Full Press Release Details
AtriCure Reports Third
Quarter 2020 Financial Results
MASON, Ohio, November 5, 2020 AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and
left atrial appendage (LAA) management, today announced third quarter 2020 financial results.
We are pleased with our third quarter performance and
the improving trajectory of our business, which reflect the commitment of our team and underlying demand in our core markets, said Michael Carrel, President and Chief Executive Officer of AtriCure. We are continuing to make significant
progress on our strategic initiatives and are on the forefront of meaningfully expanding our addressable market opportunity.
2020 Financial Results
Revenue for the third quarter of 2020 was $54.8 million, a decrease of $1.9 million or 3.3% (a decrease of 3.9%
on a constant currency basis), compared to third quarter 2019 revenue, due to the global decline in surgical procedures as a result of the COVID-19 pandemic. U.S. revenue decreased 3.1% to $44.7 million,
and international revenue decreased 4.1% to $10.1 million, (a decrease of 7.2% on a constant currency basis), compared to third quarter 2019 revenue.
Gross profit for the third quarter of 2020 was $40.3 million compared to $41.8 million for the third quarter of 2019. Gross margin for the third
quarter of 2020 remained relatively consistent at 73.7% compared to 73.8% in the third quarter of 2019, reflecting normal manufacturing operations during both periods.
Loss from operations for the third quarter of 2020 was $4.0 million, compared to $8.6 million for the third quarter of 2019. Net loss per share was
$0.11 for the third quarter of 2020 compared to $0.25 for the third quarter of 2019. Adjusted EBITDA was a positive $4.2 million for the third quarter of 2020 compared to a loss of $2.2 million for the third quarter of 2019. Adjusted loss
per share for the third quarter of 2020 was $0.11 compared to an adjusted loss per share of $0.33 for the third quarter of 2019.
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
2020 Financial Guidance
expects revenue to be $56 million to $60 million for the fourth quarter of 2020 and $205 million to $209 million for the full year 2020. Full year adjusted EBITDA loss is expected to be approximately $10 million.
Incrementally higher or lower impact from the on-going global pandemic could cause forecasts for fourth quarter and
full year 2020 to differ materially than these projections.
AtriCure will host a conference call at 4:30 p.m. Eastern Time on Thursday, November 5, 2020 to discuss its third 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 8584906. 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.
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
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 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 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 investors.
Adjusted EBITDA is calculated as Net loss before other income/expense
(including interest), income tax expense (benefit), 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 appears in the table captioned
Reconciliation of Non-GAAP Adjusted Income (Loss) (Adjusted EBITDA) later in this release.
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 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.
Chief Financial Officer
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| United States Revenue: | ||||||||||||||||
| Open ablation | $ | 19,911 | $ | 19,754 | $ | 54,679 | $ | 59,311 | ||||||||
| Minimally invasive ablation | 6,979 | 9,006 | 18,295 | 25,860 | ||||||||||||
| Appendage management | 17,430 | 16,907 | 47,870 | 49,075 | ||||||||||||
| Total ablation and appendage management | 44,320 | 45,667 | 120,844 | 134,246 | ||||||||||||
| Valve tools | 381 | 456 | 994 | 2,046 | ||||||||||||
| Total United States | 44,701 | 46,123 | 121,838 | 136,292 | ||||||||||||
| International Revenue: | ||||||||||||||||
| Open ablation | 4,907 | 5,850 | 13,766 | 18,942 | ||||||||||||
| Minimally invasive ablation | 1,692 | 2,058 | 4,346 | 6,122 | ||||||||||||
| Appendage management | 3,445 | 2,532 | 8,778 | 7,963 | ||||||||||||
| Total ablation and appendage management | 10,044 | 10,440 | 26,890 | 33,027 | ||||||||||||
| Valve tools | 12 | 51 | 78 | 167 | ||||||||||||
| Total international | 10,056 | 10,491 | 26,968 | 33,194 | ||||||||||||
| Total revenue | 54,757 | 56,614 | 148,806 | 169,486 | ||||||||||||
| Cost of revenue | 14,423 | 14,817 | 41,934 | 43,925 | ||||||||||||
| Gross profit | 40,334 | 41,797 | 106,872 | 125,561 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | 10,576 | 10,154 | 32,199 | 28,134 | ||||||||||||
| Selling, general and administrative expenses | 33,749 | 40,280 | 101,403 | 115,223 | ||||||||||||
| Total operating expenses | 44,325 | 50,434 | 133,602 | 143,357 | ||||||||||||
| Loss from operations | (3,991 | ) | (8,637 | ) | (26,730 | ) | (17,796 | ) | ||||||||
| Other expense, net | (962 | ) | (650 | ) | (2,847 | ) | (1,151 | ) | ||||||||
| Loss before income tax expense | (4,953 | ) | (9,287 | ) | (29,577 | ) | (18,947 | ) | ||||||||
| Income tax expense (benefit) | (4 | ) | 75 | 16 | 151 | |||||||||||
| Net loss | $ | (4,949 | ) | $ | (9,362 | ) | $ | (29,593 | ) | $ | (19,098 | ) | ||||
| Basic and diluted net loss per share | $ | (0.11 | ) | $ | (0.25 | ) | $ | (0.71 | ) | $ | (0.51 | ) | ||||
| Weighted average shares used in computing net loss per share: | ||||||||||||||||
| Basic and diluted | 44,012 | 37,842 | 41,442 | 37,387 |
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2020 | December 31, 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash, cash equivalents, and short-term investments | $ | 233,069 | $ | 81,801 | ||||
| Accounts receivable, net | 25,448 | 28,046 | ||||||
| Inventories | 34,326 | 29,414 | ||||||
| Prepaid and other current assets | 3,369 | 3,899 | ||||||
| Total current assets | 296,212 | 143,160 | ||||||
| Property and equipment, net | 29,089 | 32,646 | ||||||
| Operating lease right-of-use assets | 2,363 | 4,032 | ||||||
| Long-term investments | 16,516 | 12,675 | ||||||
| Goodwill and intangible assets, net | 363,218 | 364,662 | ||||||
| Other noncurrent assets | 399 | 705 | ||||||
| Total assets | $ | 707,797 | $ | 557,880 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 32,684 | $ | 47,698 | ||||
| Other current liabilities and current maturities of debt and leases | 12,070 | 2,218 | ||||||
| Total current liabilities | 44,754 | 49,916 | ||||||
| Long-term debt | 49,985 | 59,634 | ||||||
| Finance lease liabilities | 11,172 | 11,774 | ||||||
| Operating lease liabilities | 1,324 | 2,796 | ||||||
| Contingent consideration and other noncurrent liabilities | 183,030 | 186,417 | ||||||
| Total liabilities | 290,265 | 310,537 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 45 | 40 | ||||||
| Additional paid-in capital | 729,220 | 529,658 | ||||||
| Accumulated other comprehensive income (loss) | 57 | (158 | ) | |||||
| Accumulated deficit | (311,790 | ) | (282,197 | ) | ||||
| Total stockholders equity | 417,532 | 247,343 | ||||||
| Total liabilities and stockholders equity | $ | 707,797 | $ | 557,880 |
ATRICURE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
| Reconciliation of Non-GAAP Adjusted Income (Loss) (Adjusted EBITDA) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net loss, as reported | $ | (4,949 | ) | $ | (9,362 | ) | $ | (29,593 | ) | $ | (19,098 | ) | ||||
| Income tax expense (benefit) | (4 | ) | 75 | 16 | 151 | |||||||||||
| Other expense, net | 962 | 650 | 2,847 | 1,151 | ||||||||||||
| Depreciation and amortization expense | 2,479 | 2,393 | 7,381 | 6,983 | ||||||||||||
| Share-based compensation expense | 5,549 | 4,287 | 16,126 | 12,816 | ||||||||||||
| Contingent consideration adjustment | 192 | (3,062 | ) | (4,854 | ) | (6,934 | ) | |||||||||
| Acquisition costs | 2,819 | 138 | 3,645 | |||||||||||||
| Non-GAAP adjusted income (loss) (adjusted EBITDA) | $ | 4,229 | $ | (2,200 | ) | $ | (7,939 | ) | $ | (1,286 | ) | |||||
| Reconciliation of Non-GAAP Adjusted Loss Per Share | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net loss, as reported | $ | (4,949 | ) | $ | (9,362 | ) | $ | (29,593 | ) | $ | (19,098 | ) | ||||
| Contingent consideration adjustment | 192 | (3,062 | ) | (4,854 | ) | (6,934 | ) | |||||||||
| Net loss excluding contingent consideration adjustment | $ | (4,757 | ) | $ | (12,424 | ) | $ | (34,447 | ) | $ | (26,032 | ) | ||||
| Basic and diluted adjusted net loss per share | $ | (0.11 | ) | $ | (0.33 | ) | $ | (0.83 | ) | $ | (0.70 | ) | ||||
| Weighted average shares used in computing adjusted net loss per share | ||||||||||||||||
| Basic and diluted | 44,012 | 37,842 | 41,442 | 37,387 |