AtriCure, Inc.

Good afternoon, and welcome to the HRCURS first quarter 2021 earnings conference call. My name is Mel, and I will be your coordinator for the call today. 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 now like to turn the call over to Lynn Lewis from the Gilmartin Group for a few introductory comments. Ma'am?

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 ADRAcure's control, including risks and uncertainties described from time to time in ADRAcure's SEC filings. These statements include, but are not limited to, financial guidance, expectations regarding the timing of FDA reviews, and expectations for product approvals, 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. ADRAcure's results may differ materially from those projected. ADRAcure 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, everyone, and thank you for joining us. We hope you are safe and doing well. We are off to a strong start in 2021. with $59 million in total revenue for the first quarter. This represents 3% sequential revenue growth over the fourth quarter of 2020 and largely reflects improving patient flow in the United States. At the start of the quarter, we experienced headwinds from the decreased cardiac surgery procedures following the spike in COVID-19 cases, which resulted in extended quarantines and a reallocation of resources within hospitals. However, in March, most areas in the United States began to stabilize, and we saw steady growth across all of our franchises. While we believe this recovery reflects some pent-up demand, we also saw improvement in procedure volumes in March. Encouragingly, we finished the quarter with momentum, and this has continued in April. Internationally, our performance was not as strong, especially in parts of Western Europe due to COVID-19 resurgences and slower vaccine rollouts. Similar to the experience in the United States, we began to improve in March. However, trends in our international markets have not been as consistent, and we expect continued volatility in the coming months. As we begin the second quarter, we expect the upward trend to continue in the United States. While we are hopeful that international markets will improve, the outlook is less clear. We believe that worldwide cardiac surgery volumes remain below pre-pandemic levels. Conditions are improving, but this healthcare crisis is not fully behind us yet. Therefore, we expect that we will experience some variability in the second quarter and further recovery as the year progresses. Turning now to an update on our growth initiatives. Beginning with Converge, while we are closer to completing the PMA process, we cannot provide details of either a panel meeting or approval at this time. However, we are confident that we remain on a pathway to eventual approval and look forward to providing an update on this milestone shortly. Additionally, we continue to build a dedicated sales team and develop a robust infrastructure to support the commercial steps ahead. Currently, our U.S. sales and training team consists of more than 200 individuals in the field who are all critical to supporting our hybrid therapy growth. This includes 35 dedicated reps and clinical specialists in our EP-focused hybrid sales team, and over 30 professionals supporting nationwide training and educational programs. The opportunity ahead of us is very clear, and our goal is for the hybrid conversion therapy to become the standard of care for the millions of patients with longstanding persistent AFib. We are also making significant strides on AMAZE, our other landmark clinical trial. The AMAZE study is a 600-patient randomized controlled trial designed to show superiority of endocardial catheter plus our Lariat suture delivery device versus endocardial catheter ablation alone. We successfully completed patient follow-ups in early April and are now focused on analysis of the data. We remain on track for PMA submission of the AMAZE trial during the fall of this year and expect to release trial data following this submission. In our open franchise, we continue to make progress towards our 510 clearance of our new Encompass clamp in addition to the open ablation platform where we are the market leader in cardiac surgery procedures for the treatment of AFib. We anticipate clearance later this year followed by a concentrated commercial launch at certain key centers in 2021 and a broad commercial launch thereafter. As a reminder, the Encompass clamp provides a simpler and faster approach to ablating the heart in open procedures, and we expect this device to appeal to high volume CABG surgeons. As a result, we expect this new clamp to deepen our penetration of the cardiac surgery market starting in 2022 and beyond. The collective opportunity in addressable markets for our open and minimally invasive ablation platforms is well into the billions of dollars, representing hundreds of thousands of patients annually. This opportunity is complemented by the continued rise in left atrial appendage management procedures. We saw a record number of atrial flip LAA exclusion devices sold in the first quarter, and our left atrial appendage management franchise accounted for 40% of worldwide revenue. Our track record of delivering innovative LAM solutions over the past several years has contributed to revenue growth, along with increasing interest in managing the left atrial appendage. We are encouraged by the growing awareness at society meetings where the LAA management is the focal point of both sessions and discussions. Switching gears to Cryosphere, our dedicated device for managing postoperative pain in thoracic patients. The Cryowise Cryosphere probe is gaining traction in the market with sequential quarterly sales growth since launch and continuous addition of new accounts. Crown NurbLock, which is included in our open franchise revenue, is one of the fastest growing parts of our business and accounted for approximately 6% of total revenue in the first quarter. Our unique technology uses a differentiated freezing method to block nerves from transmitting pain signals after cardiothoracic surgery, providing a longstanding form of pain relief for these patients. We believe this therapy will drive accelerated revenue growth in the coming years. Looking ahead, while the pandemic is still impacting our lives, we are beginning to see some return of normalcy with the rollout of vaccines and the gradual lessening of socially restricted measures. The momentum with which we are moving forward gives us hope we're on a pathway toward recovery. Our team continues to execute and make achievements towards our strategic initiatives, and we remain confident in our future that we are strongly positioned with multiple catalysts we have underway to accelerate our revenue growth. In closing, I would like to take a moment to thank Scott Drake and Mark Lanning for their dedicated service and leadership on our Board of Directors. During their tenure, HQ has experienced tremendous growth and advancement of our mission to reduce the global AFib epidemic. We are grateful for their guidance over the years to our entire management team. With that, I'll now open the call over to Angie Wyrick, our Chief Financial Officer, to discuss more detailed results of the quarter.