AtriCure Reports Third Quarter 2015 Financial Results

  • Revenue of $31.4 million – up 17.8% as reported, 20.6% constant currency
  • U.S. sales of $24.7 million – up 23.0%
  • International sales of $6.7 million – up 2.1% as reported, 13.2% constant currency

WEST CHESTER, Ohio--()--AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage management, today announced third quarter 2015 financial results.

“We are pleased with our performance in the third quarter and excited about our prospects for sustained growth,” said Mike Carrel, President and Chief Executive Officer of AtriCure. “With our recent release of CryoForm in the EU, our acquisition of nContact and our strong product and clinical pipeline, we are well positioned to continue addressing the large and expanding market opportunities ahead of us. We remain focused on our goal of expanding treatment of atrial fibrillation and improving patients’ lives.”

Third Quarter 2015 Financial Results

Revenue for the third quarter of 2015 was $31.4 million, an increase of $4.7 million or 17.8% (20.6% on a constant currency basis), compared to third quarter 2014 revenue. Domestic revenue increased 23.0% to $24.7 million, driven by strong sales of ablation-related open-heart products, ablation-related minimally invasive products, and AtriClip products. International revenue was $6.7 million, an increase of $0.1 million or 2.1% (13.2% on a constant currency basis) compared to $6.6 million for the third quarter of 2014. International revenue growth was driven primarily by increases in product sales in Asia and the United Kingdom which offset the decline in the Euro-Dollar exchange rate between quarters.

Gross profit for the third quarter of 2015 was $22.5 million compared to $18.9 million for the third quarter of 2014. Gross margin for the third quarter of 2015 and 2014 was 71.5% and 70.8%, respectively.

Operating expenses for the third quarter of 2015 increased 45.2%, or $8.9 million, compared to the third quarter of 2014. The increase in operating expenses was driven primarily by an increase in selling, clinical, marketing, and training expenses and the favorable impact of the fair value adjustment of Estech contingent consideration recorded during the three months ended September 30, 2014.

Loss from operations for the third quarter of 2015 was $6.1 million, compared to $0.8 million for the third quarter of 2014. Adjusted EBITDA, a non-GAAP measure, was a loss of $2.2 million for the third quarter of 2015, compared to a $3.2 million loss for the third quarter of 2014. Net loss per share was $0.22 for the third quarter of 2015 and $0.02 for the third quarter of 2014.

2015 Outlook

Management projects that 2015 revenue will be in the range of $129.5 million to $130.5 million, which represents an increase of 20% to 21% over 2014 (22% to 24% on a constant currency basis), including the impact of the nContact transaction.

Management projects adjusted EBITDA, a non-GAAP measure, to be a loss in the range of $10 million to $12 million for 2015, including the impact of the nContact transaction. For a reconciliation of this non-GAAP measure to its directly comparable GAAP measure, see attached financial tables.

2016 Outlook

For 2016, AtriCure projects consolidated revenue growth of 25%. For 2016, adjusted EBITDA loss is expected to increase over 2015 due to integration, commercial expansion and clinical costs resulting from the nContact transaction, with the impact slowing in 2017. The company expects to be adjusted EBITDA positive for full year 2018.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Tuesday, October 27, 2015 to discuss its third quarter 2015 financial results. A live webcast of the conference call will be available online on the Investor page of AtriCure’s corporate website at You may also access this call through an operator by calling (855) 307-9214 for domestic callers and (330) 863-3275 for international callers using conference ID number 54944096.

The webcast will be available on AtriCure’s website and a telephonic replay of the call will be available through November 3, 2015. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. The conference ID number is 54944096.

About AtriCure, Inc.

AtriCure, Inc. is a medical device company providing innovative atrial fibrillation (Afib) solutions designed to produce superior outcomes that reduce the economic and social burden of atrial fibrillation. AtriCure’s Synergy™ Ablation System is the first and only surgical device approved for the treatment of persistent and longstanding persistent forms of Afib in patients undergoing certain open concomitant procedures. AtriCure’s AtriClip left atrial appendage management (LAAM) exclusion device is the most widely sold device worldwide that’s indicated for the occlusion of the left atrial appendage. The company believes cardiothoracic surgeons are adopting its ablation and LAAM devices for the treatment of Afib and reduction of Afib related complications such as stroke. Afib affects more than 33 million people worldwide. For more information visit or follow us on Twitter @AtriCure.

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 (including projections and guidance), 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, AtriCure’s ability to retain and attract key employees, 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, AtriCure’s ability to continue to be in compliance with applicable U.S. federal and state and foreign government laws and regulations, AtriCure’s ability to consummate acquisitions or, if consummated, to successfully integrate acquired businesses into AtriCure’s operations, AtriCure’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings, failure of an acquisition or acquired company to achieve its plans and objectives generally, risk that proposed or consummated acquisitions may disrupt operations or pose difficulties in employee retention or otherwise affect financial or operating results, AtriCure’s ability to raise the capital that may be required to accomplish the foregoing, competition from existing and new products and procedures, including the development of drug or catheter-based technologies, 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, fluctuations in exchange rates for future sales denominated in foreign currency, which represent a majority of AtriCure’s sales outside of the United States, 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. A further list and description of risks, uncertainties and other matters can be found in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

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. 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.

(In Thousands, Except Per Share Amounts)
Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Domestic Revenue:
Open-heart ablation $ 13,041 $ 11,265 $ 39,043 $ 32,498
Minimally invasive ablation 5,011 3,933 14,415 11,774
AtriClip   5,927     4,285     17,716     11,856  
Total ablation and AtriClip 23,979 19,483 71,174 56,128
Valve tools   686   577   2,158   1,978  
Total domestic 24,665 20,060 73,332 58,106
International Revenue:
Open-heart ablation 4,092 4,150 12,396 12,175
Minimally invasive ablation 1,945 1,804 5,771 5,773
AtriClip   598     543     2,058     1,390  
Total ablation and AtriClip 6,635 6,497 20,225 19,338
Valve tools   123     121     335     595  
Total international 6,758 6,618 20,560 19,933
Total revenue 31,423 26,678 93,892 78,039
Cost of revenue   8,945     7,786     26,562     22,709  
Gross profit 22,478 18,892 67,330 55,330
Operating expenses:
Research and development expenses 6,504 5,033 17,975 13,603
Selling, general and administrative expenses   22,101     14,662     65,445     53,308  
Total operating expenses   28,605     19,695     83,420     66,911  
Loss from operations (6,127 ) (803 ) (16,090 ) (11,581 )
Other (expense) income, net   (8 )   341     (188 )   750  
Loss before income tax expense (6,135 ) (462 ) (16,278 ) (10,831 )
Income tax expense 6 4 20 36
Net loss $ (6,141 ) $ (466 ) $ (16,298 ) $ (10,867 )
Basic and diluted net loss per share $ (0.22 ) $ (0.02 ) $ (0.60 ) $ (0.42 )
Weighted average shares used in computing net loss per share:
Basic and diluted   27,462     26,915     27,190     26,185  
(In Thousands, Except Per Share Amounts)
September 30, December 31,
2015 2014
Current assets:
Cash, cash equivalents, and short-term investments $ 48,426 $ 59,649
Accounts receivable, net 16,643 17,558
Inventories 16,567 14,257
Other current assets   2,477     2,044  
Total current assets 84,113 93,508
Property and equipment, net 27,455 11,552
Long-term investments 10,381 8,894
Goodwill and intangible assets, net 43,356 44,264
Other noncurrent assets   337     186  
Total assets $ 165,642   $ 158,404  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 25,494 $ 21,662
Other current liabilities and current maturities of capital leases   13,571     3,981  
Total current liabilities 39,065 25,643
Capital leases 68 74
Other noncurrent liabilities   1,025     149  
Total liabilities 40,158 25,866
Stockholders' equity:
Common stock 28 28
Additional paid-in capital 280,668 271,282
Accumulated other comprehensive loss (490 ) (348 )
Accumulated deficit   (154,722 )   (138,424 )
Total stockholders' equity   125,484     132,538  
Total liabilities and stockholders' equity $ 165,642   $ 158,404  
(In Thousands)
Nine Months Ended September 30,
2015 2014
Cash flows from operating activities:
Net loss $ (16,298 ) $ (10,867 )

Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation expense 6,533 5,704
Depreciation and amortization of intangible assets 4,212 3,471
Amortization of deferred financing costs 46 99
Loss on disposal of property and equipment 83 11
Realized loss from foreign exchange on intercompany transactions 333
Amortization/accretion on investments 472 322
Change in allowance for doubtful accounts 55 73
Change in value of contingent consideration (8,032 )
Other 95
Changes in operating assets and liabilities
Accounts receivable 571 (1,785 )
Inventories (2,461 ) (4,555 )
Other current assets (449 ) 833
Accounts payable and accrued liabilities 2,738 (4,143 )
Other non-current assets and liabilities   403     (813 )
Net cash used in operating activities (3,762 ) (19,587 )
Cash flows from investing activities:
Purchases of available-for-sale securities (19,525 ) (31,412 )
Sales and maturities of available-for-sale securities 29,174 14,614
Purchases of property and equipment (8,287 ) (4,389 )
Increases in property under build-to-suit obligation   (9,128 )    
Net cash used in investing activities (7,766 ) (21,187 )
Cash flows from financing activities:
Net proceeds from sale of stock 65,830
Payments on debt and capital leases (36 ) (6,362 )
Increases in build-to-suit obligation 9,128
Proceeds from tax incentive loan 340
Payment of debt fees and premium on retirement of debt (62 ) (181 )
Proceeds from stock option exercises 2,421 1,657
Shares repurchased for payment of taxes on stock awards (650 ) (198 )

Proceeds from issuance of common stock under employee stock purchase plan

906     708  
Net cash provided by financing activities 12,047 61,454
Effect of exchange rate changes on cash and cash equivalents   (189 )   (46 )
Net increase in cash and cash equivalents 330 20,634
Cash and cash equivalents - beginning of period   28,384     14,892  
Cash and cash equivalents - end of period $ 28,714   $ 35,526  
Supplemental cash flow information:
Cash paid for interest $ 4 $ 113
Cash paid for income taxes 20 146
Noncash investing and financing activities:
Accrued purchases of property and equipment 2,442 2,572
Assets acquired through capital lease 50 8
(In Thousands)
Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA)
Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
Net loss, as reported $ (6,141 ) $ (466 ) $ (16,298 ) $ (10,867 )
Income tax expense 6


20 36
Other expense (income), net (a) 8 (341 ) 188 (750 )
Depreciation and amortization expense 1,519 1,254 4,212 3,471
Share-based compensation expense 2,392 1,716 6,533 5,704
Change in fair value of contingent consideration       (5,370 )       (8,032 )
Non-GAAP adjusted loss (adjusted EBITDA) $ (2,216 ) $


) $ (5,345 ) $ (10,438 )
Three Months Ended September 30, Nine Months Ended September 30,
2015 2014 2015 2014
(a) Other includes:
Net interest income (expense) $ 40 $ 3 $ 91 $ (226 )
Grant income 231 35 731
Gain (loss) due to exchange rate fluctuation (48 ) (51 ) (257 ) (30 )
Non-employee stock option income (expense)       158     (57 )   275  
Other (expense) income, net $ (8 ) $ 341   $ (188 ) $ 750  


AtriCure, Inc.
Andy Wade, 513-755-4564
Senior Vice President and Chief Financial Officer
Investor Relations Contact
Westwicke Partners
Lynn Pieper, 415-202-5678

Release Summary

AtriCure announces their third quarter earnings results.


AtriCure, Inc.
Andy Wade, 513-755-4564
Senior Vice President and Chief Financial Officer
Investor Relations Contact
Westwicke Partners
Lynn Pieper, 415-202-5678