Full Press Release Details
AtriCure Reports Third Quarter 2022 Financial Results
MASON, Ohio, November 1, 2022 - AtriCure, Inc. (Nasdaq ATRC), a leading innovator in surgical treatments and therapies for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management, today announced third quarter 2022 financial results.
"We are proud to share another quarter of strong commercial execution across our business, with excellent EnCompass traction following our launch earlier this year, increasing EPi-Sense revenue and accounts, and ongoing strength in our pain management business," said Michael Carrel, President and Chief Executive Officer of AtriCure. "Our broad and deep portfolio once again enabled outstanding results, and we continue to build our organization and pipeline of activity to deliver and expand on the substantial growth opportunities ahead."
Third Quarter 2022 Financial Results
Revenue for the third quarter 2022 was $83.2 million, an increase of 18.1% (an increase of 19.8% on a constant currency basis) over third quarter 2021 revenue. U.S. revenue was $69.8 million, an increase of $12.2 million or 21.3%, compared to third quarter 2021. U.S. revenue growth was driven by sales across key product lines, notably the cryoSPHERE probe for post-operative pain management, the AtriClip Flex V device and the new ENCOMPASS clamp. International revenue increased $0.5 million or 4.2% (an increase of 13.5% on a constant currency basis) to $13.4 million, driven primarily by growth in Australia and Japan. On a sequential basis, worldwide revenue for the third quarter 2022 decreased approximately 1.5% from second quarter 2022.
Gross profit for the third quarter 2022 was $61.7 million compared to $52.2 million for the third quarter 2021. Gross margin remained flat at 74.1% for both the third quarters 2022 and 2021 reflecting leverage of higher sales volumes offset by inflationary and supply chain cost pressures and shift in product mix to lower margin products. Loss from operations for the third quarter 2022 was $10.7 million, compared to income of $98.7 million for the third quarter 2021. Third quarter 2021 income from operations includes a $189.9 million credit to operating expenses for the change in fair value of contingent consideration, offset partially by an $82.3 million intangible asset impairment charge for the IPR D asset associated with the aMAZETM clinical trial. Basic and diluted net loss per share was $0.27 for the third quarter 2022, compared to $2.15 and $2.11, respectively, for the third quarter 2021.
Adjusted EBITDA was negative for the third quarter 2022 at $0.7 million, compared to positive $0.7 million for third quarter of 2021. Adjusted loss per share for the third quarter 2022 was $0.27 compared to $0.23 for the third quarter 2021.
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.
2022 Financial Guidance
Full year 2022 revenue is projected to be approximately $328 million to $333 million, reflecting growth of approximately 20% to 21% over full year 2021. Management now expects full year 2022 adjusted EBITDA to be a loss of approximately $4 million, and full year 2022 adjusted loss per share of approximately $1.10 to $1.12.
AtriCure will host a conference call at 4 30 p.m. Eastern Time on Tuesday, November 1, 2022 to discuss its third quarter 2022 financial results. To access the webcast, please visit the Investors page of AtriCure's corporate website at https ir.atricure.com events-and-presentations events. Participants are encouraged to register more than 15 minutes before the webcast start time. A replay of the presentation will be available for 90 days following the presentation.
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. This press release also includes forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially. 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 forward-looking-statements as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors. Except where otherwise noted, the information contained in this release and the related attachment is as of November 1, 2022. We assume no obligation to update any forward-looking statements contained in this release and the related attachment as a result of new information or future events or developments, except as may be required by law.
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, 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) income before other income expense (including interest), income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition costs, legal settlement costs, impairment of intangible asset and change in fair value of contingent consideration liabilities. Management believes 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 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. 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 Loss (Adjusted EBITDA)" later in this release.
Adjusted (loss) income per share is a non-GAAP measure which calculates the net (loss) income per share before non-cash adjustments in fair value of contingent consideration liabilities, impairment of intangible asset and legal settlement costs. A reconciliation of adjusted (loss) income 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
awirick atricure.com
Lynn Lewis or Marissa Bych
lynn gilmartinir.com
marissa gilmartinir.com
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, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| United States Revenue | |||||||||||||||
| Open ablation | $ | 21,569 | $ | 17,893 | $ | 62,613 | $ | 54,835 | |||||||
| Minimally invasive ablation | 10,077 | 9,990 | 28,846 | 28,077 | |||||||||||
| Pain management | 10,510 | 6,253 | 28,734 | 15,860 | |||||||||||
| Total ablation | 42,156 | 34,136 | 120,193 | 98,772 | |||||||||||
| Appendage management | 27,620 | 23,401 | 83,120 | 69,144 | |||||||||||
| Total United States | 69,776 | 57,537 | 203,313 | 167,916 | |||||||||||
| International Revenue | |||||||||||||||
| Open ablation | 6,680 | 6,690 | 19,385 | 16,650 | |||||||||||
| Minimally invasive ablation | 1,445 | 1,849 | 4,249 | 4,698 | |||||||||||
| Pain management | 121 | 11 | 375 | 22 | |||||||||||
| Total ablation | 8,246 | 8,550 | 24,009 | 21,370 | |||||||||||
| Appendage management | 5,224 | 4,373 | 15,029 | 11,825 | |||||||||||
| Total International | 13,470 | 12,923 | 39,038 | 33,195 | |||||||||||
| Total revenue | 83,246 | 70,460 | 242,351 | 201,111 | |||||||||||
| Cost of revenue | 21,533 | 18,234 | 61,524 | 50,267 | |||||||||||
| Gross profit | 61,713 | 52,226 | 180,827 | 150,844 | |||||||||||
| Operating expenses (benefit) | |||||||||||||||
| Research and development expenses | 15,169 | 11,284 | 43,589 | 34,698 | |||||||||||
| Selling, general and administrative expenses | 57,267 | 49,873 | 175,771 | 150,939 | |||||||||||
| Change in fair value of contingent consideration | - | (189,900) | - | (184,800) | |||||||||||
| Intangible asset impairment | - | 82,300 | - | 82,300 | |||||||||||
| Total operating expenses (benefit) | 72,436 | (46,443) | 219,360 | 83,137 | |||||||||||
| (Loss) income from operations | (10,723) | 98,669 | (38,533) | 67,707 | |||||||||||
| Other expense, net | (1,503) | (1,523) | (3,616) | (3,632) | |||||||||||
| (Loss) income before income tax expense | (12,226) | 97,146 | (42,149) | 64,075 | |||||||||||
| Income tax expense | 46 | 38 | 147 | 135 | |||||||||||
| Net (loss) income | $ | (12,272) | $ | 97,108 | $ | (42,296) | $ | 63,940 | |||||||
| Basic net (loss) income per share | $ | (0.27) | $ | 2.15 | $ | (0.93) | $ | 1.42 | |||||||
| Diluted net (loss) income per share | $ | (0.27) | $ | 2.11 | $ | (0.93) | $ | 1.39 | |||||||
| Weighted average shares used in computing net (loss) income per share | |||||||||||||||
| Basic | 45,823 | 45,258 | 45,682 | 44,977 | |||||||||||
| Diluted | 45,823 | 46,100 | 45,682 | 45,996 |
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2022 | December 31, 2021 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash, cash equivalents, and short-term investments | $ | 122,644 | $ | 119,090 | |||
| Accounts receivable, net | 41,466 | 33,021 | |||||
| Inventories | 43,953 | 38,964 | |||||
| Prepaid and other current assets | 4,222 | 5,001 | |||||
| Total current assets | 212,285 | 196,076 | |||||
| Long-term investments | 51,413 | 104,338 | |||||
| Property and equipment, net | 38,556 | 31,409 | |||||
| Operating lease right-of-use assets | 3,969 | 4,761 | |||||
| Goodwill and intangible assets, net | 274,859 | 277,773 | |||||
| Other noncurrent assets | 829 | 955 | |||||
| Total assets | $ | 581,911 | $ | 615,312 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 55,567 | $ | 54,689 | |||
| Current maturities of leases | 2,031 | 1,756 | |||||
| Total current liabilities | 57,598 | 56,445 | |||||
| Long-term debt | 60,061 | 59,741 | |||||
| Finance lease liabilities | 9,407 | 10,082 | |||||
| Operating lease liabilities | 3,314 | 4,068 | |||||
| Other noncurrent liabilities | 1,223 | 1,220 | |||||
| Total liabilities | 131,603 | 131,556 | |||||
| Stockholders' equity | |||||||
| Common stock | 46 | 46 | |||||
| Additional paid-in capital | 778,006 | 764,811 | |||||
| Accumulated other comprehensive loss | (5,295) | (948) | |||||
| Accumulated deficit | (322,449) | (280,153) | |||||
| Total stockholders' equity | 450,308 | 483,756 | |||||
| Total liabilities and stockholders' equity | $ | 581,911 | $ | 615,312 |
ATRICURE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
Reconciliation of Non-GAAP Adjusted (Loss) Income (Adjusted EBITDA)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net (loss) income, as reported | $ | (12,272) | $ | 97,108 | $ | (42,296) | $ | 63,940 | |||||||
| Income tax expense | 46 | 38 | 147 | 135 | |||||||||||
| Other expense, net | 1,503 | 1,523 | 3,616 | 3,632 | |||||||||||
| Depreciation and amortization expense | 2,987 | 2,828 | 8,791 | 7,608 | |||||||||||
| Share-based compensation expense | 7,001 | 6,794 | 21,574 | 20,539 | |||||||||||
| Change in fair value of contingent consideration | - | (189,900) | - | (184,800) | |||||||||||
| Intangible asset impairment | - | 82,300 | - | 82,300 | |||||||||||
| Non-GAAP adjusted (loss) income (adjusted EBITDA) | $ | (735) | $ | 691 | $ | (8,168) | $ | (6,646) |
Reconciliation of Non-GAAP Adjusted Loss Per Share
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net (loss) income, as reported | $ | (12,272) | $ | 97,108 | $ | (42,296) | $ | 63,940 | |||||||
| Change in fair value of contingent consideration | - | (189,900) | - | (184,800) | |||||||||||
| Intangible asset impairment | - | 82,300 | - | 82,300 | |||||||||||
| Non-GAAP adjusted net loss | $ | (12,272) | $ | (10,492) | $ | (42,296) | $ | (38,560) | |||||||
| Basic and diluted adjusted net loss per share | $ | (0.27) | $ | (0.23) | $ | (0.93) | $ | (0.86) | |||||||
| Weighted average shares used in computing adjusted net loss per share | |||||||||||||||
| Basic and diluted | 45,823 | 45,258 | 45,682 | 44,977 |