AtriCure Reports Second Quarter 2019 Financial Results
- Worldwide revenue of
$58.9 million – an increase of 13.7% year over year - U.S. revenue of
$47.2 million – an increase of 15.5% year over year - International revenue of
$11.7 million – an increase of 7.0% year over year
“Our second quarter results demonstrate strength across the business,” said
Second Quarter 2019 Financial Results
Revenue for the second quarter of 2019 was
Gross profit for the second quarter of 2019 was
Loss from operations for the second quarter of 2019 was
Adjusted EBITDA was positive
2019 Financial Guidance
Management is updating revenue guidance for 2019 to a range of
Conference Call
About
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
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ATRICURE, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In Thousands, Except Per Share Amounts) |
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(Unaudited) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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United States Revenue: |
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Open ablation |
$ |
20,561 |
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|
$ |
18,073 |
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|
$ |
39,557 |
|
|
$ |
35,652 |
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Minimally invasive ablation |
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9,092 |
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9,114 |
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16,854 |
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|
17,727 |
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Appendage management |
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16,498 |
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|
13,101 |
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|
32,168 |
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|
24,898 |
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Total ablation and appendage management |
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46,151 |
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|
40,288 |
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|
88,579 |
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|
78,277 |
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Valve tools |
|
1,014 |
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|
546 |
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1,590 |
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|
993 |
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Total United States |
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47,165 |
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40,834 |
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90,169 |
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79,270 |
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International Revenue: |
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Open ablation |
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6,792 |
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5,836 |
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|
13,092 |
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|
10,745 |
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Minimally invasive ablation |
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1,935 |
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2,660 |
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4,064 |
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|
4,452 |
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Appendage management |
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2,977 |
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2,424 |
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5,431 |
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4,222 |
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Total ablation and appendage management |
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11,704 |
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10,920 |
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22,587 |
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19,419 |
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Valve tools |
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37 |
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48 |
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|
116 |
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|
107 |
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Total international |
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11,741 |
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10,968 |
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22,703 |
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19,526 |
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Total revenue |
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58,906 |
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51,802 |
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112,872 |
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98,796 |
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Cost of revenue |
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15,013 |
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13,723 |
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29,108 |
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26,214 |
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Gross profit |
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43,893 |
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38,079 |
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83,764 |
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72,582 |
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Operating expenses: |
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Research and development expenses |
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9,804 |
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8,655 |
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17,980 |
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17,712 |
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Selling, general and administrative expenses |
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37,928 |
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28,466 |
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74,943 |
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63,342 |
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Total operating expenses |
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47,732 |
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37,121 |
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|
92,923 |
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|
81,054 |
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Income (loss) from operations |
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(3,839 |
) |
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|
958 |
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(9,159 |
) |
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(8,472 |
) |
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Other expense, net |
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(252 |
) |
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(1,248 |
) |
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(501 |
) |
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(1,904 |
) |
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Loss before income tax expense |
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(4,091 |
) |
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(290 |
) |
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(9,660 |
) |
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(10,376 |
) |
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Income tax expense |
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10 |
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48 |
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|
76 |
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|
96 |
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Net loss |
$ |
(4,101 |
) |
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$ |
(338 |
) |
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$ |
(9,736 |
) |
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$ |
(10,472 |
) |
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Basic and diluted net loss per share |
$ |
(0.11 |
) |
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$ |
(0.01 |
) |
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$ |
(0.26 |
) |
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$ |
(0.32 |
) |
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Weighted average shares used in computing net loss per share: |
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Basic and diluted |
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37,334 |
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33,252 |
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37,156 |
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33,117 |
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ATRICURE, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In Thousands) |
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(Unaudited) |
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June 30, |
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December 31, |
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2019 |
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2018 |
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Assets |
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Current assets: |
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Cash, cash equivalents, and short-term investments |
$ |
90,841 |
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$ |
124,402 |
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Accounts receivable, net |
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27,955 |
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25,195 |
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Inventories |
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24,432 |
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22,484 |
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Prepaid and other current assets |
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3,297 |
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2,592 |
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Total current assets |
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146,525 |
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174,673 |
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Property and equipment, net |
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28,095 |
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27,080 |
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Operating lease right-of-use assets |
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1,624 |
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— |
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Long-term investments |
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12,860 |
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— |
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Goodwill and intangible assets, net |
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153,543 |
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154,511 |
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Other noncurrent assets |
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473 |
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|
495 |
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Total assets |
$ |
343,120 |
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$ |
356,759 |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ |
32,477 |
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$ |
35,499 |
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Other current liabilities and current maturities of debt and leases |
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6,955 |
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|
4,717 |
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Total current liabilities |
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39,432 |
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|
40,216 |
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Finance lease liabilities |
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11,834 |
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|
12,172 |
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Long-term debt |
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33,886 |
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|
35,571 |
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Operating lease liabilities |
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1,150 |
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|
— |
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Other noncurrent liabilities |
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15,270 |
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|
19,419 |
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Total liabilities |
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101,572 |
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|
107,378 |
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Stockholders' equity: |
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Common stock |
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39 |
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|
39 |
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Additional paid-in capital |
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498,402 |
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|
496,544 |
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Accumulated other comprehensive loss |
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(154 |
) |
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|
(199 |
) |
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Accumulated deficit |
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(256,739 |
) |
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|
(247,003 |
) |
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Total stockholders' equity |
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241,548 |
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|
249,381 |
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Total liabilities and stockholders' equity |
$ |
343,120 |
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$ |
356,759 |
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ATRICURE, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In Thousands) |
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(Unaudited) |
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Six Months Ended June 30, |
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2019 |
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2018 |
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Cash flows from operating activities: |
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Net loss |
$ |
(9,736 |
) |
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$ |
(10,472 |
) |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Share-based compensation expense |
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8,529 |
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|
7,424 |
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Depreciation and amortization of intangible assets |
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4,590 |
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|
|
4,403 |
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Amortization of deferred financing costs |
|
109 |
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|
217 |
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Non-cash lease expense |
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234 |
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|
— |
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Loss on disposal of property and equipment |
|
332 |
|
|
|
97 |
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Realized loss from foreign exchange on intercompany transactions |
|
102 |
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|
56 |
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|
Accretion of investments |
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(735 |
) |
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|
(56 |
) |
|
Change in allowance for doubtful accounts |
|
68 |
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|
|
58 |
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Change in fair value of contingent consideration |
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(3,872 |
) |
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|
(5,916 |
) |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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(2,859 |
) |
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|
(1,946 |
) |
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Inventories |
|
(1,966 |
) |
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|
703 |
|
|
Other current assets |
|
(710 |
) |
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|
(877 |
) |
|
Accounts payable and accrued liabilities |
|
(3,438 |
) |
|
|
(4,129 |
) |
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Other noncurrent assets and liabilities |
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(340 |
) |
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|
69 |
|
|
Net cash used in operating activities |
|
(9,692 |
) |
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|
(10,369 |
) |
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Cash flows from investing activities: |
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Purchases of available-for-sale securities |
|
(31,627 |
) |
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|
(23,510 |
) |
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Sales and maturities of available-for-sale securities |
|
46,162 |
|
|
|
13,000 |
|
|
Purchases of property and equipment |
|
(4,456 |
) |
|
|
(3,473 |
) |
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Proceeds from sale of property and equipment |
|
8 |
|
|
|
6 |
|
|
Net cash provided by (used in) investing activities |
|
10,087 |
|
|
|
(13,977 |
) |
|
Cash flows from financing activities: |
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|
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Proceeds from debt borrowings |
|
— |
|
|
|
17,381 |
|
|
Payments on debt and finance leases |
|
(303 |
) |
|
|
(1,469 |
) |
|
Payment of debt fees |
|
(300 |
) |
|
|
(1,136 |
) |
|
Proceeds from stock option exercises and employee stock purchase plan |
|
2,024 |
|
|
|
5,425 |
|
|
Shares repurchased for payment of taxes on stock awards |
|
(8,695 |
) |
|
|
(3,724 |
) |
|
Net cash (used in) provided by financing activities |
|
(7,274 |
) |
|
|
16,477 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(105 |
) |
|
|
(74 |
) |
|
Net decrease in cash and cash equivalents |
|
(6,984 |
) |
|
|
(7,943 |
) |
|
Cash and cash equivalents - beginning of period |
|
32,231 |
|
|
|
21,809 |
|
|
Cash and cash equivalents - end of period |
$ |
25,247 |
|
|
$ |
13,866 |
|
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|
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Reconciliation of Non-GAAP Adjusted Income (Loss) (Adjusted EBITDA) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2019 |
|
2018 |
|
2019 |
|
2018 |
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|
Net loss, as reported |
$ |
(4,101 |
) |
|
$ |
(338 |
) |
|
$ |
(9,736 |
) |
|
$ |
(10,472 |
) |
|
Income tax expense |
|
10 |
|
|
|
48 |
|
|
|
76 |
|
|
|
96 |
|
|
Other expense, net |
|
252 |
|
|
|
1,248 |
|
|
|
501 |
|
|
|
1,904 |
|
|
Depreciation and amortization expense |
|
2,362 |
|
|
|
2,204 |
|
|
|
4,590 |
|
|
|
4,403 |
|
|
Share-based compensation expense |
|
4,375 |
|
|
|
3,534 |
|
|
|
8,529 |
|
|
|
7,424 |
|
|
Contingent consideration adjustment |
|
(2,205 |
) |
|
|
(5,916 |
) |
|
|
(3,872 |
) |
|
|
(5,916 |
) |
|
Non-GAAP adjusted income (loss) (adjusted EBITDA) |
$ |
693 |
|
|
$ |
780 |
|
|
$ |
88 |
|
|
$ |
(2,561 |
) |
|
|
|
|
|
|
|
|
|
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|
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|
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Reconciliation of Non-GAAP Adjusted Loss Per Share |
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|
||||
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
Net loss, as reported |
$ |
(4,101 |
) |
|
$ |
(338 |
) |
|
$ |
(9,736 |
) |
|
$ |
(10,472 |
) |
|
Contingent consideration adjustment |
|
(2,205 |
) |
|
|
(5,916 |
) |
|
|
(3,872 |
) |
|
|
(5,916 |
) |
|
Net loss excluding contingent consideration adjustment |
$ |
(6,306 |
) |
|
$ |
(6,254 |
) |
|
$ |
(13,608 |
) |
|
$ |
(16,388 |
) |
|
Basic and diluted adjusted net loss per share |
$ |
(0.17 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.49 |
) |
|
Weighted average shares used in computing adjusted net loss per share |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic and diluted |
|
37,334 |
|
|
|
33,252 |
|
|
|
37,156 |
|
|
|
33,117 |
|
|
|
|
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20190730005851/en/
Source:
Andy Wade
AtriCure, Inc.
Senior Vice President and Chief Financial Officer
(513) 755-4564
awade@atricure.com
Lynn Pieper Lewis
Gilmartin Group
Investor Relations
(415) 937-5402
lynn@gilmartinir.com
