News Release

<< Back
July 30, 2019 at 4:02 PM EDT

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

MASON, Ohio--(BUSINESS WIRE)--Jul. 30, 2019-- AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, today announced second quarter 2019 financial results.

“Our second quarter results demonstrate strength across the business,” said Mike Carrel, President and Chief Executive Officer of AtriCure. “We remain confident that our investments in innovation, clinical science and physician education will enable us to continue to execute on our strategy of expanding our reach to positively impact patient outcomes worldwide.”

Second Quarter 2019 Financial Results

Revenue for the second quarter of 2019 was $58.9 million, an increase of $7.1 million or 13.7% (14.5% on a constant currency basis), compared to second quarter 2018 revenue. U.S. revenue was $47.2 million, an increase of $6.3 million or 15.5%, compared to second quarter 2018 revenue. U.S. revenue growth was driven by increased sales of open ablation and appendage management products. International revenue increased 7.0% (an increase of 10.8% on a constant currency basis) to $11.7 million, as a result of increased sales of open ablation and appendage management products. A discussion of non-GAAP financial measures and reconciliations regarding non-GAAP financial measures to their respective GAAP financial measures are provided later in this release.

Gross profit for the second quarter of 2019 was $43.9 million compared to $38.1 million for the second quarter of 2018. Gross margin for the second quarter of 2019 increased to 74.5% compared to 73.5% in the second quarter of 2018, driven primarily by improvements to operations and lower costs, partially offset by unfavorable product mix in international markets.

Loss from operations for the second quarter of 2019 was $3.8 million, compared to income of $1.0 million for the second quarter of 2018. Net loss per share was $0.11 for the second quarter of 2019 compared to a net loss per share of $0.01 for the second quarter of 2018.

Adjusted EBITDA was positive $0.7 million for the second quarter of 2019 compared to $0.8 million for the second quarter of 2018. Adjusted loss per share for the second quarter of 2019 was $0.17 compared to $0.19 for the second quarter of 2018. Adjusted EBITDA and adjusted loss per share are non-GAAP measures.

2019 Financial Guidance

Management is updating revenue guidance for 2019 to a range of $224 million to $228 million, corresponding to growth of 11% to 13% for the year. Adjusted EBITDA is now expected to be between $0 and $2 million.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, July 30, 2019 to discuss its second quarter 2019 financial results. The call may be accessed through an operator by calling (844) 884-9951 for domestic callers and (661) 378-9661 for international callers using conference ID number 6083869. A live audio webcast of the presentation may be accessed by visiting the Investors page of AtriCure’s corporate website at ir.atricure.com. 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 33 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 and only 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. 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. 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 the United States of America, or GAAP, AtriCure uses certain non-GAAP financial measures in this release as supplemental financial metrics.

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 may not be the same or calculated the same as those used 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.

 

 

 

 

 

 

 

 

 

 

 

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

United States Revenue:

 

 

 

 

 

 

 

 

 

 

 

Open ablation

$

20,561

 

 

$

18,073

 

 

$

39,557

 

 

$

35,652

 

Minimally invasive ablation

 

9,092

 

 

 

9,114

 

 

 

16,854

 

 

 

17,727

 

Appendage management

 

16,498

 

 

 

13,101

 

 

 

32,168

 

 

 

24,898

 

Total ablation and appendage management

 

46,151

 

 

 

40,288

 

 

 

88,579

 

 

 

78,277

 

Valve tools

 

1,014

 

 

 

546

 

 

 

1,590

 

 

 

993

 

Total United States

 

47,165

 

 

 

40,834

 

 

 

90,169

 

 

 

79,270

 

International Revenue:

 

 

 

 

 

 

 

 

 

 

 

Open ablation

 

6,792

 

 

 

5,836

 

 

 

13,092

 

 

 

10,745

 

Minimally invasive ablation

 

1,935

 

 

 

2,660

 

 

 

4,064

 

 

 

4,452

 

Appendage management

 

2,977

 

 

 

2,424

 

 

 

5,431

 

 

 

4,222

 

Total ablation and appendage management

 

11,704

 

 

 

10,920

 

 

 

22,587

 

 

 

19,419

 

Valve tools

 

37

 

 

 

48

 

 

 

116

 

 

 

107

 

Total international

 

11,741

 

 

 

10,968

 

 

 

22,703

 

 

 

19,526

 

Total revenue

 

58,906

 

 

 

51,802

 

 

 

112,872

 

 

 

98,796

 

Cost of revenue

 

15,013

 

 

 

13,723

 

 

 

29,108

 

 

 

26,214

 

Gross profit

 

43,893

 

 

 

38,079

 

 

 

83,764

 

 

 

72,582

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

9,804

 

 

 

8,655

 

 

 

17,980

 

 

 

17,712

 

Selling, general and administrative expenses

 

37,928

 

 

 

28,466

 

 

 

74,943

 

 

 

63,342

 

Total operating expenses

 

47,732

 

 

 

37,121

 

 

 

92,923

 

 

 

81,054

 

Income (loss) from operations

 

(3,839

)

 

 

958

 

 

 

(9,159

)

 

 

(8,472

)

Other expense, net

 

(252

)

 

 

(1,248

)

 

 

(501

)

 

 

(1,904

)

Loss before income tax expense

 

(4,091

)

 

 

(290

)

 

 

(9,660

)

 

 

(10,376

)

Income tax expense

 

10

 

 

 

48

 

 

 

76

 

 

 

96

 

Net loss

$

(4,101

)

 

$

(338

)

 

$

(9,736

)

 

$

(10,472

)

Basic and diluted net loss per share

$

(0.11

)

 

$

(0.01

)

 

$

(0.26

)

 

$

(0.32

)

Weighted average shares used in computing net loss per share:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

37,334

 

 

 

33,252

 

 

 

37,156

 

 

 

33,117

 

 

 

 

 

 

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2019

 

2018

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash, cash equivalents, and short-term investments

$

90,841

 

 

$

124,402

 

Accounts receivable, net

 

27,955

 

 

 

25,195

 

Inventories

 

24,432

 

 

 

22,484

 

Prepaid and other current assets

 

3,297

 

 

 

2,592

 

Total current assets

 

146,525

 

 

 

174,673

 

Property and equipment, net

 

28,095

 

 

 

27,080

 

Operating lease right-of-use assets

 

1,624

 

 

 

 

Long-term investments

 

12,860

 

 

 

 

Goodwill and intangible assets, net

 

153,543

 

 

 

154,511

 

Other noncurrent assets

 

473

 

 

 

495

 

Total assets

$

343,120

 

 

$

356,759

 

Liabilities and Stockholders' Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

$

32,477

 

 

$

35,499

 

Other current liabilities and current maturities of debt and leases

 

6,955

 

 

 

4,717

 

Total current liabilities

 

39,432

 

 

 

40,216

 

Finance lease liabilities

 

11,834

 

 

 

12,172

 

Long-term debt

 

33,886

 

 

 

35,571

 

Operating lease liabilities

 

1,150

 

 

 

 

Other noncurrent liabilities

 

15,270

 

 

 

19,419

 

Total liabilities

 

101,572

 

 

 

107,378

 

Stockholders' equity:

 

 

 

 

 

Common stock

 

39

 

 

 

39

 

Additional paid-in capital

 

498,402

 

 

 

496,544

 

Accumulated other comprehensive loss

 

(154

)

 

 

(199

)

Accumulated deficit

 

(256,739

)

 

 

(247,003

)

Total stockholders' equity

 

241,548

 

 

 

249,381

 

Total liabilities and stockholders' equity

$

343,120

 

 

$

356,759

 

 

 

 

 

 

 

 

 

 

 

 

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

Six Months Ended June 30,

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(9,736

)

 

$

(10,472

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Share-based compensation expense

 

8,529

 

 

 

7,424

 

Depreciation and amortization of intangible assets

 

4,590

 

 

 

4,403

 

Amortization of deferred financing costs

 

109

 

 

 

217

 

Non-cash lease expense

 

234

 

 

 

 

Loss on disposal of property and equipment

 

332

 

 

 

97

 

Realized loss from foreign exchange on intercompany transactions

 

102

 

 

 

56

 

Accretion of investments

 

(735

)

 

 

(56

)

Change in allowance for doubtful accounts

 

68

 

 

 

58

 

Change in fair value of contingent consideration

 

(3,872

)

 

 

(5,916

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(2,859

)

 

 

(1,946

)

Inventories

 

(1,966

)

 

 

703

 

Other current assets

 

(710

)

 

 

(877

)

Accounts payable and accrued liabilities

 

(3,438

)

 

 

(4,129

)

Other noncurrent assets and liabilities

 

(340

)

 

 

69

 

Net cash used in operating activities

 

(9,692

)

 

 

(10,369

)

Cash flows from investing activities:

 

 

 

 

 

Purchases of available-for-sale securities

 

(31,627

)

 

 

(23,510

)

Sales and maturities of available-for-sale securities

 

46,162

 

 

 

13,000

 

Purchases of property and equipment

 

(4,456

)

 

 

(3,473

)

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:

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

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

)

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Adjusted Loss Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: AtriCure, Inc.

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