AtriCure Inc (ATRC) 2013 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Quarter Three 2013 AtriCure Earnings Conference Call.

My name is Laura and I will be your operator for today.

At this time, all participants are in a listen-only mode.

And we will conduct a question and answer session towards the end of the conference.

(Operator Instructions)

As a reminder, this call is being recorded for replay purposes.

Now I'd like to turn the call over to Ms. Lynn Piper.

Please proceed, ma'am.

Thank you, Laura.

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 emailed to you.

Before we begin today, let me remind you 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 measures.

A reconciliation of these non-GAAP measures is included in our press release, which is available on our website.

I'd 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 Afib, 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 Afib or stroke reduction unless the product is so indicated.

The restrictions do not prevent doctors from choosing to use the products for treatment of Afib 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 product's specified indications.

With that, I'd like to turn the call over to Mike Carrel, President and Chief Executive Officer of AtriCure.

Mike?

Great.

Thanks, Lynn.

We are pleased to report strong third quarter results as we made continued progress in building our commercial, clinical and education focus team.

This includes adding many new conversion accounts and continue to build our team in a thoughtful and strategic manner.

Based upon these accomplishments and our year-to-date results, we are again increasing our full year financial guidance for 2013 to approximately 14% top line growth, up from a previous guidance of 10% to 12% growth.

I will start today's call with a quick overview of our results for the quarter, followed by an update on the business, new product developments and our clinical trial progress.

Then I will turn the call over to our CFO, Andy Wade, who will provide an overview of our financial results.

After that, I will come back to make concluding remarks and we'll open it up for questions.

We are pleased to announce revenue of $20.1 million, which is growth of 25% versus last year.

Growth in the quarter was driven by strong US sales, which were up 28% versus 2012.

We experienced a good balance across all our various product and solution areas.

Our momentum continues and we are now solidly seeing the results of our commercial and training focus.

Keys strengths for the quarter were US open-heart sales, which were up 26%, and US clip sales, which were up over 70% in the quarter.

We also achieved robust US, MIS and international sales.

In the US, the momentum around our training and education effort continues.

We are continuing to hold training symposia and have started to host more individualized courses as well.

For example, in the third quarter, despite the fact that two physicians had already attended training events, the new Chief of Cardiology at Kaiser Permanente scheduled an individual training for all Kaiser physicians in cardiology.

As part of Kaiser's goal to lower costs, provide better treatment and improve outcomes, this was mandatory as a training event.

Dr. Cox provided grand rounds for the entire cardiology group, including cardiac surgeons, EPs and cardiologists.

And in total, roughly 30 clinicians attended.

In 2014, we will be expanding our efforts even further by establishing and rolling out fellows programs at STS and HRS.

We expect to hold training courses for 40 to 50 fellows at each of these industry conferences.

This is a big program for AtriCure and we anticipate it will have a meaningful downstream effect as we are training clinicians in the early stages of their career to be thinking about and addressing Afib in constructive ways.

In addition to education and training at the clinical level, we continue to invest in increasing overall market awareness of atrial fibrillation.

As part of this endeavor, we developed a new campaign that we launched in Q3, focused on Afib risk awareness and treatment options called ACT Against Afib.

ACT stands for A -- assess your risk, C -- consult your doctor, and T -- treat your Afib.

The campaign includes advertising, press releases to the public, a website for physicians and patients, media kits for hospitals and advocacy groups to partner on the campaign and special events throughout the year.

We are also making significant strides on expanding our training on the international front and expanding our training and education efforts beyond the US market.

And in partner with leading Afib centers and thought leaders across Europe to provide the best-in-class training on surgical ablation.

We have formed a Maze IV European educational steering committee to include luminaries in the area of surgical Afib ablation from five leading centers across Europe.

Our first international Maze IV training program was October 1, in Germany at Santa Stuttgart Cardiac Surgery Center, which is one of six initial European hospitals selected to participate in this important initiative.

This course was led by Dr. Cox, Dr. Kai Nicholas Dole, who is the chief of cardiac surgery at Stuttgart, and Tim Weimer, cardiac surgeon at Stuttgart and the international medical director for AtriCure.

We had ten cardiac surgeons from Germany, Austria, Serbia and France who collectively commented that this course gave them a new perspective on Afib therapy that would invigorate and encourage them to begin treating those patients.

Overall, this was a huge success.

And, importantly, represents just the beginning of our international training courses.

In addition, we had a great showing at the European Association for Cardiac and Thoracic Surgery EX annual meeting in Vienna.

The meeting started off with a surgical case featuring AtriClip.

We hosted a training session which featured five of our most distinguished surgeons, as well as a lunch symposium entitled "Chasing the Threat of Stroke." And both were filled to capacity.

We also had 20 participants in an evening symposium on the traditional Maze IV training led by Dr. Cox, Dr. Ralph Damiano and Dr. Manuel Castello.

Consistent with our focus, training and education were key themes of the entire conference.

Internationally, we also received our registration to begin selling products in France, where we expect to have direct selling efforts.

France represents a large market opportunity.

We expect to initiate sales in the current quarter with more meaningful contributions throughout 2014.

In Japan, we signed an extension to our multi-year agreement with Century Medical, Inc.

-- CMI -- through 2019, which includes minimum revenue commitments through the next three years.

The new agreement provides CMI with exclusive rights to market the AtriCure product lines, including future sales of the AtriClip.

On that note, we have also submitted registration for the clip in Japan.

And we expect it to take 12 to 18 months before getting approved.

Moving on to the team.

We continue to build our team at AtriCure.

And I am pleased to report that we have 39 net new additions to the AtriCure team since the beginning of 2013.

Our most recent senior hire was Carl Dahlquist, our new Vice President of Legal, Quality and Regulatory Affairs, who started in late August.

Carl joined us from J&J where he was the Chief Compliance Officer for the medical device and diagnostic business based at (inaudible).

Prior to that, he was the VP of law, IP and quality management with St.

Jude's Afib division.

And prior to that, was the senior legal counsel to Medtronic spinal and biologics.

With a 20-year career in the medical device sector, Carl has deep expertise in leading global teams in all aspects of legal, quality and regulatory functions.

He is another great addition and has already made an impact.

In addition, we recently announced that Scott Drake joined our Board of Directors.

And that Don Harrison -- Dr. Don Harrison, one of the AtriCure founders, will be retiring at our annual meeting in May 2014.

Scott is the President and CEO of Spectranetics Corporation, which is a publicly held company with roughly a $750 million market cap and reported $140 million in sales in 2012.

Scott is a seasoned executive with strong experience in leading growing businesses, while managing that growth and driving operational improvements.

We are thrilled to have Scott on the Board.

All of these activities are evidence that we are gaining momentum.

Now, turning to the business trends.

In the third quarter, US open-heart revenue was up 25.9%, compared to the same period a year ago.

Our investments in strategic priorities continue to build momentum and result in sustainable growth opportunities.

As mentioned earlier, AtriClip is gaining momentum and contributed meaningfully to our US growth rate in the quarter.

We believe this is, in part, due to the growing belief in the management of the LAA as a viable treatment option.

We are successfully expanding our training programs, which, was anticipated, are resulting in increased utilization, competitive share gains and cross-selling opportunities.

Training levels and conversion of competitive accounts is providing inroads into new hospitals.

We have sold to 102 new hospitals in 2013 through the end of Q3.

We expect to continue our focused efforts on education.

MIS sales in the US were up 12% in the third quarter.

Again, better than expected.

While we are encouraged by the year-to-date results, we continue to not anticipate any meaningful resurgence of the growth in the short term.

Rather, we are optimistic we will experience stabilization in MIS as our efforts to get our clinical trial underway begin to take hold.

Internationally, revenues were up 14.2% for the quarter, achieving sales of $4.3 million.

We saw strong growth in Benelux, U.K. and German regions.

As anticipated and discussed in the last call, we also saw a rebound in our Russia business over prior quarter and prior year.

Operationally, our gross margin was 73% for the quarter and our net loss was $2.7 million, or $0.13 per share.

Moving to an update on our clinical programs.

We continue to invest in clinical science and FDA approvals.

We have now enrolled over 200 patients in our ABLATE post-approval study.

Importantly, we have over 38 sites enrolling.

And the remaining are in the final stages of approval.

This is up from 32 sites the last quarter, and 10 at the beginning of the year.

Enrollment is now ahead of plan and gaining momentum.

On the Stage Deep AF feasibility trial, we now have all six sites enrolling patients and have enrolled 28 of the 30 patients required.

We estimate enrollment to be completed this quarter.

Additionally, we submitted our 20-patient data earlier this month and are waiting feedback so we can finalize our pivotal trial protocol.

We expect feedback early 2014.

As a result, we expect to be ready for submission of our pivotal trial protocol in the first quarter of next year.

The work of our scientific advisory board, which includes leading clinical and research institutions across the world, has been instrumental in our approach.

Moving on to our stroke trial.

As we discussed last call, we made the decision to move forward with the feasibility study to evaluate the AtriClip.

Since then, we have held our first stroke medical advisory board meeting in August with leading stroke neurologists, cardiologists, cardiac surgeons and interventionalists from around the US.

The input helped us to rework the feasibility and pivotal trial designs.

And we submitted the revised feasibility study in early September.

Last week, we got approval from the FDA to move forward.

We expect to enroll up to 30 patients in seven sites, all of which have been identified and are in the process of getting their IRB approval.

We expect our first patient to be enrolled by the end of the year or early 2014.

Primary safety evaluation of the patients will occur at 30 days.

And then patients will then be followed for six months.

We anticipate having results from the feasibility study by the end of 2014 or early 2015.

In parallel, we are currently in discussions with the FDA on our pivotal trial protocol.

As you might expect, the interest in this potential seminal study is very strong.

At this point, it is too early to provide more detail than that as we look forward to updating you on the progress in the upcoming quarters.

In summary, we have been gaining momentum throughout 2013.

We are investing in clinical and educational endeavors while we strengthen our team globally, which we believe will fuel long term growth.

I will now turn the call over to Andy Wade, our Chief Financial Officer.

Thanks, Mike.

For the third quarter 2013, revenue increased 24.8% to $20.1 million.

Revenue from product sales in the US was $15.8 million, an increase of 28.1% from the third quarter of 2012.

Revenue from open-chest ablation-related product sales in the US increased by approximately $2 million to $9.6 million.

And US sales of products used in minimally invasive procedures increased approximately $373,000 to $3.5 million.

US sales of the AtriClip system during the third quarter 2013 were $2.7 million, as compared to $1.6 million for the third quarter 2012.

International revenue grew 14.2% on a GAAP basis and 10.8% on a constant currency basis, as compared to the third quarter 2012, up to $4.3 million.

Gross margin for the third quarter 2013 was 72.9%, as compared with 71.6% for the third quarter of 2012, and 74% for the second quarter of 2013.

The increase in gross margin was driven primarily through volume leverage and a lower mix of international sales.

Note that the medical device excise tax expense for the third quarter was approximately $151,000, or 75 basis points.

So after removing the impact of the MDET, gross margin would have been roughly 73.5% in the third quarter.

Pricing remained relatively steady.

For the remainder of the quarter, we will continue to anticipate modest pressure on pricing in the US.

Operating expenses increased 22.9%, or approximately $3.2 million from $14.1 million for the third quarter of 2012 to $17.3 million for the third quarter 2013.

Research and development expenses, which include clinical activities, were $3.2 million for the third quarter 2013, or 16.1% of sales, an increase of $331,000 over the third quarter of 2012.

As we've discussed previously, we expect clinical costs to continue increasing modestly in support of our key clinical initiatives, mainly the post-approval study in deep AF, along with continued investment in our product pipeline.

SG&A increased approximately $2.9 million from the third quarter of 2012 to a total of $14.1 million, or 69.8% of sales, due primarily to increases in selling, marketing and training costs.

Our operating loss for the quarter was $2.6 million, as compared with approximately $2.5 million for the third quarter of 2012.

Our adjusted EBITDA loss was approximately $1.4 million, compared to a $951,000 adjusted EBITDA loss for the third quarter of 2012.

Our net loss per share was $0.13 for the third quarter of 2013, compared to $0.16 for the third quarter of 2012.

We ended the quarter with $34 million in cash, cash equivalents and investments.

Additionally, we had approximately $8 million of borrowing capacity under the revolving portion of our credit facility.

Lastly, we are updating our guidance for 2013.

We now anticipate top line growth of approximately 14% year-over-year on a GAAP basis, up from our previous guidance of 10% to 12% growth.

We anticipate the gross margin to be approximately 73% for the year based on current trends.

We expect R&D to be 17% to 18% of sales, which is unchanged.

And we expect SG&A to be roughly 67% to 68% of sales in 2013, a slight increase in spending levels versus 2012 and versus our previous expectations.

We anticipate increased spending related to previously described commercial activities, including clinical science, training and education and international expansion.

We now expect the adjusted EBITDA for 2013 to be a loss in the range of $4.5 million to $5.5 million.

This is primarily due to some regions in the US doing significantly better than last year, and expectations, thus driving additional sales compensation.

Finally, we continue to anticipate an increase in net cash burn for 2013 versus 2012, due to additional investments and operating expenses to fund commercial and product development activities and international expansion, along with working capital and capital expenditures needed to support our growth strategy.

At this point, I would like to turn the call back to Mike for his closing comments.

Thank you, Andy.

We are pleased with our sales performance and other accomplishments in the third quarter.

Our key goal for the remainder of the year is to continue to gain market share by driving training and education initiatives, while simultaneously continuing to invest in our clinical and commercial efforts.

We are optimistic about our future.

And as we look forward to 2014, we will continue to drive top line growth while investing in our future.

However, we want to caution everyone that we are not ready to declare this growth rate as the new normal for next year.

We look forward to keeping you posted on our progress and provide more formal guidance when we report our fourth quarter and year-end results in early 2014.

As the only company in the world with an FDA approval to treat the most serious forms of atrial fibrillation, we are committed to advancing the field.

By achieving these goals, we will continue on our path towards becoming a leading innovator in atrial fibrillation and left atrial appendage management.

With that, I will open the call for questions.

Thank you.

(Operator instructions).

Your first question comes from the line of Jason Mills from Canaccord Genuity.

Please proceed.

Thanks, Mike.

Thanks, Andy, for taking the questions.

Congrats on a great quarter.

Can you hear me OK?

Yes.

We can hear you great.

Thank you.

Super.

Followed this, coming for a long time.

This is one of the best quarters I've ever seen.

And I completely appreciate and am appreciative that you have that caveat at the end of your prepared remarks, Mike, because too often folks look at a quarter -- the stock will be up on it.

And then forget about it this time next year and expect you to put up another quarter comping against it.

So perhaps it would be worthwhile for everyone so this is on record and folks can go back in the transcript, et cetera.

If you could give us a bit more color on if there was anything in the quarter because it was such an upside relative to those (inaudible) on this side of the business that we're modeling the business.

And perhaps we could make sure that there's no one-timers, or there's nothing in there that would suggest that this quarter wasn't anything other than just the phenomenal quarter that it looked like it was.

Yes.

Well, thank you for that.

And you're correct.

There's nothing that was unusual in the quarter relative to no one-time events.

This was, in my mind, quite simply the investments that we've made in over the last year really coming to fruition.

All the efforts we've been doing around education and training have had a tremendous impact.

You saw the open numbers.

I know I've talked to investors about it for the last nine months about those open numbers were going to come back in the back half of the year.

They've started to come back because of that training.

We see that in cryo and across the board, just really strong, good growth on that front.

On top of that, I think what you're seeing in the industry is a buzz around the work being done by EPs, realizing that for persistent and long-standing persistent patients, the catheter may not be the only way to go.

And that's not something being driven by us necessarily, but you're seeing a lot of that trend happen.

And so you see that coming into our numbers.

And the Clip is just a great product.

We get great feedback on the Clip.

And we're seeing a lot of progress, both on the open side and also in combination with the MIS procedures.

So quite frankly, it's just that the investments we've made in education and training are really paying dividends on the open side.

And I think that's really what's driving it more than anything else.

Thank you, Mike.

My follow-up just based on it.

It's not surprising, really, to see these kinds of results.

When you go back to when the approval was granted -- obviously that was before you took over.

But there was certainly -- at least in our view, an expectation that training should beget market share should beget growth.

And that's certainly what you've executed.

So the question is just very simply where do we go from here?

Companies are starting now to do their planning for 2014.

Some are giving guidance for it.

You guys have decided not to yet.

Unfortunately, we have to model it.

And I'm just understanding this isn't a level of growth you feel comfortable us modeling for, say, the 2014 time period.

Maybe you could give us a few qualitative items that we can go forward with and sort of modeling 2014 with respect to what you're doing internationally, getting into France, how that might help growth rates directionally.

What you're doing in the US with the clinical trials and minimally-invasive and directionally relative to this year where MIS growth might go?

And then we may expect, maybe continue build on the open side.

Sorry for the babbling, but I think it's important for us to get it kind of right and not set the expectations too high.

I think you've hit on all the areas that we're making significant investments.

And I do see a tremendous amount of upside overall in our business for the long term.

My caution for 2014 is we had a wonderful quarter.

And we have done a lot of our planning for next year.

We've looked at all the numbers.

We just want to be cautiously optimistic as we look at it.

We want to make sure that we don't get too far ahead of ourselves, that one quarter doesn't make our year or our Company long term.

And so we just don't want to get too far ahead of ourselves.

I don't know that I can give you too much detail on it other than I just like to be cautiously optimistic and make sure that we all win at the end of the day by having good numbers that are out there that we can achieve and that we can exceed, quite frankly.

And so all the things you're saying, we believe very strongly in.

And you can make a case for a very high number.

I would just caution everybody to not do that because you get ahead of yourselves in case one of those things slip up.

Now I think we've got all the good news that's out there.

And everything you said I think are really upside potentials for us to really drive long term strong growth.

And I think when I was on the road raising money and talking to people, we really hit on talking to the fact that we felt like we would be able to consistently get to 15% growth over a period of time.

And the key word there is "consistent."

I do think 15% on a consistent basis is there.

I don't want to say that we're quite there yet, that I can guarantee that kind of growth right away every single quarter.

But, again, we've just shown a great quarter.

So hopefully, that gives you some guidance and directional feedback on it that we're kind of thinking about the low to mid-teens.

That's helpful.

Thank you.

Thank you for your question.

Your next question comes from the line of Tom Gunderson from Piper Jaffray.

Go ahead.

Hi, guys.

So let me get in a little bit granularity on the quarter, Mike.

One thing that was curious and positive was the new Chief at Kaiser Permanente.

And asking for training or retraining and having 30 guys show up and two had already been trained.

Was Kaiser a big customer before?

And had the new chief been a proponent of AtriCure at his previous job?

Can you give us a little bit more background there?

It sounds interesting.

Kaiser has been a good customer, but we're seeing some significant growth there.

And a lot of it, or part of it, because of the training.

The training was recent.

But what you're seeing is a lot of people showing a lot of activity.

And I think they're a good example of that.

They were a customer of ours.

But they weren't using it on every single case.

And so that awareness to create it beyond just the surgeons and to actually get to the other clinicians and cardiologists was absolutely critical.

The surgeon was a user.

But I wouldn't say that they were quote "a power user," as many might call them.

They were an occasional user of the products as they saw fit.

And now they're changing their ways and they're actually using it on many more cases.

Okay.

Thanks.

Sounds like a possibly favorable for the ACO model going forward.

The other question I have is on something that Andy said.

And that was towards the end.

I think it might have been in SG&A expenses comment that he made that certain regions of the US were doing better.

What regions, broadly?

And why?

What can you attribute?

And is it teachable to the other regions that might be less than that?

Yes.

I think it's -- this is Mike again.

Not to get too specific on which regions we're winning in and seeing some growth, we put some pretty aggressive growth targets on some of the team that was out there.

And they've done just an absolutely wonderful job.

Most of them are with many of our seasoned veterans that have been around for a long time.

What we see is really in the zones or regions of the country where we've got some of that senior leadership -- all of those zones are really starting to show the benefits of that training and education and getting more and more customers.

They see the value of that.

And I'd say that's the biggest piece.

We've added two new zone directors over the course of the last six months.

And they're beginning to get their legs under them.

And I think that their teams are beginning to get their legs under them over the course of the next six to 12 months as well because we've got eight of those zones.

But six of them are really high performing.

And the other two are doing great for kind of getting themselves up and running and started.

And I've got a lot of confidence that we'll have eight really performing at a high level through '14 and '15.

Got it.

Thanks.

Thank you.

Your next question comes from the line of Danielle Antalffy from Leerink Swann.

Please proceed.

Hi.

This is Robert Marcus in for Danielle.

Congrats on the new quarter.

Hi, Robert.

Just a quick question.

You know, we've heard in the past that the hope was that the halo effect from the FDA approval would kind of take hold and we'd see some pull through from some other procedures.

Are you starting to see that benefit?

You know, the numbers are really good.

So, you know, any color -- that would be great.

Yes.

I think the halo effect, in particular, really affects the clip more than it does the other portions of our business.

So the training and education that we're doing probably affects that just because it's a concomitant procedure that's being done at the same time as you're doing the open chest.

And we're seeing really nice growth rates on that side of the Clip side, just as well as we're seeing it from the new AtriClip Pro.

So in terms of its impact on the MIS side of our business, I would not say that.

I think that that's much more driven by just what's happening out in the marketplace -- the EPs getting more frustrated with the lack of successes for their procedure, and therefore pushing some of -- and really starting to get their surgeons more involved.

And, quite frankly, calling us directly and asking for us to kind of get their surgeon up to speed.

So there's really a lot of reach-out from the EPs and surgeons on that front.

And certainly starting to collaborate a lot more than they have in the past.

Great.

That's less about the halo effect.

They're really two different things.

And then in terms of OUS, with France coming on, we've seen some other countries roll in over the past few quarters.

How shall we be thinking about that going forward?

And really how much of an impact should we be looking for?

Any new countries that might be coming on in the near term?

My focus for the team is, really, we're focused on countries that consistently can drive $1 million or more a year for us.

If it can't drive that kind of revenue, it's really not worth a lot of our time.

France is definitely one of those countries that is a big enough market -- 16 million people.

I think it's about a $5 million or so market today.

So we think that there's a lot of growth there.

St.

Jude had a dominant position in share there.

Medtronic is in a big way there now.

Now that we've got our registration approval, which we just got, we'll begin to kind of get some business off of that.

So I think there's a tremendous amount of upside long term for France.

It's not going to happen overnight because, like anything else, you've got to build a relationships, you've got to build confidence, we've got to be talking to both EPs and surgeons on it.

And I do think we'll make some really nice progress and get a good foothold there.

Japan, on the other front, is a well-established market.

I'd say that we'll see modest growth rates in the short term.

But long term we'll see great growth rates with the addition of new products of Cryo and a Clip.

Hopefully, the Clip will be ready in the next year and Cryo in the 2016 timeframe.

And those should, long term, have a nice boost to our business from that standpoint.

Those are the two major, kind of new, agreements that we did in the most recent quarter.

And are the new additions.

Everything else that we've got going on internationally, I wouldn't say there are any new countries that we're basically in now that would have a dramatic impact on our P&L.

The only other major impact is Germany where we've invested and we've added four resources there this year to have a much stronger direct presence.

And we're starting to see the fruits of that labor as well.

We're seeing our market share grow.

And we're also growing significantly in Germany.

Thanks a lot.

Thank you.

Your next question comes from the line of Charley Jones from Barrington Research.

Please proceed.

So a quick few questions here and I'll jump back in queue because I do have a few.

I'm curious.

You talk about a building effect of the training that you've done.

And now that you've had more experience, do you feel like you have a better sense for how long -- I know it goes across the spectrum here.

But on average, how long it takes a surgeon to really see an increase in the number of procedures they do following being trained, whether it's three, or six, or nine months.

I'm trying to understand this building impact that you have.

I wish I could tell you that it was consistent across every surgeon.

It really depends on who's walking in the door for it.

And what I mean by that is if somebody's been doing Afib procedures before, they can walk out pretty quickly and begin to practice.

For those that are new to doing Afib surgery, it takes a little bit longer for them to kind of get there and get their feet under them and get comfortable with it.

For those, it takes a year or so.

And for the other ones, you're talking about -- they can go right away.

And they can have an impact the next month.

So it really does have a mix.

I think the biggest thing for us in 2014 is we kind of begin to foreshadow and look forward is the trend in the change from here you had a three-hour didactic training that got you really excited.

Now we need to take it to the next level and do a level two type course.

And so we've established that course.

We've been working with Dr. Cox and others to really put together a great course so that people can dive into it a little bit more deeply and get even more comfortable with it.

And so we'll continue the training efforts, even though there's not as much certification that has to be done.

But to make sure that we're in front of it, and that we're getting the next level of detail, adding additional region sets and getting much more comfortable with it.

Sharing ideas with other doctors and physicians as well.

So there's no exact date I wish I could give you on each one of these surgeons because it really is different for each one.

And so if you think about internationally, how many people have you added there?

And how long do you think it will take to reach your existing accounts?

And how many new accounts do you think you can reach over the next couple of years?

Do you have any goals there?

In terms of training?

Yes.

How many people have you added internationally?

How long will it take to train your existing accounts?

And do you have goals of training new accounts?

Or is it really to be training existing accounts?

We've added approximately five people on the international front.

And we're doing a lot of outreach.

And a lot of these training courses are a little bit different.

The training course that I was referring to at Stuttgart was an advanced training course where there was a really small group that was reached out to who were not doing these procedures previously.

But in terms of our goals, we've got market share goals in each one of those regions and areas that we're definitely tracking towards.

And trying to build out Germany as a big market for us.

France is a new market.

We believe the U.K. is going to be a growing market for us as well.

The dynamics there work in our favor as they again see -- they don't see great results relative to the EP procedure so there's some legislative changes that might occur there.

And then the Benelux continues to be, actually, a good strong performer for us.

So those are some of the regions and zones that we're looking to.

And France kind of being a kind of net new one for us.

Latin America -- we have not seen a lot of growth there.

I'd say that's really going to be a focus probably in the 2015 timeframe.

I just want the team to be very focused on making sure that we execute in the European theater first.

And then make sure that Asia second.

I have a couple more on the sales force in Clip.

But I'll jump in the queue and maybe get in later.

Thank you.

Okay.

Thank you.

I would now like to turn the call over to Mike Carrel for closing remarks.

Great.

Well, everyone, thank you very much for joining today and for participating on the call.

And have a wonderful evening.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Have a good day.