EX-99.1 2 d86812dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

For immediate release

November 5, 2020

AtriCure Reports Third Quarter 2020 Financial Results

 

  •  

Worldwide revenue of $54.8 million – a decrease of 3.3% year over year

 

  •  

U.S. revenue of $44.7 million – a decrease of 3.1% year over year

 

  •  

International revenue of $10.1 million – a decrease of 4.1% year over year

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.”

Third Quarter 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.

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

Management 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.

Conference Call

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.

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 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.

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 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.

CONTACTS:

Angie Wirick

AtriCure, Inc.

Chief Financial Officer

(513) 755-5334

awirick@atricure.com

Lynn Pieper Lewis

Gilmartin Group

Investor Relations

(415) 937-5402

lynn@gilmartinir.com

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

     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

(In Thousands)

(Unaudited)

 

     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

(In Thousands)

(Unaudited)

 

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