AtriCure (ATRC) 8-K AtriCure Reports Fourth Quarter and Full Year 2014 Financial Results

Exhibit 99.1

Contact:

AtriCure, Inc.

Andy Wade

Senior Vice President and Chief Financial Officer

(513) 755-4564

awade@atricure.com

Investor Relations Contact

Lynn Pieper

Westwicke Partners

(415) 202-5678

lynn.pieper@westwicke.com

AtriCure Reports Fourth Quarter and Full Year 2014 Financial Results

• 2014 revenue of $107.5 million – up 31.2%

• 2014 U.S. sales of $80.2 million – up 28.7%

• 2014 International sales of $27.3 million – up 39.2%; 39.8% constant currency

• Fourth quarter 2014 revenue of $29.4 million – up 34.4%

WEST CHESTER, Ohio – February 23, 2015 – AtriCure, Inc. (Nasdaq: ATRC), a leading innovator in surgical treatments for atrial fibrillation (Afib) and left atrial appendage (LAA) management, today announced fourth quarter and full year 2014 financial results.

“Our fourth quarter and full year 2014 results reflect strong performance, with meaningful progress and momentum as we continue to expand treatment of atrial fibrillation and improve patient lives,” said Mike Carrel, President and Chief Executive Officer of AtriCure.

“Entering 2015, our foundation is strong, and we plan to continue to solidify the future of our market building strategy with thoughtful investments into our growth initiatives - clinical data and validation, education and training, and new products and indications. This gives us great confidence for many exciting years ahead of us, with strong commercial execution and market expansion.”

2014 Financial Results

Revenue for 2014 was $107.5 million, an increase of $25.6 million or 31.2% (31.4% on a constant currency basis), compared to 2013 revenue. Domestic revenue increased 28.7% to $80.2 million, driven by strong sales of ablation-related open-heart products, ablation-related minimally invasive products, and AtriClip products. International revenue was $27.3 million, an increase of $7.7 million or 39.2% (39.8% on a constant currency basis) when compared to $19.6 million for 2013. International revenue growth was driven primarily by increases in product sales in Europe and Asia.

Gross profit for 2014 was $75.8 million compared to $59.6 million for 2013. Gross margin for 2014 was 70.5% compared to 72.7% for 2013. The decrease in gross margin was primarily due to lower margins on products obtained through the December 2013 Estech acquisition, an increased mix of international sales, and heavier placement of loaned equipment.

Loss from operations for 2014 was $16.4 million as compared to $10.9 million for 2013. Adjusted EBITDA, a non-GAAP measure, was a loss of $12.0 million for 2014 as compared to a loss of $5.8 million for 2013. Net loss per share was $0.61 for 2014 and $0.56 for 2013.

Fourth Quarter 2014 Financial Results

Revenue for the fourth quarter of 2014 was $29.4 million, an increase of $7.5 million or 34.4% (36.5% on a constant currency basis) compared to fourth quarter 2013 revenue. Domestic revenue increased 34.9% to $22.1 million, driven by strong sales of ablation-related open-heart products, ablation-related minimally invasive products, and AtriClip products. International revenue was $7.3 million, an increase of $1.8 million or 33.1% (41.3% on a constant currency basis) when compared to $5.5 million for the fourth quarter of 2013. International revenue growth was driven primarily by an increase in product sales in Europe and Asia.

Gross profit for the fourth quarter of 2014 was $20.4 million compared to $15.7 million for the fourth quarter of 2013. Gross margin for the fourth quarter of 2014 and 2013 was 69.4% and 71.6%, respectively. The decrease in gross margin was primarily due to lower margins on products obtained through the December 2013 Estech acquisition, an increased mix of international sales, and heavier placement of loaned equipment.

Operating expenses for the fourth quarter of 2014 increased 22.9%, or $4.7 million, compared to the fourth quarter of 2013. The increase in operating expenses was driven primarily by an increase in selling, marketing, clinical, product development, and training expenses.

Loss from operations for the fourth quarter of 2014 was $4.8 million, compared to $4.8 million for the fourth quarter of 2013. Adjusted EBITDA, a non-GAAP measure, was a loss of $1.6 million for the fourth quarter of 2014, compared to a $3.3 million loss for the fourth quarter of 2013. Net loss per share was $0.20 for the fourth quarter of 2014 and $0.24 for the fourth quarter of 2013.

2015 Guidance

Management projects that 2015 revenue will be in the range of $122.5 million to $124.5 million, which represents an increase of 14% to 16% over 2014 (16% to 18% on a constant currency basis).

Adjusted EBITDA, a non-GAAP measure, is projected to be a loss in the range of $7 million to $9 million for 2015 as we continue to make strategic investments to drive our long-term growth plan.

Conference Call

AtriCure will host a conference call at 4:30 p.m. Eastern Time on Monday, February 23, 2015 to discuss its fourth quarter and full year 2014 financial results. A live webcast of the conference call will be available online from the investor relations page of AtriCure’s corporate website atwww.atricure.com. You may also access this call through an operator by calling (866) 318-8619 for domestic callers and (617) 399-5138 for international callers at least 15 minutes prior to the call start time using participant passcode 24418587.

The webcast will be available on AtriCure’s website and a telephonic replay of the call will be available through March 2, 2015. The replay dial-in numbers are (888) 286-8010 for domestic callers and (617) 801-6888 for international callers. The participant passcode is 54221769.

About AtriCure, Inc.

AtriCure, Inc. is a medical device company providing innovative atrial fibrillation (Afib) solutions designed to produce superior outcomes that reduce the economic and social burden of atrial fibrillation. AtriCure’s Synergy™ Ablation System is the first and only surgical device approved for the treatment of Persistent and Longstanding Persistent forms of Afib in patients undergoing certain open concomitant procedures. AtriCure’s AtriClip Left Atrial Appendage Management (LAAM) exclusion device is the most widely sold device worldwide that’s indicated for the occlusion of the left atrial appendage. The company believes cardiothoracic surgeons are adopting its ablation and LAAM devices for the treatment of Afib and reduction of Afib related complications such as stroke. Afib affects more than 33.5 million people worldwide.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as earnings estimates (including projections and guidance), other predictions of financial performance, launches by AtriCure of new products and market acceptance of AtriCure’s products. Forward-looking statements are based on AtriCure’s experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control. These risks and uncertainties include the rate and degree of market acceptance of AtriCure’s products, AtriCure’s ability to develop and market new and enhanced products, AtriCure’s ability to retain and attract key employees, the timing of and ability to obtain and maintain regulatory clearances and approvals for its products, the timing of and ability to obtain reimbursement of procedures utilizing AtriCure’s products, AtriCure’s ability to continue to be in compliance with applicable U.S. federal and state and foreign government laws and regulations, AtriCure’s ability to consummate acquisitions or, if consummated, to successfully integrate acquired businesses into AtriCure’s operations, AtriCure’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings, failure of an acquisition or acquired company to achieve its plans and objectives generally, risk that proposed or consummated acquisitions may disrupt operations or pose difficulties in employee retention or otherwise affect financial or operating results, competition from existing and new products and procedures, including the development of drug or catheter-based technologies, or AtriCure’s ability to effectively react to other risks and uncertainties described from time to time in AtriCure’s SEC filings, such as fluctuation of quarterly financial results, fluctuations in exchange rates for future sales denominated in foreign currency, which represent a majority of AtriCure’s sales outside of the United States, reliance on third party manufacturers and suppliers, litigation or other proceedings, government regulation and stock price volatility. AtriCure does not guarantee any forward-looking statement, and actual results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Use of Non-GAAP Financial Measures

To supplement AtriCure’s condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, AtriCure uses certain non-GAAP financial measures

in this release as supplemental financial metrics. Non-GAAP financial measures provide an indication of performance excluding certain items. Our management believes that in order to properly understand short-term and long-term financial trends, investors may wish to consider the impact of these excluded items in addition to GAAP measures. The excluded items vary in frequency and/or impact on our continuing operations and our management believes that the excluded items are typically not reflective of our ongoing core business operations. Further, management uses results of operations before these excluded items as a basis for its strategic planning. The non-GAAP financial measures used by AtriCure may not be the same or calculated the same as those used by other companies. Reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP measures for the respective periods can be found in tables later in this release. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for AtriCure’s financial results prepared and reported in accordance with GAAP.

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
Domestic Revenue:
Open-heart ablation	$	12,164		$	9,931		$	44,662		$	37,843
Minimally invasive ablation		4,276			3,519			16,050			13,648
AtriClip		4,819			2,936			16,675			10,820
Total ablation and AtriClip		21,259			16,386			77,387			62,311
Valve tools		838			—			2,816			—
Total domestic		22,097			16,386			80,203			62,311
International Revenue:
Open-heart ablation		4,270			3,529			16,445			13,064
Minimally invasive ablation		2,108			1,599			7,881			5,354
AtriClip		768			370			2,158			1,160
Total ablation and AtriClip		7,146			5,498			26,484			19,578
Valve tools		172			—			767			—
Total international		7,318			5,498			27,251			19,578
Total revenue		29,415			21,884			107,454			81,889
Cost of revenue		8,995			6,215			31,704			22,326
Gross profit		20,420			15,669			75,750			59,563
Operating expenses:
Research and development expenses		4,997			3,648			18,600			13,440
Selling, general and administrative expenses		20,202			16,859			73,510			57,014
Total operating expenses		25,199			20,507			92,110			70,454
Loss from operations		(4,779	)		(4,838	)		(16,360	)		(10,891	)
Other (expense) income, net		(568	)		(138	)		182			(553	)
Loss before income tax expense		(5,347	)		(4,976	)		(16,178	)		(11,444	)
Income tax benefit (expense)		3			(4	)		(33	)		(18	)
Net loss	$	(5,344	)	$	(4,980	)	$	(16,211	)	$	(11,462	)
Basic and diluted net loss per share	$	(0.20	)	$	(0.24	)	$	(0.61	)	$	(0.56	)
Weighted average shares used in computing net loss per share:
Basic and diluted		26,935			20,785			26,374			20,431

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Per Share Amounts)

(Unaudited)

	December 31, 2014			December 31, 2013
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	59,649		$	26,211
Accounts receivable, net		17,558			13,652
Inventories		14,257			10,214
Other current assets		2,044			2,410
Total current assets		93,508			52,487
Property and equipment, net		11,552			5,643
Long-term investments		8,894			7,914
Goodwill and intangible assets, net		44,264			45,685
Other noncurrent assets		186			218
Total assets	$	158,404		$	111,947
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	21,662		$	24,675
Other current liabilities and maturities of debt and capital leases		3,981			2,038
Total current liabilities		25,643			26,713
Long-term debt and capital leases		74			4,412
Other noncurrent liabilities		149			8,218
Total liabilities		25,866			39,343
Stockholders’ equity:
Common stock		28			23
Additional paid-in capital		271,282			194,933
Accumulated other comprehensive loss		(348	)		(139	)
Accumulated deficit		(138,424	)		(122,213	)
Total stockholders’ equity		132,538			72,604
Total liabilities and stockholders’ equity	$	158,404		$	111,947

ATRICURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Twelve Months Ended December 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(16,211	)	$	(11,462	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		7,571			3,080
Depreciation and amortization of intangible assets		4,774			2,020
Amortization of deferred financing costs		113			115
Loss (gain) on disposal of equipment		118			(6	)
Loss from foreign exchange on intercompany transactions		544			—
Amortization/accretion on investments		500			49
Change in allowance for doubtful accounts		(34	)		(14	)
Change in fair value of contingent consideration		(8,032	)		—
Other		95			—
Changes in operating assets and liabilities
Accounts receivable		(4,168	)		(1,248	)
Inventories		(4,343	)		(2,288	)
Other current assets		307			(1,257	)
Accounts payable and accrued liabilities		(2,791	)		5,559
Other non-current assets and liabilities		(43	)		230
Net cash used in operating activities		(21,600	)		(5,222	)
Cash flows from investing activities:
Purchases of available-for-sale securities		(41,107	)		(21,243	)
Sales and maturities of available-for-sale securities		19,614			6,200
Purchases of property and equipment		(9,207	)		(2,864	)
Net proceeds from the sale of equipment		77			48
Cash acquired through business combination		—			3,708
Net cash used in investing activities		(30,623	)		(14,151	)
Cash flows from financing activities:
Net proceeds from sale of stock		65,830			26,872
Payments on debt and capital leases		(6,382	)		(2,055	)
Proceeds from construction financing obligation		3,699			—
Payment of debt fees and premium on retirement of debt		(181	)		(99	)
Proceeds from stock option exercises		1,916			1,718
Shares repurchased for payment of taxes on stock awards		(331	)		(398	)
Proceeds from issuance of common stock under employee stock purchase plan		1,320			790
Net cash provided by financing activities		65,871			26,828
Effect of exchange rate changes on cash and cash equivalents		(156	)		(316	)
Net increase in cash and cash equivalents		13,492			7,139
Cash and cash equivalents - beginning of period		14,892			7,753
Cash and cash equivalents - end of period	$	28,384		$	14,892
Supplemental cash flow information:
Cash paid for interest	$	115		$	473
Cash paid for income taxes		146			30
Noncash investing and financing activities:
Accrued purchases of property and equipment		547			282
Assets acquired through capital lease		47			68
Capital lease asset early termination		38			24
Stock issuance for Estech acquisition		—			39,720
Contingent consideration for acquisition of Estech		—			8,032

ATRICURE, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS

(In Thousands)

(Unaudited)

Reconciliation of Non-GAAP Adjusted Loss (Adjusted EBITDA)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
Net loss, as reported	$	(5,344	)	$	(4,980	)	$	(16,211	)	$	(11,462	)
Income tax (income) expense		(3	)		4			33			18
Other expense (benefit), net (a)		568			138			(182	)		553
Depreciation and amortization expense		1,303			555			4,774			2,020
Share-based compensation expense		1,867			1,008			7,571			3,080
Change in fair value of contingent consideration		—			—			(8,032	)		—
Non-GAAP adjusted income (loss) (adjusted EBITDA)	$	(1,609	)	$	(3,275	)	$	(12,047	)	$	(5,791	)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2014			2013			2014			2013
(a) Other includes:
Net interest income (expense)	$	17		$	(130	)	$	(209	)	$	(550	)
Grant income		—			—			731			—
(Loss) gain due to exchange rate fluctuation		(493	)		196			(523	)		269
Non-employee stock option (expense) income		(92	)		(204	)		183			(272	)
Other (expense) income, net	$	(568	)	$	(138	)	$	182		$	(553	)

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