AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, today announced third quarter 2021 financial results.

“Our results were driven by strong growth across key product lines, including the addition of new Cryo Nerve Block and Hybrid AF™ Therapy accounts, providing further validation of demand across our business,” said Michael Carrel, President and Chief Executive Officer of AtriCure. “We feel encouraged by our progress this quarter and are well positioned to capitalize upon the recent approval from the CONVERGE™ trial. I remain impressed with the excellence our team delivers as they continue to execute against a difficult backdrop as the impacts of the delta variant were felt across the country.”

Third Quarter 2021 Financial Results

Revenue for the third quarter 2021 was $70.5 million, an increase of 28.7% (an increase of 28.6% on a constant currency basis) over third quarter 2020 revenue. U.S. revenue was $57.5 million, an increase of $12.8 million or 28.7%, compared to third quarter 2020 revenue. U.S. revenue reflected healthy growth across all product lines as conditions improved from 2020 as a result of stabilizing cardiac surgery procedure volumes and increasing demand for our Cryo Nerve Block and Hybrid AF therapy products. International revenue increased $2.9 million or 28.5% (an increase of 27.9% on a constant currency basis) to $12.9 million, reflecting rebounding activity and growth in most major markets and across product lines. On a sequential basis, worldwide revenue for the third quarter 2021 decreased approximately 1.3% over second quarter 2021.

Gross profit for the third quarter 2021 was $52.2 million compared to $40.3 million for the third quarter 2020. Gross margin was 74.1% and 73.7% for the third quarters 2021 and 2020 respectively, reflecting a favorable product mix.

Income from operations for the third quarter 2021 was $98.7 million, compared to a loss from operations of $4.0 million for the third quarter 2020. 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 a $82.3 million intangible asset impairment charge for the IPR&D asset associated with the aMAZE™ trial. Basic and diluted net income per share was $2.15 and $2.11, respectively, for the third quarter 2021, compared to basic and diluted loss per share of $0.11 for the third quarter 2020.

Adjusted EBITDA was positive for the third quarters 2021 and 2020, at $0.7 million and $4.2 million, respectively. Adjusted loss per share for the third quarter 2021 was $0.23 compared to $0.11 for the third quarter 2020.

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.

2021 Financial Guidance

Management is maintaining revenue guidance for full year 2021 at a range of $270 to $275 million, corresponding to growth of approximately 31% to 33% for the year. As with previous guidance, continued uncertainty relating to the dynamic environment with the COVID-19 pandemic could materially impact this projection. The Company is also maintaining guidance for full year 2021 adjusted EBITDA loss of approximately $10 million and an adjusted loss per share of approximately $1.20.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Wednesday, November 3, 2021 to discuss its third quarter 2021 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 5139213. 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 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. AtriCure’s Hybrid AF™ Therapy is a minimally invasive procedure that provides a lasting solution for long-standing persistent Afib patients. AtriCure’s cryoICE cryoSPHERE® probe is cleared for temporary ablation of peripheral nerves to block pain, providing pain relief in cardiac and thoracic procedures. For more information, visit AtriCure.com or follow us on Twitter @AtriCure. The information contained on our website, Twitter or any other third-party website is not incorporated by reference in this earnings release.

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/fls 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 3, 2021. 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.

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 income (loss) 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. Due to the nonrecurring nature of the third quarter 2021 impairment of an intangible asset, the Company has modified the calculation of adjusted EBITDA to exclude impairment charges. The impairment of intangible asset reflects the one-time charge recognized by the Company as a result of the impact of aMAZE trial results on the related IPR&D asset. The Company believes it is now appropriate to modify the calculation of adjusted EBITDA to exclude impairment of intangible asset because the Company has concluded that such adjustment is generally nonrecurring and is not reflective of the operational results of the Company’s core business. The Company also believes this approach is more comparable to peer company reporting.

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 Income (Loss) (Adjusted EBITDA)” later in this release.

Adjusted income (loss) per share is a non-GAAP measure which calculates the net income (loss) per share before non-cash adjustments in fair value of contingent consideration liabilities and impairment of intangible asset. Due to the nonrecurring nature of the impairment of intangible asset, the Company believes it is now appropriate to modify the calculation of adjusted income (loss) per share to exclude such amount. A reconciliation of adjusted income (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 Income (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.

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,



2021

 

2020

 

2021

 

2020

United States Revenue:

 

 

 

 

 

 

 

Open ablation

$

23,779

 

 

$

19,911

 

 

$

69,693

 

 

$

54,679

 

Minimally invasive ablation

9,990

 

 

6,979

 

 

28,077

 

 

18,295

 

Appendage management

23,401

 

 

17,430

 

 

69,144

 

 

47,870

 

Total ablation and appendage management

57,170

 

 

44,320

 

 

166,914

 

 

120,844

 

Valve tools

367

 

 

381

 

 

1,002

 

 

994

 

Total United States

57,537

 

 

44,701

 

 

167,916

 

 

121,838

 

International Revenue:

 

 

 

 

 

 

 

Open ablation

6,699

 

 

4,907

 

 

16,629

 

 

13,766

 

Minimally invasive ablation

1,849

 

 

1,692

 

 

4,698

 

 

4,346

 

Appendage management

4,373

 

 

3,445

 

 

11,825

 

 

8,778

 

Total ablation and appendage management

12,921

 

 

10,044

 

 

33,152

 

 

26,890

 

Valve tools

2

 

 

12

 

 

43

 

 

78

 

Total international

12,923

 

 

10,056

 

 

33,195

 

 

26,968

 

Total revenue

70,460

 

 

54,757

 

 

201,111

 

 

148,806

 

Cost of revenue

18,234

 

 

14,423

 

 

50,267

 

 

41,934

 

Gross profit

52,226

 

 

40,334

 

 

150,844

 

 

106,872

 

Operating (benefit) expenses:

 

 

 

 

 

 

 

Research and development expenses

11,284

 

 

10,576

 

 

34,698

 

 

32,199

 

Selling, general and administrative expenses

49,873

 

 

33,557

 

 

150,939

 

 

106,257

 

Change in fair value of contingent consideration

(189,900

)

 

192

 

 

(184,800

)

 

(4,854

)

Intangible asset impairment

82,300

 

 

 

 

82,300

 

 

 

Total operating (benefit) expenses

(46,443

)

 

44,325

 

 

83,137

 

 

133,602

 

Income (loss) from operations

98,669

 

 

(3,991

)

 

67,707

 

 

(26,730

)

Other expense, net

(1,523

)

 

(962

)

 

(3,632

)

 

(2,847

)

Income (loss) before income tax expense

97,146

 

 

(4,953

)

 

64,075

 

 

(29,577

)

Income tax expense (benefit)

38

 

 

(4

)

 

135

 

 

16

 

Net income (loss)

$

97,108

 

 

$

(4,949

)

 

$

63,940

 

 

$

(29,593

)

Basic net income (loss) per share

$

2.15

 

 

$

(0.11

)

 

$

1.42

 

 

$

(0.71

)

Diluted net income (loss) per share

$

2.11

 

 

$

(0.11

)

 

$

1.39

 

 

$

(0.71

)

Weighted average shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

Basic

45,258

 

 

44,012

 

 

44,977

 

 

41,442

 

Diluted

46,100

 

 

44,012

 

 

45,996

 

 

41,442

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 



September 30, 2021

 

December 31, 2020

Assets

 

 

 

Current assets:

 

 

 

Cash, cash equivalents, and short-term investments

$

119,746

 

 

$

244,218

 

Accounts receivable, net

33,498

 

 

23,146

 

Inventories

38,587

 

 

35,026

 

Prepaid and other current assets

3,876

 

 

4,347

 

Total current assets

195,707

 

 

306,737

 

Property and equipment, net

29,901

 

 

28,290

 

Operating lease right-of-use assets

2,465

 

 

1,914

 

Long-term investments

105,097

 

 

14,178

 

Goodwill and intangible assets, net

278,744

 

 

362,980

 

Other noncurrent assets

1,055

 

 

440

 

Total assets

$

612,969

 

 

$

714,539

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

49,373

 

 

$

40,720

 

Other current liabilities and current maturities of debt and leases

4,581

 

 

8,417

 

Total current liabilities

53,954

 

 

49,137

 

Long-term debt

56,354

 

 

53,435

 

Finance lease liabilities

10,317

 

 

10,969

 

Operating lease liabilities

1,593

 

 

1,180

 

Contingent consideration and other noncurrent liabilities

2,282

 

 

187,424

 

Total liabilities

124,500

 

 

302,145

 

Stockholders' equity:

 

 

 

Common stock

46

 

 

45

 

Additional paid-in capital

755,048

 

 

742,389

 

Accumulated other comprehensive (loss) income

(213

)

 

312

 

Accumulated deficit

(266,412

)

 

(330,352

)

Total stockholders' equity

488,469

 

 

412,394

 

Total liabilities and stockholders' equity

$

612,969

 

 

$

714,539

 

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,



2021

 

2020

 

2021

 

2020

Net income (loss), as reported

$

97,108

 

 

$

(4,949

)

 

$

63,940

 

 

$

(29,593

)

Income tax expense (benefit)

38

 

 

(4

)

 

135

 

 

16

 

Other expense, net

1,523

 

 

962

 

 

3,632

 

 

2,847

 

Depreciation and amortization expense

2,828

 

 

2,479

 

 

7,608

 

 

7,381

 

Share-based compensation expense

6,794

 

 

5,549

 

 

20,539

 

 

16,126

 

Change in fair value of contingent consideration

(189,900

)

 

192

 

 

(184,800

)

 

(4,854

)

Intangible asset impairment

82,300

 

 

 

 

82,300

 

 

 

Acquisition costs

 

 

 

 

 

 

138

 

Non-GAAP adjusted income (loss) (adjusted EBITDA)

$

691

 

 

$

4,229

 

 

$

(6,646

)

 

$

(7,939

)

Reconciliation of Non-GAAP Adjusted Loss Per Share

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Net income (loss), as reported

$

97,108

 

 

$

(4,949

)

 

$

63,940

 

 

$

(29,593

)

Change in fair value of contingent consideration

(189,900

)

 

192

 

 

(184,800

)

 

(4,854

)

Intangible asset impairment

82,300

 

 

 

 

82,300

 

 

 

Non-GAAP adjusted net loss

$

(10,492

)

 

$

(4,757

)

 

$

(38,560

)

 

$

(34,447

)

Basic and diluted adjusted net loss per share

$

(0.23

)

 

$

(0.11

)

 

$

(0.86

)

 

$

(0.83

)

Weighted average shares used in computing adjusted net loss per share

 

 

 

 

 

 

 

Basic and diluted

45,258

 

 

44,012

 

 

44,977

 

 

41,442

 

 

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

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