AtriCure Reports First Quarter 2013 Financial Results

  AtriCure Reports First Quarter 2013 Financial Results

Highlights

  *Revenue of $19.4 million – up 11.2%; 11.1% constant currency
  *U.S. sales of $14.6 million – up 11.0%
  *International sales of $4.8 million – up 11.9%; 11.7% constant currency

Business Wire

WEST CHESTER, Ohio -- May 02, 2013

AtriCure, Inc. (Nasdaq: ATRC), a medical device company and a leader in the
development of technologies and solutions for the treatment of atrial
fibrillation, or Afib, and systems for the exclusion of the left atrial
appendage, today announced financial results for the first quarter of 2013.

“Our first quarter results reflect double digit revenue growth, balanced
globally. We are starting to see the results of our training and education
efforts in capturing market share,” said Mike Carrel, President and Chief
Executive Officer of AtriCure. Mr. Carrel continued, “We will continue to
invest in transforming AtriCure into a commercially focused organization using
training and clinical outcomes to accelerate revenue growth.”

First Quarter 2013 Financial Results

Revenue for the first quarter of 2013 was $19.4 million, an increase of $2.0
million or 11.2% (11.1% on a constant currency basis), compared to first
quarter 2012 revenue. Domestic revenue increased 11.0% to $14.6 million,
driven by strong sales of ablation-related open-heart products and AtriClip
products. International revenue was $4.8 million, an increase of $0.5 million
or 11.9% (11.7% on a constant currency basis) when compared to $4.3 million
for the first quarter of 2012. International revenue growth was driven
primarily by increased sales in Asia.

Gross profit for the first quarter of 2013 was $14.1 million compared to $12.8
million for the first quarter of 2012. Gross margin for the first quarter of
2013 and 2012 was 72.5% and 73.0%, respectively. The decrease in gross margin
was due primarily to the initiation of the medical device excise tax.

Operating expenses for the first quarter of 2013 increased 11.5%, or $1.6
million, compared to the first quarter of 2012. The increase in operating
expenses was driven primarily by an increase in selling, marketing and
training expenses.

Loss from operations for the first quarter of 2013 was $1.8 million compared
to $1.5 million for the first quarter of 2012. Net loss per share was $0.10
for the first quarter of 2013 and 2012.

Cash, cash equivalents and investments were $36.0 million at March 31, 2013
and cash used in operations during the first quarter of 2013 was $2.6 million.

2013 Guidance

Management affirms the previous guidance that 2013 revenue will be in the
range of $76.5 - $78.0 million, an increase of 9 - 11% from 2012.

Adjusted EBITDA, a non-GAAP measure, is projected to be a loss in the range of
$3.0 to $5.0 million including the impact of the medical device excise tax
which is estimated to be in the range of $0.8 - $1.0 million for 2013.
Management expects to continue making investments targeted at future revenue
growth.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Thursday,
May 2, 2013 to discuss its first quarter 2013 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.

You may also access this call through an operator by calling (888) 680-0892
for domestic callers and (617) 213-4858 for international callers at least 15
minutes prior to the call start time using reservation code 31020101.

The webcast will be available on AtriCure’s website and a telephonic replay of
the call will also be available through June 2, 2013. The replay dial-in
numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for
international callers. The reservation code is 45139601.

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 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 (LAA) exclusion device is the most widely implanted device
for LAA management worldwide.The company believes cardiothoracic surgeons are
adopting its ablation and LAA management devices for the treatment of Afib and
reduction of Afib related complications such as stroke. Afib affects more than
5.5 million people worldwide.

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, 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. 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 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                              
                                                  Three Months Ended March 31,
                                                  2013              2012
                                                                    
Revenue:
Open-heart                                        $  9,121          $ 8,486
Minimally invasive                                   3,132            2,948
AtriClip                                            2,386          1,759  
Total United States                                  14,639           13,193
International                                       4,791          4,283  
Total revenue                                        19,430           17,476
Cost of revenue                                     5,344          4,724  
Gross profit                                         14,086           12,752
                                                                    
Operating expenses:
Research and development expenses                    3,506            3,389
Selling, general and administrative expenses        12,380         10,859 
Total operating expenses                            15,886         14,248 
                                                                    
Loss from operations                                 (1,800 )         (1,496 )
                                                                    
Other expense                                       (138   )        (121   )
                                                                    
Loss before income tax expense                       (1,938 )         (1,617 )
                                                                    
Income tax expense                                  (5     )        (3     )
                                                                    
Net (loss) income                                 $  (1,943 )       $ (1,620 )
                                                                    
Basic and diluted net loss per share              $  (0.10  )       $ (0.10  )
                                                                    
Weighted average shares used in computing net
loss per common share:
Basic and diluted                                   19,544         16,016 
                                                                             

                                                            
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                  
                                               March 31,          December 31,
                                               2012               2012
Assets
                                                                  
Current assets:
Cash, cash equivalents and short-term          $ 36,029           $ 12,000
investments
Accounts receivable, net                         11,135             9,948
Inventories                                      5,693              5,718
Other current assets                            1,500            873      
Total current assets                             54,357             28,539
                                                                  
Property and equipment, net                      3,455              3,430
Intangible assets                                29                 32
Other assets                                    286              430      
Total assets                                   $ 58,127          $ 32,431   
                                                                  
Liabilities and Stockholders' Equity
                                                                  
Current liabilities:
Accounts payable and accrued liabilities       $ 10,664           $ 10,176
Current maturities of long-term debt and        2,030            2,029    
capital lease obligations
Total current liabilities                        12,694             12,205
                                                                  
Long-term debt and capital lease                 5,899              6,407
obligations
Other liabilities                               934              1,319    
Total liabilities                                19,527             19,931
                                                                  
Stockholders' equity:
Common stock                                     21                 17
Additional paid-in capital                       151,340            123,157
Other comprehensive (loss) income                (67      )         77
Accumulated deficit                             (112,694 )        (110,751 )
Total stockholders' equity                       38,600             12,500
                                                                 
Total liabilities and stockholders' equity     $ 58,127          $ 32,431   
                                                                             

                                               
ATRICURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                
                                                  Three Months Ended March 31,
                                                  2013              2012
                                                                    
Cash flows from operating activities:
Net loss                                          $  (1,943 )       $ (1,620 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Share-based compensation                             518              688
Depreciation and amortization                        461              479
Amortization of deferred financing costs             21               52
Loss (gain) on disposal of equipment                 15               (13    )
Amortization/accretion on investments                (3     )         11
Change in allowance for doubtful accounts            8                14
Changes in assets and liabilities
Accounts receivable                                  (1,231 )         (177   )
Inventories                                          (1     )         (450   )
Other current assets                                 (634   )         (133   )
Accounts payable and accrued liabilities             88               128
Other non-current assets and liabilities            127            (63    )
Net cash used in operating activities                (2,574 )         (1,084 )
                                                                    
Cash flows from investing activities:
Purchases of available-for-sale securities           (2,549 )         (1,496 )
Maturities of available-for-sale securities          1,555            1,437
Purchases of equipment                               (455   )         (662   )
Net proceeds from the sale of assets                -              24     
Net cash used in investing activities                (1,449 )         (697   )
                                                                    
Cash flows from financing activities:
Net proceeds from sale of stock                      26,912           -
Proceeds from debt borrowings                        -                10,000
Payments on debt and capital leases                  (507   )         (6,552 )
Proceeds from stock option exercises                 1,002            213
Payment of debt fees                                 (25    )         (25    )
Shares repurchased for payment of taxes on          (245   )        (198   )
stock awards
Net cash provided by financing activities            27,137           3,438
                                                                    
Effect of exchange rate changes on cash and         (83    )        2      
cash equivalents
                                                                    
Net increase in cash and cash equivalents            23,031           1,659
Cash and cash equivalents - beginning of            7,753          9,759  
period
Cash and cash equivalents - end of period         $  30,784        $ 11,418 
                                                                             

                                                           
ATRICURE, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS
(Unaudited)
                                                                 
                                                                 
Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA)
                                                                 
                                               Three Months Ended March 31,
                                               2013              2012
                                                                 
Net loss, as reported                          $  (1,943 )       $ (1,620 )
Income tax expense                                5                3
Other expense (a)                                 138              121
Depreciation and amortization expense             461              479
Share-based compensation expense                 518            688    
Non-GAAP adjusted loss (adjusted EBITDA)       $  (821   )       $ (329   )
                                                                 
                                                                 
                                               Three Months Ended March 31,
(a) Other includes:                            2013              2012
                                                                 
Net interest expense                           $  (169   )       $ (222   )
Grant income                                      -                61
Gain due to exchange rate fluctuation             45               3
Non-employee stock option (expense) income       (14    )        37     
Other expense                                  $  (138   )       $ (121   )

Contact:

AtriCure, Inc.
Andy Wade, Vice President and Chief Financial Officer, 513-755-4564
awade@atricure.com
or
Investor Relations Contact:
Westwicke Partners
Lynn Pieper, 415-202-5678
Lynn.pieper@westwicke.com
 
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