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 financial results for the second quarter of 2011. Revenue was $16.8 million, reflecting 18.2 percent growth over the second quarter of 2010. Revenue from product sales in the United States was $12.7 million, reflecting growth of 6.9 percent, and international revenue was a record $4.1 million, reflecting 75.4 percent growth on a GAAP basis and 62.8 percent growth on a constant currency basis.
“In addition, we continue to work closely with the FDA in order to schedule an advisory committee (panel) meeting to review our PMA application, which would support an open-heart, concomitant atrial fibrillation approval.”
"We are encouraged by our operating performance and growth from the international markets which is attributable to our increased momentum in Europe and Asia. Our recently launched products are clearly capturing the interest of physicians in both the U.S. and the international markets, setting the foundation for sustained growth and continued market leadership," said David J. Drachman, President and Chief Executive Officer. "In addition, we continue to work closely with the FDA in order to schedule an advisory committee (panel) meeting to review our PMA application, which would support an open-heart, concomitant atrial fibrillation approval."
Second Quarter Financial Results
Revenue for the second quarter of 2011 was $16.8 million, an increase of $2.6 million or 18.2 percent, compared to second quarter 2010 revenue. Domestic revenue increased 6.9 percent to $12.7 million. Domestic revenue from ablation-related product sales was $11.3 million and revenue from sales of the AtriClip system was $1.3 million. International revenue was a record $4.1 million for the second quarter of 2011 compared to $2.3 million for the second quarter of 2010. International revenue growth of 75.4 percent was driven primarily by an increase in our direct markets in Europe and an increase in sales in Asia.
Gross profit for the second quarter of 2011 was $12.3 million compared to $11.2 million for the second quarter of 2010. Gross margin for the second quarter of 2011 was 73.2 percent compared to gross margin of 79.1 percent for the second quarter of 2010. The decrease in gross margin was primarily due to non-recurring costs related to the planned discontinuance of several products which are being replaced with next generation products, an increased mix of revenue from international sales, an increased mix of sales of the AtriClip system, and an increase in capital equipment sales.
Operating expenses for the second quarter of 2011 increased 11.9 percent, or $1.4 million, to $13.0 million from $11.7 million for the second quarter of 2010. The increase in operating expenses was primarily driven by a $0.5 million increase in clinical and regulatory related expenditures and activities and a $0.9 million increase in selling, general and administrative expenses, primarily due to an increase in selling personnel.
Loss from operations for the second quarter of 2011 was $0.8 million as compared to $0.4 million for the second quarter of 2010. Adjusted EBITDA, a non-GAAP measure, was $0.5 million for the second quarter of 2011. Net loss per share was $0.06 for the second quarter of 2011 compared to $0.05 for the second quarter of 2010.
Cash, cash equivalents and investments increased to $16.4 million at June 30, 2011 and cash used in operations during the first six months of 2011 was $0.5 million, an improvement of $1.4 million or 73.3 percent, compared to the first six months of 2010.
Other Business Updates
During July 2011 AtriCure was awarded $1.0 million from the Ohio Third Frontier Biomedical Program for its development and commercialization of a minimally invasive left atrial appendage exclusion system. The grant will be funded and recognized as the qualifying expenditures are incurred. "We believe this award supports our assertion that the market for left atrial appendage exclusion represents a large, unmet clinical need and we are excited to secure incremental spending to support our development and commercialization efforts," said David Drachman.
Additionally, during the second quarter, AtriCure's Isolator Synergy Access clamp received 510(k) clearance. Synergy Access has several competitive advantages, including articulation, and is designed to allow surgeons to more easily place the clamp into position during open-heart ablation procedures. AtriCure completed its initial user preference evaluations during the quarter and began a full commercial release of Synergy Access during the third quarter. Additionally, AtriCure anticipates that its new, highly featured cardiac cryosurgical ablation system, cryoICE BOX, will obtain 501(k) clearance and be available for full commercial release during the third quarter of 2011. cryoICE BOX was launched in Europe during the second quarter and a full commercial release in Europe is planned for the third quarter of 2011.
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