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AtriCure Reports Record Second Quarter 2008 Financial Results


-- Record consolidated revenues of $14.9 million

-- Record revenues from domestic MIS products - $5.1 million

-- Record international revenues of $2.3 million - 49% growth

-- Net loss improves 43% to $1.6 million

-- Secured $10 million credit facility - expands capital resources -- Reported MIS procedure times of 60 minutes and hospital stays of two

days or less

WEST CHESTER, Ohio, Aug. 5 /PRNewswire-FirstCall/ -- AtriCure, Inc. (Nasdaq: ATRC), a medical device company and a leader in cardiac surgical ablation systems, today announced record second quarter 2008 revenues of $14.9 million and record revenues for each line of business.

"Based on our encouraging financial trends, available cash and newly secured credit facility, we are well positioned to drive toward profitability," said David J. Drachman, President and Chief Executive Officer. "Importantly, minimally invasive procedure times of 60 minutes and patients discharged from the hospital at two days or less, combined with our reported clinical results are clear indicators of our progress and the large and growing opportunity for our products."

Second Quarter 2008 Financial Results

Revenues for the second quarter of 2008 were a record $14.9 million, a 20.3% increase over the second quarter of 2007 and a sequential increase of 9.8% over the first quarter of 2008. Revenues from domestic open-heart products were a record $7.4 million, an 8.9% increase over second quarter 2007 revenues of $6.8 million and a 7.2% sequential increase. Revenues from domestic minimally invasive products were a record $5.1 million, representing a 28.8% increase over second quarter 2007 revenues of $4.0 million and a sequential increase of 4.5%. International revenues were a record $2.3 million for the second quarter of 2008, a 48.9% increase over second quarter 2007 revenues of $1.5 million and a sequential increase of 36.9%.

Gross profit for the second quarter of 2008 was $11.4 million and gross margin was 76.5%, compared to gross profit of $9.8 million and gross margin of 79.4% for the second quarter of 2007. The decrease in gross margin was due primarily to the introduction of new products and an increased mix of international business. Operating expenses were $13.2 million for the second quarter of 2008, a 1.7% increase over second quarter 2007 operating expenses of $13.0 million. The increase in operating expenses was primarily due to an increase in selling expenses and market development activities to support revenue growth, partially offset by an overall reduction in administrative costs.

The net loss for the second quarter of 2008 was $1.6 million as compared to a $2.8 million net loss for the second quarter of 2007, an improvement of 42.7%. Net loss per share was $0.11, an improvement of 50.0%, or $0.11 per share, as compared to the second quarter 2007 net loss per share of $0.22.

Cash, cash equivalents and investments at June 30, 2008 were $11.9 million. On July 1, 2008, the Company entered into a $10.0 million, two-year revolving credit facility.

Financial Guidance

The Company is reaffirming its full year 2008 guidance of $58 to $60 million for revenues and an expected net loss per share between $0.55 and $0.70.

Conference Call

AtriCure will host a conference call at 10:00 a.m. ET on Tuesday, August 5, 2008 to discuss second quarter 2008 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

Pre-registration is available for this call at the following URL:

Pre-registering is recommended and only takes a few moments. You may pre-register at any time, including up to and after the call start time. Alternatively, if you prefer being placed into the call by an operator, please call (888) 713-4216 for domestic callers and (617) 213-4868 for international callers at least 15 minutes prior to the call start time and use reservation number 90600695.

The web cast will remain available on AtriCure's web site through September 5, 2008. A telephonic replay of the call will also be available until September 5, 2008. The replay dial-in numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. Please use reservation code 68915140.

About AtriCure, Inc.

AtriCure, Inc. is a medical device company and a leader in developing, manufacturing and selling innovative cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac, or heart, tissue. Medical journals have described the adoption by leading cardiothoracic surgeons of the AtriCure Isolator(R) bipolar ablation system as a treatment alternative during open-heart surgical procedures to create lesions in cardiac tissue to block the abnormal electrical impulses that cause atrial fibrillation, or AF, a rapid, irregular quivering of the upper chambers of the heart. Additionally, medical journals and leading cardiothoracic surgeons have described the AtriCure Isolator(R) system as a promising treatment alternative for patients who may be candidates for sole-therapy minimally invasive procedures. AF affects more than 5.5 million people worldwide and predisposes them to a five-fold increased risk of stroke.

The FDA has cleared the AtriCure Isolator(R) system, including its Isolator Synergy(TM) ablation clamps, and AtriCure's multifunctional pen and Coolrail(TM) linear ablation device, for the ablation, or destruction, of cardiac tissue during surgical procedures. Additionally, the FDA has cleared AtriCure's multifunctional pen for temporary pacing, sensing, stimulating and recording during the evaluation of cardiac arrhythmias. To date, the FDA has not cleared or approved AtriCure's products for the treatment of AF. AtriCure's left atrial appendage clip system has not been approved for commercial use.

Forward-Looking Statements

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 (including the purported class action lawsuit) 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.

Julie A. Piton

Vice President and Chief Financial Officer

(513) 755-4561




Three Months Ended June 30, Six Months Ended June 30,

2008 2007 2008 2007

Revenues $14,858,514 $12,352,219 $28,388,659 $23,102,989

Cost of revenues 3,494,908 2,547,152 6,725,788 4,757,647

Gross profit 11,363,606 9,805,067 21,662,871 18,345,342

Operating expenses:

Research and


expenses 2,593,694 2,927,984 5,026,847 6,057,262

Selling, general

and administrative

expenses 10,595,334 10,036,836 22,357,756 20,320,023



expenses 13,189,028 12,964,820 27,384,603 26,377,285

Loss from operations (1,825,422) (3,159,753) (5,721,732) (8,031,943)

Other income 232,806 372,663 523,685 942,432

Net loss available to

common stockholders $(1,592,616) $(2,787,090) $(5,198,047) $(7,089,511)

Basic and diluted loss

per share $(0.11) $(0.22) $(0.37) $(0.56)

Weighted average

shares outstanding:

Basic and diluted 14,184,973 12,943,884 14,167,468 12,622,937




June 30, December 31,

2008 2007


Current assets:

Cash and cash equivalents $10,023,442 $13,000,652

Short-term investments 1,895,462 7,006,041

Accounts receivable 9,458,302 7,189,512

Inventories 5,847,802 5,266,155

Other current assets 1,228,197 1,400,163

Total current assets 28,453,205 33,862,523

Property and equipment, net 4,454,900 4,466,060

Intangible assets 709,903 850,653

Goodwill 6,763,259 6,763,259

Other assets 227,382 129,001

Total assets $40,608,649 $46,071,496

Liabilities and stockholders' equity

Current liabilities:

Accounts payable and accrued

liabilities $7,244,994 $8,413,656

Current maturities of debt and

capital lease obligations 445,434 825,146

Total current liabilities 7,690,428 9,238,802

Long-term debt and capital lease

obligations 125,953 282,475

Other liabilities 326,866 313,717

Total liabilities 8,143,247 9,834,994

Stockholders' equity:

Common stock 14,196 14,132

Additional paid-in capital 104,899,820 103,524,814

Other comprehensive income 57,165 5,286

Accumulated deficit (72,505,779) (67,307,730)

Total stockholders' equity 32,465,402 36,236,502

Total liabilities and

stockholders' equity $40,608,649 $46,071,496




Six Months Ended June 30,

2008 2007

Cash flows from operating activities:

Net loss $(5,198,047) $(7,089,511)

Adjustments to reconcile net loss to

net cash used in operating activities:

Depreciation and amortization 1,423,711 1,046,280

Loss on disposal of equipment - 6,852

Provision for (benefit from) losses

in accounts receivable 12,397 (99,720)

Share-based compensation expense 1,142,123 882,999

Changes in assets and liabilities,

excluding effects of acquired business:

Accounts receivable (2,192,408) (585,842)

Inventories (556,362) (586,742)

Other current assets 92,879 255,872

Accounts payable and accrued

liabilities (1,234,568) 293,955

Other non-current assets and

liabilities 150 253,125

Net cash used in operating

activities (6,510,125) (5,622,732)

Cash flows from investing activities:

Purchases of property & equipment (1,092,423) (1,441,494)

Purchases of available-for-sale

securities (1,903,974) -

Maturities of available-for-sale

securities 7,000,000 3,608,000

Cash paid for acquisition (417,292) -

Net cash provided by investing

activities 3,586,311 2,166,506

Cash flows from financing activities:

Payments on debt and capital leases (221,139) (191,798)

Proceeds from stock option exercises 174,122 151,345

Gross proceeds from sale of stock - 16,499,997

Net cash (used in) provided by

financing activities (47,017) 16,459,544

Effect of exchange rate changes on

cash (6,379) (157,452)

Net (decrease) increase in cash and

cash equivalents (2,977,210) 12,845,866

Cash and cash equivalents - beginning

of period 13,000,652 14,890,383

Cash and cash equivalents - end of

period $10,023,442 $27,736,249

SOURCE AtriCure, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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