News Release Details
News Release Details

AtriCure Reports Third Quarter 2022 Financial Results

November 1, 2022 at 4:01 PM EDT
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MASON, Ohio--(BUSINESS WIRE)--Nov. 1, 2022-- AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in surgical treatments and therapies for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management, today announced third quarter 2022 financial results.

“We are proud to share another quarter of strong commercial execution across our business, with excellent EnCompass traction following our launch earlier this year, increasing EPi-Sense® revenue and accounts, and ongoing strength in our pain management business,” said Michael Carrel, President and Chief Executive Officer of AtriCure. “Our broad and deep portfolio once again enabled outstanding results, and we continue to build our organization and pipeline of activity to deliver and expand on the substantial growth opportunities ahead.”

Third Quarter 2022 Financial Results

Revenue for the third quarter 2022 was $83.2 million, an increase of 18.1% (an increase of 19.8% on a constant currency basis) over third quarter 2021 revenue. U.S. revenue was $69.8 million, an increase of $12.2 million or 21.3%, compared to third quarter 2021. U.S. revenue growth was driven by sales across key product lines, notably the cryoSPHERE® probe for post-operative pain management, the AtriClip® Flex·V® device and the new ENCOMPASS® clamp. International revenue increased $0.5 million or 4.2% (an increase of 13.5% on a constant currency basis) to $13.4 million, driven primarily by growth in Australia and Japan. On a sequential basis, worldwide revenue for the third quarter 2022 decreased approximately 1.5% from second quarter 2022.

Gross profit for the third quarter 2022 was $61.7 million compared to $52.2 million for the third quarter 2021. Gross margin remained flat at 74.1% for both the third quarters 2022 and 2021 reflecting leverage of higher sales volumes offset by inflationary and supply chain cost pressures and shift in product mix to lower margin products. Loss from operations for the third quarter 2022 was $10.7 million, compared to income of $98.7 million for the third quarter 2021. Third quarter 2021 income from operations includes a $189.9 million credit to operating expenses for the change in fair value of contingent consideration, offset partially by an $82.3 million intangible asset impairment charge for the IPR&D asset associated with the aMAZETM clinical trial. Basic and diluted net loss per share was $0.27 for the third quarter 2022, compared to $2.15 and $2.11, respectively, for the third quarter 2021.

Adjusted EBITDA was negative for the third quarter 2022 at $0.7 million, compared to positive $0.7 million for third quarter of 2021. Adjusted loss per share for the third quarter 2022 was $0.27 compared to $0.23 for the third quarter 2021.

Constant currency revenue, adjusted EBITDA and adjusted loss per share are non-GAAP measures. We discuss these non-GAAP measures and provide reconciliations to GAAP measures later in this release.

2022 Financial Guidance

Full year 2022 revenue is projected to be approximately $328 million to $333 million, reflecting growth of approximately 20% to 21% over full year 2021. Management now expects full year 2022 adjusted EBITDA to be a loss of approximately $4 million, and full year 2022 adjusted loss per share of approximately $1.10 to $1.12.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, November 1, 2022 to discuss its third quarter 2022 financial results. To access the webcast, please visit the Investors page of AtriCure’s corporate website at https://ir.atricure.com/events-and-presentations/events. Participants are encouraged to register more than 15 minutes before the webcast start time. A replay of the presentation will be available for 90 days following the presentation.

About AtriCure

AtriCure, Inc. provides innovative technologies for the treatment of Afib and related conditions. Afib affects more than 37 million people worldwide. Electrophysiologists and cardiothoracic surgeons around the globe use AtriCure technologies for the treatment of Afib and reduction of Afib related complications. AtriCure’s Isolator® Synergy™ Ablation System is the first medical device to receive FDA approval for the treatment of persistent Afib. AtriCure’s AtriClip® Left Atrial Appendage Exclusion System products are the most widely sold LAA management devices worldwide. AtriCure’s Hybrid AF™ Therapy is a minimally invasive procedure that provides a lasting solution for long-standing persistent Afib patients. AtriCure’s cryoICE cryoSPHERE® probe is cleared for temporary ablation of peripheral nerves to block pain, providing pain relief in cardiac and thoracic procedures. For more information, visit AtriCure.com or follow us on Twitter @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. This press release also includes forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially. 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/forward-looking-statements as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors. Except where otherwise noted, the information contained in this release and the related attachment is as of November 1, 2022. We assume no obligation to update any forward-looking statements contained in this release and the related attachment as a result of new information or future events or developments, except as may be required by law.

Use of Non-GAAP Financial Measures

To supplement AtriCure’s condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, AtriCure provides certain non-GAAP financial measures in this release as supplemental financial metrics.

Revenue reported on a constant currency basis is a non-GAAP measure, 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 investors.

Adjusted EBITDA is calculated as net (loss) income before other income/expense (including interest), income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition costs, legal settlement costs, impairment of intangible asset and change in fair value of contingent consideration liabilities. Management believes 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 results of operations and management believes that the excluded items are typically not reflective of our ongoing core business operations and financial condition. Further, management uses adjusted EBITDA for both strategic and annual operating planning. A reconciliation of adjusted EBITDA reported in this release to the most comparable GAAP measure for the respective periods appears in the table captioned “Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA)” later in this release.

Adjusted (loss) income per share is a non-GAAP measure which calculates the net (loss) income per share before non-cash adjustments in fair value of contingent consideration liabilities, impairment of intangible asset and legal settlement costs. A reconciliation of adjusted (loss) income per share reported in this release to the most comparable GAAP measure for the respective periods appears in the table captioned “Reconciliation of Non-GAAP Adjusted Loss Per Share” later in this release.

The non-GAAP financial measures used by AtriCure may not be the same or calculated in the same manner as those used and calculated by other companies. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for AtriCure’s financial results prepared and reported in accordance with GAAP. We urge investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financials measures included in this press release, and not to rely on any single financial measure to evaluate our business.

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)
         
   

Three Months Ended
September 30,

 

Nine Months Ended
September 30,
   

2022

 

2021

 

2022

 

2021

United States Revenue:

  

 

 

 

 

 

 

 

Open ablation

  

$

21,569

 

 

$

17,893

 

 

$

62,613

 

 

$

54,835

 

Minimally invasive ablation

  

 

10,077

 

 

 

9,990

 

 

 

28,846

 

 

 

28,077

 

Pain management

  

 

10,510

 

 

 

6,253

 

 

 

28,734

 

 

 

15,860

 

Total ablation

  

 

42,156

 

 

 

34,136

 

 

 

120,193

 

 

 

98,772

 

Appendage management

  

 

27,620

 

 

 

23,401

 

 

 

83,120

 

 

 

69,144

 

Total United States

  

 

69,776

 

 

 

57,537

 

 

 

203,313

 

 

 

167,916

 

International Revenue:

  

 

 

 

 

 

 

 

Open ablation

  

 

6,680

 

 

 

6,690

 

 

 

19,385

 

 

 

16,650

 

Minimally invasive ablation

  

 

1,445

 

 

 

1,849

 

 

 

4,249

 

 

 

4,698

 

Pain management

  

 

121

 

 

 

11

 

 

 

375

 

 

 

22

 

Total ablation

  

 

8,246

 

 

 

8,550

 

 

 

24,009

 

 

 

21,370

 

Appendage management

  

 

5,224

 

 

 

4,373

 

 

 

15,029

 

 

 

11,825

 

Total International

  

 

13,470

 

 

 

12,923

 

 

 

39,038

 

 

 

33,195

 

Total revenue

  

 

83,246

 

 

 

70,460

 

 

 

242,351

 

 

 

201,111

 

Cost of revenue

  

 

21,533

 

 

 

18,234

 

 

 

61,524

 

 

 

50,267

 

Gross profit

  

 

61,713

 

 

 

52,226

 

 

 

180,827

 

 

 

150,844

 

Operating expenses (benefit):

  

 

 

 

 

 

 

 

Research and development expenses

  

 

15,169

 

 

 

11,284

 

 

 

43,589

 

 

 

34,698

 

Selling, general and administrative expenses

  

 

57,267

 

 

 

49,873

 

 

 

175,771

 

 

 

150,939

 

Change in fair value of contingent consideration

  

 

—

 

 

 

(189,900

)

 

 

—

 

 

 

(184,800

)

Intangible asset impairment

  

 

—

 

 

 

82,300

 

 

 

—

 

 

 

82,300

 

Total operating expenses (benefit)

  

 

72,436

 

 

 

(46,443

)

 

 

219,360

 

 

 

83,137

 

(Loss) income from operations

  

 

(10,723

)

 

 

98,669

 

 

 

(38,533

)

 

 

67,707

 

Other expense, net

  

 

(1,503

)

 

 

(1,523

)

 

 

(3,616

)

 

 

(3,632

)

(Loss) income before income tax expense

  

 

(12,226

)

 

 

97,146

 

 

 

(42,149

)

 

 

64,075

 

Income tax expense

  

 

46

 

 

 

38

 

 

 

147

 

 

 

135

 

Net (loss) income

  

$

(12,272

)

 

$

97,108

 

 

$

(42,296

)

 

$

63,940

 

Basic net (loss) income per share

  

$

(0.27

)

 

$

2.15

 

 

$

(0.93

)

 

$

1.42

 

Diluted net (loss) income per share

  

$

(0.27

)

 

$

2.11

 

 

$

(0.93

)

 

$

1.39

 

Weighted average shares used in computing net (loss) income per share:

  

 

 

 

 

 

 

 

Basic

  

 

45,823

 

 

 

45,258

 

 

 

45,682

 

 

 

44,977

 

Diluted

  

 

45,823

 

 

 

46,100

 

 

 

45,682

 

 

 

45,996

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)
         
   

September 30,
2022

 

December 31,
2021

Assets

  

 

 

 

Current assets:

  

 

 

 

Cash, cash equivalents, and short-term investments

  

$

122,644

 

 

$

119,090

 

Accounts receivable, net

  

 

41,466

 

 

 

33,021

 

Inventories

  

 

43,953

 

 

 

38,964

 

Prepaid and other current assets

  

 

4,222

 

 

 

5,001

 

Total current assets

  

 

212,285

 

 

 

196,076

 

Long-term investments

  

 

51,413

 

 

 

104,338

 

Property and equipment, net

  

 

38,556

 

 

 

31,409

 

Operating lease right-of-use assets

  

 

3,969

 

 

 

4,761

 

Goodwill and intangible assets, net

  

 

274,859

 

 

 

277,773

 

Other noncurrent assets

  

 

829

 

 

 

955

 

Total assets

  

$

581,911

 

 

$

615,312

 

Liabilities and Stockholders' Equity

  

 

 

 

Current liabilities:

  

 

 

 

Accounts payable and accrued liabilities

  

$

55,567

 

 

$

54,689

 

Current maturities of leases

  

 

2,031

 

 

 

1,756

 

Total current liabilities

  

 

57,598

 

 

 

56,445

 

Long-term debt

  

 

60,061

 

 

 

59,741

 

Finance lease liabilities

  

 

9,407

 

 

 

10,082

 

Operating lease liabilities

  

 

3,314

 

 

 

4,068

 

Other noncurrent liabilities

  

 

1,223

 

 

 

1,220

 

Total liabilities

  

 

131,603

 

 

 

131,556

 

Stockholders' equity:

  

 

 

 

Common stock

  

 

46

 

 

 

46

 

Additional paid-in capital

  

 

778,006

 

 

 

764,811

 

Accumulated other comprehensive loss

  

 

(5,295

)

 

 

(948

)

Accumulated deficit

  

 

(322,449

)

 

 

(280,153

)

Total stockholders' equity

  

 

450,308

 

 

 

483,756

 

Total liabilities and stockholders' equity

  

$

581,911

 

 

$

615,312

 

ATRICURE, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS

(In Thousands)

(Unaudited)
 
 

Reconciliation of Non-GAAP Adjusted (Loss) Income (Adjusted EBITDA)
         
   

Three Months Ended
September 30,

 

Nine Months Ended
September 30,
   

2022

 

2021

 

2022

 

2021

Net (loss) income, as reported

  

$

(12,272

)

 

$

97,108

 

 

$

(42,296

)

 

$

63,940

 

Income tax expense

  

 

46

 

 

 

38

 

 

 

147

 

 

 

135

 

Other expense, net

  

 

1,503

 

 

 

1,523

 

 

 

3,616

 

 

 

3,632

 

Depreciation and amortization expense

  

 

2,987

 

 

 

2,828

 

 

 

8,791

 

 

 

7,608

 

Share-based compensation expense

  

 

7,001

 

 

 

6,794

 

 

 

21,574

 

 

 

20,539

 

Change in fair value of contingent consideration

  

 

—

 

 

 

(189,900

)

 

 

—

 

 

 

(184,800

)

Intangible asset impairment

  

 

—

 

 

 

82,300

 

 

 

—

 

 

 

82,300

 

Non-GAAP adjusted (loss) income (adjusted EBITDA)

  

$

(735

)

 

$

691

 

 

$

(8,168

)

 

$

(6,646

)

Reconciliation of Non-GAAP Adjusted Loss Per Share
         

 

  

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

  

2022

 

2021

 

2022

 

2021

Net (loss) income, as reported

  

$

(12,272

)

 

$

97,108

 

 

$

(42,296

)

 

$

63,940

 

Change in fair value of contingent consideration

  

 

—

 

 

 

(189,900

)

 

 

—

 

 

 

(184,800

)

Intangible asset impairment

  

 

—

 

 

 

82,300

 

 

 

—

 

 

 

82,300

 

Non-GAAP adjusted net loss

  

$

(12,272

)

 

$

(10,492

)

 

$

(42,296

)

 

$

(38,560

)

Basic and diluted adjusted net loss per share

  

$

(0.27

)

 

$

(0.23

)

 

$

(0.93

)

 

$

(0.86

)

Weighted average shares used in computing adjusted net loss per share

  

 

 

 

 

 

 

 

Basic and diluted

  

 

45,823

 

 

 

45,258

 

 

 

45,682

 

 

 

44,977

 

 

Angie Wirick
AtriCure, Inc.
Chief Financial Officer
(513) 755-5334
awirick@atricure.com

Lynn Lewis or Marissa Bych
Gilmartin Group
Investor Relations
lynn@gilmartinir.com
marissa@gilmartinir.com

Source: AtriCure, Inc.

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