atrc-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________________________________________

FORM 10-Q

___________________________________________________________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________to_____________

Commission File Number 000-51470

_____________________________________________

AtriCure, Inc.

(Exact name of Registrant as specified in its charter)

_____________________________________________


Delaware			34-1940305
(State or other jurisdiction of incorporation)			(IRS Employer Identification No.)

7555 Innovation Way

Mason, OH 45040

(Address of principal executive offices)

(513) 755-4100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

_____________________________________________

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Emerging growth company

Non-Accelerated Filer

Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class			Outstanding at October 31, 2022
Common Stock, $.001 par value			46,508,360

Table of Contents



		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II. OTHER INFORMATION		24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 6.	Exhibits	24
Signatures		25

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Per Share Amounts)

(Unaudited)


	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	48,823	$	43,654
Short-term investments	73,821		75,436
Accounts receivable, less allowance for credit losses of $1,096	41,466		33,021
Inventories	43,953		38,964
Prepaid and other current assets	4,222		5,001
Total current assets	212,285		196,076
Long-term investments	51,413		104,338
Property and equipment, net	38,556		31,409
Operating lease right-of-use assets	3,969		4,761
Intangible assets, net	40,078		42,992
Goodwill	234,781		234,781
Other noncurrent assets	829		955
Total Assets	$	581,911	$	615,312
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	24,405	$	18,597
Accrued liabilities	31,162		36,092
Current maturities of leases	2,031		1,756
Total current liabilities	57,598		56,445
Long-term debt	60,061		59,741
Finance lease liabilities	9,407		10,082
Operating lease liabilities	3,314		4,068
Other noncurrent liabilities	1,223		1,220
Total Liabilities	131,603		131,556
Commitments and contingencies (Note 8)
Stockholders’ Equity:
Common stock, $0.001 par value, 90,000 shares authorized and 46,443 and 46,016 issued and outstanding	46		46
Additional paid-in capital	778,006		764,811
Accumulated other comprehensive loss	(5,295)		(948)
Accumulated deficit	(322,449)		(280,153)
Total Stockholders’ Equity	450,308		483,756
Total Liabilities and Stockholders’ Equity	$	581,911	$	615,312

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	83,246	$	70,460	$	242,351	$	201,111
Cost of revenue	21,533		18,234		61,524		50,267
Gross profit	61,713		52,226		180,827		150,844
Operating expenses (benefit):
Research and development expenses	15,169		11,284		43,589		34,698
Selling, general and administrative expenses	57,267		49,873		175,771		150,939
Change in fair value of contingent consideration	—		(189,900)		—		(184,800)
Intangible asset impairment	—		82,300		—		82,300
Total operating expenses (benefit)	72,436		(46,443)		219,360		83,137
(Loss) income from operations	(10,723)		98,669		(38,533)		67,707
Other income (expense):
Interest expense	(1,324)		(1,449)		(3,425)		(3,835)
Interest income	370		117		562		354
Other	(549)		(191)		(753)		(151)
(Loss) income before income tax expense	(12,226)		97,146		(42,149)		64,075
Income tax expense	46		38		147		135
Net (loss) income	$	(12,272)	$	97,108	$	(42,296)	$	63,940
Net (loss) income per share
Basic net (loss) income per share	$	(0.27)	$	2.15	$	(0.93)	$	1.42
Diluted net (loss) income per share	$	(0.27)	$	2.11	$	(0.93)	$	1.39
Weighted average shares outstanding
Basic	45,823		45,258		45,682		44,977
Diluted	45,823		46,100		45,682		45,996
Comprehensive (loss) income:
Unrealized loss on investments	$	(691)	$	(14)	$	(3,479)	$	(177)
Foreign currency translation adjustment	(260)		(112)		(868)		(348)
Other comprehensive loss	(951)		(126)		(4,347)		(525)
Net (loss) income	(12,272)		97,108		(42,296)		63,940
Comprehensive (loss) income, net of tax	$	(13,223)	$	96,982	$	(46,643)	$	63,415

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands)

(Unaudited)

Three-Month Period Ended September 30, 2021

Common Stock

Additional

Paid-in

Capital

Accumulated
Deficit

Accumulated

Other

Comprehensive

Income (Loss)

Total

Stockholders’

Equity

Amount

Balance—June 30, 2021

45,881

SEC Form 10-Q filed by AtriCure Inc.