Good afternoon. And welcome to the Bovie Medical Corporation Second Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Hosting today's call will be Robert Gershon, Chief Executive Officer of Bovie Medical Corporation. After today’s presentation there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. Before we begin, I would like to make the following Safe Harbor statement. Today's call will relate to Bovie's second quarter 2014 earnings release and will contain forward-looking statements regarding predictions about future events. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Although, the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Important factors that may cause actual results to differ materially and could impact the company and the statements contained in this conference call can be found in the company's filings with the Securities and Exchange Commission, including the company's report on Form 10-K/A for the year ended December 31, 2013. The company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. With that, I would like to turn the call over to Mr. Rob Gershon.

Thank you, Denise, and good afternoon, everyone. And thank you for joining us on today’s call to discuss our second quarter earnings and our business outlook. With me today is our CFO, Peter Donato, who will be -- who will provide a detailed financial update and also on the line is Jack McCarthy, our Chief Commercialization Officer. At the conclusion of our prepared remarks, all three of us will be available to answer questions. Second quarter was another period of solid financial and operating performance for the company. We achieved double-digit growth compared to last year’s second quarter. Thanks to increases in our core and OEM businesses, which continued to progress in their own way, as well as support the commercialization of J-Plasma. Our core business revenues increased 2.8% over the prior year led by higher sales of electrodes and generators, and we are moving forward with several initiatives to expand our product portfolio to further drive core business revenue growth. For example, in the second quarter, we announced the launch of two new products, Derm 101 and Derm 102, which began shipping at the end of July. These high frequency desiccators allow family practitioners, pediatricians, general dermatologists, physician assistance and nurse practitioners to perform minor skin procedures in their offices instead of having to refer patients to a dermatology specialist. The key takeaway here is that this is the first new major core product launch for Bovie in more than 10 years and there is much more to come. When I joined the company eight months ago, I was very impressed by the capabilities of the in-house design team and by the state-of-the-art manufacturing facilities we have in Clearwater and our contracted facilities in Bulgaria and China. These resources provide a platform for new product development and the assessment…

Thank you Rob. I’m going to take you through the quarter in some more detail. We posted a healthy 15% percent increase in net revenue, compared with a year ago. As Rob stated, we benefited from $740,000 increase in our OEM business with the core business also having a solid quarter, up 2.8% from the second quarter of 2013. Our GAAP gross margin for the quarter was 27%. It was negatively impacted by a charge of $843,000. This charge was related to the write-down of some inventory related to J-Plasma and other items as we adjusted our inventory to match changes in commercialization plans. This is part of our ongoing process to monitor and rightsize our inventory to optimize our cash flow and to align our inventory to our current commercial plan. Excluding the charge, gross margin was 39.2% compared with 36.9% a year earlier, an expansion of 230 basis points. As we continue to benefit from structural reductions in our labor force initiated late last year and more favorable mix, thanks to the significant uptick in our OEM business. The adjusted margins this quarter are largely indicative of our go-forward margins, exclusive of any special charges. However, we expect to see margins improving as the volume picks up in our core and OEM businesses and especially as J-Plasma gains traction in the marketplace. Turning to OpEx. R&D for the quarter was flat versus last year second quarter at $318,000 compared with $314,000 a year ago as we continue to develop our J-Plasma product line and cross the finish line with new core products including Derm 101, 102 and IDS-310. Professional service fees were down almost $100,000 versus last year. As the company had higher legal costs a year ago associated with disputes that are now behind us. SG&A fell…

Thank you, Peter. To sum up, we have positive momentum going into the second half of 2014. We are focused on strengthening our core business with new product introductions and calibrating our OEM business to maximize operating efficiency. The Bovie brand is known for high quality and reliability and we are developing strategies to leverage these strengths to drive revenue growth. At the same time, we’re building a world-class organization to support the commercialization of J-Plasma. We have attracted top-tier talent to bring this product to market and we are giving our sales teams the tools and training they need to get the job done. Denise, at this time, let's open the call to questions.

(Operator Instructions) And our first question will come from Russell Cleveland of RENN Capital. Please go ahead with your questions.

Thanks for taking my call and thanks for the report. It makes good reading. My question is kind of on the three areas that we have selected. And I have two questions, one is what currently is the size of this in surgical market? Secondly, what would be our goal not a forecast but our goal to capture that, in other words in percentage terms? And those are the two questions I have.

Okay. All right. Thank you, Russell and for all these questions, I’d certainly invite Peter and Jack to chime in as well. So the size of the market, and again we are focused on three, its plastics, dermatology and of course GYN. GYN being the biggest of the three markets. Those markets collectively represent about $1 billion total addressable market and that is for the disposable hand pieces only, primarily rounding up slightly. So in terms of our goal, we certainly expect given the product at hand that we ought to be able to capture 10% of that market in due time. We think that due time is likely five years or so, plus or minus.

Okay. That’s my question. Thanks so much.

All right. Thank you Russell.

Our next question will come from Keith Hinton of Sidoti & Company. Please go ahead. Keith Hinton - Sidoti & Company: Hi, Rob. How are you?

Okay, Keith. Keith Hinton - Sidoti & Company: I have two questions here, the first one, Peter, might be able to address it a little bit. But I was hoping you can just give a little bit more color regarding the inventory write-down, sort of what the cause of that was? And specifically, whether you're looking -- whether you expect there to be any write-downs like that in the future?

Yeah. So good question Keith, $843,000. So, first off, Keith, its part of our initial process like any good [hygiene] (ph) of company, you look at your inventory balances. We have a new executive team and a new chief commercialization officer and of course, I’m relatively new to the organization starting in May. We evaluated inventory, which it tipped up over $8 million, relative to the new commercialization plan. So that was the first step. A little bit more detailed process and for me the first time through, $843,000 represented in broad-brush strokes, Keith, kind of three buckets, if you will. The first bucket was kind of J-Plasma related. There was -- like any startup there, there are some scrap, there are some products that we’ve kind of evolved away from since the earlier days and some processes that have changed, so about a quarter of the $843,000 was related to J-Plasma. The second batch was just legacy products. We either had no commercialization plan or sale commercialization plans for those items or we just had too much of some products that weren’t moving, which is the textbook definition of a write-off. And then lastly there were some new regulation. RoHS was the name of the regulations in Europe. And with that said, we either had some products that fell out of compliance that we were no longer going to market or we found it not cost effective to put those products back on the market. So those were the three big buckets of the $843,000. At this time, Keith, we don’t have any visibility to inventory write-down but we still have $6.9 million on the balance sheet and we’ll continue to kind of tweak our J-Plasma commercialization plans in that but no write-downs at this time. Keith Hinton - Sidoti & Company: Okay. Terrific. And the other question Jack, you might be able to address this little bit is regarding the growth opportunities in the core business in terms of looking internationally the Derm 101 on the veterinary space. Do you have any goals in terms of timing or what kind of growth levels, you sort of shooting for with these various initiatives?

Keith, before Jack chimes in, I’ll just kind of set it up by indicating and it’s a little bit of a repeat from previous call. In the core business where we know there is significant growth opportunity, both in the international market, specifically Latin America and the veterinary space. We are committing more resources and our vision is a mandate really to grow beyond the market pace. So with that, I’ll turn it over to Jack to add some more color.

Yeah. Well, Rob, I agree with Rob 100% there. We were just looking initially as Peter said new to the team, coming in and looking at the core business and where it’s currently exceeding year-over-year sales. And in those markets, we see opportunities to continue to grow in those segments. So that is a great segment, high-growth area and we’re going to apply some additional internal resources to it. And internationally, we've also seen some upticks in specifically Latin America and we’ll continue to focus on that. So those are the key strategies moving forward as we just take a look at the initial commercialization plan. Keith Hinton - Sidoti & Company: Okay. And in terms of the Derm 101 and 102 rollout, do you expect that to be sort of a slow build-up or do you think that there is some pent-up demand there where you're expecting the sort of sales from that to ramp up pretty quickly?

Yeah. I’ll comment and then invite Jack to chime in as well. We are in the very early innings of Derm 101, 102 that we just started shipping. We do believe that there is pent-up demand for this product because we've been discussing it, as has our exclusive distributor partner and the interest level is high. But we’re in the very early innings right now.

Yeah. Again, I think, the key point is there, if you look at the Bovie core business, we haven’t had any new product launches in years. So the market is ready for this and again, this is a very good product that will allow physicians to grow their business. So it's great timing and like Rob said, our distributor partner is very excited to move this product. Keith Hinton - Sidoti & Company: Perfect. Okay. That’s it for me. Thanks guys.

Okay. Thanks, Keith.

(Operator Instructions) The next question will come from Alison Peck of Peck Wealth Management. Please go ahead.

Good afternoon and thank you for your thorough report. I have the several questions, one is with the high success rate that you have with the surgeons adopting the technology? How does that trends like and maybe it’s too early to really understand into actual utilization. How offer they’re actually using it? What percentage of that procedure that do you expect to be utilizing in the J-Plasma?

Yes. Okay. Thanks. I’ll start and again, I welcome Peter and Jack to chime in as well. We are early and the sale cycle, as I stated in the prepared remarks, tends to be 60 to 120 days until the product is fully in the hospital and that is when you expect the utilization to really take off and be much more predictable. In the meantime, it is being adopted routinely which means for those early adopters, the surgeon set we brought on last quarter and a quarter before. Those surgeons have adopted a routinely meaning. They don’t need a Bovie representative in the room to use it. But to get a surgeon from a first-time user to using it routinely takes that 60 to 120 days. So with that kind of the set up track, I don’t know if you want to add a little bit more color.

Yeah. Again, with the pipeline it continues to grow each month and we think that we’re confident it will continue to pace on that upward trajectory. In the meantime, as Rob alluded, within that 620 days, there are different gating factors for individuals and it could be the systems themselves require certain certifications or training so things that initial, which we've got several six plan for the end of this year. So we know that these trends will definitely get these surgeons through the credentialing process and will certainly equal more revenue moving forward.

Okay. I see.

Alison, I’m sorry to interrupt you, but I just wanted to add one more comment. One thing that is different about J-Plasma than other transformational technology is this. With other transformational technologies often the surgeons are waiting for that perfect case, that uneventful case to use the product in and that in it of itself can slow down the adoption. The great news is for J-Plasma, they don’t wait for that perfect case. They could use it on most of the cases that they have. So we do expect the adoption, that cycle to be shorter than with other transformational technologies.

Good. That will be interesting to watch as you move along in them. And one last question is the current utilization rate at the Clearwater facility and just some comments around capacity and et cetera?

Sure. Yeah. Alison, this is Peter. So I think we spoke before the capacities there, we are currently on one shift. We’re kind of trying to right size the OEM business as to not over tax the existing resource. There’s a lot going on as you imagine. But in light of Jack’s ability to ramp up J-Plasma, we’re ready for it. We as part of the inventory that I talked to on one of Keith’s question, we reviewed kind of all the lead times and items that need to going to J-Plasma. So long and the short of it is there is capacity to ramp up pretty quickly. For J-Plasma, we’ve looked at the supply chain and done the resource planning necessary. And we also have the ability to add shift. We are one shift operation in Clearwater.

Great. Thank you.

(Operator Instructions) And I’m showing no additional questions in the queue, this will conclude our question-and-answer session. I would like to turn the conference back over to Rob Gershon for any closing remarks.

Okay. Thank you, Denise. And we thank all of our Bovie employees for their commitment and our shareholders and all of you that dialed into this call for your interest and support. We hope you enjoy the rest of the summer and we look forward to our next earnings call in the fall.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.