CUTR - Earnings call transcript Q4 2020

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Operator

Thank you for joining Cutera's Fourth 2020 Earnings Conference Call. After the prepared remarks, there will be a question-and-answer session. 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.

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

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

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

Dave Mowry

I the Jason fourth to and the results. who and President and Operating and as our Thank provide you, operational financial well updates Chief full will of Officer. business call our by quarter as brief results over then Ritchie, will Financial as on provide around as highlights commercial Rohan near-term by turn quarter operator. call Officer, Seth, Rohan outlook. fourth begin providing Chief detail a year full will today's on overview XXXX then well I'm joined Jason the and business call our the Today, year more

Before the progress then questions initiatives. our to opening call I highlight will on long-term

the Now fourth XXXX. performance am to quarter with I I'd pleased to like our the highlights. turn fourth quarter during overall of

capital pandemic COVID side markets our continued on the of the particularly While to end equipment business. impact the

made our and sequential bottom top We line both and continued plans execute improvement in to line significant performances. our

in the the discussed results the team challenging market in very presented supporting time. have reflection this are creativity hard direct I of has way and proud in As believe shown customers by the challenges responded team Cutera our our to us to and am COVID-XX the the work, past of I by through commitment I strong to whole. entire the our

by COVID-XX varying region degrees. overall impose of pace the localized we virus extent governments see restrictions of vary magnitude continues impact recovery and During the state continue an this improvement the progressed. and local the and demand our quarter The the environment of as in to as recovery the of to remains

with the period volumes be appears have as our increased As skin recovery in treatment treatments and rejuvenation leading have specific trends you patient sequential body patient or pandemic. at volume the both North of highly Each facial of are procedure driven the quarter conferencing of New volumes of the areas particular. This trend the XXXX total were most exiting we specifically and to of York patients the quarter California, rejuvenation to is impacted XXXX. increased data were sculpting In and video and the Southern approaching the since same by More Canada, core sharing of being days fourth reflected procedures, by Illinois those improvement suggest customers fourth in facial know conducted these Metropolitan area. during impacted while times regions total, COVID-XX that track and in the early worked access. customers traffic a exceeding various within America core Northern indicator sought limited

Regarding the Europe the Middle appear the volumes markets. international and be highly markets most to Eastern in treatment impacted Western UK,

due ahead to COVID-XX. the recovery will impact vary of regional a continue pace that of expect the Looking we to on localized basis

While introduction of that patients previously the be a timeline have optimism concern of delay to in the procedures willing with safe vaccination created procedures for environment. now delay practitioners their in expressed the provided known vaccine were treatments more the we to source a vaccines U.S. to may some until unwilling believe has patients has scheduling who

These fourth a the North We process million $XXX.X the COVID-XX the as capital leads. capital sale down sales XX% durable continue volumes, Revenue down may drive adjust compared our to our our versus compared but million XXXX. XXXX. to has Jason discuss improvement made in through of this high we American for as quality to year improvements staffing up capital direction category for quarter support to was trends showed of from of XXXX year improvements improvement will will their quality and continue posting types Revenue into revenue can heading the effects of quarter and in track continued our team was an establish will reps. our to North but treatment more to to customer will course was improvements management future help sequential as leverage pleased capabilities strong third and X% efficiency team subside. the improvement that to begin I XX% equipment sales ability leadership sequential the encouraged prior right the to prior initiatives so sales making high sequentially. well over full in and detail, quarter as focus am over process, growth posted team be Meanwhile, third client and as $XX.X continue addition area on that our of a and results accordingly. quarter prior am revenue increases American generate during XX% patient processes and and of on decline continued I year decline American focus trend the progress a our for fourth North this the quarter XX% continued our year has Fourth foundation but us expand strong will by the XXXX. was with XXXX. this which optimistic we XX% capital our

front international teams Australia, Cutera the Zealand and posted New to continue revenue bright quarter. spots the Japan systems sales for fourth for On year-over-year growth be as both

revenue for of strong XXXX and fourth prior providing recurring quarter XXXX approximately a Our our growth over sequential of exceptionally XX% over quarter revenues. fourth year XX% quarter growth XX% accounting the was period third

As recombination of a treatment. as delivery and skincare recurring used the reminder sale field of we of products products aesthetic of define repairs, consumable from the our received revenues energy sales Cutera the and service, based our service contracts a in

Cutera store account near was year-over-year of strong growth posting was increased outpaced skincare or growth were equal which revenue of sales. delivering to pleased XX% on period same Also is and of driven performance sequential product particular. customers. in improvement. volumes by greater XXX% growth expansion to The volume see growth of contributing increases sales remains tip consumables the RF treatment consumable secret reflective the parts new penetration treatment recurring our year-over-year We sales driven consumable During in with

in marked and a mentioned skin earlier market. the within increase we saw As rejuvenation procedures facial

for expect see work regain summer contouring greater and forward we Looking resume prepare increases as of body to into direct look are new and vacations a as the volume on bullish patients they year, XXXX throughout post-vaccination. procedures social body move interactions on-site and image long-awaited to

results Before out turning like to pushing sustained over point call profitability. team's would I in towards to Jason the the

part vital to improve actively the initiatives our volumes on performance, the showing business. that few increased the efforts profile overall growth working margin gross efficiencies As manufacturing skincare our material the drag have remove reduced our company's are fixed costs, to overhead Despite expand we and result. margin of desired costs of are

gross the XX.X% we at XXXX period on with non-GAAP par margin delivered XX.X%. of was During which

acme most as the other making and development marketing not during any and sales any like with cancellations expenses trade spending the show XXXX our XXXX. deliver reduced restricted and reflected the turn quarter with constrain of improving R&D critical the projects engineering associated for other our to development fourth of as we more companies the benefited delay clinical timing Cutera in though, company productivity spend Unlike our savings we efficiencies expenses sales our priority operating into way. lumpiness remains and a in Regarding from processes invested of regulatory associated throughout travel Research companies such durable events. greater reflected resources results. internal will or and quarter and of in

Now let operational cover call quarter me of year over the to Jason XXXX turn our highlights. some full and fourth to

Jason Richey

Dave. doing team of business on and evolve ways introduced Thanks multiple XXXX challenges forced our many to our levels.

we've new landscape. going In our that into the benchmark continue quarter continued Through created and processes solid driven business productivity. the improve team selling improvement a ever environment our the a calendar improvement the that we North through to this sequential feel evolve developed move fourth challenges continuously is rep methods the the I of and This As think America given XXXX, set encouraging forward. to our will upon to year. I by our markets we've of for present scaling changing year facilitate recover the as in foundation necessity in was

fuel we sales leads sharpening into to while quality additional driving reps XXXX to As growth. to by high head high customer efforts the generate quality we sales adding intend continue our expansion

resource hone sales addition. accelerate uptake invest skills to our reps of capital the program continuing to the new and also are We of into training recent

the year a recover. In these our consolidate our leadership as roles in pool help EU back our improve markets. EU we for underperformed business headwinds prior expect across continues the force we restructuring COVID capital significant Southern of half will sales within appetite capital in results namely commenced and to the efficiencies customer sales drive due distributor We to in to as several to Europe the region. versus Internationally improved improvements talent and regards XXXX

bear tracking already improved and of connectivity duplicate to the fruit. have which made earlier in UK have begun changes to we many we our Additionally, the

we and optimistic are will growth focus off our we and as depth are in of well representatives numbers global the Despite quality a these for roadmap team Early the we to a due Zealand both place. key team of following have and within leadership pay the continued geographies. sales the of revenue course geographies over other EU significant New our in result capital pandemic Japanese the Australian, to similar our XXXX. lockdowns We achieve posted investments year-over-year. in reflect continue These as regions EEU similar

Our continue product of for will launched plans half many XXXX during the in fourth of first marketing ways we efforts the XXXX. quarter

remains the drive portfolio gives our they the results. it in as Scott need market sculpting body feel true sculpting body we competitive product Our to aesthetic edge flagship practitioners best-in-class

our and body the as Fraxis™ true Marketing sequential skin efforts of reduction secret This pursuit We achieving muscle plus benefit microneedling formerly of of our continued as pro device device support V marketing space their will the efforts within the rejuvenation the direct and as program well around center our secret Laser in continue and PRO. the secret face includes demonstrating and the outcomes. Vascular will patient's around fat the to family leverage Excel known of RF of stimulation products. utilization RF desired

is and the and the this positive in to has name increasing RF remodeling Initial fractional As launched was device a texture, to combines skin scars thermal before ablative we of laser this device PRO and PRO with of XXXX tone quarter of the a few. still Secret its wrinkles the addressing The and customer the addition calendar for induce of see secret feedback to expect just resurfacing, XXXX deep the innings demand early for Secret third availability. capabilities year. in mentioned during product product been CoX

the and XXXX. for process capital through One half intend we place we recovering back learnings structure having leads focus This quality the is investment investing affectivity throughout is are on of our particular underway qualification and customer acquisition, to to the advance deployment increasing expand the in these Lastly, organization. as of of of our we base. appetite spend committed area have high committed upon and to and sales actively focused XXXX are in equipment the of in our marketing

scalable around witnessed Before call from and the our and is would and I to a the turn work conditions the our have financials. foundation build turn to long-term my Their I teams dedication which discuss over to call that irrespective the share like our commercial operational from Rohan over world. market appreciation I'll And Rohan hard we to dedication of work to with hard and forms organization. inspiring for strong

Rohan Seth

Jason. you Thank

prepared clarify lower disruptions. contained listeners reconciliation As as release. to metrics reduced review of The that encourage of and is representing solely for due the period revenue learning in same equipment decline earnings in review GAAP $XX.X the want and attributed $XX.X included will our COVID remarks as is I release. the XXXX was non-GAAP metrics compared of levels a quarter I with volumes be to million and Total non-GAAP our for both A approximately fourth to my capital results in purchases decline million non-GAAP GAAP I complete in treatment X%. to the GAAP readers to We to conjunction sharing relevant.

For revenue while $XX.X in American million million our New million compared and European Zealand international million offset to quarter the was the distributed year, compared was XXXX. for and equipment were for period $XXX.X driven quarter revenue North a $XX.X by last year $XXX.X to was revenue $XX.X in Fourth fourth capital declines million Japan. gains X% full The capital the Australia, decline. in same businesses equipment

American especially year $XX.X $XX.X I revenue was international revenue million growth XXXX. million million to For North $XX.X in compared $XX compared equipment period Full the same the year. XX% skincare representing in as was year consumables, last service to to million equipment compared capital the to an and million report prior global capital am full $XX defined XXXX. million quarter pleased fourth XXXX $XX.X was for revenue recurring that year, in over

GAAP fourth For fourth XX compared $XX.X gross for recurring increased period profit shift the was leverage. million a deliver expenses XXXX Total the to was service same decrease impact GAAP full $XX.X compared XXXX fiscal manufacturing that a XXXX. $XX.X last million compared The year. operations. for decline XXXX allowed XX.X% us GAAP quarter representing quarter million compared our basis mix by in for gross for a $XX.X period and of our of year same $XX.X of revenue XXXX. XX% the improved margin operating in profit were million to improvement offset million gross negative to was last to year, point the was to savings million $XX.X

and due marketing expenses for live to Lower XXXX sales events. was from year day-to-day million Our million shifting to and operational expense of the marketing quarter for $XX.X same million lower to were compared efforts the Sales million results the Operating the made reflect XXXX. expenses and by team primarily $XXX.X our the to compared strong to drive discipline were such $XX.X $XX.X rigor last as year. of full operations. fourth lower to in commission period for and XXXX in sales our online process result our adjustments activities

COVID $X.X fourth back during the and While the $XX.X some million $X in and million more more XXXX. restrictions period be compared for in that marketing XXXX expect marketing million last was that the of we million million year was $XX.X compared spending R&D R&D nature of XXXX. for XXXX come year million expense in Sales expense have and same changes may quarter full are the to for ease was XXXX environment. for we related $XX.X normalized many as full year. compared $XX.X to expense XXXX the us of sales implemented allow confident more return efficient will a as to we expenses these to do permanent to

the for compared of as expense very $X.X proved same the million the XXXX all of costs expense XXXX legal to the be up expenses million effort G&A challenging and by as quarter bad fees was an to G&A debts, as period $XX.X XXXX. last fourth XXXX in expense. $X.X increased year $XX which of bad our million full CFO; for cases driven the for settlements compared was legal a which broke showed in with associated and growth Finally well environment million debts. of such G&A interim year resolving to in the in fees

Looking in not be there lumpiness do these though recurring and we into increase nature. moderate may some XXXX to view expect we as items this

expenses. For operating loss million or Adjusted period to compared same were our fourth gain for a the quarter material due EBITDA XXXX to There position. non-GAAP significant income of XXXX. million for operating of as XXXX $X.X was was year compared last our of profit lower of full EBITDA of no also tax to a adjusted profit the million year known a $X.X $X.X changes million in to the a $X.X

However, of one-time true-up of as did part ongoing we processes year-end certain have tax a provisions. our

$XX.X $XX million our $XX.X continue and we the fruit. that to as quarter to our to ended same the sheet. end at pleased cash pandemic of quarter goals balance XXXX. third the million effort and now at ended time to quarter very COVID-XX $X.X the we equivalents onset Turning inventory compared million million our bear end the $XX.X last million We down approximately through at with of year quarter marketable the XXXX. cash, investments to with We monetize outlined of from in of third report I'm the inventory continued the of

and diligent growth to our be tax balance retain our in investment. strength fund to sheet to We upcoming management our in continue continue

guidance. Lastly, turning to

be not range COVID-XX procedure both we outcomes the this impact and and surrounding course over uncertainty at pandemic wide year formal of Given the guidance for the time. its the providing on will duration volumes sales of magnitude capital continued and of the

providing think in the of about commentary investors direction However, we XXXX. following our the drivers to our help performance are

will micro-needling sculpt Truesculpt driven true capital as continue our Secret sculpting to that by PRO body Truesculpt ID expect equipment products. as well sales flex and be We the platforms,

to by continued we we field internationally both anticipate we recovery the a be While expect revenue in recurring second move into sales year. in first our half capital particularly the the U.S. equipment of as driven half our and

year. virus measured rollout remaining move the unknown their a newer our this variants on as the impact the the as in be are We reasons more outlook to well for including seen for impact Corona and of of contagious year vaccines we of yet number behavior through consumer as

we a and expansion the recurring expect at continued our skincare At come to by We the that year of products attached line growing continue our revenues driven the clip gross healthy the expect consumable. throughout to driven line to margin of driving expansion the margins more capital normal cost equipment continued in smaller by manufacturing year XXXX levels improvements absorption of a full base. returns cost as natural our

expense continued We line and in continued at the with on costs. administrative leverage general expect discipline operating XXXX

However, cause making will of we please the that to our and meaningful spending investments will note a lesser extent as increased in products acne ahead year we year. be the launch throughout which and move sales development and research this of marketing

cash With expect pass now better be or back it closing an I to Dave that EBITDA neutral will for we to on adjusted flows For basis. remarks.

Dave Mowry

Thank you Rohan.

attention Before my Six an Cutera to our report ago our and approach execution for joining arrival stated upon provide shared that against the we like our key create unlock opening and I brief shortly story Cutera after quarters initiatives. progress the strides would we've making. up sustainability. value plan reviewing a I building to Q&A was turned to in a made

the fund to to include consistent performance revenue we we reliability third, few from differentiated mix two, future business. foundation by the our coming set to to game-changing we the and serve align that sustained the Number the executing key vital that could our Number the that aligned improve and one performance of programs customers of resource one, investments recurring our financial products Cutera deliver increasing categories transformation required required three elements. of results. core from our phase Cutera build of business clear focus at our foundation balance profitability contribution and shift achieving and plan on accelerating our or tackle a initiatives which strong Our standards

on goal improving reliability closing recurring more our of XX/XX gap to we our aiming the capital split revenue balanced a of focused for the a to Regarding revenue performance mix. of

new of better resources skincare Over the last have consumable must the a Cutera that each marketing and local support promotional service better streams directly to committed accelerating commercial procedures, held including our providing recurring patients. customers position support helping and XX stream. specifically position and of months all and for our improving revenue we've products practices We've regional to to treatment promotional inclusive products taken

to of the able of over financial began XXXX. to aesthetics On fast held way Over belief we've six these than second some of been to and that in in embrace unmet percentage remarkable doing challenge R&D designers the the investment more development investments engineers market XXXX pressures Despite of we've one delivered. plan element of targeting of We in investment needs critical the uniquely the to allocate programs XXs type second these unleashed core past quarter a scientists, have upper is group customers. specifically higher the low the to strategy the so back of XXs entering our revenue total our the third resources pandemic clinical made allocate programs. shifting of by mover first impact revenue of spend the greater our challenged recurring critical energy-based decisions from COVID-XX changing internal we our and and in our to XXXX product a quarters continued increase to half

meaningful most will impact to of coming and product products our through this solution be high First the pipeline acne.

current pharma accelerated believe and side the a aligned without provide will our with we practitioners organization with solutions. development process around solution effects a durable the which to strategy associated product acne prioritization Our

element of Finally, rigor a pathway culture financial developing is and foundation profitability. and a our is that sustain the of third to

have is various pool our more our projects considerable focus overall functional the warranty removed on vital expansion our move of the ability includes the set to quarters. during overhead material, and benefit redundancy, This and reduced we out narrowing streamlined By costs labor single of few which improving to of the distractions and financial last already the made key and six actively and fixed programs business. programs of a expenses. efficiently. We is have faster our gross recognized areas of margin has One initiatives carving business from eliminated cost performance progress focus alignment and significant ensuring

transition third to XXXX fourth marketing and COVID the company activities functions executed cash any in in We during and of scalability right-sizing X.X to generated the will be a as adjustments strategic from some and pandemic sales the additional redundant done positions. processes quarter the the one-time we spoke need roles aside identified P&L to of a and within were operating identify million identified a bit Our just as I that we Concurrently, adjustment. impact year of provide in irrespective durable of as the to well in to projects manner. the generate us removed by G&A our initiate approximately X start improvements that will we phase improve consolidating enabling non-essential of key and close near-term future. expenses releasing quarter while for phase believe provide savings the programs from cash improvement while creating The future. out to the our I lead the one

more will and a X phase product notable expansions be commercial phase time basic by launches tackling exciting was much X that While marked to a and deliver growth. return blocking

performance. XXXX are am realizing to I vision ahead plan. be positioned journey as more of from organization have company, we quarters’ could motivated that to creating team with to journey fully the our the like momentum Cutera to up I emerged where into the we aesthetics. challenges our better critical a entire the by team thankful of As open faced future tasks and With our the dedication From highly not get us fourth for continue I'd segment the today hard we we our of overcome medical a Operator? aligned are embark and to ahead work a towards that questions. call shown extremely of we on moving and fired knowing and as next focused stronger more the

Operator

[Operator you. with question of comes Please Stifel. the John from with first line question. Glass proceed Thank Instructions] Our your

John Glass

Thanks is I'll zoom do in and I'll guys. Maybe questions. what the afternoon. wrap zoom up to I'll sort then Good out of first

one really that hey Dave, said was the baseline skincare first big you quarter around and XQ. a X quarter million new here The last for and obviously in

we about did new I this million as do utilization mention think contribution going how success as going you accounts is and accounts. color it number forward about It's we of a current but XX the little just base? well big a So more bit new want the call of how forward. that the think

Dave Mowry

for thanks John, the question.

inflation I you continued I continued think was our that's artificial think or anticipated of fourth rolled was we've to increases quarter customers excited that an obviously there what how due from out. line have but do anticipation some skincare that to and be with some the about I quite just grow. price not believe to timing associated

time is for base behavior. and $X business think do expect into into of there think we going think be where believe is spoke I or time people some of of new or I really I'd stocking customers and there will the naturally do lumpiness from to was what forward. from base a customers baseline the pull believe of I as anticipate think bit kind is the there fourth I still think but of I this I I that anticipate and million some of that $X.X quarter to like increases that So spoke just earlier customer is million expansion XXXX I a little going of that pricing

John Glass

margins around good in they again that but were non-GAAP over shift And one's and just of Got XX% this really you Rohan XX% to then to back the it. half the Perfect. of XXXX. gross maybe for quarter to in sort

year-over-year if the I've skincare your a of more level believe in about and commentary as acts bit into environment, more. can but we think got a mixed talked I margins I sustain even just normalized XH isolate headwind that if even one that up then ‘XX you margins gross gross at

Rohan Seth

Yes.

that. for thanks and question great So

grew we've durable gains some pointed headwind. of and continue margin margin base. of significantly back volumes as up really I taken rightly look, sales out fixed to online. the actions come you the this in expect as our spite pandemic right-sized quarter to lower be do up to and cost very ramp So actually our middle and We mixed expect nature ramp in would these significant our in

to our continued by get will to be our in driven and this would right services lower expectation growth XXs in the exit we business. sizing margin as Our year further the be

the Our long-term target in be XXs. for to mid margin continues

John Glass

then out, Great numbers just that environment? so sort a as said I'll got past years as was there but normalized plus fourth sequentially normalize you're of real? and point XX% Wow. look how the was in well just and it $XX is as of environment to and XQ it's think off real willing your and granularity around quarter unfair questions to down right into give. that million you. that to jump Do I capital Thank XQ you XQ non-COVID I've [$XX] COVID and to the capital much million sort sometimes I it's the ask getting get I in I guess. questions some Great. zoom

Dave Mowry

we we because John variables different question were multi-faceted a had through. that's that a Well, of number Yes. working

great though. question a it's think I

indicated So let North in components. take we you investments few through sales had of particular. make our Obviously we expected in some as America sequential as to in a kind me force growth we started

build those once saw during upgrades capabilities it do a the to still people they we as a lift number great make productivity. have we America a and continued positions quarter That from to fill their takes North for said we pipelines. think you contributions those I and we deal believe positions and fill of and their for time their talent

So normalized perspective that I about a it thinking headcount probably to from a similar. of perspective from kind think you're XQ XQ

I in fall deals and of restrictions, think fighting as the elective off very-very that see to deals lot and whole a very elected etc. ups off our if in the to mixed a We treatment volumes downs kind but certainly or certain possibly shutdowns, we way we toe perspective will regional you all toe we quarter. were know procedures for didn't difficult, fell find to as were trying of and very find markets. of could from many for

perspective think XQ quarter-to-quarter growth XQ. to I it's similar So probably to going be that from change

cure in I I you is that's think and QX. has out the is for opened out the rolling the little that vaccines might that's QX the improved the if be that our do from thing there you be or and think one if around favor momentum customers working of will just bit corner the the capital which that excitement around to buying created and will doors optimism may slightly a and

that think uphill got a do to still I lot there. of However, work we've

seasonal three from So I'd simple of to I don't those we mostly elements bit around optimism additional you bracket XQ help if first vaccine. it's say the XQ quarter but maybe know kind little of what think a with

John Glass

That's great color. guys. Thanks

Dave Mowry

right. All

Operator

question comes Matthew Sandler. next Our questions. from proceed of O'Brien your the with Piper line with Please

Matthew O’Brien

and Afternoon you. questions. for Thank the taking thanks

Just for couple a me.

XX? and just the strength faced the business, about kind skincare consumable them other talked other John's some just Japan accounts of zoom First technologies of Dave those and that the on side as to one at to and you're question here you getting just rest you as there you're and you products? traditional of in seeing in about into’ U.S. the pull are is a skincare seeing as then with there up of phenomenon on buy this any consumable component secondly how we business durable on and look couple the parts the outside follow the the as talk the through of Are far you overall look seeing to but but what

Dave Mowry

coin start of Matt, I zoomed to you face stealing the will that but heard of all I have phase first the probably I shamelessly. haven't coin give credit. Well,

question into terms the account less product. the same necessarily and token susceptible expand In new does like skincare in allow contributor us by the your kind it of don't pull it through. which sales as base penetration some accounts. and is of us of It expansion we creep. or business pull to see get significant probably first of a shrink or distribution that also It we does But to there our one our minds said back makes a it there durability and is and from to through durable that's

or term capital a However, any in purchases in not not longer believe are case. now. many the or case do shape transferring but certainly that cases period necessarily current We that be over to way those right may form the

for the XXXX that a part higher the couch a think, play folks and a more We people think week you a to contouring freedom, to going in of remain healthy that potato interactions what said a more more lower we and think attitude bit but feel summer to been volume going few to as cases that about little restrictions a look have know As procedures. first days body the we more drive I people need have bullish back facial and independence and the into over many think a contouring work some are bit degree start true there's or I long and we on body body and to we basis bit adopt greater think think out vacations. more they're coming kind returning rejuvenation the and will lines waiting little I zoom of lose feel as get we little social kind the that's exceptionally face of what programs have phenomenon of of the continue do on probably going there as

and our with and at talking hearing. understanding insight they're least that's customers our what So seeing

calibrated. believe I that fairly well So that's

Matthew O’Brien

it. Got

I makes mentioned side but of investments Dave, of know sense probably Okay. more these And sounds like it still investments think in to phase R&D this year the year I a on over this that this Rohan is marketing dozen then some flipping year. for here development acne type acne two with

ourselves to think that could So with about last little out just maybe that in too something that the it? months but more bit Is roll ‘XX. acne I about don't like the program? confidence right talk ahead far that of way in the then want get any a to of And couple it feels this is you've over seen

Dave Mowry

the appreciate question. I Matt Yes

that to out to don't any that what to learning. anything product know sit We have do we not, there's to own of some a we've release. advantage we our terms our competitive intend in bit and there little through able We hands give gain we've on decided them been kind of

known been through and with that and we product solve investors we've has back the it move acne ability providing kind not So a bullishness That of little bit said the patience its I that. medical as as position. come for not us and our being appreciate to sitting been and much the have treat as data condition and we off remarkable

and insight a more little more around the the this but transform be seeing to will helping in maybe that fast a or do a helping the think I can we company not technology. quite bullish half market do our from we timing can designers of why the over that we're significance year couldn't so where of also company the programs. early also that that the and Those in team, from we a perspective things more the timing this us and there to a proud for on second this of believe a would to behind some continue maybe and engineers, provide clinicians be later first I the into we'll is R&D half follower get product mover bit these same position transformative little us the drive are results this things believe said are size scientists, and and first there interest the we're we be that a announce

Matthew O’Brien

Thank you so fair. much. Very

Dave Mowry

Okay.

Operator

Cooley proceed questions. from with with comes question next Our line your of Please Stephens. the Chris

Chris Cooley

everyone evening great on a and fourth congrats Good quarter.

that think capital as we year to place, fourth through do competition How wrinkle initiatives if bit about in me as then you about the think quarter the cellulite already and the the little a it as We out those well expanded sales you in force marketing the Just pretty that side therapies. in third we if force the upgrading from there cadences in out some and for you quickly further for some started I have treatments have we sales could, all which go how there the first other indications the half? the heralded which are start nuances are well know expansion initiatives, face quarter. coming

got of Just kind you incremental capital for And first curious how half I've of demand are the finite kind addressing of follow-up. during at the looking a of year. kind the

Dave Mowry

Yes Chris that's question. great a

fourth regarding that the results. of First all the for thanks quarter compliment. certainly We appreciate

will technologies competition is aware share question kind that of wallet and for there. continuing that out and and terms expand no you the of we're to are well is if grow of In the your there doubt

we've continue half is think the by that and new efficiency as somewhat been build their I reps the some a the been of as pipeline our own our limited we of and the view be little second add the We that think first to and to of constrained believe the get we could open to year speed, but these of little markets in recurring come more staff have though a deal up productivity. contributor of growth be markets and will to modulated year half. a markets bit it'll kind said revenue growth. do positive somewhat and continue first capital expand a reps these that XXXX there the We the happen in on kind I and something story believe more to for do learn bit we'll on gain that capital believe us That be a the processes half kind up is room is that then we probably that of believe and our grow. that story think back equipment footprint as and of plenty half we of to

well and a very differentiated we're of fighting any anywhere almost out in there. for So deal wallet believe portfolio our allows we that have We really We I understand very engaged understand what's we portfolio think available. have product the and share aware any competition. deal know complete also be access to on what is that's we us allows going that to almost to reps that that but

of the broad capabilities get the also we're flexibility product, have that know to come breadth that able leverage products of new continue know into and known command we and ASP market our entity. because people the been the a as to quality we've we'll We markets, to our new of that deals our and

our lines. that on to robust We reliable, and have capabilities good legacy we'll product, continue ride

Chris Cooley

expectations and color P&L to then the guess look you down quick in from line capital with me the being was quarter. I only strong the downside all service more to Great. results, especially clarifying place in I on appreciate and our with really surprising component bit that just that the maybe the little when a question a

line Just specifically in the curious service saw if with you about consumables. you there could the provide pertains as fourth quarter there the it color item any to what

Dave Mowry

Yes. There to elements service side. a that couple on the is of

have year I share would of end can been we strong the active year distributor service distributors I element many as think on saw first parts, service as as from typically some last sales selling all of with restrictions. distributors tell of suffered parts you first is this comparative very you the stock The those a or year through not with at line of our markets have many the products and in market up

can kind some that somewhat if and different you I think was within secondly will well. some of come were the I as restrictions we restrictive also that had of and catch think territories go,

were able were and both were we it to that they So to access accounts. with disappointed the restrictions we actually together that at frankly all service faced pull in travel kind not pleased our performance. of We on pretty

Chris Cooley

one I Rohan. flow one P&L. in and queue if just cash by could second And for the squeeze great. last there driven maybe sequentially quick I'll in one Great That's get back the half improvement leverage a

curious year the you we sales? will half in second of so like some about as with it's be adjusted first items we R&D the from the perspective kind we the to of going start or year as sequential it lumpy through anticipate continued in other as go capital and is spin but of going sounds improvement cash the Thanks just more leverage some So forward realize it flow stronger think EBITDA should half get an to skewed much. I or business

Rohan Seth

neutral to Look, is one guide. and we've or at better may question we that not no, have do year. the EBITDA you chosen the The appreciate cash thing to reiterate look as I Yes. expect noted for will be I

as to investments continue as We on drive future. our can while manage our will to keeping our growth P&L eye we responsibly

Chris Cooley

Thank you.

Operator

Group. Our Please questions. Maxim of Vendetti the next from with your question proceed Anthony comes from line

Anthony Vendetti

terms of most products of as Yes, now. that is True products my the your True answered capital questions Thanks. but Sculpt just product driving V in terms Is you those where if terms of one contribution do the of right still equipment and just revenues to comment rejuvenation Excel and growth facial now of main are one been on equipment main of go products know also in of in Body, you terms in capital mentioned sales I you then could and and forward?

Dave Mowry

laser customers Excel product upgrades We've really higher legacy we it's seen our we've facial creates. we've field you couple to facial and at Excel pickup We've side performing the top a volume our people also seeing lot bit legacy part that that going I things. and V customers best product some that products. and of on are are probably value the workhorse portfolio are the product you offer. for that Yes. just seen of Anthony. rejuvenation, the of a We the and core of but of a that over because a of we color the accounts offerings laser but of [indiscernible] products the couple our programs the perspective a V performer, because a in are and within highest will Excel the are don't core believe products out that is break and refreshing seen give those that let our From kind the They little line me it last if on done a [indiscernible] there high performing vascular years they're comes out specifically from our think also V that

that great the Zio that deal offers. there's of flexibility On side a

in of facial and a are and So have rejuvenation on for will of the you new into clinic procedures. the great sales a nature higher if been, of XXXX focus of Zio or practices think practice practices percentage applications into procedures to or because those expansion bringing I and just facial both

Anthony Vendetti

revenue on and helpful Okay. That's maybe the that in quarter outperformance then handpiece went Dave through it's the behind line just but the skincare rationale refills obviously the and very skincare. this and that you

terms in to the skincare should anything for that that? In plus number fourth Titan is look at there be we how handpiece XX% refills for the there of used product. Is quarter and else the or

Dave Mowry

the say as that hedging is majority out vast that say that of as replacements is year-over-year marketplace. Japan probably Titan growth of technology really number by there that The comes new if reported into I skincare and even skincare. available out the are would product. this The when you It from a slightly declining number really will Yes. on per basis I and all I'm a is

a up gained pick growth regulatory as predominant the but will new to approvals see that the that's you So are decline elsewhere skincare continue if and contributor. products we'll number within will and and systems that's

Anthony Vendetti

for released? products which line. by on to just then on the gross have is improvement that and that there meet new skincare be mentioned driven gross threshold to that goal be Is is Rohan improvement a the question The the Okay margin that the room going order there to certain margin is and or last stable? in

Dave Mowry

next with products opportunity that to both we margins and relationship and the with and but to and of that more and so as for say to a place tell manufacturer product. I for makes contract continue and the it a is probably line of our and will drag volumes be will the for within gives grow probably that We've on there improvement see can things happy it's leverage we have overhead we're very Yes. fortified That skincare said would that with control. the do good opportunity us I own contributions assurance higher would in slight us so and I happy overall the that very the you improvement? is we'll believe more absorption support continue that and year. we continue that

in contribution be significant So manage it, declines it from have and a able from looking further not skincare. to I'm maintain Frankly, the just margin it. anticipating I'm to not

Anthony Vendetti

very Okay helpful.

Dave Mowry

will is to I point Anthony, think think believe that I'm it make the I I this from this think either XXs this and say achieving I low don't from business that goal. to us I If I for could block us we've is achieving important really probably sorry, we've that's more meant goal our thing. prevent one mid to gross margin don't will modeled targeted we as and

Anthony Vendetti

Excellent. Thanks Okay. Thanks. very much.

Operator

proceed Our from next of question Company. line comes Sidoti Sidoti Jim questions. the with with & your Please

Jim Sidoti

me? hear afternoon. good Hi you Can

Dave Mowry

Jim. How you? are can We

Jim Sidoti

give I'm well. that Two if but in Glad is? little hear rest sales questions. the can down it of just America XX% color everybody's look a you world, North there. you Glad like healthy. the down doing to why us X% at to everybody's system only One, well in sounds more

Dave Mowry

Yes.

it's think I a question. great

really were that few bit to it's log very think countries numbers. I a We a able first had all numbers little the small of of outperform. in

they'll tell those to So continue stretch the of you will add the undergone in course a portion improve, within sales and I that's talent still of the grow, COVID part business. had able North here in Australia, I story and make capabilities type think the we'll through We're significant to to this two process New Zealand terms I significant in be of we've and believe the doing organization opportunity and which have scale here America of over and the makeovers U.S. the in regions. Jim. of upgrades Japan of and those

I believe earlier don't and you periods to will look if certainly on the for think us it's but I back area QX on year. you a so if us recovery that for So continue that's a I within issue to look a accelerate and long back term focus Q, think

impacted by some I that play North deals. think the seen what areas is We've and increase market market. I like from I nature you certain were than you'll in. Europe an see to were impact more Asian markets less competitive similar the areas significant in of said, that a intercontinental other region competitive also even impacted things tell Those some of that think COVID more American we is had and COVID the will direct

been I gives great fact the majority the we've think what win optimism price compelling me and able is the to hold deals that that in. of is and what we're

you a got I more that competitive deals the more forward. do think will are I view think good the portfolio a of we've allows and we'll we positioning that us win that while go good if So product as kind

Jim Sidoti

you so to a Zealand Australia, say and distributor or change New you did you Japan, for there? distribution And new did added

Dave Mowry

ago and of what No. invest years talent to play quality We the is that place and these in. made and they've the we here quality kind seeing leadership of developed investments put a we're the that of out couple continue that in

Jim Sidoti

in what sense that that what that just the little Is that spending give development make you're Is Okay. regulatory don't for but the Thanks. And give is blame I then Can costs? some second a Can I know going hesitant you the means? some magnitude? more just up maybe us approval comment still and guidance give to R&D clinical color a you us you on question, acne you stage, development. trial? a I think did about

Dave Mowry

appropriate you got think to it make to the perspective appropriately finish Japan we that believe sure a give as in in and approval. and I'll give magnitude globe predominant that are regions I necessary to going in that achieve medical same data from we and North be as elements We FDA amounts well Mark support such it's I a other kind markets you major the those Jim some to Korea huge very as and regulatory of and the continue obviously to for can the don't are approvals which and here to in within This Yes. the approvals to we but some color not but only acne across my in CE we regulatory as maybe approvals giving asked want line really need has as terms regions. but Rohan of those play is think markets condition access. we've such Asia make in large America

how work this of knowledge trials got for we and understand data device to additional have approval not but regulatory forward train, do. inclusive the the we needed and know responsible to applications look to teach just effectively get be delivered. for right the deliver will to to and to outcomes which can best that going we that's going if work is as be a clinical We're you rollout developing clinical So

across that's this worthy of being and clinical give to lot you the size? color prototype dissemination on from that's kind from a plan to benchmarking Rohan to a R&D going the that there's data builds of would of market to size So collection that able scientific on want some perspective address. presenting have just

Rohan Seth

Yes.

year spending range very in. a as X light all the the manufacturing we like the So where in on amount there's and and front the of for sales commercialization and there could Dave out the on X of on side in and we million R&D depending are some build well some marketing mentioned to on million expect be to that spending side be

Jim Sidoti

That's Got you it. very very much. helpful. Thank

Dave Mowry

queue. this think calls don't attention wanted thank I attendance just more the there Operator and earnings Great. is call. their on to any in everyone I for

and I continue vision of think to updating performance to Well, of good to executing in Thank our we're a going plan future and done we've game plan our along future excited executing our calls XXXX we've realize the that you medical and giving job look of you. the insight way exceptionally on built. aesthetics. and into you knowing the momentum forward we creating the company's

Cutera (CUTR) 18 Feb 212020 Q4 Earnings call transcript