- 2019 Worldwide revenue of $230.8 million – an increase of 14.5%
year over year
- 2019 U.S. revenue of $185.8 million – an increase of 14.6% year
over year
- 2019 International revenue of $45.0 million – an increase of
13.9% year over year
AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments
for atrial fibrillation (Afib) and left atrial appendage (LAA)
management, today announced fourth quarter 2019 and full year 2019
financial results.
“We achieved several critical accomplishments throughout 2019,
highlighted by the submission of our final module for the CONVERGE
IDE clinical trial to FDA coupled with enrollment completion in our
aMAZE IDE clinical trial in the fourth quarter of 2019,” said
Michael Carrel, President and Chief Executive Officer of AtriCure.
“Looking ahead to the next decade, we are confident that we have
built a strong foundation for success.”
Fourth Quarter 2019 Financial
Results
Revenue for the fourth quarter of 2019 was $61.3 million, an
increase of $8.4 million or 15.9% (16.4% on a constant currency
basis), compared to fourth quarter 2018 revenue. U.S. revenue was
$49.5 million, an increase of $6.4 million or 14.9%, compared to
fourth quarter 2018 revenue. International revenue increased 20.5%
(an increase of 22.8% on a constant currency basis) to $11.8
million. Both U.S. and international revenue growth were driven by
increased sales across appendage management and open ablation
product lines.
Gross profit for the fourth quarter of 2019 was $44.8 million
compared to $38.6 million for the fourth quarter of 2018. Gross
margin was 73.0% for both the fourth quarter of 2019 and 2018.
Operating expenses for the fourth quarter of 2019 increased
45.9%, or $18.9 million, compared to the fourth quarter of 2018.
The increase in operating expense was driven by a $6.1 million year
over year change in non-cash charges related to the contingent
consideration liability and approximately $5.8 million related to
the absorption of SentreHEART headcount, aMAZE clinical trial
expenses, and acquisition related costs. Other expense drivers
include increased personnel costs resulting from additional
headcount and variable compensation and research and development
project spend.
Loss from operations for the fourth quarter of 2019 was $15.3
million, compared to $2.6 million for the fourth quarter of 2018.
Net loss per share was $0.42 for the fourth quarter of 2019
compared to a net loss per share of $0.09 for the fourth quarter of
2018.
Adjusted EBITDA was a loss of $5.4 million for the fourth
quarter of 2019 compared to positive $0.3 million for the fourth
quarter of 2018. Adjusted loss per share for the fourth quarter of
2019 was $0.37 compared to $0.21 for the fourth quarter of 2018.
Adjusted EBITDA and adjusted loss per share are non-GAAP
measures.
2019 Financial Results
Revenue for 2019 was $230.8 million, an increase of $29.2
million or 14.5% (15.2% on a constant currency basis), compared to
2018 revenue. US revenue increased 14.6% to $185.8 million, driven
by growth across our open ablation products and appendage
management products. International revenue was $45.0 million, an
increase of $5.5 million or 13.9% (17.6% on a constant currency
basis). International revenue growth was driven by primarily by
increases in product sales in China, the United Kingdom, Germany,
Australia and Japan.
Gross profit for 2019 was $170.3 million compared to $147.1
million for 2018. Gross margin for 2019 increased to 73.8% compared
to 73.0% for 2018.
Loss from operations for 2019 was $33.1 million, compared to
$17.1 million for 2018. Adjusted EBITDA was a loss of $6.7 million
for 2019, compared to $2.7 million for 2018. Net loss per share was
$0.94 for 2019 compared to $0.62 for 2018. The adjusted loss per
share for 2019 was $1.07 compared to an adjusted loss per share of
$0.94 for 2018.
2020 Financial Guidance
Revenue is projected to be approximately $254 million to $261
million, reflecting growth of approximately 10% to 13% over full
year 2019. Adjusted EBITDA is projected to be a loss of
approximately $10 million for 2020. Adjusted net loss per share is
projected to be in the range of $1.14 to $1.24.
Conference Call
AtriCure will host a conference call at 4:30 p.m. Eastern Time
on Tuesday, February 18, 2020 to discuss its fourth quarter 2019
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 1287627. 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. 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, 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. Due to the nonrecurring nature of
acquisition costs, the Company has modified the calculation of
adjusted EBITDA to exclude acquisition costs. Acquisition costs are
expenses incurred to effect a business combination and include
advisory, legal, accounting, valuation and other professional fees;
finder fees; and costs of registering and issuing debt and equity
securities. Prior to the SentreHEART transaction, the Company’s
most recent acquisition occurred in October 2015 and acquisition
costs related to the transactions were included in the calculation
of adjusted EBITDA at that time. The Company believes it is
appropriate to modify the calculation of adjusted EBITDA to exclude
acquisition costs because the Company has concluded that
acquisition costs are generally nonrecurring and are not reflective
of the operational results of the Company’s core business, and the
Company believes this approach is more comparable to peer company
reporting. 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 (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
December 31,
Twelve Months Ended
December 31,
2019
2018
2019
2018
United States Revenue:
Open ablation
$
20,894
$
18,650
$
80,205
$
72,250
Minimally invasive ablation
8,982
9,449
34,842
35,053
Appendage management
19,091
14,506
68,166
52,891
Total ablation and appendage
management
48,967
42,605
183,213
160,194
Valve tools
570
507
2,616
1,952
Total United States
49,537
43,112
185,829
162,146
International Revenue:
Open ablation
6,003
4,936
24,945
21,118
Minimally invasive ablation
2,227
2,369
8,349
9,176
Appendage management
3,513
2,448
11,476
8,988
Total ablation and appendage
management
11,743
9,753
44,770
39,282
Valve tools
41
28
208
202
Total international
11,784
9,781
44,978
39,484
Total revenue
61,321
52,893
230,807
201,630
Cost of revenue
16,547
14,303
60,472
54,510
Gross profit
44,774
38,590
170,335
147,120
Operating expenses:
Research and development expenses
13,096
8,455
41,230
34,723
Selling, general and administrative
expenses
47,004
32,742
162,227
129,524
Total operating expenses
60,100
41,197
203,457
164,247
Loss from operations
(15,326
)
(2,607
)
(33,122
)
(17,127
)
Other expense, net
(722
)
(744
)
(1,873
)
(3,784
)
Loss before income tax expense
(16,048
)
(3,351
)
(34,995
)
(20,911
)
Income tax expense
48
79
199
226
Net loss
$
(16,096
)
$
(3,430
)
$
(35,194
)
$
(21,137
)
Basic and diluted net loss per share
$
(0.42
)
$
(0.09
)
$
(0.94
)
$
(0.62
)
Weighted average shares used in computing
net loss per share:
Basic and diluted
38,190
36,480
37,589
34,087
ATRICURE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In Thousands)
(Unaudited)
December 31,
December 31,
2019
2018
Assets
Current assets:
Cash, cash equivalents, and short-term
investments
$
81,801
$
124,402
Accounts receivable, net
28,046
25,195
Inventories
29,414
22,484
Prepaid and other current assets
3,899
2,592
Total current assets
143,160
174,673
Property and equipment, net
32,646
27,080
Operating lease right-of-use assets
4,032
—
Long-term investments
12,675
—
Goodwill and intangible assets, net
364,662
154,511
Other noncurrent assets
705
495
Total assets
$
557,880
$
356,759
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
47,698
$
35,499
Other current liabilities and current
maturities of debt and leases
2,218
4,717
Total current liabilities
49,916
40,216
Finance lease liabilities
11,774
12,172
Long-term debt
59,634
35,571
Operating lease liabilities
2,796
—
Contingent consideration and other
noncurrent liabilities
186,417
19,419
Total liabilities
310,537
107,378
Stockholders' equity:
Common stock
40
39
Additional paid-in capital
529,658
496,544
Accumulated other comprehensive loss
(158
)
(199
)
Accumulated deficit
(282,197
)
(247,003
)
Total stockholders' equity
247,343
249,381
Total liabilities and stockholders'
equity
$
557,880
$
356,759
ATRICURE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Twelve Months Ended December
31,
2019
2018
Cash flows from operating activities:
Net loss
$
(35,194
)
$
(21,137
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share-based compensation expense
17,977
16,495
Depreciation and amortization of
intangible assets
9,366
8,754
Amortization of deferred financing
costs
375
515
Non-cash lease expense
751
—
Loss on disposal of property and equipment
and impairment of assets
604
323
Realized loss from foreign exchange on
intercompany transactions
181
165
Accretion of investments
(922
)
(362
)
Provision for doubtful accounts
582
598
Change in fair value of contingent
consideration
(4,916
)
(10,825
)
Payment of contingent consideration in
excess of purchase accounting amount
—
(96
)
Changes in operating assets and
liabilities, net of amounts acquired:
Accounts receivable
(3,201
)
(2,837
)
Inventories
(5,151
)
(146
)
Other current assets
(1,199
)
(367
)
Accounts payable and accrued
liabilities
5,898
4,618
Other noncurrent assets and
liabilities
(962
)
131
Net cash used in operating activities
(15,811
)
(4,171
)
Cash flows from investing activities:
Purchases of available-for-sale
securities
(73,249
)
(106,588
)
Sales and maturities of available-for-sale
securities
100,485
27,389
Purchases of property and equipment
(12,182
)
(6,211
)
Proceeds from sale of property and
equipment
39
6
Cash paid for SentreHEART business
combination
(17,240
)
—
Net cash used in investing activities
(2,147
)
(85,404
)
Cash flows from financing activities:
Net proceeds from stock offering
—
82,873
Proceeds from debt borrowings
20,000
17,381
Payments on debt and finance leases
(629
)
(1,755
)
Payment of debt fees
(329
)
(1,136
)
Proceeds from exercise of stock options
and employee stock purchase plan
3,864
8,395
Shares repurchased for payment of taxes on
stock awards
(9,033
)
(4,457
)
Payments of contingent consideration
liability previously established in purchase accounting
—
(1,125
)
Proceeds from economic incentive loan
500
—
Net cash provided by financing
activities
14,373
100,176
Effect of exchange rate changes on cash
and cash equivalents
(163
)
(179
)
Net (decrease) increase in cash and cash
equivalents
(3,748
)
10,422
Cash and cash equivalents - beginning of
period
32,231
21,809
Cash and cash equivalents - end of
period
$
28,483
$
32,231
Reconciliation of Non-GAAP Adjusted
Income
(Loss) (Adjusted EBITDA)
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Net loss, as reported
$
(16,096
)
$
(3,430
)
$
(35,194
)
$
(21,137
)
Income tax expense (benefit)
48
79
199
226
Other expense, net
722
744
1,873
3,784
Depreciation and amortization expense
2,383
2,223
9,366
8,754
Share-based compensation expense
5,161
4,829
17,977
16,495
Contingent consideration adjustment
2,018
(4,129
)
(4,916
)
(10,825
)
Acquisition costs
333
—
3,978
—
Non-GAAP adjusted (loss) income (adjusted
EBITDA)
$
(5,431
)
$
316
$
(6,717
)
$
(2,703
)
Reconciliation of Non-GAAP Adjusted
Loss Per Share
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Net loss, as reported
$
(16,096
)
$
(3,430
)
$
(35,194
)
$
(21,137
)
Contingent consideration adjustment
2,018
(4,129
)
(4,916
)
(10,825
)
Net loss excluding contingent
consideration adjustment
$
(14,078
)
$
(7,559
)
$
(40,110
)
$
(31,962
)
Basic and diluted adjusted net loss per
share
$
(0.37
)
$
(0.21
)
$
(1.07
)
$
(0.94
)
Weighted average shares used in computing
adjusted net loss per share
Basic and diluted
38,190
36,480
37,589
34,087
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200218005881/en/
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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