AtriCure, Inc.

Afternoon and welcome to A3Q's first quarter 2022 earnings conference call. My name is Jeff and I'll be your coordinator for the call today. At this time, all participants are in listen-only mode. We'll 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 Marissa Baez 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 HR's control including risks and uncertainties described from time to time in Atricure's SEC filing. These statements include, but are not limited to, financial expectations and guidance, expectations regarding the potential market opportunity for Atricure's franchises and growth initiatives, including the adoption of the hybrid AF procedure and future product approvals, clearances, and reimbursements. Atricure's results may differ materially from those projected. HRA 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. And with that, I would like to turn the call over to Mike Carroll, President and Chief Executive Officer. Mike?

Good afternoon and thank you for joining us. We hope that you're all well. I'm pleased to share that HF Care delivered an excellent first quarter results as growth across key product lines and geographies demonstrated the strength of our portfolio despite challenging conditions to begin the quarter. We generated $74.6 million in revenue, reflecting growth of approximately 26% over the first quarter of 2021. Highlights for the quarter included the growth of our cryosphere probe for pain management, and strength in our AtriaClip product line, showing the broad appeal and continued adoption by new and existing customers. Before providing a more detailed review of our business, I would like to comment on the operating environment to date. As discussed on our fourth quarter 2021 call, the Omicron variant brought capacity and staffing constraints to our customer base early in the year, and we experienced pressure to the cardiac procedures globally, in particular, elective procedures. However, as conditions began to improve in late February and early March, we saw a strong return in procedure volumes and demand. This stability has continued into the second quarter, and we are gaining momentum. Based on the current backdrop and considering continued robust physician interest in our therapies, we remain confident in our ability to execute over the remainder of the year. As a result, we are increasing our 2022 revenue guidance to $318 to $330 million, and reflecting full-year growth of approximately 16% to 20%. Now let's focus on the initiatives driving our growth, starting with hybrid AF therapy. Last week, we celebrated the one-year anniversary of PMA approval for the Epicent system for the treatment of patients with long-standing persistent AFib. This approval resulted from the groundbreaking CONVERGE trial, which demonstrated the superiority of hybrid AF therapy using our Epicent system with an endocardial catheter versus the endocardial catheter ablation alone. Hybrid AF therapy is additive to catheter ablation and the only FDA-approved standalone treatment for patients with long-standing persistent AFib, giving Atricure a clear and differentiated position in a vastly underpenetrated market. Key accomplishments over the last year include completion of multiple hybrid AF therapy training courses, which have been co-sponsored by the Heart Rhythm Society, or HRS, expansion of our customer base, and increasing atrial clip attachment in hybrid AF procedures. The response to the launch and our training programs has been excellent, and we continue to see great potential and add new and grow within existing accounts. Therefore, as the year progresses, we expect sales of the Epicent system to accelerate. We also continue to make investments in our sales team, enhancing clinical support, and adding therapy awareness reps to build comprehensive and effective programs for providers and their patients. With millions of diagnosed AFib patients, and roughly 45% of those considered longstanding persistent, we possess a unique opportunity to establish hybrid AF therapy as the standard of care in the coming years as it is the only proven therapy for these patients. Turning now to our open ablation franchise. We are excited to have recently announced our full-scale commercial launch of the Encompass clamp in the United States following FDA 510 clearance last year. Encompass provides a simpler and faster approach to ablating and open heart procedures leveraging the proven technology of our Synergy ablation system. While the contribution to 2022 revenue will be moderate, feedback on our initial limited launch has been exceptional, and we are already seeing growing interest from physicians. With the addition of Encompass, we expect to sustain upper single-digit revenue growth in our open ablation franchise and deepen our penetration of the cardiac surgery market. Complementing the opportunities for our open and minimally invasive, or hybrid, therapies is our appendage management franchise. The Atroclip product line has driven consistent growth over the decade, as continued innovation and increasing awareness to manage the LAA has led to broad adoption globally. In the first quarter of 2022, our appendage management franchise delivered revenue growth of approximately 30%. reflecting record sales of the Atrial Flex V and Pro-V devices. There is ample opportunity still ahead as we grow hybrid AF therapy, increase penetration in cardiac surgery, and pursue clinical trials to extend our addressable markets, and more will be made on that point in a moment. Next, I would like to highlight our pain management franchise. Cryo nerve block therapy continues to be the fastest growing part of our business. Our unique technology, the cryosphere probe, uses a differentiated freezing method to block nerves from transmitting pain signals after thoracic surgery, providing a long-standing form of pain relief for patients. Pain management was an important driver of our first quarter results, with sales of the cryosphere probe roughly doubling year over year. We've been pleased to see consistent growth of our customer base reflected in procedure volume and account traction to date. Even with this incredible growth, the ability to impact patients undergoing thoracic surgery remains a significant opportunity for AtriCare, and we continue to make investments in our commercial and training teams while expanding clinical evidence for the cryo nerve block therapy. Finally, I would like to discuss a few key and exciting clinical and regulatory developments that position us for sustained long-term growth. Starting with the LEAPS clinical trial, I am thrilled to announce that last week we received FDA approval to move forward with our landmark clinical trial. LEAPS will examine the prophylactic use of atrial clip devices in cardiac surgery patients without preoperative AFib diagnosis, with the primary endpoint of the randomized controlled trial demonstrating a reduction in ischemic stroke and systemic arterial embolism. As a reminder, over two-thirds of the nearly 1 million cardiac surgery patients worldwide do not have preoperative AFib diagnosis. With this clinical trial, we are one step closer to a meaningful expansion of the addressable market for our appendage management franchise. The LEAPS trial will take a number of years to complete, with enrollment targeting 6,500 subjects at up to 250 sites globally. Using early interest in the study as an indication, We expect awareness of appendage management in all cardiac surgery procedures to be a topic of increasing scientific interest. We are also cultivating markets that are highly complementary to our core competency of treating complex arrhythmias, leveraging the unique physician relationships we have developed and building upon our technology platforms. Earlier in the year, we detailed plans for HEAL-IST, a new IDE trial for the treatment of patients with inappropriate sinus tachycardia, or IST, using hybrid ablation procedures. IST is characterized by an elevated heart rate and distressing symptoms of heart palpitations contributing to the inability to sleep or exercise. Like AFib, IST has a dramatic impact on a patient's quality of life, and currently there are no approved treatments. I am pleased to share that we received FDA approval for the HEAL IST trial and are now beginning site initiation followed by first patient enrollment. In addition, we are making progress on the development of a dedicated device for this therapy. Our approach to the significant market, the significant unmet need for treatment of IST patients follows the hallmark of AtriCare. Innovative technology combined with robust clinical science and advanced physician education. In summary, we remain excited about our future. Much like the last decade, we continue to deliver on our immediate opportunities while we make investments in long-term growth drivers. I would like to thank the Atricure team for their dedication to our patient-first mission and focus on execution as we capitalize on these opportunities and bring life-changing technology to market. I will now attend the call over to Angie Weirich, Chief Financial Officer, to discuss more detailed results for the quarter.