AtriCure, Inc.

Good afternoon, and welcome to the HRCARE second quarter 2022 earnings conference call. My name is Michelle, and I'll be your coordinator for today's 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 now like to turn the call over to Marcia Beisch from the Gilmartin Group for her introductory remarks. Please go ahead.

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, 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 HRCUR's control, including risks and uncertainties described from time to time in HRCUR's SEC filings. 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 reimbursement. Atricure's results may differ materially from those projected. Atricure undertakes no obligation to publicly update any forward-looking statements. Additionally, we refer to non-GAAP financial measures specifically revenue reported on the 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 would like to turn the call over to Mike Carroll, President and Chief Executive Officer. Mike?

Good afternoon, and thank you for joining us today. We hope everybody's doing great. I am pleased to report another exceptional quarter for AtriPure as we continue changing the standard of care for patients with our innovative therapies. In the second quarter of 2022, we generated $84.5 million in revenue, reflecting growth of 18% over the second quarter of 2021, a remarkable achievement given the strength of the comparable quarter. Our performance was once again driven by increasing adoption across key product lines throughout the business. On our first quarter call, we discussed pandemic and hospital staffing related pressures on cardiac procedure volumes early in the year. I'm glad to share that as we transitioned into the second quarter, those pressures have continued to decline, leading to modest residual impacts on elective procedures involving our products. We are gaining momentum across our platforms and therapies and remain confident in our ability to execute our 2022 objectives. As a result, we are increasing our 2022 revenue guidance to $323 to $333 million, reflecting full-year growth of approximately 18 to 21%. Now I would like to review our business, highlighting several initiatives driving growth over the next decade, starting with our convergent hybrid AF therapy with the Epicense system. As we've mentioned in previous quarters, the impact of COVID on elective procedures, staffing, and new program advancement has affected our ability to expand adoption more quickly following the PMA approval. However, we are immensely proud of the progress that we have driven in this environment and remain bullish of our growth prospects long term. More specifically, in the second quarter, U.S. Epicenter's revenue, product revenue increased 12% year over year and nearly 20% on a sequential basis. I would like to share our thoughts on progress over the past year, focusing on the impact of our training and education programs for convergent hybrid AF therapy. We conducted our first didactic physician training program in June 2021 and have extended our training efforts steadily since then, including the addition of both mobile and traditional labs where physicians receive hand-on experience. Today, we have trained over 100 surgeons and electrophysiologists on the hybrid AF technique, and we have educated many more cardiologists and heart teams on the benefits of these most difficult to treat patients. As a result, we have both grown the number of conversion accounts as well as the average procedure volumes per account. We're also excited that Convergint is now in several well-recognized leading cardiology hospitals in the country, notably Mayo Clinic, UCLA, Cleveland Clinic, Northwestern, and Johns Hopkins, and anticipate many more in the coming years. While these institutions are in varying stages of adoption, we are encouraged by the strong interest from each of their teams and believe it gives us further credibility to the procedure and approach to care for these longstanding persistent AFib patients. After experience with hybrid AF therapy, many have also started outreach programs to help even more patients. As a result, we expect the journey to establish our convergent hybrid AF therapy as a standard of care will provide an expansive growth opportunity for AtroCure over the coming decade. Turning now to our open ablation franchise. Earlier this year, we announced our full-scale commercial launch of the Encompass clamp in the United States following 510K clearance in 2021. The Encompass clamp leverages the proven technology of our Synergy ablation systems to offer a simpler and faster approach to ablation and open heart procedures. We are seeing excellent physician reception and adoption, and exited the second quarter with strong momentum from the launch. Sales from Encompass Clamp accelerated our domestic open ablation revenue growth to over 13% this quarter, representing a mix of new adoption and additional revenue per procedure upon conversion to the Encompass Clamp. With this unique and differentiated technology and our world-class education programs, We are excited and increasingly confident in our ability to further penetrate the cardiac surgery market for many years to come. Complementing both open and hybrid ablation platforms is our appendage management franchise. The consistent performance of our atrial clip product line continued into the second quarter of 2022, with 18% worldwide growth this quarter over an outstanding second quarter last year. We are advancing product innovation efforts with a focus on less invasive and easier to use devices. There's ample opportunity ahead in our existing markets as we grow demand in hybrid AF therapy and an increased penetration in cardiac surgery. Moreover, we are pursuing clinical studies to extend our addressable markets, most notably the LEAPS clinical trial. Last quarter, we announced FDA approval to move forward with this landmark trial examining the prophylactic use of atrial clip devices in cardiac surgery patients without a preoperative AFib diagnosis. Over two-thirds of the nearly 1 million cardiac surgery patients worldwide do not have preoperative AFib diagnosis. Our team has begun preparing for trial initiation followed by patient enrollment later this year. As a reminder, the trial will involve 6,500 patients at up to 250 sites worldwide. We have strong interest from accounts to participate in this seminal work, which should change the standard of care for all cardiac surgery patients. While the LEAPS trial will take a number of years to complete, all progress puts us closer to a truly meaningful distinction for the atrial clip device and an extension of the addressable market for our appendage management franchise. Now shifting to our pain management franchise, where crown nerve block continues to be one of our fastest growing therapies. The cryosphere probe uses a unique freezing method to block nerves from transmitting pain signals after thoracic surgery, providing a long-lasting form of pain relief for patients. We reached quarterly revenue exceeding $10 million in the United States, marking both another quarter of sequential growth and increasing traction within our account base. We are also starting to expand this therapy globally and ended the second quarter with growing interest in Europe and Australia. Despite great progress since launch of Crown NeuroBlock in 2019, we believe we are still in early stages of therapy adoption as we work to impact more patients undergoing thoracic surgery and explore new opportunities and applications of our technology for pain management and thus again expanding our overall market opportunity. Finally, in addition to our focus in driving adoption across these platforms, we are cultivating new markets by building upon existing technology and leveraging the unique physician relationships we have developed. On our last call, we announced FDA approval for the HEAL-IST trial along with product development efforts for a dedicated device for this therapy. HEAL-IST will study 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. It affects millions of people around the world, and currently there are no approved treatments for those suffering from this debilitating condition. We are excited to share that the trial is underway. Initial cases have been performed in Belgium and the United States. While we are just beginning therapy, this market represents another opportunity for AtroCure to dramatically improve many patients' lives with our innovative technology and robust clinical science. In summary, our results this quarter demonstrate the strength of our many catalysts for accelerated growth. Simultaneously, we are investing in new areas such as heel IST, leaps, encompassing converged launches, and cryonerve block therapy expansion, all driven by insights and technology that is unique to AtroCure. Foundational to our success has been disruptive innovation and a patient-focused culture and team we have built over the past decade. I'm incredibly proud to work alongside nearly 1,000 AtroCure teammates as we advance our patient-focused mission, and I'm humbled by the recognition of our Cincinnati, Ohio, Minneapolis, Minnesota, and Amsterdam, Netherlands locations as top workplaces this year. For that, I will simply say thank you to our AtroCure team Together, we have created a truly special company. I'll now turn the call over to Angie Weirich, our Chief Financial Officer, to discuss more details and results from the quarter.