AtriCure (ATRC) Q4 2010 earnings summary

Executive summary

• 2010 priorities delivered revenue growth, improved operating leverage, FDA clearance and U.S. launch of AtriClip, and progress toward an AF indication for Isolator Synergy.

• Adjusted EBITDA was $1.9 million for 2010, and the fourth quarter marked the first quarter with net income.

Financial highlights

• Revenue rose 8.2% to $59.0 million in 2010; excluding FX, growth was 8.9%.

• Gross profit was $45.4 million and gross margin was 76.9%, versus $41.8 million and 76.6% in 2009.

• Operating loss narrowed to $3.2 million from $15.5 million; net loss narrowed to $3.8 million from $16.5 million.

• Q4 revenue was $16.4 million; Q4 net income was $12,000, compared with a $2.4 million net loss in Q4 2009.

• 2009 included a $6.8 million goodwill impairment and $4.0 million DOJ settlement reserve; 2010 other income included a one-time $0.5 million IRS grant.

Outlook and guidance

• 2011 growth expected from AtriClip and ablation sales in the U.S., international share gains, new products and expanded selling capacity.

• Planned 2011 launches included an articulating bipolar RF clamp, a cryoablation platform and an enhanced cryo generator.

• An Isolator Synergy AF indication was anticipated during 2012, subject to FDA review; approval could expand the open-heart ablation market.

• DEEP AF enrollment was expected to finish in Q3 2011; initial enrollment in a stand-alone thoracoscopic AtriClip feasibility trial was anticipated in 2012, subject to trial progress.