Acutus Medical Reports Fourth Quarter And Full Year 2021 Financial Results Carlsbad, Calif.

The following excerpt is from the company's SEC filing.
 – March 30, 2022 – 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 fourth quarter and full year ended December 31, 2021.
Recent Highlights:
Reported revenue of $4.4 million for the fourth quarter of 2021, compared to $2.6 million for the same quarter last year.
Reported revenue of $17.3 million for the full year of 2021, compared to $8.5 million for the full year of 2020.
Global procedure volumes increased nearly 70% for the full year of 2021, compare d to the full year of 2020.
Initiated CE Mark Study for Pulsed Field Ablation.
“Amidst dynamic market conditions, our fourth quarter operating results were led by strength in our businesses outside the United States, as our complete mapping and therapy system continues to gain traction across the region. We enter the new year with a refreshed and highly focused strategy for 2022 to drive commercial performance, sustain innovation and strengthen our financial position. With this strategy, we plan to place a greater emphasis on procedure volumes and utilization over installed base growth during this calendar year. We are pleased with the progress we are seeing here in the first quarter,” said Vince Burgess, President & CEO of Acutus.
We are also putting programs in place to improve gross margins and moderate operating expenses, including the sizeable restructuring we announced in January of 2022.”
Mr. Burgess continued “In addition to our organic initiatives to drive value creation for all stakeholders, we have retained several specialized third-party consultants and advisors to review our strategy as well as a range of options to fund our long-term growth, including non-dilutive financing, partnerships, licensing and distribution agreements.”
Fourth Quarter 2021 Financial Results
Revenue was $4.4 million for the fourth quarter of 2021, an increase of 69% compared to $2.6 million for the fourth quarter of 2020. The improvement over the same quarter last year was driven by increased direct sales of Acutus disposables and higher procedure volumes, as well as increased distributor sales through the Company’s partner, Biotronik. Gross margin on a GAAP basis was negative 128% for the fourth quarter of 2021, compared with negative 90% for the same quarter last year. The change was driven by several factors including recognition of capitalized manufacturing variances, higher depreciation associated with placed equipment, and higher field service and freight expenses. The Company continues to make significant investments in its manufacturing infrastructure to support rapid adoption of its broad product portfolio and to position it to scale in-house production as the business grows. As production volumes increase over time and the Company recognizes the benefits of cost optimization initiatives, it expects gross margin to improve.
Operating expenses on a GAAP basis were $24.3 million for the fourth quarter of 2021, compared with $25.7 million for the same quarter last year. The decrease was primarily driven by a change in fair value of the contingent consideration related to the acquisition of Rhythm Xience, Inc., the timing of certain research and development investments and lower discretionary expenses.
Net loss on a GAAP basis was $31.3 million for the fourth quarter of 2021 and net loss per share was $1.12 on a weighted average basic and diluted outstanding share count of 28.0 million, compared to $29.4 million and a net loss per share of $1.05 on a weighted average basic and diluted outstanding share count of 27.9 million for the same period of the prior year. Excluding income tax expense, amortization of acquired intangibles, non-cash stock-based compensation expense and changes in the fair value of contingent consideration, the Company’s non-GAAP net loss for the fourth quarter of 2021 was $28.0 million, or $1.00 per share, compared to $24.9 million, or $0.89 per share, for the fourth quarter of 2020.
Cash, cash equivalents, marketable securities and restricted cash were $108.0 million as of December 31, 2021.
Full Year 2021 Financial Results
Revenue was $17.3 million for the full year of 2021, an increase of 104% compared to $8.5 million in the prior year, driven by direct sales of Acutus disposables, sales of the AcQMap consoles and distributor sales through the Company’s partner, Biotronik. Gross margin on a GAAP basis was negative 91% for the full year of 2021, compared with negative 88% in the prior
Press Release
year driven by several factors including, product and geographic mix, higher depreciation associated with placed equipment, higher field service expenses, as well as the write-off of excess and obsolete inventory in 2021.
Operating expenses were $96.5 million for the full year of 2021, compared with $83.9 million in the prior year. The increase was driven primarily by selling, general and administrative expenses related to growth in the commercial team in conjunction with the Company’s full commercial launch, a full year of costs related to being a public company, and various research and development projects, partially offset by the change in fair value of contingent consideration.
Net loss on a GAAP basis was $117.7 million for the full year of 2021 and net loss per share was $4.11 on a weighted average basic and diluted outstanding share count of 28.7 million, compared to $102.0 million and a net loss per share of $8.94 on a weighted average basic and diluted outstanding share count of 11.4 million in the prior year. Excluding income tax expense, amortization of acquired intangibles, non-cash stock-based compensation expense, remeasurement of the warrant liability and changes in the fair value of contingent consideration, the Company’s non-GAAP net loss for the full year of 2021 was $107.0 million, or $3.74 per share, compared to $83.7 million, or $3.91 per share, for 2020.
Outlook
Headwinds associated with COVID-19 persisted through the fourth quarter of 2021 and into early 2022. Management continues to view the current situation with COVID-19 as being fluid, and the potential impact on the Company’s business from hospital and government actions in response to potential resurgences in COVID-19 cases, COVID-19-related hospital admissions, restrictions on lab access and new technology assessments and hospital staffing shortages are all factors that could influence performance. In addition, the Company is actively monitoring supply chain dynamics and is working to mitigate potential shortages for critical materials.
For the first quarter of 2022, management expects revenue in a range of $3.2-3.5 million. Management will provide further details regarding its outlook during the Company’s fourth quarter and full year 2021 earnings call.
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 loss before income taxes, adjusted for stock-based compensation, amortization of acquisition-related intangibles, acquisition related costs, discontinued operations, asset impairments, non-operating items, restructuring charges, stock repurchases and other adjustments. 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 fourth quarter and full year 2021 financial results after market close on Wednesday, March 30, 2022 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The conference call can be accessed live over the phone (833) 570-1131 for U.S. callers or (914) 987-7078 for international callers, using conference ID: 4985645. The live webinar can be accessed at
https://ir.acutusmedical.com
About Acutus
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 based 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
Holly Windler
Westwicke ICR
M: 619-929-1275
D: 415-202-5678
media@acutusmedical.com
caroline.corner@westwicke.com
Consolidated Balance Sheets
(in thousands, except per share amounts)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
24,071 
25,234 
Marketable securities, short-term
76,702 
105,839 
Restricted cash
Accounts receivable
3,633 
2,160 
Inventory
16,408 
12,958 
Prepaid expenses and other current assets
5,326 
5,047 
Total current assets
126,290 
151,388 
Marketable securities, long-term
7,120 
8,726 
Property and equipment, net
13,670 
12,356 
Right-of-use assets, net
4,521 
1,669 
Intangible assets, net
5,013 
5,653 
Goodwill
12,026 
Other assets
1,152 
Total assets
169,792
192,535
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
7,519 
8,266 
Accrued liabilities
9,096 
7,308 
Contingent consideration, short-term
1,500 
5,400 
Operating lease liabilities, short-term
Total current liabilities
18,510 
21,907 
Operating lease liabilities, long-term
4,591 
1,134 
Long-term debt
40,415 
39,011 
Contingent consideration, long-term
3,900 
Other long-term liabilities
Total liabilities
64,066 
65,952 
Stockholders' equity
Preferred stock, $0.001 par value
Common stock, $0.001 par value
Additional paid-in capital
584,613 
487,290 
Accumulated deficit
(478,698)
(361,015)
Accumulated other comprehensive (loss) income
Total stockholders' equity
105,726 
126,583 
Total liabilities and stockholders' equity
Consolidated Statements of Operations and Comprehensive Loss
Three Months Ended
Year Ended
(in thousands, except share and per share amounts)
4,362 
2,574 
17,263 
8,464 
Costs and operating expenses:
Cost of products sold
9,939 
4,891 
32,925 
15,889 
Research and development
8,840 
8,962 
36,683 
33,454 
Selling, general and administrative
15,865 
15,164 
63,523 
50,357 
Change in fair value of contingent consideration
1,563 
(3,746)
Total costs and operating expenses
34,262 
30,580 
129,385 
99,797 
Loss from operations
(29,900)
(28,006)
(112,122)
(91,333)
Other income (expense):
Change in fair value of warrant liability
(5,555)
Interest income
Interest expense
(1,392)
(1,416)
(5,677)
(5,506)
Total other expense, net
(1,364)
(1,373)
(5,561)
(10,625)
Loss before income taxes
(31,264)
(29,379)
(117,683)
(101,958)
Income tax expense
(29,402)
(101,981)
Other comprehensive income (loss)
Unrealized loss on marketable securities
Foreign currency translation adjustment
Comprehensive loss
(31,441)
(29,189)
(118,180)
(101,671)
Net loss per common share, basic and diluted
(1.12)
(1.05)
(4.11)
(8.94)
Weighted average shares outstanding, basic and diluted
27,953,803 
27,897,224 
28,654,313 
11,407,542 
Consolidated Statements of Cash Flows
(in thousands)
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense
5,754 
2,763 
AcQMap Systems converted to sales
2,182 
Sales-type lease loss
Amortization of intangible assets
Non-cash stock-based compensation expense
13,754 
12,103 
Amortization of premiums/(accretion of discounts) on marketable securities, net
1,277 
Amortization of debt issuance costs
1,404 
Amortization of right-of-use assets
5,555 
Changes in operating assets and liabilities:
(1,473)
(1,897)
(3,872)
(3,891)
1,133 
(3,383)
2,283 
1,549 
2,232 
Net cash used in operating activities
(99,682)
(85,169)
Cash flows from investing activities
Purchases of available-for-sale marketable securities
(87,258)
(114,694)
Sales of available-for-sale marketable securities
8,590 
17,095 
Maturities of available-for-sale marketable securities
107,707 
45,000 
Purchases of property and equipment
(9,973)
(11,225)
Net cash provided by (used in) investing activities
19,066 
(63,824)
Cash flows from financing activities
Payment of deferred offering costs
Payment of contingent consideration
(3,435)
(2,500)
Payment of contingent consideration into escrow
Proceeds from warrant exercise
Proceeds from the issuance of common stock, net of issuance costs
82,657 
166,286 
Proceeds from stock options exercises
Proceeds from Employee Stock Purchase Plan
Net cash provided by financing activities
79,569 
164,433 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net change in cash, cash equivalents and restricted cash
(1,163)
15,782 
Cash, cash equivalents and restricted cash, at the beginning of the period
25,384 
9,602 
Cash, cash equivalents and restricted cash, at the end of the period
24,221
Reconciliation of GAAP Results to Non-GAAP Results
(Unaudited)
Three Months Ended December 31, 2021
Other expenses, net
Basic and diluted EPS
Amortization of acquired intangibles
Stock-based compensation
(2,710)
3,494 
(0.01)
Adjusted
13,150
(26,628)
(27,992)
(1.00)
Three Months Ended December 31, 2020
(2,379)
2,831 
12,658
(23,485)
(1,350)
(24,858)
(0.89)
Year Ended December 31, 2021
(2,181)
(10,709)
(0.13)
31,751
34,502
52,484
(101,474)
(107,035)
(3.74)
Year Ended December 31, 2020
Adjustment for assumed conversion of convertible preferred stock
(10,790)
15,449
32,581
39,110
(73,121)
(10,602)
(83,746)
(3.91)
Denominator
Weighted average shares of common stock outstanding used in GAAP per share calculations
Adjustments to reflect the assumed conversion of convertible preferred stock
10,011,751 
Shares used in non-GAAP per share calculations
21,419,293 
Assumes the conversion of outstanding shares of convertible preferred stock into shares of common stock prior to the Company’s initial public stock offering as if such conversion had occurred at the beginning of the period or their issuance dates, if later.
Key Business Metrics
Installed Base & Procedure Volumes
The total installed base as of, and procedure volumes for the three months ended March 31, 2021 and 2020, June 30, 2021 and 2020, September 30, 2021 and 2020, and December 31, 2021 and 2020, are set forth in the table below:
Installed base
Procedure volumes
Installed base includes AcQMap Systems.
The following table sets forth the Company’s revenue for disposables, systems and service/other for both the three months and the years ended December 31, 2021 and 2020 (in thousands):
Disposables
3,249 
2,353 
11,938 
6,713 
4,058 
1,660 
Service/Other
1,267 
Total revenue
The following table provides revenue by geographic location for both the three months and the years ended December 31, 2021 and 2020 (in thousands):
2,069 
1,578 
8,325 
4,854 
Outside the United States
2,293 
8,938 
3,610 

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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