AtriCure(US:ATRC)2020-04-30 02:50Financial Data and Key Metrics Changes - First quarter 2020 worldwide revenue was $53.2 million, a decline of 1.4% on a GAAP basis and a decline of 1% on a constant currency basis compared to Q1 2019 [8] - U.S. revenue was $43.5 million, an increase of 1.1% from Q1 2019, impacted by COVID-19 in the last three weeks of the quarter [9] - Gross margin for Q1 2020 was 73.1%, down from 73.9% in Q1 2019 [10] - Operating loss for the quarter was $15.5 million compared to a loss of $5.3 million in Q1 2019 [12] - Adjusted EBITDA loss was $6.1 million compared to a loss of $491,000 in Q1 2019 [12] - Cash, cash equivalents, and investments at the end of the quarter were approximately $68.5 million [13] Business Line Data and Key Metrics Changes - U.S. sales of appendage management products grew 11.2% to $17.4 million [9] - U.S. open ablation-related product sales increased to $19.2 million, representing growth of 1.2% [9] - U.S. sales of products used in minimally invasive procedures were $6.6 million, down 15.5% [9] - International revenue decreased to $9.8 million, down 11% on a GAAP basis compared to Q1 2019 [10] Market Data and Key Metrics Changes - COVID-19 significantly impacted revenue, with U.S. sales declining roughly 70% in the final weeks of Q1 [8] - International orders, particularly from China, were affected, with no orders received in Q1 [10] Company Strategy and Development Direction - The company is prioritizing investments in CONVERGE and aMAZE trials, as well as new product development [26] - The CONVERGE trial results are expected to be presented on May 8, 2020, with implications for the Afib market [26][27] - The company is focused on maintaining operational readiness and supporting physicians and patients during the pandemic [25][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented uncertainty due to COVID-19 and the impact on nonemergent procedures [17] - There is optimism about the return of deferred procedures as states begin to reopen [31] - Management expects a rough second quarter but anticipates gradual recovery in the following months [39][41] Other Important Information - The company has implemented measures to reduce operating expenses by over $25 million [15] - The company is continuing critical manufacturing and fulfillment of products while ensuring employee safety [20] Q&A Session Summary Question: How should we think about the deferrability of various business lines? - Management indicated that open procedures are more emergent and are starting to see a pickup, while elective procedures are expected to bounce back in May and June [34][35] Question: How do you see the recovery of volumes over the coming months? - Management expects April and May to be challenging, with gradual improvement anticipated in the second quarter and a return to normalcy by the fourth quarter [38][39] Question: Can you provide insight into the CONVERGE trial expectations? - Management emphasized the importance of statistical significance in the trial results, which would drive excitement in the market [60][70] Question: What is the status of the aMAZE trial? - Enrollment for the aMAZE trial is complete, and management does not anticipate significant delays in follow-up procedures [62] Question: How is the company preparing for the CONVERGE rollout post-FDA approval? - Management is focusing on internal training and cross-training staff to ensure readiness for the launch [54][55]