Exhibit 99.1
Contacts:
| AtriCure, Inc. Thomas Etergino Chief Financial Officer 513-755-4561 tetergino@atricure.com |
The Ruth Group Stephanie Carrington / Nick Laudico (investors) (646) 536-7017 / 7030 scarrington@theruthgroup.com nlaudico@theruthgroup.com
Jason Rando (media) (646) 536-7025 jrando@theruthgroup.com |
Press Release
AtriCure Reports First Quarter 2006 Financial Results
- Provides 2006 Financial Guidance -
WEST CHESTER, Ohio – May 4, 2006 – AtriCure, Inc. (Nasdaq:ATRC), 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 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, 2006 | December 31, 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 | ||||