ATRC - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to AtriCure's Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to hand the call over to Marissa Bych from the Gilmartin Group for a few introductory comments.

Marissa Bych

Thank you. By now, you should have received a copy of the earnings press release.

received e-mailed please to not to (XXX) have one have you. you a call copy, XXX-XXXX If

Before we begin the company's today, let me include statements. remind forward-looking remarks you that

adoption of and numerous the reimbursement. Hybrid Forward-looking to of publicly subject described financial not potential expectations materially These from in statements. the guidance, including risks statements which time uncertainties are opportunity regarding AtriCure to expectations initiatives, market to product AtriCure's and no SEC any projected. and risks undertakes differ the statements and franchises and procedure clearances growth beyond to future AtriCure's limited may and from uncertainties, AtriCure's AF those forward-looking are time update include, control, obligation including for approvals, AtriCure's results are many filings. but

is included I would GAAP that, which directly Additionally, these non-GAAP to call turn to the constant Officer. A Chief on basis, to adjusted reported measures, Mike Mike? With in per measures and revenue non-GAAP over available reconciliation with Executive currency specifically release, measures share. we President refer loss website. like and most adjusted our comparable EBITDA of our press on Carrel, a financial the is

Michael Carrel

Good hope everyone, joining year XXXX of Marissa. well. you The quarter AtriCure. us. thank that for Thanks, afternoon, and We fourth all extraordinary you're concluded for an

in and new product of release, in XXXX reflecting delivered the underlying Hybrid line. AF Growth we of continued announcement broad afternoon's AtriClip primarily sequentially. therapy appeal driven expansion our $XX.X to revenue this by fourth preliminary approximately both of franchise growth strength quarter, franchise was and our XX% while pain in X% existing in reflect in in the accounts, our described appendage management management over As and quarter million the

with of detailed the continued more our business, I a many the beginning fourth pandemic. of review related of the the suppressing impact to staffing cardiac capacity shortages to recognize XXXX have At and spike pandemic our brought over quarter. ongoing still the customer operating volumes. quarter, the other of difficult The constraints, challenges These Like constraints the and customers providing conditions experienced continued cases COVID-XX want pressure Before XXXX. procedure that experiencing the we are in from carried companies, like this ended quarter across to impact many much base.

$XXX in are Although recent year have weeks been strong the we to to XXXX. pleased Afib conditions business ahead for persistent and growth, positioned initiatives over we we of million have therapy AF to guidance volumes in I our patients. slowly $XXX as uptick -- continue would to an growth seen our million highlight are the to starting long-standing improve, like believe reaffirming for begin annual is our in our with Hybrid facilitating

from April PMA since CONVERGE in trial with approval our clinical are receiving our XXXX. We progress pleased pivotal

Hybrid this AF a reminder, millions AtriCure estimate long-standing patients achievement of the establish care with FDA procedure the long-standing diagnosed are this of We opportunity the market. vastly with only the treatment Afib. the to persistent, unique approximately of As XX% marks stand-alone patients underpenetrated that a presenting approval persistent standard Afib in as of for

so year. sales As in levels grow with new to within pre-COVID to second add fourth near much begin our this volumes accounts opportunity. accelerate saw last we names year within then of accounts half market EPi-Sense system in rebound year and potential record unfolded, multibillion-dollar and base procedure the the ended physician to the existing We quarter, the

from community meet the to efforts and a training recently demand increasing are the lab. mobile added third We physician

upstream at reps reps the large of clinical well focused cardiology and further relationships commercial as referral the on We within addition channels. also needs the continue awareness as to therapy look programs and patient expand through team build community sales to our develop as support we of

Turning system. treatment our ablation for of of heart Isolator foundational PMA ablation to and during long-standing for AtriCure Synergy technology approval open of we now persistent Afib the anniversary approved medical where This the device XXth open persistent franchise, the was procedures. marked our the first

procedures spent Through We in decade success open clamp's broad physician past date approach adoption, limited recently, cardiac are and in gives which high-volume now launch since and XXX(k) therapy of and education resulting States. expansion have The appeal over a completed -- launch, growth the limited faster we our heart XXXX. to EnCompass the have of driving conviction the device, ablating the to to awareness, provides More received FDA we procedures. our the we now simpler surgeons. EnCompass for United consistent us in XXX clearance

availability Complementing AtriClip XXXX product in the our next and our are our franchise. along commercial technology of our commercial record and expect resources, sales towards XX% to decade. in hybrid full development legacy this with XXXX, deepen of devices. market cardiac opportunities market In device, and the the We AtriClip grew moving surgery penetration line over and appendage management Flex-V ablation both with open is focused

enhance the continued on future. innovations in working to this are business We

as We AF clinical and grows of the the of surgical expansion our evidence mounting expect see expansion to for steady appendage therapy. from management the Hybrid procedures of the the franchise and wave

undergoing dedicated of our the X cryoSPHERE of postoperative turning improving managing our Nerve entered years development goal management launch Finally, compelling, and a thoracic were surgery. recovery early ago Block. to for nearly with a surgery pain leading We Cryo probe, patients in results cardiothoracic the the XXXX to pain device The of franchise, market pain patients. management

therapies, transmitting providing our block of long-lasting providing our for and patients. surgery, pain of become expanded Nerve to CE Europe. relief market doubled received than in the Mark nearly an penetration XXXX, we XXX Block uplift freezing results. U.S. thoracic ablation more open fastest-growing doubled form differentiated a Cryo In commercial has Cryo team, technology Nerve approval our Block one and of pain our unique Our a nerve from to uses after signals method accounts

teams this year. adoption therapy to and invest to continue will dedicated We in drive our commercial education

the our submission protocol LEAPS of have AtriClip number initiation drivers, trial innovation to do developments ATLAS results market management, for this the patients management study expansion. after position Afib the use significant of X/X clinical FDA us a globally. preoperative subsequent our ongoing and regulatory not the device cardiac of of for the from Beyond More year surgery promising we to trial. diagnosis, clinical addressable prophylactic of the and of than representing expansion a In appendage core expect appendage

will complete, While expect trial years a of appendage increase. for number treating the we LEAPS to awareness to continue take to

leveraging treating markets building to have complementary looking unique are into are our complex highly relationships we and the AtriCure physician RF expand arrhythmias, that ablation Next, we upon developed to competency core of technology.

or IST to the a begin significant the heart has quality are approved along young dramatic focuses trial need. This IST impact in inability new to a a symptoms to to inappropriate of exercise. expect an contributing treatments. are device IST IST, using occurs solution elevated And dedicated calling Heal most development heart patient's extremely for The there often unmet with hybrid currently, for with no life. of palpitations, a women. disease the the trial, of patients on the of in rate procedures. Afib, which distressing ablation Like We sleep results sinus IDE and tachycardia or treatment we

real-world We for evidence also registries. emphasis investigator-sponsored programs our to expand therapies continue research particular on through with

we Nerve remain our And continue expect activities, expertise strong and we over In Internationally, ongoing the next our our for build of of other Block foundation international to about excited new have clearance in in our throughout the we to clinical clearances and summary, potential reimbursement to have Cryo we Regulations XXXX first to decade. In on Europe our additional addition product a pursue EU and markets. Medical MDR. efforts product Device therapies. under received or

Our differentiated unmet and growth offer and with our diverse, are solutions markets in proven opportunities needs. products substantial

we X challenges across arose for of very on new years future the industry, past AtriCure. over remain bullish While companies the the

Before published I the another over inaugural week. turn our last we highlight to to important Angie, I want report, call ESG which initiative,

responsibly, culture commitment that been seriously. and improving sustainably aspect operating and take one around important long we of communities of the Our well-being an our us has to the

Our be ESG ESG lay this report, additional so you and Chief results call achievements our are the our to our read to out discuss I about in and quarter. partners. with we'll work our our the we to for to directly of happy more our turn collaborate patients, core our the grow and the to initiatives strategy we detailed more in encourage discuss this address values, area report undertaking. In Angie lives is and efforts, far to Wirick, tied Financial empower Officer, heal now learn I'll people over detail. to

Angela Wirick

Mike. Thanks,

to XXXX, EPi-Sense fourth system the XX.X% by reflecting $XX.X international as and lines, revenue the worldwide revenue the $X.X million of quarter up X.X% healthy reported constant of of Middle and a growth revenue Activity accounted XXXX million U.S. revenue. on basis basis, to across of basis and Asia currency constant East a XXXX. Flex-V quarter reported the for XX.X% the worldwide and compared Africa XX.X% devices. up on revenue our fourth our million, in sequential record from increased increase on International other when $XX to approximately international XX.X% compared Our million, AtriClip a revenue, of quarter product XX.X% XXXX. basis quarter. activity fourth accounted cryoSPHERE, our across sales million international and currency the on while fourth totaled Europe, a quarter a of for of third a enhanced of the was experienced basis we $X.X markets On fourth $XX.X from

FX lines, While impact staffing reflecting the to the product volumes declining a quarter. we and extent, higher on from lesser procedure rates saw in distributor and see hospital increase, both from Omicron, a and pressure fourth in key typically constraints growth quarter transitions sequential the

the product of on largely favorable margin of positive by touching fourth a loss and operating key compared variable leverage quarter adjusted continued to and along $X.X incremental of costs quarter XXXX. operations. costs quarter. from EBITDA few most norms. for an had with of in up the return our fourth training This driven XXXX bottom to the Gross for of from compensation mix million change EBITDA geographic points and line our reflects was the fourth XXX $X.X scaling We metrics million Now basis XX.X%, headcount, adjusted to XXXX, pre-pandemic

a to was $X.XX adjusted The for $X.XX, loss compared the of share loss loss the fourth quarter of period per and $X.XX per share XXXX XXXX. each quarter $X.XX Our per respectively. of share fourth was for

XXXX of associated each currency of driver was XX.X% improvement $XXX.X reached The [indiscernible] sales our $XX.X basis the to increase, revenue, on were million, cryoSPHERE to production U.S. fiscal $XX.X margin constant to of XXXX surgery favorable XXXX due international XX.X% while was geographic in in probe constant XXXX volume of to the charges our basis. respectively. compared each our normal XX.X% return recovery revenue an system. of by XXXX by while year. in the XX.X% restrictions cryoSPHERE of was Two in for ablation XX.X% sales mix, the inventory U.S. Now EPi-Sense basis a currency a and ablation reductions cardiac within increase XXXX in EPi-Sense XX.X% $XXX.X product sales products [Eleria] U.S. basis. procedure activity in and to increased to offset a points driven partially recap product. $XX.X The reported full product and and key in increase franchise. margin gross million primary with product Worldwide on XXXX. COVID-XX of XX.X% along with million, to million, year management notable MIS and sales totaled million, open increased Gross drivers reflected XXX on adoption is during growth a

operating turning Now year expenses. full to

and associated aMAZE I both charge comparability, exclude in in fair IPR&D value recorded PMA, quarter was asset the the years will of as the as Total expenses consideration an from recorded XX.X% which levels XXXX. operating -- share-based increased in For [indiscernible] in increase mainly the charges suppressed costs, third well expand the changes contingent XXXX in from the $XXX.X impairment personnel investments results XXXX. million the of in XXXX. in with compensation $XX.X to increases over variable expense million $XXX.X largest our saw million as The from or compensation XXXX to

PMA year costs. in approval $X.X $X.X adjusted XXXX Additionally, meeting million with million the and CONVERGE increase Full compared was April expansion following easing we an travel of training in the restrictions, in EBITDA XXXX XXXX. associated experienced loss to and programs

significant Adjusted earnings adjustment $X.XX Our our consideration Other investments. while with share was cash include and the and facility, per $X.XX, per credit a the $XXX.X refinancing liability to respectively. year capacity. costs We million reflecting contingent ended loss XXXX, our was borrowing in share highlights loss $X.XX share which of for reduced $X.XX XXXX of expanding significantly the in to per compared XXXX.

chain, we throughout with in support of able position anticipation inventory our to bolster Additionally, supply were growth. future our

for Consistent January, outlook $XXX and our to between our with $XXX turning XXXX. million revenue to expect in Finally, million year. early announcement achieve in for we the

accelerated from in normalize continue drive a upward our year. confident recognize several many we will have optimistic historically In that cautiously volumes drive our to our growth for be of of quarter. the fourth could historical sequentially procedure position to will our first the the boosted While or by that flat we growth quarter and remain downward macro our revenue progression catalysts. seen meaningfully trends results, year, We

be Therefore, to we effect down staffing from However, first we of which of immune $XX.X fourth currently XXXX volumes. XXXX impacting quarter are slightly quarter to Omicron ongoing or revenue procedure revenue expect million. challenges, are not the

be the mix. potential gross varying from with and XXXX expect XXXX impacts We to margin costs comparable for increasing to

spend of adjusted share our of are but development with to SG&A per $X is approximately range. loss EBITDA on which expected upper year and revenues highlighted a level be research a guidance a several We Therefore, earlier the million, adjusted to be full basis full exceeds leverage adjusted decline XXXX in corresponding is also Mike quarterly million first of slight end XXXX expense. loss to of discretionary slightly gain year XXXX $X.XX investment our with quarter, loss year quarter sequential to our first and activities, in the will from full expected the $X $X.XX, maintaining a the and EBITDA call of in in

increased we revenues quarterly As see EBITDA. quarterly during improvement the adjusted year, to

cash due quarter other Finally, burn needs. share as heavier a the compensation in reminder, variable first payments, vesting we to a typically operating experience and

drive point, to managing thoughtfully continue catalyst-rich to At In in growth to progressing comments. future. long-term business our strategic closing prioritize towards balancing for are turn will investments initiatives back in XXXX, the call this investments numerous our profitability. We and success, of we support for Mike I

Michael Carrel

Thank you, Angie.

we'll up the many While we To this provide future investments care that year fundamental for you patients. for now challenges discussed we we value today. that focused growth and and health to on remain renewed end, brought open questions. community, we are are the executing the the for us, catalysts to fueling to Thank committed to it on joining

Operator

Needham. of first line [Operator question Instructions] the Our comes from David Saxon from

David Saxon

correct, heard Angie, year. that and the you I mid-single-digit one of $XX.X probe. Mike on penetration cryoSPHERE you market. kind first correctly, $XXX my did If for think I maybe million by you're the million in And if that's math,

wondering from just low-teens 'XX the volume recovery? procedure Can penetration sales just here? So in you and where force potential reach that goes expansion given

Michael Carrel

Yes. I mean your numbers right. are about

as deeper the sites to those did do into anticipate all in we'll to on throughout cases at ends -- and that double of good kind of get that be feel I'd the we'll the of the people there's We into that business. growth really our kind But say in able doubled for than year team. kind about point, X,XXX we so year. And or XX,XXX I deeper about terms we're the so market progresses. prospects we the of total about at that more XXX And added of going And penetration get be that we we this range. anticipate And digits demand. talked size because that to we accounts.

to check add continue resources, out website. our We

add we're accounts. all just got get into country resources over we've can even also a cases, kind of more You deal, both new people but to see the big to is -- which that looking cover for to

David Saxon

Angie. if recall you I long-term XX%. said your similar somewhat is Got maybe to should for target then But margin mean gross correctly, 'XX. be it. I And one

that that tough leverage? memory that going guess, to you've pretty more seeing are grow where continues I EPi-Sense So a revenue and to as in achieved does environment, here And get cryoSPHERE accretive and serves, go forward both margin. if you

from Why So 'XX? continued yes, not that guess go? does improvement where I

Angela Wirick

Sure. David, good I question. -- think

year. historically when the annual on boosted was of about seen margin by an have you mix gross basis. improvements really XXXX modest think to start the We geographic pretty

of U.S. to product full the kind the revenue historically. was the total year, versus XX% For XX% of XX% our

EPi-Sense and mix, we the product. well think as about U.S. then that also production previous very cautious face the supply inflation mix particular of expansion product capacity tailwinds saw of in benefit making and our to of we're of kind When some others. revenues with that we're that as you revenue pressures we And you're higher the we're -- chain some our we that And investments Clip some are the mix. the are hearing the as But product that well beneficial seeing the from V was that XXXX, we've team. in talked have headwinds calls about within of as

Operator

of comes question from next from Marcus JPMorgan. Robbie the line Our

Robbie Marcus

Great.

should So Great invasive maybe year? minimally think to how about we start, growth this opportunity.

or You -- had to a educate in and centers. business your into to almost go a full fastest-growing this full line year year be Could XXXX? get basically

Michael Carrel

look Robbie, Yes. down look when it, the of overall. for at of -- The question, it and I'll if the it we kind break it's break into really components you at business, at components different you down of look kind and fair way to you X kind a aspects of and you is

our high a the headwinds to as guidance that and even things numbers, with XXXX. to asked we is first one really super range pretty types while probably us, open about those above in is new to area reimbursement business to XX% digits. look the single call, phenomenal kind invasive, ablation which product are the you is us new if but feel those what overall. we at line the look historical So of coming down open minimally you comfortable the is of are, at mid been our the likely important kind that growth obviously We've business, below an of growth, with, I'll of historically in rates That's XX%

-- to look we grow kind As that those look the kind are anticipate things of and the we Clip for us, numbers. as tailwinds then you -- above of -- on for those franchise,

of Block You which going be areas anticipate kind not as those then but faster, X is that the Hybrid grow fastest-growing we've growth going of to the obviously, is that that very are of growthy, and rates to and of overall well. the the be kind of rates say excess to really Cryo I'm business for one one XX% of of kind going drive, in growth really in to XX%. kind kind to the that the are Nerve got

business On broken up those the and really of what call to we flat that's used CONVERGE minimally our is the areas. One one EPi-Sense minimally invasive, down slightly. part that definitely X that of our product, of and our The is into north is to part deep business, TT really business it's areas. growing or invasive

the growing Clip. kind fast Cryo ranges it if really Nerve competition on and not of the of at But with there's Block look are rates same little be them in you're overall, going MIS and that it, aspect So as quite I to we may grow all and seeing you CONVERGE anticipate there. fast. of But going mean, growing,

Robbie Marcus

of you hear bag? your whether think running, how do expansion rep's inorganic How products then products it's And different How do you procedures to add thinking new Great. some market trials it's to think the are future? about the size organic over new interesting just about that? addressable of And ISG. for or you're about about we to products these

Michael Carrel

our because acquisition most -- We accelerate the because we asking question. to to story. having an we've parts the business mean kind great for of got our today. our place actually a of It's rate exciting thanks when that to growth things Yes. of it's don't continue of and need in do look at I one

was you it look compare stages started, standard about per XX, this of at in new the the happen in was all and Afib as creating and around small. talked and -- very it can thing was TAVR that they of the have aortic we a I'm of franchise, you XX much of going before will terms long-standing But to large within on beginning it our do We people I've it think in big space. ago we're years to If just persistent call it's getting was it. more Obviously, of market kind when a don't procedure, then how market. CONVERGE, at And stenosis. be as get it and market, a same the overall. care of not suggesting is very have CONVERGE

of on. when of within It's Block. a creating large that let a we're in stages the product works, establishing and U.S., early overall around that and Europe today in our just So market of earlier I Cryo that and digits at and kind the of that just it asked exists sizing we're really same market market, in it alone the got we standards clearance penetration, $XXX I that's care. in Nerve And mentioned the the think works The very market. thing the really really well. approval question just million-plus single David

And IST different growth over It's kind a a to time. new think lot organically of opportunities in whole clinical we've that one. to market. is unique got benefit so area, prove that that data I within a various continuing invest of

doing also actually got And we're new next a product early out fine-tune. of our an lot product patients. a of we'll doing things you if sometime work kind IST, market using So late the talking thousands, or development. It's when hundreds and be of -- millions of thereafter existing about to of today. think and really year that the into organic putting not you're either we've year that's But

large zero or it's to almost a need large. States we in Right number that. have to cases that, frankly, this. consider difficult big And that them. But of at market too people tell And quite million their getting most we're that patients because you that the are says almost an they'll very you IST. for there of lot if upwards these X have out now, United done. to that is Some treat talk It's basically no really of a the kind data EP, have they patients know are solution and starting to we don't

results So multi-hundred that surgeon rewarding invented dollars, we can patients opportunity, as market that help a can many, And millions some treat. this view very really of seeing the many it's that we of we large and seeing sites in we're it, an of procedure at some doing there. a over the where Brussels, was particular, of in EP that it kind over and the are by

And if clip to those really and prove actually reduce can that later And that out There's no And at it demonstrate appendage procedure point. improve you at surgery, time to market you will better the atrial if from at cardiac about large have how rates patient lifetime, them, XX is cost think patients, some just relative that in LEAPS for opportunity. they're overall, point the we beneficial beneficial we the some a a that's it's get fibrillation. so the are even about It's many for things for left touched the are can talk those that we X for of cardiac and and additional the or most markets. stroke trials their and atrial benefit of not I after that appendage. upon that on undergo atrial left to think we putting big When surgery, is, begin can going if additional and haven't they them that expanding market patients of years about market undergoing their actually to and undergo going society.

at years. it. we've developed we of a things clinical of over technologies the So that's on do platforms I are invest How we're we're we've Those continue couple got combination to kind growth that leveraging decades of the think the to front in the data. new that of last and and our way us. looking of going expand existing both

Operator

comes line of from O'Brien Matthew Sandler. the Our from Piper next question

Matthew O'Brien

MIS Great. bump are I you Mike, nicely say in the U.S. or up where question did rating center of that from? at Or on And maybe some up I going to saw little attract folks MIS. it really question, knowing mean of come in new most you're a follow QX? year to those the X growth to the both that QX. side data, Robbie's Was that a did know that on bit on ago drove we Convergent? this growth number should bump some protocols just of X and the how looking added and those really was starting centers the really patients? adopt it What to to refining but

Michael Carrel

board. I'll mostly revenue We're lot we're trained are making not those more X the new sites kind upfront don't on case getting months started. the just all -- on It's really of and sell We that first sure they're that sites lines They're existing ties, mostly in that getting it's existing surprise up you bulk a there, packages new that and latter. sites try of of kind they're coming they're really cetera. getting to drive their just much well, from sites yet in revenue because et running. of

And So getting and to more of programs they're lot have added there. coming centers. of -- deeper, up patterns, existing growth said, little kind mean of the of most new is EPs getting a That running, referral sites. from their a actually getting to net I being referring better we

contribute 'XX and they for we those should our sure, new growth as so add in 'XX. in sites, towards And XXXX,

the line. really so a a to good site And getting lag, you to contribution a revenue having there's new if obviously, to --

previous I'll over to that the now, we're year of XX XX So it's new telling talking, from that a months. hopefully, we you a lot when added be coming sites from the

Matthew O'Brien

very a 'XX. it clip of seen 'XX again, things, that. Got you here what side before it. 'XX on versus It accelerated And like versus actually then in the looks had good performance

it's as I doctors started growth the little a the if business, what attracted the of to utilization last And point? then the talk the at influence clip about sales reps in within has seeing you're adding? Just or on that bit this as far new date, you're woven clip guess, there

Michael Carrel

the mean On the I last why date appendage. have -- that's over is impact of been confirmatory had of And another that's top that, on time, managing to the information the which that years. benefit piece there. say over I'd Yes. rates of a growth dramatic innovate to the continued it, the we've is

come just the at getting the are of others getting for continues As about mean -- are clip you lot as growth within we're more we're whether More I quarter, particular that that to a just benefits field there's lot some the of And and out, it. the there room to -- there. continues it's a of of franchise. data patients out that in benefit or doing go. that look

that, we've in XX% always We're in kind the the maybe CONVERGE. even about high really got point, quarter of the with that in attachment good low We've range. to clip the fourth at addition procedure. terms end to on that attachment XX% of talked of being with more very at this our into In -- XXs getting of the Convergent

So more and more combine we're seeing procedures. those than actually

Operator

comes of Our line next from Plovanic from Bill Canaccord. question the

Bill Plovanic

Great.

numbers we look at shared Or CONVERGE But kind can in is results develops? at, we we so terms there this new just mean you're Convergent what the as are the your of -- and So productive? procedure. is you existing looking then accounts product can board was the across How us really in of kind kind gauge as those metrics seeing Mike, you of can be just new we what strong with can watch – on accounts will see of when and to I -- just categories. the that in really the benefit

Michael Carrel

We be et have roll deeper have where question. us swings kind and because them quarter-to-quarter kind up everybody It's of don't of just right a that really single might important to adding want existing a in cetera. may we because don't new not the every we're we trained, maybe that account. to And of it's in indicative want do centers going area know everybody out very than go to to net fair wants of an deep, front country account more and be really kind for particular

you to Every metric of up, be give do at. said, And number when we'll an year, number. not that year We'll the of, what to. kind of macro kind you probably later it came hey, may sometime That we you kind of look here's so it get. basically being update year, sites you we that annual likely first will and give basically right the this we that on the to guys here's bring do

types what's see those if next established getting at looking going forward? actually month internally can softer treat in looking collaborating kind at EPs like to We're about discuss of days that Those are benefits really they're these good, how patients? going to the happening? programs You much going in repeat the We're establishing are that's talking number and surgeons it. time Are patients addition sticky or they're really signs are types sites that they telltale of that, for meetings way? they to the protocols from Have a they're program actually at good be monthly long things buying of to per do to they in us. where they those establishing and like things of like of are buyers, site. sites around a have Or

we're for to our of a kind And like what of kind future does get on that so front. look sense really at looking those

Bill Plovanic

have that others OUS, are then are more basically global? phenomenon, for down specific we a on more that U.S. the there should And Okay. of think first product guidance that any And about? sequentially. quarter, you this impacted categories than Is

Michael Carrel

I'll let Angie answer that one.

Angela Wirick

about we're sequential say, I think is say, customers. I'd the interesting, some a franchise I impacting decline, Block being in the think while impact Europe I resistance to bit that Nerve in manage think our U.S., little it and Cryo same the of in kind so in seeing world kind It's more felt seeing we're of challenges -- the being the staffing through. around Bill, would of The improvement from Sure. globally. terms able

the we've that's open progress a of physicians that business. seen on some in patient. the lower results side pleased think is that see surgery And I the with can immediate slightly cardiac we're our stay and they patients when treat also MIS

Bill Plovanic

could, $X would then it's EBIT to QX. or a on million like clarification And EBITDA like in closer be I that the $X if saying guidance Are Okay. you a million adjusted just loss for the QX? guidance, it

Angela Wirick

the QX expect the -- may historically we the EBITDA said this full we results, loss guidance and was seen exceed would that QX of What our you've range. out

compared And of contributing the events above quarter other kind to to million happened year. the phenomenon discretionary then burn revenue. being a the year for a So in maybe your higher the of that spend the first $X of the loss overall that's just first revenue quarter the and lowest and

Operator

Our from Danielle from Leerink. SVB line of next comes question Antalffy the

Danielle Antalffy

us number of number. the you all I'm year. much give $XX.X that PMA the acknowledging that what a thanks to I on Congrats just for with sense on had been some growth sort Mike, guys curious new success off million can of before kind prior I got that of of great launches. color That's number. product was prior or the EPi-Sense, what done the that so CONVERGE And this you approval? know if was don't years, guess

Michael Carrel

you take do want one? to Angie, that

Angela Wirick

Sure.

number. we year haven't the given So prior Danielle,

think you I XXXX that the XXXX, across business. at MIS when is versus of rebound a a lot look

quarter I back time were U.S. $X look between back XX-XX to then that at and million to in around if legacy a CONVERGE and business. split think levels. And TT XXXX averaging about think that you MIS close we XXXX it our better ablation. was frame, And

numbers dramatically XXXX, quite pretty you would mind, So effects growth MIS ablation line. healthy I think due keep COVID those of but growth the in kind -- to healthy of when not were the we just tell frame on you but XXX% reference think down numbers, of

Danielle Antalffy

great a Got Yes, point. that's it.

curious you're come curious is EPs points about practice. the friction I points, by world? Does it EPs still? embraced the Mike, are sort how are? more because what this misunderstood Where it I where on to seeing mean you excited centers, sort just appreciate in seeing and how little of then CONVERGE? brings practice very are their there be there you're I friction of seeing should real as but existing are out embrace CONVERGE bit also what volume Okay. that a adopted? seeing Just And it then I of this mean about think CONVERGE, you're those readily the EPs down how just because and to logistics?

Michael Carrel

Yes.

embraced by well, EPs. said the new from We've that, You've I net -- revenue it centers. just Danielle. of actually question do what lot It's mean we in got really a of is new they've has coming based have it but been the more with and kind been on of significantly kind centers net rollout contributing the a running them. seeing we're that anticipate that are up lot of doing XXXX that we and of

major -- to So talking they've you're of not community community. both is of at looking It's overall opportunity excitement with at to what high-volume there's We've population and they're got very them centers, about, lot their EP going that within hospitals lot a academic engagement the have there help which had normally facilities, is at had a well. patient very volumes. treating this treat the exactly a

described make program you get word, look like get you patients get do out? And and what And frankly. collaborate the of they start Of for running they case you work the that some -- but there's sure the biggest wrong battle far naysayers, then to once do up to how protocols see want coordinated be And the managed? site. point. and these That's to at going the going dramatically to what The individual everything that are and at volumes very the to their and how and biggest site the piece at want And see is you going, kind handoffs? then the increase that an be do to course, just like? how you've that logistics we to do right it's quite you is may between really few battle got back, pushing but how

Operator

comes the Marie Thibault next Our of line question BTIG. from from

Marie Thibault

to little wanted what if here going the back bit registry I study that trial and Heal line a forward IST for same the more know clinical expect circle see we a under product. I that. don't about lines But the on can I to time size time of there's hear that's and that trials.

Michael Carrel

Yes.

procedure forward with process that working we trial the kind anticipate but anticipate It sites. or full able on be year, have so you it trial. IDE we're in So likely final size, actually be between don't Brussels of a kind overall. and developed with of of of sometime But now. to where that by this group XX was we we're move those that. And -- FDA solidified the being and XX a kind we likely working very numbers so in sit still of trial. a the a the with about physicians -- Dr. with that we or hundred of some be if FDA to The will international patients will anything think several It's We and

all us La kind Dr. Meir, and putting obviously it. trial, kind with have and together to They we've who they're Asmundis, them to of of the years. going big established of front. worked kind kind it really with X that defining contributors of be partnered last for then over from And that us

FDA then an forward trial us quickly to thereafter. approval enrollment year, getting the anticipate to start and So the with this move very

Marie Thibault

catalyst X-part, X follow-up another kind my I to of want helpful, parts. quick Very here, to. very look forward Okay. to ask a

new or the new Cryo. the you've received on On CE contributors, Cryo like products Mark -- just

the launch what full margin premium these some How is planning when a newer meaningful of And products? also like of EnCompass on CE Are and mark You're these comes Clamp. Clamp for products, we to then division? cryo of in of products? the contribution it those you some seeing new is EnCompass pricing

Michael Carrel

get in at is as first, question. approval faster to But obviously exciting long-term not than it. we we're the some super we But over to got cryo-free the much about and I'll going that when XXXX answer margin the take excited impact all. pass Angie It's to expected it to actually answer out. roll you Europe time it. We -- had I'll

and But the going we at different talked market. to excited the on individual take able but kind of to it, little the there. that each bring et again, really much. bit of in it see more to market that's And we a to look so in to And XXXX, don't had very the out separately over over based impact cetera. team, be the standard to in is become in running get they're angles care team. to will Europe, Whereas building are quicker, reimbursement a the little different why, components building kind it. we're on area have now U.S., and that U.S. we're to There reimbursement definitely it kind I've forward they're much been looking Europe of of to have longer learnings up and And over which

start up XXXX, it will big a see some in in by think in running Europe. XXXX. think I and you'll way be sure, I for impact And to

Angela Wirick

new you've question lean Marie, in new get but EnCompass margins, I'd takes Yes. a you coming while your manufacturing of is is product device, seen a to out great on here, say past out development, which really to the what the applies scale. it

margin just unfortunately, So lower it's see we at point is time, any U.S. product this is then got And a margin. headwind to our it Europe, in we've in that that the in the

So that's X. the those from impact

Operator

Our Oppenheimer. next line question of Kalia from Suraj from comes the

Suraj Kalia

right, Mike? me all you Can hear

Michael Carrel

Yes.

Suraj Kalia

memory different thing sliced my XXX diced right, me cases XX If approximately serves Hybrid being centers, -- done X,XXX has was been So serves memory and pretrial I ways. know questions. X memory hope across my me release. data CONVERGE right. the I My

CONVERGE, start we same could, shaping should the to is you that when world, it also, sort looking XX% are about? we at from start in And real thinking How plus days baseline these of if growth stage? XX% is up? So the

Michael Carrel

doing course mentioned. you're think a were procedures. close. procedure it year, side, sites period of in we're was. were on over I'd a course, given COVID the say on, about talked in to general, doing years. any that up kind we've maybe X,XXX the XX given range for so But sites, to historically of had elective -- XX the in in But us, impact CONVERGE the to you of I in Your how we about quarter, that are or as numbers XXX I XXX of to And was in X,XXX volumes kind previous mean, buying pretty time range about a that the given of basically Prior from obviously, weird quarter,

second around the your kind But And right of that? impact Suraj, it. on me was I that's so some kind around COVID of question, had of funky what numbers. kind again, -- think Remind

Suraj Kalia

Angie's terms answer a to of the question growth. of in components

I was going heard growth. plus CONVERGE -- if it So over XX% to correctly, be or XX%

that thinking is this then to was I we start over just the baseline? should So And triangulating, XX% plus baseline? XX%

Michael Carrel

-- is business suggesting end end that Nerve that CONVERGE, ablation the And number growing well to we're the a open they're rates our be aren't of flat is headwinds at saying to to at those the -- below then slightly. going are is down doing it basically The what Clip invasive the CONVERGE that's tailwinds, when by of Block. kind giving as specific was and then growth are that not that still talk going those rate, that Cryo to for growth minimally of going headwinds business higher -- Yes. to those to overall the because the high call I you at without category, -- look ranges. range, when the the high you look kind And be growing than not really quite that's them be

mixed of Does to flat rate from when the a help? with kind you blended standpoint. the down slightly combine So CONVERGE, get obviously you that that's that

Suraj Kalia

it's it Yes. can take an and Mike, as Fair we certainly understand it, And On very offline. etiology IST, interesting is IST, question. the clear. -- I not one enough. Mike, last

from known many no hundred interesting what's color Any ablation, adverse current trial, be the Could device it's thinking? other fulfill. the it that therapy in you would new have identified the current inconsistent events. of in it evidence tachycardia would share late patients, and color be on what sites. you must guess I your have comparing sinus registry can RF today. And gap some great. Because could a efficacy nodal are You market you additional how matter right, to

Michael Carrel

it. doing the has inability of access doing have on all connecting and get worked And of and therapy kind of Brussels And because go leverage lesion seen basically the to terminals came and actually some details kind the of results been play up clamp Hybrid and the they're enter the SBC way endocardial specific as group more long-term of a it. described. This not catheter the while the area set what perfect lesions. you're Yes. crystal that as does around any unfortunately a around correct. It's role those into kind you that is effects a way absolutely our of they've to off-line you catheter to to the and the for endocardial and into a get they're to good Suraj, primarily can to they've solution we make it with IBC really use without now, dramatically doing. and And novel But negative and because get

it. actually details that that's lot work for we've been And so basis then They've on as you U.S. exciting a we to detail studying we've that. the that's you and kind the But mentioned. of it on that. doing been to written paper a the and in and again, more talk get tested getting ready there published. is still Again, trial learn, the we'll the of lot be It's And an can area, clinical a happy for in

Operator

for the any question-and-answer the remarks. Carrel I'd to Mike session program. like back today's further conclude does hand of to this And program

Michael Carrel

as for are have at Great. and wonderful joining Hopefully, AtriCure. healthy, Bye Well, and now. excited we much was be everyone, a as about here the it you thank evening. tonight. so Please informative future you're

Operator

conclude participation for today's you, the your gentlemen, ladies program. and conference. in Thank This does

disconnect. day. You now Good may

AtriCure (ATRC) 16 Feb 222021 Q4 Earnings call transcript