AtriCure, Inc.

Good afternoon and welcome to HQR's fourth quarter and full year 2020 earnings conference call. My name is Kevin and I'll be your coordinator for the call today. At this time, all participants are in a listen-only mode. We will be facilitating the question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Lynn Lewis from the Gilmartin 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 one emailed 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-Recure's control, including risks and uncertainties described from time to time in H-Recure's SEC filing. These statements include but are not limited to financial guidance, expectations regarding the timing of FDA review, expectations regarding the FDA's response and whether it will approve Converge, the potential Converge launch timing, the potential market opportunity for Converge, and the adoption of the Converge procedure. HRQ's results may differ materially from those projected. HRQ undertakes no obligation to publicly update any forward-looking statements. 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, everyone, and thank you for joining us. We hope that you are remaining safe and healthy. As we look back on 2020, I want to begin by recognizing the dedication of our team at Atropure and the resilience and durability of our business. In spite of the dynamic and challenging nature of the past year, we made meaningful progress in all areas of our business. In 2021, we will continue building for the future with many key catalysts on the horizon. Total revenues for the fourth quarter were $58 million, representing a 5% sequential revenue growth over the third quarter. Following solid growth in the early part of the quarter, as COVID cases and hospitalizations increased after the holidays, we experienced volatility both in the U.S. and in Europe. This led to reduced cardiac procedure volumes at the end of 2020 and put pressure on our volumes as a result. These trends continued into January and in some areas began to worsen driven by a return to quarantines and diversion of medical resources to COVID patients. With that said, we are starting to see some strong positive trends and experience an uptick in volumes as hospital constraints subside. While we expect this upward trend to continue, we believe that cardiac surgery volumes will remain slightly below full capacity and that we will experience some variability for the first half of the year. Now turning to some of our accomplishments through the year, beginning with Converge. Last year we made our final submission to the FDA seeking a label for the treatment of patients with long-standing persistent AFib. This brings us closer to completing the regulatory process which will allow us to market the hybrid convergent therapy, providing a compelling treatment option in a large and vastly underpenetrated patient population. On our last call, we discussed the differentiated clinical trial results of longstanding persistent AFib patients in the converged trial. Since then, the clinical results for longstanding persistent patient group were presented last month at the 26th Annual AFib Symposium. The analysis demonstrated clear superiority in the hybrid convergent arm compared to the endocardial catheter ablation arm with 29% absolute difference in effectiveness at the 12-month period. While this alone is a significant improvement over catheter ablation, the data were even more convincing at 18 months, where for long-standing persistent patients returned a 35% absolute difference in effectiveness. We are incredibly encouraged by these results and firmly believe the hybrid convergent procedure has a more pronounced, consistent, and durable effect for longstanding, persistent AFib patients than any other clinically available standalone treatment alternatives today. While I know the exact timing of panel and or approval is top of mind for all investors, we cannot give that today. However, we are making excellent progress on the regulatory front, and the PMA process with the FDA has been both productive and collaborative. We look forward to providing an update on this milestone soon. The anticipated approval of Converge marks the culmination of many years of tireless work by so many HFR employees and physicians in pursuit of a therapy for this underserved patient population. I am incredibly proud of the partnership throughout our company which brought us to this point. We have a clear and extensive opportunity in front of us, and in preparation for the anticipated approval of Converge, we have built a dedicated sales team and developed training programs and infrastructure to support the launch of this therapy. Currently, our U.S. sales and training team consists of more than 200 individuals in the field, including 35 dedicated reps and clinical specialists in our EP-focused hybrid sales team and over 30 professionals supporting nationwide training, and education courses. We look forward to a future where we champion the hybrid conversion therapy to become the standard of care for the millions of patients with long-standing persistent AFib. We also took significant steps on AMAZE, our other landmark clinical trial. The AMAZE study is a 600-patient randomized controlled trial designed to show superiority of catheter plus our Lariat LAA exclusion system versus catheter ablation alone. We have submitted three of five modules of the PMA to the FDA and made excellent progress on patient follow-ups. To put this into perspective, 127 patients completed final primary endpoint visits during 2020, and we now have only 11 patients to complete follow-up. This is a testament to our clinical trial team and the AMAZE investigators and study teams who strongly believe in this therapy. We expect a complete patient follow-up in April, after which we will conduct our analysis of the data. We are targeting our PMA submission on the AMAZE trial for the second half of this year and expect to release trial data following that submission. As a reminder, the Lariat system is the first HHR solution directly in the hands of electrophysiologists. And we believe the AMAZE clinical trial will show this therapy, much like the hybrid convergent procedure, is complementary, not competitive to catheter ablation. By adding the Lariat system to their toolkit, EPs will be able to offer a solution which both mechanically and electrically isolates the appendage without leaving anything in the bloodstream. This complementary technology not only diversifies our portfolio, but is also an opportunity to further leverage our existing commercial channels in the EP market that has been built up in anticipation of the Converge approval. Adding to the many achievements of 2020, we made strides towards 5 cent tape clearance of our new Encompass clamp, in addition to our open ablation platform where we are the market leader in cardiac surgery procedures for the treatment of AFib. The Encompass clamp provides a simpler and faster approach for ablating the heart in open procedures and we expect this device to appeal to high-volume cabin surgeons. As a result, we expect this new clamp to deepen our penetration in the cardiac surgery market. Our 510K submission to the FDA is currently under review, and we anticipate clearance later this year, followed by concentrated commercial launch at certain key centers and broad commercial launch shortly thereafter. Finally, while a strong history of revenue growth was interrupted due to COVID-19, There were two products, Cryosphere and the Atrial FlexV, which both grew over 2019. Starting with Cryosphere, our innovative and dedicated device for managing post-operative pain in thoracic patients. Our unique Cryo-ICE technology uses a differentiated freezing method to block nerves from transmitting pain signals for several months. The Cryosphere probe continues to resonate in the market following its launch in the first half of 2019. with a positive trend of consistent sequential quarterly sales growth. We ended 2020 with the cryosphere probe accounting for approximately 5% of our total revenue. We recently expanded our 510K label for cryonurblot therapy to include the treatment of adolescent patients of at least 12 years or older. Adolescent patients undergoing invasive surgery of the chest wall can experience severe pain and have limited options for pain management after surgery. This label expansion provides an opportunity to help these younger patients manage post-recovery pain. We have heard inspiring stories about patients, young and old, who are going home from the hospital with absolutely no pain and are excited to further build our presence in the pain management field with the CryoNerveBlock therapy. This therapy should continue to drive accelerated revenue growth in the coming years. The Atrial FlexV was first launched in early 2018 and was a novel addition to our AtriClip franchise. Despite the impact of the pandemic, the FlexV Clip delivered year-over-year growth in 2020 versus 2019, indicating strong and steady adoption by physicians since launch. We have also seen the increased use of our minimally invasive AtriClip devices in hybrid conversion procedures, a trend which we expect to boost revenue growth with the expansion of this therapy over the next decade. The Cryosphere Probe and the AtriaClip FlexV are both shining examples of the ingenuity and efforts of our product development team and the innovative spirit on which AtriaCare was founded. Now, looking ahead, we are incredibly encouraged by the many catalysts on the horizon, which we believe will further accelerate our revenue growth in 2022 from our historical rates of growth. We remain laser-focused on the many activities underway to drive our market expansion, including Converge, Amaze, Crown, Nurbot, and Encompass, all mentioned in this discussion. I'm proud to be part of a team with such a pivotal moment in AsiaCare, and we are strongly positioned and poised for the future. With that, I will now turn the call over to Angie Weirich, our Chief Financial Officer, to discuss more detailed results and our guidance for 2021.