Earnings call transcript Q1 2023

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Cutera Inc.

First Quarter 2023 Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. will opportunity there ask presentation, the be to an questions. After Instructions] [Operator

today financial guidance The forecast These forward-looking company's or forward-looking statements statements. of purposes. but limited discussion any including, aspects future provided for includes current reflect business the of to not expectation management's modeling current

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

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

identify we today. our statements, to to that you words in For statement the forward-looking press refer encourage safe harbor earlier release

All risks entitled filed. and our Form risk Risk those are Securities as forward-looking section our updated factors in in the statements Commission XX-K, Form subject and uncertainties, Exchange subsequently Factors the XX-Q filed to described in with including and

statements Cutera obligation not results you which Cutera only the as on may place are or events. to update the current from reliance to differ occurrence undertakes expectations. events publicly reflect speak reflect of Future management's undue made. also cautions unanticipated they forward-looking new date information, to of or no circumstances materially forward-looking statements, to any

we will an basis. can financial to operations, of believe underlying from measures, discuss including comparing results adjusted greater measures complete results period facilitate period. Cutera's these on financial analysis more results ongoing non-GAAP We a and addition, into In transparency particularly when

non-GAAP release. operating GAAP. as the by to measures not performance These earnings refer reconciliation be Please financial prescribed our considered non-GAAP of measures to the with, in should GAAP to alternatives but along measures

of to Cutera. over the CEO would Please Interim With like that, I turn Hopkins, conference to go ahead. Sheila

Sheila Hopkins

Cutera's glad able Good us this to you're Call. XXXX Sharice. Earnings Quarter afternoon First Thank update. and join for welcome to you I'm

Board on you April. the in most was As by the call interim I CEO appointed know of

on joining Drummond, Interim in Relations. our Controller Stuart Vice company. of our Investor is been announced Seth Greg with President appointed has leaving call today CEO. press along and today's Vice Rohan Barker release earnings me Stuart President is formerly and our As Corporate FP&A the

will and on discuss recent through call, detail then first call and questions. the provide to will I wrap greater financials today's our I you Stuart will quarter then I pass our it to On the walk call events to open results. up over up financial related the XXXX performance for

of bit a me. First on background

Cutera facing roles held am situations with Before we am Bausch faced roles I challenges and + have that is drive joining to Gamble interim Cutera Colgate-Palmolive those business I I turnarounds new & XXXX executive Procter those and in our while the role that I can at value. in the I Board are acceleration. Lomb, and Tambrands. long-term leadership led to similar that overcome challenges confident In

extensively opportunity meet with these In with had interim senior since across many role team I've two I've the regard the to observations. and that our away others conversations from key company. leadership the taking come

have First excellent products deliver are and differentiated innovative we and that technology results.

a customer result have and satisfaction. we patient As strong

practice to committed believe up have world-class technology of our future mission for of our we talented and aesthetics. clinicians highly people is are are Second strategy owners creating who a made which organization who in the and engineering

our XXXX results we strong a quarter executed reported first recent however well have very disappointing in results the have evidenced as place including not we particularly So quarters, by being foundation today. in

clear. the results that the and has help significant year our improve of Board me said fourth the realized Cutera last reinforce CEO the challenges of Committee Special in execution. execution quarter in a let to new needed quarter but publicly, actually that first Board The the fact As be

suboptimal and solved. will quarter that led leadership can can attributed be be the self-inflicted that in and challenges issues direction Our to to were mostly execution

can the our next permanent execute right Special end the search the the is opportunities identify to Committee the to That on not Board CEO business, and finding other Cutera. any board. director me its underway who to currently effectively process is leader against in the of committed Now, new or permanent be that will for CEO

We we are candidates. sourcing executive and in engaged external search leading the a firm of have process

The level as Board effectively candidates the is some to our and company, operate we're highest best long-term committed carrier and a integrity. will be of serve someone executive, to seeing who CEO operating the we for bringing terrific the in announcing through interest a with are look our culture soon And shareholders, with the execute forward already world-class a as of process. permanent strategy

input of our thank to to We role. aligned needed of providing skills are bring Cutera the we specification I for largest for framework the in shareholders many on forward. want believe this critical the

you Now and the group as comprise Committee. are, former undoubtedly some of aware, there the leadership a controversies are directors between Special independent the of company that

working and through clarity issues months. We few those next shareholders are should in have for the

company's do the of and for important improving new of to the In our the continuing a meantime, work we strategy CEO. searching are execution

the call, of going the of not we For are litigation. address which governance these purposes are subject matters, this to

like shift first an that I'd provide with and to quarter. So the overview of

result operating EBITDA expectations international ago, a of was below also equipment was revenue the This negative down was headwinds. in to gross and and lower by and strength expenses slightly skincare from our Total Adjusted quarter primarily traces $XX year capital $XX.X margins, decline North FX a equipment The softness the in of the million, American offset year business. in the ago for period. million capital higher Japan.

and acceptance November the Now, on driving expectations, quarter, our encouraged quite XXX this has while directed been early of focus launch, to AviClear Since placed of our on take mover revenue performance. expectations in advantage. AviClear's exceeded market to the we're breakthrough our below devices healthy We team the capital technology. first placements advantage came by demonstrates in which AviClear

is pace has drive in outpaced exactly While ability last clear successful we well and placements will partly done now It utilization. install primary two we've units been to the forward devices, driving to quarters placing that. treatment significant our our very utilization, not going the as practices in have quickly in that and so focus be with of effectively

to team to installation the time shorten our placement expand from we'll forward, Going utilization.

We fine-tune Key Account even transform the of help KAMs to them the each treatment systems business of will to key training to our utilization. our utilization also drive more of is volume clinicians AviClear's Increasing and to the Managers with effectively and that practitioner. work for also potential unlocking or

a will rates new high drive deploying can need volume treatment practices Know we achieve continue Cutera. we pace. that with our that place do equipment will We but for we to at to measured and and be discipline the ROI are will sure and so capital more that and utilization units,

performance was of North equipment. the the factors. primarily to America. Revenue XXXX, North was two offset of capital capital American result Turning over Lower-than-expected world. a equipment by of the down in operational positive underperformance slightly The revenues result North were rest in within America performance

on shutdown sales And or quarter. average a First, of focus driving for pressure continued downward a and inventory production the completing our in on which placements challenges resulted placed output. second, four-week team's company in faced the ASPs prices selling revenue capital Decreases audit-related our loss also plant AviClear. count, its in

more So first on detail points. the let a go me bit into two

to quarter diverted attention was as number AviClear call, quarterly quarter deals. actually fewer result were the maintain the on our trend directed core focus capital a fourth placements from discussed the as core away in last volume capital a capital continued This as AviClear sales priority one team As on first the deals of in deals and closed.

or As AviClear manager by organization. KAM are commercial utilization, our driven key which account mentioned, now is shifting we our device emphasis towards

our Moving forward, this reps pace. at primary should simultaneously capital AviClear sale while new allow to of capital return their securing our a core more measured the to attractive products, focus placements

of driving we've over remain our Based With the their on and the force. conversations in these to I've about weeks, are sales recent last highly retention changes extensive successful opportunities and the our they had of fully business. growth couple committed enthusiastic reenergized they incentives, implementation

second The product faced shutdown inventory ship impacted ability challenge to traces an period during of operational build plant and a our for the that extended to quarter we time.

enable week of physical of January of to during typically there's our facilities production a one-week count the So shutdown a first inventory.

expected three extended by to the shut and build comply core year year-end product business physical longer to audit This with our the were the shutdown our negatively during to impacted additional quarter. facilities down ship inventory fully meet in than and took required ability This the an weeks. count requirements production demand

Turning to international intercontinental. Japan, which includes capital, Europe,

sales up solid business Our driven was team approximately XX% constant execution from in external partners. and currency, by our

This the Europe intercontinental points to growth in During and capital for underlying regions. products. a healthy our demand saw we quarter, strong our

versus constant ago Recurring year AviClear. by on. driven a was revenue results up currency, Moving on X% in

and meetings April, on-the-ground Surgery the a It's energy-based I'd and minute we now Cutera's one great had that bit XXth for perspective. for We Laser ASLMS use Society a the like Medicine the sprinkle big in take market Conference attended customers American celebrated ours. of company In anniversary. where Phoenix. of conference in or to technologies like a

productive potential highly in reps in were Our with customers was and the AviClear conversations significant. engaged interest very

lead acne. which treatment our XX-nanometer of for From lasers, conversation perspective we XX in continue device technology use the a AviClear to the

demand growth opportunity we So remain the performance and connecting provides. quarter about core our the underlying optimistic all the dots, that first for did not meet while our our expectations, products AviClear

financial the return as guidance not our that business, this convinced growth. am will in sustainable the business confidence improve are to execution our Despite I providing time. we at long-term we

for going towards to today, forward. the discussed and entire team We a the we're possible. expectations recognize that Street go to work that through current the our them. the take underlie ensure lot the guidance soon as to diligent assumptions reintroducing time in financial is of that the and has process Given importance we've business comfortable working to We the and to the projections as issues financial with of this validate be do team guidance the want

be as our work remiss, flexibility the everyone their thank of work, not recent in and hard changes the for focus, some I Finally, through continued leadership. would organization throughout to we

ourselves Our biggest we our to and consider are have team. in our the the people people fortunate on best industry asset

Stuart update. to like would a over I call for turn the Stuart? now financial to

Stuart Drummond

you, Thank Sheila.

the note As is contained earnings our We operating of will review I to to our listeners in GAAP A and non-GAAP be encourage I non-GAAP as results. reconciliation earnings release. GAAP release. some want review and results discussing remarks, loss the conjunction my in the to gross readers I with prepared in non-GAAP results margin that included

total in roles industry. joined in Corporate and a just Zealand before multinationals sciences First, obtained Europe I've Cutera about bit worked recently New for coming around I with worked me. July Controller. President through Area most life Bay XX Vice my Accounting in in Certification States. to XXXX then Chartered KPMG United little as the I and years, of a in large in Corporate Controller

in period XXXX, for our compared a as-reported approximately million Total Turning an the to results. decrease $XX to of $XX representing was on same QX basis. quarter for million X% revenue first the

During headwinds foreign decline was we approximately continued currency revenue face constant the quarter, to currency and our X%.

for inventory of with an performance on was begin lost million had to We shutdown, the some in $X.X I North the of you million details the $X let fulfill Before to Sheila the and of in able you due the by revenue call. providing audit-related that give estimated our products, earlier hand split across me globe, orders million which goods financial procedures the the regarding weren't production $X.X lack America we impact and internationally. insights with in mentioned on driven estimate finished

inventory. to customers were that we which we orders received never as our relevant have In didn't deals aware addition, the other

of decreased capital plant geographic as well by resulting the shutdown low consolidated million, America million equipment ASPs shift and $XX.X volume. to distributors, a year quarter as North prior from decrease the our from previously customers revenue the international First reflects $X.X This of impact extended period. sales on mentioned from

revenue American the decreased by of capital North year. equipment $XX over XX% million, prior

shipped As I could the finished to shortfall $X.X to of lack estimate due million that be the approximately orders due that goods. mentioned, of was we not

quarter, this meet In have did to decline million addition, orders the were XX%. the the would managed available to cutoff. but of million in ship, $X.X we get revenue been revenue packaged $X.X and not Had

markets. note driven also and revenue equipment XXX XXXX, that for execution up in are International we capital had focus, XX% direct the AviClear from was $XX.X more million, particularly disappointed than of our first the European quarter. and markets distributor with quarter we these we consistent by While the in first results, placements quarter

on X% which Recurring Consumables revenue $XX.X the product came currency the decline prior on as Global Skincare of by year currency million reported quarter, revenue up revenue basis a growth was AviClear was offset This $X.X in driven was period. line $X.X increase defined AviClear X% and reported comparative million. the in X% down constant Skincare at first by million in partially basis. The a Service XX% and up our as constant as over and a versus

by service availability of to continues X%, revenue the by declined spare Our be it as impacted parts.

the of last with first representing year. decrease gross for XX.X%, same period XXXX fiscal of Non-GAAP quarter a points margin gross basis profit XXX the million, was of $XX compared a to

Foreign fronts. basis resulted approximately delays XXX production basis our exchange manufacturing The gross points points headwinds in impact points. multiple adversely and basis XXX by procedures of impacted our fixed an absorption impacted imagery XXX cost which goods had in the lack resulting margin completing on affected finished delays by us audit leverage, resulting and availability lower of approximately in the

nature up approximately as XXX and ramp We growth impacts customer our basis impacting these points. and to returns volumes is in gross that North these expect margin largely impacts adversely Also margin were will transitory region view impacts America production mix and dissipate. of

to Non-GAAP and compared for last the More audit to year. for the year ERP $XX.X same compared implemented the in with $XX.X associated year. compared sales G&A the expansion was million a XXXX half of million, million million last for extended and million, to were quarter by sales legal expenses than same quarter increase $X.X IT system. XXXX quarter first increased fees of the last the marketing of first relates for period for to recently same of the first period primarily our the were and $X.X expenses in Non-GAAP expenses million expenses were $X.X continued $XX.X force. XXXX our driven rest by Non-GAAP R&D driven period AviClear support costs to the

to headwinds. of material loss There period. unfavorable in tax in significant was a changes year by adjusted prior driven gross of the operating XXXX, was to refer expenses For increase non-GAAP increasing million as first our were loss of $X.X income, a we no quarter loss FX EBITDA million our compared operating $XX.X which margin, This the largely to and position. or

driven million sequential Turning from AviClear ended inventory marketable cash by of $XXX.X of $XXX.X cash we sheet. support from $XX.X from to utilization $XX.X We core XXXX. shortfalls, $XX.X million Driving now of $X.X in our to collections. gross core and this decrease balance with million at and primarily which $X.X core increase sales to expect quarter a the and recover compared to end the million margin million slower quickly losses million securities million

expectation is XXXX. this watermark high is burn this Our that the for cash and throughout will trend downwards

With now pass back to will that Sheila. I the call

Sheila Hopkins

Stuart. Thanks

change unmatched. the moderate safety the will the way mild, clinical and acne. patient across strategy be AviClear of treatment first our dermatologists on conclusion and sound procedure Most skin and acne critically, outcomes we all believe focus the that in drive remain particular, we So device enthusiastic execution. profile AviClear, In down severe FDA-approved we double for our to types. is from the are believe signature about able we'll as treat results that We

a our have Know our stewards practice recurring By a AviClear. stream as full treatment true clinicians interest acne with we Cutera, a aligns move with tightly forward customers the also and and we be minimal that we that and market revenue for of collaboration our commitment meaningful responsible our of the customers, financial upfront approaching capital established to will realize potential the owners.

the and our ever. AviClear. enthusiastic and remain and of The that extremely and prospects leadership exist are on business the about business people as capitalizing are organization the foundation significant within believe we our strong the is Directors business for Board both We our highly bright talented is opportunities enthusiastic as the and committed Cutera who have the to about with of future core business throughout team

we're So any at this answer time to questions. happy

Operator

begin will Instructions] question-and-answer We Sellers Stephens question ahead. Inc. Please [Operator now the session. with first from George The comes go

George Sellers

there's and taking those the for thanks you shutdown some question. that the details and from the when timing afternoon, ultimately provide good on to in back occurred, factory normal? second some are or there if Hey headwinds operations that the quarter, and expected Could additional of if any additional

Stuart Drummond

for Yeah. It's Thanks, here. Stuart your George question.

beginning one for down production at about do inventory purposes. shut we for January So to count week typically audit the the of

time, there This than recount no production. We implemented movements had to material this we so from perform inventory year's ERP new to identified plus inaccuracies, we'd our the past. warehouse. can't levels into are we recounts third-party count count challenging ultimately was increased During anything in more had move a of Due inventory. XXXX some and numerous

additional an count and weeks four produce. we're for procedures weeks the to extended So in three total unable

lower to remarks so usual comments had You see and unable costs. gross we produced impacted were by margin fixed all that we We inventory my prepared the my this. in absorb were

about So quarter. hit effects points our and by gross production resume second are believe these X.X margin normal the transitory in was but we'll we

George Sellers

would And would back back been than I specifically the of that you helpful. characterize That's than up progressed? underlying in would sales capital And also the factory North from asking the you a we that shutdown and think numbers called have have coming a maybe I'm I Okay. expected? little bit even expecting. some then quarter little step shorter the within how that what taking out aesthetic adding that issues, revenue question, drivers after the American lower were guess been to a market how

Sheila Hopkins

George Thanks, for question. that

the that I'd the to shutdown, I other as say continue on driver that capital continue a in saw bit be had to focus plant directed to organization in the the of is priority and a business the comments we as did softness to number distraction. one addition actually In the been mentioned key capital that the AviClear of

forward. going that correct So we are working to

a the a on more forward. placements market place remains aesthetics only manner heard -- is forward, speaking that drive sure Capital that devices Avi As a the also continue mentioned some in going making volume will have one They placed business. more patient will strategic the would the in traffic offices are to deliberate return to state and I focus the devices the we will way Generally that but of pacing going significant much Capital to have treatment to number healthy. in suggest be that organization all

George Sellers

at I’ll Thank for you time. Okay. just it you Thank all. leave Great. the two.

Sheila Hopkins

you. Thank

Operator

Jon go next The Please comes with question Stifel. Block ahead. from

Jon Block

orders. Thanks. start on on reps' that marching Good confused a the point. last I'll afternoon. maybe I'm sales just Sheila, little

quarter program supposed of as So if fourth was again, already help if new between allocate rep's in was on about I which the it conveyed and that taken you was to refocus attention incentive And place. and the recall a correctly Capital. talked management the time call, had their properly prior sort the it quarter call fourth AviClear

to So didn't all has you did squared And importantly, you not sit clarify? away? then allocate their been are most as or it today time know here properly. place take how saying so doing they're can it they this that and resonate? Maybe And we

Sheila Hopkins

is in there we direction. is only But the have to shift the devices that the commercial organization placements. from not organization direction against that bit to did The distracted happened there the now clarity is capital were that as delivered regarding sales place focus a good direction, Appreciate a also was that clear this of is news and -- answer the the market have reality be them AviClear to executed. organization. plan that Jon. short a that but would What question. a direction one capital Thanks, revisions appears selling comp priority the crystal I in in capital think number The

to in take mover job is of enables which position So, us marketplace. advantage done devices a what first the we've a of placing great

job focus drive capital the off enables and next against devices team task the and a the that's capital Now, utilization the of KAM to of again. in way those organization to priority which relentlessly is

speed will the They against really in being we the that capital relentlessly Avi organization focus placements and where more in world our place about we are enables a -- capital. driving more to those being device deliberate which devices strategic in

to what So, needs done clear on we think very we're get now.

Jon Block

pivot I got right and your maybe that employees had leadership. signed recall the direction. see current But saying go potential roughly in just a to want going in executive didn't I'll key to thoughts back a on other They letter defections the dozen things ahead thought a if moving it. a team to they Okay, in change second.

anyway. leave ahead your under But made went company. and ahead saw some decisions just and Rohan We you leadership guys changes go the tough and

Sheila being company's You call people the the talked the on biggest about asset.

that sits So, just within some improving? I'd the and where commentary the if that's on morale love company and

And the the thoughts then that again about of and that written letter maybe made? Board's when decision changes and that was risk to other make of ahead defections we go still your think the they

Sheila Hopkins

another again Thanks great Yes. question.

the employees news single I I'm what passionate to with think say to are who office in company. coming is here people I ground my remain basis on the just good every I this have you. on I'm the frankly area and to into you I'm a and Cutera committed see regular know here. day want I

everyone the got and right you I drive to with a partnership a that for with to do committed has we to said been talk. leadership but nothing, I day business. the not commitment And this grow business. have person and Sheila a partnering The seen that here, I to what's had meeting are team

good quite nodding their are the the in heads. room I who given is actually morale The people circumstances. me So, are think with

Jon Block

under last I Okay I third justifies and -- hopefully these circumstances the the it one think question. think

I without clarity business think provide guidance how some might thought the there is with do but you high-level said you strong was shareholders a any range. And You of get providing guidance? comfortable wide a you give might

But even another XX% now off bidding you levels. right XX%, that's stock down of depressed got a

guess I see as from certainly the telling not it the that you're So, don't call. today's but takeaway that strong is quantifying you're we and us business

clarity there guys. for your be any Thanks would time additional could you So, helpful? provide very

Sheila Hopkins

Sure.

why underlying quarter, think the executional seen is challenges say in we business we weakness the in weakness business healthy. have and first reflects that's not that I continue So, the that fundamentally largely fundamental the to

and is face challenges self-inflicted that those are correcting good charge and in news addressing issues. are we are now we that The largely of the that challenges

And so working our we it's just control do under to that. are aggressively and

understand Stuart that guidance. of evaluate and the key assumptions in existing importance I, are them. the And furiously to comfortable working are do to the on sure and fast new underlie understand want the that we've projections I we to know position, business you financial And with and that, got And both really make them. and who I are

miss the quarter, the provide it team the Obviously, we'll in to of guidance in have again. first imperative that But once once a makes more numbers we set be to even a again, reassess. is fully confident in, position

Operator

question next Piper The O'Brien Please ahead. Sandler. from comes go Matthew with

Matthew O'Brien

being Great. management $XX questions. Thanks little maybe there, Jon's product follow-up had level. on previous my Sheila, taking AviClear to but that this approaching year for million just talked about a question bit a

year? as run off closer of be AviClear, to grow this When should the top business we QX, maybe full we to Should year? rate it maybe down about million saw even on? just line you we everything $XX the exclude going it then, given a think for on can what in expect And the that's

Sheila Hopkins

Right.

So the that guidance that, the I answer can to tell business answer What would not which to do prepared right provide we -- this just grow to you is have year. expect we're would actually I question now. to

Matthew O'Brien

AviClear? Inclusive of

Sheila Hopkins

that's again, guiding Once a bit.

Matthew O'Brien

Okay.

for And you Okay. question if is … I'm this Understood. not sure

Sheila Hopkins

Yeah.

Matthew O'Brien

the numbers were OpEx -- a high. the the but …or quarter you the in earlier, to hear because love more that about sales little for retention bit would Stuart, mentioned quite plan I

when And the how had there? year there? can not then, to feel long sometime is What XXXX? comfortable commitments commit expire How these to duration or have next we that there's exodus that another you

Stuart Drummond

QX Hi. aren't It's Stuart numbers Yeah. actually speaking. our sales in Those retention results.

as it subsequent our be event a we'll in So footnote. XX-K announcing

up is for about amounts four which to paid The folks. chunks. along Our Board committed the will million $XX million, period. has XX-month in way of sales an It's $XX be

Sheila Hopkins

would that, is I want point retention those the out effective. that powerfully And incentives have overabundant evidence to been

lost have not person. single a We sales

Matthew O'Brien

any you follow-up quarter Is Okay. one-time as give Maybe can those just so numbers in as increase what -- some guidance sizable. What more the in again in was Stuart, costs high? far a the OpEx are pretty that there? on up the drove

we're we're for how – we like, Because we like looks I these think to supposed and it that? while of see rates. could at be some do know here. pretty And guidance that's but come some high about don't numbers elevated have to mean, a looking starting Because down, it I

Stuart Drummond

our comparisons we up Yeah. sales against headcount, in expense XXXX. up we've audit expense numbers XX obviously another QX ramped by audit-related remember, an so audit year, around the so due Two item in into AviClear force And the last and is the primary G&A increase to reasons, had those QX are $X.X of the extended rolling to million.

Matthew O'Brien

Got you. it. Thank

Operator

The with go comes William from ahead. next Blair. Please Margaret question Kaczor

Margaret Kaczor

my to metrics, comfort guess, are wanted this that could guidance Hi. on follow-up you specific provide Good looking to afternoon but questions. I everyone. provide to guidance? Thanks on not time for taking what for maybe specifically I rather, what guidance be. But

I prohibiting today of What have doing like, sound that? don't you its awareness is you sales force from doesn't turnover. that It guess,

point And prior it guidance might achieve are more specifically, did Sheila. we else guys spoke Jon's what sense potential the you last us some provide obviously missing? So that to to you when around sound

the made weeks So there you Was since something happened guess few joined? in you I I last what with months guess new or doing not that? that comfortable

Sheila Hopkins

I not around I we're so the if guidance. color and sharing guidance. Yes. a be me help color on understand perhaps helpful if -- folks why see more have better let I also front providing can some mean And not did conversations little

AviClear to of all essential that is need we're verify compelling of one fine-tune to being make from as a can technology. that we is the we we're have so outlook. things new be, particularly we timing to into utilization placement device getting the active the with AviClear, And as with in devices. of And really those because it assumptions on gusto right the the digging So number to underlying placement regarding marketplace assumptions sure

best say interest see you right And best our of and And for that in a I focused would we can. number to us lot I that is get it's right there as as would your it interest think where hopefully energy in now. is

Margaret Kaczor

helpful. That's Okay.

utilization. least guys you over support of give that quarter I might so at be in think into KAM it's and that help, I I how back reps of end AviClear new KAM what to can see you're mean, have a follow-up sense take or first or able two is could and thought know maybe on the But is expenses strategizing hiring -- help then each and And one what the their outcome they but us can't in go kind quarter, going individually you X,XXX to as both as will potentially a you to you you was to longer-term me, that Thank well with be? growth it those at require sites look reeducating this time? maybe relative about talked kind account the guys for to guess But a your focus. new around phenomenon, tell effort identify, on you. a implement utilization now while this And I procedures or quarter

Sheila Hopkins

question. That's a great

the treating March big boxes, means patients. because of phase low meaningfully one place. increase are device Utilization with out situation. the changed varies of November still long by type started in that here's just early significantly a been number in across the varies in you has the But importantly, start-up rates, It have has launch. and that that thing So that placements occurred the they is We're office we between utilization in the how that pointed installed fair base. as

we are really looking offices up The quite is numbers the at a very been and in average for that utilization utilization that that while at we So is helpful. if look good encouraging. not see have running today news levels

So is organizationally can all we base as with sense plans tremendous what we have can, the the take drive as of have to do can, on we and that a steps of we we in as do urgency that. existing to high to place utilization fast as installed

utilization. refining we training increase organization, that team We're can is going for our the size for driving install which to installation We're the so of responsible KAM our faster.

utilization. So, offices even partner that effectively volume they can increase treatment more and to with

manage. way, KAM measured more and than in a new team we we that the strategic devices devices absolutely are as effectively making can certain we And place don't more place

actually with return steps need to will we as have move currently that to a So that we investment. get on place, boxes through that those low the confident take rates rates, quarters, in utilization those are good we we quite the up

is this all about execution. So

Margaret Kaczor

Okay.

So can just question. last I one if

million, much hearing about in ballpark the -- you cash especially think $XX you we highlight Are for a we so marketable $XX you. that $XX a Thank over As I million million it burn or those decrease, us? your a might know we comments if provide Can from I on, guys But it's with million, don't perspective it. think year, quarter cash can KAM how see that $XXX cash even and thinking maybe and securities. change burn?

Stuart Drummond

that that repeat Can it's and Sorry, Margaret, Stuart. the you question you number announced?

Margaret Kaczor

to the million and Yes. then compared securities at When But at me of a end I doing XXXX, seemed it plus and quick end to quarter, I worth that that of $XXX marketable looked of math I securities if if it cash the added and was this burn. was apologize the wrong. marketable I'm year cash

tell guess forward? look me at I a should if quarterly that's how correct? one, going And So two, then basis that on we

Sheila Hopkins

and some we macro year. calculation in The perspective answer then the a me can cash Stuart quarter be burn provide would the Let for or specific low point more question. saw Greg that just this

burn sequentially that We expect cash will position will improve -- our our the through cash quarters.

Stuart Drummond

Stuart. It's Margaret. Yes,

that devices with cash in $XX.X the and some burn balance of plus XX million had increases March was inventory sheet December million raw AviClear on between actual materials. Our was $XX increase XX. we

as were Our collections well. AR lower

Margaret Kaczor

my Okay. be on end could something the math. of It

I catch on looking press what with up you Thank we that that's so up I guys. can Sorry, came on later. was and releases the

Sheila Hopkins

you. Thank

Operator

comes from Instructions] The question [Operator Vendetti Group. Please Anthony next with Maxim ahead. go

Anthony Vendetti

you. Thank

change about Just what of AviClear out the practitioner? of whatever. placement the that maybe utilization? an wanted that on on sales related looks potentially for any AviClear selling was at xeo, to allow focused the equipment structure, the let's get piece the rest talk exclusion force to Is on it pointed the like truSculpt, they placements. a it's placement will And for the price, there them of does a work? say, going the for a terms -- Can portfolio the truSculpt, follow-up since the I incentive structure the How to selling price sales lower it's whole do in average cost capital maybe AviClear, was sales refocus you that in guess force is rep or than, of the you commission the the a portfolio compensation forward?

Sheila Hopkins

Got it.

comp that somewhat capital does get has is more a program organization, fee utilization, placement things for box. business. organization it's plan the a is function capital well function compensation Avi all-inclusive. as a structure each drives the Because those first believe was ultimately that their and it The was both of different two of that performance be intended. to I flat capital revenue. does, sides the view and I to one I covers comp selling released the that was is tied of of the design balance It KAM incent So, and of It our less fact vis-a-vis organization to helps. does organizations a was on -- compensation issue, -- And commissions that in quarter, if Avi against and the placements, to the directed designed organization the commission a which the to organization probably priority, of the tied sales. the think the placements, Avi number structure both view a

Anthony Vendetti

then And helpful. that's a Yes, on big picture. lastly, Okay. just

capital -- in hearing healthy. to been we've aesthetic some the mentioned be leases they've to that's equipment, that space, underlying hearing or remain other point? are not the fundamentals getting hearing on patients this You been certain also from some at by related back treatments. may interest of that, hesitant when whether these We've of that that, practices pulling Are you buy or impacted rates their seen business higher companies

Sheila Hopkins

question, you that Thank Anthony. for

of some bit evidence of that this have we seems may So Canada, I'm field No we -- of not strong. to be an funds what kind our of emerging seen a small-ish that problem. affecting little from But in generally is issues, organization. the market our are US, selling availability, the is are stable be There hearing derm in tightening seeing business. speaking,

closely. this We question, that are Anthony? monitoring Does answer your very

Anthony Vendetti

of Is that's yes. period you added Okay No, you that good. on -- were added I just the side, XX time? -- specifically -- over mentioned quarter? many and what how then in And employees AviClear. expense the first

Stuart Drummond

was No XX of Hi, Yes. again. it's year. Stuart, since that QX last

XXXX. you most towards in April, recall, the end launch headcount was had So commercial we initial launch full so of and the November as a that of in

Anthony Vendetti

I’ll great. hop Appreciate it. Okay much. queue. very in you back the Thank

Operator

The Inc. next question comes go Stephens from George ahead. Sellers with Please

George Sellers

so thanks about for just I the few that a between minutes agreement much wanted Hi, shareholders. about up. ask ago taking of to and some Cutera release follow hit just the the an

implications the And follow-up is discussions and also so the special a given active to are color Just additional Thank you, get well? discussions agreement? the if taking prior with the meeting some the could curious, again of CEO curious mentions, progress this resolution, that expected what for, we any as towards release how just those then on for

Sheila Hopkins

that additional perspective of I could under on a we the our umbrella that, that the but working provide falls wish I are governance through. Right. way issues external bit

in happening insight what's to defer gather would what's So, to there. on release, the I

George Sellers

you, understood. again. Okay. Thank

Sheila Hopkins

George. Thanks,

Operator

to session. over This turn concludes back the for remarks. closing I to Sheila like would Hopkins, the conference any question-and-answer

Sheila Hopkins

Yes.

would answers want you our And conversations, call. the just to Thank the we to with for to look very to us you We found on you thank questions. follow-up for on look forward the to you Hopefully, much next taking I call. time forward one-on-one. updating join helpful. be So, you, this

thank So, wish a note would our thank on your that I and afternoon you Sharice, and operator, rest all here of team Thank much. you to like great the day.

Stuart Drummond

Thank you.

Operator

today's This conference call. concludes

day. have a lines. your disconnect Thank may You you pleasant for and participating

Cutera (CUTR) 9 May 232023 Q1 Earnings call transcript