News Release

<< Back
July 28, 2020 at 4:01 PM EDT

AtriCure Reports Second Quarter 2020 Financial Results

  • Worldwide revenue of $40.8 million – a decrease of 30.7% year over year
  • U.S. revenue of $33.7 million – a decrease of 28.6% year over year
  • International revenue of $7.1 million – a decrease of 39.0% year over year

MASON, Ohio--(BUSINESS WIRE)--Jul. 28, 2020-- AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, today announced second quarter 2020 financial results.

“Amidst tremendous uncertainty in this challenging environment, our team at AtriCure has shown both resiliency and leadership without missing a beat. We are continuing to support our clinician partners in creative and evolving ways while maintaining our patient-first culture,” said Michael Carrel, President and Chief Executive Officer of AtriCure. “We are pleased by our second quarter results, which as expected, experienced a trough in April, then a rapid return in May, followed by steady volumes through June. In addition, we achieved significant milestones on our strategic initiatives with the release of the CONVERGE clinical trial data in May as well as further progress on aMAZE, continued success with Cryo Nerve Block, and ongoing training and education programs.”

Mr. Carrel continued, “While we are encouraged by the improvement in our business throughout the second quarter, we have begun to experience more regional variability and procedure slowdowns in July in response to the recent resurgence of COVID-19 cases and related restrictions. Despite the continued uncertainty, as we look forward, we are extremely confident about our future. We were able to strengthen our balance sheet this quarter, allowing us to continue to invest in our people as well as our pillars to ensure that AtriCure is well positioned for durable growth over the next several years with a robust pipeline of clinical and product innovation.”

Second Quarter 2020 Financial Results

Revenue for the second quarter of 2020 was $40.8 million, a decrease of $18.1 million or 30.7% (a decrease of 30.6% on a constant currency basis), compared to second quarter 2019 revenue. U.S. revenue decreased 28.6% to $33.7 million, and international revenue decreased 39.0% to $7.1 million, (a decrease of 38.5% on a constant currency basis), compared to second quarter 2019 revenue.

Gross profit for the second quarter of 2020 was $27.7 million compared to $43.9 million for the second quarter of 2019. Gross margin for the second quarter of 2020 decreased to 67.7% compared to 74.5% in the second quarter of 2019.

Loss from operations for the second quarter of 2020 was $7.3 million, compared to $3.8 million for the second quarter of 2019. Net loss per share was $0.20 for the second quarter of 2020 compared to $0.11 for the second quarter of 2019.

Adjusted EBITDA was a loss of $6.1 million for the second quarter of 2020 compared to positive $1.4 million for the second quarter of 2019. Adjusted loss per share for the second quarter of 2020 was $0.38 compared to an adjusted loss per share of $0.17 for the second quarter of 2019. 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.

2020 Financial Guidance

As previously reported, AtriCure is not providing 2020 financial guidance due to the continued uncertainties from the impact of COVID-19.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, July 28, 2020 to discuss its second quarter 2020 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 6338708. 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. 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 is calculated as Net loss before other income/expense (including interest), income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition costs, and change in fair value of contingent consideration liabilities. Management believes in order to properly understand the 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, and previously used adjusted EBITDA as a performance metric in the annual incentive plan. A reconciliation of adjusted EBITDA reported in this release to the most comparable GAAP measure for the respective periods can be found in the table captioned “Reconciliation of Non-GAAP Adjusted (Loss) Income (Adjusted EBITDA)” 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 contingent consideration liabilities. Management believes this metric provides a better measure of comparability of results between periods, as such adjustments can be significant and vary in value and are not reflective of our core business. 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 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 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,

 

2020

 

2019

 

2020

 

2019

United States Revenue:

 

 

 

 

 

 

 

 

 

 

 

Open ablation

$

15,550

 

 

$

20,561

 

 

$

34,768

 

 

$

39,557

 

Minimally invasive ablation

 

4,755

 

 

 

9,092

 

 

 

11,316

 

 

 

16,854

 

Appendage management

 

13,021

 

 

 

16,498

 

 

 

30,440

 

 

 

32,168

 

Total ablation and appendage management

 

33,326

 

 

 

46,151

 

 

 

76,524

 

 

 

88,579

 

Valve tools

 

338

 

 

 

1,014

 

 

 

613

 

 

 

1,590

 

Total United States

 

33,664

 

 

 

47,165

 

 

 

77,137

 

 

 

90,169

 

International Revenue:

 

 

 

 

 

 

 

 

 

 

 

Open ablation

 

3,744

 

 

 

6,792

 

 

 

8,859

 

 

 

13,092

 

Minimally invasive ablation

 

1,109

 

 

 

1,935

 

 

 

2,654

 

 

 

4,064

 

Appendage management

 

2,271

 

 

 

2,977

 

 

 

5,333

 

 

 

5,431

 

Total ablation and appendage management

 

7,124

 

 

 

11,704

 

 

 

16,846

 

 

 

22,587

 

Valve tools

 

36

 

 

 

37

 

 

 

66

 

 

 

116

 

Total international

 

7,160

 

 

 

11,741

 

 

 

16,912

 

 

 

22,703

 

Total revenue

 

40,824

 

 

 

58,906

 

 

 

94,049

 

 

 

112,872

 

Cost of revenue

 

13,170

 

 

 

15,013

 

 

 

27,511

 

 

 

29,108

 

Gross profit

 

27,654

 

 

 

43,893

 

 

 

66,538

 

 

 

83,764

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

10,036

 

 

 

9,804

 

 

 

21,623

 

 

 

17,980

 

Selling, general and administrative expenses

 

24,903

 

 

 

37,928

 

 

 

67,654

 

 

 

74,943

 

Total operating expenses

 

34,939

 

 

 

47,732

 

 

 

89,277

 

 

 

92,923

 

Loss from operations

 

(7,285

)

 

 

(3,839

)

 

 

(22,739

)

 

 

(9,159

)

Other expense, net

 

(939

)

 

 

(252

)

 

 

(1,885

)

 

 

(501

)

Loss before income tax expense

 

(8,224

)

 

 

(4,091

)

 

 

(24,624

)

 

 

(9,660

)

Income tax expense

 

12

 

 

 

10

 

 

 

20

 

 

 

76

 

Net loss

$

(8,236

)

 

$

(4,101

)

 

$

(24,644

)

 

$

(9,736

)

Basic and diluted net loss per share

$

(0.20

)

 

$

(0.11

)

 

$

(0.61

)

 

$

(0.26

)

Weighted average shares used in computing net loss per share:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

41,649

 

 

 

37,334

 

 

 

40,160

 

 

 

37,156

 

 

 

 

 

 

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2020

 

2019

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash, cash equivalents, and short-term investments

$

232,498

 

 

$

81,801

 

Accounts receivable, net

 

22,892

 

 

 

28,046

 

Inventories

 

32,809

 

 

 

29,414

 

Prepaid and other current assets

 

3,835

 

 

 

3,899

 

Total current assets

 

292,034

 

 

 

143,160

 

Property and equipment, net

 

30,236

 

 

 

32,646

 

Operating lease right-of-use assets

 

2,573

 

 

 

4,032

 

Long-term investments

 

15,339

 

 

 

12,675

 

Goodwill and intangible assets, net

 

363,685

 

 

 

364,662

 

Other noncurrent assets

 

366

 

 

 

705

 

Total assets

$

704,233

 

 

$

557,880

 

Liabilities and Stockholders' Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

$

30,351

 

 

$

47,698

 

Other current liabilities and current maturities of debt and leases

 

7,701

 

 

 

2,218

 

Total current liabilities

 

38,052

 

 

 

49,916

 

Long-term debt

 

54,154

 

 

 

59,634

 

Finance lease liabilities

 

11,377

 

 

 

11,774

 

Operating lease liabilities

 

1,581

 

 

 

2,796

 

Contingent consideration and other noncurrent liabilities

 

182,207

 

 

 

186,417

 

Total liabilities

 

287,371

 

 

 

310,537

 

Stockholders' equity:

 

 

 

 

 

Common stock

 

45

 

 

 

40

 

Additional paid-in capital

 

723,754

 

 

 

529,658

 

Accumulated other comprehensive loss

 

(96

)

 

 

(158

)

Accumulated deficit

 

(306,841

)

 

 

(282,197

)

Total stockholders' equity

 

416,862

 

 

 

247,343

 

Total liabilities and stockholders' equity

$

704,233

 

 

$

557,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Net loss, as reported

$

(8,236

)

 

$

(4,101

)

 

$

(24,644

)

 

$

(9,736

)

Income tax expense

 

12

 

 

 

10

 

 

 

20

 

 

 

76

 

Other expense, net

 

939

 

 

 

252

 

 

 

1,885

 

 

 

501

 

Depreciation and amortization expense

 

2,458

 

 

 

2,362

 

 

 

4,902

 

 

 

4,590

 

Share-based compensation expense

 

6,193

 

 

 

4,375

 

 

 

10,577

 

 

 

8,529

 

Contingent consideration adjustment

 

(7,504

)

 

 

(2,205

)

 

 

(5,046

)

 

 

(3,872

)

Acquisition costs

 

39

 

 

 

713

 

 

 

138

 

 

 

827

 

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

$

(6,099

)

 

$

1,406

 

 

$

(12,168

)

 

$

915

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Adjusted Loss Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Net loss, as reported

$

(8,236

)

 

$

(4,101

)

 

$

(24,644

)

 

$

(9,736

)

Contingent consideration adjustment

 

(7,504

)

 

 

(2,205

)

 

 

(5,046

)

 

 

(3,872

)

Net loss excluding contingent consideration adjustment

$

(15,740

)

 

$

(6,306

)

 

$

(29,690

)

 

$

(13,608

)

Basic and diluted adjusted net loss per share

$

(0.38

)

 

$

(0.17

)

 

$

(0.74

)

 

$

(0.37

)

Weighted average shares used in computing adjusted net loss per share

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

41,649

 

 

 

37,334

 

 

 

40,160

 

 

 

37,156

 

 

Andy Wade
AtriCure, Inc.
Chief Financial Officer
(513) 755-4564
awade@atricure.com

Lynn Pieper Lewis
Gilmartin Group
Investor Relations
(415) 937-5402
lynn@gilmartinir.com

Source: AtriCure, Inc.