Cutera (CUTR) 8-K Results of Operations and Financial Condition

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACTS:

Cutera, Inc.

Ron Santilli

Chief Financial Officer

415-657-5500

Investor Relations

John Mills

Integrated Corporate Relations, Inc.

310-954-1100

john.mills@icrinc.com

Cutera Reports First Quarter 2011 Results

BRISBANE, Calif., May 2, 2011 ─ Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and other light-based aesthetic systems for practitioners worldwide, today reported financial results for the first quarter ended March 31, 2011.

First quarter 2011 revenue was $11.6 million, compared to $13.7 million in the same period last year.  Net loss for the first quarter of 2011 was $3.9 million, or $0.28 per diluted share.

Kevin Connors, President and CEO of Cutera, stated, “In our first quarter we launched our Excel V vascular laser system at the American Academy of Dermatology meeting.  Beginning in April 2011, we initiated commercial shipments of this product and we look forward to a continued ramp up of sales and marketing activities.  The unfortunate disaster in Japan resulted in a delay in product deliveries to certain customers, as well as our ability to solicit new orders in the latter part of March.  We will continue to monitor the business conditions in Japan closely.”

“We believe that the following initiatives will put us on a stronger performance trajectory beginning in the second quarter of 2011:

· The commencement of commercial shipments of our Excel V laser system;

· The recent FDA clearance of our GenesisPlus product for onychomycosis (toenail fungus).  We had been unable to initiate sales and marketing activities in our domestic market for this indication prior to receiving this clearance in April;

· Our confidence in the leadership of our recently hired North American sales management team and the new growth strategies we put in place. We believe both will result in stronger performance for the balance of the year; and

· Strengthening our research and development leadership with the addition of Len DeBenedictis as our Chief Technology Officer, who was hired in the first quarter of 2011.”

Mr. Connors concluded, “We remain focused on key initiatives to increase future revenue levels and leverage our business model, which we expect will result in improved performance and cash flows in 2011, compared to 2010.  We believe that our worldwide distribution network, strong balance sheet with approximately $96 million in cash and investments – with no debt – a broad portfolio of products, and various research and development projects underway, offer continuing, long-term opportunities for our company.”

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 May 2, 2011. 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 May 16, 2011. In addition, you may call (877) 407-0789 to listen to the live broadcast.

About Cutera, Inc.

Brisbane, California-based Cutera is a leading provider of laser and other light-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, increase profitability, realize benefits from changes in management, develop and commercialize existing and new products and applications, and statements regarding long-term prospects and opportunities 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 the current uncertainty related to the Japanese economy and infrastructure, which may reduce demand for the company’s products and cause potential customers to delay their purchase decisions; the Company may not be successful in its efforts to improve sales productivity and revenue performance; its 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 its 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 May 2, 2011. 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 first quarter ended March 31, 2011 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

CUTERA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

	March 31,			December 31,			March 31,
	2011			2010			2010
Assets
Current assets:
Cash and cash equivalents	$	13,164		$	12,519		$	22,519
Marketable investments		75,934			77,484			73,733
Accounts receivable, net		3,334			4,208			3,488
Inventories, net		7,268			6,448			6,953
Deferred tax asset		14			63			178
Other current assets and prepaid expenses		1,665			2,740			3,190
Total current assets		101,379			103,462			110,061
Property and equipment, net		668			597			796
Long-term investments		6,492			6,784			7,153
Intangibles, net		589			637			781
Deferred tax asset, net of current portion		321			325			97
Total assets	$	109,449		$	111,805		$	118,888
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,545		$	1,296		$	1,898
Accrued liabilities		5,861			6,194			7,328
Deferred revenue		5,671			5,633			6,270
Total current liabilities		13,077			13,123			15,496
Deferred rent		1,478			1,501			1,398
Deferred revenue, net of current portion		1,045			1,287			1,594
Income tax liability		479			477			729
Total liabilities		16,079			16,388			19,217
Stockholders’ equity:
Common stock		14			14			13
Additional paid-in capital		92,051			90,423			86,150
Retained earnings		2,881			6,736			15,236
Accumulated other comprehensive loss		(1,576	)		(1,756	)		(1,728	)
Total stockholders' equity		93,370			95,417			99,671
Total liabilities and stockholders' equity	$	109,449		$	111,805		$	118,888

CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2011			2010			2010
Net revenue	$	11,621		$	15,216		$	13,749
Cost of revenue		5,224			6,233			5,829
Gross profit		6,397			8,983			7,920
Operating expenses:
Sales and marketing		5,946			6,123			6,361
Research and development		2,130			2,173			1,454
General and administrative		2,328			2,238			2,242
Total operating expenses		10,404			10,534			10,057
Loss from operations		(4,007	)		(1,551	)		(2,137	)
Interest and other income, net		184			144			166
Loss before income taxes		(3,823	)		(1,407	)		(1,971	)
Provision (benefit) for income taxes		32			(127	)		47
Net loss	$	(3,855	)	$	(1,280	)	$	(2,018	)
Net loss per share:
Basic and Diluted	$	(0.28	)	$	(0.09	)	$	(0.15	)
Weighted-average number of shares used in per share calculations:
Basic and Diluted		13,667			13,622			13,438

CUTERA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended
	March 31,			December 31,			March 31,
	2011			2010			2010
Cash flows from operating activities:
Net loss	$	(3,855	)	$	(1,280	)	$	(2,018	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		886			980			828
Tax benefit from stock-based compensation		-			8			-
Excess tax deficit related to stock-based compensation		-			(8	)		-
Depreciation and amortization		157			157			194
Provision for excess and obsolete inventories		(45	)		18			(23	)
Provision for doubtful accounts receivable		(9	)		(31	)		(82	)
Gain on sale of marketable investments, net		-			-			(43	)
Change in deferred tax asset		53			(87	)		(3	)
Changes in assets and liabilities:
Accounts receivable		883			(1,153	)		(79	)
Inventories		(775	)		678			(522	)
Other current assets and prepaid expenses		1,509			553			338
Accounts payable		249			(405	)		817
Accrued liabilities		(353	)		412			(1,760	)
Deferred rent		(3	)		(42	)		(55	)
Deferred revenue		(204	)		(139	)		(264	)
Income tax liability		2			(89	)		(20	)
Net cash used in operating activities		(1,505	)		(428	)		(2,692	)
Cash flows from investing activities:
Acquisition of property and equipment		(180	)		(82	)		(95	)
Proceeds from sales of marketable and long-term investments		4,241			4,030			14,990
Proceeds from maturities of marketable investments		12,125			8,370			14,125
Purchase of marketable investments		(14,778	)		(21,220	)		(26,712	)
Net cash provided by (used in) investing activities		1,408			(8,902	)		2,308
Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan		742			138			74
Excess tax benefit related to stock-based compensation		-			8			-
Net cash provided by financing activities		742			146			74
Net increase/(decrease) in cash and cash equivalents		645			(9,184	)		(310	)
Cash and cash equivalents at beginning of period		12,519			21,703			22,829
Cash and cash equivalents at end of period	$	13,164		$	12,519		$	22,519

CUTERA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in thousands, except percentage data)

(unaudited)

	Three Months Ended
	March 31,		% of			December 31,		% of			March 31,		% of
	2011		Revenue			2010		Revenue			2010		Revenue
Revenue By Geography:
United States	$	4,207		36	%	$	5,793		38	%	$	4,547		33	%
International		7,414		64	%		9,423		62	%		9,202		67	%
	$	11,621				$	15,216				$	13,749
Revenue By Product Category:
Products	$	5,345		46	%	$	8,920		58	%	$	7,445		54	%
Upgrades		821		7	%		869		6	%		1,203		9	%
Service		3,328		29	%		3,314		22	%		3,314		24	%
Titan hand piece refills		1,057		9	%		934		6	%		1,322		10	%
Dermal fillers and cosmeceuticals		1,070		9	%		1,179		8	%		465		3	%
	$	11,621				$	15,216				$	13,749

	Three Months Ended
	March 31,		December 31,		March 31,
	2011		2010		2010
Pre-tax Stock-Based Compensation Expense:
Cost of revenue	$	143	$	158	$	147
Sales and marketing		238		286		231
Research and development		143		152		96
General and administrative		362		384		354
	$	886	$	980	$	828