AtriCure first quarter revenue increases 11.8% to $17.5 million

AtriCure, Inc. (Nasdaq: ATRC), a medical device company and a leader in cardiac surgical ablation systems for the treatment of atrial fibrillation, or AF, and systems for the exclusion of the left atrial appendage, today announced financial results for the first quarter of 2012.    

Revenue for first quarter 2012 was a new high of $17.5 million, reflecting 11.8% growth over the first quarter of 2011. Revenue from U.S. product sales was a record $13.2 million, reflecting growth of 8.8%, and revenue from product sales to international customers was a record $4.3 million, reflecting growth of 21.9% or 25.1% on a constant currency basis.

"We are pleased with our performance in the first quarter which saw a resurgence of growth in domestic product sales and continued strength in the international markets - notably from our direct markets in Europe and continued growth from Asia. We are increasingly confident that U.S. procedure volumes are stabilizing which we anticipate will continue through the remainder of 2012," said David J. Drachman, President and Chief Executive Officer of AtriCure. "We anticipate growth accelerating during the second half of 2012. We believe AtriCure is positioned to capitalize on our wide range of premium products, recent AF approval, education and marketing activities, momentum in international markets, and continued investment in regulatory approvals and clinical science."

First Quarter Financial Results

Revenue for the first quarter of 2012 was $17.5 million, an increase of $1.8 million or 11.8% compared to first quarter 2011 revenue. Domestic revenue increased 8.8% to a record $13.2 million, including $1.8 million in sales of the AtriClip system. International revenue was a record $4.3 million, an increase of $0.8 million or 21.9% (25.1% on a constant currency basis) when compared to $3.5 million for the first quarter of 2011. International revenue growth was driven primarily by our direct markets in Europe and an increase in sales in Asia.

Gross profit for the first quarter of 2012 was $12.8 million compared to $11.9 million for the first quarter of 2011. Gross margin for the first quarter of 2012 was 73.0% compared to 76.1% for the first quarter of 2011. The decrease in gross margin was primarily due to an increase in manufacturing costs, scrap and inefficiencies primarily associated with the anticipation of transitioning to the manufacturing of PMA approved products, an increased mix of international sales and an increase in capital equipment sales.

Operating expenses for the first quarter of 2012 increased 9.9%, or $1.3 million, to $14.2 million from $13.0 million for the first quarter of 2011. The increase in operating expenses was primarily driven by an increase in clinical-related activities and expenses and an increase in selling, general and administrative expenses, primarily due to an increase in sales and marketing expenditures, along with an increase in training expenses related to the recent FDA clearance of the Synergy Ablation System for the treatment of AF.

Loss from operations for the first quarter of 2012 was $1.5 million compared to $1.1 million for the first quarter of 2011. Adjusted EBITDA, a non-GAAP measure, was a loss of $0.3 million for the first quarter of 2012. Net loss per share was $0.10 for the first quarter of 2012 and $0.08 for the first quarter of 2011.

Cash, cash equivalents and investments were $15.9 million at March 31, 2012 and cash used in operations during the first quarter of 2012 was $1.1 million.

Company Outlook

AtriCure is providing full year 2012 revenue guidance in a range of 12% to 15% growth over 2011. The Company anticipates gross margin to approximate 73% to 75% of sales in 2012.

Management Transition

Separately, AtriCure has announced that Julie Piton has resigned as the Company's Chief Financial Officer to pursue other opportunities.

"During Julie's tenure, AtriCure developed a strong accounting and finance team with broad capabilities, including an Executive Director of Finance who has assumed responsibility for financial reporting and controls and a Corporate Controller. Based on our internal assessment and input from the diligence conducted by external consultants we are confident that the company is well positioned as we search for her successor." said David J. Drachman, President and Chief Executive Officer. "The Board of Directors and I thank Julie for her contributions and service and wish her well."