Fourth quarter 2005, compared with the same quarter in 2004:
-- Revenue increased by 49% from $16.1 million to $24.0 million
-- Operating margins improved from 17% to 29%
-- Earnings per diluted share climbed from $0.16 to $0.41
-- Cash generated by operations improved from $3.9 million to $7.6 million
Full year 2005, compared with full year 2004:
-- Revenue increased by 44% from $52.6 million to $75.6 million
-- Operating margins improved from 10% to 22%
-- Earnings per diluted share climbed from $0.31 to $1.00
-- Cash generated by operations more than doubled, from $9.2 million to $20.4 million
-- Cash and marketable investments increased by $25.7 million from $66.3 to $92.0 million.
"These impressive results are attributable to the positive reception that our products have been receiving in the marketplace and to the expansion of our sales force," said Kevin Connors, President and Chief Executive Officer. "In 2005, we experienced significant financial leverage in our business model. We increased gross margins and decreased each of our operating expenses, as a percent of revenue.
"We remain committed to aggressively investing in our business to exploit the growth opportunities in this robust market. Specifically, we are focused on the following key initiatives, which are yielding measurable returns as proven by our results in 2005: (i) worldwide sales force expansion -- we ended 2005 with 47 direct sales territories in North America, up from 32 territories at the end of 2004; (ii) new aesthetic solutions and product introductions; and, (iii) marketing to the broad and expanding market of physicians outside of the traditional dermatology and plastic surgery physician specialties, including the emerging medi-spa market. That market is comprised of physicians who offer aesthetic treatments in a spa environment."
Revenue highlights for the full year 2005, compared with the full year 2004, are as follows:
-- U.S. and international revenue increased by 57% and 19%, respectively.
-- Product revenue grew by 46%, primarily due to our premium multi-application Xeo product and the newly introduced Solera platform products.
-- Service revenue increased by 60%, primarily due to the sales of post-warranty service contracts to an increasing number of customers.
-- Revenue from Titan refills- an annuity business line introduced in late 2004 -- contributed $1.8 million in 2005.
Mr. Connors concluded, "We are very pleased with the results of our key initiatives. Our strong financial position, together with the fast-paced growth of our company, strategically position Cutera as a leading global provider of light-based aesthetic systems."