Good day ladies and gentlemen and welcome to the Third Quarter AtriCure Incorporated Earnings Conference Call. My name is Jodie, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will be conducting a question-and-answer session. (Operator Instructions). I would now like to turn the conference over to your host for today Lynn Pieper, AtriCure Investor Relations Consultant from Westwicke Partner. Please proceed.

Thank you, Jodie. By now you should have received a copy of the earnings press release. If not received a copy, please call 513-755-4136 to have one emailed to you. Before we begin today, let me remind you that the company’s remarks may include forward-looking statements. These statements include, but are not limited to, those that address activities, events or developments that AtriCure expects, believes or anticipates, will or may occur in the future, such as revenue and earnings estimates, other predictions of financial performance, launches of new products and market acceptance of new products. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control, including, but not limited to, the rate and degree of market acceptance of AtriCure’s products, governmental approvals, and other risks and uncertainties described from time-to-time in AtriCure’s SEC filings. AtriCure’s results may differ materially from those projected on today’s call. AtriCure undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, we may refer to non-GAAP financial metrics. A reconciliation of these non-GAAP measures is included in our press release, which is available on our website. I would like to remind everyone on the call today, that the Food and Drug Administration, or FDA, has not approved certain AtriCure products for the treatment of atrial fibrillation or AF, or for stroke reduction. The company and others acting on its behalf may not promote these non-approved products to train doctors for the surgical treatment of AF, or stroke reduction unless the product is so indicated. These restrictions do not prevent doctors from choosing to use the products for the treatment of AF or stroke reduction, or prevent AtriCure from engaging in sales and marketing efforts to focus only on the general attributes of the products for the current cleared uses. AtriCure educates and trains doctors in the proper use of its products and related technologies, including for the treatment of AF in accordance with the products specific indication. With that, I would like to turn the call back to Dick Johnston, Chairman of the Board at AtriCure.

Thank you Lynn. Good afternoon and welcome to AtriCure’s third quarter 2012 conference call. Joining me today Michael Hooven, one of AtriCure’s founders and board members; Andy Wade, Vice President of Finance and Mike Carrel, just announced as AtriCure’s President and CEO. On today’s call I will provide an overview and then turn the call over to Mike Hooven who will provide a review of business trends, our strategy for capitalizing on our AF approval and an update on our clinical trial progress. Andy will provide more detail on our third quarter financial results and finally, we will open the call for your questions. Before we begin, I’d like to address the announcement that we made this afternoon that Mike Carrel has joined AtriCure as President and CEO. Mike was most recently President and CEO of Vital Images which was publicly traded on NASDAQ, acquired by Toshiba in 2011. Under his leadership Vital Images grew revenue and profitability, increased global market share, expanded his presence to over 90 countries and raised over 100 million in equity financing. We’re pleased to welcome Mike and look forward to his leadership and expertise in further developing and executing our strategy here at AtriCure. Over the past few months, Mike Hooven and I have worked closely with the management team and employees at the company to carry out a strategic and operational priorities. We have great people who are all committed to our growth and success. I appreciate their support and the support of our partners and associates during this transition time. I'll turn the call over to Mike Hooven for a more detailed update on business trends, the strategy for capitalizing on our AF approval and clinical trial progress. Mike?

Thank you Dick. Good afternoon and thank you for joining us. I also would like to take the opportunity to welcome Mike Carrel to our team. Mike brings a solid track record of establishing strategic vision, expanding businesses internationally and driving revenue growth and subsequent profitability. We look forward to his leadership and contribution here at AtriCure. Turning to business trends. We are pleased to report that in the third quarter, US open heart revenue including AtriClip was up 11% compared to the same period a year ago. We believe that this is evidenced that our investments and strategic priorities are building momentum and resulting in sustainable growth opportunities. In the US, procedure trends have remained generally stable throughout the third quarter despite a typical seasonal slowdown and we continue to experience strong growth trends from our international markets which are up 17% versus prior year on a constant currency basis. We are continuing to capitalize on our investments in support of our AF approval through education activities designed to increase awareness and improve patient outcomes. We initiated our first training and certification event in January of this year and to date, we have trained 569 cardiac surgeons up from 377 surgeons we've reported last quarter. We are successfully expanding this program which as we anticipated is resulting in increased utilization, competitive share gains and cross selling opportunities. Training levels are strong and conversions are proceeding as expected. But the cycle time from training to the sales process has been slightly longer than anticipated due to the increased focus and time on product value analysis at hospitals. This modest increase in conversion time coupled with seasonality in Q3 led to a bit of weakness. We have worked through this effect of this longer cycle time and did not see it…

Thank you Mike. For the third quarter of 2012, revenue increased 6% to $16.1 million. Revenue from product sales in the US was $12.4 million, an increase of 5.1% from the third quarter of 2011. Revenue from ablation related product sales in the US increased by approximately $400,000 to $10.8 million with an increase in open sales of approximately $700,000 and a decrease of approximately $300,000 in sales of products used in minimally invasive procedures. US sales of the AtriClip system during the third quarter of 2012 were $1.6 million as compared to $1.4 million for the third quarter of 2011. When looking at the open ablation business along with the AtriClip system, revenue increased $900,000 or 10.6%. International revenue grew 9% on a GAAP basis and 16.7% on a constant currency basis as compared to the third quarter of 2011 up to $3.8 million. The increase in international revenue was driven primarily by growth in Europe. Gross margin for the third quarter of 2012 was 71.6% as compared with 72.8% for the third quarter of 2011 and 69.6% for the second quarter of 2012. Similar to what we have described for earlier quarters, the year-over-year change in gross margin was primarily the result of investment in manufacturings and quality systems to transition and maintain the manufacturing of PMA approved products and to support our expanding operations. Along with a small portion driven by the continued increase in the mix of international sales along with an increase in the placement of capital equipment. We continue to be highly focused on establishing enhanced operational processes to drive increased efficiencies and lower product costs. We have seen a decline in manufacturing scrap and are encouraged by the programs that are being introduced into our manufacturing and quality systems. Operating expenses increased 14.7%…

Thank you Andy. Overall we’re pleased with our third quarter performance and commend the team at AtriCure for staying on course through a transitional summer. We expect growth in the fourth quarter to be driven by stable procedural volumes in the U.S. and overseas, enrollment DEEP AF, new product introductions and ongoing training and education initiatives. We continue to see healthcare reform trends impact our industry which is moving to a model where positions are rapidly becoming hospital employees. We believe that AtriCure is well positioned to capitalize on these trends as the only company in the industry with an AF label. Strong education and sole therapy platforms. We’re the only company in the world with an FDA approval to treat the most serious forms of Atrial Fibrillation. We believe that AtriCure is uniquely positioned for worldwide growth in this increasingly challenging healthcare environment. To conclude I believe that team at AtriCure is in good hands and I have confidence in our people. We have a strong management team and a board that is committed to continuing the trajectory of success and increasing shareholder value. We welcome Mike Carrel’s leadership to further develop and execute our strategy. We will now open the call for your questions.

(Operator Instructions). And your first question comes from the line of Thomas Gunderson from Piper Jaffray. Please proceed. Michael Dinerman – Piper Jaffray: This is Michael Dinerman actually for Tom. First let me congratulate you Mike on joining the company. If I could ask you a question it would be can you tell us little bit about what in the due diligence that you did major particularly excited about this opportunity?

It was actually pretty simple I met the managed team, the board and I really like the strategy they put together. Over the last three months, Mike Hooven and Dick have really crystalized that strategy, put a focus on the right areas of the business and they continue to invest in both the products and innovation and also the search for the customers and I really like that and I saw huge opportunity from market potential as well. I mean the native (ph) market is a tremendous market, I have been studying it for quite some time, have been working with cardiologist for the last 5 years and it has become a really, really critical disease, stay (inaudible) treat and that was something I got really excited about. So you combine all those things together, a combination of the team, the board and the market opportunity that’s what got me excited. Michael Dinerman – Piper Jaffray: Okay great and then do you guys have an update on the CFO search?

Right now we have – I have to congratulate Andy Wade on the terrific job that he has done for the last six months and our financial houses is in great shape and we’re going to leave that decision up to Mike Carrel but there is no immediate urgency at this point and we wanted to leave that decision to Mike.

Your next question comes from the line of Jason Mills from Canaccord Genuity. Please proceed. Jason Mills – Canaccord Genuity: So my first question has to deal with the Maze IV training and development of that market. Once again it seems you had another good quarter of training as referenced by the number of centers that have been trained on the Maze IV procedure but obviously the open-heart revenue was down sequentially. Could you talk about the cycle that exists between the time the docs are getting trained on the procedure and how long it's taking to sort of get purchase orders to start to ramp at those hospitals that have been trained where they had been trained in the past.

And that is actually the primary reason that the open sales came in a bit under expectations. This quarter is that cycle time is running a little bit longer that we expected, there is really two categories that we are looking at, if it's a current customer that is being trained and the condition already gotten an approval and the timeframe is essentially faster. In many cases increasing the utilization of AtriCure products for that customer, they may only use ablation products but with AtriCure Maze IV that also involves a cryo product. So there may be some additional training that that surgeon requires and in addition that surgeon needs to get comfortable with that procedure and so to drive increases in revenue at existing accounts. We’re looking at a cycle time that’s a little bit longer than we had anticipated really to start that ramp and so what we’re going to be looking at is a ramp where that surgeon is looking at increased utilization of our products and then building up their procedure volume. The second case and this is something we have been looking at in a lot of detail because we initially started training with kind of the (inaudible) which was our existing accounts and our best customers and in the first quarter and second quarter we were transitioning to some competitive accounts and third quarter we have been training quite a few competitive accounts and the issue with the cycle time on a competitive account is it's a bit longer because first of all let’s say that surgeon is using competitive product comes out of the account and because of the new role that many surgeons are in where their hospital employees they don’t quite have the leverage that they use to have and that…

At this point as we stated I think in the initial part of the call, we’re not going to be giving guidance on this call for 2013, I will say that based on what we are seeing this month which has been very encouraging we feel comfortable putting out about a 10% to 12% top-line growth this quarter, it's based on strong trends and what we are seeing in October it's possible we can come at the high end of this range but we also have to factor in that we are seeing one less selling day in the fourth quarter and we don’t yet know the impact of Hurricane Sandy on our revenue in the North East. Jason Mills – Canaccord Genuity: And what about the international market direct plans?

This has been one of our key initiatives to support our international market growth, we have about a 20% market share in Europe and so you compare to that what we believe is over 50% market share here, we think there is a significant potential to increase our market share in Europe. we have the MIS procedure over there is, that’s been done and we also are looking at new markets in Asia and specifically China and we’re looking as well at South America.

Your next question comes from the line of Matt Dolan from Roth Capital Partners. Please proceed. Chris Lewis – Roth Capital Partners: This is Chris Lewis online for Matt, thanks for taking the questions. First Mike just wanted to congratulate you and walking you to the company there. Can you guys just discuss any disruptions the company may have seen during the quarter related to the transition just in terms of possible physician relationships, hospital relationships or just any sales force disruption or turnover the company may have seen.

Yes this is something that I have spoken a number of you about and I think I talked to Matt about this but it's been actually very surprising, to my knowledge have not lost a single account, we have not negatively impacted any surgeon relationships. In fact that’s going the other way for a few of them and we have seen in terms of turnover, we did, we have had no sales force turnover whatsoever and so this has been in terms of the key customers, the key accounts, their main question is are you going to continue to work with me and at this point we are saying absolutely. Chris Lewis – Roth Capital Partners: And then I think you mentioned in your comments related to the training programs, but can you expand a little bit more and provide us with more commentary around the competitive market share gains you saw during the quarter.

I can’t give you actual numbers but I can tell you that the conversion of competitive accounts, I mean we look at kind of net conversions and we look at the number of accounts we have converted competitive accounts and then we subtract the number of competitive accounts. We have lost and we are doing extraordinarily well in converting competitive accounts and so we think this is going to pay some significant dividends and the only downside of that is the cycle time, is a little bit longer than we anticipate it. Chris Lewis – Roth Capital Partners: Okay and then just last question here. The 10% to 12% is that for the fourth quarter, is that a year-over-year growth rate?

Yes.

Your next question comes from the line of Danielle Antalffy from Leerink Swann. Please proceed. Robert Markison – Leerink Swann: This is Robert Markison, my congratulations on the new appointment. Just wanted to see if you have had time to assess your strategy if you’re going to continue with the current strategy or if there are different roads that you think you might take going forward.

Right now I have the chance to assess the strategy in the period of the time that I have been able through the interview process but I’m going to continue to reevaluate. I think they have got a strong (inaudible) just one of the things that actually attracted me to them and it turns the conversion with Mike and Dick but obviously there is always going to be things up for looking at over the course of the next 60, 90 days and I will give an update to everybody on the earnings call in the February timeframe.

Your next question comes from the line of Charley Jones from Barrington Research. Please proceed. Charley Jones – Barrington Research: I guess my first one is around the sales force, I was curious are you how many reps do you have, how many managers do you have, are you still using kind of electrophysiology specialist and how many of those are there, are we all three in agreement of the sales level we need or what are some of the variant choices you have in front of you?

Right now we have somewhere in the order of 40 reps, about 10 management but 60% personnel on the field and we have looked at, we’re actually in the process and this is something that we are excited about having Mike onboard so he can evaluate this. We have had a strategic AF a couple strategic AF marketing managers who are have been very successful in driving referrals and converting accounts and training and so we’re evaluating, we believe we are sufficiently staffed, the question do we want to reallocate some of the support resources maybe to focus a little more heavily on our open procedure and our AF label. Charley Jones – Barrington Research: Have you seen some of your Eps kind of slowdown on referrals as a result of days departure or is that same as the cardiac surgeons?

Not at all. Charley Jones – Barrington Research: Just a couple of quick more, a couple of more. ABLATE II is that a minimally invasive or is that an open concomitant for these people who have failed previous catheter ablation.

ABLATE II is actually a very exciting study, and it's becoming more exciting because we believe we have a way to place our new clipped system with the new Boa Pro clip applier. It's a right lateral through economy, it's essentially the same procedure that is becoming the procedure choice for surgeons who are doing minimally invasive valves and what we are adding to that procedure is essentially all of the lines for the AtriCure Maze IV done under direct visualization. So we anticipate the outcome and this is done on a stop heart with the Fem Fem Bypass. So we anticipate that the results of this procedure should be similar to our ABLATE, our results that got us FDA approval. We have a word from the FDA that this is eligible for supplemental PMA and when I talked about the ball Boa Pro clip applier. Just a few weeks ago, we had a surgeon used this product in one of our user studies took that surgeon a matter of seconds to apply to clip to the appendage. We’re in process of putting together some videos and if we have had a number of other surgeons do the same procedure and so we think the potential is not only and we are submitting an amendment to there tomorrow to the FDA to incorporate this clip into the ABLATE II trial and we believe there is not only selling opportunity to use this clip in this standalone procedure which is, the advantage of this procedure is it's very familiar to cardiac surgeons, any cardiac surgeon that doesn’t in minimally invasive valve knows this procedure. So we have the advantage, and not only been able to sell due to this procedure but we can also sell the clip into minimally invasive valve procedures for any surgeon that wants appendage management for that procedure and the ASP for this product is significantly higher than the ASP for the previous system. Charley Jones – Barrington Research: Just a one real quick follow-up it's about (inaudible) I was hoping you could be a little bit more specific about the differences, is it just a longer delivery device, or is there anything different and if you have the ability to go in minimally invasively here why the delay of the stroke trial given the potential value creation there and what is it that you’re waiting on product development or did you see something that was just going to be too difficult to get through the FDA, maybe you can talk a little bit about that stroke trial. It sounds like maybe even financing has something to do with it and I would be curious, Mike Carrel’s initial view on whether or not this company is properly capitalized.

That’s really like three questions but let me so you want to know the (inaudible) Boa Pro and the differences. Charley Jones – Barrington Research: And why not stroke why delay in the stroke. It seems like it was related to capital.

Let me address the stroke trial first. The stroke trial is a huge undertaking and what we decided was that we do two things, one is we would look at really going if we’re are going to do the trail we have to go big in the trial and we want to look at an NIH funded trial. So we need to get serious NIH support for that trial. Second is since this is going to take some time to do that and we have had great success in developing our largest Boa Pro product, we would want to develop an even more minimally invasive system for delivering that clip. So when we do the trial we do it with NIH funding and with a significantly less invasive product than the one we already have. Now to answer your question about the Boa Pro there is quite a few differences from the existing system, the first difference is that the surgeon was required to cut the (inaudible) to release the product from the delivery part of the mechanism so in the Boa Pro it's a very simple system where the (inaudible) are simply released by pulling on a piece on the handle. You extend that piece and the clip is released and also and this is why this product is being – we’re so excited about this for the wide lateral for economy procedure, the head of the product that contains the clip can be articulated in anyone of the axis. So it's posed to the previous product where you can only rotate that in one axis. The third thing is it's really bio-friendly. We have designed it to be grasped by a robotic grasper. So and the fourth the ASP is significantly higher, we believe we can command a much higher price for this product.

(Operator Instructions). At the present time you have no further questions. I would now like to turn the call back over to Mike Hooven for closing remarks.

Just like to thank everybody for joining us. We’re really excited about the future of the company going forward under Mike Carrel’s leadership and look forward to our next earnings call. Thank you.

Ladies and gentlemen that concludes today’s conference. Thank you for participation. You may now disconnect. Have a great day.