CUTR - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for joining Cutera’s Second Quarter 2020 Earnings Conference Call. [Operator Instructions] The discussion today includes forward-looking statements. These forward-looking statements reflect management’s current forecast or expectation of certain aspects of the company’s future business, including, but not limited to, any financial guidance provided for modeling purposes.

Forward-looking statements are based on current information that is by its nature dynamic and subject to change.

Forward-looking statements include, among others, statements regarding financial guidance, plans to introduce new products, regulatory approvals and productivity improvements.

our identify statements, – refer we safe statement may may words to that today. harbor forward-looking earlier identify encourage in words forward for approval that the For release press you to All filed. forward-looking and those Form Risk factors updated risk Exchange XX-K entitled our to as in XX-Q section the in in uncertainties, Commission Securities the and including described Factors are statements subject risk our subsequently filed Form with and undue place are reliance forward-looking also cautions to Cutera of they not speak which date as made. on only you statements, the Cutera forward-looking or undertakes new of no circumstances obligation to events to events. update occurrence publicly information, the unanticipated statements any or reflect to reflect management’s expectations. materially results differ Future current may from

adjusted more period to believe facilitate Please Dave reconciliation the operating operations, earnings basis. measures the can In along GAAP. as results analysis to turn Cutera’s underlying complete financial results We from to, alternative to non-GAAP the should measures, we like addition, discuss release. an an non-GAAP these would with, measures a CEO, will but call greater from when comparing of financial ongoing period. transparency and particularly into to on including prescribed considered I measures refer financial measures your With performance by be GAAP Mowry. to non-GAAP not These our that, over results in

Dave Mowry

you, Thank operator.

all crisis form. affected XXXX of or by As has pandemic. us way, quarter unprecedented know, was significantly impacted we global second the all the COVID-XX in This shape of some

many care provide have our their a and watch call community, around XXXX As in The for to begin Chief been like and the brief customer our and integrity, business to highlighting who a by impressive, skill would an call take the sacrificed quarter Financial by but acute demonstrated touched on to such I the first by of staffs Interim commitment humbling moment President only mobilize care to environment. our express Jason while as Fuad not Ahmad, to care directly have member today’s well also safety to the our face a our market appreciation rightsizing own for virus. responders by overview center health of people evolving am Richey, Operating I second adversity. the I Officer; our end joined results, Today, Chief will the providing as business of Officer. efforts those

the the the will through will the then our upon poised is see to share back of of Cutera view market highlights initiatives of how to and XXXX. and discuss to I Additionally, it. few focus capitalize operational our we the back the carry over for Jason continued our XXXX expect pace fiscal us and magnitude into of quarter on half half and recovery outline XXXX vital

of high-level Fuad have Jason, review for our we will steps Following update the a performance balance financial our taken strengthen company and position key indicators sheet on longer term. the the and provide you to

session We conclude by inviting then the questions. will your

crisis. quarter. the response COVID-XX to I second our am with to now team’s turning pleased the So

and clearly organization of in and performed up May, were and stepped way of impacted results by financial light pandemic associated broader market our shutdowns our the most While April the the in the proud challenge. am I of

of effort customer first emphasis our quarter on discussed increase outreach. second I to our and call, was account As quarter engagement of point level earnings for one the

opportunities drive customers arose. initiative, sales capital position accurate to team’s our were this and partner deals ourselves an to patient market in we to as with commitment of to result take on engage and traffic in real-time a available the As pulse able the

back May traffic, aesthetic processes. room distancing pre-COVID demonstrations in the new mid-June, in and by patients lifted, quarter in to treatment with the began more practices though comfortable to social the federal disinfecting Patient social their became early slightly As as of returning restrictions and and half steadily restarted straight increased routines. disrupted

on initially constrained to near adopting in the their June. capacities COVID-safe ramping feedback third the steadily improving open XX% as of practices as of capacity through This that practice new new many pre-COVID move processes Overall, treatments of patient routine. most reopening is we quarter our treatment end protocols XX% that excess their their While resilient a pre-COVID of upon the rates by to were effectively more very ramp belief practices anticipate their of group XXXX. were the the practices utilize volumes running through by period capacity will to wore customers. Based is and achieve processes, that procedures, we these have patient exiting trends, customers became of continue our on, current their based from quarter

this Although future restrictions. subsequent potential government to pandemic subject the surrounding uncertainty of is and severity estimate the the and trajectory the

fully core shutdown. they practices to able leverage As were followed lost with closely groups we able conservative were online reopen consultations aggressive similar opportunities during surgery faced limited customer pent-up shutdown. a groups which had portion anticipated, of book Both the the their revenues streams ramp during efforts and most volumes, practices. med plastic were by tap significant offset other the as their Dermatologist the to demand to spas in and the to were offices, most to patients billing their the of revenue our

they to June in by a reorders anticipated line second for customers the third as all inventories these the and to volumes customer the XXXX bit. realize demand the of to rebuild reserves, during to we acceleration with cash reopenings patient And our the much Along consistent rate a quarter segments, of monetize reestablish traffic consumable can half result, patient a is their shutdown. balance As as consumable began prior sheets skin existing have trailed been are impacted of looking during traffic approach with consumables their practice and restocking. We care run as a slight case rebounds. consumable lines, will believe as significantly and similar

evidence U.S. service during this. The this of customers field macro was challenged has opted standout, their in patients quarter. skin rate with reduction categories, nearly revenue slightly a revenue has our team service positive by on year-over-year. numerous between customer split and well challenging Japan. to our the reopening, offices responsive in one Globally, of comments a our and our down this access effect us XX-XX also with treatments, has in requested during of in better of Cutera of that System than and was calls approach field customers to the of of various growing many our purchases was unsolicited service and a was expectations. it customers. international, the satisfaction environment Service using the access from and capital, customer new our been period. to our the we to had performance topical This service we team anticipated is product, restricted anticipated continued systems directly prospected proximity majority deals of double increased current revenue practices strong excess XXX% recently Japan. combination in with believes of in respectively, sold and nonetheless competitive benefited Despite advance million served our dermatologists’ and at driven care across Looking and received patients $XX.X prime as being differentiators, thereby driving we originally

low and equipment the diligent leading capital products Late consumable similar to courtesy pricing, future maintain the instead performance, energy-based the in As margin into expires. investment. our where ourselves as also top to at the This option we in our program purchase buy pull monthly not similar exceptionally quarter, differentiate of discipline for their on or evidenced retain able fee automotive to customers customers, once program, perform still level we post-sales with Cutera a deals. pay must impacted and designed term maintaining Customers a our access unit relying systems initial procedures them with in allowing our membership equipment used a an We limited were products to to a depreciated by forward our to pricing a upgrade the service competitive contract were gross lease sales this consumable on quarter. the and they line aesthetic launched did payment. is upfront was support

only short-term to of them appreciated and reopening deals, were rebuilding and our executed constraints their practices. many customer them sign into handful invest equipment. with customers their Cutera cash who recognition a these telltale of a The While existing we willingness of of in is are capital a partnering with confidence cash

strong recovery and resilience are Our second the of patient portfolio. and our customers’ as our in their traffic value as equipment international endorsements levels they capital American recognize of quarter acknowledgment sales North well

challenging within quality time. the were in both All volume reflected expectations system for initial this of surpassed factors of which our deals period, and these the the

Looking and to that way. med both aggressive marketing treatment efforts, dedicated ahead, the be we leading in practices believe aesthetic and spas continue many with their plastic surgeons will

rooms, also anticipate treatment efficient topicals ramp We to greater iD, and prioritizing such coming RF treatment Secret and will for over and leading months, profitable practices injectables, shorter, of profitability our V+, times continue the capacity excel steadily provides towards more as near use practices. dermatological truSculpt the pre-COVID that constrained to treatments which shorter their capacities of more the

capital in far early in Nevertheless, We constrain are the with recovery will the believe the quarter XXXX. the recovering. mind we and year. steadily trends revenue of we to the COVID that first in of by first the performance are we too the of are were of customer quarter ahead are in third not Keeping patient as seeing quarter ahead the with potentially which traffic revenue and to month of continue of mindful indeed the encouraged prior get process fourth are XXXX the month prior ramping, back-end accounts current quarter, in that loaded, line sales

As that results. second will our quarter improvement revenue such, XXXX sequential optimistic third we guardedly quarter over provide are XXXX

Before operating would to to the the quarter. like highlight also over in second I discipline Jason, turning call our

programs. to earnings the As headcount to reflect rate in reduce most improvements several portion the the company began May, we decisions narrow first reducing I in expenses, as expected during our and focus critical call, made our second run and of difficult mid-May. were most programs the initiated quarter a results Beginning quarter shared

significant we operating expense staff we levels. several our employees our and a furloughed workforce, portion While resetting of rightsizing also full-time our released

projects value-added In addition we to curtailed eliminated several and and during non activities. reductions, nonessential headcount period, programs the

improved the and more regions. business specific expense the Jason the changes, second drivers these the discuss will outperformed the for to to call and gross reversed reductions The of back vast the I ramp expectations will even majority over resumes, result stage revenues of of rest up a are quarter of and margin of our EBITDA year. XXXX. company not categories setting internal be adjusted As permanent over the as profitability now across as turn in these

Jason Richey

Dave. Thanks,

several made operations to we quarter, ongoing the last to adjustments to COVID discussed environment. our I As commercial adapt

second, traffic active flexible; quickly activities resources committing in during our of reminder, to them running and on the the first, to patient against principles: as their response as our and with up remaining providing medical the ensure and the our us safely our a and as fourth, as commissions and to installed and base daily programs webinars fifth, out our accelerate advisory hyperfocused customers; to following we third, core our our pandemic, and well partners period weather recovery educational necessary We of as a storm in the customers; our employees, by through customers; the priorities to As getting help and assist connecting around these quickly aligned commercial our safety extremely possible. organization our we the input finally, board with customers and and guide on increase to aligned gain survival executed possible. quarter are staying reaching our and health messaging;

Our us new help demonstrations normal has of with virtual programs and customers them faster. educational recover meetings, partner to consults, to allowed

the quarter. Now turning sales during to

sales ease procedures As mid-March began the to procedure-related were Sales drive focus negatively our put high-impact our through restrictions. volume beginning genesis response and steadily on when practices volumes early by discussed to increase North microneedling. body by These has previously, the sculpting on skin America, revitalization as June. to results the greatest cost, a working restrictions with government had restrictions and in rebounded beginning in impacted focus early In from in June COVID-XX began laser place like patient with crisis. emphasizing states been lower to the in mid-March, on impact

border both difficult. shutdowns, addition, capital truSculpt portfolio sculpting now sales most restrictions to reopen, we’re by our beginning experiencing truSculpt so-called after flex. launch capital capital promote for quarter versus year, some recovery equipment sales during having to European the offering results markets. and the losing to In pulled sales international leveraging was Europe, tax second In Despite we’re were these program and our body in relief truSculpt of regions flat into businesses realized the our benefited made better-than-expected when packages difficult overall our and begun COVID-XX organizational government iD quarter, a flex. a the market travel We sales environment, from minimal. see government the the Australia, our likely restructuring of in in although to have prior and impact the In forward sales

XX% XX% In skin addition, flex to XX% XX% in QX was in shutting to and truSculpt into In as offices of quarter QX of sculpting the both launch resulted much systems experienced pushed growth late country remained being at Japan, of in capacity. as those two. some body we down, of revitalization open the

as the face and European to to to Most distributor markets fewer government and continues sales travel capitalize the strict restrictions. of the of on expect look increase country growth as pockets pandemic. Middle capacity We East to from in restrictions with markets this distributors recover continue our with

Asian the end the markets to as towards capacity COVID decreased. started cases quarter of increased see

June experienced revenue. May Service steady in between to prepared treat insured and systems now a backlog were increase practices a patients. as to Turning of recurring revenue

started delay their popularity nearly decision our mentioned, And significant as into as Dave of ramp. doubled an took volume and to increases patient increased experienced base in year-over-year As from of due finally, skincare growing June Japan to business revenue customer consumable treatments. customers advantage topical home-based a May to our price increase

just This when monetize mentioned great Dave option equipment patient a at our allow remarks, example want to customers best-in-class launched our to cash of them cost. during customers an membership his help the their to traffic. one quarter, with with of do solutions second to tangible provide program, current leasing for customers access our is reserves program faster. the we that is in As team provide allows Cutera has that recover gain them recovering not reduced a equipment patients levels technology the to how to yet This pivoted upfront

to I’d the outlook for like remainder the discuss Lastly, year. our of commercial

model more of virtual smaller specialized evolved demonstration and that localized education have We workshop our products. events participation one-on-one allow our to and

as review indicators the now available call I the will RF. product performance this This focused through the we XXXX, our with as PRO, a late States expect in continue over our practices. launch with seek Fuad We this we Secret a dermatological laser device both our mainly will ever-changing and expand well to along market product balance for environment. designed the In Canada webinars the to of this the second this platform. plastic we on to fiscal support surgery suited United launch to in QX, will By platform customers to United combined our of through to well expect Fraxis success will year, as We to key make COX deliver meet best-in-class believe microneedling needs along be fractional with to the of in turn financial quarter. end Kingdom. the our core be customers

Fuad Ahmad

Jason. you, Thank

earnings modest non-GAAP unless fiscal is shutdowns a approximately the to period all were in well second XXXX. with fiscal that our XXXX, quarter attributed non-GAAP conduct noted. was to revenues The XX% Before release. now was Those quarter ability was compared results last year. review Total second begin, ZO XX%. and contained million of the period international was U.S. to a will revenue please $XX.X decline A robust million aided of U.S. for in rather our increase prepared go the second countrywide for business $XX.X sales decline. over as second Australia, same I skincare quarter in our conjunction Japan for fell as skincare from included The the for to last focus geographies. second shutdowns. on note decline in of solely COVID-XX-related the million XXXX curtailed in across will most is quarter dramatically our XX% our of the by metrics Cutera’s International year. $XX.X revenue release. results remarks Zealand to results to of the compared million, in representing $XX.X XXXX, the earnings of emerge GAAP otherwise XXX% the We revenue sales reconciliation a to relative quarter decline of non-GAAP to our $X.X to the Japan. geographies line in readers New listeners of GAAP as million in first encourage and revenue system fiscal primarily strong I for from same quarter

of quarter Declines and year. by was consumer was more service The deferrals reduction consumables, of fiscal $XX.X revenue million million in for to revenue. as $XX.X period declined service and service early last recurring renewal substantial mandatory in ZO the service revenue than period revenue second compared reflected our procedure XXXX, calls skincare same to and For shutdowns. increase revenue the were global from offset contract a due Skincare in deferrals decline result the in

addition, lower In year. planned $XX.X volumes was described the margin XX.X% XX% decline sales Gross fiscal revenue down fiscal compared COVID-XX. XXXX associated direct overhead the due versus shutdowns in on lower absorption revenue with gross production Gross to practices last aesthetic year of the the period a last due margin declined substantially a company second of Gross earlier. quarter profit for million, in inventory reductions. correlation of mandatory XX.X% quarter same lower was was profit same result second period the XXXX to and representing of and the for to decline as consumable to

XXXX year, for same the compared decrease. expenses operating period to million $XX.X the a second were Total expenses. of operating for $XX.X last to fiscal moving million XX% Now quarter

COVID-XX. for and measures company headwinds. reduction expense cost disruptions as compared the compensation was Sales with measures for by variable to fiscal lower marketing thoughtful COVID-XX $XX.X million expense lesser well lower XXXX the million variable of a expense same lower million expenses last face second last $X.X a expense of implemented return was were the reflect to to second cost from $X.X compared year, our project revenue. due $X.X million of compensation as the primarily business as period result same result XXXX their activities durable and to these the reduction office in to We a closures of the direct quarter for XX% reduction. as employees R&D period teams the extent, office of of from fiscal accelerate lower results expenses level quarter and, in a the rebound Our lower associated anticipate the on-site and a temporary activities. year The for

expenses fiscal last same reserve reported XXXX in year. deals from $X the the G&A to million substantial executed the of in for XXXX second fiscal quarter. of In debt quarter compared quarter second light COVID-XX-related of the million $X.X challenges, period the Finally, we bad in a were first

While in with and is to elevated make we extremely us these our investment important of couple reserves debt expected fidelity are we continue to decisions next receivables, accounts for flow remain cash uncertain receivables quarters. customers of work Therefore, overdue to manage as the bad on times.

year. EBITDA, of the million non-GAAP quarter compared second for operating adjusted $X.X fiscal to $X.X this loss a same called of XXXX, of For period also last profit our was a income, million

legal that to matters onetime second had included During several activities, and resolving XXXX, are open fiscal our rightsizing charges GAAP in results. we the certain increasing of relating reserves quarter

expect quarter or the Going as our from changes costs to our were the earlier, us There we reduced full mentioned positions. quarter conjunction by see Dave rate. in we forward, third run tax sequential of in no with significant material measures and behind with these in improvement a issues benefit to cost-cutting

at quarter balance now March Turning We of with million to approximately time year the and our $XX.X the at cash XX, $XX.X of million to the equivalents last XXXX. million end same compared ended sheet. $XX.X and

equity improve. bolster remarks, million to be the shutdown begins April, In liquidity to help offering, and As with to it business we on an our prudent felt to my business quarter’s raising closed we approximately – potentially $XX in well withstand I highlighted a proceeds. in last positioned net prolonged when

a received Payroll enhancing the in or also our Program, We position. PPP Protection loan, cash million, of further amount $X.X

The recovery liquidity, rate. this favorable on draw on existing terms we closed $XX not this $XX the this do projects facility facility. We new credit in on of growth. current a new and facility, credit million and recently Finally, near our more to to strength, new invest environment. working programs attention facility interest to million in and in we our plan facility term, long-term our capital replacing but to a are bolstered features credit the lower close ability particularly management paying renewed fuel accelerate Regardless

to exposure As deferring conserve are We limiting report mentioned of cash purchases we’re our the the ended pleased end am last fruit. million partners million that and the extending of bearing $X.X onset at of outlined spend. our call, continuing on on work from pandemic to payments, vendor the future material first we with by goals quarter. to I COVID-XX down inventory, with $XX.X cash quarter

effort expect this quarters. next inventory our continue to the two monetize three We to over to

that increase advantage and allowing strategic be flows, to growth us to improved and continue while R&D capital investments To near-term initiatives. margins our clear, allocation our ending improvements shape position. remain diligent enhance cash priorities our substantial to activities with cash efficiencies said, fund the unchanged. The strength With making our and Additionally, qualify We in over unforeseen Deliver from COVID-XX, foundational call but we now customers. these balance recognizing closing being in processes faced or fair environment. With protracted believe challenging our customers good have by enable during that, on for Dave from the we current have excellent approach impact partners in our pass place opportunities believe additional is take that added commercial in us we to of to that come will insulates sheet business I us and times. is can collection distribution firm, our any challenges QX liquidity comments. our of on collections, remained programs way

Dave Mowry

Thank Fuad. you,

efficiencies Cutera we executive business, our the am decades help team. as for drive will controls will assume position and Rohan As myself you initiatives improve of transformative August join Rohan to to Fuad the be issued to and his journey. Mr. deep complementary would with nearly very like release will a our and have Cutera a already execute duties Cutera though extend systems Rohan his the His on will today heartfelt XX working press and further seen you may be from future. background I have CFO, earnings results, our to we experience to and experience hired of this closely our permanent that CFO on assignment. delighted a the accelerate formally will accompanying for Jason have support many thank team through moment Seth. for dedication the to two take scale interim us I to and and

partner period, He focus assignment. the we appreciate wavered. full-time has a I’d a been to COVID, of greatly wish We support to well Fuad’s any subsequent initially questions. bridge longer call and the with CFO provided. this and he like reliable contributions that With While the that, hiring him than anticipated never open bit in onset the many and process during has strong extended

Operator

ahead. comes Thank Instructions] Jon from go Stifel. you. question first [Operator with Our Block Please

Unidentified Analyst

my taking for Jon. This question. for is Thanks on Trevor

growth The is first the quarter. revenue on one in recurring

on down if sort do that Just of of much drawing you inventory, has inventory, that how rebuilding practices with to stuff. wondering think do

there would have any be great. you If comments

Dave Mowry

I could exited saw think seemed Listen, June, of the the way lag on. going But – consumables. we kind We up. kind was we little June, Glad volumes part saw knew bit though in we of you the Trevor. Look were that thanks, as saw we even procedures on of back procedures lag of a join. the early that to Yes. step

in function So back a from couple it couple weeks first step the was weeks almost of of June of to the change like June.

kind all exited say the And line pretty inventory would taking of much patient think I of down in behind from lag the us. with is kind we I traffic. increased the So,

Unidentified Analyst

to point? Got to line program, bit, anything you have time at Or focusing else on it. Maybe your pivot this little a do updates acne share that any you the could there?

Dave Mowry

lot No. Look, practices down. COVID everyone a knows was that these of of result were the shut

studies clinical extended. got So

I think working remote. was everyone in

the things our of compress those. think and collapse a to ways find extend to lines, nature lot is of as time these job a I company and

We execution continue coming sure be or wood pleased can. months perspective, over kind we’re And market going where right and those our and now, would commercial idea we’ll will working regulatory point, more from we with, to from of make with got And we transformative what the of accelerate we’ve that to any And that is a be, of and company. with would at the to coordinate publicly. very lot as that to it we But time legitimate have effectively. the of an to the to we be committed how customers. and share chop a like, for current very efforts. pathway existing we’re and portfolio with focus when looks change obviously, kind that what can firm agencies tell I line this a But you our

Unidentified Analyst

Great. you. Thank

Operator

Our with go O’Brien Jaffrey. next Please comes Piper from ahead. Matthew question

Matthew O’Brien

Piper my question, Thanks and for taking it’s Sandler.

how parts in don’t moving it So that headwind more Dave, are a tailwind. lot the accounts a just loosening things revenues comments the then because in also will program, of direction. drawdown to somewhat which recur it as think to going membership finer go just for there’s all July. of be in seems appreciate or point got a between far kind the skincare going I which is you’ve as with new of up And could put about kind be which But like newer business, accounts of the love here I’d consumables, of QX, potentially on newer of a headwind

everything do of you revenue of do So up and the America the impact talked with the numbers we how just things? side about elsewhere And as loosening? as on in far that North QX here up down sum just kind about how we think

Dave Mowry

long time, a make thoughtful giving encouraged That market get kind Matt, I’m over that into I data of the indications skis, to the this tips as seen wants not patient pretty not get too to want grow. share sure good traffic. publicly. seen We’ve – me Well, we’re make trying that so to that continues said, one We’ve this known and very look, coming I’ll just sure call. as be of to So my good possible. I’m you’ve that, to we’re transparently we’re that right? sharing

indicator that along patient all said have leading traffic to is the We capital.

that we’re of So certainly long-term perspective, indicators right pointing seeing kind in how the and seeing of them the kind we’re we think are direction. that

recurring I’d say, you’re on know procedures I in the have products somewhat particular, up right, the line it’s the well that for So the consumable profitability sell, depleted. guess, truSculpt a high RF, We tailwind to iD, customers. really inventories kind the of, we that been the Secret side, that

pushing towards So are less those and because done treatment in shorter use they’re that. patients They those periods benefit their them from folks that capacity, time. of have room we

tailwinds side. think there I of revenue lot recurring a the are So on

perspective, nice look, was a that us pickup for I in a period. kind think a from really think I skincare of the

will patient both improvement the a that’s the that, customer in see the think think the customer of acceptance the things. liking component product products. of continued couple and We that result We with of I continue.

coming but and We some product. benefited we stick we new the think risks there’s our with had that sustainable convert growth going that competitor to QX. some in the supply those think So of be some from, are of will into that Japan, QX from

as like we that well. So

it’s that we’re be kind complete growth. not to a a to care. reset contributor So bit will our think skin that And that, a we on of continue favorable little bullish a

to aggressively. continues of that the very terms service, go In

my improvement the right that and great for strength. hustling think work the as always think going company. force. have our we job. to that’s of continued is doing we’re do a team. up us. I And comments They’re they’re tell picked field I heard great a that busy You be a that They’ve a service field Since of our will, team as great to see well. service us. And service strengths, will you I sequential I’ve would They’re you, one you coverage, also you that, But now. if told on for quality a very sales

which So those think and I that make then are reserves the this aggressively is these in procedures to result those opportunity would in we in net patient things, I look add I had at practices all from recovered. the I the U.S., a with going my people is perspective haven’t COX that previously. all being to point for the gives product Fraxis capital. direction. in to running are of practices be laser, really unique And are an combines cash a last people greater is, the we think launch and fractional the open confidence the microneedling is fact right in are And think as the of leading their particular, our running their things RF restored, And that that traffic portfolio

a tell lot heading. is you think – not into I that So, we’re trying than And there’s coming futures. headwind pretty to from I’m where All QX tailwind QX. more pleased look, with it’s I’m sell to trying

these invest to I of and invested things are though, the decisions and we’ve what very to fruits. on you I going some didn’t think the we’ve because But that to cuts be right say And important, think I be are coming what are and right investments, I’d durable. made made remiss, we’ve those cut to in. are yielding made the in we’ve the equally if

Matthew O’Brien

making area. business helpful the end, of coming much really think you To about you Okay. a How before? there, commentary, back Could leaner are we what we you had all growth I last cuts to planned the the be or lower? you making you right now think slightly appreciate trajectory of That’s of that mean, were that out that. grower Dave. be you’re in point How what than pre-COVID I about this? kind that? can organization do do

Dave Mowry

probably the a with inhibitors busy. give of going of But were being – we customers back travel to some they’re small expenses, we kept will so some from be intact, growth things because that I to accelerators. think growth face-to-face of see on So I’ll have thought have increase commentary cut we’re of We top didn’t result I come mind. amount those think kind or as right? Jason going things Matt, to that

But the more these the costs bit a most those were wouldn’t that the added, our to little take that to non-value adding the part, chance weren’t for value. on, necessary think formal do out some it our demonstrate to of see really practices. gave and non-required our products I And opportunities. think to events us I to of spend some a say, ability you’ll I but the product events, value bring

leaned performance. organization, and doubled driving things. while also think the the are So have those focus might driving don’t down out bad we I growth on And of we

you back add? were growth to we’re if say on have anything I Jason, I’d So basis. where don’t know a we

Jason Richey

And never nail I head. our very or we think having thing to obviously, of the on is the to and the a took opportunity, size used just do, it fun No, we seriously. hit the force you popular

hire some some areas, that opportunity, look to that impact some we to this we’ve to we with able the that pleased cases, commercial people immediate been back talent really and they’ve I’m on efforts. potentially to our As furlough gaps, organization as some used and bring reps. had in the had an competitive on in attract And we

for And exit our us, gone that we something really to QX you believe starting productivity, not. momentum go when it part’s and well are then is as So tracking, at that QX. we we’re see rep quite the look with which we’re into that pleased or

Matthew O’Brien

to buying them its membership I for this on figure looks for helpful. charging not Very flipping typically, And clinicians that them mean, payback like and take just on is program. and me try head last look one kind Okay. out what the since then of you’re will upfront. something they’re at What is And how the months partnerships in from XX, to I we tailwind from you headwind what into XX this, maybe the terms big in contributor these and then entering it could be? we of maybe face near are the of could for payback see a term? kind going guess what guys of a now?

Dave Mowry

right? offered have cash of great COVID, important that think, them a have that people so foremost, understand these that’s Matt, to traffic allow by was to patient to those first – cash patients. deploy because that There could a practices don’t the it’s courtesy I this that purchase question, are as to monetize for equipment impacted were availability the that of and

this done really So as was a courtesy.

buy the I think as if ones the buy lease people The membership vehicle to look et committed vehicle. they that something I want to and at cetera, cars basement that cetera. lease at versus right? that think want want long-term that the at a It’s difference want new be the don’t cycle. where out. people are coming that is person the et to be the have have a And are car I end the and bargain don’t program. program, that to to between going person from should people car. generally This is upgrade better than the program, But looking mile are their basis, on program, it, a And the people the better lease that that perspective, wed the probably think cost the leases buys novel profitability to that of something people could the be to a per

these at on of have just maybe one higher expense you built over thoughtfully that but to So upfront, is programs somewhat low the kind period. look

built higher current the The needs right? that’s the different the the program. is, over think to the customers’ on a right? of hear I should our that things We revenues, but think based courtesy kind to last I expect state. important think upon profitability take upfront thing going greater program over is this – membership offer is term, I And other they we think don’t really is at you

measure time. the the again at it to right COVID point due one We’re extending more at this quarter situation. And we’ll

customers point, cash So the partnered It been on their this is at be hand that’s to helping to business. inventory. up some our them to tied flows need our with to into assets view think deploy give us allows they capital I get our in

win-win quarter, right, as That shift a parties. continue things for to may it’s rebound. fundamentally So both a after

Matthew O’Brien

Thank helpful. so Very you much. Okay.

Operator

you. Thank

question ahead. Our Jim with Sidoti Please Sidoti go from Company. next comes &

Jim Sidoti

Can Hi, hear you me? afternoon. good

Dave Mowry

We can hear you.

Jim Sidoti

took Great. The that in million you PPP was or quarter, so. the $X

will if you in you back? And that XXXX? against something offset pay pay back, that don’t some get point at Now is expenses

Dave Mowry

want right talk Fuad, do just reflected about you on how to now? our maybe assets it’s

Fuad Ahmad

Yes.

some a of agreement right period now, the a that it’s which our time. on sheet, is SBA the loan interest see you and that So it’s X% balance loan to for subject loan to two-year and us, can provided defer

we’ll balance rules it adjustment When for will sheet. the for loan. come a appropriately. those as make apply are extent then the the it’s So appropriate And granted, that on we to out the forgiveness,

correctly. have As in agreement the this of point. this the know, and a we’ll loan, is come rules at SBA it’s prescribed you not now, of And out flux. requirements as fulfill as from the The

Jim Sidoti

as is offset the to forgiven, that Okay. But if recorded on income loan an be statement, the would expenses?

Fuad Ahmad

on appropriate – line the have we No. our forgiven, it extinguishment the will We require of accounting that below forgiven. below the will from the we notification And OpEx is a authorities will debt if be rules believe line. it as that then it’s income recognize statement or

Jim Sidoti

skincare in pickup well? then was in Japan? Or other That regions in that business. And right. was exclusively the the All almost as

Dave Mowry

in we that distribute now, only skincare actually Right Japan. line

fact it And lot the I in home do doing think actually in treatments. And promotion culture, has as that of the has a place. been with came a Japan COVID so to around

I product really think a that. time, only that this so in we And nice of lift in a But at in that got Japan. result distribute we point as

Jim Sidoti

And All that and actually the the with having right. Okay. get could then product clinic. in visit of is obviously, go without the customer advantage the to

Dave Mowry

care what correct. show In And is, like right, heard up. a from some we’ve pickup, curbside in been the it’s general, skin they U.S., cases, Yes. almost in Jim. That’s

Jim Sidoti

the right. recognition All does term? that have in the effect the near revenue then Okay. delaying program, And membership Cutera of some

Dave Mowry

not. Probably

think money because access on you I And question, capital the but the that a the the capital. don’t to lease we’ll Jim, it’s think the doing of it thoughtful spending that at the be have the folks to option access have probably not will. may I least evaluate probably delaying program, it’s if folks capital

the vast customers, earlier because the I this to I as before and the of that the in a handful Instead, of move in move us for lease up, saw we people, or didn’t sell think cases customer opted and do what to continue very thing to a capital posed where third-party looking of we with they program. that like primary those capital are few, tip courtesy majority focus you, question regular have membership said is product. think at they people purchase to forward. I a a on the is a the our it’s this to to And only

Jim Sidoti

And right. then All me. last for one

in typical anything year, this the not Third is year that quarter typical.

quarter, you seasonality. some had Third

much Or of as Are internationally the is for of month that include seeing you August. slowdowns seasonality? out that any this going year? indicated – QX. some pretty had do checked of any you Does you QX come people You to in ahead think

Dave Mowry

Yes.

I think The of some before school in just is be stagnant month there Europe. typically still holidays fairly seasonality, the particularly of due August will culture starts. to

a be of bit I there’s that. going So little to think still

for taking taking just all. procedures, smaller carrying they’re not or physicians much population many going that’s patient taking However, at postponing aesthetic particularly at that that’s I the also not summer or U.S., across in holidays where seen And holidays holidays all think that, months. the we’ve the are in during

to And so some still on may going be plays this. that. into I when think seasonality there’s But get that with you look international lift temporary we some it at scale,

Jason Richey

Yes.

kind that your seasonality caution order is to of revenue models, material Just partial less of with the even just obviously you you to of than it build in think, if recognize the I Jim, Europe elsewhere. from some – is magnitude just guys coming Europe,

do of markets number revenues seasonality, two, or is from amount number just a small. those normal, that significant geographies cetera, Europe, seasonality we’re Australia, seeing it’s In one. where not of the get relatively revenue little the see bit than a And direct in we of large So seasonality. Japan, scale that U.S., so then we contributing of less the et

Jim Sidoti

of say to All comment right. June you period. business make in July? want that about the was And in excess a year you procedures did prior Do or XX% from

Dave Mowry

traffic. I is And you make at what demand. think That’s of June would of patient a exiting the XX% in that year. I told that on think there’s I Well, terms prior I was pent-up was point

about competitors demand. our talked I have think a lot of pent-up

continues that think I exist. to

may people bang some how kind is great that think and out there. of it tell drum the you I

disinfecting new being there’s their rooms be processes done. the go it’s think There’s means in be to some still environment, waiting cars, there’s which a to directly have that COVID in are called treatment to procedures, I that patients that to waiting right, in practices.

You’ve of got constraining offices. these a capacity lot of are procedures somewhat that

we two, that getting we’re much so other trying as to and that’s the be if that year patient think of patients believe and So getting We able People prior them procedures. to QX, or believe are work used pent-up late are we and exit we room just capacities. some demand that they part fall. the ramping out, to more at well give people more to we’ll can not only and practices as that to what treat guidance they they extends effectively. because probably treatment more into routine. even an more understand There’s more is said these So And through they expanding And there’s straight get extra being do. still we a that’s near that them XX% right? used get plus move become and how

cycle Secret in shorter-cycle shorter allowing be our getting we’re XLV as RF in lot lift the time time maybe a is vascular are on those times. the procedures iD, because less procedures and than I well. more a to of – of truSculpt the the done and think particular, other nature folks The

think, are – us. I are benefiting all these So

I want everything I not navigating you is you is see to I to will be – tell and it what these worried that we’re something is is So remind COVID about. but What do tailwinds. effectively. as don’t fine Because

be our that are that to consider at a pretty of faster believe benefit I we clip of the what day, the recovering navigating that at and recovery. good end getting We’re the customers And we’re others. than

Jim Sidoti

Thank you.

Operator

with Anthony from Please Our go Vendetti question comes ahead. Maxim. next

Unidentified Analyst

for guys. Anthony. is one you this just I question for quick Matt Hi, have on

how If customers encouraged your to received? initiatives those you drive could and traffic speak in a little more utilize you’ve been to detail patient on the have

Dave Mowry

early going more the we and management by driven ask in sales go a At – hit that out point and probably and Jason May. kind high April the And back organizations, we’re a to our going specifically high into lot account from understand some want in, engagement. and more specifics. around I’m executive to think to of I to just outreach I’m level, significantly started of work level cases, very I of very Well, and to a

early. programs and of for traffic, getting and So only not deals. the we them, not also the And to are in from month June new capital but patient think us where to close prospect customer started these in benefited understanding July. We to I in these

about bit and So the want things regional that said, marketing Jason, we’re doing? some you to of the other some a maybe, of localized little talk

Jason Richey

pair commercial this. Yes, there’s We teams our they’re pathogens, around as lot to et our that in and quickly the do that areas like it. you as demand time we of that with webinars management how And things in but of the how really coming their and you a also in development portfolio they while with sure they them we in hands-free, shutdown, the than used, spend practice manage with order demand had in should we that well cetera, at airborne COVID stronger treat that surviving to that COVID only exit up the our but survival schedules into should right minimizing customers, et advertising along that helps have a practice onset advertise did a lot build with and they patients fill out fill in engage and we to spent how teams, how not the schedules try went terms organize, they’re cetera. lot of then lockdown, should of their guide we also make

how the on focus as time techniques We around educated also patient to sterilization maximize they and throughput.

keep we played to patients, are I tactics key the connected advantage stay connected them like with as patient had So was think to a focusing them trying lot providers. with care engagement just of the – to of health that really their that. on But that help here

Unidentified Analyst

Thank you so much. helpful. That’s

Operator

to over turn closing to Mowry floor the like I’d Dave comments. for

Dave Mowry

Thank we’ve stay positioned I and interesting I times, to you forward to you interest and you, everyone stay an health operator. want to forward. think and thank I you. quarter. being And look we are want focused on to These your welcome to well-being. ask Thank for well your on safe next update the call. giving the go company and really

Operator

your conference. today’s for you Thank concludes participation. This

Cutera (CUTR) 8 Aug 202020 Q2 Earnings call transcript