Cardiovascular Systems, Inc.

Hello, everyone, and welcome to the Cardiovascular Systems Inc. Fiscal 2023 First Quarter Earnings Conference Call. My name is Seb, and I'll be the operator for your call today. There will be an opportunity for Q&A. You can register your question by pressing star 1 on your telephone keypad or press star 2 to withdraw your question. I will now hand the floor to Jack Nielsen, Vice President of Investor Relations. Please go ahead.

Thank you. good morning and welcome to our fiscal 23 first quarter conference call with me today are scott ward csi chairman president chief executive officer and jeff points chief financial officer earlier this morning we issued a press release announcing first quarter financial 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 supplement that includes additional details on our performance and outlook 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 and 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. Good morning, everyone, and thank you for joining us today. Hopefully you've had an opportunity to review the press release that we issued earlier this morning. We are really pleased with the state of our business and our performance in Q1. Q1 revenues of $59.7 million increased 2% and we're right in line with our forecast and ahead of consensus. Worldwide coronary revenue increased 8% to $20.9 million. led by strong growth in our support devices and international expansion. We continue to make great progress in our efforts to broaden and diversify our product pipeline. The launch of the ScoreFlex scoring balloon is going really well, generating over 1.7 million in sales during Q1, which helped drive an increase in coronary ISD revenue of 70% to 4.5 million. International revenue, which is mostly coronary, grew 40% over the prior year, with strong growth in each of our key markets, including Japan, Europe, Asia Pacific, and Canada. In addition, we launched OAS in five new countries during the first quarter, and we are now commercial in 34 countries outside of the U.S., where we have over 1,000 physicians trained to use orbital atherectomy. Worldwide peripheral revenue was about flat at 38.8 million. While we believe the situation in hospitals is gradually improving, sporadic staffing shortages continue to impact peripheral procedural volumes, particularly for lower acuity patients with intermittent claudication. Our strategy to leverage the presence of our sales force and accelerate our revenue per procedure through the sale of ISDs has been very successful. Importantly, our peripheral revenue per procedure continued to expand and we delivered $142 per procedure in Q1. We remain on track to achieve $200 of incremental revenue from peripheral ISDs by fiscal year end. In October, we launched our 2.0 max crown for peripheral OAS. This device expands the lesions that can be treated with orbital arthrectomy and delivers exceptional luminal gain in mixed morphology lesions above the knee. We expect the 2.0 max will accelerate future growth in peripheral OAS sales. In addition to solid Q1 revenue results, leading indicators like new accounts, new customers trained, and new contracts exceeded our expectations once again in Q1. Each of these performance metrics demonstrate solid demand for our products and position us for continued momentum throughout the year. Finally, we anticipate a stable reimbursement environment for our procedures in 2023. Earlier this week, CMS released final physician fee schedule, hospital outpatient and ambulatory surgery center rules, and payment rates, all of which were in line with our expectations. On a positive note, the endovascular ambulatory payment classification will increase 4.2% for coronary arthrectomy procedures and 4.4% for peripheral arthrectomy procedures that are performed in a hospital outpatient setting. As anticipated, physician fee schedule final rates reflect decreases from the four-year clinical labor adjustment, resulting in an 8.2% decrease in arthrectomy procedures performed in office-based labs. In total, The weighted impact of CMS 2023 final rules is favorable for CSI and results in a 0.4% increase in reimbursement for our company across all sites of service. Now, Jeff Points will provide additional details regarding our first quarter financial results and our guidance. Jeff.