Acutus Medical Reports Third Quarter 2022 Financial Results

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.

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:

⁽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:

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):

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