering a hardware and software upgrade that improves product
reliability and moves billing from a per-patient model to paying
for individual treatment cycles, without the need for
patient-specific QR codes. The Company is also planning enhanced
support for growing utilization, including expanded cooperative
marketing opportunities as well as a multi-day university-style
educational program, supported by the Company’s clinical training
team.
The Company is beginning a North American limited commercial
release in Q4 2023 focused on existing customers, followed by a
broader launch in Q1 2024. Additionally, the Company will begin an
international limited commercial release in select countries
starting in Q1 2024.
Inventory Issue and Form 10Q Filing Delay
The Company performed a physical inventory count at the end of
the third quarter of 2023. The results of this count identified a
shortfall of inventory relative to the system of record in the
range of $8 million to $9 million. The Company believes that this
variance began to accumulate prior to the third quarter and is in
the process of determining the amounts attributable to prior 2023
periods. The Company expects to complete the analysis of the
inventory variance within the next few weeks, at which point full
third quarter financial results will be published on Form 10-Q.
Financial Outlook
The Company expects full-year 2023 revenue of approximately $205
million and ending 2023 cash and marketable securities of
approximately $135 million. The Company expects that its current
cash position will be sufficient to achieve cash flow
breakeven.
Revenue Overview
Three Months Ended September
30, 2023
% Change vs Three Months Ended
June 30, 2022
Key Revenue Metrics
Reported
Constant Currency
Capital Equipment
$26.3
-36%
-36%
Skincare
$7.1
-24%
-20%
Consumables
$3.7
-26%
-25%
Service
$5.5
-12%
-11%
AviClear
$3.9
nm
nm
Recurring
$20.2
-7%
-5%
Total Revenue
$46.5
-26%
-25%
Nine Months Ended September
30, 2023
% Change vs Nine Months Ended
September 30, 2022
Key Revenue Metrics
Reported
Constant Currency
Capital Equipment
$97.5
-20%
-18%
Skincare
$24.7
-20%
-12%
Consumables
$11.7
-17%
-15%
Service
$16.5
-7%
-5%
AviClear
$12.3
N/A
N/A
Recurring
$65.2
2%
7%
Total Revenue
$162.7
-12%
-9%
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 Taylor Harris, Chief
Executive Officer, Stuart Drummond, Interim Chief Financial
Officer, and Greg Barker, Vice President of FP&A and Investor
Relations.
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.
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, Cutera’s 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 Company’s 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 Company’s 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, 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,
2023, as discussed in this release, is preliminary and unaudited,
and subject to adjustment, pending resolution of a physical
inventory count shortfall of $8 million to $9 million.
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version on businesswire.com: https://www.businesswire.com/news/home/20231108688551/en/
Cutera, Inc. Greg Barker VP, Corporate FP&A and
Investor Relations 415-657-5500 IR@cutera.com
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