Cutera(CUTR) - 2019 Q1 - Quarterly Report

Financial Performance - Total net revenue for the three months ended March 31, 2019, was $36,026,000, an increase of 5.6% compared to $34,125,000 for the same period in 2018[16] - Gross profit for the three months ended March 31, 2019, was $17,309,000, slightly down from $17,334,000 in the prior year[16] - Operating expenses increased to $25,335,000 for the three months ended March 31, 2019, compared to $22,083,000 in the same period of 2018, representing a 14.9% increase[16] - The net loss for the three months ended March 31, 2019, was $8,220,000, compared to a net loss of $2,032,000 for the same period in 2018, indicating a significant increase in losses[16] - Net loss per share for the three months ended March 31, 2019, was $(0.59), compared to $(0.15) for the same period in 2018[16] Cash and Equity - Cash and cash equivalents at the end of the period were $19,158,000, down from $26,052,000 at the beginning of the period[30] - Total stockholders' equity decreased to $39,120,000 as of March 31, 2019, from $46,386,000 at the end of 2018[10] - The company reported a total of $1,307,000 in stock-based compensation expense for the three months ended March 31, 2019[30] - The company has a total accumulated deficit of $(32,230,000) as of March 31, 2019, compared to $(24,010,000) at the end of 2018[10] Assets and Liabilities - The company’s total liabilities and stockholders' equity were $97,355,000 as of March 31, 2019, compared to $97,637,000 at the end of 2018[10] - As of March 31, 2019, total cash and cash equivalents amounted to $27.1 million, with marketable investments totaling $7.9 million[52] - The Company’s cash and cash equivalents decreased from $35.6 million as of December 31, 2018, to $27.1 million as of March 31, 2019[53] - The total marketable investments were classified as current assets, with a fair market value of $7.9 million as of March 31, 2019[54] Revenue Streams - The Company generates recurring revenue from consumables, including replacement hand pieces and single-use disposable tips, enhancing its revenue stream from existing customers[81] - Extended service contracts for post-warranty services provide additional recurring revenue, recognized over the service period, which can last one to three years[83] - Revenue recognized from performance obligations transferred over time accounted for approximately 15% of total revenue for the three months ended March 31, 2019[70] - The Company recorded $4.142 million in payments received for deferred service contracts during the three months ended March 31, 2019, compared to $2.995 million in the same period of 2018[69] Market Performance - Revenue from the United States decreased to $20,400,000, down 3.5% from $21,136,000 in the prior year[138] - Revenue from Japan increased significantly to $5,294,000, up 49% from $3,555,000 year-over-year[138] - Total product revenue was $30,762,000, an increase of 5.1% compared to $29,264,000 in the previous year[138] - Consumables revenue surged by 153% to $1,945,000, attributed to the introduction of new products with consumable elements[172] Expenses and Losses - The Company reported a net loss of $8.2 million for the three months ended March 31, 2019, compared to a net loss of $2.0 million for the same period in 2018[110] - Basic and diluted net loss per share for the three months ended March 31, 2019, was $(0.59), compared to $(0.15) for the same period in 2018[110] - Sales and marketing expenses increased by $3.0 million, or 23%, to $16,104,000, accounting for 45% of total net revenue[179] Accounting and Compliance - The Company plans to early adopt ASU No. 2018-15 for applicable implementation costs, currently assessing its impact on financial statements[46] - The Company adopted a new lease accounting standard resulting in additional net lease assets and liabilities of $10.3 million and $10.4 million, respectively, as of January 1, 2019[159] - The effective interest rate on the line of credit facility was based on a floating rate equal to the LIBOR rate, which was 2.60% as of March 31, 2019[206] Future Outlook - The Company’s future operating results are subject to risks including rapid technological change and competition from larger companies[40] - The Company is facing increased competition and regulatory challenges, which may impact future performance and product sales[154] - The Company is focused on expanding its product offerings through both internal development and partnerships with other vendors[152]