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AtriCure Reports Second Quarter 2021 Financial Results

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

“Our second quarter results were driven by outperformance across our business, as strong underlying demand returned and we saw continued progress toward making our platforms the standard of care,” said Michael Carrel, President and Chief Executive Officer of AtriCure. “We are poised for accelerating growth with the recent FDA approval of our EPi-Sense® System to improve the lives of millions of patients with long-standing persistent Afib. This approval enriches the foundation of our Company, built on core technologies which continue to deliver solid growth as we address vastly underpenetrated markets.”

Second Quarter 2021 Financial Results
Revenue for the second quarter of 2021 was $71.4 million, an increase of 74.8% (an increase of 73.5% on a constant currency basis) over second quarter 2020 revenue. U.S. revenue was $60.1 million, an increase of $26.4 million or 78.4%, compared to second quarter 2020 revenue. U.S. revenue growth was seen across all product lines, driven by the receding impact of the COVID-19 pandemic in 2021 which resulted in stabilizing cardiac surgery procedure volumes and increasing demand. International revenue increased $4.1 million or 57.9% (an increase of 50.2% on a constant currency basis) to $11.3 million, reflecting growth in most major markets and across product lines. On a sequential basis, worldwide revenue for the second quarter 2021 increased approximately 20% over first quarter 2021.

Gross profit for the second quarter of 2021 was $54.1 million compared to $27.7 million for the second quarter of 2020. Gross margin was 75.8% and 67.7% for the second quarters of 2021 and 2020 respectively, reflecting the increase in revenue and reduced fixed cost burden on cost of revenue with the return to normal production in 2021, along with the favorable impact of both geographic and product mix.

Loss from operations for the second quarter of 2021 was $15.1 million, compared to $7.3 million for the second quarter of 2020. Net loss per share was $0.36 for the second quarter of 2021, compared to $0.20 for the second quarter of 2020.

Adjusted EBITDA was a loss of $2.7 million for the second quarter of 2021 compared to a $6.1 million loss for the second quarter of 2020. Adjusted loss per share for the second quarter of 2021 was $0.30 compared to $0.38 for the second quarter of 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 updating revenue guidance for full year 2021 to 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 maintaining guidance for full year 2021 adjusted EBITDA loss of approximately $10 million, and updating guidance for 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, August 4, 2021 to discuss its second 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 8299332. 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 AFTM 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.

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. We do not undertake to update our forward-looking statements.

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 before other income/expense (including interest), income tax expense, depreciation and amortization expense, share-based compensation expense, acquisition costs, legal settlement costs, 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 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 in fair value of contingent consideration liabilities and legal settlement costs. 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.

 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

United States Revenue:

Open ablation

$

24,839

$

15,550

$

45,914

$

34,768

Minimally invasive ablation

9,702

4,755

18,087

11,316

Appendage management

25,156

13,021

45,743

30,440

Total ablation and appendage management

59,697

33,326

109,744

76,524

Valve tools

373

338

635

613

Total United States

60,070

33,664

110,379

77,137

International Revenue:

Open ablation

5,513

3,744

9,930

8,859

Minimally invasive ablation

1,575

1,109

2,849

2,654

Appendage management

4,194

2,271

7,452

5,333

Total ablation and appendage management

11,282

7,124

20,231

16,846

Valve tools

24

36

41

66

Total international

11,306

7,160

20,272

16,912

Total revenue

71,376

40,824

130,651

94,049

Cost of revenue

17,298

13,170

32,033

27,511

Gross profit

54,078

27,654

98,618

66,538

Operating expenses:

Research and development expenses

12,197

10,036

23,414

21,623

Selling, general and administrative expenses

56,958

24,903

106,166

67,654

Total operating expenses

69,155

34,939

129,580

89,277

Loss from operations

(15,077

)

(7,285

)

(30,962

)

(22,739

)

Other expense, net

(1,108

)

(939

)

(2,109

)

(1,885

)

Loss before income tax expense

(16,185

)

(8,224

)

(33,071

)

(24,624

)

Income tax expense (benefit)

66

12

97

20

Net loss

$

(16,251

)

$

(8,236

)

$

(33,168

)

$

(24,644

)

Basic and diluted net loss per share

$

(0.36

)

$

(0.20

)

$

(0.74

)

$

(0.61

)

Weighted average shares used in computing net loss per share:

Basic and diluted

45,035

41,649

44,834

40,160

 
 

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

June 30,

December 31,

2021

2020

Assets

Current assets:

Cash, cash equivalents, and short-term investments

$

159,865

$

244,218

Accounts receivable, net

33,835

23,146

Inventories

37,608

35,026

Prepaid and other current assets

4,636

4,347

Total current assets

235,944

306,737

Property and equipment, net

30,175

28,290

Operating lease right-of-use assets

2,683

1,914

Long-term investments

69,770

14,178

Goodwill and intangible assets, net

362,015

362,980

Other noncurrent assets

488

440

Total assets

$

701,075

$

714,539

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable and accrued liabilities

$

48,940

$

40,720

Other current liabilities and current maturities of debt and leases

18,493

8,417

Total current liabilities

67,433

49,137

Long-term debt

43,669

53,435

Finance lease liabilities

10,540

10,969

Operating lease liabilities

1,833

1,180

Contingent consideration and other noncurrent liabilities

192,517

187,424

Total liabilities

315,992

302,145

Stockholders' equity:

Common stock

46

45

Additional paid-in capital

748,644

742,389

Accumulated other comprehensive (loss) income

(87

)

312

Accumulated deficit

(363,520

)

(330,352

)

Total stockholders' equity

385,083

412,394

Total liabilities and stockholders' equity

$

701,075

$

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 June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net loss, as reported

$

(16,251

)

$

(8,236

)

$

(33,168

)

$

(24,644

)

Income tax expense

66

12

97

20

Other expense, net

1,108

939

2,109

1,885

Depreciation and amortization expense

2,658

2,458

4,780

4,902

Share-based compensation expense

7,141

6,193

13,745

10,577

Contingent consideration adjustment

2,600

(7,504

)

5,100

(5,046

)

Acquisition costs

39

138

Non-GAAP adjusted loss (adjusted EBITDA)

$

(2,678

)

$

(6,099

)

$

(7,337

)

$

(12,168

)

Reconciliation of Non-GAAP Adjusted Loss Per Share

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net loss, as reported

$

(16,251

)

$

(8,236

)

$

(33,168

)

$

(24,644

)

Contingent consideration adjustment

2,600

(7,504

)

5,100

(5,046

)

Net loss excluding contingent consideration adjustment

$

(13,651

)

$

(15,740

)

$

(28,068

)

$

(29,690

)

Basic and diluted adjusted net loss per share

$

(0.30

)

$

(0.38

)

$

(0.63

)

$

(0.74

)

Weighted average shares used in computing adjusted net loss per share

Basic and diluted

45,035

41,649

44,834

40,160

 

Contacts:

Angie Wirick
AtriCure, Inc.
Chief Financial Officer
(513) 755-5334
awirick@atricure.com

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