AtriCure(US:ATRC)2020-02-19 02:52Financial Data and Key Metrics Changes - For the full year 2019, worldwide revenue was $230.8 million, an increase of 14.5% on a GAAP basis and 15.2% on a constant currency basis [25] - Fourth quarter revenue was $61.3 million, representing growth of 15.9% on a GAAP basis and 16.4% on a constant currency basis compared to Q4 2018 [19] - Gross margin was 73% for Q4 2019, consistent with Q4 2018, while full year gross margin was 73.8%, up from 73% in 2018 [21][26] - The adjusted EBITDA loss for 2019 was $6.7 million compared to $2.7 million in 2018, with a net loss per share of $0.94 for 2019 compared to $0.62 for 2018 [27] Business Line Data and Key Metrics Changes - U.S. sales of appendage management products grew 28.9% to $68.2 million, driven by strong performance of the AtriClip Flex V LAA exclusion system [25] - U.S. open ablation revenue increased 11% to $80.2 million, with growth led by the cryoSPHERE probe [25] - U.S. sales of minimally invasive ablation products were down 5% to $9 million, indicating continued volatility in this business [19] Market Data and Key Metrics Changes - International revenue totaled $45 million for the full year 2019, growing 13.9% on a GAAP basis and 17.6% on a constant currency basis [26] - Strong growth was noted in Asia, particularly in Japan and China, as well as in European markets, notably the UK, Germany, and France [20][26] - The appendage management business saw significant international growth, particularly with the V clip products being available in Europe after securing CE mark in late 2019 [14] Company Strategy and Development Direction - The company aims for another year of double-digit revenue growth in 2020, with revenue guidance in the range of $254 million to $261 million [9][28] - Focus on clinical trials such as CONVERGE and aMAZE to address under-penetrated patient populations, representing a market opportunity of over $1 billion [10] - The company is building a strong sales force and clinical education team to support the expansion of its minimally invasive and appendage management products [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the minimally invasive surgery (MIS) market, projecting it as a multibillion-dollar opportunity [36] - The company anticipates that the approval of the CONVERGE trial will significantly accelerate growth in the coming years [38] - Management highlighted the importance of training and collaboration with surgeons to ensure successful adoption of new technologies [63] Other Important Information - The company has invested heavily in clinical trials and training programs, having trained over 3,000 healthcare professionals globally [8] - The adjusted loss per share for 2020 is expected to be between $1.14 to $1.24, with a GAAP reported loss per share expected to be between $1.40 to $1.55 [30] Q&A Session Summary Question: Future of the MIS business and revenue growth post-CONVERGE - Management views the MIS market as a multibillion-dollar opportunity, with expectations of significant growth following FDA approval [36][37] Question: Insights on the appendage management business - The appendage management market is expected to grow significantly, with the acquisition of SentreHEART enhancing growth potential [41][42] Question: Guidance for 2020 and factors influencing it - The guidance of 10% to 13% growth reflects a conservative approach to ensure the company can meet expectations [66][68] Question: Impact of TAVR on open heart business - Management does not see any significant impact from TAVR on the open heart business, as the market remains under-penetrated [78] Question: Timing and confidence regarding CONVERGE approval - The company submitted data to the FDA in December 2019 and anticipates feedback in April 2020, with potential panel discussions in mid-2020 [59][61]