Cutera(CUTR) - 2024 Q3 - Quarterly Report

Financial Performance - Total net revenue for Q3 2024 was $32.5 million, a decrease of 30.1$46.5 million in Q3 2023[11] - Product revenue was $27.2 million, down 33.5$41.0 million in the same quarter last year[11] - Gross profit for Q3 2024 was $1.8 million, representing a gross margin of 5.6$6.5 million and 13.9% in Q3 2023[11] - The net loss for Q3 2024 was $39.0 million, compared to a net loss of$44.3 million in Q3 2023, reflecting a 12.9% improvement[11] - For the nine months ended September 30, 2024, the company reported a net loss of $86.5 million, compared to a net loss of$105.6 million for the same period in 2023[21] - The company reported a basic net loss per share of $1.94 for Q3 2024, compared to$2.22 for Q3 2023[11] - The Company reported net losses of $86.5 million for the nine months ended September 30, 2024, and$162.8 million for the year ended December 31, 2023[26] - The Company’s comprehensive loss for the nine months ended September 30, 2024, was $86,477 thousand, down from$105,600 thousand in the same period of 2023, indicating an 18.1% reduction[13] Cash and Liquidity - Cash and cash equivalents decreased to $57.6 million as of September 30, 2024, down from$143.6 million at the end of 2023[8] - The company experienced a decrease in cash, cash equivalents, and restricted cash, ending the period at $58.98 million, down from$180.22 million[21] - As of September 30, 2024, cash, cash equivalents, and restricted cash totaled $59.0 million, down from$143.6 million as of December 31, 2023[53] - The Company’s liquidity assessment includes evaluating current funds and forecasted future cash flows[26] - The Company has a historic trend of operating losses, impacting overall liquidity and raising doubts about its ability to continue as a going concern[27] Assets and Liabilities - Total current assets were $160.5 million, a decline of 40.4$269.2 million at the end of 2023[8] - Total liabilities amounted to $487.3 million, a slight decrease from$518.1 million at the end of 2023[8] - The accumulated deficit increased to $389.8 million as of September 30, 2024, compared to$303.3 million at the end of 2023[8] - The total stockholders' deficit increased to $(252.9) million as of September 30, 2024, from$(171.8) million at December 31, 2023[16] - Total assets decreased to $234,418 as of September 30, 2024, from$346,291 as of December 31, 2023[8] Revenue Sources and Changes - Revenue from the distribution of skincare products was $4.2 million for the nine months ended September 30, 2024, compared to$24.7 million for the same period in 2023, representing a decline of 83.0%[43] - Revenue from performance obligations satisfied over time accounted for approximately 11% and 13% of total revenue for the three and nine months ended September 30, 2024, compared to 13% and 10% for the same periods in 2023[77] - Revenue from the United States for the three months ended September 30, 2024, was $12,043, down 44.6$21,526 in 2023[174] - The Company generates revenue from Products, which include Systems and Consumables, as well as Service revenue from post-warranty contracts[24] Operational Changes and Strategies - The Company is transitioning from a lease model to a direct sales model for AviClear, which is critical for revenue growth[28] - The Company terminated its distribution agreement for skincare products with ZO Skin Health, Inc. on February 28, 2024[24] - The Company is implementing cost savings initiatives due to workforce reductions in Q4 2023 and Q2 2024[28] - The Company is focusing on improving inventory and receivables management as part of its restructuring efforts[28] - The Company has developed and marketed multiple energy-based product platforms, including AviClear and truSculpt, for various medical treatments[23] Stock and Equity - The balance of common shares increased to 20,177,717 as of September 30, 2024, from 19,960,622 at December 31, 2023[16] - The Company’s stock options outstanding as of September 30, 2024, were 2,231,124, with a weighted average exercise price of $2.42[99] - The Company’s equity incentive plans had 3,009,733 shares available for grant as of September 30, 2024[96] Legal and Settlement Matters - The Company reached a settlement agreement with Lutronic, where Lutronic agreed to pay$5.75 million within thirty days of the Settlement Date[125] - The Company had accrued $2.6 million related to various pending commercial and product liability lawsuits[126] - All pending actions against both parties in the Lutronic case were dismissed with prejudice as of July 3, 2024[125] Debt and Financing - The outstanding principal amount of the Company's Convertible Notes as of September 30, 2024, was$420.4 million[128] - The 2026 Notes bear an interest rate of 2.25% per year, with a principal amount of $69.1 million remaining outstanding after exchanges[129][130] - The 2028 Notes, issued in May 2022, have a principal amount of$240 million and an interest rate of 2.25% per year[132][133] - The 2029 Notes, issued in December 2022, have a principal amount of $120 million and an interest rate of 4.00$82.62, representing a 100% premium over the last reported sale price of $41.31 per share[166]