UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 26, 2018
ATRICURE, INC.
(Exact name of registrant as specified in charter)
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Delaware (State or other jurisdiction of incorporation) |
000-51470 (Commission File Number) |
34-1940305 (IRS Employer Identification No.) |
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7555 Innovation Way Mason, OH (Address of principal executive offices) |
45040 (Zip Code) |
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Registrant's telephone number, including area code: (513) 755-4100
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02.Results of Operations and Financial Condition.
On April 26, 2018, AtriCure, Inc. issued a press release regarding its financial results for the first quarter ended March 31, 2018. The Company will hold a conference call on April 26, 2018 at 4:30 p.m. Eastern Time to discuss the financial results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
The information in this Item 2.02 of Form 8-K and in the press release attached as Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Form 8-K and Exhibit 99.1 shall not be incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in any such filing or document.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ATRICURE, INC. |
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Dated: |
April 26, 2018 |
By: |
/s/ M. Andrew Wade |
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M. Andrew Wade |
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Senior Vice President and Chief Financial Officer |
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Exhibit 99.1 |
April 26, 2018
AtriCure Reports First Quarter 2018 Financial Results
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Worldwide revenue of $47.0 million – an increase of 13.9% year over year |
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U.S. revenue of $38.4 million – an increase of 15.5% year over year |
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International revenue of $8.6 million – an increase of 6.9% year over year |
MASON, Ohio, April 26, 2018 – AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, today announced first quarter 2018 financial results.
“We are pleased with our first quarter performance and meaningful progress toward completing enrollment in CONVERGE,” said Mike Carrel, President and Chief Executive Officer of AtriCure. “We remain well-positioned to help treat patients suffering from atrial fibrillation through our continued investments in an innovative product pipeline, clinical data, and physician education and training.”
First Quarter 2018 Financial Results
Revenue for the first quarter of 2018 was $47.0 million, an increase of $5.7 million or 13.9% (12.0% on a constant currency basis), compared to first quarter 2017 revenue. U.S. revenue increased 15.5% to $38.4 million, driven by increased sales of ablation-related open-heart products and appendage management products. International revenue was $8.6 million, an increase of $0.6 million or 6.9% (a decrease of 2.5% on a constant currency basis), compared to first quarter 2017 revenue, driven primarily by softness in China and certain European markets.
Gross profit for the first quarter of 2018 was $34.5 million compared to $30.0 million for the first quarter of 2017. Gross margin for the first quarter of 2018 increased to 73.4% compared to 72.7% in the first quarter of 2017, driven primarily by higher concentration of revenue in the U.S.
Operating expenses for the first quarter of 2018 increased 10.8%, or $4.3 million, compared to the first quarter of 2017. The increase in operating expenses was driven primarily by increases in selling expenses and legal fees related to the Civil Investigative Demand we received from the U.S. Department of Justice in December 2017.
Loss from operations for the first quarter of 2018 was $9.4 million, compared to $9.6 million for the first quarter of 2017. Net loss per share was $0.31 for the first quarter of 2018 compared to $0.32 for the first quarter of 2017.
Adjusted EBITDA, a non-GAAP measure, was a loss of $3.3 million for the first quarter of 2018 and $3.7 million for the first quarter of 2017 (see reconciliation of GAAP results to non-GAAP results in the table accompanying this release).
2018 Financial Guidance
Management reiterates 2018 revenue guidance of approximately $190 million to $196 million, with positive full-year adjusted EBITDA, a non-GAAP measure.
Conference Call
AtriCure will host a conference call at 4:30 p.m. Eastern Time on Thursday, April 26, 2018 to discuss its first quarter 2018 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 1288126. 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, with more than 125,000 implanted to date. 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 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.
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.
CONTACTS:
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
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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 March 31, |
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2018 |
2017 |
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United States Revenue: |
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Open-heart ablation |
$ |
17,579 |
$ |
15,705 | |
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Minimally invasive ablation |
8,613 | 8,282 | |||
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Appendage management |
11,797 | 8,702 | |||
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Total ablation and appendage management |
37,989 | 32,689 | |||
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Valve tools |
447 | 579 | |||
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Total United States |
38,436 | 33,268 | |||
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International Revenue: |
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Open-heart ablation |
4,909 | 4,590 | |||
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Minimally invasive ablation |
1,792 | 1,958 | |||
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Appendage management |
1,798 | 1,395 | |||
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Total ablation and appendage management |
8,499 | 7,943 | |||
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Valve tools |
59 | 62 | |||
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Total international |
8,558 | 8,005 | |||
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Total revenue |
46,994 | 41,273 | |||
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Cost of revenue |
12,491 | 11,265 | |||
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Gross profit |
34,503 | 30,008 | |||
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Operating expenses: |
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Research and development expenses |
9,057 | 9,550 | |||
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Selling, general and administrative expenses |
34,876 | 30,100 | |||
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Total operating expenses |
43,933 | 39,650 | |||
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Loss from operations |
(9,430) | (9,642) | |||
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Other expense, net |
(656) | (518) | |||
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Loss before income tax expense |
(10,086) | (10,160) | |||
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Income tax expense |
48 | 23 | |||
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Net loss |
$ |
(10,134) |
$ |
(10,183) | |
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Basic and diluted net loss per share |
$ |
(0.31) |
$ |
(0.32) | |
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Weighted average shares used in computing net loss per share: |
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Basic and diluted |
32,926 | 32,020 | |||
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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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March 31, |
December 31, |
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2018 |
2017 |
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Assets |
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Current assets: |
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Cash, cash equivalents, and short-term investments |
$ |
36,038 |
$ |
34,451 | |
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Accounts receivable, net |
22,325 | 23,083 | |||
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Inventories |
22,571 | 22,451 | |||
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Other current assets |
3,835 | 2,273 | |||
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Total current assets |
84,769 | 82,258 | |||
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Property and equipment, net |
28,549 | 28,749 | |||
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Goodwill and intangible assets, net |
155,679 | 156,021 | |||
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Other noncurrent assets |
705 | 676 | |||
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Total assets |
$ |
269,702 |
$ |
267,704 | |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ |
26,297 |
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31,342 | |
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Other current liabilities and current maturities of capital leases |
575 | 561 | |||
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Total current liabilities |
26,872 | 31,903 | |||
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Capital leases |
12,626 | 12,761 | |||
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Long-term debt |
39,313 | 24,100 | |||
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Other noncurrent liabilities |
37,768 | 37,774 | |||
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Total liabilities |
116,579 | 106,538 | |||
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Stockholders' equity: |
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Common stock |
35 | 35 | |||
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Additional paid-in capital |
388,976 | 386,963 | |||
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Accumulated other comprehensive income |
112 | 34 | |||
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Accumulated deficit |
(236,000) | (225,866) | |||
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Total stockholders' equity |
153,123 | 161,166 | |||
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Total liabilities and stockholders' equity |
$ |
269,702 |
$ |
267,704 | |
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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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Three Months Ended March 31, |
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2018 |
2017 |
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Cash flows from operating activities: |
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Net loss |
$ |
(10,134) |
$ |
(10,183) | |
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Adjustments to reconcile net loss to net cash used in |
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Share-based compensation expense |
3,890 | 3,628 | |||
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Depreciation and amortization of intangible assets |
2,199 | 2,304 | |||
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Amortization of deferred financing costs |
93 | 66 | |||
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(Gain) loss on disposal of property and equipment |
(5) | 62 | |||
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Realized (gain) loss from foreign exchange on intercompany transactions |
(82) | 21 | |||
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(Accretion) amortization of investments |
(15) | 38 | |||
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Change in allowance for doubtful accounts |
51 | (136) | |||
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Changes in operating assets and liabilities |
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Accounts receivable |
783 | (397) | |||
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Inventories |
(43) | (1,145) | |||
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Other current assets |
(1,540) | (1,175) | |||
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Accounts payable and accrued liabilities |
(4,652) | (2,474) | |||
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Other noncurrent assets and liabilities |
21 | (155) | |||
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Net cash used in operating activities |
(9,434) | (9,546) | |||
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Cash flows from investing activities: |
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Purchases of available-for-sale securities |
(10,359) | (3,096) | |||
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Sales and maturities of available-for-sale securities |
8,200 | 10,550 | |||
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Purchases of property and equipment |
(2,086) | (1,728) | |||
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Net cash (used in) provided by investing activities |
(4,245) | 5,726 | |||
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Cash flows from financing activities: |
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Proceeds from debt borrowings |
17,381 |
— |
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Payments on debt and capital leases |
(1,326) | (120) | |||
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Payment of debt fees |
(1,114) |
— |
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Proceeds from stock option exercises |
1,787 | 631 | |||
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Shares repurchased for payment of taxes on stock awards |
(3,665) | (1,735) | |||
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Net cash provided by (used in) financing activities |
13,063 | (1,224) | |||
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Effect of exchange rate changes on cash and cash equivalents |
36 | (10) | |||
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Net decrease in cash and cash equivalents |
(580) | (5,054) | |||
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Cash and cash equivalents - beginning of period |
21,809 | 24,208 | |||
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Cash and cash equivalents - end of period |
$ |
21,229 |
$ |
19,154 | |
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Supplemental cash flow information: |
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Cash paid for interest |
$ |
416 |
$ |
488 | |
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Cash paid for income taxes |
— |
— |
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Non-cash investing and financing activities: |
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Accrued purchases of property and equipment |
178 | 559 | |||
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Assets acquired through capital lease |
27 |
— |
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Capital lease asset early termination |
(9) |
— |
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ATRICURE, INC. AND SUBSIDIARIES |
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RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS |
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(In Thousands) |
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(Unaudited) |
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Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA) |
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Three Months Ended March 31, |
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2018 |
2017 |
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Net loss, as reported |
$ |
(10,134) |
$ |
(10,183) | |
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Income tax (benefit) expense |
48 | 23 | |||
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Other expense, net (a) |
656 | 518 | |||
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Depreciation and amortization expense |
2,199 | 2,304 | |||
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Share-based compensation expense |
3,890 | 3,628 | |||
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Non-GAAP adjusted loss (adjusted EBITDA) |
$ |
(3,341) |
$ |
(3,710) | |
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Three Months Ended March 31, |
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2018 |
2017 |
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(a) Other includes: |
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Net interest expense |
$ |
744 |
$ |
500 | |
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(Gain) loss due to exchange rate fluctuation |
(88) | 18 | |||
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Other expense, net |
$ |
656 |
$ |
518 | |
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