AtriCure, Inc.

Good afternoon, and welcome to HRCARE's first quarter 2023 earnings conference call. At this time, all participants are in 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 Marissa Bausch. from the Gilmartin Group for a few introductory comments. Please go ahead.

Great, and thank you for joining us. By now, you should have received a copy of the earnings press release. If you have not received a copy, please call 513-644-4484 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 AtroCure's control, including risks and uncertainties described from time to time in AtroCure's SEC filings. These statements include, but are not limited to, financial expectations and guidance, expectations regarding the potential market opportunity for AtroCure's franchises and growth initiatives, including the adoption of hybrid AF therapy, and future product approvals, clearances, reimbursements, and clinical trial outcomes. AtroCure's results may differ materially from those projected. Atrix here 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. And with that, I would like to turn the call over to Mike Carroll, President and CEO.

Thank you, Marisa. Good afternoon, and thank you to everyone for joining us today. I am pleased to share an exceptional start to 2023 at Atricare. We achieved $93 million in revenue, reflecting 25% year-over-year growth and 6% sequential growth. We are experiencing robust demand from physicians to treat patients and remain excited for the extensive opportunities in our markets. Our performance was driven by broad-based strength across all of our franchises and geographies, reflecting the depth of our product portfolio and considerable market opportunities. This momentum is a testament to our people and their drive to execute a growth strategy while doing what is right for patients globally. Our robust top line growth also contributed to positive adjusted EBITDA of nearly $2 million for the first quarter, which Angie will discuss further in a few minutes. As a result of our first quarter performance and ongoing momentum across the business, we now expect full year 2023 revenue of $385 to $392 million, reflecting 17 to 19% growth over the prior year and full year 2023 adjusted EBITDA of approximately $2 million with improvement into 2024 and beyond. Now turning to the highlights in the first quarter. In our open ablation franchise, we recently celebrated the one-year anniversary of the full market release for our Encompass Clamp in the United States. The Encompass Clamp leverages the proven technology of our Synergy ablation system to provide a simpler and faster approach to ablation in open heart procedures. Since the launch, we've seen remarkable adoption by new surgeon users and ended the quarter with roughly one-third of our U.S. accounts incorporating the Encompass Clamp in cardiac surgery procedures. Globally, our open ablation franchise saw 27% year-over-year growth in the first quarter, primarily driven by outstanding encompass sales in the US. Even with our progress, the cardiac surgery market remains vastly under-penetrated. We are confident in our ability to achieve further penetration through our leading innovation in a differentiated market position. Shifting to appendage management, The Atroclip family of devices, our foundational technology for left atrial appendage exclusion, continues to show durable expansion. In the first quarter, appendage management revenue grew 24% worldwide over the prior year with strong activity in all of our markets. We are committed to extending our leadership in the appendage management space with a focus on the expanded benefits to patients and providers. To that end, we continue to transform our technology with an eye towards easier to use, less invasive devices. At the same time, we are investing in a landmark clinical trial to bring the benefits of atrial clip devices to more patients. In 2022, we introduced LEAPS, a trial of 6,500 patients, 250 sites, multi-year randomized controlled trial to examine the prophylactic use of the atrial clip devices on cardiac surgery patients without preoperative AFib diagnosis. The size of the LEAPS clinical trial reflects the immense opportunity we expect to capture, with two-thirds of the over one million annual cardiac surgery patients worldwide not having a preoperative AFib diagnosis. The primary endpoint of the study is a demonstrated reduction in ischemic stroke and systemic arterial embolism, laying the groundwork for a new frontier in stroke prevention. Enrollment in LEAPS is well underway, more robust than we expected, and we are investing in a major expansion of trial sites through the remainder of 2023. The trial will take several years to complete. However, we expect increasing awareness of appendage management in all cardiac procedures in the near term and a meaningful extension of our addressable market over the long term. Turning next to hybrid therapy, we had a solid quarter and continued to deliver unmatched outcomes for patients with longstanding persistent atrial fibrillation. To this point on outcomes, in addition to the CONVERGE procedure, in the first quarter there were several European randomized trials which were presented and published consistently showing the superiority of hybrid therapy to catheter ablation alone in the advanced AF population. As a reminder, the CONVERGE procedure combines our EpiSense technology with catheter ablation, showing over 100% improvement over catheter ablation alone and durable outcomes for long-standing persistent AFib patients. Similarly, the CEASE-AF clinical trial, presented at AERA this April, demonstrated that hybrid epicardial and endocardial ablation using AtroCure's Synergy technology is the superior option to robust endocardial catheter ablation alone. The data presented error showed an 82.7% relative benefit of the hybrid approach over the endocardial ablation only, or 71.6% primary effectiveness of hybrid ablation versus 39.2% endocardial ablation only. This groundbreaking randomized control trial, combined with the results we've seen in CONVERGE with the heart cap randomized trial results, and non-RCT data of over 2,700 patients highlights the importance of hybrid therapy treatment options for patients with more advanced forms of atrial fibrillation. Also in the first quarter, our professional education team assembled top U.S. providers to discuss physician experiences with hybrid approaches to treatment and how to deliver the best solutions to those who suffer with longstanding persistent AFib. It was striking to see EPs, surgeons, nurses, and care teams engaging with patient stories, discussing early patient identification, evaluating the consequences of delaying AFib treatment, and learning how to effectively implement hybrid AF therapy programs at their hospitals. We continue to focus on providing comprehensive support for the many programs we have in the early stages of adoption and expect 2023 to build the foundation for our future growth. Now, we are frequently asked about innovation in cardiac ablation and the potential for pulse field ablation, or PFA, to the impact of AF therapies. So I thought a brief statement would be worthwhile. We believe innovation is of paramount importance in the medical device field and are encouraged by the activity and progress with PFA. The awareness it brings to the treatment of AFib encourages robust conversations on this topic, and the focus on more efficient endocardial ablation is a tailwind for everyone in this market. For Atricare, these are all positives, and our hybrid approach remains complimentary, much like it is shown with all the other energy sources. We are excited for the building momentum in the broader AFib market and potential impact on the substantial unmet needs today. Finally, our pain management franchise continues to deliver outstanding growth. Worldwide revenue increased 39% over the first quarter of 2022, with contribution from new and existing accounts in the US, Europe, and Australia. Across engagements with physicians, there is a tangible excitement and the demand for outcomes that can be achieved with this solution for postoperative pain, giving us confidence in the trajectory of the therapy for years to come. We're in the process of implementing enhanced training and awareness of programs for thoracic surgery. Additionally, we're making excellent progress on our evaluation of crown nerve block and sternotomy applications and are beginning a very limited rollout with our existing device. The opportunity for postoperative pain management in thoracic and sternotomy procedures is truly compelling, and we continue to drive awareness for this differentiated patient experience. To that end, I would like to invite everyone to join us for the next phase of our virtual education series on May 16th, where we will sit down with Dr. Stephanie Chang, Associate Professor of the Department of Cardiothoracic Surgery at NYU Grossman School of Medicine to discuss her experience using the Atricure Cryosphere Probe for the management of postoperative pain. We hope the event sheds more light on the incredible outcomes patients receive and how the physician community implements this important therapy into their practice. In closing, we are pleased with such a strong start to 2023. Our framework for expanding the business extends beyond targeting large, under-penetrated market opportunities. We are thoughtful about building a complementary portfolio with diverse drivers while being intentional about our spending as we enhance profitability in our business. Our first quarter results highlight the progress we are making because of these efforts and the potential for HQ to drive meaningful, accelerated, and profitable growth for years to come. I will now turn the call over to Angie Wyrick, our Chief Financial Officer, for more details regarding our financial performance.