Good day, ladies and gentlemen. And welcome to the Anika Therapeutics Fourth Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Sylvia Cheung, Anika’s Chief Financial Officer. Please proceed.

Thank you, Charlotte. Good morning, everyone, and thank you for joining us. If you have not received a copy of the Anika news release, which was issued yesterday after the market closed or you would like to be added to our contact list, please contact Sharon Merrill Associates at 617-542-5300. The news release is also posted in the Investor Relations section of our website at anikatherapeutics.com. In addition, a slide presentation is posted on the Anika website. It illustrates many of the key points we’ll be covering during today’s call. The slides will be found -- can be found on the Investor Relations section, under Events, Webcasts & Presentations tab. We invite you to take a moment to open the file and follow the presentation along with us. Please turn to slide number two. Before we begin, please remember that the statements made in this call, which are not statements of historical facts, are forward-looking statements as defined in the Securities and Exchange Act of 1934. These statements are based on current beliefs and expectations of management and are subject to significant risks and uncertainties. The company’s actual results could differ materially from any anticipated future results, performance, or achievements. Please see our SEC filings for more information about factors that could affect our results. Please turn to slide number three, as I turn the call over to Dr. Charles Sherwood.

Thank you, Sylvia. As many of you are aware, we hit a few very significant milestones for the company this week, namely the FDA approval of Monovisc and the completion of enrollment in the Phase III Cingal clinical trial, more about those events later. Now, let’s begin, as usual, with our prepared remarks. Anika concluded a record year for revenue and earnings. Our net income was up 49% from $4.5 million in the fourth quarter of last year to $6.7 million. Earnings increased from $0.31 per share a year ago to $0.44 per share in the fourth quarter of 2013. For the full year, Anika’s net income was up 75%, while total revenue grew 5%. This was despite a $4 million anticipated drop in ophthalmic revenue. Overall, non-ophthalmic revenue increased 13%, driven primarily by growing demand for Orthovisc both in United States and internationally. Our total revenue for the fourth quarter of 2013 was down from Q4 of 2012 by 6%, which was in line with our internal expectations. Please recall that in Q4 of 2012, we filled a large number of orders that were delayed due to a temporary scale up issue after moving into our Bedford, Massachusetts manufacturing facility. This resulted in a deferral of product revenue from the third quarter of 2012 to the fourth quarter of 2012. Please now turn to slide number four. In terms of the bottom line, our net income growth for both the fourth quarter and full year 2013 reflected the strength of our Orthobiologics franchise, as well as improvements in operational efficiencies. Product gross margin was up substantially, driven primarily by gains from our new manufacturing facility in Bedford and the elimination of dual facilities since mid-2012. Product gross margin also improved due to the closure of our tissue engineering operation…

Thank you, Chuck. Please now turn to slide number nine in the presentation, which covers our income statement highlights for the quarter and the full year. Anika’s total revenue for the fourth quarter of 2013 was $21.3 million compared with $22.6 million a year ago. For the full year, total revenue increased to $75.1 million from $71.4 million in 2012. This year-over-year comparison reflected last year’s shipment delays as well as the anticipated $4 million decline in ophthalmic revenue, which were previously discussed. As the Orthobiologics franchise was discussed earlier by Chuck, I would now highlight our remaining franchises. Our advanced wound care product revenue in the dermal franchise was up 69% year-over-year. This growth reflected increased business through our existing distributors in Europe as well as territorial expansion in South America. Our surgical franchise delivered an overall 8% product revenue growth, driven by increases in Hyalobarrier sales in Europe and ENT surgical product sales in the United States. The veterinary franchise was up 36% year-over-year, primarily due to order timing. Lastly, the ophthalmic franchise. You’ll recall that we’re now one of the two key suppliers to Bausch & Lomb. As we expected, our product revenue from B&L decreased by about $4 million year-over-year and our ophthalmic business is now at the current contract level, and it’s not part of our strategic investment growth plan. Our 2013 product gross margin was up 68%, up 11 percentage points from 2012. This improvement was driven by manufacturing and operational efficiency gains at our Bedford, Massachusetts facility, closing the tissue engineering operation in Italy and transferring S.r.l.’s gel-based products manufacturing from Italy to Bedford as well as favorable product mix. The favorable product mix was due to the higher proportions of Orthobiologics revenue as a percentage of total revenue and lower ophthalmic product…

Thank you, Sylvia. Let's turn to slide number 11 and the business outlook. 2013 was a successful year for Anika and we are beginning 2014 in a strong position. Underlying demand for our viscosupplementation products is solid both in the United States and internationally. We are enthusiastic about the potential for Monovisc in the United States and encouraged by the potential for Hyalofast to become a leading product for regenerative orthopedic applications. We are continuing to strengthen our product pipeline and we are making good progress in building the internal capabilities we need to expand beyond viscosupplementation and deliver on our growth potential. Finally, we are beginning to focus on effectively deploying the cash currently on our balance sheet as a result of our carefully managing the business. We expect to maintain our bias towards being conservative with our cash, while generating the highest possible returns. At the same time, management and our Board of Directors will continue to consider and explore the full range of options for maximizing shareholder value. Summing up, we're pleased with our 2013 accomplishments and the achievement of FDA approval for Monovisc. We're encouraged by our business prospects and we look forward to reporting our progress as the rest of 2014 unfolds. And with that, I'll turn the call back over to Charlotte for any questions you may have.

(Operator Instructions) Our first question will come from the line of Joe Munda from Sidoti & Company. Your line is open. Joe Munda - Sidoti & Company: Good morning, Chuck and Sylvia.

Good morning.

Good morning, Joe. Joe Munda - Sidoti & Company: Quite an eventful last couple days here. My first question and my follow-up, Chuck, on the Monovisc approval, any concerns about possible cannibalization between Monovisc and Orthovisc? And I guess my follow-up would be for Sylvia. I was wondering if you could break out some of that international sales growth that you saw, the 34%, any color on what the breakout was between Monovisc and Orthovisc would be very helpful. Thanks.

Okay. We have been -- the question of cannibalization of Orthovisc and Monovisc has been brought up before. And we pretty much said that we do not believe that Monovisc will significantly cannibalize Orthovisc. However, it's likely that the introduction of Monovisc will eat into the growth of Orthovisc. So that's still our position. I think that we need to get Monovisc out into the marketplace and see how it -- how the uptake is to make any changes to that, but I think that the growth of Orthovisc has been pretty significant. There must be a lot of customer satisfaction. I have personal experience and know the product works pretty well. So for now, I think it -- the growth may flatten out and the market share gains will be through Monovisc but we'll have to see if that's indeed the case. But we don't anticipate a significant deterioration in Orthovisc sales by any means.

With regards to your second question about international viscosupplementation growth, the Orthovisc growth is at about 30%, while the Monovisc growth is about 50%. And keep in mind that the base for Orthovisc is larger, about 2.5 times larger than Monovisc but we're certainly seeing a much more robust growth rate for the Ortho -- for the Monovisc business internationally.

Thank you. (Operator Instructions) Our next question will come from the line of Jim Gentrup from Discovery Investment. Your line is open.

Good morning.

Good morning.

Good morning, Jim.

Congratulations on the approval.

Thank you.

Thank you.

I just wanted you to talk a little bit more about the Monovisc opportunity and Genzyme's current market share and just a little bit more detail about it. Again, just remind us what the opportunity is there and the market share gains that -- if you take a stab at that you might be able to obtain in the next one to five years?

Okay. I'll give you some estimates. I'll throw out some numbers. But keep in mind that these are not verified by strong actual data. But it appears that the marketplace for single injection products still remains somewhere between mid 40s and 50%. There are two products that participate there, Synvisc-One and then, the Zimmer say, they’ve got the product Gel-One. Gel-One, like any new product has come on a bit slowly. I think they're up to three share or so points now. And the Synvisc product is declining ever so slightly, but seeming to hold on. So that split of the multi-single injection market has held for the last couple years. I can tell you that Monovisc is a very effective product. I think it will be well received. We've seen it might be differentiated from the other products, at least from the data that we have and the onset of the benefit of the effect. It's a little more rapid. It has absolutely zero safety concerns. So, we think in the hands of Mitek, which also has three injections, our multi-injection regimen at disposal. We think the combination of those -- that portfolio will make a pretty powerful marketing thrust. Beyond that, Jim, I can't really say much. If you're looking for me to try to give you some market share uptake, I'll give you some historical numbers and then you can go from there. When we first introduced, Orthovisc, it was the third one in way back, gee, almost ten years ago maybe -- 2004, yeah. And the first couple years, we went from 0% to 1% share, and then 1% to 2%, and then 2% to 4%. So the uptake was not so rapid. Having said that, it was in the hands of another J&J company at the time, called -- I forget the name of it. But after that, it switched over to Mitek and then the growth became much more rapid. So that's one data point. I just talked to you about Gel-One and I said those guys pretty much went out and maybe they got 1% to 2% market share over the first year, a year and a half or so. I hope that we can do a little better, given Mitek is already positioned in the market with sales people who have been selling viscosupplementation for a while, but that remains to be seen. Was that helpful?

Yeah. It's very helpful. If I may, the total market in the U.S. was approximately $840 million, is that correct?

Thereabout.

Yeah, that was about 2012. I think it's grown since then, closer to the $900 million.

$900 million, okay.

So, $900 million is the total and so you're saying about roughly $400 million, $450 million would be the single share?

Somewhere in that range, yeah.

Okay. And then if I could ask a quick follow-up as well?

Sure.

The treatment of milestone payments, would that be done the same way historically as you have, would it might be Mitek or would that be recognized as revenue in the period?

Yeah, same as historic Orthovisc milestone accounting treatment.

So, it would be going to the deferred revenue and then amortized off?

Yeah, it will be amortized over the initial terms of the Monovisc contract, which is 15 years. The Orthovisc contract was about 10 years, so there is a timing difference. But the accounting method in terms of amortization and deferred revenue is the same.

Thank you. (Operator Instructions) Our next question will come from the line of Greg Garner from Millennium Asset Management. Your line is open.

Thank you for taking my question. Again, congratulations on the Monovisc approval, Chuck and Sylvia. So, my question has been primarily answered, but I think you might have talked before about the cost of the treatment of the Monovisc versus Orthovisc and I just don't recall what that was. Is it a similar cost or is it a higher cost for the Monovisc? Can you give us some flavor on the comparative cost to the patient?

Okay. I will. I'll make a couple comments, Greg. One is, it is my understanding that the single injection products that are out in the marketplace right now, namely Synvisc-One and Gel-One are priced at a premium to the multi-injection regimen. So, I use to make examples, but they're not actual examples. So, let's say that the multi would be 500, maybe that the single injection regimen would cost 600 plus.

Okay. Good.

But that -- now what exactly the strategy and initial pricing for Mitek will be. It's likely that will be priced at a premium. Whether or not it will be priced at par with the other injections is not known to me right now.

Okay. And with just one -- it comes packaged in the injection vehicle, whatever you call the shot mechanism. So I would presume then that even at a similar price, it would be a higher margin product for Anika. Is that the right way to look at this?

To some degree. We designed the Monovisc to contain the same dose of HA as is contained in the three injections of Orthovisc. So from a raw material cost of the active ingredient, it would be absolutely just the same. Obviously, there's one syringe instead of three. The packaging costs, so on and so forth. So there is some margin improvement but since the dose is the same and the largest single expense we have, other than label and overhead is the active ingredient. It's not magnificently better.

Thank you. Our next question will come from the line of Neil Gore, Private Investor. Your line is open.

Good morning. Talk about free cash flow cash increased by $19 million last year. However, you also spent $8.4 million to pay down debt. Can we expect cash flow to be similar each quarter going forward this year?

For operating purposes, yes. For capital investment, for 2013 as well as 2012, our spending had been pretty low and I think in 2014 we will see a slight uptick in terms of capital investment.

Okay. Thank you.

Thank you. Our next question will come from the line of Joe Munda from Sidoti & Company. Your line is open. Joe Munda - Sidoti & Company: Just quick follow up, Chuck and Sylvia. In your prepared remarks you talked about Bausch & Lomb agreement, can you just remind us when that agreement ends and what the plans are for that segment going forward or that business? I know you said it's not part of your strategic plans but any color would be great?

Sure. The agreement ends this year. Correct, Sylvia?

Correct.

2014. We're in discussions now about what will happen after 2014, and you know, it's likely we'll make a bid on continuing with the business. But we should know that by third quarter of this year. Joe Munda - Sidoti & Company: Okay. And then one quick follow up, if I may. As far as the platform is concerned, any possibility of expanding the indications for Orthovisc or Monovisc, say into osteoarthritis of the hip or even the shoulder?

There are certainly opportunities to do so. We -- in the European economic union with our CE Mark we have indications for all joints. So the United States is -- FDA is not so open-minded. So any indication into a new joint requires another PMA, clinical trial. We're talking about that right now with Mitek and how we can share or how we can use some of the leverage, some of the data that we have outside the United States to bring in shoulder and ankle and even hip to bring to bear for other potential U.S. approval but I can't make any other -- any more conclusive statements than that. The addition now to -- of Monovisc to the portfolio doesn't complicate things but it makes them more interesting because if you're going to invest, would you invest in a clinical effort to further the Orthovisc brand or would you put your money into furthering the Monovisc brand? And there are certainly some applications where a single injection treatment is much preferred, shoulder being one of them.

Thank you. (Operator Instructions) Our next question will come from the line of Jim Gentrup from Discovery Investment. Your line is open.

Yes. Just wanted to find out on the P&L, I believe you had lower operating expenses on the SG&A line because of benefit or offset from the settlement that you received. Can you quantify that for us?

Yes. So the cash we received from Fidia to settle the MeroGel injectable was included in the SG&A. It's an undisclosed settlement amount in the six digit order of magnitude closer to the $1 million.

Okay. And then also, on the international side, I know you mentioned some of the success you've had in Canada and the Middle East and I guess larger markets, South America I guess you're starting to sell into as well. Can you kind of look forward for us in 2014 and give us an idea where the -- you know, the growth might be the most robust and also just give us a little more color on what's going on and why you're going to grow there?

Sure. So for 2014, we see continued international viscosupplementation growth both for Orthovisc and Monovisc and the rate of growth in ‘14 will be similar and potentially better than the 2013 growth rates. What that means is the Monovisc international growth rate is currently planned to exceed the 40% to 50% growth rate that I described earlier. We are focusing in a number of territories, including the Middle East as well as some South American countries. And we believe that we will at the minimum be able to meet, if not exceed, the last year's international growth rate. Outside of viscosupplementation, we also see our dermal business having international growth potential for our Hyalomatrix product, particularly in South America.

Thank you. Our next question will come from the line of Patrick Griffin from Morgan Partnership. Your line is open.

Good morning. Congratulations on your acceptance. I have a question on one of your competitors, the three injected Euflexxa. How does the Monovisc compare in comfort level time? In other words, how long are you going to feel good with the one injection versus the three from your competitor, Euflexxa?

I can only speculate, because I haven't seen any real hard data. I would tell you that the tradition when one runs clinical trials, the FDA really to approve your product you have to show efficacy over a 12-week period. So some people stop at 12 weeks, some people run out to 26 or six months. I can tell you with Monovisc, we stopped at 26 weeks. So we don't really have a lot of data past the 26 week point. The change from baseline in pain was still pretty strong at that level. So we feel pretty confident in saying that it will last six months on average but I can't say anything more than that. I can tell you also that magnitude of the pain reduction with Monovisc was pretty good. So I would have to say that it's -- it's at least as good as Euflexxa. We have to go really head on head in the same kind of controlled situation to determine whether it was superior and if it was, how it was superior.

That's great. I think in compared to Orthovisc, arthroscopic surgery, both of them will be the real God send to the country, hopefully. Good luck.

I've been a patient for -- and getting these injections for probably about five or six years, and I'm only one, but my knees are not -- from sports are not in terrific shape. And they've made a big difference for me. And for me, it affect lasts somewhere between six and 11 months.

Yeah. That's about true for me, also. Great. Well, look forward to the future. Thank you.

Thank you.

Thank you. And at this time I'm not showing any further questions, I would now like to turn the call back over for any closing remarks.

Thank you, Charlotte. And thanks to all of you for participating in the call. As I said in the prepared remarks, we're pretty excited about 2014, and we're looking forward to reporting some more progress on our successive earnings calls throughout the year. So thanks again.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.