Acutus Medical Reports Third Quarter 2023 Financial Results
Acutus Medical, Inc. (Nasdaq: AFIB) reported third quarter 2023 revenue of $5.2 million, a 44% year-over-year growth, driven by strong distribution revenue from sales of left-heart access products to Medtronic. The company also achieved significant reductions in operating expenses and cash burn, and announced a strategic realignment of resources and corporate restructuring to optimize financial position and maximize free cash flow.
11/08/2023 - 04:01 PM
CARLSBAD, Calif., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Acutus Medical, Inc. (“Acutus” or the “Company”) (Nasdaq: AFIB) today reported results for the third quarter of 2023.
Recent Highlights:
Third quarter revenue of $5.2 million grew 44% year-over-year, led by strong growth in distribution revenue from sales of left-heart access products to Medtronic Registered significant year-over-year reductions in both GAAP and non-GAAP operating expenses and cash burn, resulting from disciplined focus on expense management Announced strategic realignment of resources and corporate restructuring with the objective of optimizing financial position and maximizing free cash flow Third Quarter 2023 Financial Results $5.2 million for the third quarter of 2023, an increase of 44% compared to $3.6 million for the third quarter of 2022. The improvement over the same quarter last year was primarily driven by sales through the Company’s distribution agreement with Medtronic, higher capital sales, and increases in service, rent and other revenue.
Gross margin on a GAAP basis was negative 64% for the third quarter of 2023 compared to negative 91% for the same quarter last year. Non-GAAP gross margin was negative 60% for the third quarter of 2023 compared to negative 109% for the same quarter last year. The improvement on both a GAAP and non-GAAP basis was driven by higher production volumes primarily related to left-heart access manufacturing, lower manufacturing variances, and reduced manufacturing overhead expenses.
Operating expenses, consisting of research and development and selling, general and administrative expenses on a GAAP basis were $12.2 million for the third quarter of 2023 compared to $15.6 million for the same quarter last year. Non-GAAP operating expenses were $11.1 million for the third quarter of 2023 compared to $15.2 million for the same quarter last year. The decrease in operating expenses on both a GAAP and Non-GAAP basis resulted from reduced discretionary spend, and the reprioritization of certain research and development programs.
Net loss on a GAAP basis was $13.2 million for the third quarter of 2023 and net loss per share was $0.45 on a weighted average basic and diluted outstanding share count of 29.3 million, compared to a net loss of $20.4 million and a net loss per share of $0.72 on a weighted average basic and diluted outstanding share count of 28.4 million for the same quarter last year. Non-GAAP net loss for the third quarter of 2023 was $15.2 million , or $0.52 per share, compared to non-GAAP net loss of $20.0 million , or $0.70 per share, for the third quarter of 2022.
Cash, cash equivalents, marketable securities and restricted cash were $45.5 million as of September 30, 2023.
Outlook
Non-GAAP Financial Measures
About Acutus
Caution Regarding Forward-Looking Statements
Investor Contact: investors@acutus.com
ACUTUS MEDICAL, INC. Condensed Consolidated Balance Sheets (in thousands, except per share amounts ) September 30, 2023 December 31, 2022 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 24,100 $ 25,584 Marketable securities, short-term 14,375 44,863 Restricted cash, short-term 7,015 5,764 Accounts receivable 8,952 21,085 Inventory 15,728 13,327 Employer retention credit receivable — 4,703 Prepaid expenses and other current assets 2,467 2,541 Total current assets 72,637 117,867 Property and equipment, net 6,611 9,221 Right-of-use asset, net 3,359 3,872 Intangible assets, net 1,433 1,583 Other assets 688 897 Total assets $ 84,728 $ 133,440 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,754 $ 4,721 Accrued liabilities 7,438 9,686 Contingent consideration, short-term — 1,800 Operating lease liabilities, short-term 707 319 Warrant liability 1,868 3,346 Total current liabilities 14,767 19,872 Operating lease liabilities, long-term 3,462 4,103 Long-term debt 34,761 34,434 Other long-term liabilities 32 12 Total liabilities 53,022 58,421 Commitments and contingencies Stockholders' equity Preferred stock, $0.00 1 par value; 5,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 6,666 shares of the preferred stock, designated as Series A Common Equivalent Preferred Stock, are issued and outstanding as of September 30, 2023 and December 31, 2022 — — Common stock, $0.00 1 par value; 260,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 29,289,934 and 28,554,656 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively 29 29 Additional paid-in capital 598,842 594,173 Accumulated deficit (566,212 ) (518,314 ) Accumulated other comprehensive loss (953 ) (869 ) Total stockholders' equity 31,706 75,019 Total liabilities and stockholders' equity $ 84,728 $ 133,440
ACUTUS MEDICAL, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts ) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (unaudited) Revenue $ 5,238 $ 3,644 $ 14,696 $ 11,401 Cost of products sold 8,595 6,951 23,447 23,589 Gross profit (3,357 ) (3,307 ) (8,751 ) (12,188 ) Operating expenses (income): Research and development 4,795 5,946 17,712 21,884 Selling, general and administrative 7,432 9,679 26,280 38,207 Goodwill impairment — — — 12,026 Restructuring — 1,331 475 2,280 Change in fair value of contingent consideration — 198 123 1,153 Gain on sale of business (2,648 ) — (5,927 ) (43,575 ) Total operating expenses 9,579 17,154 38,663 31,975 Loss from operations (12,936 ) (20,461 ) (47,414 ) (44,163 ) Other income (expense): Loss on debt extinguishment — — — (7,947 ) Change in fair value of warrant liability 636 904 1,478 904 Interest income 547 241 2,223 292 Interest expense (1,409 ) (1,109 ) (4,110 ) (3,810 ) Total other income (expense), net (226 ) 36 (409 ) (10,561 ) Loss before income taxes (13,162 ) (20,425 ) (47,823 ) (54,724 ) Income tax expense 75 — 75 — Net loss $ (13,237 ) $ (20,425 ) $ (47,898 ) $ (54,724 ) Other comprehensive income (loss): Unrealized gain on marketable securities 4 39 7 — Foreign currency translation adjustment (66 ) (351 ) (91 ) (904 ) Comprehensive loss $ (13,299 ) $ (20,737 ) $ (47,982 ) $ (55,628 ) Net loss per common share, basic and diluted $ (0.45 ) $ (0.72 ) $ (1.65 ) $ (1.93 ) Weighted average shares outstanding, basic and diluted 29,262,768 28,359,516 29,024,353 28,273,207
ACUTUS MEDICAL, INC. Condensed Consolidated Statements of Cash Flows (in thousands ) Nine Months Ended September 30, 2023 2022 (unaudited) Cash flows from operating activities Net loss $ (47,898 ) $ (54,724 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 3,498 4,653 AcQMap Systems converted to sales 238 266 Sales-type lease gain (310 ) (87 ) Amortization of intangible assets 150 370 Non-cash stock-based compensation expense 4,915 7,497 (Accretion of discounts) amortization of premiums on marketable securities, net (1,318 ) 237 Amortization of debt issuance cost 325 741 Amortization of operating lease right-of-use assets 513 480 Loss on debt extinguishment — 7,947 Goodwill impairment — 12,026 Gain on sale of business, net (5,927 ) (43,575 ) Direct costs paid related to sale of business — (2,917 ) Change in fair value of warrant liability (1,478 ) (904 ) Loss on disposal of property and equipment 268 — Change in fair value of contingent consideration 123 1,153 Changes in operating assets and liabilities: Accounts receivable 1,244 420 Inventory (2,401 ) 1,812 Employer retention credit receivable 4,703 — Prepaid expenses and other current assets 420 (4,296 ) Other assets 495 386 Accounts payable (2 ) (2,929 ) Accrued liabilities (2,430 ) (179 ) Operating lease liabilities (253 ) (390 ) Other long-term liabilities 20 (40 ) Net cash used in operating activities (45,105 ) (72,053 ) Cash flows from investing activities Proceeds from sale of business 17,000 50,000 Purchases of available-for-sale marketable securities (38,521 ) (33,235 ) Sales of available-for-sale marketable securities — 18,599 Maturities of available-for-sale marketable securities 70,250 59,642 Purchases of property and equipment (1,394 ) (2,473 ) Net cash provided by investing activities 47,335 92,533 Cash flows from financing activities Repayment of debt — (44,550 ) Penalty fees paid for early prepayment of debt — (1,063 ) Borrowing under new debt — 34,825 Payment of debt issuance costs — (626 ) Proceeds from the exercise of stock options 4 66 Repurchase of common shares to pay employee withholding taxes (275 ) (62 ) Proceeds from employee stock purchase plan 25 182 Payment of contingent consideration (1,923 ) (873 ) Net cash used in financing activities (2,169 ) (12,101 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (294 ) (447 ) Net change in cash, cash equivalents and restricted cash (233 ) 7,932 Cash, cash equivalents and restricted cash, at the beginning of the period 31,348 24,221 Cash, cash equivalents and restricted cash, at the end of the period $ 31,115 $ 32,153 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,731 $ 3,101 Nine Months Ended September 30, 2023 2022 (unaudited) Supplemental disclosure of noncash investing and financing activities: Accounts receivable from sale of business $ 6,111 $ — Change in unrealized (gain) loss on marketable securities $ (7 ) $ — Change in unpaid purchases of property and equipment $ 35 $ 48 Contingent consideration escrow release $ — $ 380 Net book value on AcQMap system sales-type leases $ 238 $ 244 Amount of debt proceeds allocated to warrant liability $ — $ 3,379
ACUTUS MEDICAL, INC. Reconciliation of GAAP Results to Non-GAAP Results (in thousands ) (unaudited) Three Months Ended September 30, 2023 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Expense, Net Net Loss Basic and Diluted EPS Reported $ 8,595 $ 4,795 $ 7,432 $ (12,936 ) $ (226 ) $ (13,237 ) $ (0.45 ) Amortization of acquired intangibles (50 ) — — 50 — 50 — Stock-based compensation (146 ) (317 ) (815 ) 1,278 — 1,278 0.04 Change in fair value of warrant liability — — — — (636 ) (636 ) (0.02 ) Change in fair value of contingent consideration — — — — — — 0.00 Gain on sale of business — — — (2,648 ) — (2,648 ) (0.09 ) Adjusted $ 8,399 $ 4,478 $ 6,617 $ (14,256 ) $ (862 ) $ (15,193 ) $ (0.52 ) Three Months Ended September 30, 2022 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Income (Expense), Net Net Loss Basic and Diluted EPS Reported $ 6,951 $ 5,946 $ 9,679 $ (20,461 ) $ 36 $ (20,425 ) $ (0.72 ) Amortization of acquired intangibles (50 ) — — 50 — 50 — Stock-based compensation (93 ) (349 ) (1,442 ) 1,884 — 1,884 0.07 Change in fair value of warrant liability — — — — (904 ) (904 ) (0.03 ) Change in fair value of contingent consideration — — — 198 — 198 0.01 Restructuring — — — 1,331 — 1,331 0.05 Employee retention credit 813 414 919 (2,146 ) — (2,146 ) (0.08 ) Adjusted $ 7,621 $ 6,011 $ 9,156 $ (19,144 ) $ (868 ) $ (20,012 ) $ (0.70 )
ACUTUS MEDICAL, INC. Key Business Metrics unaudited )
Installed Base and Procedure Volumes
The total installed base which includes AcQMap Systems as of September 30, 2023 and 2022 are as follows:
As of September 30, 2023 2022 Acutus U.S. 26 32 Outside the U.S. 56 42 Total Acutus net system placements 82 74
Procedure volumes for the three and nine months ended September 30, 2023 and 2022 are as follows:
Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Procedure volumes 531 441 1,566 1,389
Revenue
The following table sets forth the Company’s revenue for disposables, systems and service/other for the three and nine months ended September 30, 2023 and 2022 (in thousands):
Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Disposables $ 4,069 $ 2,857 $ 11,409 $ 9,402 Systems 563 476 1,254 823 Service / other 606 311 2,033 1,176 Total revenue $ 5,238 $ 3,644 $ 14,696 $ 11,401
The following table presents revenue by geographic location for the three and nine months ended September 30, 2023 and 2022 (in thousands):
Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 United States $ 3,347 $ 1,925 $ 8,720 $ 5,985 Outside the United States 1,891 1,719 5,976 5,416 Total revenue $ 5,238 $ 3,644 $ 14,696 $ 11,401
What is the ticker symbol for Acutus Medical, Inc.?
The ticker symbol for Acutus Medical, Inc. is AFIB on the Nasdaq.
What were the third quarter 2023 revenue and growth for Acutus Medical, Inc.?
The company reported third quarter 2023 revenue of $5.2 million, representing a 44% year-over-year growth.
What were the key highlights of Acutus Medical, Inc.'s recent report?
The key highlights include significant year-over-year reductions in operating expenses and cash burn, as well as a strategic realignment of resources and corporate restructuring to optimize financial position and maximize free cash flow.
What were the non-GAAP financial measures mentioned in the press release?
The press release references non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP basic and diluted net loss per share as important indicators of the company's operating performance.
What is the outlook for Acutus Medical, Inc. following the announced plan to realign resources?
Due to the announced plan to realign resources, the company will no longer provide financial guidance.
