Cardiovascular Systems, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Cardiovascular System, Inc. fiscal year 2021 first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to Mr. Jack Nielsen. Thank you. Please go ahead, sir.

Jack Nielsen Thank you, Kavita. Good afternoon and welcome to our fiscal 21 fiscal conference. 21 First Quarter Conference Call. With me today are Scott Ward, CSI Chairman, President, Chief Executive Officer, Rhonda Robb, Chief Operating Officer, Jeff Points, Chief Financial Officer, and Dr. Ryan Eglin, Chief Medical Officer. Approximately 30 minutes ago, we issued a press release announcing first quarter results. You may find a copy of this release on the investor relations section of our corporate website. Here you may also find an earnings presentation that includes additional results for our performance and outlook. In a few moments, CSI management will discuss results for our first quarter, which ended on September 30, 2020. After our prepared remarks, we will entertain your questions. During today's call, we will make forward-looking statements. These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding CSI's future financial and operating results or other statements that are not historical facts. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q. In particular, the COVID-19 pandemic has created risks and uncertainties for our business, results of operations, financial condition, and prospects, which we will discuss on this call. CSI disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise. We will also refer to non-GAAP measures because we believe they provide useful information for our investors. Today's press release contains a reconciliation table to GAAP results. I will now turn the call over to Scott Ward.

Thank you, Jack, and good afternoon, everyone, and thank you for joining us today. I hope that you and your families are healthy and persevering through this pandemic. Today we reported fiscal 21 first quarter revenue of $60.5 million, which represents a 6% decrease compared to Q1 of last year, but a sequential quarterly increase of 42% compared to the fourth quarter of fiscal 20. In the U.S., strong sequential growth in peripheral and coronary health drive domestic revenue of $58.8 million, or 96% of domestic revenue in Q1 last year. Although our results were negatively impacted by the pandemic, we did see consistent improvement throughout the quarter with atherectomy procedure volumes recovering faster than expected. Similar to last quarter, our peripheral franchise performed better than expected, reflecting a positive mix of non-elective procedures for critical limb ischemia, increased adoption at OBLs, and Claudicant procedures recovered faster than expected, as hospitals and OBLs most likely worked through some backlog early in the quarter. Peripheral units increased 40% sequentially and nearly recovered to pre-COVID levels at 97% of last year's levels. The recovery in coronary procedures was also better than expected, with consistent improvement throughout the quarter reflecting very favorable trends in the patient referral channels and the indispensable attributes of orbital atherectomy in the treatment of patients with severely calcified coronary lesions. We are encouraged that the Q1 coronary units increased 63% sequentially and finished at 94% of Q1 last year. Despite the challenges of COVID-19, our U.S. business is sustaining a healthy cadence of sequential organic growth Our Q1 orbital atherectomy unit sales accurately reflect the number of procedures performed during the quarter, demonstrating the robust demand for our products. International revenue of $1.7 million was negatively impacted by the pandemic and declined 42% compared to last year. Our ability to enroll new accounts and drive adoption outside the United States is hindered by international travel restrictions that began last February. Turning to the P&L, we continued to successfully manage our business during this period. Steady production volumes, favorable sales mix, and continued cost reduction initiatives helped drive 79 percent margins during the quarter. In addition, we reduced our operating expenses 14 percent compared to last year. The combination of stronger revenues, improving gross margins, and lower expenses resulted in over $4 million of adjusted EBITDA in Q1, an improvement of $14.9 million versus last quarter. So in summary, our business is strong. We experienced a robust recovery in Q1, and we're off to a great start in fiscal 21. In a moment, Rhonda will provide highlights regarding our commercial progress. But first, Jeff will provide you with details regarding our financial results and our second quarter revenue guidance. Jeff.