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Acutus Medical Reports Third Quarter 2022 Financial Results

Acutus Medical, Inc.
Acutus Medical, Inc.

CARLSBAD, Calif., Nov. 10, 2022 (GLOBE NEWSWIRE) -- Acutus Medical, Inc. (“Acutus” or the “Company”) (Nasdaq: AFIB), an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated, today reported results for the third quarter of 2022.

Recent Updates:

  • Reported revenue of $3.6 million in the third quarter of 2022, compared to $4.6 million in the same quarter last year

  • Global mapping procedures volumes increased 17% from the same quarter last year

  • Generated significant year-over-year reductions in operating expenses and cash burn for the third quarter of 2022

  • Submitted US premarket approval (PMA) application for the AcQBlate Force-Sensing Ablation Catheter and System

  • Announced achievement of Original Equipment Manufacturer milestone in sale of left-heart access portfolio to Medtronic, triggering a $20 million contingent consideration earnout payment from Medtronic

“Our teams continued to execute our strategy, as we achieved another quarter of strong year-over-year growth in procedure volumes while further improving our operating and financial performance,” said David Roman, President & CEO of Acutus. “We are pleased with the trends in our underlying results, including strong mapping procedure volume growth and increased revenue share capture within existing accounts, and we are taking the necessary steps to strengthen our foundation for future growth. These include the filing of the US PMA for AcQBlate and continued optimization of our expense profile, as well as furthering the transition of our left-heart access portfolio to Medtronic.”

Third Quarter 2022 Financial Results
Revenue was $3.6 million for the third quarter of 2022, compared to $4.6 million in the third quarter last year. This decrease of $1.0 million was entirely driven by a decrease of $1.1 million in capital revenue, offsetting a $0.1 million increase in Disposables and Service/Other revenue. Gross margin was negative 91% on a GAAP basis for the three months ended September 30, 2022 and negative 86% for the three months ended September 30, 2021. This decrease in gross margin was primarily attributable to lower sales and the recognition of unfavorable manufacturing variances.

Operating expenses on a GAAP basis were $17.2 million for the third quarter of 2022, compared with $23.2 million in the same quarter last year. The decrease of $6.0 million was primarily attributable to a $1.3 million benefit from the employee retention credit (ERC), lower selling, general and administrative expenses of $5.4 million from cost savings initiatives enacted earlier this year and a $2.8 million reduction in research and development expenses related to the program prioritization. These reductions were partially offset by $1.3 million in restructuring charges that were not incurred in the prior year and an increase of $2.2 million for the contingent consideration related to the acquisition of Rhythm Xience, Inc. prior to our IPO.

Net loss on a GAAP basis was $20.4 million for the third quarter of 2022 and net loss per share was $0.72 on a weighted average basic and diluted outstanding share count of 28.4 million, compared to a net loss of $28.5 million and a net loss per share of $0.94 on a weighted average basic and diluted outstanding share count of 30.5 million in the same period of the prior year.

Excluding amortization of acquired intangibles, non-cash stock-based compensation expense, goodwill impairment, gain on sale of business, debt refinancing charges, restructuring charges, the employee retention credit benefit and changes in the fair value of contingent consideration, the Company’s non-GAAP net loss for the third quarter of 2022 was $20.0 million, or $0.70 per share, compared to a net loss of $26.7 million, or $0.87 per share in the same period of the prior year.

Total cash, cash equivalents, marketable securities and restricted cash was $70.5 million as of September 30, 2022.

Outlook
The Company continues to experience year-over-year headwinds related to foreign exchange and capital equipment sales. In late September, the Company started to experience disruptions in the supply chain for certain raw materials that negatively impacted revenue in the third quarter of 2022 and is expected to have a further negative impact in the fourth quarter of 2022. The Company now expects revenue to be in a range from $15.5-$16.0 million, which includes incremental headwinds related to both foreign exchange and supply chain pressures.

Non-GAAP Financial Measures
This press release includes references to non-GAAP net loss and non-GAAP net loss per share, which are non-GAAP financial measures, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. The Company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are primarily non-cash accounting line items unrelated to, and may not be indicative of, the Company’s core operating results. These non-GAAP financial measures, as Acutus calculates them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. Non-GAAP net loss is defined as net income (loss) before income taxes, adjusted for stock-based compensation, amortization of acquisition-related intangibles, acquisition related costs, discontinued operations, asset/goodwill impairments, changes in the fair value of contingent consideration, restructuring charges, stock repurchases and other adjustments for non-operating items, such as gain on sale of business, debt financing charges, and employee retention credit benefits. To the extent such non-GAAP financial measures are used in the future, the Company expects to calculate them using a consistent method from period to period. A reconciliation of the most directly comparable GAAP financial measure to the non-GAAP financial measure has been provided under the heading “Reconciliation of GAAP Results to Non-GAAP Results” in the financial statement tables attached to this press release.

Webcast and Conference Call Information
Acutus will host a conference call to discuss the third quarter 2022 financial results after market close on Thursday, November 10, 2022 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. To access the live call via telephone, please register in advance using the link: https://register.vevent.com/register/BI3e071f2eac494dbcbf755038c36c29e9. Upon registering, each participant will receive an email confirmation with dial-in numbers and a unique personal PIN that can be used to join the call. The live webinar of the call may be accessed by visiting the Events section of the Acutus investor relations website at ir.acutusmedical.com. A replay of the webinar will be available shortly after the conclusion of the call and will be archived on the company’s website.

About Acutus Medical, Inc.
Acutus is an arrhythmia management company focused on improving the way cardiac arrhythmias are diagnosed and treated. Acutus is committed to advancing the field of electrophysiology with a unique array of products and technologies which will enable more physicians to treat more patients more efficiently and effectively. Through internal product development, acquisitions and global partnerships, Acutus has established a global sales presence delivering a broad portfolio of highly differentiated electrophysiology products that provide its customers with a complete solution for catheter-based treatment of cardiac arrhythmias. Founded in 2011, Acutus is headquartered in Carlsbad, California.

Caution Regarding Forward-Looking Statements
This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, the Company’s ability to continue to manage expenses and cash burn rate at sustainable levels, continued acceptance of its products in the marketplace, the effect of global economic conditions on the ability and willingness of customers to purchase the Company’s systems and the timing of such purchases, competitive factors, changes resulting from healthcare policy in the United States and globally, including changes in government reimbursement of procedures, dependence upon third-party vendors and distributors, timing of regulatory approvals, the impact of the coronavirus (COVID-19) pandemic and Acutus’ response to it, and other risks discussed in the Company’s periodic and other filings with the Securities and Exchange Commission. By making these forward-looking statements, Acutus undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:

Media Contact:

Caroline Corner

Levitate

Westwicke ICR

M: 260-408-5383

D: 415-202-5678

acutus@levitatenow.com

caroline.corner@westwicke.com


 

Acutus Medical, Inc.
Condensed Consolidated Balance Sheets

 

 

 

 

(in thousands, except per share amounts)

September 30,
2022

 

December 31,
2021

 

(unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

28,003

 

 

$

24,071

 

Marketable securities, short-term

 

38,299

 

 

 

76,702

 

Restricted cash, short-term

 

150

 

 

 

150

 

Accounts receivable

 

3,213

 

 

 

3,633

 

Inventory

 

14,596

 

 

 

16,408

 

Prepaid expenses and other current assets

 

9,633

 

 

 

5,326

 

Total current assets

 

93,894

 

 

 

126,290

 

 

 

 

 

Marketable securities, long-term

 

 

 

 

7,120

 

Restricted cash, long-term

 

4,000

 

 

 

 

Property and equipment, net

 

10,087

 

 

 

13,670

 

Right-of-use assets, net

 

4,027

 

 

 

4,521

 

Intangible assets, net

 

1,633

 

 

 

5,013

 

Goodwill

 

 

 

 

12,026

 

Other assets

 

986

 

 

 

1,152

 

Total assets

$

114,627

 

 

$

169,792

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,638

 

 

$

7,519

 

Accrued liabilities

 

8,917

 

 

 

9,096

 

Contingent consideration, short-term

 

1,900

 

 

 

1,500

 

Operating lease liabilities, short-term

 

392

 

 

 

395

 

Warrant liability

 

2,475

 

 

 

 

Total current liabilities

 

18,322

 

 

 

18,510

 

 

 

 

 

Operating lease liabilities, long-term

 

4,204

 

 

 

4,591

 

Long-term debt

 

34,310

 

 

 

40,415

 

Contingent consideration, long-term

 

 

 

 

500

 

Other long-term liabilities

 

10

 

 

 

50

 

Total liabilities

 

56,846

 

 

 

64,066

 

 

 

 

 

Stockholders' equity

 

 

 

Preferred stock, $0.001 par value

 

 

 

 

 

Common stock, $0.001 par value

 

28

 

 

 

28

 

Additional paid-in capital

 

592,296

 

 

 

584,613

 

Accumulated deficit

 

(533,422

)

 

 

(478,698

)

Accumulated other comprehensive loss

 

(1,121

)

 

 

(217

)

Total stockholders' equity

 

57,781

 

 

 

105,726

 

Total liabilities and stockholders' equity

$

114,627

 

 

$

169,792

 

 

 

 

 

 

 

 

 


Acutus Medical, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands, except share and per share amounts)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

Revenue

$

3,644

 

 

$

4,601

 

 

$

11,401

 

 

$

12,901

 

 

 

 

 

 

 

 

 

Costs and operating (income) expenses:

 

 

 

 

 

 

 

Cost of products sold

 

6,951

 

 

 

8,539

 

 

 

23,589

 

 

 

22,986

 

Research and development

 

5,946

 

 

 

9,299

 

 

 

21,884

 

 

 

27,843

 

Selling, general and administrative

 

9,679

 

 

 

15,805

 

 

 

38,207

 

 

 

47,658

 

Goodwill impairment

 

 

 

 

 

 

 

12,026

 

 

 

 

Restructuring

 

1,331

 

 

 

 

 

 

2,280

 

 

 

 

Change in fair value of contingent consideration

 

198

 

 

 

(1,953

)

 

 

1,153

 

 

 

(3,364

)

Gain on sale of business

 

 

 

 

 

 

 

(43,575

)

 

 

 

Total costs and operating expenses

 

24,105

 

 

 

31,690

 

 

 

55,564

 

 

 

95,123

 

Loss from operations

 

(20,461

)

 

 

(27,089

)

 

 

(44,163

)

 

 

(82,222

)

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

(7,947

)

 

 

 

Change in fair value of warrant liability

 

904

 

 

 

 

 

 

904

 

 

 

 

Interest income

 

241

 

 

 

19

 

 

 

292

 

 

 

88

 

Interest expense

 

(1,109

)

 

 

(1,441

)

 

 

(3,810

)

 

 

(4,285

)

Total other income (expense), net

 

36

 

 

 

(1,422

)

 

 

(10,561

)

 

 

(4,197

)

Loss before income taxes

 

(20,425

)

 

 

(28,511

)

 

 

(54,724

)

 

 

(86,419

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(20,425

)

 

$

(28,511

)

 

$

(54,724

)

 

$

(86,419

)

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

39

 

 

 

(13

)

 

 

 

 

 

(3

)

Foreign currency translation adjustment

 

(351

)

 

 

(183

)

 

 

(904

)

 

 

(317

)

Comprehensive loss

$

(20,737

)

 

$

(28,707

)

 

$

(55,628

)

 

$

(86,739

)

 

 

 

 

 

 

 

 

Net loss per common share, basic and diluted

$

(0.72

)

 

$

(0.94

)

 

$

(1.93

)

 

$

(2.99

)

Weighted average shares outstanding, basic and diluted

 

28,359,516

 

 

 

30,460,466

 

 

 

28,273,207

 

 

 

28,890,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Acutus Medical, Inc.
Condensed Consolidated Statements of Cash Flows

 

 

Nine Months Ended
September 30,

(in thousands)

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

(unaudited)

Cash flows from operating activities

 

 

 

Net loss

$

(54,724

)

 

$

(86,419

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation expense

 

4,653

 

 

 

4,227

 

AcQMap Systems converted to sales

 

266

 

 

 

 

Sales-type lease gain

 

(87

)

 

 

 

Amortization of intangible assets

 

370

 

 

 

480

 

Stock-based compensation expense

 

7,497

 

 

 

10,263

 

Amortization of premiums and accretion of discounts on marketable securities, net

 

237

 

 

 

1,011

 

Amortization of debt issuance costs

 

741

 

 

 

1,032

 

Amortization of right-of-use assets

 

480

 

 

 

496

 

Goodwill impairment

 

12,026

 

 

 

 

Loss on debt extinguishment

 

7,947

 

 

 

 

Gain on sale of business

 

(43,575

)

 

 

 

Direct costs paid related to sale of business

 

(2,917

)

 

 

 

Change in fair value of warrant liability

 

(904

)

 

 

 

Change in fair value of contingent consideration

 

1,153

 

 

 

(3,364

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

420

 

 

 

(2,030

)

Inventory

 

1,812

 

 

 

(2,004

)

Prepaid expenses and other current assets

 

(4,296

)

 

 

(59

)

Other assets

 

386

 

 

 

(369

)

Accounts payable

 

(2,929

)

 

 

(1,813

)

Accrued liabilities

 

(179

)

 

 

1,862

 

Operating lease liabilities

 

(390

)

 

 

(432

)

Other long-term liabilities

 

(40

)

 

 

18

 

Net cash used in operating activities

 

(72,053

)

 

 

(77,101

)

 

 

 

 

Cash flows from investing activities

 

 

 

Proceeds from sale of business

 

50,000

 

 

 

 

Purchases of available-for-sale marketable securities

 

(33,235

)

 

 

(70,020

)

Sales of available-for-sale marketable securities

 

18,599

 

 

 

8,590

 

Maturities of available-for-sale marketable securities

 

59,642

 

 

 

98,507

 

Purchases of property and equipment

 

(2,473

)

 

 

(6,587

)

Net cash provided by investing activities

 

92,533

 

 

 

30,490

 

 

 

 

 

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

)

 

 

 

Payment of deferred offering costs

 

 

 

 

(572

)

Payment of contingent consideration

 

(873

)

 

 

(3,152

)

Repurchase of common shares to pay employee withholding taxes

 

(62

)

 

 

 

Proceeds from stock options exercises

 

66

 

 

 

703

 

Proceeds from issuance of common stock, net of issuance costs

 

 

 

 

82,664

 

Proceeds from employee stock purchase plan

 

182

 

 

 

440

 

Net cash (used in) provided by financing activities

 

(12,101

)

 

 

80,083

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(447

)

 

 

(214

)

Net change in cash, cash equivalents and restricted cash

 

7,932

 

 

 

33,258

 

Cash, cash equivalents and restricted cash, at the beginning of the period

 

24,221

 

 

 

25,384

 

Cash, cash equivalents and restricted cash, at the end of the period

$

32,153

 

 

$

58,642

 

 

 

 

 

 

 

 

 


Acutus Medical, Inc.
Reconciliation of GAAP Results to Non-GAAP Results
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

Cost of
products sold

 

Research and
development

 

Selling, general
and
administrative

 

Income (loss)
from
operations

 

Other
expenses,
net

 

Net income
(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

 

Employee retention credit

 

813

 

 

414

 

 

 

919

 

 

 

(2,146

)

 

 

 

 

 

(2,146

)

 

 

(0.08

)

Restructuring

 

 

 

 

 

 

 

 

 

 

1,331

 

 

 

 

 

 

1,331

 

 

 

0.05

 

Change in fair value of contingent consideration

 

 

 

 

 

 

 

 

 

 

198

 

 

 

 

 

 

198

 

 

 

0.01

 

Change in fair value of warrant liability

 

 

 

 

 

 

 

 

 

 

 

 

 

(904

)

 

 

 

 

 

(0.03

)

Adjusted

$

7,621

 

 

$

6,011

 

 

$

9,156

 

 

$

(19,144

)

 

$

(868

)

 

$

(20,012

)

 

$

(0.70

)


Three Months Ended September 30, 2021

Cost of
products sold

 

Research and
development

 

Selling, general
and
administrative

 

Loss from
operations

 

Other
expenses,
net

 

Net loss

 

Basic and
diluted EPS

Reported

$

8,539

 

 

$

9,299

 

 

$

15,805

 

 

$

(27,089

)

 

$

(1,422

)

 

$

(28,511

)

 

$

(0.94

)

Amortization of acquired intangibles

 

(155

)

 

 

 

 

 

(5

)

 

 

160

 

 

 

 

 

 

160

 

 

 

0.01

 

Stock-based compensation

 

(243

)

 

 

(567

)

 

 

(2,767

)

 

 

3,577

 

 

 

 

 

 

3,577

 

 

 

0.12

 

Change in fair value of contingent consideration

 

 

 

 

 

 

 

 

 

 

(1,953

)

 

 

 

 

 

(1,953

)

 

 

(0.06

)

Adjusted

$

8,141

 

 

$

8,732

 

 

$

13,033

 

 

$

(25,305

)

 

$

(1,422

)

 

$

(26,727

)

 

$

(0.87

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acutus Medical, Inc.
Key Business Metrics

Installed Base & Procedure Volumes

Our total installed base as of September 30, 2022 and 2021 are set forth in the table below:

 

 

September 30,

 

 

2022

 

2021

 

 

 

 

 

Key Business Metrics

 

(unaudited)

Installed base(1)

 

74

 

71

 

 

 

 

 

(1) Installed base includes AcQMap Systems.

Our total procedure volumes for the three and nine months ended September 30, 2022 and 2021 is set forth in the table below:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

Key Business Metrics

(unaudited)

 

(unaudited)

Procedure volumes

441

 

377

 

1,389

 

1,145

 

 

 

 

 

 

 

 

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, 2022 and 2021 (in thousands):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

Disposables

$

2,857

 

$

2,837

 

$

9,402

 

$

8,690

Systems

 

476

 

 

1,529

 

 

823

 

 

3,296

Service/Other

 

311

 

 

235

 

 

1,176

 

 

915

Total revenue

$

3,644

 

$

4,601

 

$

11,401

 

$

12,901


The following table provides revenue by geographic location for the three and nine months ended September 30, 2022 and 2021 (in thousands):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

United States

$

1,925

 

$

2,189

 

$

5,985

 

$

6,256

Outside the United States

 

1,719

 

 

2,412

 

 

5,416

 

 

6,645

Total revenue

$

3,644

 

$

4,601

 

$

11,401

 

$

12,901