WEST CHESTER, Ohio, May 4 /PRNewswire-FirstCall/ -- AtriCure, Inc. , a medical device company focused on developing, manufacturing and selling innovative surgical devices, announced today financial results for the first quarter ended March 31, 2006.
First quarter 2006 consolidated revenue was $8.6 million, compared to $7.5 million for the first quarter 2005 and $8.6 million for the fourth quarter 2005. First quarter 2006 revenue from domestic open-heart products was $5.5 million, revenue from domestic minimally invasive sole-therapy products was $2.3 million, and international revenue was $0.8 million.
Gross profit for the first quarter 2006 was $7.0 million with gross margins of 81.5%, compared to $5.6 million with gross margins of 74.4% in the same period last year.
Research and development expenses were $2.9 million for the first quarter 2006, compared with $1.7 million for the first quarter 2005 and $2.8 million for the fourth quarter 2005. The increased research and development expenses were attributable primarily to the expansion of product development initiatives and clinical trials.
Selling, general and administrative expenses were $7.5 million for the first quarter 2006, compared with $5.2 million for the first quarter 2005 and $7.9 million for the fourth quarter 2005. Selling, general and administrative expenses increased year over year primarily due to the expansion of the Company’s sales and marketing organization and higher general corporate expenditures as a result of being a public company.
Net loss available to common shareholders for the first quarter 2006 totaled $3.1 million or $0.26 per share, including the after-tax effect of approximately $0.2 million of stock-based compensation related to SFAS 123(R) and other non-cash-based compensation. Excluding the impact of non-cash-based compensation, adjusted net loss available to common shareholders totaled $2.9 million or $0.24 per share for the first quarter 2006.
Cash, cash equivalents and investments at March 31, 2006 were $29.8 million.
David Drachman, President and Chief Executive Officer, said, “Our first quarter performance reflects strong continuing support from our customers and the successful execution by AtriCure in meeting the market challenges. Our entire organization has demonstrated significant resolve and commitment to preserving and improving human life through the expansion of treatment options for patients who suffer from atrial fibrillation.”
Financial Guidance
For the full year 2006, the Company expects total revenue to be between $36.0 million and $38.0 million and loss per share to be between $1.30 and $1.50. The Company’s full year loss per share guidance includes the estimated impact of $0.08 to $0.10 per share of after-tax, stock-based compensation related to SFAS 123(R) and other non-cash-based compensation.
For the second quarter 2006, the Company expects total revenue to be between $8.9 million and $9.4 million.
Conference Call
AtriCure will host a Web cast and conference call at 5:30 pm ET on May 4, 2006 to discuss first quarter 2006 results. A live Web cast of the conference call will be available online from the investor relations page of AtriCure’s corporate Web site at http://www.atricure.com. The dial-in numbers are (866) 831-6270 for domestic callers and (617) 213-8858 for international callers. The reservation number for both is 66542359. A recording of the conference call will remain available on AtriCure’s Web site through August 2, 2006. A telephonic replay of the call will be available until June 5, 2006. The replay dial-in numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use reservation code 68239897.
About AtriCure, Inc.
AtriCure, Inc. is a medical device company focused on developing, manufacturing and selling innovative surgical devices to create precise lesions, or scars, in soft and cardiac tissues. Medical journals have described the adoption by leading cardiothoracic surgeons of the AtriCure bipolar ablation system as a standard treatment alternative during open-heart surgical procedures to safely, rapidly and reliably create lesions in cardiac, or heart, tissue to block the abnormal electrical impulses that cause atrial fibrillation, a rapid, irregular quivering of the upper chambers of the heart. Atrial fibrillation affects more than 2.4 million people in the U.S. and predisposes them to a five fold increased risk of stroke.
The FDA has cleared the AtriCure bipolar ablation system for the ablation, or destruction, of soft tissues in general and non-cardiac related surgical procedures but to date has not cleared or approved the system for cardiac use or for the treatment of AF.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements that address activities, events or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as earnings estimates, other predictions of financial performance, launches by AtriCure of new products and market acceptance of AtriCure’s products. Forward-looking statements are based on AtriCure’s experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control. These risks and uncertainties include the rate and degree of market acceptance of AtriCure’s products, AtriCure’s ability to develop and market new and enhanced products, the timing of and ability to obtain and maintain regulatory clearances and approvals for its products, the timing of and ability to obtain reimbursement of procedures utilizing AtriCure’s products, competition from existing and new products and procedures or AtriCure’s ability to effectively react to other risks and uncertainties described from time to time in AtriCure’s SEC filings, such as fluctuation of quarterly financial results, reliance on third party manufacturers and suppliers, litigation or other proceedings, government regulation and stock price volatility. AtriCure does not guarantee any forward-looking statement, and actual results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward- looking statement, whether as a result of new information, future events or otherwise.
ATRICURE, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 2006 2005 Revenues $8,636,808 $7,497,759 Cost of revenues (a) 1,599,741 1,919,512 Gross profit 7,037,067 5,578,247 Operating expenses: Research and development expenses (a) 2,910,493 1,736,836 Selling, general and administrative expenses 7,496,098 5,228,598 Total operating expenses 10,406,591 6,965,434 Loss from operations (3,369,524) (1,387,187) Preferred stock interest expense - (976,292) Interest income, net 279,753 20,801 Loss before income taxes (3,089,771) (2,342,678) Income tax expense - 23,500 Net loss available to common shareholders $(3,089,771) $(2,366,178) Basic and diluted loss per share $(0.26) $(1.26) Weighted average shares outstanding: Basic and diluted 12,096,200 1,881,542 (a) Includes the following expenses resulting from transactions with Enable Medical Corporation prior to the acquisition as of August 10, 2005: Cost of revenues $- $1,621,470 Research and development expenses $- $382,635 ATRICURE, INC. CONDENSED BALANCE SHEETS (Unaudited) March 31, December 31, 2006 2005 Assets Current assets: Cash and cash equivalents $23,058,275 $27,432,948 Short-term investments 4,920,257 6,369,234 Accounts receivable, net 5,490,512 4,865,065 Inventories, net 2,708,529 2,135,143 Other current assets 726,148 845,330 Total current assets 36,903,721 41,647,720 Property and equipment, net 3,272,995 3,359,549 Long-term investments 1,788,680 - Intangible assets 933,278 986,778 Goodwill 3,840,837 3,840,837 Other assets 233,029 205,531 Total assets $46,972,540 $50,040,415 Liabilities and shareholders’ equity Current liabilities: Accounts payable and accrued liabilities $5,301,570 $5,374,998 Current maturities of capital lease obligation and long-term debt 373,711 369,835 Total current liabilities 5,675,281 5,744,833 Capital lease obligation 32,737 38,855 Long-term debt 956,332 1,045,150 Other liabilities 42,187 28,125 Shareholders’ equity: Common stock 12,117 12,086 Additional paid-in capital 85,687,317 86,107,520 Unearned compensation - (599,591) Other comprehensive income (6,270) 826 Accumulated deficit (45,427,161) (42,337,389) Total shareholders’ equity 40,266,003 43,183,452 Total liabilities and shareholders’ equity $46,972,540 $50,040,415 ATRICURE, INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2006 2005 Cash flows from operating activities: Net loss $(3,089,771) $(2,366,178) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 426,556 298,650 Gain on disposal of equipment (20,000) - Stock compensation 197,377 169,451 Preferred stock interest - 976,292 Changes in assets and liabilities, excluding the effects of acquisition: Accounts receivable (605,449) (876,226) Inventory (573,386) 37,045 Other current assets 119,181 (88,419) Accounts payable and accrued liabilities (250,824) 676,763 Other non-current assets and liabilities 30,870 (605,741) Net cash used in operating activities (3,765,446) (1,778,363) Cash flows from investing activities: Purchases of property & equipment (193,389) (450,072) Purchases of available-for-sale securities (353,929) - Advance payments for acquisition of company - (500,000) Net cash used in investing activities (547,318) (950,072) Cash flow from financing activities: Payments on long-term debt (82,010) - Payments on capital lease obligations (9,049) - Proceeds from stock option exercises and warrants 29,150 4,850 Net cash provided by (used in) financing activities (61,909) 4,850 Net decrease in cash and cash equivalents (4,374,673) (2,723,585) Cash and cash equivalents - beginning of period 27,432,948 5,175,177 Cash and cash equivalents - end of period $23,058,275 $2,451,592 Contacts: AtriCure, Inc. The Ruth Group Thomas Etergino Stephanie Carrington / Nick Laudico (investors) Chief Financial Officer (646) 536-7017 / 7030 513-755-4561 scarrington@theruthgroup.comtetergino@atricure.comnlaudico@theruthgroup.com Jason Rando (media) (646) 536-7025 jrando@theruthgroup.com
AtriCure, Inc.
CONTACT: Thomas Etergino, Chief Financial Officer of AtriCure, Inc.,+1-513-755-4561, tetergino@atricure.com; or Stephanie Carrington,+1-646-536-7017, scarrington@theruthgroup.com, or Nick Laudico,+1-646-536-7030, nlaudico@theruthgroup.com, investors, or Jason Rando,media, +1-646-536-7025, jrando@theruthgroup.com, all of The Ruth Group, forAtriCure, Inc.
Web site: http://www.atricure.com/
