Good day, ladies and gentlemen, and welcome to LivaNova's PLC Second Quarter 2021 [sic] Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation there will be a question-and-answer session. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Matthew Dodds, LivaNova's Senior Vice President of Corporate Development. Please go ahead, sir.

Thank you, Crystal, and welcome to our conference call and webcast discussing LivaNova's financial results for the second quarter of 2021. Joining me on today's call are Damien McDonald, our Chief Executive Officer; Alex Shvartsburg, our Interim Chief Financial Officer who will be appointed as our Chief Financial Officer effective August 1st, and Lindsey Little, our Senior Director of Investor Relations. Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statement. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which will all be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool. You can find the presentation and press release in the Investors section of our website under News, Events & Presentations at investor.livanova.com. With that, I will now turn the call over to Damien.

Thank you, Matt, and thank you to everyone for joining us today, and welcome to our conference call for the second quarter of 2021. First, I'd like to officially welcome Alex Shvartsburg as our newly appointed CFO. Alex has served as our Interim CFO since October 2020, and brings more than 25 years of industry experience to our team. Alex, congratulations on the appointment.

Thank you.

I'll start off by discussing some recent updates, move to sales results, and then review our strategic portfolio initiatives. After my comments, Alex will provide you with additional details on our results and increases to our 2021 full-year guidance. Then I'll wrap up with closing remarks before moving on to Q&A. The neuromodulation and cardiovascular businesses continue to recover from the depressed levels of activity that began early in 2020 related to COVID-19. After a slow start in 2021 trends improved in March and showed good momentum in the second quarter especially in the U.S. While some regions continue to be impacted, we saw sequential progress in case volumes and less apprehension by patients seeking treatment. Although we anticipate continued impact from COVID-19, we expect procedure volumes in the second half to show further improvement in the U.S. and globally. Moving to recent events. On June 1, we completed the initial closing of our heart valve divestiture, including both manufacturing sites. Further closings related to the sales infrastructure in various geographies around the world will follow in the second half of the year. Financial results for the heart valve business had deconsolidated effective June 1. Also, during June we received investigational device exemption, FDA approval to proceed with our conservative clinical trials in Obstructive Sleep Apnea or OSA. The OSPREY trial will seek to demonstrate the safety and effectiveness of the aura6000 System, our implantable hypoglossal neurostimulator intended to treat adult patients with moderate to severe OSA. After receiving approval, we immediately launched the start-up phase of the OSPREY study anticipate enrolling our patients later this year. OSPREY is a randomized control trial and will include approximately 20 sites across the United States and enrol a maximum of 150 adult patients who did not achieve results from traditional CPAP therapy…

Thank you, Damien. I'll discuss our second quarter results in greater detail and then provide an update to our revised 2021 guidance. Sales in the quarter were $265 million, an increase of 41% versus the second quarter of 2020. Sales in the quarter, excluding the heart valve business were $250 million, an increase of 48% as compared to the same quarter of the previous year. Cardiovascular sales were $146 million, up 13% from the second quarter of 2020. Neuromodulation sales were $118 million, an increase of 102% compared to the second quarter of 2020. Adjusted gross margin as a percent of net sales in the quarter was 70%, up from 61% in the second quarter of 2020. The margin increase was primarily driven by product and geographic mix. Adjusted R&D expense in the second quarter was $44 million, compared to $35 million in the second quarter of 2020. R&D as a percentage of net sales was 16.5%, down from 19.3% in the second quarter of 2020. Overall R&D on an absolute dollar basis is increasing behind continued progress in the ANTHEM-HFrEF Pivotal trial and RECOVER study. Adjusted SG&A expense for the second quarter was $102 million, compared to $80 million in the second quarter of 2020. SG&A as a percentage of net sales was 38.4%, down from 43.7% in the second quarter of 2020. The dollar increase in SG&A is primarily due to commercial-related variable and discretionary spending last year as a result of COVID-19. Adjusted operating income from continuing operations was $39 million, compared to an adjusted operating loss from continuing operations of $4 million in the second quarter of last year. Adjusted operating income margin from continuing operations was 15%, compared to a loss of 2% in the second quarter of 2020. The adjusted effective tax rate in…

Thanks, Alex. In summary, we've built good momentum during the first half of the year and we're optimistic regarding the growth outlook for the remainder of the year. And taking this into consideration, we increased the mid-point within all that guidance ranges. While we acknowledge that we continue to live with changing market dynamics resulting from the pandemic, we remain focused on execution to deliver our pipeline commitments and our updated full-year guidance. And with that, Crystal, I'll open the line up for questions.

Thank you. [Operator Instructions]. So your first question comes from the line of Mr. Rick Wise from Stifel. Sir your line is open.

Good morning, everybody. Nice to see the solid quarter. Thanks for that. Let me begin; let's start off with neuromod with epilepsy. I mean, it's great to hear that all three regions showing improved performance. And maybe you could talk in a little more detail just about what you're seeing, and what we can expect both on the new implant side and the replacement side. I mean its tremendous momentum on new implants. Is that -- to what extent is that the new sales you've approach versus new accounts. Just to help us better understand what's happening there?

Yes, great question. Good to hear from you and good morning, Rick. We're very pleased with how the team is executing and getting effect to what I think looked more like 2019 levels of performance. Total U.S. implants rose 70% year-on-year, which is very strong performance for the team. The epilepsy implant in the quarter also grew slightly from 2019. And I think, again, that's a really important signal for that business bouncing back to 2019 level. In the past few quarters, end-of-services recovered faster than NPI. We've been talking about that that tailwind from the backlog of procedures from 2020. They grew about 85% year-on-year and nearly 20% sequentially, which I think is a big sign too. NPI's grew about 40% and low-teens sequentially. So again, end-of-service really leading the way there. I think a lot has to do with the new go-to-market strategy. As I pointed out in the script, they've gone from around 10% of the U.S. sales to 16% of the U.S. sales. And that is important for us, because we believe that's how we're going to continue to make changes in our awareness and impact on new patient implants over time. Matt, if you wanted to add anything on that.

No, I would say Rick the U.S. is the majority of the business, but we're also seeing a lot of good trends in areas in Europe and some of the other international markets as well. In the quarter, we just know most of the focus is on the U.S. So we gave a few more nuggets there.

Yes. Great. May be two more. You've made encouraging comments about the DTD trial. And I think your words gave me -- were we've made good progress in the quarter for that $250 million, $150 million by year-end. Can you give us any sense of as things are reopening, recovering, hopefully, returning to a normal, was enrollment in line did it accelerate. Why you -- it sounds like you're more confident in reaching your year-end targets, but any more detail there you can share?

Yes, I think since the education event we hosted, we've seen the progress in line with our forecasts. And we noted in May that were over three quarters of our sites were activated, over half of that target number of patients have consented. And just so everyone's aware that consent is like a technical precursor to the implant state. And then over one-third of the target number of patients have implanted. And that's continued to progress. And we've seen that basically running on our model since then.

Okay. Alex, congratulations to you, and I give you full credit for the excellent print already. But maybe you could help us think through the second half in a little more detail. How do we think about the third quarter, fourth quarter sales cadence? I mean, I sort of think about the third quarters in normally in Life and MedTech Life has been sequentially softer, because of seasonality in vacations. Or no, that's not it could be more flat to up this year because of the business trends you're seeing and new sales initiatives and recovery. How do we think about splitting up and thinking about the second half? Thank you.

Yes. So you’re right, Rick. First of all thanks for the congratulatory remarks. I would say, look, the trends -- the seasonal trends we expect to be similar as we've seen historically, Q3 sort of being a slower quarter relative to Q4. One thing I will remind you is that heart valves are out of our sales trajectory for the second half of the year. So that's going to have an impact in terms of costs. We feel good about the sales trajectory and as Damien said we are expecting sequential growth in the second half. Now that we've reached the mid-point to the year, we’re more comfortable updating our guidance and putting all of our EPS upside generated into our new guidance range.

I'm just confused, Alex. Just if I get interrupted, just -- and so if we think about the third quarter ex heart valves does it match the first quarter revenue levels? Is that the right way to think about it as we get ready for the full?

Yes, please. Yes.

Okay.

Yes. Look, we -- I think we feel pretty good about the second half of the year. We continue to see unpredictable impact of COVID, especially in pockets of APAC, Middle East and Latin America. The U.S. trends about obviously improved and, but it's not yet quite back to normal on epilepsy, particularly on NPI or new patient implements. So, as we look for just the back half of the year, we’re assuming delivering the same level of EPS that we delivered in the first half.

Your next question comes from the line of Mike Matson from Needham & Company. Sir, your line is open.

Hi, good morning. Thanks for taking my question. I guess I want to start with neuromodulation. So obviously good performance there. But I wanted to ask about the strength of replacements. You did mention there's a bit of a backlog there. So is there a risk that that slows down the replacement part of the business and maybe we see air pocket before the new implants sort of continue to pick up. I guess in other words, how much confidence do you have or visibility do you have in the backlog? Is that that part of the business can be sustained the replacement portion?

Hey Mike, it's Matt. So on the replacements; like we said before that in 2020, we thought there were about 1,200 replacements that based on our modeling should have occurred that did not. We've eaten into that a little bit, but we still think there's at least a 1,000 of those replacements that are still out there and available. So we did burn a little bit in the first and second quarter. But just thinking about that math, that should carry into 2022. So I don't -- I don't think it's going to -- and if anything, you need to worry about through this year. And then in terms of the new implants, as Damien second, we did actually show a nice growth sequentially. And our expectation is that we'll show growth sequentially again in the third quarter. So not quite back to what we call baseline, but getting there.

Okay, thanks. That's helpful. And then I just had a couple on THN3 trial? So is this impact of pivotal trial. In other words, it'll support FDA approval or 6,000. I was a little confused because the slides called it a confirmatory trial. So I wasn’t really sure what that meant. And then I wanted to get a better understanding of the timing. What's the follow-up period for the endpoint in the trial? Could we see results?

Yes. Yes. So great question, Mike. So the things for us that are important here is that we finished the THN3 trial. I weren't happy with how that was executed as we took that over. And so we're calling it a confirmatory trial, but yes, it does support as a pivotal the FDA approval cycle for PMA. So that that is correct. It is a PMA pivotal approval trial. And as far as follow-up, it's a six-month follow-up.

Okay.

And then the timing, like we're assuming approval in 2024 right now.

Your next question comes from the line from Adam Maeder from Piper Sandler. Sir, your line is open.

Hey guys, thanks for taking the question. Congrats on the results and to you, Alex, on the appointment as permanent CFO. Maybe just one kind of short-term question to start, I guess it was just hoping to get a little bit more color on Q2 and how the business progress over the course of the quarter or by month, and just trying to get a better sense for the recent trajectory there and exit momentum that you have. And then if you're seeing any kind of early impact from the Delta variant in recent weeks. I had a couple of follow-ups. Thanks.

Hey Adam, thanks for your question. Yes. Look, as Damien mentioned in his remarks, we started to see the strength in our trajectory in March and is continued throughout the quarter. So we came out at the end of Q2 with really good trends. So really happy with the type of trends that we saw in epilepsy. U.S. in particular across the board, across all franchises, we saw some really strong trends. So that that made us feel pretty good about the balance of the year second half. So also in terms of beyond the sales trend, we saw some good progress in terms of gross margin and we're seeing leverage across the rest of the P&L, so all positive. In terms of Delta, like, sure everyone is doing, we watch this carefully, some time ago we started a internal monitoring through Matt, see the team and we've been tracking that by geography extremely closely. And then on a focus Friday call, we talk about this with the teams every week to look at where we see pockets and hot spots. LatAm is an issue, Middle East, Africa, still being an issue. And in the U.S., we're tracking pretty carefully this whole Florida, Georgia, Louisiana spike. And that that's important too for us, the East is an important geography for us in all the franchises. So we're watching it again, I'm sure like everyone else that we're confident at the moment that we're going to be able to execute to the goal we just laid out.

That's really helpful. Thanks guys for that color. And then, for my next question, just on CP, I think you said that's expected to grow low to mid-single-digits this year. You talked a little bit about capital being soft, but maybe I was hoping to get a little bit more color or puts and takes there. And then I know you're not giving obviously guidance for 2022 at this time, but just conceptually, I wanted to ask about the CP business when the new heart lung machine is launched what's the right way to think about the growth trajectory of that business. What type of impact did Polaris have and just how do we think about kind of the stage rollout of timing? And then I have one quick follow-up.

All right. Adam, so on your question around CP, in oxygenators we saw -- we continue to see progress in the quarter. We had approximately 12% sequential growth, which was positive. In terms of the capital cycle, the HLM sales tend to be kind of lumpy. So it's -- that we're not seeing anything that we hadn't predicted in our forecast earlier this year.

And then, in terms of 2022, we've said this as a low-single-digit market. So with Polaris coming online, I would say at least for now maybe think mid-single-digits until we get more visibility on the exact timing.

Got it. Okay. Thanks, guys. And then just sneak in one more, if I may just to ask about obstructive sleep apnea. Just want to learn a little bit more about the technology itself. This next-gen device kind of relative to the previous generation or a 6,000, what changes have been made to the design and the feature set? How do you kind of view the value proposition versus the other available technologies? Thanks so much guys.

So in terms of the technology, not a lot of changes to the device overall in terms of what it does, the number of electrodes on the lead, really just, I think refining and enhancing the components for reliability. I'd say two of the big differences versus the current therapy out there Inspire. We don't have the second lead right now. So it's a single lead. And we have more electrodes. We have six electrodes. They sit further back on the nerves and inspire. So you can theoretically recruit additional muscle fibers. And you can sort of adjust the shape of the tongue a bit better versus just stick it out. So that's kind of a core component. We think that that'll actually help a little bit more with complete concentric collapse, which is about a third of patients. So there is some differentiation, I think in the way it works. But in terms of the device, it's -- I wouldn't call this like an enhanced device from a therapy effect.

Got it. Crystal clear. Thanks, Matt.

Your next question comes from the line of Anthony Petrone from Jefferies. Sir, your line is open.

Hey, Anthony. Maybe we have some trouble getting you on. Crystal, do you want to come to the next one and we'll come back to Anthony if he can get back in.

Sure. So the next question comes from the line of Mr. Michael Polark from Baird. Sir, your line is open.

Hi, good morning. Can you hear me?

Yes. Hi Mike, how are you?

Hey, very well. Question for probably Alex on just gross margin into the second half; obviously we pull heart valves out, which just should be an accretive exercise to the gross margin. I previously did the math last year when you first announced it probably 200 basis points of lifts just from stripping heart valves out of the model on gross margin. Does that anywhere around the ballpark?

That’s right, Mike. We expect gross margins increase in this year relative to 20 point by about 300 basis points. So the outlook is trying to get to 70 and beyond. All of that -- all of that positive trend is really driven by the product mix, right as we sell more neuromodulation, also the increased volumes on cardiopulmonary that that will drive the -- well that will drive some upside there.

On R&D, always trying to model the -- or frame the shape of this curve. I know you're investing in a lot of important initiatives. Are we at a quarterly run rate or a quarterly number here $44 million? Is this going higher kind of flat here for the next few quarters? How do you see this playing out rest of this year into next?

Yes. We see a little bit of a step-up in the second half, especially as we enroll the OSPREY trial. So a bit of a step-up, but we’re sort of in the ballpark there with our first half trends on the other trial and sort of the base.

Yes. And then on OSPREY, this is my last one. On the, Matt, the CCC comments, are you -- is the protocol for this study design, such that all these patients go through the drug induced sleep endoscopy and you pull the CCC patients out and then run a trial kind of consistent with the current FDA indication for hypoglossal nerve stimulation, or are you expecting that this study is going to have a CCC and a non-CCC subgroups?

So you got me on the endoscopy. I'm going to have to get back to you on that one. The CCC it’s going to include the CCC patients. I don't think they’re going to be separated from the other patients in the trial. But if that's wrong, I'll let you know, but they are definitely going to be in the trial.

Yes. You run the dice to identify the nature of the airway. So I presume that's part of the protocol then.

I'll check -- I'll check on that.

Your next question comes from the line of Mr. Anthony Petrone from Jefferies. Sir, your line is open.

Hi, good morning. Apologies we're off in between calls. So apologies if some of these got asked. Well, my first question would be on VNS backlog. You mentioned last quarter, there was still about a 1,000 patients really that were backlog and I believe those were replacement patients. So just wondering if there's an update there, and how long of a tailwind does that represent? I think last quarter you mentioned into 2022. And then on the margin side, just trying to quantify, there was certainly an outperformance both at the gross and operating level versus our estimate. Certainly the outsized revenue beat helps there. Just sort of trying to work through that, how much of that was the revenue beat versus just cost savings? And if you can, Alex, maybe just some high-level thoughts on where you see the adjusted operating margin profile trending perhaps over the next several years. Thank you very much. Congratulations on a good quarter.

Thanks, Anthony. It's Matt. So for VNS, it's still over a 1,000 patients the way that works is. We've probably reduced the 2020 number by about 150 to 200, but we're still not back to normal, I would say in the U.S. epilepsy in terms of market trends. So there were some additional ones added. So the net is still, I would say north of a 1,000.

Anthony, in terms of the margin profile, so gross margin, yes, it was sort of outperform on basis of sales volumes. But that's a -- it's a kind of a mixed phenomenon, right as we sell more neuromodulation, which is carries a higher gross margin than the rest of the fleet. That that, that really helps. I mean, we're trending at somewhere in the 70% range and we expect to maintain that or improve that in the back half of the year and into 2022. In terms of the operating margin, we feel pretty good about where we landed in Q2. I would say it's going to be pretty similar in the second half. Our goal, I think we stated all along that we wanted to -- we're striving to get to 20%. I'm not sure we can get there in 2022, but we're certainly going to give it a shot, a trial.

Your next question comes from the line of Mr. Matt Taylor from UBS. Sir, your line is open.

Hey, Matt. How are you?

Hey, good, Damien. How are you doing? Thanks for taking the question. So I wanted to ask more about the epilepsy dynamics instead of the follow-up on replacement versus de novo. Could you talk about how that mix looks today in different geographies? And how you expect it to change over time? When might you be able to recapture those 1,000 that are still out there and any more color on the trends would be really helpful.

Hey, Matt, it's Matt. For U.S., we're currently getting closer to 70% now. Year-and-a-half ago, we were closer to the 60% range. So no surprise, it's slowly gone up. We do expect it to eventually start to go down next year. Internationally in Europe, it's about -- our split is about 52% NPI, 48% ELS, so not quite as high as the U.S., but almost 50/50. And then in the other markets, international markets, it's like 85% NPI. And again, all of them over time, we do expect the end of service to move up.

Okay, great. And what have you seen in the recapture and I guess versus your modeling, how are those coming along? And what's the pace that you could recapture those thousands are out there.

So again, it's not perfect math, but we think 150 to 200 were captured in the second quarter. There were some captured in the first quarter. We'd expect it to continue to go up in the back half of the year. Well we don't know is how long the tail lasts, because it's -- this is therapy and the settings it really depends by patient. Even when you get the alert that your battery is below 17%, you could potentially go a year. So the -- we don't have a perfect window on when a patient is going to come in by month, but within a year period, we have very high confidence. So what we think right now is more in the third and fourth quarter, some will spill over into 2022, and then by 2023, we're largely back to normal.

Okay. And I just want to ask a hypothetical question on RECOVER assuming that you do hit your involvement goals for the cohorts by the end of the year. And based on what you've seen in the register data previously. Could you just clarify some goal post about when you might be able to see separation of the curves enough to make a signal that you have a high success chance for a positive result? How long, I guess, could that take in a reasonably good scenario?

So Matt, right now, we're assuming it's sometime in the back half of 2022. Again, it's facing. We get to look a lot for each arm it gets to with every 25 patients. So we don't have long intervals of waiting. But based on the statistics that was designed on, it's -- it's somewhere in the back half. And again, we've committed to late 2022, early 2023 from a shift to registry that just gives some time for CMS to decide. And then also we're in the back half, we think the odds are the highest, so that's how we're currently looking at it.

Okay. And just on the softer side of things what can you do ahead of time, I guess, to start to raise awareness and see the margin? What are you doing now and what can you do next year to start to get the psychiatry and you're [ph] excited about this?

I think our real focus is just on RECOVER, but we've also done I think a very good job in working with a publications subgroup of the investigated to map out a publication strategy. And so we are actively publishing in the area and engaging more with interventional psychiatrists. We're also working to make sure we've got capacity to implant. So whether that's a neurosurgeon, ENT or general surgeon and so that we can make sure that the flow works from interventional psychiatrist to the implant, and back to the interventional psychiatrist. So that there are two of the steps we're taking them on the many aspects of what the team is doing and very focused too on mapping using DIG data, where the centers are and how we would think about a commercial expansion strategy once we get to certain milestones with CMS.

We have our last question from the queue. We have Mr. Scott Bardo from Burbridge Company. Your line is open.

Okay,

Hey, Scott. How are you doing?

Very good. Thanks. I'll be speaking on from Berenberg, but not Burbridge.

Okay, one that keeps saying most recently, so.

Yes. Thanks, guys, and congratulations, Alex for the permanent tenure. So first question please, just relates to operating margin this quarter, which I think came in pretty reasonable at 14.9%. Now, of course, that margin is somewhat benefiting from the revenues that you built for heart valves for a couple of quarters. So I wonder if you can give us a sense, Alex, as best you can, what you think the underlying margin for your Cardiac Monitoring and Advanced Circulatory support and Neuromodulation was this quarter, if you were to completely net out sales and costs from heart valves that would be helpful. And I guess, follow-on question, SG&A trending up to about $105 million. Now that you've exited heart valves, there's an awful lot of folks there within that business and the basis will remain flat, goes up some sense there would be helpful. And second question, just relates to cardiopulmonary please. I think correct me if I'm wrong, but you're applied or the outlook you provide that is being somewhat moderated and you were flowing to weak capital trends on top of what was already a weak capital year the year before. And are you confident that you're not losing market share there? We know that Getinge has now entered the market with a heart-lung machine and finding strong momentum I wonder if you can comment there. And further more then some sense of the climbing's for both Polaris and your new VNS device, please. Thanks, again.

Right. So let’s take this one at a time. So our operating margin excluding heart valves largely the same Scott, because the heart valve business carried a lower gross margin relative to the rest of the fleet. So it's taking that out of the mix. The operating margin isn't drastically affected. Recall when we announced the divestiture, we said we were going to be dealing with some stranded costs in the back half of the year. So that's absorbed in our guidance in our margin for the balance of the year. And that’s -- we're working on costs to get those out as soon as possible. But we're supporting the transitional services agreement with Prosum [ph] which requires us to continue to stand up from an SG&A perspective. Now just look your -- I believe your second question was on cardiopulmonary and in particular, the HLM cycle. So in the quarter, we saw some really good trends in the U.S. Rest of world, I would say is -- it was pretty lumpy. We had forecasted during the year that the HLM business, the capital business would be down versus 2020, because remember we're coming up on the end of the S3 to S5 conversion cycle. So it -- the HLM business, we are not losing share. We believe that it is in line, the business is running in line with our forecast.

Yes. A couple more things Scott, it’s Matt. Last year, we thought the HLM business would do worse than it did. Capital didn't fall as much as we thought. It was down about 15% last year for the full-year. In terms of the getting HLM, we certainly know it's out there. We know they launched it. We check with the CP team all the time. They have just not said much about that product having an impact yet. And then in terms of the timing of Polaris, no change. We still said first half in Europe, around mid-year in the U.S., and then in some of the other markets in the back half of the year.

That's helpful guys. And maybe just one clarification, please and Alex, just to fully understand what you were saying on setting the marketing costs. So this $105 million that you're looking in the quarter, do you expect that to remain stable if you like into the second half of the year, until you work down some of these stranded costs. Just trying to understand what sort of costs come out of the business now you've exited heart valve?

That’s correct, Scott. Number, we’re still investing behind our go-to-market initiatives in Neuromodulation and ACS.

Understood. Maybe last one from me. Very much appreciate all of these investor education sessions you’ve done on the various different divisions, they are helpful. But I think what would be most helpful is a mid-term framework for margin. I'm glad to get some sense of your operating costs, your expected delivery of your platform cycle. You've talked a little bit about at the end of the day, have we now got a definitive date in the diary for fiscal 2021.

We're still looking at the fourth quarter. We were hoping to be live. In fact, I have plans had -- had been to be live, of course, the issues with border crossings and who's been vaccinated and who hasn't, it's just complicating our planning, but our current plan is mid-fourth quarter.

We have a follow-up question from Mr. Rick Wise from Stifel. Sir, your line is open.

Hi, sorry for the follow-up. I just wanted to hear your comments publicly if you would a little bit on TandemLife and LifeSPARC permit, obviously terrific year-over-year numbers. But if I'm looking and understanding the numbers correctly sort of flattish into the dollars, sequentially, just what's going on, where are we in the rollout, what's next, how do we think about the second half, et cetera, et cetera? Thanks a lot.

Yes, Rick. Look, we still expect ACS to accelerate its growth in the second half of the year, we like the trajectory and in the comps versus last year, if you recall in the quarter basically as LifeSPARC was anticipated in Q3, there was a sort of a slowdown in placement. So, I would say, we were looking at the business sequentially. We like the sequential progress we're making in terms of procedure volumes as well as the capital placement.

And Rick it's accelerated growth on an absolute basis, not a percent basis.

You're right.

Just the case.

And we've talked about previously, what are we doing, it's about account acquisition, and those plans are right on track with the team through the mid-point, which is terrific. We also committed to putting on up to 20 head this year, we're about halfway through and we're about halfway through the recruiting. We like what we're seeing in terms of talent attraction too, we've been able to, I think really up the talent that we're bringing in to the team. And I think that will ultimately raise through into fast the uptime of those people in the field. And we're really pleased with how this is progressing.

So just quick words in your opinion, but we should anticipate further sequential dollar acceleration in third, fourth or into next year, it's going the direction you want. Thank you.

Correct. That's correct, Rick.

Yes.

[Operator Instructions]. There are no questions in the phone sir. Please continue.

Okay, thank you, Crystal. And thank you everyone for your time and the whole series of questions and your interest. On behalf of the entire team, I appreciate your support for LivaNova and we look forward to speaking to you next quarter. Thanks, everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.