Acutus Medical (NSDQ:AFIB) announced today that it has undertaken a corporate restructuring that includes cutting some of its staff.
Part of the restructuring includes a planned reduction in force (RIF) for the developer of technologies for diagnosing and treating cardiac arrhythmias. A spokesperson for the company confirmed that Acutus is not disclosing the number of notified employees. Still, the company noted that the action is subject to the WARN Act, meaning it involves more than 50 people.
“We have undertaken a detailed review of our strategic priorities, the external environment, and cost structure and are restructuring the company to sharpen our focus and strengthen our financial position,” Acutus President & CEO Vince Burgess said in a news release. “While challenging, this restructuring is a critical step in positioning Acutus for the future, and we are committed to treating impacted employees with respect and support through this period of change.”
Acutus said it will prioritize maximizing console utilization and procedure volume growth in targeted geographies while also focusing on product development initiatives. Along with the planned RIF, all restructuring actions are expected to result in operating expense savings of between $23 million and $25 million annually compared to 2021.
The company expects that operating expense savings, cost reductions in manufacturing operations and working capital improvements will result in a 30%-40% reduction in quarterly cash burn exiting 2022 compared to 2021. The company expects to start realizing the benefit of its restructuring plan beginning late in the first quarter of 2022.
Along with the restructuring, Acutus announced preliminary fourth-quarter and full-year revenue results, with the full-year range of between $17.1 million and $17.3 million (compared to $8.5 million in 2020) falling in line with the company’s guidance.
“This restructuring is one component of our efforts to strengthen the company’s foundation,” Burgess added. “We expect to emerge from these actions as a stronger organization and better-positioned to achieve our mission and strategic objectives. We are making good progress on the clinical and product development front, and we are confident that our strategic realignment of priorities and resources will position us for long-term growth. We are planning to share more detail on our renewed focus and priorities on our earnings call in March.”
Acutus’ preliminary revenue estimates fall in line with analysts’ projections on Wall Street, too, with BTIG analyst Marie Thibault writing in a report that Acutus is considered a “Buy” option amid the news of the earnings report and restructuring efforts.
“While these efforts may help alleviate cash burn pressure in the near-term, reductions to SG&A and R&D may limit the company’s ability to meaningfully grow the top-line and scale operations, and may still result in the need for future raises,” Thibault wrote.
Shares of AFIB were unmoved at $2.53 per share in mid-morning trading today.