AtriCure, Inc.

Good afternoon and welcome to HRCOR's second quarter 2023 earnings conference 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 Marissa Veitch from the Gilmartin Group for a few introductory comments. Go ahead, Marissa.

Great, thank you. By now, you should have received a copy of the earnings press release. If you have not received a copy, please call 513-644-4484 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 HRCUR's control including risks and uncertainties described from time to time in HRCURES SEC filings. These statements include, but are not limited to, financial expectations and guidance, expectations regarding the potential market opportunity for HRCURES franchises and growth initiatives, including the adoption of hybrid AF therapy, future product approvals, clearances, reimbursement, and clinical trial outcomes. HRCURES 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 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 will turn the call over to Mike Carroll, President and CEO.

Great, good afternoon, and thank you for joining us today. I am very proud to report another outstanding quarter at H-Acure as our team continues to expand patient care and awareness for the treatment of AFib, left atrial appendage management, and post-operative pain management. We achieved quarterly revenue of $101 million, reflecting 19% year-over-year growth. Second quarter growth was broad-based across all franchises and geographies, reflecting the depth of H-Recruiter's product portfolio and the impact our therapies are making. We are thrilled to surpass the $100 million mark this quarter and remain excited about the trajectory of our business. We are also driving meaningful leverage in our business as we work towards sustainable profitability. To that end, we achieved positive adjusted EBITDA of $8 million in the quarter, driven by our robust top-line performance and improving operating leverage throughout the entire business. Given our progress to date and the confidence and activities throughout the business, we now expect the full-year revenue of $392 to $395 million, reflecting approximately 19% to 20% growth over last year. We also expect full-year adjusted EBITDA to be approximately $12 million, largely driven by our strong second quarter. While we are pleased that our recent results showcase the leverage that we can generate across the business, we continue to see immense opportunity to support growth across the markets. And we are excited to ramp investments in the back half of the year in several new and ongoing research and development initiatives as we build our pipeline and continue to expand our markets. Turning to highlights for the quarter. I will start with our open inflation franchise where our focus is on driving awareness and expanding adoption of our Encompass Clamp. The Encompass Clamp leverages the proven technology of our Synergy ablation system to provide simpler and faster ablations in open heart procedures. Quarterly sales of the Encompass Clamp exceeded $10 million in the quarter, reflecting rapid adoption since the full market release in April 2022 in the US. The Encompass Clamp and persistence of our team has deepened penetration of cardiac surgery markets resulting in 23% worldwide growth of our open ablation franchise in the second quarter. We are continuing efforts to make the concomitant treatment the standard of care for all patients around the world and see significant opportunity ahead with our proven technology and leading market position. Shifting to appendage management and our atrial clip devices, which represent approximately 40% of our global revenue. In the second quarter of 2023, worldwide revenue grew 17% over the prior year, reflecting healthy activity across all geographies. The Atriclip product line embodies almost 20 years of innovation at Atricare and is a key growth driver of our business. To that end, I'm delighted to announce the strategic acquisition of key foundational patents and intellectual property during the second quarter related to the Atriclip line. This acquisition enables Atriclip to fully control patents in this critical space while also eliminating any future royalty obligations. We have several activities in the appendage management franchise ramping in the second half of 2023. First, we are continuing to iterate on the Atriclip product line to enhance functionality, improve the ergonomics, and decrease the profile. In addition, we are studying the prophylactic use of the atrial clip devices through the groundbreaking LEAPS clinical trial. With two-thirds of the well over 1 million annual cardiac surgery patients worldwide not having any preoperative AFib diagnosis, LEAPS has the potential to greatly expand the market for this franchise while making a positive impact on patient lives. As we discussed on previous calls, the primary endpoint of the study is a demonstrated reduction in ischemic strokes and systemic arterial embolism, laying the groundwork for a new frontier in stroke prevention. We are experiencing significant interest in LEAPs among cardiothoracic surgeons from around the world. As a result, momentum has been building at an extraordinary rate. with 492 patients as of today already enrolled in just the first six months at only three dozen sites. Simply amazing at the progress that we've made to date. And we are investing in a major expansion of trial sites in North America and Europe through the remainder of 2023 and expect robust enrollment and acceleration. Reflecting on the progress that we've made in 15 months since the FDA approval of this landmark trial, I am truly grateful for the cross-functional team at AtriaCare leading this work and the thoughtful collaboration with many key opinion leaders to elevate patient care. Now turning to our pain management franchise, which continues to deliver impressive growth. In the second quarter, worldwide revenue grew 26% with a life-to-date sales of Cryosphere Probe surpassing $100 million. The rapid pace of adoption for AtriaCare's crown nerve block therapy and thoracotomy procedures reflects its exceptional ease of use and outstanding patient outcomes. Our team is driving awareness for crown nerve block through new and enhanced training programs, and we are seeing a continual expansion of sites. Earlier this year, we began a limited rollout of crown nerve block for sternotomy procedures. While the initial results have been positive, it is still early. and we are taking a very measured approach as we do with most of our launches. The milestone of $100 million life-to-date revenue from Cryosphere Probe is exciting. However, penetration in our market is low. There is still tremendous opportunity for growth in postoperative pain management for patients in thoracic and sternotomy procedures. Finally, we continue to make progress with adoption of our hybrid therapy. The second quarter saw strong revenue performance of Represents Technology with an overall increase in accounts ordering and productivity within accounts as well. We are focused on providing comprehensive support for the many programs we have in various stages of adoption, collaborating with care teams to build scalable patient workflows, in-depth reviews of clinical protocols between surgery and the EP lab, as well as cultivating new referral pathways. Our activities are establishing the foundation for strong and durable growth of hybrid AF therapy in the future. We continue to hear that patient outcomes are exceptional, and the growing body of clinical evidence repeatedly demonstrates that combining AtroCure's EpiSense technology with catheter ablation results in over 100% improvement versus catheter ablation alone. Our dedication to the treatment of long-standing, persistent AFib patients is unrivaled. with no competing technology or clinical studies addressing the millions of patients suffering from this disease. In closing, we are incredibly pleased with our strong first half performance and activities across our diverse portfolio. I will reiterate my comments from our first quarter call. We are building a complimentary portfolio with diversified drivers while being intentional about our spending as we progress to sustained profitability. Our results this year have shown the potential for Atricare to drive meaningful, accelerating and profitable growth for years to come. And we are excited to elevate patient impact throughout all of our markets. I will now turn the call over to Angie Weirich, our Chief Financial Officer for more details regarding our financial performance.