Good day, ladies and gentlemen, and welcome to the LivaNova PLC second quarter 2022 earnings conference call. If you would like to ask a question following today's presentation, you can do so by pressing Star followed by one on your telephone keypads. As a reminder, this conference call 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, Melissa, and welcome to our conference call and webcast discussing LivaNova's financial results for the second quarter of 2022. Joining me on today's call are Damien McDonald, our Chief Executive Officer, Alex Shvartsburg, our Chief Financial Officer, and Briana Gotlin, our newly appointed 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 financial 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, and 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. Welcome to our conference call for the second quarter of 2022. I'll start by discussing our second quarter revenue results and reviewing our strategic portfolio initiatives. After my comments, Alex will provide additional details on our results, recent financing activities, and an updated outlook. I will wrap up with closing comments before moving on to Q&A. In the quarter, we achieved 7% revenue growth, excluding heart valves. This was driven by year-over-year growth in cardiopulmonary and neuromodulation. Advanced circulatory support was unfavorably impacted by a significant decline in severe COVID cases and hospital staffing challenges. Now turning to segment results. For the cardiopulmonary segment, revenue was $126 million, an increase of 14% versus the second quarter of 2021. Oxygenator sales grew in the mid-teens, driven by continued procedure volume recovery. Heart-lung machine sales increased in the mid-teens, led by growth in the Rest of World and U.S. regions. We were particularly pleased with the way the international team is driving results through the application of the LivaNova business system to execute commercially. We now expect cardiopulmonary revenue to grow 6%-8% for the full year. This range considers the strong first half performance and continued demand for the S5 HLM, particularly in the Rest of World region. Epilepsy revenue increased 3% versus the second quarter of 2021, driven by Europe and the Rest of World regions. In the U.S., favorable pricing was partially offset by lower implant volumes. Year-over-year comparisons were especially difficult given that implant volumes in the second quarter last year were the highest since the pandemic onset. Procedures continue to be impacted by hospital staffing challenges and COVID-related postponements. U.S. epilepsy revenue was flat year-over-year, with total implants down in the mid-single digits. On a sequential basis, total implant growth increased in the high single digits driven by replacements. U.S. epilepsy results continue to be led by our go-to-market initiative, which currently encompasses 14 dedicated CEC teams. These teams accounted for 21% of U.S. revenue in the quarter as compared to 20% on a same quarter basis during the prior year. This key commercial strategy continues to deliver absolute revenue and implant growth as well as relative growth above the baseline business. Epilepsy revenue in Europe grew 7% versus prior year, primarily led by improved commercial execution on NPIs in France and Germany. The rest of world region achieved 19% growth led by Brazil, Japan, and Taiwan. For the full year, we continue to expect global epilepsy revenue to grow 5%-7%. Our forecast includes sequential growth in new patient implants through the remainder of the year as we expect healthcare staffing challenges to gradually improve. In addition, we anticipate a continued tailwind in replacement implants related to the backlog created during the pandemic. We're pleased with the progress of the go-to-market initiative and plan to add two additional dedicated teams in the second half. ACS revenue was $9 million in the quarter, representing a decrease of 29% from the second quarter of 2021. Results were primarily impacted by a reduction in severe COVID cases and continued hospital staffing challenges, leading to lower procedure volumes versus the prior year period. Our field data suggests that ACS case volumes related to COVID declined nearly 80% year-over-year, as fewer hospitalized patients progressed to the severity that required ECMO therapy. Notably, ACS non-COVID case volumes increased in the mid-teens year-over-year, driven by account acquisition. For the full year 2022, we now expect ACS revenue to be down in the mid- to high-teens. Our forecast has been updated to reflect a further decline in COVID-related cases and assumes sequential growth in non-COVID cases. We believe this business will return to double-digit growth in 2023 and beyond. A positive step towards this goal was achieved on Monday. The U.S. Centers for Medicare & Medicaid Services approved a new technology add-on payment or NTAP for our Hemolung respiratory assist system for in-care patients. The NTAP designation is awarded to novel medical technologies and services supported by clinical evidence that are expected to substantially improve the diagnosis or treatment of Medicare beneficiaries. It will go into effect October 1, 2022. As a reminder, our heart valve business was divested on June 1 of last year, and heart valve revenue for the second quarter of 2021 was $15 million. Now turning to our strategic portfolio initiatives. DTD revenue for the second quarter was $1.8 million. For 2022, we now anticipate DTD revenue of approximately $9 million. The RECOVER study continues to maintain momentum. The randomized controlled study is designed with frequent interim analyses by cohort that will assess if predicted probability of success has been reached or if the study should continue. As stated previously, we believe a series of interim analyses is likely needed as we collect patient follow-up data over time. Our interim analyses for the unipolar cohort to date have confirmed the study's continuation with the next interim look at 350 patients, which is expected this month. We still anticipate a transition to the prospective longitudinal study for the unipolar cohort in late 2022 or early 2023. In heart failure, the ANTHEM-HFrEF U.S. pivotal trial continues to advance. The Independent Statistical Analysis Committee will conduct the next interim analysis after the 500th patient is enrolled, which we anticipate in the fourth quarter. If all the pre-specified conditions are met, including safety, a trend towards primary endpoint, and success in the three functional endpoints, we would expect to submit the functional data to the FDA. Moving to OSA, the OSPREY trial continues to progress. All 20 study sites are active, the majority of which are recruiting patients. We still assume submission for FDA approval to occur in the latter half of 2023, with a decision anticipated in 2024. Before turning the call over to Alex, I wanted to provide a brief comment on the SNIA litigation. The Italian Supreme Court hearing has been scheduled for October 5 to review the appeals of liability and damages, and we anticipate a decision in the first half of 2023. With that, I'll turn the call over to Alex. Thanks, Damien. During my portion of the call, I'll share a brief recap of second quarter results and provide commentary on the full year 2022 outlook. Turning to results. Revenue in the quarter was $254 million, a 7% increase versus 2021, excluding heart valves. Foreign exchange had an unfavorable year-over-year impact of approximately $12 million, or 5%. Adjusted gross margin as a percent of net revenue was 69%, which was in line with the second quarter of 2021. Adjusted gross margin was favorably impacted by the divestiture of heart valves, offset by product and geographic mix combined with inflation. Adjusted R&D expense in the second quarter was $42 million compared to $44 million in the second quarter of 2021. R&D as a percent of net revenue was 16.4%, in line with the second quarter of 2021. Adjusted SG&A expense for the second quarter was $101 million, compared to $102 million in the second quarter of 2021. SG&A as a percent of net revenue was 39.8%, up from 38.4% in the second quarter of 2021. The increase was driven by higher freight costs and the acquisition of ALung. Adjusted operating income was $33 million, compared to $38 million in the second quarter of last year. Adjusted operating income was 13%, down from 14% for the second quarter of 2021 as a result of product and geographic revenue mix and supply chain pressures, including inflation. Adjusted effective tax rate in the quarter was 5%, compared to 14% in the second quarter of 2021. The lower tax rate is attributable to changes in discrete items and geographic income mix. For the full year, we now expect a tax rate range of 7%-8%. Adjusted diluted earnings per share was $0.53 compared to $0.50 in the second quarter of 2021. Our cash balance at June 30th was $407 million, including $298 million of restricted cash held as collateral for the SNIA litigation guarantee, up from $208 million at year-end 2021. Total debt at June 30th was $466 million, up from $240 million at year-end 2021. The increase primarily relates to the bridge facility entered into in February. The bridge facility was repaid and replaced by the $350 million term loan facility that we executed in July. Adjusted free cash flow for the quarter was negative $14 million as compared to the second quarter of 2021. Free cash flow was unfavorably impacted by lower cash flow from operating activities, reflecting inflation, foreign exchange, and inventory builds to mitigate supply chain risk. Also, second quarter is when LivaNova pays short-term incentive compensation. The 2022 payout reflects higher performance in 2021 relative to 2020. Capital investments were $11 million in the first half compared to $15 million in the first half of 2021. Now turning to our 2022 outlook. Based on our revenue performance in the first half of the year and including continued supply chain challenges, the inflationary environment and anticipated foreign currency headwinds, we're updating our full-year outlook. We now expect constant currency revenue growth between 4%-6%, excluding Cardiovascular. An adjusted EPS range of $2.25-$2.45, and an adjusted free cash flow range of $60 million-$80 million. Our outlook now assumes a 4%-5% revenue and approximately $0.35 EPS headwind from exchange rates. With that, I'll turn the call back over to Damien. Thanks, Alex. Operationally, the second quarter performance illustrates the underlying strength of our diverse portfolio in light of challenging macroeconomic factors. Our updated full-year outlook reflects a commitment to drive the top-line growth and delivering differentiated products and therapies to patients while we try to navigate a dynamic external environment. Our emphasis on the strategic triangle underpinned by the LivaNova business system positions us to drive long-term shareholder value. With that, Melissa, we're open to questions. Thank you. If you would like to ask a question, you can press the star then the number one key on your touchtone telephone. If your question has already been answered or you wish to remove yourself from the queue, please press the star followed by two. As we enter the Q&A session, please limit yourself to one question and one follow-up, and then return to the queue if you have additional follow-ups. We'll be taking our first question today from Michael Polark of Wolfe Research. Michael, over to you. Hey, good morning. Thank you for taking the questions. Maybe starting, I'm curious on ACS, you know, looking at the updated guidance, the revenue there is implied to pick back up sequentially. Can you walk us through the puts and takes of how you get there? What gives you confidence that after a couple of quarters of sequential erosion due to, you know, case mix evolving away from COVID patients that business is gonna be back on a growth trajectory in the second half? Sure, Mike, it's Matt. Hope all well with you. For ACS, you know, what's changed from Q1 to Q2, you know, is the COVID procedures dropped even more in Q2, and that's why when we look at the full year, we now assume, as Damien said, an 80% drop in procedures. Last year that was a pretty big chunk of the mix. If you look at the second half, you know, we do think there will be some improvement in staffing. For ACS, you know, it's a very complex procedure to set up. There's a lot of monitoring, so you have to have staff around if you're gonna put someone on ECMO because they could be on it for multiple days. That is one part of our thesis. The other part is we did expand the sales force last year, and that does take time, six to nine months generally to see some growth in, you know, their performance. Those are the two primary drivers overall. As Damien also highlighted, you know, the cardiac side of the business, not the respiratory side, you know, has continued to grow. You know, that's also gonna help in the back half. On depression, you guys have been kind enough to provide very, specific insights on timing of enrollment there in the unipolar arm. You know, Damien, you mentioned in your prepared remark, next interim analysis expected this month. I'm curious, have you reached 350 patients yet, or is that expected, in the next week or two? You know, just kind of how close are you? For Alex, just to confirm in the updated EPS guidance. Is the new term loan that replaced the bridge, is the interest cost from that still excluded from the adjusted EPS outlook? That's right, Mike. As I've said before, we're treating this term loan as sort of an extraordinary item. It's related to the SNIA litigation, which is in fact an extraordinary item. Until the liability is clarified, we are gonna continue to treat it as such. Once we know about the outcome of the hearing, it will either become a part of our permanent capital structure or perhaps be repaid or redeployed. Thank you so much. Thanks, Mike. Cheers. Thank you. Thank you, Michael. We'll take our next question today from Rick Wise of Stifel. Rick, over to you. Thank you very much. Good morning, Damien. I guess, for my question, I'd start with RECOVER as well. I mean, encouraging that this next look will be, let's say, this month or later this month. It's always good to hear actually from you about next steps. One, how will you communicate? Two, you know, your current expectations for the timing of CMS response, timing of shift to registry, the data presentation. Any updated thoughts that you'd wanna share along that line? Thank you. Thanks, Rick. Hi. Welcome, and thanks for making time for us. We're pleased with how the team's progressing here. The enrollment's continuing well. The non-Medicare Medicare patient mix has been, you know, really good. We had a bit of a burst of non-Medicare patients in the quarter, which helped us get closer to the 350. We're still progressing to this transition to registry late 2022, early 2023. As you know, each arm is 500 patients. The probability assessment, you know, starts being able to kick in somewhere in that sort of 325-375 range. The fact though is, you know, it's still powered to run to 500 patients. We're hopeful that we get a signal earlier than that, but we're progressing with the assumption that, you know, if we have to, we'll run to the full 500. The team have really done a great job in terms of their work for the whole flow of patients to move quickly to the registry, once we do get the signal, and I think we've got a good workflow there that we've communicated with the clinics. The other thing they've also started to do is work on the shell of the paper for the submission. That's a very key step, because not only do we have to get the data, but we have to have it published for submission to CMS. The team, I think, are doing really tremendous work in terms of their parallel preparation, both for the move to registry with patients, then the move to submit the paper as quickly as possible. The selection of a journal is also imminent. I'm really pleased with how we're progressing there. Our focus will of course turn to the bipolar. That's recruiting slower, but again, because all of our energy has been really on the unipolar arm. As I've said before, I view the bipolar as sort of an indication expansion, if you will, for the whole application of this therapy. It's progressing well on unipolar. As I said, bipolar will be next. Yeah. Rick, on the timing, you know, as we said, shift to registry late this year, early next year. We have to follow up every patient for a year. Add a year to when we would actually get the data. Add in about two to three months for the analysis. To Damien's point, we have to submit it to a major journal for publication. Assume up to six months for that. It's in CMS's hands for the final decision, which could be anywhere from six months to a year. None of that's changed. Okay. That's great. That's a great rundown. Thank you. Turning to your assumptions for 2022 and for the rest of the year. Gosh, here we are in the third week of the second quarter earnings season, and it's no shock that currency, geographic challenges, inflation, supply chain, et cetera, are a factor. My question is, when I think about or maybe you could give us a little more color, as you give us this new revenue guidance range. I appreciate a lot of moving pieces there. As you think about it, are you comfortable, you know, having us being in the middle of the range? Or maybe talk us through what pushes you to the lower end or the upper end, and you're thinking? I'm sorry, I'm just rattling on. I can't help myself. I'd like to say that Matt made me promise to ask about 2023 guidance, but I wouldn't wanna say that. The next part. Next question. Maybe you could give us some early thinking as we're gonna have to reframe our models. What would you hope based on what you know now as you think about contemplate the setup for 2023? I know there's a lot there. I apologize. Rick, I'll start out with, you know, as far as the revenue guide, you know, we're comfortable in sort of the midpoint of our range. Feel like we've seen sort of the strong performance from the cardiopulmonary business in the first half, which gives us confidence that we can achieve this guide. With epilepsy, we still believe that we could achieve the 5%-7% growth range. Midpoint is a good place to be. In ACS, that's what we talked about already. If you sort of look below the line, we still expect our gross margin to improve by about 100 basis points relative to 2021. We now assume a higher mix of cardiopulmonary sales, which carry a lower margin profile relative to the rest of the fleet. We continue to anticipate input costs, raw materials and labor, to continue to be at sort of high watermark. We're partially offsetting that with manufacturing efficiencies and select pricing actions. But it'll take time to kind of read through the results. As far as SG&A is concerned, we expect it to be higher just due to continued inflation, and this is all primarily driven by freight costs. Freight costs have been skyrocketing and we can share some stats with you when we have our one-on-one call. That's the primary driver there. With regard to the foreign exchange impact, as I've stated, it's a 4%-5% headwind from a top line perspective, $0.35 impact on operating income. We feel pretty good about this guide. We think it's sensible. Mm-hmm. I would say, Rick, we like, to your point, we're not given 2023 guidance yet, but you can do the math on, you know, foreign exchange, current rates. It'll obviously carry into next year. Then like a lot of other companies have talked about, you know, the inflationary pressure, it's hard to know exactly when that lightens up, but there is obviously some risk that goes into 2023 as well. Thank you very much. Thanks, Rick. Thank you. Our next question today comes from Mike Matson of Needham. Mike, please go ahead. Yeah, thanks. Thanks for taking my questions. I guess first with the $0.30 guidance reduction kind of at the midpoint, can you maybe break that into components between currency inflation and the product geographic mix issue? Thanks for your question, Mike. It's equal part sort of, inflationary impact and currency. Like I said, both currency and inflation are significantly impacting the guide. We're able to offset a significant portion of that, partially with efficiencies and pricing actions, as well as our lower tax rate. Okay. Got it. I didn't hear anything about the new heart-lung machine, the Essenz product. Can you give us an update on launch timing there? Is it being affected at all by the supply chain issues? How does that factor into the guidance you've given for cardiopulmonary, I guess? No impact on the supply chain issues that we're seeing. We are essentially, I would say, roughly a quarter delayed. We still expect a limited commercial release at the end of this year with the full commercial release early in Q1. Okay. Thanks. Just a quick one on RECOVER. You still plan to put out an 8-K within a few days of knowing something about the, you know, from the interim analysis beyond like just, hey, continue to enroll, right? Yes, Mike, that's the case. Within four days we would put out the 8-K. We believe it's a material event and a lot of people are interested, so we would put out something within the four days. Okay. Got it. Thank you. Cheers. Thank you, Mike. Our next question today comes from Adam Maeder of Piper Sandler. Adam, your line is now open. Hi. Good morning. Thank you for taking the questions. Maybe just to start, would love some additional color on how you're thinking about The outlook here for the back half of the year. Obviously recognize you have updated full year guidance, but I'm asking about phasing for kinda Q3 and Q4. Just any incremental color that you can provide on puts and takes would be much appreciated. I had a follow-up. Yeah, Adam. Thanks. Q3s typically are sort of the lower revenue quarter just simply because of the holiday season. That's kind of the normal seasonality. With regard to our sort of phasing of gross margins, we're gonna expect to see some improvement more sort of on the back end of the second half. As far as SG&A where OpEx is concerned, we're kind of on a normal run rate of about, you know, $140 million combined R&D and SG&A for each of the quarters. Okay. That's helpful, Alex. Appreciate that. Then for the follow-up, wanted to try and deconstruct the epilepsy guidance. I think that's 5%-7%, year-over-year. Can you just talk about what's embedded for NPIs versus replacements? Kinda what those latest trends look like, and then how you think about those progressing, especially in the U.S. market. Thanks again for taking the questions. Sure, Adam. It's Matt. So in the first half, you know, based on the comments, you can see that replacements continue to outpace new patients. We think that the gap will close in the back half. We expect new patients to improve sequentially in the third and fourth quarter. We still expect replacements to be strong. The comps are tough, but you know, we still think we have about 550 patients in backlog. So I would say that still assume replacements maybe grow a bit faster, but we should see a nice improvement in the new patients, and that's in the guidance. That's helpful. Thank you. Thanks, Adam. Thank you. Our next question today comes from Amit Hazan of Goldman Sachs. Amit, over to you. Thanks. It's Phil, on for Amit. I'm hoping to probably just pull on a few more of these threads that have already been touched on. Maybe first for Alex, trying to understand and decompose that currency impact dropping down. I think you started the year about 1% headwind to top line. Can you remind us or give us a sort of an incremental how that drop through to start the year has changed? Basically, what a point of top line FX headwind means in terms of operating income, in EPS terms. Sure question. We expected a currency headwind about 1%. We thought we could cover that with all of our efficiency gains throughout the P&L. We're sort of at that level, we're kinda naturally hedged. What we're seeing is our international revenue is sort of trending on the higher end, so that obviously has a higher level of exposure from a currency perspective, both from a top line and a bottom line. You know, when we guided in May at 2%-3% impact, we thought we were still kind of in that, I don't know, $0.20-$0.25 impact, which we thought we could cover with the favorable tax rate. It's now sort of heading down another 100 to 150 basis points in unfavorable direction. You know, we think that, you know, we're sort of at a point where we can't cover any more within our operational P&L and hence the change in the guide. Okay. It sounds like it's kind of non-linear, once we start to get to these outer bands. If we saw another point of FX headwind come through, just, you know, roughly speaking, how incremental would that be probably to the P&L? Another $0.15? Yeah, approximately. Okay, that's really helpful. Circling back to the last question on epilepsy, I was hoping to dig just a little bit more into kind of the monthly dynamics and understand kind of how COVID has been impacting new patients or even replacement scheduling. Just understand kind of June and maybe July dynamics, if you can give us a little bit of flavor. Thanks. Sure, Phil. You remember at your conferences last time, we gave an update on the trends and we said, you know, April looked good, May looked good. June did slow a little bit, and I think, you know, like you've heard with a lot of other companies, there was a little bit more of an increase in staffing issues from Omicron. You know, we saw that as well. July you know has improved a bit in terms of implants, so far so good this quarter, overall. Okay, that's helpful. Thanks. I'll jump back in queue. Thank you, Phil. Our next question today comes from Zachary Weiner of Jefferies. Zach, please go ahead. Hey, everyone. Thanks for taking the questions, and congrats to Briana on the new role. I just wanna touch on the heart-lung machine replacement cycle. How should we think about growth from that and, you know, potential margin impact being driven by that? Thanks. Sure, Zach, I'll take this one. Yeah, so the heart-lung machine, we expect to launch it broadly commercially in Europe, and then followed by the U.S., in Q1 of 2023. That is gonna be a premium price product, so that will have a positive impact on gross margins. What was the other part of the question? I'm trying to remember. That was it. The launch phasing and the margin impact. Yeah. Yeah, Yeah, so. No, that's helpful. Thanks. That's all I have. Thanks, Zach. Thank you, Zach. We'll take our next question today from Anthony Petrone of Mizuho. Anthony, over to you. Thanks. I have one question for Alex on guidance, and then a follow-up on RECOVER. On the new EPS guide, just wondering, you have a plant in Germany and another med tech competitor out there spoke about an unscheduled shutdown in Germany due to energy shortages. I'm just wondering, you know, looking into the second half, you know, if gas imports were to be, you know, further compressed out of Russia into Germany, you know, is that baked into the second half guidance and are there any offsets that the company is working on? Then secondly, on RECOVER, just an update on treatment duration. Just wondering what is the target for how many of the patients later this month, of the 300+ expected to be enrolled will, you know, be. will have treatment, close to 12 months? Thanks. Just on Germany. Yeah, we haven't seen the headwinds like that other one that was reported in terms of disrupting production. You know, our biggest issues in Germany, as they are in Italy, are just around the supply chain in terms of delivery, spot purchases. We've done a great job, I think, with that whole team in terms of giving suppliers better long-range forecasts. Our review cycle of inventory has increased. Our visibility to inventory in the German plant in particular has really increased. We've taken a program that we introduced first in Houston called Plan for Every Part. We've replicated that in Munich. Now Munich is a very interesting thing because the bill of materials for an HLM is like 1,700 SKUs. Using that Plan for Every Part methodology there has been much more complex to introduce. It's certainly giving us much more visibility. They've done Kanban, Kaizens, and they've done a Kaizen on reducing freight costs. Overall, I think this group has really taken a lot of steps to work forward into what they've been facing. I don't expect at what we're seeing so far, any of the issues that have been talked about with respect to like diesel or fuel. With respect to RECOVER, I wanna understand what you're really looking for here. What's the pace of the recruiting? The follow-up. No. How many patients, by the end of the month will have been treated, actively treated with neurostimulation close to 12 months at that time of the analysis? In other words, I'm asking on duration of treatment effect. Right. We haven't given yet any. You know, the percent that have hit 12 months, but we can tell you is that studies we've done that have gone out to a year, you really start to see separation at 6. We're now getting into the sweet spot of when we should start to see the control and therapy arm separate. Thanks again. Thanks, Anthony, and congrats on the new gig. Thank you. Thank you, Anthony. That was our last question today. I'll now hand back to Damien McDonald for any closing remarks. Well, thank you, everyone, and we appreciate you joining us for our call today. On behalf of the entire team, we appreciate your support and we look forward to updating you on our Q3 results. Thank you. Thank you. This concludes the call today. You may now disconnect your lines.