AtriCure(US:ATRC)2022-02-16 02:28Financial Data and Key Metrics Changes - AtriCure reported Q4 2021 revenue of $73.2 million, reflecting a growth of approximately 27% year-over-year and 4% sequentially [5][17] - Gross margin for Q4 2021 was 75.1%, up 160 basis points from Q4 2020, driven by favorable geographic and product mix [19] - The company experienced an adjusted EBITDA loss of $2.1 million in Q4 2021, compared to a positive adjusted EBITDA of $1.7 million in Q4 2020 [19] - For the full year 2021, worldwide revenue was $274.3 million, an increase of 32.8% on a reported basis [20] - The full year adjusted EBITDA loss was $8.8 million, compared to a loss of $6.3 million in 2020 [22] Business Line Data and Key Metrics Changes - The pain management franchise, particularly the Cryo Nerve Block, has become one of the fastest-growing therapies, with significant expansion in the U.S. market [12][13] - The appendage management franchise, led by the AtriClip product line, grew 39% in 2021, with record sales of AtriClip Flex-V devices [11] - The Hybrid AF therapy franchise saw significant growth, with the company estimating that approximately 45% of diagnosed Afib patients are long-standing persistent, presenting a unique market opportunity [8] Market Data and Key Metrics Changes - U.S. revenue for Q4 2021 was $61.2 million, a 29.1% increase from Q4 2020, reflecting healthy activity across product lines [17] - International revenue totaled $12 million, up 16.3% on a reported basis, with Europe, the Middle East, and Africa accounting for $7.4 million [18] - The company anticipates first quarter 2022 revenue to be down slightly from Q4 2021 due to ongoing staffing challenges and the impact of Omicron [24] Company Strategy and Development Direction - AtriCure is focused on expanding its Hybrid AF therapy and has plans to deepen penetration in the cardiac surgery market with the EnCompass device [10][11] - The company aims to leverage its unique physician relationships and expand into markets complementary to treating complex arrhythmias [14] - AtriCure is committed to ongoing clinical innovation and regulatory developments, including the submission of the LEAPS protocol to the FDA [13][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from the COVID-19 pandemic, including staffing shortages and capacity constraints impacting procedure volumes [7] - The company remains optimistic about growth in 2022, reaffirming its revenue guidance of $315 million to $330 million [7][23] - Management highlighted the importance of investments in research and development to drive future growth and profitability [25] Other Important Information - AtriCure published its inaugural ESG report, emphasizing its commitment to operating responsibly and sustainably [16] - The company has expanded its commercial team and training efforts to meet demand from the physician community [9] Q&A Session Summary Question: What is the future penetration outlook for the cryoSPHERE probe? - Management indicated that they anticipate reaching double-digit penetration in the cryoSPHERE market as the year progresses, supported by sales force expansion and procedure volume recovery [27][28] Question: What is the outlook for gross margin improvement? - Management noted that while gross margin is expected to be similar to 2021, there are headwinds from investments in production capacity and inflation pressures [30][31] Question: How is the minimally invasive segment expected to grow? - Management expects the minimally invasive segment, particularly the CONVERGE and EPi-Sense products, to grow above historical rates, driven by increased adoption and demand [34][35] Question: What metrics will indicate productivity from new accounts? - Management will monitor repeat buyers and the establishment of collaborative programs at new sites to gauge productivity, rather than focusing solely on revenue from new accounts [51][53] Question: What is the expected impact of the CE mark for Cryo in Europe? - Management expressed excitement about the CE mark for Cryo but indicated that significant impact in 2022 is unlikely, with expectations for a more substantial rollout in 2023 and 2024 [70]