“We are pleased with our first quarter results and remain confident that, despite a challenging environment, AtriCure is uniquely positioned in high growth markets with the right technologies, capabilities and people. Furthermore, the decisive actions that we implemented during the fourth quarter of 2008, which were aimed at further aligning costs and revenues in order to achieve profitability, are fueling momentum and gaining traction. These actions contributed to positive adjusted EBITDA for the first time since becoming a public company and, importantly, we achieved this major milestone during what has historically been our heaviest spend quarter,” said David J. Drachman, president and chief executive officer. “In addition, we are pleased that our financial performance and growth opportunities provide us with the ability to secure financial resources with attractive terms. This credit facility strengthens our balance sheet and further supports our ability to execute our strategy.”
Revenues from domestic open-heart products increased 2.5% to $7.1 million and revenues from domestic minimally invasive products declined from $4.9 million for the first quarter of 2008 to $4.3 million for the first quarter of 2009. As compared with the fourth quarter of 2008, revenues from domestic open heart and minimally invasive products increased 18.4% and 6.6%, respectively. International revenues grew 37.9%, or 48.9% on an exchange rate neutral basis, to $2.3 million. Gross profit for the first quarter of 2009 was $10.7 million and gross margin was 78.5%, compared to gross profit of $10.3 million and gross margin of 76.1% for the first quarter of 2008. The increase in gross margin was primarily due to a reduction in product cost and a reduced mix of revenues from capital equipment, partially offset by an increase in international revenues.
Operating expenses, including a $6.8 million goodwill impairment charge, which was recorded as a result of a reduction in AtriCure’s market capitalization, increased 31.5% from $14.2 million to $18.7 million. Operating expenses, excluding the goodwill impairment charge, were $11.8 million or a 16.5% reduction for the first quarter of 2009, driven primarily by a reduction in headcount related expenses, partially offset by an increase in share-based compensation expense and an increase in costs associated with clinical trials and product development activities.
Loss from operations for the first quarter of 2009 was $7.9 million. Excluding the goodwill impairment, loss from operations was $1.1 million, a record low and a 71.3% improvement over the first quarter 2008 operating loss of $3.9 million. The net loss including the goodwill impairment charge was $8.0 million, or $0.56 per share and $1.2 million, or $0.08 per share, excluding the goodwill impairment charge for the first quarter of 2009. The net loss excluding the goodwill impairment charge improved $2.5 million or 68.0% to $1.2 million as compared to $3.6 million for the first quarter of 2008. Net loss per share excluding the goodwill impairment charge improved 68.0% to $0.08 as compared with $0.25 for the first quarter of 2008.
Adjusted EBITDA, a non-GAAP measure, was $0.6 million, an improvement of $3.2 million as compared with a loss of $2.6 million for the first quarter of 2008. Cash and cash equivalents were $8.6 million at March 31, 2009 and no debt was outstanding on our credit facility.
