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AtriCure Reports First 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 first quarter 2021 financial results.

“Our growth in the first quarter is a testament of our team’s strong execution and unwavering dedication despite continued COVID headwinds,” said Michael Carrel, President and Chief Executive Officer of AtriCure. “As we navigate toward a return to normalcy, I am confident that we are extremely well positioned for the future with our pathway of growth catalysts and the realization of these opportunities underway, beginning with CONVERGE.”

First Quarter 2021 Financial Results

Revenue for the first quarter of 2021 was $59.3 million, an increase of $6.1 million or 11.4% (an increase of 10.5% on a constant currency basis), compared to first quarter 2020 revenue. U.S. revenue was $50.3 million, an increase of $6.8 million or 15.7%, compared to first quarter 2020 revenue. U.S. revenue growth was driven by increased sales across key products within open ablation, minimally invasive ablation and appendage management categories, reflecting continued recovery of domestic procedure volumes. International revenue decreased 8.1% (a decrease of 12.9% on a constant currency basis) to $9.0 million. The decline in international revenue was driven by the various COVID-19 restrictions and delayed recoveries across the different geographies. On a sequential basis, worldwide revenue for the first quarter 2021 increased approximately 3% over fourth quarter 2020.

Gross profit for the first quarter of 2021 was $44.5 million compared to $38.9 million for the first quarter of 2020. Gross margin was 75.1% and 73.1% for the first quarters of 2021 and 2020 respectively, reflecting the favorable impact of both geographic and product mix.

Loss from operations for the first quarter of 2021 was $15.9 million, compared to $15.5 million for the first quarter of 2020. Net loss per share was $0.38 for the first quarter of 2021, compared to $0.42 for the first quarter of 2020.

Adjusted EBITDA was a loss of $4.7 million for the first quarter of 2021 compared to a $6.1 million loss for the first quarter of 2020. Adjusted loss per share for the first quarter of 2021 was $0.32 compared to $0.36 for the first 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

Full year 2021 revenue is now projected to be approximately $252 million to $256 million. As with previous guidance, continued uncertainty relating to the dynamic environment with the COVID-19 pandemic could materially impact this projection. Additionally, the Company is maintaining guidance for full year 2021 adjusted EBITDA loss of approximately $10 million and adjusted loss per share of $1.15.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, April 27, 2021 to discuss its first 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 3349395. 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. 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 March 31,

2021

2020

United States Revenue:

Open ablation

$

21,075

$

19,218

Minimally invasive ablation

8,385

6,561

Appendage management

20,587

17,419

Total ablation and appendage management

50,047

43,198

Valve tools

262

275

Total United States

50,309

43,473

International Revenue:

Open ablation

4,417

5,115

Minimally invasive ablation

1,274

1,545

Appendage management

3,258

3,062

Total ablation and appendage management

8,949

9,722

Valve tools

17

30

Total international

8,966

9,752

Total revenue

59,275

53,225

Cost of revenue

14,735

14,341

Gross profit

44,540

38,884

Operating expenses:

Research and development expenses

11,217

11,587

Selling, general and administrative expenses

49,208

42,751

Total operating expenses

60,425

54,338

Loss from operations

(15,885

)

(15,454

)

Other expense, net

(1,001

)

(946

)

Loss before income tax expense

(16,886

)

(16,400

)

Income tax expense (benefit)

31

8

Net loss

$

(16,917

)

$

(16,408

)

Basic and diluted net loss per share

$

(0.38

)

$

(0.42

)

Weighted average shares used in computing net loss per share:

Basic and diluted

44,632

38,671

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

March 31,

December 31,

2021

2020

Assets

Current assets:

Cash, cash equivalents, and short-term investments

$

227,205

$

244,218

Accounts receivable, net

29,741

23,146

Inventories

36,144

35,026

Prepaid and other current assets

5,214

4,347

Total current assets

298,304

306,737

Property and equipment, net

27,633

28,290

Operating lease right-of-use assets

1,622

1,914

Long-term investments

9,127

14,178

Goodwill and intangible assets, net

362,742

362,980

Other noncurrent assets

474

440

Total assets

$

699,902

$

714,539

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable and accrued liabilities

$

45,155

$

40,720

Other current liabilities and current maturities of debt and leases

13,308

8,417

Total current liabilities

58,463

49,137

Long-term debt

48,552

53,435

Finance lease liabilities

10,749

10,969

Operating lease liabilities

966

1,180

Contingent consideration and other noncurrent liabilities

189,929

187,424

Total liabilities

308,659

302,145

Stockholders' equity:

Common stock

46

45

Additional paid-in capital

738,484

742,389

Accumulated other comprehensive (loss) income

(18

)

312

Accumulated deficit

(347,269

)

(330,352

)

Total stockholders' equity

391,243

412,394

Total liabilities and stockholders' equity

$

699,902

$

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 March 31,

2021

2020

Net loss, as reported

$

(16,917

)

$

(16,408

)

Income tax expense

31

8

Other expense, net

1,001

946

Depreciation and amortization expense

2,122

2,444

Share-based compensation expense

6,604

4,384

Contingent consideration adjustment

2,500

2,458

Acquisition costs

99

Non-GAAP adjusted loss (adjusted EBITDA)

$

(4,659

)

$

(6,069

)

Reconciliation of Non-GAAP Adjusted Loss Per Share

Three Months Ended March 31,

2021

2020

Net loss, as reported

$

(16,917

)

$

(16,408

)

Contingent consideration adjustment

2,500

2,458

Net loss excluding contingent consideration adjustment

$

(14,417

)

$

(13,950

)

Basic and diluted adjusted net loss per share

$

(0.32

)

$

(0.36

)

Weighted average shares used in computing adjusted net loss per share

Basic and diluted

44,632

38,671

Contacts:

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

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