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AtriCure Reports Second Quarter 2012 Financial Results

Thu, 08/02/2012 - 4:05pm
The Associated Press

WEST CHESTER, Ohio--(BUSINESS WIRE)--Aug 2, 2012--AtriCure, Inc. (Nasdaq: ATRC), a medical device company and a leader in cardiac surgical ablation systems for the treatment of atrial fibrillation, or AF, and systems for the exclusion of the left atrial appendage, today announced financial results for the second quarter of 2012.

Revenue for second quarter 2012 was a new high of $18.3 million, reflecting 8.9% growth (10.5% growth constant currency) over the second quarter of 2011. Revenue from U.S. product sales was a record $13.4 million, reflecting growth of 5.9%, and revenue from product sales to international customers was a record $4.9 million, reflecting growth of 17.9% or 24.8% on a constant currency basis.

“We are pleased with our performance in the second quarter which saw solid growth in domestic product sales and continued strength in the international markets. U.S. procedure volumes have remained stable through the first half of 2012 and we are optimistic that these trends will continue through the remainder of 2012,” said David J. Drachman, President and Chief Executive Officer of AtriCure. “We believe AtriCure is well positioned to capitalize on our wide range of premium products, recent AF approval, education and marketing activities, momentum in international markets, and continued investment in regulatory approvals and clinical science.” Second Quarter Financial Results Revenue for the second quarter of 2012 was $18.3 million, an increase of $1.5 million or 8.9% compared to second quarter 2011 revenue. Domestic revenue increased 5.9% to a record $13.4 million, including $1.8 million in sales of the AtriClip system. International revenue was a record $4.9 million, an increase of $0.8 million or 17.9% (24.8% on a constant currency basis) when compared to $4.1 million for the second quarter of 2011. International revenue growth was driven primarily by an increase in sales in Russia and Asia.

Gross profit for the second quarter of 2012 was $12.7 million compared to $12.3 million for the second quarter of 2011. Gross margin for the second quarter of 2012 was 69.6% compared to 73.2% for the second quarter of 2011. The decrease in gross margin was primarily due to increased manufacturing overhead costs required to transition and maintain the manufacturing of PMA approved products and our continued investments in quality systems to support our expanding operations.

Operating expenses for the second quarter of 2012 increased 7.5%, or $1.0 million, to $14.0 million from $13.0 million for the second quarter of 2011. The increase in operating expenses was driven primarily by a combination of increased selling, general and administrative expenses as well as non-recurring severance charges in the quarter.

Loss from operations for the second quarter of 2012 was $1.3 million compared to $0.9 million for the second quarter of 2011. Adjusted EBITDA, a non-GAAP measure, was $0.4 million for the second quarter of 2012. Net loss per share was $0.08 for the second quarter of 2012 and $0.06 for the second quarter of 2011.

Cash, cash equivalents and investments were $15.0 million at June 30, 2012, and cash used in operations during the second quarter of 2012 was $0.2 million.

Company Outlook Given the recently announced management transition, the Company is suspending its financial guidance until it hires a new Chief Executive Officer and that person is comfortable resuming guidance.

Conference Call AtriCure will host a conference call at 4:30 p.m. Eastern Time on Thursday, August 2, 2012 to discuss its second quarter 2012 financial results. A live webcast of the conference call will be available online from the investor relations page of AtriCure’s corporate website at www.atricure.com.

Pre-registration is available and recommended for this call at the following URL: https://www.theconferencingservice.com/prereg/key.process?key=PK4YA7CQL You may also access this call through an operator by calling (888) 680-0865 for domestic callers and (617) 213-4853 for international callers at least 15 minutes prior to the call start time using reservation code 16753863.

The webcast will be available on AtriCure’s website and a telephonic replay of the call will also be available through September 2, 2012. The replay dial-in numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. The reservation code is 64571881.

About AtriCure, Inc. AtriCure, Inc. is a medical device company and a leader in developing, manufacturing and selling innovative cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac, or heart, tissue for the treatment of atrial fibrillation, or AF, and systems for the exclusion of the left atrial appendage. The Company believes cardiothoracic surgeons are adopting its ablation products for the treatment of AF during concomitant open-heart surgical procedures and sole-therapy minimally invasive procedures. AF affects more than 5.5 million people worldwide and predisposes them to a five-fold increased risk of stroke. The FDA has not cleared or approved certain AtriCure products for the treatment of AF or a reduction in the risk of stroke.

Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as earnings estimates, other predictions of financial performance, launches by AtriCure of new products and market acceptance of AtriCure’s products. Forward-looking statements are based on AtriCure’s experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control. These risks and uncertainties include the rate and degree of market acceptance of AtriCure’s products, AtriCure’s ability to develop and market new and enhanced products, the timing of and ability to obtain and maintain regulatory clearances and approvals for its products, the timing of and ability to obtain reimbursement of procedures utilizing AtriCure’s products, competition from existing and new products and procedures or AtriCure’s ability to effectively react to other risks and uncertainties described from time to time in AtriCure’s SEC filings, such as fluctuation of quarterly financial results, reliance on third party manufacturers and suppliers, litigation or other proceedings, government regulation and stock price volatility. AtriCure does not guarantee any forward-looking statement, and actual results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures To supplement AtriCure’s condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles, 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. Our 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 our 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. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (Unaudited)         Three Months Ended June 30, Six Months Ended June 30, 2012 2011 2012 2011   Revenue $ 18,268 $ 16,780 $ 35,744 $ 32,417 Cost of revenue   5,557     4,502     10,281     8,246   Gross profit 12,711 12,278 25,463 24,171   Operating expenses: Research and development expenses 2,885 2,879 6,275 5,823 Selling, general and administrative expenses   11,146     10,170     22,005     20,193   Total operating expenses   14,031     13,049     28,280     26,016     Loss from operations (1,320 ) (771 ) (2,817 ) (1,845 )   Other expense   -     (166 )   (121 )   (361 )   Loss before income tax expense (1,320 ) (937 ) (2,938 ) (2,206 )   Income tax expense   (6 )   (9 )   (8 )   (14 )   Net (loss) income $ (1,326 ) $ (946 ) $ (2,946 ) $ (2,220 )   Basic and diluted net loss per share $ (0.08 ) $ (0.06 ) $ (0.18 ) $ (0.14 )   Weighted average shares used in computing net loss per common share: Basic and diluted   16,132     15,613     16,074     15,505     ATRICURE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited)     June 30, December 31, 2012 2011 Assets   Current assets: Cash, cash equivalents and short-term investments $ 13,455 $ 14,183 Accounts receivable 10,383 9,514 Inventories 6,491 6,563 Other current assets   1,099     933   Total current assets 31,428 31,193   Property and equipment, net 2,653 2,351 Intangible assets 39 45 Long-term investments 1,499 - Other assets   405     270   Total assets $ 36,024   $ 33,859     Liabilities and Stockholders' Equity   Current liabilities: Accounts payable and accrued liabilities $ 9,703 $ 9,266 Current maturities of debt and capital lease obligations   2,039     1,543   Total current liabilities 11,742 10,809   Long-term debt and capital lease obligations 7,366 4,926 Other liabilities   1,980     2,509   Total liabilities 21,088 18,244   Stockholders' equity: Common stock 17 16 Additional paid-in capital 121,172 118,853 Other comprehensive income (loss) (90 ) (37 ) Accumulated deficit   (106,163 )   (103,217 ) Total stockholders' equity 14,936 15,615     Total liabilities and stockholders' equity $ 36,024   $ 33,859     This article has been truncated. You can see the rest of this article by visiting http://www.businesswire.com/news/home/20120802006582/en.

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