A very good morning to you all, ladies and gentlemen. Thank you all for joining and welcome to Quarter 3 2012 MiMedx Group, Inc. Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Mr. Thornton Kuntz, Vice President of Human Resources and Administration.

Good morning, everyone. This presentation contains forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 and Section 21-E of the Securities Exchange Act of 1934. These statements are based upon the current beliefs and expectations of our management and are subject to risks and uncertainties. Actual results may differ materially from those set forth in, contemplated by, or underlying the forward-looking statements based on factors described in this conference call and in our reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2011, and our most recent 10-Q. We do not undertake to update or revise any forward-looking statements except as maybe required by the company's disclosure obligations in filings it makes with the Securities and Exchange Commission under federal securities laws. With that, I will turn over the call to Pete Petit, Chairman and CEO.

Thank you, Thornton, and good morning. I have with me today, Bill Taylor, our President and Chief Operating Officer; and Mike Senken, our Chief Financial Officer; and some other members of our executive group. I hope you've already seen our press release and therefore have some of the information on our third quarter results. We'll go into more detail on those results during the conference call. However, I would like to begin by briefly discussing management's vision as it relates to amniotic membrane tissue technology. Briefly, and we firmly believe that our amniotic membrane tissue technology will prove to be a platform from numerous innovations for healthcare procedures. The amniotic membrane itself has a significant number of growth factors that we continue to study scientifically. There were number of clinical studies underway, and as you are probably aware, we issued a press release last quarter on our first randomized control trial for EpiFix tissue graft being used to treat diabetic foot ulcers. Those results were very compelling. We have other studies underway to validate the clinical and cost effectiveness of our EpiFix grafts, which are used externally and our AmnioFix grafts, which are used internally for surgical and sports medicine procedures. Our scientific and clinical studies are giving us a great deal of confidence that the uses of amniotic membrane tissue will be numerous and will be very clinic effective as well as cost effective in many procedures. In addition, we feel strongly that there will be many uses for the remainder of a placenta. As we go through the expensive developing and collection network nationally, and improving our storage processes, we believe that we will find numerous other uses for the remainder of a placenta as byproducts of our amniotic membrane tissue processing, which of course we call a…

Thank you, Pete. Good morning, everyone. I'd like to start by once again highlighting that MiMedx tissues serve a regenerative medicine function to many different specialties, including orthopedics, sports medicine, ophthalmic, dental, chronic wound, acute wound and surgical anti-scarring markets, besides indicating that our Surgical, Ortho and Sports Medicine tissues were the largest segment of our business in the first half of last year. Until today, we have not broken down our revenue by specialty areas. Because we have taken the next steps in our growth, we feel it is now appropriate to start the process of giving you more detail. I was thinking, we'll go into more analysis later, but I wanted to highlight the way that we look at our specialty areas, so that you can understand our breakdowns. The first segment is our Surgical and Sports Medicine area which includes our AmnioFix, AmnioFix Wrap and AmnioFix Injectable, all of which also includes our private label versions of the same. Our second segment is our Wound Care specialty area, which includes EpiFix as well as our plastic surgery grafts. The third area is a bit of a catch-all for our other products and tissues, which would include our Dental and Ophthalmic tissues as well as HydroFix. Let me follow-up on Pete's comments on our direct sales force and their impact on our increased sales this past quarter. Over the course of the third quarter, we've hired 21 sales professionals, including sales management. Of this group, 19 were hired with the specific focus on government accounts with a specific emphasis on Wound Care. Add them to the national sales director, whom we hired in June, and the total in government sales team at the end of the third quarter was 20 sales professionals. This government sales team also sells…

Bill, thank you. I hope that clarified a number of issues. And let's toss it to, Mike Senken, our Chief Financial Officer.

Thanks, Pete. Company recorded revenues for the quarter of approximately $8 million, an increase of 270% or $5.8 million as compared to $2.2 million in revenue for the same period in 2011, a 63% increase over the second quarter and a $1.6 million improvement versus our plan. Revenue for the 9 months ended September 30, 2012, was approximately $16.5 million as compared to $5.1 million for the same period in 2011, which represents a 223% increase over prior year. The increase in sales revenue for the quarter was driven by sales of our EpiFix platform to government accounts, predominantly for wound care procedures. Beginning with this quarter, the company will provide a revenue breakdown between key regenerative medicine specialties, as Pete and Bill mentioned earlier. This was the first quarter, where Wound Care sales exceeded Surgical and Sports Medicine. In the quarter, 61% of our sales revenue was tied to Wound Care, 34% to Surgical and Sports Medicine, and 5% to Other. On a year-to-date basis, Surgical and Sports Medicine represents 51%, Wound Care represents 38%, and Other represents 8% of total revenue. Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization with the additional adjustment being share-based compensation, the earn out provision related to the acquisition of surgical biologics as well as an intangible asset impairment charge related to the HydroFix platform, which are all non-cash related expenses. Included in today's press release is a supplemental disclosure that reconciles our reported net income to adjusted EBITDA. The company reported positive adjusted EBITDA of approximately $726,000 for the quarter ended September 30, 2012, which is a $1.7 million improvement as compared to an adjusted EBITDA loss of $934,000 in the third quarter 2011. This is the third consecutive quarter of positive adjusted EBITDA reported by the company. Year-to-date, positive…

Thank you, Mike. And now, we'll turn over to the question-and-answer period. So who has some Q&A for us?

[Operator Instructions] Your first question is from Bruce Jackson.

Just a couple of questions about the VA sales force, were they added at the start of the quarter or do they sort of come on line over the course of the third quarter?

We had a portion of them at the first part of it, and then came on throughout the whole first quarter. Probably our FTE equivalent would have been between 12 and 14 for the quarter, if you average it out.

And then, what are your plans going forward? Do you feel like you're fully staffed with that particular sales force or might you add a few more people going forward?

We will probably be adding in the neighborhood of anywhere from probably 2 to 5, 2 to 6 more in that area, is our current plan. We think in the neighborhood of 25, 26 people are going to be probably the right number for that sales force.

Bruce, this is Pete. Let me add one thing. We'll be focusing now primarily on the commercial side of the Wound Care sales force, but we don't plan to add aggressively there until we have the various regionals, MACs, fall [ph], in terms of reimbursements. So as the reimbursement picture changes on a regional basis, we'll add commercial sales people in those regions.

Then on the gross margin side, the gross margins were quite good, is that a level that we can expect to see going forward?

Well, from an operational standpoint, we certainly think so. We'll let Mike make a comment.

Yes, I'd say, Bruce, conservatively the gross margins in the quarter were 82%, and you can use that as a baseline going forward.

Our next question is from the line of Bill Plovanic.

On the gross margin, what is the max gross margin you think you can get to over time?

How about slightly higher than where we are now.

And then, as we look at the VA, obviously as you started selling into that channel, how much of that is sell-through versus how much is initial stock and what are typically the terms of payment from the VA?

Let me make a comment and then Bill will finish. Bill, we're very, very focused on understanding exactly where our tissue goes, exactly how to track that and exactly where we stand with any stock related to dealers and that sort of thing. In the VA, it's much simpler, frankly. We initiated an IT half [ph] here and Debbie Dean's presence has made that happen very quickly, where we can track accurately and rapidly, where we stand in each facility. Let me let Bill add to that.

With that, there was some level of stocking as you would expect, because our sales executives are present for a lot of these procedures, but they not necessarily there for all of it. So we do need to have a certain element of stock on the shelves there. So I think right now we're targeting right around the cumulative total of about 3 weeks or so of inventory, and we're tracking to that level. We expect to be able to keep it in that, 2 to 3, 2 to 4 weeks, on a go-forward basis, which is a pretty reasonable level throughout the whole system. So it's a pretty small level throughout that VA system.

And then -- I don't know if this is Bill or Mike -- the average DSOs on the VA, is it something that runs longer or is this normal, kind of 60 days this type stuff?

Yes, this is Mike. It's normal 60-day type DSOs. We wouldn't expect it --DSOs ticked up in the quarter a bit, primarily because we were ramping up the sales, and when you do the averages over the course of the year, it doesn't take into consideration, kind of, your month-over-month revenue. So we would expect DSOs to stabilize here.

And then, I think one of the comments was you needed get data for the C-code, to really get the private pay to adopt the technology, kind of, what studies and when do you think you'll have that data available?

Well, actually, just to clarify, we're getting very good payment on the private pay side right now. So for that portion of the market that is private pay, we're getting in the vast majority of -- the payers are paying on that. But if you look to the Medicare side, the CMS side, and then our Q-code that we expect to get, we should find out definitely in the next probably, 1 to 2 weeks. But we expected the Q-code in January. We've already got -- with our clinical study that we have right now, we've submitted that. Although, I think there are 10 now, regional MACs that cover the 17 or 16 different regional areas. We've submitted those, and we expect to get through several of the MACs probably by the end of this year. And then we'll have supplemental data from our incremental DFU studies that we'll be submitting to them in the second quarter for any of the MACs that we don't get through.

And then, just kind of, Pete, just to rib you a little, if I look at your original goals that you set out before we started the year, I think Q3 was [indiscernible] and I think your total revenue number was $23 million. You've met or exceeded every quarter thus far. Shall we still look at Q4 as an $8 million goal or $8.1 million as originally set or did you just raise the bar with this quarter?

Well, we explained in our press release that we expect to exceed the $25 million upper-end of the goal we set for 2012. So Bill, on arithmetic, we will exceed the $8 million number in fourth quarter.

And then just last, the housekeeping question and I will jump off here. Your capital structure has been a little convoluted. You're cleaning that up. Where do you stand today with shares outstanding, and how much kind of more options, warrants or converts or stuff do you have out there to give us kind of a full feeling for the full number of shares?

On a fully diluted basis, adding everything in, including convertible debt, options and warrants, we're at a little over 111 million shares.

We have no further questions at this time. [Operator Instructions]

I'm going to ask Bill Taylor to enlighten us one more time and clarify some things on the difference between the C-code, which we've had since January 1 of this year and the Q-code, which we'll add to that, January 1, 2013, Bill?

Okay. The C-code since we've had since January is designed for Medicare reimbursement in the ASC or Ambulatory Surgery Centers and Hospital Outpatient. It's called the HCPCS pass-through code. It's essentially a temporary code that lasts somewhere between 2 and 3 years, and it's designed as kind of a transitional code. The Q-code is actually a subset of the J-codes which are drug codes. The way that EpiFix is reimbursed is in the section of CMS that is for drugs and non-implantable biologics. And the code that they've specified is considered a skin substitute code although we're much more of an allograft, but the way they've actually set it up for chronic wounds is considered as skin substitute category and that's a Q-code. And Q-code will not only be for the Ambulatory Surgery Center and Hospital Outpatient, but will also be for the physician's office. What it does not cover are surgery cases in-patient in a hospital which typically fall under the DRG for those cases. So again, Q-code will get in all the Medicare cases from the physician's office, the Ambulatory Surgery Center, Hospital Outpatient and we expect to get that in January of 2013. You'll recall back in May, we received preliminary positive indication that we would receive a Q-code. The final determination is supposed to be out the first week or so of November.

And I think, we have another question come from Bruce Conway.

Yes, we do.

I have 2 questions really for the future. One, I don't know if you had time to consider, but when you think you might be able to take this product overseas? And second, just a little more color on which exchange we might go to at some point down the road?

First of all relative to overseas, we already have some distributions in Europe with EpiFix, AmnioFix. I'm going to let Bill give you a little more detail on that. And management will begin to focus now on moving up and improving where we trade. Although, frankly, we're quite happy with the results we're seeing in terms of volume, and of course price. We are not having any complaints, any more. So the platform is certainly more than adequate. On the other hand, we want to help our shareholders by moving to one of the other more mature exchanges. We'll focus on that shortly, but I think one of the issues that people might be concerned about is the Sarbanes Oxley issues, where we've been compliant with those at the end of this fiscal year. Our auditors will certify our Sarbanes Oxley procedures. I think they'll be -- certainly will be where we're supposed to be there. So the issues associated where we're trading. We've just been busy doing a few other things, as evidenced by the quarter, the results and we'll get around to dealing with those matters shortly. Now I will let Bill give you a little more detail on the European situation.

We are already in Europe. It's not been a major focus for us, but we have been essentially utilizing distribution that we had set up originally for our HydroFix product line. And we're almost ready to sell into the U.K. We've been going through the registration process there. We are already in Italy. We've already sold into Ireland. And also moving over into the Middle East, a little bit, we've sold into Saudi Arabia, and in Asia we've sold into South Korea. And I think we also have the ability to sell into Spain. I don't think I've missed anybody. I think that pretty much covers it. We were actually evaluating how we can expand our presence now in Europe. We want to be a little careful there to not spend a lot of time and attention there until we make sure that we've properly address the U.S. market, because we have so much opportunity here. So we don't want to get too defocused, but we have some opportunity. We expect to see our sales there grow over the coming quarters.

[Operator Instructions] We have no questions at this time. I'd now like to turn the call over to Mr. Pete Petit for closing remarks.

Thank you. For our shareholders, I appreciate your comments. We've got a lot of comments come in this morning. Your management team is working very hard, very diligently and very effectively. And we hope to continue to report, frankly, expect to continue report good results for you. There are number of issues we're working with on a day-to-day basis in terms of -- particularly in terms of reimbursement. Those are issues that are very, very important to a company that it's in our stage of growth. And I think we have the professionals here that know how to work through those issues, and help bring the reimbursement side of things and a proper focus and get through the concerns and constraints that the reimbursement organizations may have for a company that's in our stage of growth. And with the new set of grafts that are apparently very clinically effective and cost effective, but they want absolute proof of that. So we'll continue to go down that path. So thanks so much. Look for press releases from us, because we expect to be releasing some other news here as the quarter progresses on a number of issues, and we'll go from there. And thanks so much for your support and confidence.

Thank you very much, to all the presenters. Thank you very much, ladies and gentlemen, for your participation in today's conference. This concludes your presentation. You may now disconnect. Have a good day. Thank you.