Form 8-K - Current report

0001323885False00013238852023-11-012023-11-01

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) of the

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 1, 2023

AtriCure, Inc.

(Exact name of registrant as specified in charter)

Delaware			000-51470			34-1940305
(State or other jurisdiction of incorporation)			(Commission File Number)			(IRS Employer Identification No.)

7555 Innovation Way, Mason OH 45040

(Address of Principal Executive Offices, and Zip Code)

[phone]

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, $.001 par value			ATRC			NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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Item 2.02.    Results of Operations and Financial Condition.

On November 1, 2023, AtriCure, Inc. issued a press release regarding its financial results for the third quarter ended September 30, 2023. The Company will hold a conference call on November 1, 2023 at 4:30 p.m. Eastern Time to discuss the financial results. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in Item 2.02 of Form 8-K and in the press release attached as Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in each of Item 2.02 of this Form 8-K and Exhibit 99.1 shall not be incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing or document.

Item 9.01.    Financial Statements and Exhibits.

(d)Exhibits

No.						Description
99.1						Press Release dated November 1, 2023 relating to financial results for the third quarter ended September 30, 2023.
104						Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						ATRICURE, INC.
Dated:			November 1, 2023			By:			/s/ Angela L. Wirick
									Angela L. Wirick
									Chief Financial Officer

			Exhibit 99.1

For immediate release

November 1, 2023

AtriCure Reports Third Quarter 2023 Financial Results

•Worldwide revenue of $98.3 million – an increase of 18.1% year over year

•U.S. revenue of $81.7 million – an increase of 17.1% year over year

•International revenue of $16.6 million – an increase of 23.2% year over year

•Net loss of $9.1 million – an improvement of $3.2 million year over year

•Positive adjusted EBITDA of $4.7 million – an improvement of $5.4 million year over year

MASON, Ohio, November 1, 2023 – AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in surgical treatments and therapies for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management, today announced third quarter 2023 financial results.

“We are excited to report another strong quarter at AtriCure, driven by the performance across our business globally. We also made progress against many strategic initiatives in our pillars of innovation, education and clinical science,” said Michael Carrel, President and Chief Executive Officer at AtriCure. “To that end, we continue to prioritize thoughtful investments while demonstrating meaningful operating leverage in our business. As we look to the future, we remain confident in the vast potential of our markets and our ability to deliver profitable growth.”

Third Quarter 2023 Financial Results

Revenue for the third quarter 2023 was $98.3 million, an increase of 18.1% over third quarter 2022 revenue (17.3% on a constant currency basis). Our worldwide revenue growth reflects continuing adoption of our products by physicians for the treatment of patients with Afib, LAA management and post-operative pain management.

U.S. revenue was $81.7 million, an increase of $11.9 million or 17.1%, compared to the third quarter 2022. U.S. revenue growth was driven by sales across key product lines, highlighted by sales of the EnCompass® clamp in open ablation, cryoSPHERE® probe for post-operative pain management and the AtriClip® Flex·V® device in appendage management. International revenue increased $3.1 million or 23.2% (18.7% on a constant currency basis) to $16.6 million, across all franchises and geographic regions. On a sequential basis, worldwide revenue for the third quarter 2023 decreased approximately 2.6% from the second quarter 2023 due to normal seasonality of procedures in summer months.

Gross profit for the third quarter 2023 was $73.9 million compared to $61.7 million for the third quarter 2022. Gross margin was 75.2% for the third quarter 2023, showing improvement of 110 basis points from the third quarter 2022. The current quarter reflects leverage of our operations and production efficiencies, partially offset by pressure from geographic and product mix. Loss from operations for the third quarter 2023 was $8.1 million, compared to $10.7 million for the third quarter 2022, reflecting strong revenue growth, cost efficiencies, and improving operating leverage. Basic and diluted net loss per share was $0.20 for the third quarter 2023, compared to $0.27 for the third quarter 2022.

Adjusted EBITDA was positive for the third quarter 2023 at $4.7 million, compared to negative $0.7 million for third quarter of 2022. Adjusted loss per share for the third quarter 2023 was $0.20, compared to $0.27 for the third quarter 2022.

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.

2023 Financial Guidance

Full year 2023 revenue is projected to be $394 million to $396 million, reflecting growth of approximately 19% to 20% over full year 2022. Management now expects full year 2023 positive adjusted EBITDA of approximately $18 million to $20 million, and full year 2023 adjusted loss per share of approximately $0.74 to $0.76.

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Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Wednesday, November 1, 2023 to discuss third quarter 2023 financial results. To access the webcast, please visit the Investors page of AtriCure’s corporate website at https://ir.atricure.com/events-and-presentations/events. Participants are encouraged to register more than 15 minutes before the webcast start time. 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 37 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 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. AtriCure’s Hybrid AF™ Therapy is a minimally invasive procedure that provides a lasting solution for long-standing persistent Afib patients. AtriCure’s cryoICE cryoSPHERE® probe is cleared for temporary ablation of peripheral nerves to block pain, providing pain relief in cardiac and thoracic procedures. 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/forward-looking-statements as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors. Except where otherwise noted, the information contained in this release is as of November 1, 2023. We assume no obligation to update any forward-looking statements contained in this release as a result of new information or future events or developments, except as may be required by law.

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 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 settlements, impairment of intangible assets 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, impairment of intangible assets and legal settlements. A reconciliation of adjusted loss income 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

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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.

CONTACTS:

Angie Wirick

AtriCure, Inc.

Chief Financial Officer

[phone]

[e-mail]

Lynn Lewis or Marissa Bych

Gilmartin Group

Investor Relations

[e-mail]

[e-mail]

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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,
			2023						2022						2023						2022
United States Revenue:
Open ablation			$	25,844					$	21,569					$	77,988					$	62,613
Minimally invasive ablation			10,893						10,077						31,900						28,846
Pain management			12,591						10,510						36,249						28,734
Total ablation			49,328						42,156						146,137						120,193
Appendage management			32,364						27,620						98,647						83,120
Total United States			81,692						69,776						244,784						203,313
International Revenue:
Open ablation			8,007						6,680						23,015						19,385
Minimally invasive ablation			1,578						1,445						4,820						4,249
Pain management			547						121						1,214						375
Total ablation			10,132						8,246						29,049						24,009
Appendage management			6,466						5,224						18,869						15,029
Total International			16,598						13,470						47,918						39,038
Total revenue			98,290						83,246						292,702						242,351
Cost of revenue			24,421						21,533						72,147						61,524
Gross profit			73,869						61,713						220,555						180,827
Operating expenses:
Research and development expenses			20,354						15,169						53,119						43,589
Selling, general and administrative expenses			61,604						57,267						185,451						175,771
Total operating expenses			81,958						72,436						238,570						219,360
Loss from operations			(8,089)						(10,723)						(18,015)						(38,533)
Other expense, net			(919)						(1,503)						(2,416)						(3,616)
Loss before income tax expense			(9,008)						(12,226)						(20,431)						(42,149)
Income tax expense			47						46						218						147
Net loss			$	(9,055)					$	(12,272)					$	(20,649)					$	(42,296)
Basic and diluted net loss per share			$	(0.20)					$	(0.27)					$	(0.45)					$	(0.93)
Weighted average shares used in computing net loss per share:
Basic and diluted			46,411						45,823						46,262						45,682

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ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

			September 30, 2023						December 31, 2022
Assets
Current assets:
Cash, cash equivalents, and short-term investments			$	133,014					$	121,113
Accounts receivable, net			51,528						42,693
Inventories			61,894						45,931
Prepaid and other current assets			6,283						5,477
Total current assets			252,719						215,214
Long-term investments			—						51,509
Property and equipment, net			41,400						38,833
Operating lease right-of-use assets			4,043						3,787
Goodwill and intangible assets, net			300,465						274,120
Other noncurrent assets			1,644						1,985
Total assets			$	600,271					$	585,448
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities			$	61,836					$	52,920
Current maturities of debt and leases			20,702						5,472
Total current liabilities			82,538						58,392
Long-term debt			42,153						56,834
Finance and operating lease liabilities			11,520						12,242
Other noncurrent liabilities			1,227						1,226
Total liabilities			137,438						128,694
Stockholders' equity:
Common stock			47						47
Additional paid-in capital			812,238						787,422
Accumulated other comprehensive loss			(2,184)						(4,096)
Accumulated deficit			(347,268)						(326,619)
Total stockholders' equity			462,833						456,754
Total liabilities and stockholders' equity			$	600,271					$	585,448

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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 September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Net loss, as reported			$	(9,055)					$	(12,272)					$	(20,649)					$	(42,296)
Income tax expense			47						46						218						147
Other expense, net			919						1,503						2,416						3,616
Depreciation and amortization expense			4,111						2,987						10,634						8,791
Share-based compensation expense			8,661						7,001						26,416						21,574
Net gain from legal settlements			—						—						(4,412)						—
Non-GAAP adjusted income (loss) (adjusted EBITDA)			$	4,683					$	(735)					$	14,623					$	(8,168)

Reconciliation of Non-GAAP Adjusted Loss Per Share

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Net loss, as reported			$	(9,055)					$	(12,272)					$	(20,649)					$	(42,296)
Net gain from legal settlements			—						—						(4,412)						—
Non-GAAP adjusted net loss			$	(9,055)					$	(12,272)					$	(25,061)					$	(42,296)
Basic and diluted adjusted net loss per share			$	(0.20)					$	(0.27)					$	(0.54)					$	(0.93)
Weighted average shares used in computing adjusted net loss per share
Basic and diluted			46,411						45,823						46,262						45,682

Cover	Nov. 01, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 01, 2023
Entity Registrant Name	AtriCure, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-51470
Entity Tax Identification Number	34-1940305
Entity Address, Address Line One	7555 Innovation Way
Entity Address, City or Town	Mason
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45040
City Area Code	513
Local Phone Number	755-4100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	ATRC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Central Index Key	0001323885
Amendment Flag	false

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