AtriCure Reports Third Quarter 2018 Financial Results
-
Worldwide revenue of
$49 .9 million – an increase of 18.5% year over year -
U.S. revenue of
$39 .8 million – an increase of 19.1% year over year -
International revenue of
$10 .2 million – an increase of 16.2% year over year
“We are pleased with our third quarter performance and building track
record of strong, consistent, revenue growth,” said
Third Quarter 2018 Financial Results
Revenue for the third quarter of 2018 was
Gross profit for the third quarter of 2018 was
Operating expenses for the third quarter of 2018 increased 11.2%, or
Loss from operations for the third quarter of 2018 was
Adjusted EBITDA, a non-GAAP measure, was a loss of
2018 Financial Guidance
Revenue for 2018 is projected to be approximately
Conference Call
About AtriCure
Forward-Looking Statements
This press release contains “forward-looking statements”– that is, statements related to future events that by their nature address matters that are uncertain. For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, visit http://www.atricure.com/fls as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors. We do not undertake to update our forward-looking statements. This document also includes forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
Use of Non-GAAP Financial Measures
To supplement AtriCure’s condensed consolidated financial statements
prepared in accordance with accounting principles generally accepted in
Revenue reported on a constant currency basis is a non-GAAP measure and is calculated by applying previous period foreign currency exchange rates, which are determined by the average daily Euro to Dollar exchange rate, to each of the comparable periods. Management analyzes revenue on a constant currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on revenue, the Company believes that evaluating growth in revenue on a constant currency basis provides an additional and meaningful assessment of revenue to both management and the company’s investors.
Adjusted EBITDA provides an indication of performance excluding certain items. Management believes that in order to properly understand short-term and long-term financial trends, investors may wish to consider the impact of these excluded items in addition to GAAP measures. The excluded items vary in frequency and/or impact on our continuing operations and management believes that the excluded items are typically not reflective of our ongoing core business operations. Further, management uses adjusted EBITDA for its strategic planning. A reconciliation of adjusted EBITDA reported in this release to the most comparable GAAP measure for the respective periods can be found in a table later in this release.
Adjusted loss per share is a non-GAAP measure which calculates the net loss per share before non-cash adjustments to expenses related to the adjustment in value of the contingent consideration liability. Management believes this metric provides a better measure of comparability of results between periods, as such adjustments are not frequent in nature or similar in value, and can be significant. A reconciliation of adjusted loss per share reported in this release to the most comparable GAAP measure for the respective periods can be found in a table later in this release.
The non-GAAP financial measures used by
ATRICURE, INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
United States Revenue: | ||||||||||||||||
Open-heart ablation | $ | 17,948 | $ | 15,351 | $ | 53,600 | $ | 47,846 | ||||||||
Minimally invasive ablation | 7,877 | 9,049 | 25,604 | 26,056 | ||||||||||||
Appendage management | 13,487 | 8,471 | 38,385 | 26,636 | ||||||||||||
Total ablation and appendage management | 39,312 | 32,871 | 117,589 | 100,538 | ||||||||||||
Valve tools | 452 | 523 | 1,445 | 1,658 | ||||||||||||
Total United States | 39,764 | 33,394 | 119,034 | 102,196 | ||||||||||||
International Revenue: | ||||||||||||||||
Open-heart ablation | 5,437 | 5,255 | 16,182 | 15,519 | ||||||||||||
Minimally invasive ablation | 2,355 | 1,766 | 6,807 | 5,859 | ||||||||||||
Appendage management | 2,318 | 1,653 | 6,540 | 4,825 | ||||||||||||
Total ablation and appendage management | 10,110 | 8,674 | 29,529 | 26,203 | ||||||||||||
Valve tools | 67 | 82 | 174 | 255 | ||||||||||||
Total International | 10,177 | 8,756 | 29,703 | 26,458 | ||||||||||||
Total revenue | 49,941 | 42,150 | 148,737 | 128,654 | ||||||||||||
Cost of revenue | 13,993 | 11,232 | 40,207 | 35,174 | ||||||||||||
Gross profit | 35,948 | 30,918 | 108,530 | 93,480 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development expenses | 8,556 | 7,966 | 26,268 | 26,423 | ||||||||||||
Selling, general and administrative expenses | 33,440 | 29,799 | 96,782 | 89,901 | ||||||||||||
Total operating expenses | 41,996 | 37,765 | 123,050 | 116,324 | ||||||||||||
Loss from operations | (6,048 | ) | (6,847 | ) | (14,520 | ) | (22,844 | ) | ||||||||
Other expense, net | (1,136 | ) | (373 | ) | (3,040 | ) | (1,402 | ) | ||||||||
Loss before income tax expense | (7,184 | ) | (7,220 | ) | (17,560 | ) | (24,246 | ) | ||||||||
Income tax expense | 51 | 26 | 147 | 66 | ||||||||||||
Net loss | $ | (7,235 | ) | $ | (7,246 | ) | $ | (17,707 | ) | $ | (24,312 | ) | ||||
Basic and diluted net loss per share | $ | (0.22 | ) | $ | (0.22 | ) | $ | (0.53 | ) | $ | (0.75 | ) | ||||
Weighted average shares used in computing net loss per share: | ||||||||||||||||
Basic and diluted | 33,601 | 32,576 | 33,280 | 32,297 | ||||||||||||
ATRICURE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In Thousands) | ||||||||
(Unaudited) | ||||||||
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents, and short-term investments | $ | 40,219 | $ | 34,451 | ||||
Accounts receivable, net | 23,290 | 23,083 | ||||||
Inventories | 22,258 | 22,451 | ||||||
Other current assets | 2,662 | 2,273 | ||||||
Total current assets | 88,429 | 82,258 | ||||||
Property and equipment, net | 27,964 | 28,749 | ||||||
Goodwill and intangible assets, net | 154,995 | 156,021 | ||||||
Other noncurrent assets | 574 | 676 | ||||||
Total assets | $ | 271,962 | $ | 267,704 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 32,185 | $ | 31,342 | ||||
Other current liabilities and current maturities of debt and capital leases | 1,559 | 561 | ||||||
Total current liabilities | 33,744 | 31,903 | ||||||
Capital leases | 12,336 | 12,761 | ||||||
Long-term debt | 38,554 | 24,100 | ||||||
Other noncurrent liabilities | 23,560 | 37,774 | ||||||
Total liabilities | 108,194 | 106,538 | ||||||
Stockholders' equity: | ||||||||
Common stock | 36 | 35 | ||||||
Additional paid-in capital | 407,442 | 386,963 | ||||||
Accumulated other comprehensive (loss) income | (136 | ) | 34 | |||||
Accumulated deficit | (243,574 | ) | (225,866 | ) | ||||
Total stockholders' equity | 163,768 | 161,166 | ||||||
Total liabilities and stockholders' equity | $ | 271,962 | $ | 267,704 | ||||
ATRICURE, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In Thousands) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (17,707 | ) | $ | (24,312 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Share-based compensation expense | 11,666 | 10,947 | ||||||
Depreciation and amortization of intangible assets | 6,531 | 6,857 | ||||||
Amortization of deferred financing costs | 341 | 198 | ||||||
Loss on disposal of property and equipment | 106 | 95 | ||||||
Realized loss (gain) from foreign exchange on intercompany transactions | 94 | (163 | ) | |||||
(Accretion) amortization of investments | (121 | ) | 42 | |||||
Change in allowance for doubtful accounts | 419 | (149 | ) | |||||
Change in fair value of contingent consideration | (6,696 | ) | — | |||||
Payment of contingent consideration in excess of purchase accounting amount | (96 | ) | — | |||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (727 | ) | (1,030 | ) | ||||
Inventories | 110 | (4,632 | ) | |||||
Other current assets | (425 | ) | 477 | |||||
Accounts payable and accrued liabilities | 1,262 | 1,587 | ||||||
Other noncurrent assets and liabilities | 87 | (389 | ) | |||||
Net cash used in operating activities | (5,156 | ) | (10,472 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of available-for-sale securities | (29,995 | ) | (12,769 | ) | ||||
Sales and maturities of available-for-sale securities | 20,539 | 20,600 | ||||||
Purchases of property and equipment | (5,128 | ) | (5,135 | ) | ||||
Proceeds from sale of property and equipment | 6 | — | ||||||
Net cash (used in) provided by investing activities | (14,578 | ) | 2,696 | |||||
Cash flows from financing activities: | ||||||||
Proceeds from debt borrowings | 17,381 | — | ||||||
Payments on debt and capital leases | (1,608 | ) | (365 | ) | ||||
Payment of debt fees | (1,136 | ) | (50 | ) | ||||
Shares repurchased for payment of taxes on stock awards | (4,422 | ) | (1,991 | ) | ||||
Proceeds from exercise of stock options and employee stock purchase plan | 6,957 | 5,375 | ||||||
Payment of contingent consideration amount established in purchase accounting | (1,125 | ) | — | |||||
Net cash provided by financing activities | 16,047 | 2,969 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (123 | ) | 43 | |||||
Net decrease in cash and cash equivalents | (3,810 | ) | (4,764 | ) | ||||
Cash and cash equivalents - beginning of period | 21,809 | 24,208 | ||||||
Cash and cash equivalents - end of period | $ | 17,999 | $ | 19,444 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 2,743 | $ | 1,497 | ||||
Cash paid for income taxes | 45 | 37 | ||||||
Non-cash investing and financing activities: | ||||||||
Accrued purchases of property and equipment | 335 | 263 | ||||||
Assets acquired through capital lease | 24 | 2 | ||||||
Share-settled portion of contingent consideration | 6,279 | — | ||||||
Capital lease asset early termination | (6 | ) | — | |||||
ATRICURE, INC. AND SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS | ||||||||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net loss, as reported | $ | (7,235 | ) | $ | (7,246 | ) | $ | (17,707 | ) | $ | (24,312 | ) | ||||
Income tax expense | 51 | 26 | 147 | 66 | ||||||||||||
Other expense, net (a) | 1,136 | 373 | 3,040 | 1,402 | ||||||||||||
Depreciation and amortization expense | 2,128 | 2,267 | 6,531 | 6,857 | ||||||||||||
Share-based compensation expense | 4,242 | 3,622 | 11,666 | 10,947 | ||||||||||||
Change in fair value of contingent consideration | (780 | ) | — | (6,696 | ) | — | ||||||||||
Non-GAAP adjusted (loss) (Adjusted EBITDA) | $ | (458 | ) | $ | (958 | ) | $ | (3,019 | ) | $ | (5,040 | ) | ||||
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Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(a) Other includes: | ||||||||||||||||
Net interest expense | $ | 1,095 | $ | 518 | $ | 2,937 | $ | 1,534 | ||||||||
Loss (gain) due to exchange rate fluctuation | 41 | (145 | ) | 103 | (132 | ) | ||||||||||
Other expense, net | $ | 1,136 | $ | 373 | $ | 3,040 | $ | 1,402 | ||||||||
Reconciliation of Non-GAAP Loss Per Share (Adjusted LPS) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net loss, as reported | $ | (7,235 | ) | $ | (7,246 | ) | $ | (17,707 | ) | $ | (24,312 | ) | ||||
Contingent consideration adjustment | (780 | ) | — | (6,696 | ) | — | ||||||||||
Net Loss excluding contingent consideration adjustment | $ | (8,015 | ) | $ | (7,246 | ) | $ | (24,403 | ) | $ | (24,312 | ) | ||||
Basic and diluted adjusted net loss per share | $ | (0.24 | ) | $ | (0.22 | ) | $ | (0.73 | ) | $ | (0.75 | ) | ||||
Weighted average shares used in computing adjusted net loss per share: | ||||||||||||||||
Basic and diluted | 33,601 | 32,576 | 33,280 | 32,297 | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181101006049/en/
Source:
AtriCure, Inc.
Andy Wade, 513-755-4564
Senior Vice President
and Chief Financial Officer
awade@atricure.com
or
Gilmartin
Group
Lynn Pieper Lewis, 415-937-5402
Investor Relations
lynn@gilmartinir.com