AtriCure’s First-Quarter Revenues Soar 20.3 Percent

AtriCure Inc. had a profitable first quarter.

Q1 revenue was $35.9 million, an increase of $6.1 million or 20.3 percent (20.4 percent on a constant currency basis), compared to the same period last year. Domestic revenue increased 23.3 percent to $28.3 million, driven by strong sales of ablation-related open-heart products, ablation-related minimally invasive products, and AtriClip products. International revenue was $7.7 million, an increase of $700,000 or 10.1 percent (10.9 percent on a constant currency basis). International revenue growth was driven primarily by increases in product sales in Japan, China, and France, across all applicable product lines.

Gross profit for the first quarter of 2016 (ended March 31) was $25.9 million compared to $21.7 million for the first quarter of 2015. Gross margin for the first quarter of 2016 and 2015 was 72.1 percent and 72.7 percent, respectively.

Operating expenses for the first quarter of 2016 increased 31.5 percent, or $8.5 million, compared to the first quarter of 2015. The increase in operating expenses was driven primarily by an increase in selling, clinical, product development, marketing and training expenses, with most of these areas impacted by the changes in the company’s operating structure to support its acquisition of nContact in late 2015.

“We are pleased to report first quarter results which reflect solid operational and commercial execution. Performance in the quarter was again marked by continued growth from U.S. customers, and we are reiterating our guidance of 25 percent top line growth for 2016,” said Mike Carrel, president and CEO. “We are also pleased to have strengthened our balance sheet through the term loan with Silicon Valley Bank which, coupled with initiatives underway, strengthen our confidence in our ability to reach profitability in 2018.”

Loss from operations for the first quarter of 2016 was $9.4 million compared to $5.1 million for the first quarter of 2015. Adjusted EBITDA, a non-GAAP measure, was a loss of $4.4 million for the first quarter of 2016, compared to a $2.1 million loss for the first quarter of 2015. Net loss per share was 31 cents for the first quarter of 2016 and 19 cents for the first quarter of 2015.

Management projects 2016 revenue growth of approximately 25 percent over full year 2015 at current exchange rates.

Adjusted EBITDA, a non-GAAP measure, is projected to be a loss in the range of $14 million to $15 million for 2016 as the company continues to make strategic investments to drive the long-term growth plan, including several clinical trials, modest expansion of the U.S. field sales team, and ongoing product development efforts. In terms of EPS, this EBITDA range translates into a loss of between $1.12 and $1.22. Significant improvements in the adjusted EBITDA loss are expected for 2017, turning to a positive adjusted EBITDA for 2018.

AtriCure Inc. develops atrial fibrillation (Afib) solutions. Its 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 is indicated for the occlusion of the left atrial appendage, according to the company.