AtriCure, Inc. (Nasdaq: ATRC), a medical device company and a leader in cardiac surgical ablation systems and systems for the exclusion of the left atrial appendage, today announced revenue of $14.5 million for its seasonally impacted third quarter of 2010. Revenue from product sales in the United States was $11.6 million, reflecting growth of 8.1 percent and international revenue was $2.9 million, reflecting 19.2 percent growth on a constant currency basis or 12.7 percent on a GAAP basis. Revenue from the AtriClip system in the United States was $1.0 million during the first quarter of full commercial launch.
"We are encouraged by our third quarter momentum and financial results. We believe that our strategic investments in new products, sales force expansion and FDA approvals will continue to accelerate growth. Importantly, we believe that initial sales from the AtriClip system and our new product and regulatory progress affirms the power of our strategic plan," said David J. Drachman, President and Chief Executive Officer. "During the quarter we made positive progress on our ABLATE clinical module submission, and anticipate filing the final module in support of a PMA during the first quarter of 2011 and receiving an atrial fibrillation approval during 2012. Furthermore, we continue to anticipate initial patient enrollment in our DEEP AF clinical trial during the fourth quarter of 2010."
Third Quarter Financial Results
Revenue for the third quarter of 2010 was $14.5 million, a $1.2 million increase when compared to third quarter 2009 revenue of $13.3 million. Domestic revenue increased 8.1 percent to $11.6 million. Revenue from domestic open-heart products for the third quarter of 2010, which includes $1.0 million in revenue from the AtriClip system, increased to $7.9 million from $6.5 million. Revenue from domestic minimally invasive products decreased from $4.2 million for the third quarter of 2009 to $3.7 million for the third quarter of 2010, reflecting fewer procedures. International revenue was $2.9 million for the third quarter of 2010 as compared to $2.6 million for the third quarter of 2009. International growth of 19.2 percent on a constant currency basis was driven primarily by European markets, reflecting growth in both our direct and distributor markets.
Gross profit for the third quarter of 2010 was $11.2 million as compared to $10.0 million for the third quarter of 2009. Gross margin for the third quarter of 2010 was 77.2 percent compared to gross margin of 75.3 percent for the third quarter of 2009. The improvement in gross margin was primarily driven by an increase in gross margin from international sales, driven by a more favorable product mix and a benefit from growth in direct markets. These increases to gross margin were partially offset by an increased mix of revenue from Cryo1 and the AtriClip system, which carry a lower gross margin than our other disposable products.
Operating expenses for the third quarter of 2010 were $12.0 million as compared with third quarter 2009 operating expenses of $14.4 million on a GAAP basis and $10.7 million excluding the settlement reserve. The increase in non-GAAP adjusted operating expenses of $1.3 million was primarily due to increased costs related to clinical activities of $0.4 million and a $1.0 million increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses was due primarily to increased sales and marketing headcount related expenses of $0.8 million, reflecting an expansion of the worldwide sales and marketing organization, and costs to exit a distributor relationship of $0.3 million.
Adjusted EBITDA was $0.4 million and net loss was $1.0 million for the third quarter of 2010. Cash, cash equivalents and investments were $11.5 million at September 30, 2010 and cash provided by operations during the quarter was $0.3 million.