Cutera (CUTR) 10-Q 2 Nov 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Entity Registrant Name	CUTERA INC
Entity Central Index Key	1,162,461
Trading Symbol	cutr
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		12,928,577
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Convertible Preferred Stock [Member]
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; authorized: 5,000,000 shares; none issued and outstanding
Cash and cash equivalents	$ 10,055	$ 9,803
Marketable investments	37,689	71,343
Accounts receivable, net	9,013	11,137
Inventories	13,479	10,988
Deferred tax asset	69	26
Other current assets and prepaid expenses	1,977	1,591
Total current assets	72,282	104,888
Property and equipment, net	1,386	1,461
Deferred tax asset, net of current portion	291	269
Intangibles, net	227	595
Goodwill	1,339	1,339
Other long-term assets	392	361
Total assets	75,917	108,913
Accounts payable	2,659	3,083
Accrued liabilities	12,234	11,007
Deferred revenue	8,470	8,898
Total current liabilities	23,363	22,988
Deferred revenue, net of current portion	2,495	4,346
Income tax liability	187	145
Other long-term liabilities	538	926
Total liabilities	26,583	28,405
Common stock, $0.001 par value; authorized: 50,000,000 shares; issued and outstanding: 13,136,245 and 14,446,950 shares at September 30, 2015 and December 31, 2014, respectively	13	14
Additional paid-in capital	81,043	105,721
Accumulated deficit	$ (31,722)	(25,232)
Accumulated other comprehensive income		5
Total stockholders’ equity	$ 49,334	80,508
Total liabilities and stockholders’ equity	$ 75,917	$ 108,913

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Convertible Preferred Stock [Member]
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, authorized (in shares)	5,000,000	5,000,000
Convertible preferred stock, issued (in shares)	0	0
Convertible preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	50,000,000	50,000,000
Common stock, issued (in shares)	13,136,245	14,446,950
Common stock, outstanding (in shares)	13,136,245	14,446,950

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net revenue:
Products	$ 18,797,000	$ 14,409,000	$ 51,542,000	$ 39,332,000
Service	4,288,000	4,317,000	13,177,000	13,307,000
Total net revenue	23,085,000	18,726,000	64,719,000	52,639,000
Cost of revenue:
Products	7,625,000	5,877,000	22,555,000	16,871,000
Service	1,969,000	2,058,000	5,778,000	6,215,000
Total cost of revenue	9,594,000	7,935,000	28,333,000	23,086,000
Gross profit	13,491,000	10,791,000	36,386,000	29,553,000
Operating expenses:
Sales and marketing	8,790,000	7,805,000	26,043,000	22,890,000
Research and development	2,748,000	2,628,000	7,921,000	7,894,000
General and administrative	2,937,000	2,897,000	8,940,000	7,796,000
Total operating expenses	14,475,000	13,330,000	42,904,000	38,580,000
Loss from operations	(984,000)	$ (2,539,000)	(6,518,000)	(9,027,000)
Interest and other income, net	84,000		188,000	218,000
Loss before income taxes	(900,000)	$ (2,539,000)	(6,330,000)	(8,809,000)
Provision for income taxes	57,000	97,000	160,000	178,000
Net loss	$ (957,000)	$ (2,636,000)	$ (6,490,000)	$ (8,987,000)
Net loss per share:
Basic and Diluted (in dollars per share)	$ (0.07)	$ (0.18)	$ (0.45)	$ (0.63)
Weighted-average number of shares used in per share calculations:
Basic and Diluted (in shares)	13,827	14,334	14,290	14,197

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net loss	$ (957)	$ (2,636)	$ (6,490)	$ (8,987)
Available-for-sale investments
Net change in unrealized gain (loss) on available-for-sale investments	(19)	(57)	1	(29)
Less: Reclassification adjustment for gains on investments recognized during the year	(4)	(3)	(6)	(4)
Net change in unrealized gain (loss) on available-for-sale investments	(23)	(60)	$ (5)	$ (33)
Tax benefit	(6)	(10)
Other comprehensive loss, net of tax	(17)	(50)	$ (5)	$ (33)
Comprehensive loss	$ (974)	$ (2,686)	$ (6,495)	$ (9,020)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (6,490)	$ (8,987)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,987	2,298
Depreciation and amortization	912	989
Other	213	222
Changes in assets and liabilities:
Accounts receivable	2,124	845
Inventories	(2,491)	(2,100)
Other current assets and prepaid expenses	(138)	(181)
Other long-term assets	(31)	311
Accounts payable	(424)	898
Accrued liabilities	544	(385)
Other long-term liabilities	(217)	(214)
Deferred revenue	(2,279)	1,507
Income tax liability	42	43
Net cash used in operating activities	(5,248)	(4,754)
Cash flows from investing activities:
Acquisition of property, equipment and software	(703)	(390)
Proceeds from sales of marketable investments	19,271	11,501
Proceeds from maturities of marketable investments	29,024	22,260
Purchase of marketable investments	(14,887)	(36,539)
Net cash provided by (used in) investing activities	32,705	$ (3,168)
Cash flows from financing activities:
Repurchase of common stock	(36,616)
Proceeds from exercise of stock options and employee stock purchase plan	9,554	$ 3,166
Payments on capital lease obligations	(143)	(109)
Net cash provided by (used in) financing activities	(27,205)	3,057
Net increase (decrease) in cash and cash equivalents	252	(4,865)
Cash and cash equivalents at beginning of period	9,803	16,242
Cash and cash equivalents at end of period	10,055	$ 11,377
Supplemental disclosure of non-cash items:
Repurchase of common stock acquired but not settled	$ 604

Note 1 - Summary of Significant

Note 1 - Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]	Note 1. Summary of Significant Accounting Policies Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) CoolGlide ® xeo ® solera ® GenesisPlus TM excel V TM truSculpt TM , excel HR TM , enlighten TM myQ TM “Skincare” (“Merz”) Radiesse Titan Headquartered in Brisbane, California, the Company has wholly-owned subsidiaries in Australia, Belgium, Canada, France, Hong Kong, Japan , Spain, Switzerland and the United Kingdom. The Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries and all inter-company transactions and balances have been eliminated. The Company markets, sells and services its products outside of the United States through its direct employees as well as a global distributor network. Unaudited Interim Financial Information The interim financial information filed is unaudited. The Condensed Consolidated Financial Statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair statement of the results of operations for the interim periods covered and of the financial condition of the Company at the date of the interim balance sheet. The December 31, 2014 Condensed Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) “SEC” Use of Estimates The preparation of interim Condensed Consolidated Financial Statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported and disclosed in the Condensed Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates these estimates, including those related to revenue elements, warranty obligations, sales commissions, accounts receivable and sales allowances, provision for excess and obsolete inventories, fair values of marketable investments, fair values of acquired intangible assets, useful lives of intangible assets and property and equipment, fair values of performance stock units and options to purchase the Company’s stock, recoverability of deferred tax assets, legal matters and claims, and effective income tax rates, among others. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Recent Accounting Pronouncements In May 2014, the Financial Accountings Standards Board ( “FASB” Revenue from Contracts with Customers In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern. This standard update provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new guidance is effective for all annual and interim periods ending after December 15, 2016. The new guidance will not have an impact on the Company's consolidated financial statements.

Note 2 - Cash, Cash Equivalents

Note 2 - Cash, Cash Equivalents and Marketable Investments	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Cash, Cash Equivalents, and Marketable Securities [Text Block]	Note 2. Cash , Cash Equivalents and Marketable Investments The Company invests its cash primarily in money market funds, commercial paper, corporate notes and bonds, municipal bonds, and debt securities issued by the U.S. government and its agencies. The Company considers all highly liquid investments, with an original maturity of three months or less at the time of purchase, to be cash equivalents. Investments with maturities of greater than three months at the time of purchase are accounted for as “available-for-sale ,” are carried at fair value with unrealized gains and losses reported as a component of stockholders’ equity, are held for use in current operations and are classified in current assets as “marketable investments .” The following tables summarize the components, and the unrealized gains and losses position, related to the Company’s cash, cash equivalents and marketable investments (in thousands): September 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Cash and cash equivalents: Cash $ 7,137 $ — $ — $ 7,137 Money market funds 719 — — 719 Commercial paper 2,199 — — 2,199 Total cash and cash equivalents 10,055 — — 10,055 Marketable investments: U.S. government notes 7,766 23 — 7,789 U.S. government agencies 9,676 18 — 9,694 Municipal securities 3,913 8 — 3,921 Commercial paper 4,996 2 — 4,998 Corporate debt securities 11,288 3 (4 ) 11,287 Total marketable investments 37,639 54 (4 ) 37,689 Total cash, cash equivalents and marketable investments $ 47,694 $ 54 $ (4 ) $ 47,744 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Cash and cash equivalents: Cash $ 7,761 $ — $ — $ 7,761 Money market funds 242 — — 242 Commercial paper 1,800 — — 1,800 Total cash and cash equivalents 9,803 — — 9,803 Marketable investments: U.S. government notes 18,345 17 (1 ) 18,361 U.S. government agencies 19,768 33 (1 ) 19,800 Municipal securities 3,607 3 (3 ) 3,607 Commercial paper 10,693 2 — 10,695 Corporate debt securities 18,875 13 (8 ) 18,880 Total marketable investments 71,288 68 (13 ) 71,343 Total cash, cash equivalents and marketable investments $ 81,091 $ 68 $ (13 ) $ 81,146 As of September 30, 2015 and December 31, 2014, total gross unrealized losses were $4 ,000 and $13,000, respectively, and were related to interest rate changes on available-for-sale marketable investments. The Company has concluded that it is more-likely-than-not that the securities will be held until maturity or the recovery of their cost basis. No securities were in an unrealized loss position for more than 12 months . The following table summarizes the contractual maturities of the Company’s available-for-sale securities, classified as marketable investments as of September 30, 2015 (in thousands): Amount Due in less than one year $ 26,103 Due in 1 to 3 years 11,586 Total marketable investments $ 37,689

Note 3 - Fair Value of Financia

Note 3 - Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Fair Value Disclosures [Text Block]	Note 3. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) unobservable inputs (Level 1) (Level 3). ● Level 1: ● Level 2: ● Level 3: In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. As of September 30, 2015, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands): September 30, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 719 $ — $ — $ 719 Commercial paper — 2,199 — 2,199 Marketable investments: Available-for-sale securities — 37,689 — 37,689 Total assets at fair value $ 719 $ 39,888 $ — $ 40,607 As of December 31, 2014, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above was as follows (in thousands): December 31, 2014 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 242 $ — $ — $ 242 Commercial paper — 1,800 — 1,800 Marketable investments: Available-for-sale securities — 71,343 — 71,343 Total assets at fair value $ 242 $ 73,143 $ — $ 73,385 The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The average remaining maturity of the Company’s Level 2 investments as of September 30, 2015 is less than 36 months and all of these investments are rated by S&P and Moody’s at A or better .

Note 4 - Inventories

Note 4 - Inventories	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 4. Inventories As of September 30, 2015 and December 31, 2014, inventories consist of the following (in thousands): September 3 0 , 201 5 December 31, 201 4 Raw materials $ 8,379 $ 7,185 Finished goods 5,100 3,803 Total $ 13,479 $ 10,988

Note 5 - Warranty

Note 5 - Warranty	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Product Warranty Disclosure [Text Block]	Note 5. Warranty The Company provides a standard one-year warranty on all systems. Warranty coverage provided is for labor and parts necessary to repair the systems during the warranty period. The Company accounts for the estimated warranty cost of the standard warranty coverage as a charge to costs of revenue when revenue is recognized. The estimated warranty cost is based on historical product performance. To determine the estimated warranty reserve, the Company utilizes historical service costs to calculate the expected service expense per system and applies this to the equivalent number of units exposed under warranty. The Company updates these estimated charges every quarter. The following table provides the changes in the product warranty accrual for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Beginning Balance $ 1,254 $ 1,080 $ 1,167 $ 1,202 Add: Accruals for warranties issued during the period 1,122 568 2,674 1,615 Less: Settlements made during the period (979 ) (671 ) (2,444 ) (1,840 ) Ending Balance $ 1,397 $ 977 $ 1,397 $ 977

Note 6 - Deferred Service Contr

Note 6 - Deferred Service Contract Revenue	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Deferred Revenue Disclosure [Text Block]	Note 6. Deferred Service Contract Revenue The Company generates Service revenue from the sale of extended service contracts and from time and material services provided to customers who are not under a warranty or extended service contract. Service contract revenue is recognized on a straight-line basis over the period of the applicable contract. Service revenue, from customers whose systems are not under a service contract, is recognized as the services are provided. The following table provides changes in the deferred service contract revenue balance for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Beginning Balance $ 11,546 $ 13,001 $ 12,949 $ 11,637 Add: Payments received 2,331 3,418 7,383 10,985 Less: Revenue recognized (3,199 ) (3,233 ) (9,654 ) (9,436 ) Ending Balance $ 10,678 $ 13,186 $ 10,678 $ 13,186 Costs for extended service contracts were $1.5 million and $1.8 million for the three months ended September 30, 2015 and 2014, respectively, and $4.6 million and $5.3 million for the nine months ended September 30, 2015 and 2014, respectively.

Note 7 - Stockholders' Equity a

Note 7 - Stockholders' Equity and Stock-based Compensation Expense	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 7. Stockholders’ Equity and Stock-based Compensation Expense Share Repurchase Program On February 18, 2015, the Company’s Board of Directors modified the Company’s stock buyback program ( “Modified Stock Buyback Program” In the three months ended September 3 0, 2015, the Company repurchased 1,344,699 shares of its common stock for approximately $19.4 million. In the nine months ended September 3 0, 2015, the Company repurchased 2,609,308 shares of its common stock for approximately $37.1 million. In the month of October 2015, the Company completed the buyback of the remaining $2.9 million under the Modified Stock Buyback Program . All shares repurchased were retired and returned to authorized but unissued status. Stock-based Compensation Expense Stock-based compensation expense by department recognized during the three and nine months ended September 30, 2015 and 2014 were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Cost of revenue $ 112 $ 145 $ 329 $ 416 Sales and marketing 311 195 727 414 Research and development 148 167 510 406 General and administrative 473 473 1,421 1,062 Total stock-based compensation expense $ 1,044 $ 980 $ 2,987 $ 2,298 Under the 2004 Equity Incentive Plan, as amended, the Company issued 290,759 and 1,335,484 shares of common stock during the three and nine months ended September 3 0, 2015 , in conjunction with stock options exercised and the vesting of RSUs and PSUs . Activity under the Company’s 2004 Equity Incentive Plan, as amended, is summarized as follows: Options Outstanding Shares Available for Grant Number of Stock Options Outstanding Weighted- Average Exercise Price Balance, December 31, 2014 129,760 3,462,567 $ 9.39 Additional shares reserved 1,300,000 — — Options granted (129,000 ) 129,000 13.26 Stock awards granted 1 2 (394,010 ) — — Options exercised — (1,117,639 ) 9.20 Options canceled 278,554 (278,554 ) 12.54 Stock awards canceled 1 83,157 — — Balance, September 30, 2015 1,268,461 2,195,374 $ 9.31 1. The Company has a “fungible share” provision in its 2004 Equity Incentive Plan whereby for each full-value award (RSU/PSU) issued or canceled under the Plan, results in a requirement to subtract / add back 2.12 shares from / to the Shares Available for Grant. 2. Included in 'Stock awards granted' of 394,010, was 158,294 fungible shares relating to 74,667of PSUs granted. These PSUs will result in a higher or lower number of shares of common stock that may be paid out on March 15, 2016, based on the achievement of three performance goals at targets that were pre-determined by the Board and disclosed in a Form 8-K on August 7, 2015. As of September 3 0, 2015, there was approximately $4.9 million of unrecognized compensation expense, net of projected forfeitures , related to non-vested equity awards. The expense is expected to be recognized over the remaining weighted-average period of 2.1 years. The actual expense recorded may be higher or lower based on a number of factors, including actual forfeitures experienced and the degree of achievement of the performance goals related to the PSUs granted.

Note 8 - Net Loss Per Share

Note 8 - Net Loss Per Share	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Earnings Per Share [Text Block]	Note 8. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the year. Diluted net loss per common share is the same as basic net loss per common share, as the effect of the potential common stock equivalents is anti-dilutive and as such is excluded from the calculations of the diluted net loss per share. The following numbers of shares outstanding, prior to the application of the treasury stock method, were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 201 5 201 4 201 5 201 4 Options to purchase common stock 2,330 3,391 2,710 3,498 Restricted stock units 307 209 296 177 Performance stock units — — 96 3 Employee stock purchase plan shares 27 31 59 54 Total 2,664 3,631 3,161 3,732

Note 9 - Income Taxes

Note 9 - Income Taxes	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 9. Income Taxes The Company’s quarterly income taxes reflect an estimate of the corresponding year’s annual effective tax rate and include, when applicable, adjustments from discrete tax items. For the three and nine months ended September 30, 2015, the Company’s tax provision was $57,000 and $160,000, compared to $97,000 and $178,000 for the three and nine months ended September 30, 2014, respectively, and was primarily related to income taxes of the Company’s non-U.S. operations as the Company’s U.S. operations were in a loss position and the Company maintains a 100% valuation allowance against its U.S. deferred tax assets. The Company utilizes the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. As of September 3 0, 2015 and December 31, 2014, the Company had a 100% valuation allowance against its U.S. deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, the Company considered available positive and negative evidence giving greater weight to its recent cumulative losses and lesser weight to its projected financial results due to the subjectivity involved in forecasting future periods. The Company also considered, commensurate with its objective verifiability, the forecast of future taxable income including the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.

Note 10 - Commitments and Conti

Note 10 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 10. Commitments and Contingencies Litigation and Litigation Settlements The Company is named from time to time as a party to product liability, contractual lawsuits and other general corporate matters in the normal course of business. The Company routinely assesses the likelihood of any adverse judgments or outcomes related to legal matters and claims, as well as ranges of probable losses. A determination of the amount of the reserves required, if any, for these contingencies is made after analysis of each known issue, historical experience, whether it is more likely than not that the Company shall incur a loss, and whether the loss is estimable. As of September 30, 2015 and December 31, 2014, the Company had an immaterial accrual for legal matters and claims and did not expect to incur any material costs beyond the amounts accrued.

Significant Accounting Policies

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]	Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) CoolGlide ® xeo ® solera ® GenesisPlus TM excel V TM truSculpt TM , excel HR TM , enlighten TM myQ TM “Skincare” (“Merz”) Radiesse Titan Headquartered in Brisbane, California, the Company has wholly-owned subsidiaries in Australia, Belgium, Canada, France, Hong Kong, Italy, Japan , Spain, Switzerland and the United Kingdom. The Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries and all inter-company transactions and balances have been eliminated. The Company markets, sells and services its products outside of the United States through its direct employees as well as a global distributor network.
Unaudited Interim Financial Information [Policy Text Block]	Unaudited Interim Financial Information The interim financial information filed is unaudited. The Condensed Consolidated Financial Statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair statement of the results of operations for the interim periods covered and of the financial condition of the Company at the date of the interim balance sheet. The December 31, 2014 Condensed Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) “SEC”
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of interim Condensed Consolidated Financial Statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported and disclosed in the Condensed Consolidated Financial Statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates these estimates, including those related to revenue elements, warranty obligations, sales commissions, accounts receivable and sales allowances, provision for excess and obsolete inventories, fair values of marketable investments, fair values of acquired intangible assets, useful lives of intangible assets and property and equipment, fair values of performance stock units and options to purchase the Company’s stock, recoverability of deferred tax assets, legal matters and claims, and effective income tax rates, among others. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements In May 2014, the Financial Accountings Standards Board ( “FASB” Revenue from Contracts with Customers In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern. This standard update provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new guidance is effective for all annual and interim periods ending after December 15, 2016. The new guidance will not have an impact on the Company's consolidated financial statements.

Note 2 - Cash, Cash Equivalen18

Note 2 - Cash, Cash Equivalents and Marketable Investments (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Unrealized Gain (Loss) on Investments [Table Text Block]	September 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Cash and cash equivalents: Cash $ 7,137 $ — $ — $ 7,137 Money market funds 719 — — 719 Commercial paper 2,199 — — 2,199 Total cash and cash equivalents 10,055 — — 10,055 Marketable investments: U.S. government notes 7,766 23 — 7,789 U.S. government agencies 9,676 18 — 9,694 Municipal securities 3,913 8 — 3,921 Commercial paper 4,996 2 — 4,998 Corporate debt securities 11,288 3 (4 ) 11,287 Total marketable investments 37,639 54 (4 ) 37,689 Total cash, cash equivalents and marketable investments $ 47,694 $ 54 $ (4 ) $ 47,744 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value Cash and cash equivalents: Cash $ 7,761 $ — $ — $ 7,761 Money market funds 242 — — 242 Commercial paper 1,800 — — 1,800 Total cash and cash equivalents 9,803 — — 9,803 Marketable investments: U.S. government notes 18,345 17 (1 ) 18,361 U.S. government agencies 19,768 33 (1 ) 19,800 Municipal securities 3,607 3 (3 ) 3,607 Commercial paper 10,693 2 — 10,695 Corporate debt securities 18,875 13 (8 ) 18,880 Total marketable investments 71,288 68 (13 ) 71,343 Total cash, cash equivalents and marketable investments $ 81,091 $ 68 $ (13 ) $ 81,146
Investments Classified by Contractual Maturity Date [Table Text Block]	Amount Due in less than one year $ 26,103 Due in 1 to 3 years 11,586 Total marketable investments $ 37,689

Note 3 - Fair Value of Financ19

Note 3 - Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]	September 30, 2015 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 719 $ — $ — $ 719 Commercial paper — 2,199 — 2,199 Marketable investments: Available-for-sale securities — 37,689 — 37,689 Total assets at fair value $ 719 $ 39,888 $ — $ 40,607 December 31, 2014 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 242 $ — $ — $ 242 Commercial paper — 1,800 — 1,800 Marketable investments: Available-for-sale securities — 71,343 — 71,343 Total assets at fair value $ 242 $ 73,143 $ — $ 73,385

Note 4 - Inventories (Tables)

Note 4 - Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Schedule of Inventory, Current [Table Text Block]	September 3 0 , 201 5 December 31, 201 4 Raw materials $ 8,379 $ 7,185 Finished goods 5,100 3,803 Total $ 13,479 $ 10,988

Note 5 - Warranty (Tables)

Note 5 - Warranty (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Schedule of Product Warranty Liability [Table Text Block]	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Beginning Balance $ 1,254 $ 1,080 $ 1,167 $ 1,202 Add: Accruals for warranties issued during the period 1,122 568 2,674 1,615 Less: Settlements made during the period (979 ) (671 ) (2,444 ) (1,840 ) Ending Balance $ 1,397 $ 977 $ 1,397 $ 977

Note 6 - Deferred Service Con22

Note 6 - Deferred Service Contract Revenue (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Deferred Revenue, by Arrangement, Disclosure [Table Text Block]	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Beginning Balance $ 11,546 $ 13,001 $ 12,949 $ 11,637 Add: Payments received 2,331 3,418 7,383 10,985 Less: Revenue recognized (3,199 ) (3,233 ) (9,654 ) (9,436 ) Ending Balance $ 10,678 $ 13,186 $ 10,678 $ 13,186

Note 7 - Stockholders' Equity23

Note 7 - Stockholders' Equity and Stock-based Compensation Expense (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Cost of revenue $ 112 $ 145 $ 329 $ 416 Sales and marketing 311 195 727 414 Research and development 148 167 510 406 General and administrative 473 473 1,421 1,062 Total stock-based compensation expense $ 1,044 $ 980 $ 2,987 $ 2,298
Schedule of Share-based Compensation, Activity [Table Text Block]	Options Outstanding Shares Available for Grant Number of Stock Options Outstanding Weighted- Average Exercise Price Balance, December 31, 2014 129,760 3,462,567 $ 9.39 Additional shares reserved 1,300,000 — — Options granted (129,000 ) 129,000 13.26 Stock awards granted 1 2 (394,010 ) — — Options exercised — (1,117,639 ) 9.20 Options canceled 278,554 (278,554 ) 12.54 Stock awards canceled 1 83,157 — — Balance, September 30, 2015 1,268,461 2,195,374 $ 9.31

Note 8 - Net Loss Per Share (Ta

Note 8 - Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Tables
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	Three Months Ended Nine Months Ended September 30, September 30, 201 5 201 4 201 5 201 4 Options to purchase common stock 2,330 3,391 2,710 3,498 Restricted stock units 307 209 296 177 Performance stock units — — 96 3 Employee stock purchase plan shares 27 31 59 54 Total 2,664 3,631 3,161 3,732

Note 2 - Cash, Cash Equivalen25

Note 2 - Cash, Cash Equivalents and Marketable Investments (Details Textual) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	$ 4,000	$ 13,000

Note 2 - Unrealized Gains and L

Note 2 - Unrealized Gains and Losses Related to Marketable Investments (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Cash [Member]
Cash and cash equivalents	$ 7,137,000	$ 7,761,000
Money market funds	7,137,000	7,761,000
Money Market Funds [Member]
Cash and cash equivalents	719,000	242,000
Money market funds	719,000	242,000
Commercial Paper [Member]
Cash and cash equivalents	2,199,000	1,800,000
Money market funds	2,199,000	1,800,000
US Treasury and Government [Member]
Amortized Cost	7,766,000	18,345,000
Gross Unrealized Gains	$ 23,000	17,000
Gross Unrealized Losses		(1,000)
Available-for-sale securities	$ 7,789,000	18,361,000
US Government Agencies Debt Securities [Member]
Amortized Cost	9,676,000	19,768,000
Gross Unrealized Gains	$ 18,000	33,000
Gross Unrealized Losses		(1,000)
Available-for-sale securities	$ 9,694,000	19,800,000
US States and Political Subdivisions Debt Securities [Member]
Amortized Cost	3,913,000	3,607,000
Gross Unrealized Gains	$ 8,000	3,000
Gross Unrealized Losses		(3,000)
Available-for-sale securities	$ 3,921,000	3,607,000
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Amortized Cost	4,996,000	10,693,000
Gross Unrealized Gains	$ 2,000	$ 2,000
Gross Unrealized Losses
Available-for-sale securities	$ 4,998,000	$ 10,695,000
Corporate Debt Securities [Member]
Amortized Cost	11,288,000	18,875,000
Gross Unrealized Gains	3,000	13,000
Gross Unrealized Losses	(4,000)	(8,000)
Available-for-sale securities	11,287,000	18,880,000
Cash and cash equivalents	10,055,000	9,803,000
Money market funds	10,055,000	9,803,000
Amortized Cost	37,639,000	71,288,000
Gross Unrealized Gains	54,000	68,000
Gross Unrealized Losses	(4,000)	(13,000)
Available-for-sale securities	37,689,000	71,343,000
Amortized Cost	47,694,000	81,091,000
Fair Market Value	$ 47,744,000	$ 81,146,000

Note 2 - Maturities of Availabl

Note 2 - Maturities of Available-for-Sale Securities (Details) $ in Thousands	Sep. 30, 2015USD ($)
Due in less than one year	$ 26,103
Due in 1 to 3 years	11,586
Total marketable investments	$ 37,689

Note 3 - Fair Value of Financ28

Note 3 - Fair Value of Financial Instruments (Details Textual)	9 Months Ended
	Sep. 30, 2015
Fair Value, Inputs, Level 2 [Member]
Maximum Maturity Period Of Investments	3 years

Note 3 - Fair Value of Financ29

Note 3 - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Cash equivalents:
Money market funds	$ 719	$ 242
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents:
Money market funds
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Cash equivalents:
Money market funds
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member]
Cash equivalents:
Money market funds	$ 719	$ 242
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 1 [Member]
Cash equivalents:
Money market funds
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents:
Money market funds	$ 2,199	$ 1,800
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member] | Fair Value, Inputs, Level 3 [Member]
Cash equivalents:
Money market funds
Fair Value, Measurements, Recurring [Member] | Commercial Paper [Member]
Cash equivalents:
Money market funds	$ 2,199	$ 1,800
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Marketable investments:
Available-for-sale securities
Total Assets Fair Value	$ 719	$ 242
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Marketable investments:
Available-for-sale securities	37,689	71,343
Total Assets Fair Value	$ 39,888	$ 73,143
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Marketable investments:
Available-for-sale securities
Total Assets Fair Value
Fair Value, Measurements, Recurring [Member]
Marketable investments:
Available-for-sale securities	$ 37,689	$ 71,343
Total Assets Fair Value	40,607	73,385
Money Market Funds [Member]
Cash equivalents:
Money market funds	719	242
Commercial Paper [Member]
Cash equivalents:
Money market funds	2,199	1,800
Money market funds	10,055	9,803
Marketable investments:
Available-for-sale securities	$ 37,689	$ 71,343

Note 4 - Summary of Inventories

Note 4 - Summary of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Raw materials	$ 8,379	$ 7,185
Finished goods	5,100	3,803
Total	$ 13,479	$ 10,988

Note 5 - Summary of Warranties

Note 5 - Summary of Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Beginning Balance	$ 1,254	$ 1,080	$ 1,167	$ 1,202
Add: Accruals for warranties issued during the period	1,122	568	2,674	1,615
Less: Settlements made during the period	(979)	(671)	(2,444)	(1,840)
Ending Balance	$ 1,397	$ 977	$ 1,397	$ 977

Note 6 - Deferred Service Con32

Note 6 - Deferred Service Contract Revenue (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Deferred Revenue Costs Incurred	$ 1.5	$ 1.8	$ 4.6	$ 5.3

Note 6 - Summary of Deferred Se

Note 6 - Summary of Deferred Service Contract Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Beginning Balance	$ 11,546	$ 13,001	$ 12,949	$ 11,637
Add: Payments received	2,331	3,418	7,383	10,985
Less: Revenue recognized	(3,199)	(3,233)	(9,654)	(9,436)
Ending Balance	$ 10,678	$ 13,186	$ 10,678	$ 13,186

Note 7 - Stockholders' Equity34

Note 7 - Stockholders' Equity and Stock-based Compensation Expense (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Feb. 18, 2015	Feb. 17, 2015
Modified Stock Buyback Program [Member]
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 2.9	$ 2.9	$ 40	$ 10
Stock Repurchased During Period, Shares	1,344,699	2,609,308
Treasury Stock, Value, Acquired, Cost Method	$ 19.4	$ 37.1
Two Thousand Four Equity Incentive Plan [Member] | Fungible Shares [Member]
Share Based Compensation Arrangement By Share Based Payment Award Shares Available For Grant In Period Gross		158,294
Two Thousand Four Equity Incentive Plan [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted		74,667
Two Thousand Four Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	290,759	1,335,484
Number of Stock Awards Counted for Every Share Granted or Canceled		2.12
Share Based Compensation Arrangement By Share Based Payment Award Shares Available For Grant In Period Gross		394,010
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 4.9	$ 4.9
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		2 years 36 days
Share Based Compensation Arrangement By Share Based Payment Award Shares Available For Grant In Period Gross		394,010

Note 7 - Stock-based Compensati

Note 7 - Stock-based Compensation Expense by Department (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Cost of Sales [Member]
Allocated Share Based Compensation Expense	$ 112	$ 145	$ 329	$ 416
Selling and Marketing Expense [Member]
Allocated Share Based Compensation Expense	311	195	727	414
Research and Development Expense [Member]
Allocated Share Based Compensation Expense	148	167	510	406
General and Administrative Expense [Member]
Allocated Share Based Compensation Expense	473	473	1,421	1,062
Allocated Share Based Compensation Expense	$ 1,044	$ 980	$ 2,987	$ 2,298

Note 7 - Activity Under the 200

Note 7 - Activity Under the 2004 Equiy Incentive Plan (Details)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Balance, December 31, 2014 (in shares)	129,760
Balance, December 31, 2014 (in shares)	3,462,567
Balance, December 31, 2014 (in dollars per share) | $ / shares	$ 9.39
Additional shares reserved (in shares)	1,300,000
Options granted (in shares)	(129,000)
Options granted (in shares)	129,000
Options granted (in dollars per share) | $ / shares	$ 13.26
Stock awards granted 1 2 (in shares)	(394,010)
Options exercised (in shares)	(1,117,639)
Options exercised (in dollars per share) | $ / shares	$ 9.20
Options canceled (in shares)	278,554
Options canceled (in shares)	(278,554)
Options canceled (in dollars per share) | $ / shares	$ 12.54
Stock awards canceled 1 (in shares)	83,157
Balance, September 30, 2015 (in shares)	1,268,461
Balance, September 30, 2015 (in shares)	2,195,374
Balance, September 30, 2015 (in dollars per share) | $ / shares	$ 9.31

Note 8 - Antidilutive Securitie

Note 8 - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Stock Option [Member]
Antidilutive Securities (in shares)	2,330	3,391	2,710	3,498
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities (in shares)	307	209	296	177
Performance Shares [Member]
Antidilutive Securities (in shares)			96	3
ESPP [Member]
Antidilutive Securities (in shares)	27	31	59	54
Antidilutive Securities (in shares)	2,664	3,631	3,161	3,732

Note 9 - Income Taxes (Details

Note 9 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Income Tax Expense (Benefit)	$ 57,000	$ 97,000	$ 160,000	$ 178,000
Deferred Tax Assets Valuation Allowance Percentage			100.00%		100.00%