Acutus Medical Reports Fourth Quarter and Full Year 2022 Financial Results

CARLSBAD, Calif., March 16, 2023 (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 fourth quarter and full year ended December 31, 2022. Financial statements and other information presented for 2022 is unaudited.

Recent Highlights:

  • Reported revenue of $5.0 million for the fourth quarter of 2022, a 14% increase compared to $4.4 million for the same quarter last year
  • Reported revenue of $16.4 million for the full year of 2022, a 5% decrease compared to $17.3 million for the full year of 2021
  • Global mapping procedure volumes increased 19% for the full year of 2022, compared to the full year of 2021
  • Achieved key milestones under the asset purchase agreement with Medtronic of its left-heart access portfolio ahead of schedule, and received $20 million in earn-out payments in December 2022 and an additional $17 million in January 2023

“Our fourth quarter results demonstrated significant progress on our strategic and financial objectives, as we achieved our highest level of quarterly sales on record while also registering our lowest level of cash burn and operating expenses since IPO,” said David Roman, President & CEO of Acutus. “As we enter 2023, our focus turns from stabilization to growth through increased adoption of our differentiated mapping and therapy platform, and geographic expansion as well as continued improvement in our financial profile.”

Fourth Quarter 2022 Financial Results

Revenue was $5.0 million for the fourth quarter of 2022, an increase of 14% compared to $4.4 million for the fourth quarter of 2021. The improvement over the same quarter last year was driven by an increase in commercial AcQMap procedures worldwide, by continued adoption of the Company’s differentiated mapping, by an increase in sales of therapy and accessory products and a stabilization in capital sales. Gross margin on a GAAP basis was a negative 68% for the fourth quarter of 2022, compared with negative 128% for the same quarter last year. The improvement was primarily driven by a higher production volume, lower manufacturing variances and a positive impact from restructuring actions taken earlier in the year. The Company will continue to deploy significant resources and focus in improving its gross margin in 2023.

Operating expenses consisting of research & development and selling, general & administrative expenses on a GAAP basis were $15.7 million for the fourth quarter of 2022 compared with $24.7 million for the same quarter last year. Additionally, a one-time gain on the sale of a portion of our business of $35.9 million was responsible for providing a positive bottom line for the fourth quarter of 2022.

Non-GAAP operating expenses were $13.9 million for the fourth quarter of 2022 compared with $21.4 million in the prior year. The decrease of $7.5 million was primarily driven by the reduction in headcount due to restructuring, as well as a reduction in discretionary spend on certain research and development programs.

Net income on a GAAP basis was $15.1 million for the fourth quarter of 2022 and basic net income per share was $0.53 on a weighted average basic outstanding share count of 28.5 million. Diluted net income per share was $0.41 on a weighted average diluted outstanding share count of 37.2 million. For the fourth quarter 2021, net loss was $31.3 million with a basic and diluted net loss per share of $1.12 on a weighted average basic and diluted outstanding share count of 28.0 million.

Excluding income tax expense, amortization of acquired intangibles, non-cash stock-based compensation expense, restructuring charges, change in fair value of warrant liability, change in the fair value of contingent consideration and gain on sale of business, the Company’s non-GAAP net loss for the fourth quarter of 2022 was $17.9 million, or $0.63 per share, compared to a net loss of $28.0 million, or $1.00 per share, for the fourth quarter of 2021.

Full Year 2022 Financial Results

Revenue was $16.4 million for the full year of 2022, a decrease of 5% compared to $17.3 million in the prior year. Disposable, service and other grew 12% driven by an increase in AcQMap procedures and console utilization, absorbing supply chain disruptions and foreign exchange headwinds of approximately $0.4 million. This growth was offset with Capital sales down $2.3 million compared to the prior year.

Gross margin on a GAAP basis was negative 95% for the full year of 2022, compared with negative 91% in the prior year, driven by unfavorable manufacturing variances carried into 2022 from the prior year, idle capacity, and the write-off of excess and obsolete inventory, offset by a partial reduction in manufacturing overhead from the restructuring actions taken in the first half of 2022.

Operating expenses consisting of research & development and selling, general & administrative expenses on a GAAP basis were $75.8 million for the full year of 2022 compared with $100.2 million in the prior year. Non-GAAP operating expenses were $71.5 million for the full year of 2022 compared with $87.0 million in the prior year. The decrease of $15.4 million was a result of realizing the benefits of our cost savings initiatives enacted earlier this year and a reduction in research and development related to the program prioritization.

Net loss on a GAAP basis was $39.6 million for the full year of 2022 and net loss per share was $1.40 on a weighted average basic and diluted outstanding share count of 28.3 million, compared to $117.7 million and a net loss per share of $4.11 on a weighted average basic and diluted outstanding share count of 28.7 million in the prior year.

Excluding income tax expense, amortization of acquired intangibles, non-cash stock-based compensation expense, employee retention credit, goodwill impairment, restructuring charges, changes in the fair value of contingent consideration, gain on sale of business, loss on debt extinguishment and change in fair value of warrant liability, the Company’s non-GAAP net loss for the full year of 2022 was $92.6 million, or $3.27 per share, compared to $107.0 million, or $3.74 per share, for 2021.

Cash, cash equivalents, marketable securities and restricted cash were $76.2 million as of December 31, 2022.

2023 Outlook

The company expects full year 2023 revenue to be in a range from $18.0-$21.0 million.

Non-GAAP Financial Measures

This press release includes references to non-GAAP net loss and non-GAAP basic and diluted 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, employee retention credit, goodwill impairment, restructuring charges, changes in the fair value of contingent consideration, gain on sale of business, loss on debt extinguishment and change in fair value of warrant liability 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 2022 financial results after market close on Thursday March 16, 2023 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 following link: https://register.vevent.com/register/BI99cd3a13a2514da19eb8ed750c11370d. 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

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 CornerPeter Neems
Westwicke ICRAcutus Medical, Inc.
D: 415-202-5678M: 442-232-6094
caroline.corner@westwicke.com media@acutusmedical.com 

ACUTUS MEDICAL, INC.
Consolidated Balance Sheets
(in thousands, except per share amounts)

 December 31, 2022 December 31, 2021
 (unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$25,584  $24,071 
Marketable securities, short-term 44,863   76,702 
Restricted cash 5,764   150 
Accounts receivable 21,085   3,633 
Inventory 13,327   16,408 
Employer retention credit receivable 4,703    
Prepaid expenses and other current assets 2,541   5,326 
Total current assets 117,867   126,290 
    
Marketable securities, long-term    7,120 
Property and equipment, net 9,221   13,670 
Right-of-use asset, net 3,872   4,521 
Intangible assets, net 1,583   5,013 
Goodwill    12,026 
Other assets 897   1,152 
Total assets$133,440  $169,792 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$4,721  $7,519 
Accrued liabilities 9,686   9,096 
Contingent consideration, short-term 1,800   1,500 
Operating lease liabilities, short-term 319   395 
Warrant liability 3,346    
Total current liabilities 19,872   18,510 
    
Operating lease liabilities, long-term 4,103   4,591 
Long-term debt 34,434   40,415 
Contingent consideration, long-term    500 
Other long-term liabilities 12   50 
Total liabilities 58,421   64,066 
    
Commitments and contingencies   
    
Stockholders’ equity   
Preferred stock: Series A Common Equivalent Preferred Stock, 0.001 par value; 5,000,000 shares authorized, and 6,666 shares issued and outstanding     
Common stock: 0.001 par value; 260,000,000 shares authorized, 28,554,656 and 27,957,223 issued and outstanding at December 31, 2022 and 2021, respectively 29   28 
Additional paid-in capital 594,173   584,613 
Accumulated deficit (518,314)  (478,698)
Accumulated other comprehensive loss (869)  (217)
Total stockholders’ equity 75,019   105,726 
Total liabilities and stockholders’ equity$133,440  $169,792 

ACUTUS MEDICAL, INC.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except per share amounts)

 Three Months Ended Twelve Months Ended
 December 31, December 31,
  2022   2021   2022   2021 
 (unaudited)   (unaudited)  
Revenue$4,962  $4,362  $16,363  $17,263 
        
Costs and operating expenses (income):       
Cost of products sold 8,321   9,939   31,910   32,925 
Research and development 6,269   8,840   28,153   36,683 
Selling, general and administrative 9,447   15,865   47,654   63,523 
Goodwill impairment       12,026    
Restructuring 91      2,371    
Change in fair value of contingent consideration (100)  (382)  1,053   (3,746)
Gain on sale of business (35,890)     (79,465)   
Total costs and operating (income) expenses (11,862)  34,262   43,702   129,385 
Income (loss) from operations 16,824   (29,900)  (27,339)  (112,122)
        
Other income (expense):       
Loss on debt extinguishment       (7,947)   
Change in fair value of warrant liability (871)     33    
Interest income 576   28   868   116 
Interest expense (1,339)  (1,392)  (5,149)  (5,677)
Total other expense, net (1,634)  (1,364)  (12,195)  (5,561)
Income (loss) before income taxes 15,190   (31,264)  (39,534)  (117,683)
Income tax expense 82      82    
Net income (loss)$15,108  $(31,264) $(39,616) $(117,683)
        
Other comprehensive income (loss):       
Unrealized gain (loss) on marketable securities 39   (34)  39   (37)
Foreign currency translation adjustment 213   (143)  (691)  (460)
Comprehensive income (loss)$15,360  $(31,441) $(40,268) $(118,180)
        
Basic net income (loss) per common share$0.53  $(1.12) $(1.40) $(4.11)
Diluted net income (loss) per common share$0.41  $(1.12) $(1.40) $(4.11)
        
Basic weighted average shares outstanding 28,471,389   27,953,803   28,322,753   28,654,313 
Diluted weighted average shares outstanding 37,236,064   27,953,803   28,322,753   28,654,313 

ACUTUS MEDICAL, INC.
Consolidated Statements of Cash Flows
(in thousands)

 Year Ended December 31,
  2022   2021 
 (unaudited)  
Cash flows from operating activities   
Net loss$(39,616) $(117,683)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation expense 6,060   5,754 
AcQMap Systems converted to sales 605   2,182 
Sales-type lease gain (87)  28 
Amortization of intangible assets 420   640 
Non-cash stock-based compensation expense 9,391   13,754 
Amortization of premiums/(accretion of discounts) on marketable securities, net (24)  1,277 
Amortization of debt issuance cost 850   1,404 
Amortization of operating lease right-of-use assets 649   496 
Goodwill impairment 12,026    
Loss on extinguishment of debt 7,947    
Gain on sale of business, net (79,465)   
Direct costs paid for sale of business (4,027)   
Change in fair value of warrant liability (33)   
Loss on disposal of fixed assets 825    
Change in fair value of contingent consideration 1,053   (3,746)
Changes in operating assets and liabilities:   
Accounts receivable (452)  (1,473)
Inventory 3,081   (3,872)
Employer retention credit receivable (4,703)   
Prepaid expenses and other current assets 2,804   1,133 
Other assets 475   304 
Accounts payable (2,852)  (871)
Accrued liabilities 605   1,549 
Operating lease liabilities (526)  (608)
Other long-term liabilities (38)  50 
Net cash used in operating activities (85,032)  (99,682)
    
Cash flows from investing activities   
Proceeds from sale of business 70,000    
Purchases of available-for-sale marketable securities (54,508)  (87,258)
Sales of available-for-sale marketable securities 18,599   8,590 
Maturities of available-for-sale marketable securities 74,642   107,707 
Purchases of fixed assets (3,983)  (9,973)
Net cash provided by investing activities 104,750   19,066 
    
Cash flows from financing activities   
Proceeds from issuance of common stock, net of issuance costs    82,657 
Proceeds from the exercise of stock options 67   711 
Repurchase of common shares to pay employee withholding taxes (111)   
Proceeds from employee stock purchase plan 214   440 
Payment of contingent consideration (872)  (3,435)
Payment of deferred offering costs    (580)
Payment of contingent consideration into escrow    (224)
Repayment of old term loan (44,550)   
Prepayment penalty fees (1,063)   
Borrowing under new term loan 34,825    
Payment of debt issuance costs for new loan (626)   
Net cash (used in) provided by financing activities (12,116)  79,569 
    
Effect of exchange rate changes on cash, cash equivalents and restricted cash (475)  (116)
    
Net change in cash, cash equivalents and restricted cash 7,127   (1,163)
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$31,348  $24,221 

ACUTUS MEDICAL, INC.
Reconciliation of GAAP Results to Non-GAAP Results
(in thousands)
(unaudited)

                 
Three Months Ended December 31, 2022 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Expense, Net Net Income (loss) Basic EPS Diluted EPS
Reported $8,321  $6,269  $9,447  $16,824  $(1,634) $15,108  $0.53  $0.41 
Amortization of acquired intangibles  (50)        50      50  $0.00  $0.00 
Stock-based compensation  (125)  (319)  (1,450)  1,894      1,894  $0.07  $0.05 
Restructuring charges           91      91  $0.00  $0.00 
Change in fair value of warrant liability              871   871  $0.03  $0.02 
Change in fair value of contingent consideration           (100)     (100) $0.00  $0.00 
Gain on sale of business           (35,890)     (35,890) $(1.26) $(0.96)
Income tax expense                82  $0.00  $0.00 
Adjusted $8,146  $5,950  $7,997  $(17,131) $(763) $(17,894) $(0.63) $(0.48)
                 
                 
Three Months Ended December 31, 2021 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Expense, Net Net Loss Basic and Diluted EPS  
Reported $9,939  $8,840  $15,865  $(29,900) $(1,364) $(31,264) $(1.12)  
Amortization of acquired intangibles  (155)     (5)  160      160  $0.01   
Stock-based compensation  (241)  (543)  (2,710)  3,494      3,494  $0.12   
Change in fair value of contingent consideration           (382)     (382) $(0.01)  
Adjusted $9,543  $8,297  $13,150  $(26,628) $(1,364) $(27,992) $(1.00)  
Twelve Months Ended December 31, 2022 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Expense, Net Net Loss Basic and Diluted EPS
Reported $31,910  $28,153  $47,654  $(27,339) $(12,195) $(39,616) $(1.40)
Amortization of acquired intangibles  (410)     (10)  420      420  $0.01 
Stock-based compensation  (669)  (1,736)  (6,986)  9,391      9,391  $0.33 
Goodwill impairment           12,026      12,026  $0.42 
Restructuring charges           2,371      2,371  $0.08 
Change in fair value of contingent consideration           1,053      1,053  $0.04 
Gain on sale of business           (79,465)     (79,465) $(2.79)
Loss on debt extinguishment              7,947   7,947  $0.28 
Change in fair value of warrant liability              (33)  (33) $0.00 
Employee retention credit  2,316   1,808   2,661   (6,785)     (6,785) $(0.24)
Income tax expense                82  $0.00 
Adjusted $33,147  $28,225  $43,319  $(88,328) $(4,281) $(92,609) $(3.27)
               
               
Twelve Months Ended December 31, 2021 Cost of Products Sold Research and Development Selling, General and Administrative Loss from Operations Other Expense, Net Net Loss Basic and Diluted EPS
Reported $32,925  $36,683  $63,523  $(112,122) $(5,561) $(117,683) $(4.11)
Amortization of acquired intangibles  (310)     (330)  640      640  $0.02 
Stock-based compensation  (864)  (2,181)  (10,709)  13,754      13,754  $0.48 
Change in fair value of contingent consideration           (3,746)     (3,746) $(0.13)
Adjusted $31,751  $34,502  $52,484  $(101,474) $(5,561) $(107,035) $(3.74)

ACUTUS MEDICAL, INC.
Key Business Metrics
(unaudited)

Installed Base & Procedure Volumes

Procedure volumes for the three months and twelve months ended December 31, 2022 and 2021 are as follows:

 Three Months Ended Twelve Months Ended
 December 31, December 31,
 2022 2021 2022 2021
Procedure volumes472 425 1,861 1,570


The total installed base which includes AcQMap Systems as of December 31, 2022 and 2021 was 76 and 77, respectively.

Revenue

The following table sets forth the Company’s revenue for disposables, systems and service/other for both the three months and the twelve months ended December 31, 2022 and 2021 (in thousands):

 Three Months Ended Twelve Months Ended
 December 31, December 31,
  2022  2021  2022  2021
Disposables$3,520 $3,249 $12,922 $11,938
Systems 927  761  1,750  4,058
Service / other 515  352  1,691  1,267
Total revenue 4,962  4,362  16,363  17,263


The following table provides revenue by geographic location for both the three months and the twelve months ended December 31, 2022 and 2021 (in thousands):

 Three Months Ended Twelve Months Ended
 December 31, December 31,
  2022  2021  2022  2021
United States$2,722 $2,069 $8,707 $8,325
Outside the United States 2,240  2,293  7,656  8,938
Total revenue$4,962 $4,362 $16,363 $17,263
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