Nov 4, 2013
Executives
John Mills - Senior Managing Director Kevin P. Connors - Chief Executive Officer, President and Director Ronald J.
Santilli - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance & Administration
Analysts
Thomas J. Gunderson - Piper Jaffray Companies, Research Division Anthony V.
Vendetti - Maxim Group LLC, Research Division Morris Ajzenman - Griffin Securities, Inc., Research Division Jack Wallace - Sidoti & Company, LLC
Operator
Greetings, and welcome to the Cutera, Inc. Third Quarter 2013 Earnings Conference Call.
[Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Mills of ICR.
Thank you, Mr. Mills.
You may begin.
John Mills
Good afternoon, everyone. Thank you for joining us today to review Cutera's financial results for the third quarter ended September 30, 2013.
On the call today is Kevin Connors, Chief Executive Officer; and Ron Santilli, Executive Vice President and Chief Financial Officer. Kevin will start the call with a brief review of the quarter, then Ron will discuss third quarter financial performance.
Finally, the company will open the call for your questions. Before we start, I want to touch upon any forward-looking statements made during the call including management's belief and expectations about the company's future results.
Please be aware they are based on the best available information to management and assumptions that management believes are reasonable. Cutera also cautions you to not place undue reliance on forward-looking statements, which speak only as of the date they were made.
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. Future results may differ materially from management's current expectations, forward-looking statements, including statements concerning financial guidance on future revenue growth, expense levels, gross and net margins, the result of cost improvement initiatives and other financial metrics.
Expectations for increasing revenue, the development, commercialization and revenue growth potential of existing and planned new products. While we manage to commercialize new products and we attempt to launch products according to our plans, there is risk both from regulatory and technical challenges that our actually launch -- that our actual launch date could be delayed or the launch of certain products may never occur.
Management plans for the repurchase of Cutera stock. Management and the Board of Directors make no assurances to the magnitude of our planned share repurchases, although we have established board approved limits and the company has to comply with regulatory and repurchase volume restrictions.
Also, management may make additional forward-looking statements in response to your questions. For a complete list of risk factors that could cause Cutera's actual results to differ materially from the forward-looking statements, please refer to the section entitled Risk Factors in the company's most recent 10-Q filed today with the Securities and Exchange Commission.
With that, I'll turn the call over to Kevin Connors, Cutera's President and CEO. Go ahead, Kevin.
Kevin P. Connors
Thank you, John. Good afternoon, everyone, and thanks for joining us today to discuss Cutera's results for the third quarter ended September 30, 2013.
Our revenue for the third quarter of 2013 was $16.8 million. Our current quarter revenue contraction was primarily due to the following key reasons: One, a decline in our podiatry business; two, continued softness in our Canadian operations; three, Japanese yen devaluation compared to this time last year; four, lower than expected penetration into the body contouring market with our truSculpt product.
And I will expand on each of these reasons, provide additional color on initiatives -- and on initiatives to improve on each of these areas. Starting with the podiatry business.
Our podiatry revenue contracts by $1 million relative to last year. Our significant growth and market leadership in this market was built primarily in the United States and Canada.
Since beginning of 2013, we experienced softness in our performance and we are actively pursuing a number of specific initiatives. We have modified and expanded the North American sales organization, that we'll discuss later, are relevant to our podiatry business' future performance.
In 2012, we have dedicated a small team in North America calling on podiatrists, and we found the challenge of large geographic coverage created inefficiencies. We no longer have a dedicated sales force to this call point, but we've made other sales force modifications in the past quarter.
Our GenesisPlus product is the premier offering in this category as it was specifically designed for this market and we have robust clinical experience to share with clinicians. Additional focus provides opportunities for enhanced commercial performance.
However, we are seeing evidence that additional focus is yielding positive early results. Softness in our Canadian business.
Our business in Canada declined by over $800,000 relative to the same period last year, some of which was podiatry revenue. Canadian market has been significant for us for many years, and in the third quarter, we had a change in leadership in our Canadian sales team.
We are actively refocusing our resources to achieve significantly improved performance metrics. Our team in Canada has historically been an out-performer, and we're committed to regain our more typical strong performance levels in Canada by augmenting training and expanding support.
Yen devaluation. The yen devalued by approximately 25% to the U.S.
dollar in comparing Q3 of 2013 to Q3 2012. Our Japan sourced revenue was $3.5 million in Q3 2013, including the impact of Japan yen devaluation.
We estimate the foreign exchange impact on our revenue was in the range of $1 million in the third quarter 2013. truSculpt for the body contouring market.
The body contouring market segment continues to grow, and we continue to hear positive comments from our customers regarding our truSculpt product and our expanding family of truSculpt applicators. However, relative to this high-growth market segment, we believe there's an opportunity to significantly expand our penetration.
Turning to the North American segment, we have made improvements in our overall North American sales force. We have restructured and expanded the number of sales territories and have targeted approximately 40 salespeople in North America, with additional expansion plans for early 2014.
This includes a mix of product specialists and sales representatives that sell up our entire portfolio. During the quarter, we established a North American sales specialist function initially for our Excel V and have been pleased with the early results.
We have found the addition of the product specialists sales function has resulted in greater focus for the Excel V business. With our expanded product portfolio and new launches planned in the near future, it's imperative that we maintain focus on each product category.
We are currently expanding the specialist model to other products where we believe additional focus can provide enhanced performance. Beyond Japan and Canada, our international revenue grew slightly.
We experienced growth in many Asian and European markets, including China, Middle East and France. We are continuing to invest in our international markets and are expanding our direct presence in Switzerland and Benelux regions in the fourth quarter of 2013.
Turning to research and development. We are pleased with the progress the team has made during the quarter, which is as follows: During the quarter, we launched a new 16-square centimeter truSculpt applicator to treat smaller cosmetic areas.
The initial feedback has been very positive as our key competitors have been unable to provide a solution for treating smaller regions. During the quarter, customers included this applicator with most of their truSculpt orders.
truSculpt has a commercial advantage of being a platform. We were able to launch new applicators to better treat different parts of the body, as well as the potential to pursue other aesthetic applications.
We are also pleased to be able to offer this new applicator to our existing truSculpt customers so that they can expand the capabilities of the technology. At the American Academy of Dermatology meeting in March 2014, we plan to launch 3 exciting new products pending regulatory clearances.
One, we are encouraged with the progress of our picosecond, dual-wavelength program for the treatment of pigmented lesions and for tattoo removal. A multiple wavelength solution provides physicians with the ability to successfully treat a broader range of tattoo inks.
Furthermore, we believe our high-performance flexible platform will allow for clinical research and other dermatologic conditions. Two, laser hair removal continues to be one of the largest markets in our industry.
We plan to launch a premier offering that incorporates Alexandrite and Nd:YAG laser solutions in a compact, integrated design. Similar to our experience with the launch of Excel V, we have found that dermatologists have a preference for high-utility laser solutions, and this product will be in line with our strategy of extending our portfolio of premium laser-based products.
Three, a new applicator on the truSculpt platform that is intended to expand its indications for years and allow treatment of other parts of the body. In conclusion, we are pleased with the breadth of programs in our engineering team, and we believe we have an exciting product pipeline that, combined with improvements we are making with our sales team, will allow us to position -- to be positioned for much improved results in the fourth quarter and throughout 2014.
Further, we remain pleased with the market acceptance and the revenue growth of our Excel V vascular product. However, our Excel V revenue growth improvements and our cost structure were more than offset by the decline in other areas of our business.
Now, I'd like to turn the call to Ron to discuss our financials in more detail.
Ronald J. Santilli
Thanks, Kevin, and thanks to all of you for joining us today in our third quarter 2013 conference call. Our revenue was $16.8 million or a decline of $2.6 million from the third quarter of 2012.
This decline was primarily due to the following factors: One, our podiatry business declined by approximately $1 million; two, we estimate the Japanese yen devaluation had an impact in the $1 million range; and three, our Canadian business declined by over $800,000, of which the podiatry business decline was roughly half. Gross margin was 55% for the quarter.
Although this was flat compared to a year ago, if we had an increase in revenue, we would have experienced positive impact on our gross margins. This reflects the realization of several cost reductions in recently launched products, which was offset by the impact of lower than expected volume.
Net loss was $1.7 million or $0.11 per diluted share. Noncash stock-based compensation and depreciation and amortization totaled $1.1 million for the quarter.
Balance sheet remains strong with $82.3 million in cash and investments following the stock repurchases. As Kevin mentioned, the Japanese yen devalued approximately 25% when comparing the average rates of the third quarter of 2013 to the third quarter of 2012.
Our Japanese revenue for the quarter was $3.5 million, of which approximately 2/3 is sourced in Japanese yen. The impact of the Japanese yen devaluation on our revenue this quarter was approximately $600,000 with additional negative impact due to the effective price increase, which is difficult to quantify.
In the aggregate, we estimate that our revenue was negatively impacted by approximately $1 million in the quarter. Fillers and cosmeceuticals revenue in Japan declined by $255,000 or 19% due primarily to the yen devaluation, although we had a strong filler performance.
We are in the process of phasing out distribution of the Obagi products in Japan and instead have elected to begin distributing the ZO product portfolio, Dr. Obagi's new company.
One of the factors in our choice to make this change was related to customers' dissatisfaction with competing Internet sales channels available to Obagi customers, our customers' patients. Our physician customers' desire to provide these products to their patients directly, thereby capturing recurring product revenue while maintaining a regular patient contact, which can yield additional procedures at the physician's office.
In the long term, we believe that this new portfolio, which doesn't have a competing Internet sales channel, will allow our customers and Cutera to capture all product revenue in Japan, which should result in greater sales levels as the account volume expands. Now, I will address our operating performance.
Our gross margin was 55% in the third quarter of 2013 compared to gross margin of 55% in the third quarter of 2012. We realized the same gross margin percentage in a lower revenue volume.
It is our belief our gross margin percentage would have been 58% or greater if our revenue would have been at the third quarter 2012 level, which would have reflected improved performance. This improved performance is the result of realization of many cost initiatives driven during the past year and increased reliability of our products resulting in lower service expenses.
Sales and marketing expenses were $6.6 million at 39% of revenue compared to the $7 million or 36% of revenue in the third quarter of 2012. The decline is largely explained by reduced commissions from the lower volume.
We expect our sales and marketing expenses to increase in absolute dollars in the future quarters due to continued expansion of our global sales force, particularly in North America, and increased commissions for higher projected revenue. Research and development expenses increased to $2.4 million in the third quarter of 2013 from $2.2 million in the third quarter of 2012.
The growth in the current quarter was due primarily to increased material spending, which is project timing dependent related to new product development activity. We remain committed to investing in R&D and launching new products in the future, and expect quarterly spending to be in the range of $2 million to $2.5 million per quarter.
General and administrative expenses decreased by $300,000 to $2.2 million. The large reduction was due primarily to reduced variable personnel costs and legal related costs, offset by higher costs associated with the commencement of the U.S.
medical excise tax on January 1, 2013. We expect general and administrative expenses to be approximately $2.6 million per quarter in the future, which includes the U.S.
medical device excise tax. Income tax provision, our tax provision is primarily attributable to international taxes related to our foreign subsidiaries and small amounts of minimum and capital base taxes in the US.
As a reminder, we continue to maintain a 100% valuation allowance for our deferred U.S. tax assets.
We recorded a onetime tax credit of $169,000 in the current quarter. This includes a onetime credit associated with the releasing of some reserves for uncertain tax position.
Going forward, for modeling purposes, we suggest using an effective income tax expense of approximately $100,000 per quarter. Turning to the balance sheet, net accounts receivable at the end of the third quarter 2013 were $7.5 million and our DSOs were 41 days.
Our DSOs increased this quarter primarily related to higher revenue contributions from some key international distributor customers who had payment terms. We expect our DSOs to return to the mid-30 days in the fourth quarter as our revenue increases.
Inventories declined by $100,000 to $10.4 million at September 30, 2013, compared to the second quarter of 2013. This reflects turns of approximately 3 per year.
We believe there continues to be room to reduce our inventory further where appropriate and increase our turns to 4 per year. Deferred revenue increased over $750,000 during the third quarter of 2013.
We have had an increased volume of customers who purchased multiyear extended service contracts at the time of purchase of their new systems. This deferred revenue will be amortized into revenue during the period in which the customer obtains service coverage.
This is primarily years 2 and 3 from date of purchase. Regarding our share repurchase.
During the quarter, we repurchased $7.6 million of common stock pursuant to the $20 million share buyback program approved by our board. Our program has 2 plans.
One in the open market during the open window at the discretion of management. The other plan is a 10b5-1 plan, which can trigger based on predetermined criteria.
We acquired 796,919 shares or almost 800,000 shares at an average price of $9.54 and have up to $12.4 million available for additional purchases. We remain opportunistic with repurchasing our shares.
The repurchase program may be suspended or discontinued at any time. In conclusion, our financial position remains strong as we hold cash and investments of $82.3 million with no debt.
This represents approximately $5.83 per outstanding share. Our operations had generated approximately $1.1 million of cash in the 9 months of this year, and we expect to be accretive in the future.
Now, I'd like to open up the call for your questions. Operator?
Operator
[Operator Instructions] Our first question comes from the line of Tom Gunderson with Piper Jaffray.
Thomas J. Gunderson - Piper Jaffray Companies, Research Division
So you must be disappointed with those results and you delineated the contraction or the decline into several parts. Let me focus on just one of them, and that would be truSculpt.
In North America, we don't have any FX to worry about, you're not going to impact the dollar-yen trade anytime soon. But on truSculpt, you had a competitor report last week that did surprisingly well in the quarter with their non-invasive fat reduction.
And I'm just wondering how you compare, Kevin, your performance, not just in the quarter, but maybe in the last 9 months, 12 months, to what ZELTIQ has been doing. And is it simply a matter of expanding sales territories by 4 or 5, or adding an applicator?
Or is there something else that needs to be done to change the momentum?
Kevin P. Connors
Sure, Tom. Well, obviously, we track our key competitors and ZELTIQ is one in the body contouring space that's done very well.
And as we mentioned in the script, we see this market as an attractive market. We don't have the track record of being in the market as long as that company and the Liposonix product as well.
And there's been a fair amount of clinical story that's emerged over the years with those -- both of those companies, and this has been the 1-year anniversary because halfway through Q3 of last year is when we launched this product. So relative to those companies, we still think we're early in the game.
Maybe it didn't come across as a strategy in the script, but this notion of bringing specialization to the sales force is something that we're encouraged by the first experience of truSculpt because it did result in a higher level of focus on that product, which translates -- I'm sorry, with Excel V. We were able to just raise the bar in terms of the focus on that product and in the script we mentioned that we're looking at that model to serve as the model for other products.
Obviously, truSculpt would be one where we think we have a tremendous opportunity with the product that we have today, and then we've been expanding the applicators over the years, so it just seems like we really need to be measuring our performance in this market relative to the other key competitors. And so it's a major opportunity for us, particularly in North America.
Thomas J. Gunderson - Piper Jaffray Companies, Research Division
And, Kevin, if on the specialization, you move out of specialization for podiatry and put it more in the general group, I get that, there's more territories and so more opportunities to make calls. How many -- and you're talking about success with Excel V.
I know it's early, but how many sales guys are working -- specializing in Excel V?
Kevin P. Connors
Right now, we have 4. And we have -- each one of the specialists teamed with a territory.
So a territory is typically 8 reps or so. And then the specialist works with those other 8 reps to really cultivate the business and the particular specialty.
So this is a different specialization relative to what we had with the podiatry sales force. We're finding there's much greater efficiencies with this model than what we had with the large geographies in podiatry.
Thomas J. Gunderson - Piper Jaffray Companies, Research Division
Got it. And then one last area and I'll let some others ask questions, and that is new products.
New products saved you the last time you had a downturn in the market in the overall recession and you brought yourself back up with a series of new products, Excel and truSculpt being 2 of them. And now, we've got some new products coming up at Derm.
The real new, new product for me at least is the new tattoo laser. Now in the past, you've shown these at the Derm meetings and then launched them later.
Is that the way we should look at the new tattoo laser, or is it going to be closer to being ready to commercialize?
Kevin P. Connors
Well, we are always mindful of the timing of talking about new product launches, and we talked about 3 different products that we're excited about. With the laser hair removal platform, obviously, it would be a risk of cannibalizing our core hair removal business if we would have a delay in the launch of that.
So we feel like that's pretty far along. And the regulatory assumptions with all these, but we think that having the ability to go to market soon after the debut of these products is a key goal for us.
I think -- so it's -- the R&D team really is working extremely well together, and we've really augmented the team and foreseen the results in terms of prolific activity in the new product department.
Operator
Our next question comes from the line of Anthony Vendetti with Maxim Group.
Anthony V. Vendetti - Maxim Group LLC, Research Division
So, Kevin, I just want to understand the new products at AAD just to follow up, I guess. Is the new high-performance laser system that was scheduled to be launched at the end of the year is now going to be 1 of the 3 launched at AAD or is that separate?
Kevin P. Connors
No, that's correct. You got it right.
Anthony V. Vendetti - Maxim Group LLC, Research Division
Okay, okay. And is that the picosecond one or is that the -- which one was that of the 3?
Kevin P. Connors
Okay, so we talked about 3. So one is the hair removal platform with the alexandrite technology, as well as Nd:YAG.
We talked about the dual-wavelength picosecond product, which is for the treatment of pigmented lesions and tattoo removal for a broader range of tattoo inks. And then another extension to the truSculpt family of applicators.
Anthony V. Vendetti - Maxim Group LLC, Research Division
But the -- I'm just trying to understand, the one that was supposed to be launched by the end of the year, is that the picosecond one or was that the laser one?
Kevin P. Connors
No, we were looking at the hair removal platform by the end of the year.
Ronald J. Santilli
The alexandrite moved to AAD to make sure our resources are there to get both the alexandrite and the pico products ready for AAD.
Anthony V. Vendetti - Maxim Group LLC, Research Division
Okay. Got it.
Got it. And just can you give us an update on the -- on where you are with the FDA process for the picosecond?
Kevin P. Connors
On past calls, we talked about having a constructive discussion with the FDA. We were able to have our team meet with the reviewer of the division, the branch chief, I believe, was there, and talked about the path to getting an ultimate indication for both pigmented lesions and the removal of tattoos.
So it was a very good meeting. And so we have plans for both of those 510(k)s being submitted.
And whether we got -- whether we get the clearance in time for the meeting or not, clearly, we're working towards that. But that's out of our control, to some extent.
Anthony V. Vendetti - Maxim Group LLC, Research Division
Sure, sure. No, I understand that.
And then lastly on the sales force. In terms of the reorganization there and so forth, do you feel -- because the softness now in Canada has been sort of an ongoing story for this year, do you feel with the change made specifically there, the management change there, that, A, you're on the right path to turn that around?
And then when specifically was that management change made?
Kevin P. Connors
Specific date, I couldn't tell you the exact date, but it was the first month of the third quarter, I believe, yes. So the team in Canada, as we talked on various calls in the past, we've had a really successful track record, and a team of great achievers who are still intact largely and we've made -- we've expanded there.
And so we have some new people on board. But we're really digging into the details of getting that business level to where it needs to be and we don't think that the market has changed.
There are always bumps that happen, but we believe we've got the right people on the ground and we just think that staying closer to the execution on these opportunities should get the business where it needs to be.
Operator
Our next question comes from the line of Morris Ajzenman with Griffin Securities.
Morris Ajzenman - Griffin Securities, Inc., Research Division
First question, you went through some of the shortfalls: Podiatry, $1 million year-over-year; Canada, $800,000 year-over-year; and then the yen impacting approximately $1 million. So that -- those 3 outside of truSculpt, which you didn't put a number on, equates to about $2.8 million.
So if you look at the $2.8 million and you add that to the top line, just for argument's sake, you've been flat versus a year ago and even sequentially, and the industry has shown growth. What else -- even making those adjustments, you're still kind of flat.
Can you maybe put some color on truSculpt? Just help us understand.
Even with those adjustments, you look like your top line is still lagging with the industry in the numbers they're exhibiting recently.
Kevin P. Connors
Yes, sure. I mean the -- I think you have it right in general, Morris.
And we didn't put a number on truSculpt, but clearly, as we talked earlier in the call, we see what's happening with one of our competitors in particular, we see that as a huge market and -- which represents a tremendous opportunity for us that we're clearly focused on getting our fair share. But in terms of the industry, clearly, the ZELTIQ performance is notably fantastic.
But we're still waiting for some of our other competitors to report and then we'll gauge our performance relative to the whole peer group. But the short answer is we've got to get more of the truSculpt opportunity in our business.
Morris Ajzenman - Griffin Securities, Inc., Research Division
Let's just switch over to podiatry. PinPointe, that was a small competitor, has been acquired by a larger, well-known competitor of yours, and they seem to be having better traction.
Is that part of the reason, with revenues being down year-over-year, you talked about sales force, but are there competitive pressures that's impacting you there?
Kevin P. Connors
What acquisition are you referring to, Morris?
Morris Ajzenman - Griffin Securities, Inc., Research Division
Well, PinPointe is now part of, I think, Cynosure now.
Kevin P. Connors
It's a distribution agreement, it's not an acquisition agreement. But at least I haven't seen any news break on that.
So that's been in place for 1.5 years or so. So that's not new.
I think in the case of our experience in podiatry is that we have that dedicated team, and some of those sales reps did very, very well. But as I alluded in the prepared comments, the overall approach created some inefficiencies because the reps were carrying or covering such a large geography.
So with our early positive experience with the specialist model, we think that other products should make sense to evaluate that as well.
Morris Ajzenman - Griffin Securities, Inc., Research Division
Okay, one last question and I'll get back on queue. On the Titan and truSculpt hand piece refills, they're both down sequentially and year-over-year in double digits, mid teens to lower 20 -- mid-12% range.
And truSculpt, again, being rather new -- it's my presumption that Titan is it a bigger percentage decline? Can we read into this in any manner?
Ronald J. Santilli
Well, there's 2 primary reasons there. One, the Titan hand piece refill is largely being impacted in Japan with the yen because that -- we have a big install base there.
So that's pulled part of it down. And truSculpt, we've gone to a non-refillable process.
So we're not getting the refill business there either.
Kevin P. Connors
If the customer is willing to pay for a service contract with it. So we -- it's just a different bundling approach.
Ronald J. Santilli
Correct.
Operator
[Operator Instructions] Our next question comes from the line of Jack Wallace with Sidoti & Company.
Jack Wallace - Sidoti & Company, LLC
In previous quarters' calls, you've been nice enough to break out truSculpt and Excel V as a combo, as a percentage of sales. What was that figure for this quarter?
Ronald J. Santilli
Just the combination. We may have made a comment, but we don't have any regular disclosure regarding those 2 items.
Kevin P. Connors
Yes, I remember making a comment. I think the -- of the product sales.
It was like 50% at that -- at one quarter. We don't have that calculation in front of us, Jack.
But anecdotal, the -- our Excel V had nice growth year-over-year and truSculpt, we'd be seeing opportunities for improved performance.
Jack Wallace - Sidoti & Company, LLC
Okay. And then, I guess, just looking out a couple of years now, I mean -- part of the last couple of quarters here of relative underperformance and part of you are pointing at the sales staff.
Part of it has been now a little bit of the truSculpt not maybe getting adapted as quickly as anticipated with the new products to be commercialized in the upcoming year. And I guess, 2 years out, do you see these products becoming a significant, say, in the 30% to 50% range of revenue contribution or do you still see your legacy products going ahead and being much larger contributors like they had, say, last year?
Kevin P. Connors
Well, we think that a couple of things going on. Number one is that with the prolific R&D activities that are underway, we think that the product portfolio is going to be very fresh.
I mean we're making major strides in doing that. So I think continuing to step on the accelerator on the development programs, and I think that we have other things in mind for -- beyond what we talked about in today's call.
But it's also clear to us that we have to get our commercial house in order in terms to maintain the proper focus on all these different products. It's great to have an ever broadening portfolio of products, but it does make it incumbent upon us to structurally identify how we're going to maintain focus on the legacy products rather than this year has modeled, give it a lot of focus and other product categories get a lack of attention.
Jack Wallace - Sidoti & Company, LLC
And then you mentioned in the prepared remarks and again in the questions-and-answer session here that the podiatry segment was disappointing, was down year-over-year and likely sequentially. How much of that was an impact from the de-specialization of that segment?
Kevin P. Connors
It's hard to get a number on that. But clearly, we -- this script and press release, we try to provide more granularity of the various components of the business so that you can get a better sense of the magnitude of these various things.
All I'll say is that we haven't concluded that the market disappeared on us. We wrapped up the fourth quarter of last year with a very strong podiatry end, and we're certainly are doing what we think is appropriate to get our fair share back.
Jack Wallace - Sidoti & Company, LLC
And lastly here, can you maybe break out the, I guess, the mix of the repurchase in the quarter? How much of that was from the discretionary repurchase and how much of that was on the other repurchase that had the specific triggers within it?
Ronald J. Santilli
All of it was from discretionary. And we -- the 10b5-1 has not reached its threshold yet.
Operator
There are no further questions at this time. I'd like to turn the floor back over for closing comments.
Kevin P. Connors
Thank you for participating on our call today. We will be attending a number of investor events in the coming months, and we'll update you on business progress in the fourth quarter of 2013 on the conference call on February 2014.
Good afternoon, and thanks for your continued interest in Cutera.
Operator
Thank you. This concludes today's teleconference.
You may disconnect your lines at this time and thank you for your participation.