Good afternoon and welcome to AtriCure’s Fourth Quarter and Full Year 2014 Earnings Conference Call. My name is Denise, and I’ll be your coordinator for the call today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. I’d now like to turn the call over to Lynn Pieper from Westwicke Partners for a few introductory comments. Please proceed.

Thank you, Denise. By now, you should have received a copy of the earnings press release. If you’ve not received a copy, please call 513-755-4136 to have one e-mailed to you. Before we begin today, let me remind you that the Company’s remarks include forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control, including 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 statements. Additionally, we may refer to non-GAAP financial metrics. A reconciliation of these non-GAAP measures with the most directly comparable GAAP measures is included in our press release, which is available on our Web site. With that, I’d like to turn the call over to Mike Carrel, President and Chief Executive Officer. Mike?

Thank you, Lynn. Good afternoon and thank you for joining us today. 2014 was another solid year for AtriCure with accelerating growth throughout the year. We continue to build a strong foundation for the future and are encouraged by our prospects of becoming the leading innovator in the treatment of Afib and LAA management for stroke reduction. We have several large opportunities in front of us in both open and minimally invasive Afib treatment and LAA management. We estimate these are billion dollar markets long-term. To that point, we’re holding an Analyst Day in New York on March 24th where clinicians that have built practices treating Afib will lead discussion focused on examining the available markets for our innovative solutions and discuss the impact of our clinical trials. I will start today’s call with a quick overview of our results for the quarter, followed by an update on the business, our clinical trial project progress and education initiatives. Then I will the turn call over to Andy Wade, our CFO who will provide detail on our financial results and provide an outlook for 2015. After that, I’ll come back to make some concluding remarks. Our fourth quarter revenue reached $29.4 million, up 34% from the fourth quarter last year. Growth was balanced across all of our product lines both in the U.S. and internationally. In the U.S, sales were up 35% and international sales were up 33%. On particular note, the AtriClip franchise was again strong with an increase in the U.S. of 64% over the fourth quarter of 2013. AtriClip Pro sale increased 101% while sales of open clips were up 54%. We have now sold more than 43,000 AtriClip LAA occlusion devices including 17,000 in 2014 alone. In fact, more AtriClip devices have been sold than all other…

Thank you, Mike. For the fourth quarter of 2014 revenue increased 34.4% on a GAAP basis to $29.4 million. On a constant currency basis worldwide revenue increased 36.5%. Revenue from product sales in the U.S. was $22.1 million, an increase of 34.9% from the fourth quarter of 2013. Revenue from open chest ablation related product sales in the U.S. increased by approximately $2.2 million to $12.2 million representing growth of 22.5% driven by our education and training efforts as we build the still underpenetrated market for concomitant surgical ablation. U.S. sales of products used in minimally invasive procedures increased approximately $750,000 to $4.3 million up 21.5% and driven primarily by the contribution from Estech products with organic MIS growth flat as expected. We expect this trend to continue through 2015. Continued development of clinical data in support of MIS ablation for the treatment of Afib through trials such as AtriCure's DEEP IDE study beginning this quarter are critical to growing this market. U.S. sales of the AtriClip system during the fourth quarter of 2014 were $4.8 million as compared to $2.9 million for the fourth quarter of 2013, an increase of 64.1%. International revenue grew 33.1% on a GAAP basis and 41.3% on a constant currency basis as compared to the fourth quarter of 2013 to $7.3 million. Valve tool sales totaled $1 million worldwide approximately $800,000 in the U.S. and $200,000 in the international markets. Gross margin for the fourth quarter of 2014 was 69.4% as compared with 71.6% for the fourth quarter of 2013. As in previous quarters, the sales of products acquired in the Estech transaction put some pressure on the overall gross margins. Additionally, the placement and servicing of the capital equipment needed to run our ablation disposables including the Estech equipment continues to be strong,…

Thank you, Andy. In 2014 we strengthened our foundation for our future and we plan to continue to solidify this, the future of our market building strategy with thoughtful investment in our growth initiatives. Our core growth strategy is unchanged and is in fact accelerating. We are working very hard to expand the market and capture share by increasing awareness through education and training, driving innovation through clinical and commercial support. We look forward to updating you on our progress and hope to see all of you in Analyst Day in New York on March 24th. With that, I’ll open up to questions.

[Operator Instructions] Our first question comes from Jason Mills with Canaccord. Please proceed.

Congrats on another good quarter. So I have Mike one clinical sort of 20,000 foot question and then Andy one question on the P&L, with respect to the former -- Mike I am sure you will go over this probably in much more depth at the Analyst meeting, but perhaps it would be helpful to talk a little bit more about the DEEP AF study, and remind us of the study protocol and mainly the cadence of the [FI] [ph] and endocardial steps and any best practices that you’ve been passing on to-date understanding that in only few patients in but had had several meetings with you investigators over the last couple of months? And then I guess last part of that question is just helping us frame the market opportunity juxtaposed to the current market in concomitant which is obviously separate I think one thing we discuss quite a lot is just the market opportunity that exists here outside of your current concomitant market? And then Andy I have a follow-up for you after that. Thanks.

As to the DEEP protocol, the way the protocol works is that there is a -- the lead PIs at each site are both an EP and a surgeon and then the way that is actually transpires is usually the EP is a referring physician of the patients. They meet with those patients, talk to them about the procedure and then from there you get surgery first followed on 90 days later by a catheter ablation. You’re doing most of the left-sided lesions for those of you who didn’t know the Maze. Most of the left-sided lesions are being done by the surgeon and they are also clipping the appendage with AtriClip Pro during that procedure as well to take out that line as you’re kind of going down that path. And then you’re doing some of the right sided lesions and then the EP is coming in 90 days later and doing a combination of both touch up and also doing the flutter line. And from there you have got a complete Maze. And so with the combination of the two you get the complete Maze procedure, but it takes both steps to get there. And then there is a 90-day blanking period after that and then we’ll count and we’ll track them for a year and then we’re looking for kind of one year follow-up. We will continue to track them for three years ago after the study as well but we’re doing one follow-up to go after the label from that standpoint. So that’s the basic protocol. We’ve had lots of input from many EPs and surgeons around the country at all these leading institutions. Dr. Ellenbogen and Dr. Wang are the two lead EPs and we’ve also got several others that are kind of bringing their…

So just as a follow-up to that four plus years is kind of the timeline within which you think you’ll take to enroll the 220 odd patients and do the year follow-up on each of those, it sounds like it’s really about a year and a half from the time the patient is first treated surgically, is that right Mike?

That’s exactly right, so if we anticipate that the first patient will be enrolled we’ve just got the first patient enrolled obviously last week, but that we’ve only got one site today up on IRB, so as we get more and more sites up and running we’re kind of in good mode of enrolling by the July-August timeframe of this year. We anticipate it will take about two years to kind of get full enrollment. We will have to wait a year to close that out which will put you out to three years and then we'll just have to gather the data, so it’s about 3.5 to 4 years. I know we’ve got to talk to the FDA about it before we anticipate approval.

And then Andy, thank you for the gross margin granularity, it’s just one of the things that popped into my mind just as you were giving that guidance on the currency, with respect to the currency, so just as a point of clarification the 70% does that reflect current exchange rates, it sounds like the gross margin will be impacted negatively if the dollar continues to strengthen and I suppose it would be helpful to understand what your assumptions are with respect to the dollar as it relates to the bottom-end of your guidance and on other hand what your assumptions are with respect to the volume leverage at the top-end of your guidance? I would assume it’s the top-end of you revenue guidance but perhaps you could clarify there? And thanks for taking the questions.

Yes, so I would say yes on the leverage that you are speaking of would be at the top-end of the revenue guidance. On the exchange rate impact when we initially did the guidance from 70% to 71% we were looking at the exchange rates that are sitting around now. So if you do see further strengthening of the dollar then that is sort of the low-end of the range and in the potential downside risk on the bottom size so hopefully...

And vice versa I guess?

And vice versa, right, exactly. So if we obviously saw the opposite effect then we would get past with some leverage off of it, that is right.

Our next question comes from Rick Wise with Stifel. Please proceed.

This is Drew Ranieri in for Rick and congratulations on the quarter, but just a question for you Mike in terms of the overall market just looking over the next 12 or 24 months. Can you just talk about what you expect for procedural growth within mitral, aortic and CABG? And also if I heard you correctly are your training courses now moving away from procedure specific and now going to advanced ablation?

Just so that I've got a clarifying question when you say mitral, aortic and CABG meaning the overall growth of that in cardiac surgery is that?

Right, yes.

Our anticipation is those markets as we look forward over the next several years that those will continue to be kind of flat markets over the -- if you look at the data base and you look at kind of the growth in procedures over the last several years what you've seen is that actually CABG get down a couple of years ago and then has got, kind of come back the last couple of years. We've seen aortic continue to grow as CABG came out we anticipate that will grow for another year slightly and then kind of level off to down pressure may be three-four years from now and then mitral will continue to grow at a steady pace for the next four to five years and then as new products come in that are more minimally invasive could feel some pressure on that. So we've looked in depth at kind of our thought process on that but if you kind of blend all that together it’s about a flat cardiac surgery market overall on a worldwide basis which give us comfort on the numbers that we've got as we look at and quite frankly today only 27% of the patients maybe at the 29% depending on how you look at it are actually getting treatment when they are invasive going in there. So we believe that over the next five to eight years we can move that 29% to 50% of those patients and that’s where we are realty focused on the education front. We are not deemphasizing the work we're doing on the basic didactic courses that we had from before it's a matter of adding the advanced courses for those surgeons that want to have a deeper dive discussion they want to get into understanding the different various techniques around mitral surgery versus aortic versus CABG and so that’s really where those deeper advance courses kind of come into play. Most of these people are coming back and then we have also got more in-person training courses where they want see those cases live and have deep conversations one-on-one with the surgeons and we kind of let them go visit some of those sights. So I'd say it is more additive than it is taking anything away from the other ones.

And then just a follow-up question to that, out of the 2,000 surgeons you trained. Do you have any idea of what percent of the procedure market that those surgeons are responsible for? Thanks.

The 2,000 is international number, it is about 1,500 domestic and about 500 outside the U.S. and I don’t know what they represent globally on Afib surgeons because we don’t know what we know by account we can't track it by surgeon and we don’t get that information. So we get it on an account-by-account basis.

Our next question comes from Tom Gunderson with Piper Jaffray. Please proceed.

So Mike may be similar to what you did with DEEP AF you could a little bit about the stroke trial it sounds like your discussion with the FDA cut some time off the feasibility trial I think you said you've done 11 you were going to do 30 and the following up were six months. So we could have been another year out before the FDA got back to you but you were able to consolidate a lot of information to get that am I looking at that the right way?

I would say that for a half story and it's a good part of the story they are both good parts but basically with they came back with exactly what you said which is that the safety profile and we were doing a safety feasibility study but if they look at the totality of information from all the studies we've done with placed clips they were very comfortable with that safety data and said we could move forward with the pivotal trial. However we were looking for a single arm trial and to be able to move pretty quickly into that and they've been very strong not just in the meeting we had with them on December 3rd but also at a subsequent meeting at the Afib Symposium in Orlando in January where they basically said that we needed to do a randomized control trial and so since then I’d say while they cut off time on the feasibility study so there is no need to continue down that path per se. We do need to redesigning a little bit to figure out what and if we could do on a randomized they are suggesting heavily against Aspirin as what they've talked about they've talked about an open form at the Afib Symposium and so we have brought in the best experts that we know that kind of give us some feedback on how we would do that. How we would get enrolment and what that patient population would look like and we're looking at kind of the criteria by which would we bring in. So it might take a little time that’s why I said we anticipate by kind of the end of the second quarter we will be able to talk about kind of where we’re going with the stroke trial on that front. So yes, they did cut time, but also they have had this reevaluate to kind of look at what that trial looks like and now what’s interesting about that is, the industry stroke neurologist and EPs are incredibly excited about the possibility of us going down the path and doing a study like this. We just got to make sure the design rate is right so we can get enrollment to be at a nice brisk pace.

And then could you talk a little bit about how you’re feeling about competition right now, it sounds from this conversation this afternoon and previous ones that this is mostly about you building the market yourself in these particular zones, are you seeing any direct competitive efforts out there that would be slowing you down at all?

I don’t know but I’d say that there is anything that are slowing us down we’re still continue to compete on the concomitant basis with Medtronic, they continue to be, -- they’ve got good products on the market. We see them in lots of accounts in particular on an international basis we definitely see them in our accounts there. So you never want to kind of let your guard down. We continue we believe to gain market share and push and develop the market like you said but we’re waiting for the day for them to possibly ever get back into the market and we want to be ready to go after it. There is still they’re selling and winning business today. But I’d say that we’re gaining share. In terms of in the other parts of our business there is minimal competition today those are really new markets. The clip business we typically compete against sutures and really low cost items on the open part of the business on the minimally invasive side when you get minimally invasive oblations there aren’t really any competitors or many competitors, we don’t see them out there in that space. When it comes to the rest of our business on the minimally invasive side there are one or two small competitors that are in the space that we continue to see on the market and they’re very good competitors.

Our next question comes from Danielle Antalffy with Leerink Partners. Please proceed.

I wanted to get a little bit more color about what’s going on internationally like when you were at our conference you touched on a little bit where you guys are in the training process. And it sounds like there is still a ton of runway there. So just wondering if you could frame where you have decided this training internationally and how much more we have to go still there?

Yes, we have really just begun the training process internationally. We’ve only trained 500 surgeons internationally and there are 3,000 plus to eventually get to untrained and so we’ve revamped the course we’re taking the course from the U.S. part over there we have a medical director over there whose really leading the charge and then helping us kind of do a lot of training Dr. Cox has also spent a good bit of time with this over many of the developing countries and helped us with training and so we’re doing a lot of training and investing heavily but we’ve got many years of runaway to invest in that space not just in Europe but also in China and in Japan and the Asian countries as well. So I’d say we’re kind of in the early game of that. The labeling is different there so some of the training we can do over in Europe is different than the training we can do in the U.S. We can train a little more aggressively on the minimally invasive procedure and also on the left atrial appendage and so we’re part of sponsoring some programs that are over there right now that things we would not be able to do in the U.S.

And then I was wondering if you can comment on I think it was a few months ago there was a proposal or a physician letter of some sort of talking about RF ablation reimbursements and to believe it was the perception was that RF ablation reimbursement is overdone. And wondering if you can comment on just broadly the reimbursement landscape in AF and how surgical ablation is well positioned within that and any potential upside should something change on the RF ablation side?

Yes, I think the RF ablation you’re to referring to I think there was an article that came out where they had mentioned that there was some pressure that was being had there. And I’d say that be upside for us if that happens but that is not something that we count on when we give our guidance or look at it, we look at it as if everything status quo relative to that from that standpoint. In terms of the reimbursement there are no changes in the reimbursement on the surgical side. There haven’t been any meaningful changes one way or the other. I think as we’ve talked about on these calls before when you look at the open portion of our business to add, it’s all about better patient care, it’s about making sure you have taken care of that patient getting them out of the hospital faster and making sure that that patient is recovering more quickly and there are a lot of data suggested that if you treat Afib at the time concomitantly that patient will do better and there is a lot of data and information that is coming down from that standpoint there was a recommendation at STS to move it to a level 1A recommendation by some committees and councils there and they’re making that recommendation to the STS that may in fact influence things long-term but I’m not sure that it will impact reimbursement I think what it will more impact is that surgeons will understand that yes, they should do this on every single case and then you could kind of go off and get trained and make sure that they are doing and thinking about it every time they go in somebody has Afib. So I would say that is the kind of the general reimbursement landscape and we haven’t seen anything else change in the last couple of months.

We have no further questions. I will now turn the call over to management for any closing remarks. Please proceed.

Great. Thank you everyone for joining our call today and your interest in AtriCure. Have a wonderful evening.