AtriCure, Inc 10-Q for FY2020 Q1

AtriCure, Inc. (ATRC)

10-Q 2020-04-30 For: 2020-03-31

Added on April 07, 2026

About this 10-Q

AtriCure, Inc filed this 10-Q on April 30, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $53.23M; down 1.4% from $53.97M a year earlier
Net loss: $16.41M; compared with a net loss of $5.64M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.001 par value	ATRC	NASDAQ



Large Accelerated Filer	x	Accelerated Filer	¨

Non-Accelerated Filer	¨	Smaller reporting company	¨



Class	Outstanding at April 27, 2020
Common Stock, $.001 par value	40,072,514


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019	3
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2020 and 2019	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 6.	Exhibits	27
Signatures		28



	March 31,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	21,766	$	28,483
Short-term investments		46,771		53,318
Accounts receivable, less allowance for credit losses of $1,096 and $1,124		22,131		28,046
Inventories		32,063		29,414
Prepaid and other current assets		4,293		3,899
Total current assets		127,024		143,160
Property and equipment, net		32,324		32,646
Operating lease right-of-use assets		3,739		4,032
Long-term investments		—		12,675
Intangible assets, net		129,392		129,881
Goodwill		234,781		234,781
Other noncurrent assets		474		705
Total Assets	$	527,734	$	557,880
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	17,302	$	14,948
Accrued liabilities		18,155		32,750
Other current liabilities and current maturities of leases and long-term debt		3,614		2,218
Total current liabilities		39,071		49,916
Long-term debt		58,323		59,634
Finance lease liabilities		11,577		11,774
Operating lease liabilities		2,526		2,796
Contingent consideration and other noncurrent liabilities		188,871		186,417
Total Liabilities		300,368		310,537
Commitments and contingencies (Note 8)
Stockholders’ Equity:
Common stock, $0.001 par value, 90,000 shares authorized and 40,077 and 39,655 issued and outstanding		40		40
Additional paid-in capital		526,302		529,658
Accumulated other comprehensive loss		(371)		(158)
Accumulated deficit		(298,605)		(282,197)
Total Stockholders’ Equity		227,366		247,343
Total Liabilities and Stockholders’ Equity	$	527,734	$	557,880



	Three Months Ended
	March 31,
	2020		2019
Revenue	$	53,225	$	53,966
Cost of revenue		14,341		14,095
Gross profit		38,884		39,871
Operating expenses:
Research and development expenses		11,587		8,176
Selling, general and administrative expenses		42,751		37,015
Total operating expenses		54,338		45,191
Loss from operations		(15,454)		(5,320)
Other income (expense):
Interest expense		(1,228)		(862)
Interest income		405		720
Other		(123)		(107)
Loss before income tax expense		(16,400)		(5,569)
Income tax expense		8		66
Net loss	$	(16,408)	$	(5,635)
Basic and diluted net loss per share	$	(0.42)	$	(0.15)
Weighted average shares outstanding—basic and diluted		38,671		36,976
Comprehensive loss:
Unrealized (loss) gain on investments	$	(63)	$	66
Foreign currency translation adjustment		(150)		(153)
Other comprehensive loss		(213)		(87)
Net loss		(16,408)		(5,635)
Comprehensive loss, net of tax	$	(16,621)	$	(5,722)


	Three-Month Period Ended March 31, 2019
								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income (Loss)		Equity
Balance—December 31, 2018	38,604	$	39	$	496,544	$	(247,003)	$	(199)	$	249,381
Impact of equity compensation plans	54		—		(4,367)		—		—		(4,367)
Other comprehensive loss	—		—		—		—		(87)		(87)
Net loss	—		—		—		(5,635)		—		(5,635)
Balance—March 31, 2019	38,658	$	39	$	492,177	$	(252,638)	$	(286)	$	239,292

	Three-Month Period Ended March 31, 2020
								Accumulated
				Additional				Other		Total
	Common Stock			Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income (Loss)		Equity
Balance—December 31, 2019	39,655	$	40	$	529,658	$	(282,197)	$	(158)	$	247,343
Impact of equity compensation plans	422		—		(3,356)		—		—		(3,356)
Other comprehensive loss	—		—		—		—		(213)		(213)
Net loss	—		—		—		(16,408)		—		(16,408)
Balance—March 31, 2020	40,077	$	40	$	526,302	$	(298,605)	$	(371)	$	227,366



	Estimated Useful Life
Generators and related equipment	3 years
Building under finance lease	15 years
Computers, software and office equipment	3 years
Machinery and equipment	3 - 7 years
Furniture and fixtures	3 - 7 years
Leasehold improvements	5 - 15 years
Equipment under finance leases	3 - 5 years



	Quoted Prices in ‎Active Markets for ‎Identical Assets ‎(Level 1)		Significant Other ‎Observable Inputs ‎(Level 2)		Significant Other ‎Unobservable ‎Inputs (Level 3)		Total
Assets:
Money market funds	$	—	$	18,235	$	—	$	18,235
U.S. government agencies and securities		5,556		—		—		5,556
Corporate bonds		—		24,739		—		24,739
Asset-backed securities		—		16,476		—		16,476
Total assets	$	5,556	$	59,450	$	—	$	65,006
Liabilities:
Contingent consideration		—		—		187,615		187,615
Total liabilities	$	—	$	—	$	187,615	$	187,615



							Weighted average
	Fair Value		Valuation Technique	Unobservable Input	Range		by relative fair value
				Discount rate	5.56	%	5.56	%
Regulatory & Commercialization-based milestones	$	187,615	Probability-weighted scenario approach	Projected month and year of payment	June 2020 - ‎September 2025		n/a
				Probability of payment	77.40 - 85.00	%	81.75	%



	Three Months Ended		Twelve Months Ended
	March 31, 2020		December 31, 2019
Beginning Balance	$	185,157	$	18,773
Amounts acquired		—		171,300
Changes in fair value included in earnings		2,458		(4,916)
Ending Balance	$	187,615	$	185,157



2020 (excluding the three months ended March 31, 2020)	$	1,333
2021		1,511
2022		18
2023		18
2024		18
2025 and thereafter		173
Total	$	3,071



2020 (excluding the three months ended March 31, 2020)	$	—
2021		14,286
2022		17,143
2023		17,143
2024		11,428
Total long-term debt, of which $1,429 is current and $58,571 is noncurrent	$	60,000



	March 31, 2020			December 31, 2019
Operating Leases
Weighted average remaining lease term (years)		3.1			3.5
Weighted average discount rate		5.9	%		5.9	%

Finance leases
Weighted average remaining lease term (years)		10.4			11.0
Weighted average discount rate		7.0	%		7.0	%



Exhibit No.	Description
31.1	Rule 13a-14(a) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Rule 13a-14(a) Certification of Principal Accounting and Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. Section 1350 by the Principal Executive Officer, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification pursuant to 18 U.S.C. Section 1350 by the Principal Accounting and Financial Officer, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


Emerging growth company	¨



	Three Months Ended
	March 31,
	2020		2019
Cash flows from operating activities:
Net loss	$	(16,408)	$	(5,635)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		4,384		4,154
Depreciation		1,955		1,744
Amortization of intangible assets		489		484
Amortization of deferred financing costs		141		55
Loss on disposal of property and equipment		32		261
Accretion of investments		(3)		(391)
Change in value of contingent consideration		2,458		(1,667)
Other non-cash adjustments to income		360		175
Changes in operating assets and liabilities:
Accounts receivable		5,875		(1,547)
Inventories		(2,728)		(1,699)
Other current assets		(499)		(1,023)
Accounts payable		2,522		438
Accrued liabilities		(14,545)		(8,652)
Other noncurrent assets and liabilities		(120)		(135)
Net cash used in operating activities		(16,087)		(13,438)
Cash flows from investing activities:
Purchases of available-for-sale securities		—		(2,947)
Sales and maturities of available-for-sale securities		19,163		15,665
Purchases of property and equipment		(1,832)		(1,709)
Proceeds from sale of property and equipment		—		8
Net cash provided by investing activities		17,331		11,017
Cash flows from financing activities:
Payments on debt and leases		(94)		(150)
Payments of debt fees		—		(299)
Proceeds from stock option exercises and employee stock purchase plan		4,036		80
Shares repurchased for payment of taxes on stock awards		(11,776)		(8,601)
Net cash used in financing activities		(7,834)		(8,970)
Effect of exchange rate changes on cash and cash equivalents		(127)		(120)
Net decrease in cash and cash equivalents		(6,717)		(11,511)
Cash and cash equivalents—beginning of period		28,483		32,231
Cash and cash equivalents—end of period	$	21,766	$	20,720



	March 31,		December 31,
	2020		2019
Raw materials	$	11,122	$	11,126
Work in process		2,316		1,260
Finished goods		18,625		17,028
Inventories	$	32,063	$	29,414



	March 31,		December 31,
	2020		2019
Accrued payroll and employee-related expenses	$	7,434	$	6,748
Accrued commissions		3,529		8,734
Accrued bonus		1,151		10,840
Sales returns and allowances		3,940		3,979
Accrued royalties		663		732
Accrued taxes and value-added taxes payable		1,171		1,658
Other accrued liabilities		267		59
Total	$	18,155	$	32,750



	AtriCure, Inc.
	(REGISTRANT)


Date: April 30, 2020	/s/ Michael H. Carrel
	Michael H. Carrel
	President and Chief Executive Officer (Principal Executive Officer)


Date: April 30, 2020	/s/ M. Andrew Wade
	M. Andrew Wade
	Chief Financial Officer (Principal Accounting and Financial Officer)