Record second-quarter revenue driven by ongoing momentum in Capital Equipment and Consumable Product segments

Over one hundred new patients treated during the first quarter of AviClear's availability

Management reiterates full-year revenue guidance despite $15 million of annual foreign exchange headwinds

Cutera, Inc. (NASDAQ:CUTR) ("Cutera" or the "Company"), a leading provider of aesthetic and dermatology solutions, today reported financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial and Operational Highlights

Consolidated revenue of $64.2 million driven by strength in capital equipment and consumable product demand.
Over 50 AviClear devices were placed and activated during the first quarter of the product's limited commercial release.
Gross margin of 54.6% in the quarter, compared to 57.7% in the prior-year period.
- Excluding the 190 basis point impact from the AviClear program and foreign exchange headwinds of approximately 180 basis points, the gross margin would have been 58.3%.
Operating expenses were $45.1 million in the quarter, compared to $31.7 million in the prior-year period. Operating expenses during the period included $7.0 million in AviClear program spending in addition to $2.4 million of ERP implementation expenses.
GAAP Net loss was $47.3M, inclusive of a non-recurring charge of $34.4 million for the extinguishment of 50% of the 2026 convertible notes.
Adjusted EBITDA was a loss of $1.6 million, compared to a gain of $6.8 million in the prior-year period.
- Excluding AviClear program impacts of $7.5 million in the quarter and foreign exchange headwinds of $2.4 million over the prior year period, comparable adjusted EBITDA would have been $8.3 million.
Completed $240 million in convertible debt financing, ending the quarter with $278.2 million in cash, cash equivalents, and marketable securities on the balance sheet after retiring $69.1 million in convertible notes due 2026.

Key Revenue Metrics	Three Months Ended June 30, 2022	% Change 2022 Vs 2021		Constant Currency		Key Profit Metrics	Three Months Ended June 30, 2022		Constant Currency
Capital Equipment	$43.7	23	%	27	%	GAAP Margin %	54.6	%	56.4	%
Skincare	$9.6	-18	%	-6	%	Non-GAAP Margin %	55.6	%	57.4	%
Consumables	$5.3	20	%	23	%	Adjusted EBITDA	($1.6	)	$0.7
Service	$5.6	-17	%	-13	%	Adjusted EBITDA Margin %	-2.5	%	1.2	%
Recurring	$20.6	-11	%	-2	%
Total Revenue	$64.2	10	%	15	%

Key Revenue Metrics	Six Months Ended June 30, 2022	% Change 2022 Vs 2021		Constant Currency		Key Profit Metrics	Six Months Ended June 30, 2022		Constant Currency
Capital Equipment	$80.2	25	%	29	%	GAAP Margin %	54.7	%	56.3	%
Skincare	$21.3	-12	%	-1	%	Non-GAAP Margin %	55.7	%	57.2	%
Consumables	$9.2	25	%	28	%	Adjusted EBITDA	($5.4	)	($1.5	)
Service	$11.6	-10	%	-7	%	Adjusted EBITDA Margin %	-4.5	%	-1.2	%
Recurring	$42.1	-5	%	2	%
Total Revenue	$122.2	13	%	18	%

"I am excited by the momentum we continue to see in our core business, as prior investments in our sales force drove strong results in capital and consumables product segments in North America, Europe, and Australia/New Zealand in particular. Our team is further encouraged by the resiliency and strength of underlying demand trends in the marketplace," commented Dave Mowry, Chief Executive Officer of Cutera, Inc. "During the quarter, our team achieved the successful launch of AviClear, our first-mover product for the treatment of acne. In the first three months of our limited commercial release of AviClear, we were able to validate successful clinical outcomes in the hands of our customers, verify patient satisfaction with AviClear post-treatment patient survey data, and onboard dozens of practices in the use of the AviClear Laser as they look to provide their patients with a drug-free solution for acne while enhancing the profitability of their practices. We are looking forward to expanding the footprint of new AviClear practices during the next phase of the limited commercial release and significantly ramping the utilization of the device."

2022 Outlook

Management is reiterating its 2022 revenue guidance of $255 million to $260 million, entirely absorbing the impact of the unprecedented foreign exchange headwinds of $15 million, implying constant currency growth of 17% to 19%. This guidance does not include revenue from our AviClear device as we continue with its limited commercial release. The company plans to add over 100 new AviClear devices into the market during the course of the third quarter of 2022. Based on current AviClear trends, management expects to move into a full commercial launch by the end of the current calendar year.

Conference Call

The Company's management will host a conference call to discuss these results and related matters today at 1:15 p.m. PT (4:15 p.m. ET). Participating in the call will be Dave Mowry, Chief Executive Officer, and Rohan Seth, Chief Financial Officer.

To participate in the conference call, dial 1-800-319-4610 (domestic) or + 1-631-891-4304 (international).

The call will also be a webcast and can be accessed from the Investor Relations section of Cutera's website at http://www.cutera.com/. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

About Cutera, Inc.

Brisbane, California-based Cutera is a leading provider of aesthetic and dermatology solutions for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that harness the power of science and nature to enable medical practitioners to offer safe and effective treatments to their patients. For more information, call +1-415-657-5500 or 1-888-4CUTERA or visit www.cutera.com.

*Use of Non-GAAP Financial Measures

In this press release, in order to supplement the Company's condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations and net income (loss) per diluted share. Non-GAAP adjustments include stock-based compensation, depreciation, amortization, executive and other non-recurring severance costs, customer relationship management ("CRM") and enterprise resource planning ("ERP") system costs, non-recurring legal and litigation costs, and the loss on extinguishment of convertible notes. From time to time in the future, there may be other items that we may exclude if the Company believes that doing so is consistent with the goal of providing useful information to investors and management. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The Company has not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability, limited visibility, unpredictability, or unique non-recurring nature of the items. Forward-looking non-GAAP measures include adjusted EBITDA. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive and other non-recurring separation costs, customer relationship management and enterprise resource planning system costs, non-recurring legal and litigation costs, and losses on the extinguishment of convertible notes.

Company management uses these measurements as aids in monitoring the Company's ongoing financial performance from quarter to quarter, and year to year, regularly and for benchmarking against other similar companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measure as prescribed by GAAP. Non-GAAP financial measures for the statement of operations and net income per diluted share exclude the following:

Non-cash expenses for stock-based compensation. The Company has excluded the effect of stock-based compensation expenses in calculating its non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to the Company's employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expenses related to grants of options, employee stock purchase plans, and performance and restricted stock. Depending upon the size, timing, and terms of the grants, this expense may vary significantly but will recur in future periods. The Company believes that excluding stock-based compensation better allows for comparisons to its peer companies;

Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net income measures. Depreciation and amortization are non-cash charges to current operations;

Executive and other non-recurring severance costs. We have excluded costs associated with the resignation of our former Executive Officers in calculating our non-GAAP operating expenses and net income measures. We exclude these and other non-recurring employee separation costs because we believe that these items do not reflect future operating expenses;

Customer Relationship Management. We have excluded CRM system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new CRM solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance;

Enterprise Resource Planning. We have excluded ERP system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new ERP solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance;

Non-recurring legal and litigation costs. We have excluded costs incurred related to third-party litigation and disputes, that are non-recurring; and

Loss on extinguishment of convertible notes. We have excluded the loss on extinguishment of convertible notes. We excluded this loss because we believe it is non-recurring.

The Company believes that excluding all of the items above allows users of its financial statements to better review and assess both current and historical results of operations.

Safe Harbor Statement

Certain statements in this press release, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements include but are not limited to, Cutera's plans, objectives, strategies, financial performance and outlook, product launches and performance, trends, prospects, or future events and involve known and unknown risks that are difficult to predict. As a result, the Company's actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "seek," "guidance," "predict," "potential," "likely," "believe," "will," "should," "expect," "anticipate," "estimate," "plan," "intend," "forecast," "foresee" or variations of these terms and similar expressions or the negative of these terms or similar expressions. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause Cutera's actual results to differ materially from the statements contained herein. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are several risks, uncertainties, and other important factors, many of which are beyond the Company's control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the "Risk Factors" section of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, the Registration Statement on Form S-8 and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.

All information in this press release is as of the date of its release. Accordingly, undue reliance should not be placed on forward-looking statements. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made, or to reflect the occurrence of unanticipated events. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2022, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

CUTERA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)


			June 30,			December 31,
			2022			2021
Assets
Current assets:
	Cash and cash equivalents		$	75,050		$	164,164
	Marketable investments			203,126			-
	Accounts receivable, net			32,148			31,449
	Inventories, net			45,410			39,503
	Other current assets and prepaid expenses			17,579			14,545
		Total current assets		373,313			249,661

Property and equipment, net				24,470			3,019
Deferred tax asset				698			778
Goodwill				1,339			1,339
Operating lease right-of-use assets				13,771			14,627
Other long-term assets				9,801			10,169
Restricted cash				700			700
		Total assets	$	424,092		$	280,293

Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	25,365		$	7,891
	Accrued liabilities			47,539			54,100
	Operating leases liabilities			2,714			2,419
	Deferred revenue			10,098			9,490
		Total current liabilities		85,716			73,900

Deferred revenue, net of current portion				1,429			1,335
Operating lease liabilities, net of current portion				12,368			13,483
Convertible notes, net of unamortized debt issuance costs				299,856			134,243
Other long-term liabilities				849			763
		Total liabilities		400,218			223,724

Stockholders' equity:
	Common stock			20			18
	Additional paid-in capital			144,628			114,724
	Accumulated other comprehensive loss			(183	)		-
	Accumulated deficit			(120,591	)		(58,173	)
		Total stockholders' equity		23,874			56,569
		Total liabilities and stockholders' equity	$	424,092		$	280,293

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)


			Three Months Ended						Six Months Ended
			June 30,			June 30,			June 30,			June 30,
			2022			2021			2022			2021

Products			$	58,589		$	51,812		$	110,655		$	95,363
Service				5,635			6,777			11,583			12,894
Total net revenue				64,224			58,589			122,238			108,257

Products				25,899			20,892			48,811			39,224
Service				3,281			3,908			6,595			7,534
Total cost of revenue				29,180			24,800			55,406			46,758
		Gross profit		35,044			33,789			66,832			61,499
		Gross margin %		54.6	%		57.7	%		54.7	%		56.8	%

Operating expenses:
	Sales and marketing			27,001			18,410			51,945			33,478
	Research and development			6,859			4,850			13,358			8,962
	General and administrative			11,248			8,461			24,750			15,826
		Total operating expenses		45,108			31,721			90,053			58,266
(Loss) income from operations				(10,064	)		2,068			(23,221	)		3,233
Interest and other (expense) income, net
Amortization of debt issuance costs				(298	)		(215	)		(517	)		(267	)
Interest on convertible notes				(1,149	)		(778	)		(1,927	)		(969	)
Loss on extinguishment of convertible notes				(34,423	)		-			(34,423	)		-
Gain on extinguishment of PPP loan				-			7,185			-			7,185
Other expense, net				(1,528	)		(392	)		(2,283	)		(1,415	)
(Loss) income before income taxes				(47,462	)		7,868			(62,371	)		7,767
Income tax (benefit) expense				(186	)		122			47			380
Net (loss) income			$	(47,276	)	$	7,746		$	(62,418	)	$	7,387

Net (loss) income per share:
	Basic		$	(2.53	)	$	0.43		$	(3.39	)	$	0.41
	Diluted		$	(2.53	)	$	0.39		$	(3.39	)	$	0.40

Weighted-average number of shares used in per share calculations:
	Basic			18,700			17,862			18,392			17,815
	Diluted			18,700			22,453			18,392			20,855

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

			Three Months Ended						Six Months Ended
			June 30,			June 30,			June 30,			June 30,
				2022			2021			2022			2021
Cash flows from operating activities:
Net (loss) income			$	(47,276	)	$	7,746		$	(62,418	)	$	7,387
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
	Stock-based compensation			4,733			2,919			8,776			4,765
	Depreciation and amortization			502			346			929			707
	Amortization of contract acquisition costs			567			458			1,219			1,003
	Amortization of debt issuance costs			298			215			517			267
	Impairment of capitalized cloud computing costs			-			-			-			182
	Change in deferred tax asset			39			6			80			51
	Provision for excess and obsolete inventories			200			506			558			699
	Provision for credit losses			217			274			409			492
	Loss (gain) on sale of property and equipment			49			(23	)		63			(82	)
	PPP loan forgiveness			-			(7,185	)		-			(7,185	)
	Change in right-of-use asset			670			-			1,308			604
	Loss on extinguishment of convertible notes			34,423			-			34,423			-
Changes in assets and liabilities:
	Accounts receivable, net			804			(2,026	)		(1,108	)		(4,433	)
	Inventories, net			(5,524	)		(443	)		(18,059	)		(6,657	)
	Other current assets and prepaid expenses			2,577			1,483			(3,034	)		(77	)
	Other long-term assets			(686	)		(1,220	)		(1,071	)		(1,720	)
	Accounts payable			9,016			1,179			14,771			(474	)
	Accrued liabilities			(889	)		(369	)		(6,878	)		9,653
	Operating lease liabilities			(664	)		33			(1,272	)		(530	)
	Deferred revenue			463			(334	)		702			166
		Net cash provided by (used in) operating activities		(481	)		3,565			(30,085	)		4,818

Cash flows from investing activities:
Acquisition of property and equipment				(7,917	)		(269	)		(8,238	)		(370	)
Disposal of property and equipment				-			19			-			71
Purchase of marketable securities and long-term investments				(129,251	)		-			(203,309	)		-
		Net cash used in investing activities		(137,168	)		(250	)		(211,547	)		(299	)

Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan				1,288			1,501			1,439			1,897
Purchase of capped call				(31,671	)		-			(31,671	)		(16,134	)
Proceeds from issuance of convertible notes				240,000			-			240,000			138,250
Payment of issuance costs of convertible notes				(6,956	)		-			(6,956	)		(4,717	)
Extinguishment of convertible notes				(45,777	)		-			(45,777	)		-
Taxes paid related to net share settlement of equity awards				(1,784	)		(452	)		(4,234	)		(1,451	)
Payments on capital lease obligation				(133	)		(96	)		(283	)		(211	)
		Net cash provided by financing activities		154,967			953			152,518			117,634

Net increase (decrease) in cash, cash equivalents and restricted cash				17,318			4,268			(89,114	)		122,153
Cash, cash equivalents, and restricted cash at beginning of period				58,432			164,932			164,864			47,047
Cash, cash equivalents, and restricted cash at end of period			$	75,750		$	169,200		$	75,750		$	169,200

CUTERA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(in thousands, except percentage data)
(unaudited)

			Three Months Ended						*% Change*	Six Months Ended						*% Change*
			June 30,			June 30,			*2022 Vs*	June 30,			June 30,			*2022 Vs*
			2022			2021			*2021*	2022			2021			*2021*
Revenue By Geography:
		North America	$	32,239		$	26,786		+20.4%	$	61,092		$	49,084		+24.5%
		Japan		15,174			17,421		-12.9%		32,677			33,976		-3.8%
		Rest of World		16,811			14,382		+16.9%		28,469			25,197		+13.0%
		Total Net Revenue	$	64,224		$	58,589		+9.6%	$	122,238		$	108,257		+12.9%
		International as a percentage of total revenue		49.8	%		54.3	%			50.0	%		54.7	%

Revenue By Product Category:
	Systems
		- North America	$	25,232		$	19,888		+26.9%	$	47,939		$	36,673		+30.7%
		- Rest of World (including Japan)		18,421			15,680		+17.5%		32,228			27,215		+18.4%
		Total Systems		43,653			35,568		+22.7%		80,167			63,888		+25.5%
	Consumables			5,298			4,432		+19.5%		9,201			7,357		+25.1%
	Skincare			9,638			11,812		-18.4%		21,287			24,118		-11.7%
		Total Products		58,589			51,812		+13.1%		110,655			95,363		+16.0%
	Service			5,635			6,777		-16.9%		11,583			12,894		-10.2%
		Total Net Revenue	$	64,224		$	58,589		+9.6%	$	122,238		$	108,257		+12.9%




			Three Months Ended							Six Months Ended
			June 30,			June 30,				June 30,			June 30,
			2022			2021				2022			2021
Pre-tax Stock-Based Compensation Expense:
		Cost of revenue	$	500		$	434			$	959		$	578
		Sales and marketing		1,638			522				2,214			1,243
		Research and development		1,067			307				2,047			608
		General and administrative		1,528			1,656				3,556			2,336
			$	4,733		$	2,919			$	8,776		$	4,765

CUTERA, INC.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)


			*Three Months Ended June 30, 2022*																				*Three Months Ended June 30, 2021*
			GAAP			Depreciation and Amortization			Stock-Based Compensation			ERP Implementation			Legal - Lutronic			Loss on Extinguishment of Convertible Notes		Non-GAAP			GAAP			Depreciation and Amortization			Stock-Based Compensation			CRM and ERP Implementation			Severance (RIF)			Legal - Lutronic			Other Adjustments			Non-GAAP

Net revenue			$	64,224			-			-			-			-			-	$	64,224		$	58,589			-			-			-			-			-					$	58,589
Cost of revenue				29,180			(161	)		(500	)		-			-			-		28,519			24,800			(138	)		(434	)		-			-			-			346			24,574
		Gross profit		35,044			161			500			-			-			-		35,705			33,789			138			434			-			-			-			(346	)		34,015
		Gross margin %		54.6	%																55.6	%		57.7	%																				58.1	%

Operating expenses:
	Sales and marketing			27,001			(793	)		(1,638	)		-			-			-		24,570			18,410			(600	)		(522	)		-			(638	)		-			-			16,650
	Research and development			6,859			(68	)		(1,067	)		-			-			-		5,724			4,850			(45	)		(307	)		-			-			-			-			4,498
	General and administrative			11,248			(46	)		(1,528	)		(2,385	)		(242	)		-		7,047			8,461			(21	)		(1,656	)		(407	)		-			(290	)		-			6,087
		Total operating expenses		45,108			(907	)		(4,233	)		(2,385	)		(242	)		-		37,341			31,721			(666	)		(2,485	)		(407	)		(638	)		(290	)		-			27,235
(Loss) income from operations				(10,064	)		1,068			4,733			2,385			242			-		(1,636	)		2,068			804			2,919			407			638			290			(346	)		6,780
Interest and other expense, net																																													-
Amortization of debt issuance costs				(298	)		-			-			-			-			-		(298	)		(215	)		-			-			-			-			-			-			(215	)
Interest on convertible notes				(1,149	)		-			-			-			-			-		(1,149	)		(778	)		-			-			-			-			-			-			(778	)
Loss on extinguishment of convertible notes				(34,423	)		-			-			-			-			34,423		-			-			-			-			-			-			-			-			-
Gain on extinguishment of PPP loan				-			-			-			-			-			-		-			7,185			-			-			-			-			-			(7,185	)		-
Other expense				(1,528	)		-			-			-			-			-		(1,528	)		(392	)		-			-			-			-			-			-			(392	)
Total interest and other (expense) income, net				(37,398	)		-			-			-			-			34,423		(2,975	)		5,800			-			-			-			-			-			(7,185	)		(1,385	)
(Loss) income before income taxes				(47,462	)		1,068			4,733			2,385			242			34,423		(4,611	)		7,868			804			2,919			407			638			290			(7,531	)		5,395
Income tax (benefit) expense				(186	)		-			-			-			-			-		(186	)		122			-			-			-			-			-			-			122
Net (loss) income			$	(47,276	)	$	1,068		$	4,733		$	2,385		$	242		$	34,423	$	(4,425	)	$	7,746		$	804		$	2,919		$	407		$	638		$	290		$	(7,531	)	$	5,273

Net (loss) income per share:
	Basic		$	(2.53	)															$	(0.24	)	$	0.43																				$	0.30

Weighted-average number of shares used in per share calculations:
	Basic			18,700																	18,700			17,862																					17,862




	Operating expenses as a % of net revenue

			GAAP																	Non-GAAP			GAAP																					Non-GAAP
	Sales and marketing			42.0	%																38.3	%		31.4	%																				28.4	%
	Research and development			10.7	%																8.9	%		8.3	%																				7.7	%
	General and administrative			17.5	%																11.0	%		14.4	%																				10.4	%
				70.2	%																58.2	%		54.1	%																				46.5	%

CUTERA, INC.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)


			*Six Months Ended June 30, 2022*																				*Six Months Ended June 30, 2021*
			GAAP			Depreciation and Amortization			Stock-Based Compensation			ERP Implementation			Legal - Lutronic			Loss on Extinguishment of Convertible Notes		Non-GAAP			GAAP			Depreciation and Amortization			Stock-Based Compensation			CRM and ERP Implementation			Severance (RIF)			Legal - Lutronic			Other Adjustments			Non-GAAP

Net revenue			$	122,238			-			-			-			-			-	$	122,238		$	108,257			-			-			-									-		$	108,257
Cost of revenue				55,406			(237	)		(959	)		-			-			-		54,210			46,758			(300	)		(578	)		-			-			-			346			46,226
		Gross profit		66,832			237			959			-			-			-		68,028			61,499			300			578			-			-			-			(346	)		62,031
		Gross margin %		54.7	%																55.7	%		56.8	%																				57.3	%

Operating expenses:
	Sales and marketing			51,945			(1,613	)		(2,214	)		-			-			-		48,118			33,478			(1,278	)		(1,243	)		(182	)		(638	)		-			-			30,137
	Research and development			13,358			(113	)		(2,047	)		-			-			-		11,198			8,962			(84	)		(608	)		-			-			-			-			8,270
	General and administrative			24,750			(184	)		(3,556	)		(6,361	)		(496	)		-		14,153			15,826			(48	)		(2,336	)		(477	)		-			(691	)		-			12,274
		Total operating expenses		90,053			(1,910	)		(7,817	)		(6,361	)		(496	)		-		73,469			58,266			(1,410	)		(4,187	)		(659	)		(638	)		(691	)		-			50,681
(Loss) income from operations				(23,221	)		2,147			8,776			6,361			496			-		(5,441	)		3,233			1,710			4,765			659			638			691			(346	)		11,350
Interest and other expense, net
Amortization of debt issuance costs				(517	)		-			-			-			-			-		(517	)		(267	)		-			-			-			-			-			-			(267	)
Interest on convertible notes				(1,927	)		-			-			-			-			-		(1,927	)		(969	)		-			-			-			-			-			-			(969	)
Loss on extinguishment of convertible notes				(34,423	)		-			-			-			-			34,423		-			-			-			-			-			-			-			-			-
Gain on extinguishment of PPP loan				-			-			-			-			-			-		-			7,185			-			-			-			-			-			(7,185	)		-
Other expense				(2,283	)		-			-			-			-			-		(2,283	)		(1,415	)		-			-			-			-			-			-			(1,415	)
Total interest and other (expense) income, net				(39,150	)		-			-			-			-			34,423		(4,727	)		4,534			-			-			-			-						(7,185	)		(2,651	)
(Loss) income before income taxes				(62,371	)		2,147			8,776			6,361			496			34,423		(10,168	)		7,767			1,710			4,765			659			638			691			(7,531	)		8,699
Income tax expense				47			-			-			-			-			-		47			380			-			-			-			-			-			-			380
Net (loss) income			$	(62,418	)	$	2,147		$	8,776		$	6,361		$	496		$	34,423	$	(10,215	)	$	7,387		$	1,710		$	4,765		$	659		$	638		$	691		$	(7,531	)	$	8,319

Net (loss) income per share:
	Basic		$	(3.39	)															$	(0.56	)	$	0.41																				$	0.47

Weighted-average number of shares used in per share calculations:
	Basic			18,392																	18,392			17,815																					17,815




	Operating expenses as a % of net revenue

			GAAP																	Non-GAAP			GAAP																					Non-GAAP
	Sales and marketing			42.5	%																39.4	%		30.9	%																				27.8	%
	Research and development			10.9	%																9.2	%		8.3	%																				7.6	%
	General and administrative			20.2	%																11.6	%		14.6	%																				11.3	%
				73.6	%																60.2	%		53.8	%																				46.7	%

CUTERA, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands)
(unaudited)


			Three Months Ended			Six Months Ended
			June 30, 2022

Net loss			$	(47,276	)	$	(62,418	)
Adjustments:
	Stock-based compensation			4,733			8,776
	ERP implementation cost			2,385			6,361
	Interest and other expense, net			37,398			39,150
	Depreciation and amortization			1,068			2,147
	Legal - Lutronic			242			496
	Income tax (benefit) expense			(186	)		47
		Total adjustments		45,640			56,977
Adjusted EBITDA			$	(1,636	)	$	(5,441	)

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Cutera Announces Second Quarter 2022 Financial Results