AtriCure, Inc.

Good afternoon and welcome to ADCure's third quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would like to turn the call over to Ms. Lynn Lewis from the Gilmorton Group for a few introductory comments.

Thank you. By now, you should have received a copy of the earnings press release. If you have not received a copy, please call 513-755-4136 to have an email to you. Before we begin today, let me remind you that the company's remarks include forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond H-I-Cure's control, including risks and uncertainties described from time to time in H-I-Cure's SEC filing. H-I-Cure's results may differ materially from those projected. Adrian undertakes no obligation to publicly update any forward-looking statement. Additionally, we refer to non-GAAP financial measures, specifically revenue reported on a constant currency basis, adjusted EBITDA, and adjusted loss per share. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures is included in our press release, which is available on our website. With that, I'd like to turn the call over to Mike Carroll, President and Chief Executive Officer. Mike?

Thanks, Lynn. Good afternoon, and thank you for joining us today. We are continuing our strong momentum from the first half of 2019 with total revenue in the third quarter of approximately $57 million, our 28th consecutive quarter of double-digit revenue growth. Our top-line performance was again driven by strength across our U.S. franchises. With this strong momentum, we are raising our revenue outlook for 2019, which we now expect to be in the range of $227 to $229 million. This range corresponds to growth of 13% to 14% for the year. The third quarter was a very exciting quarter and transformative quarter for us here at AtriCure. It was highlighted by the strategic acquisition of CenterHeart, paving the way for our direct entry into the electrophysiology market. As we discussed on our August call announcing the transaction, CenterHeart developed the Lariat device, which is a percutaneous, suture-based approach to close the left atrial appendage. This is particularly important given the groundswell of support and acceptance of managing the left atrial appendage in the treatment of AFib and the growth potential within the EP market. The Lariat device is currently being studied in the AMAZE clinical trial. The Lariat product is on the market today in the US under a 510K and in Europe. However, we expect very few devices to be sold outside of the AMAZE trial. Our top priority is to complete enrollment in this trial and we have made meaningful progress since the acquisition in August. As of today, we have enrolled 579 patients and are on track to reach full enrollment of 600 patients in the first quarter of 2020. With the CONVERGE, DEEP-AF and AMAZE trials, we have the only three clinical trials addressing the most complex and advanced forms of AFib. Strategically, we expect the Lariat technology to advance our position in the EP space as is complementary to the endocardial capillary ablation procedures and multidisciplinary approaches such as CONVERGE and DEEP. Each of these therapies offers a valuable treatment option for AFib patients, and the total addressable market for CONVERGENT, DEEP, and AMAZE procedures is well into the billions using conservative estimates. Turning now to our quarterly results, we continue to execute and are seeing the benefit of our broad portfolio and robust pipeline. Specifically, in our U.S. business in the third quarter, we saw continued strength in our appendage management franchise, driven by our open and minimally invasive Atriclip products. We again had meaningful contribution from our minimally invasive Atriclip Pro2 and ProV devices, as well as from our open chest Atriclip FlexV device. Within our open ablation platform, we remain focused on innovation, education, and training to address this large, still under-penetrated market. We are progressing with our plan to launch a new open clamp in 2020, which we believe will be attractive to physicians who are seeking a simpler and faster approach to ablating the heart in open procedures. While we anticipate broad market appeal, we expect it to be particularly resonant with the CABG surgeons in the open concomitant space, and to be accretive to our open ablation revenue. In addition, in the third quarter we received FDA clearance for expanded labeling claims for atrial clip family devices. We were able to demonstrate through clinical evidence that atrial clip devices both exclude and electrically isolate the left atrial appendage. This expansion of the atrial clip labeling is important because epicardial exclusion of the appendage has multiple benefits. Over the past several years, we have invested in our AtrialClip portfolio with innovative new products and evidence to support increasing adoption. Physicians continue to recognize the benefits of the left atrial appendage management and how the AtrialClip line of left atrial appendage management devices can serve their needs in a variety of different ways. The CryoSeer probe, our dedicated device for managing postoperative pain in cardiothoracic surgical patients, also contributed to our strong U.S. results in the third quarter. While it is still early and overall revenue contribution is still relatively low, we are seeing this therapy perform well and our account base continues to build. We are steadily bolstering our small, dedicated thoracic team with clinical resources to support cases in select markets. Our approach is focused on depth rather than breadth as we first identify accounts that we believe in a comprehensive and innovative pain management program for their patients, and then we go deep, adding resources to support case volume as the business builds. We are encouraged by our results and expect the thoracic pain management market to offer significant opportunity over the long term. Transitioning to our MIS ablation business, US revenues were up 14% in the quarter, rebounding from year-to-date growth of approximately 1%. This is consistent with quarterly fluctuations we have been experiencing in this franchise, and the variability that we expect to continue until we receive FDA approval of our Epicense system using the convergent approach in treating symptomatic persistent AFib patients. As it relates to the CONVERGE trial, I want to take a step back and review our timeline and expectations again. The last patient in the study was treated in August 2018, and one year follow-up was completed recently. Our clinical team is working through the data and are on track to submit the final PMA module including training protocols and other details by the end of this year. The convergent procedure is a novel therapy for patient group for whom there is no product with group label for standalone treatment of persistent and longstanding persistent AFib. With that in mind, we are expecting the FDA to convene a panel. We anticipate that we will release the data in 2020 along with our submission and preparation for the panel. Based on this timeline, we're optimistic that we could receive FDA approval toward the end of 2020, although this is clearly dependent on the process within the FDA. Internationally, third quarter results were up modestly with strength driven by our open and appendage management businesses. We recently received CE Mark for H-Equip Flex V and Pro V devices and look forward to their contribution in the European market in the future. Broadly speaking, we continue to see steady growth prospects and the end-user markets in which we operate outside the U.S. In summary, we are excited about our broadening portfolio and channels this quarter and are extremely pleased with our track record of sustained double-digit top-line growth. I will now turn the call over to Andy Wade, our Chief Financial Officer, to review our financials and the outlook and will return for closing comments.