AtriCure Reports Third Quarter 2016 Financial Results
- Revenue of $38.3 million – up 22.0%
- U.S. sales of $30.6 million – up 24.0%
- International sales of $7.8 million – up 14.9%
MASON, Ohio–(BUSINESS WIRE)–AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for
atrial fibrillation (Afib) and left atrial appendage (LAA) management,
today announced third quarter 2016 financial results.
“We are pleased to report solid third quarter results led by sales in
the U.S. and driven by all areas of our business,” said Mike Carrel,
President and Chief Executive Officer of AtriCure. “Our focus on
improving patient outcomes continues to guide our clinical and
commercial efforts, and we are well-positioned to reach EBITDA
profitability in 2018 and for sustainable success.”
Third Quarter 2016 Financial Results
Revenue for the third quarter of 2016 was $38.3 million, an increase of
$6.9 million or 22.0% (22.0% on a constant currency basis), compared to
third quarter 2015 revenue. U.S. revenue increased 24.0% to $30.6
million, driven by strong sales of ablation-related open-heart products,
ablation-related minimally invasive products, and AtriClip® products.
International revenue was $7.8 million, an increase of $1.0 million or
14.9% (14.7% on a constant currency basis). International revenue growth
was driven primarily by increases in product sales in Japan, Italy,
Russia and France.
Gross profit for the third quarter of 2016 was $27.5 million compared to
$22.5 million for the third quarter of 2015. Gross margin for the third
quarter of 2016 increased to 71.7%, compared to 71.5% in the third
quarter of 2015.
Operating expenses for the third quarter of 2016 increased 18.0%, or
$5.2 million, compared to the third quarter of 2015. The increase in
operating expenses was driven primarily by an increase in selling,
clinical, product development, marketing and training expenses, with
most of these areas impacted by the changes in our operating structure
to support our acquisition of nContact in late 2015.
Loss from operations for the third quarter of 2016 was $6.3 million,
compared to $6.1 million for the third quarter of 2015. Net loss per
share was $0.21 for the third quarter of 2016 and $0.22 for the third
quarter of 2015. Adjusted EBITDA, a non-GAAP measure, was a loss of $1.0
million for the third quarter of 2016, compared to a $2.2 million loss
for the third quarter of 2015.
2016 Financial Guidance
Management projects 2016 revenue growth of approximately 20% to 22% over
full year 2015 revenue, which is a range of approximately $156 million
to $158 million.
Adjusted EBITDA, a non-GAAP measure, is projected to be a loss in the
range of $12 to $14 million for 2016 as the Company continues to make
strategic investments to drive the long-term growth plan, including
several clinical trials, modest expansion of the U.S. field sales team,
and ongoing product development efforts. This adjusted EBITDA range
translates into an EPS loss of between $1.10 and $1.16. Significant
improvements in the adjusted EBITDA loss are expected for 2017, turning
to a positive adjusted EBITDA for 2018.
Conference Call
AtriCure will host a conference call at 4:30 p.m. Eastern Time on
Thursday, October 27, 2016 to discuss its third quarter 2016 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 91346855. A live webcast of the
conference call will be available online on the Investors page of
AtriCure’s corporate website at www.atricure.com.
A replay of the webcast will be available for 90 days following the call.
About AtriCure, Inc.
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, with more than 75,000 implanted to date.
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.
Non-GAAP financial measures provide an indication of performance
excluding certain items. Management believes that 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 operations and management believes that the excluded items
are typically not reflective of our ongoing core business operations.
Further, management uses results of operations before these excluded
items as a basis for its strategic planning. The non-GAAP financial
measures used by AtriCure may not be the same or calculated the same as
those used by other companies. Reconciliations of the non-GAAP financial
measures used in this release to the most comparable GAAP measures for
the respective periods can be found in tables later in this release.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Domestic Revenue: | |||||||||||||||||
Open-heart ablation | $ | 14,766 | $ | 13,041 | $ | 43,455 | $ | 39,043 | |||||||||
Minimally invasive ablation | 7,517 | 5,011 | 22,232 | 14,415 | |||||||||||||
AtriClip | 7,721 | 5,927 | 21,917 | 17,716 | |||||||||||||
Total ablation and AtriClip | 30,004 | 23,979 | 87,604 | 71,174 | |||||||||||||
Valve tools | 571 | 686 | 2,115 | 2,158 | |||||||||||||
Total domestic | 30,575 | 24,665 | 89,719 | 73,332 | |||||||||||||
International Revenue: | |||||||||||||||||
Open-heart ablation | 5,152 | 4,092 | 15,062 | 12,396 | |||||||||||||
Minimally invasive ablation | 1,533 | 1,945 | 5,883 | 5,771 | |||||||||||||
AtriClip | 994 | 598 | 2,883 | 2,058 | |||||||||||||
Total ablation and AtriClip | 7,679 | 6,635 | 23,828 | 20,225 | |||||||||||||
Valve tools | 86 | 123 | 405 | 335 | |||||||||||||
Total international | 7,765 | 6,758 | 24,233 | 20,560 | |||||||||||||
Total revenue | 38,340 | 31,423 | 113,952 | 93,892 | |||||||||||||
Cost of revenue | 10,868 | 8,945 | 31,748 | 26,562 | |||||||||||||
Gross profit | 27,472 | 22,478 | 82,204 | 67,330 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development expenses | 8,271 | 6,504 | 25,958 | 17,975 | |||||||||||||
Selling, general and administrative expenses | 25,487 | 22,101 | 79,689 | 65,445 | |||||||||||||
Total operating expenses | 33,758 | 28,605 | 105,647 | 83,420 | |||||||||||||
Loss from operations | (6,286 | ) | (6,127 | ) | (23,443 | ) | (16,090 | ) | |||||||||
Other expense, net | (495 | ) | (8 | ) | (1,246 | ) | (188 | ) | |||||||||
Loss before income tax expense | (6,781 | ) | (6,135 | ) | (24,689 | ) | (16,278 | ) | |||||||||
Income tax expense | 2 | 6 | 24 | 20 | |||||||||||||
Net loss | $ | (6,783 | ) | $ | (6,141 | ) | $ | (24,713 | ) | $ | (16,298 | ) | |||||
Basic and diluted net loss per share | $ | (0.21 | ) | $ | (0.22 | ) | $ | (0.78 | ) | $ | (0.60 | ) | |||||
Weighted average shares used in computing net loss per share: | |||||||||||||||||
Basic and diluted | 31,706 | 27,462 | 31,547 | 27,190 |
ATRICURE, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In Thousands) | |||||||||
(Unaudited) | |||||||||
September 30, | December 31, | ||||||||
2016 | 2015 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash, cash equivalents, and short-term investments | $ | 41,343 | $ | 34,578 | |||||
Accounts receivable, net | 21,066 | 19,409 | |||||||
Inventories | 18,985 | 17,659 | |||||||
Other current assets | 3,016 | 3,106 | |||||||
Total current assets | 84,410 | 74,752 | |||||||
Property and equipment, net | 30,742 | 31,279 | |||||||
Long-term investments | 6,017 | 7,706 | |||||||
Goodwill and intangible assets, net | 157,799 | 159,032 | |||||||
Other noncurrent assets | 348 | 323 | |||||||
Total assets | $ | 279,316 | $ | 273,092 | |||||
Liabilities and Stockholders’ Equity | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued liabilities | $ | 25,998 | $ | 31,138 | |||||
Other current liabilities and current maturities of capital leases | 492 | 450 | |||||||
Total current liabilities | 26,490 | 31,588 | |||||||
Capital leases | 13,423 | 13,710 | |||||||
Long-term debt | 25,023 | — | |||||||
Other noncurrent liabilities | 40,946 | 41,109 | |||||||
Total liabilities | 105,882 | 86,407 | |||||||
Stockholders’ equity: | |||||||||
Common stock | 33 | 32 | |||||||
Additional paid-in capital | 364,199 | 352,900 | |||||||
Accumulated other comprehensive loss | (449 | ) | (611 | ) | |||||
Accumulated deficit | (190,349 | ) | (165,636 | ) | |||||
Total stockholders’ equity | 173,434 | 186,685 | |||||||
Total liabilities and stockholders’ equity | $ | 279,316 | $ | 273,092 |
ATRICURE, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(In Thousands) | |||||||||
(Unaudited) | |||||||||
Nine Months Ended September 30, | |||||||||
2016 | 2015 | ||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (24,713 | ) | $ | (16,298 | ) | |||
Adjustments to reconcile net loss to net cash used in operating |
|||||||||
Share-based compensation expense | 8,796 | 6,533 | |||||||
Depreciation and amortization of intangible assets | 6,858 | 4,212 | |||||||
Amortization of deferred financing costs | 152 | 46 | |||||||
Loss on disposal of property and equipment | 107 | 83 | |||||||
Realized (gain) loss from foreign exchange on intercompany transactions |
(23 | ) | 333 | ||||||
Amortization/accretion on investments | 96 | 472 | |||||||
Change in allowance for doubtful accounts | 142 | 55 | |||||||
Changes in operating assets and liabilities | |||||||||
Accounts receivable | (1,777 | ) | 571 | ||||||
Inventories | (1,234 | ) | (2,461 | ) | |||||
Other current assets | 136 | (449 | ) | ||||||
Accounts payable and accrued liabilities | (4,228 | ) | 2,738 | ||||||
Other non-current assets and liabilities | (192 | ) | 403 | ||||||
Net cash used in operating activities | (15,880 | ) | (3,762 | ) | |||||
Cash flows from investing activities: | |||||||||
Purchases of available-for-sale securities | (27,395 | ) | (19,525 | ) | |||||
Sales and maturities of available-for-sale securities | 14,602 | 29,174 | |||||||
Purchases of property and equipment | (6,102 | ) | (8,287 | ) | |||||
Proceeds from sale of property and equipment | 3 | — | |||||||
Increases in property under build-to-suit obligation | — | (9,128 | ) | ||||||
Net cash used in investing activities | (18,892 | ) | (7,766 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from debt borrowings | 25,000 | — | |||||||
Payments on capital leases | (343 | ) | (36 | ) | |||||
Increases in build-to-suit obligation | — | 9,128 | |||||||
Proceeds from tax incentive loan | — | 340 | |||||||
Payment of debt fees | (120 | ) | (62 | ) | |||||
Proceeds from stock option exercises | 2,595 | 2,421 | |||||||
Shares repurchased for payment of taxes on stock awards | (1,078 | ) | (650 | ) | |||||
Proceeds from issuance of common stock under employee stock |
987 | 906 | |||||||
Net cash provided by financing activities | 27,041 | 12,047 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 74 | (189 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (7,657 | ) | 330 | ||||||
Cash and cash equivalents – beginning of period | 23,764 | 28,384 | |||||||
Cash and cash equivalents – end of period | $ | 16,107 | $ | 28,714 | |||||
Supplemental cash flow information: | |||||||||
Cash paid for interest | $ | 1,043 | $ | 4 | |||||
Cash paid for income taxes | 30 | 20 | |||||||
Noncash investing and financing activities: | |||||||||
Accrued purchases of property and equipment | 243 | 2,442 | |||||||
Assets acquired through capital lease | 125 | 50 | |||||||
Capital lease asset early termination | 28 | — |
ATRICURE, INC. AND SUBSIDIARIES | |||||||||||||||||
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS | |||||||||||||||||
(In Thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Reconciliation of Non-GAAP Adjusted Loss | |||||||||||||||||
(Adjusted EBITDA) | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net loss, as reported | $ | (6,783 | ) | $ | (6,141 | ) | $ | (24,713 | ) | $ | (16,298 | ) | |||||
Income tax expense | 2 | 6 | 24 | 20 | |||||||||||||
Other expense, net (a) | 495 | 8 | 1,246 | 188 | |||||||||||||
Depreciation and amortization expense | 2,358 | 1,519 | 6,858 | 4,212 | |||||||||||||
Share-based compensation expense | 2,927 | 2,392 | 8,796 | 6,533 | |||||||||||||
Non-GAAP adjusted loss (adjusted EBITDA) | $ | (1,001 | ) | $ | (2,216 | ) | $ | (7,789 | ) | $ | (5,345 | ) | |||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(a) Other includes: | |||||||||||||||||
Net interest expense (income) | $ | 463 | $ | (40 | ) | $ | 1,100 | $ | (91 | ) | |||||||
Grant income | — | — | — | (35 | ) | ||||||||||||
Loss due to exchange rate fluctuation | 32 | 48 | 146 | 257 | |||||||||||||
Non-employee stock option expense | — | — | — | 57 | |||||||||||||
Other expense, net | $ | 495 | $ | 8 | $ | 1,246 | $ | 188 |
Contacts
AtriCure, Inc.
Andy Wade, 513-755-4564
Senior Vice
President and Chief Financial Officer
awade@atricure.com
or
Investor
Relations Contact
Gilmartin Group
Lynn Pieper Lewis,
415-937-5402
lynn@gilmartinir.com