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spk03: Good morning and welcome to Dental Corp's fourth quarter and full year 2023 results conference call. Please note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key, then the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. At this time, I'd like to turn the call over to Mr. Nate Chaplea, Chief Financial Officer of Dental Corp. Please go ahead, sir.
spk05: Thank you, operator, and good morning, everyone. Welcome to the Dental Corp fourth quarter and fiscal 2023 results conference call. I'm joined here by Graham Rosenberg, our CEO. Before we start, we would like to remind you that all amounts disclosed and discussed on this call are denominated in Canadian dollars unless otherwise indicated. Please note that the statements made during this call may include forward looking statements and information and future oriented financial information regarding dental corp and its business and disclosure regarding possible events. conditions or results that are based on information currently available to management which indicate management's expectation of future growth results of operations business performance business prospects and opportunities. Such statements are made as the date hereof, and Dental Corp assumes no obligation to update or revise them to reflect events, disclosures, or circumstances except as otherwise required by applicable securities law. Such statements involve significant risks and uncertainties and are not a guarantee of future performance or results. A number of these risks and uncertainties could cause results to differ materially from results discussed today. Given these risks and uncertainties, one should not place undue reliance on these statements and information. Please refer to the forward looking statements and information and future oriented financial information section of our public filings without limitations our mdna and our earnings press release issued today for additional information. For those of you have dialed into the call the company's prepared a series of slides to complement our prepared remarks. These slides are available on the investor relations section of our website and the events and presentation section, I will now turn the call over to our chief executive officer Graham rosenberg for opening remarks Graham.
spk00: Thanks, Nate, and good morning, everyone. We're pleased to be with you today to review Dental Corp's recent developments, as well as our financial and operating results for the three and 12 months end of December 31, 2023. For today's call, I'm going to share a number of those developments with you, and I will then hand the call over to Nate, who will discuss our financial results in detail, after which I will provide some forward-looking remarks about how our business is trending. As a reminder, Dental Corp operates in a highly recurring essential healthcare industry that is cash pay, resilient through economic cycles, and insulated from disintermediation by technologies. More importantly, Dental Corp expenditures have experienced strong relative growth during periods of higher than average inflation. Accordingly, and in the context of the current macro environment, we believe that Dental Corp's favorable cost structure, high margins, low commodity risk, and negligible capital expenditures provide support for the company's continued delivery of balanced double-digit growth in the $22 billion Canadian dental industry. Our confidence in the business is supported by our fourth quarter and four-year results, which met our expectations and provide a constructive outlook for the coming year. I am very pleased with our results for this quarter. for which our base business results were modestly ahead of expectations and included strong practice level performance underpinned by strong patient volumes with acquisitions that met our expectations for the full year. On slide three, you will see that this performance has been made possible by our deep and diverse network of nearly 10,000 healthcare practitioners across the country. Our teams continue to deliver the highest standards of care during the reporting period, supporting more than 2.1 million active patients and managing over 5.1 million patient visits annually. You'll see that we completed the fourth quarter into December 31, 2023 with approximately $1.5 billion of last 12 months pro forma revenue and $274 million of pro forma adjusted EBITDA. On the next slide, You will see that we continued with our balanced approach to drive sustained double-digit growth, and we intend to continue growing our business organically through accretive mergers and acquisitions and by driving overall business efficiencies and operating leverage over the medium to long term. This is a program that we've meticulously built over the last decade, and we believe we are able to thrive in any economic climate. With respect to M&A, We acquired 12 practices in the fourth quarter for a total consideration of $65 million. These practices are expected to generate $9.3 million in pro forma adjusted EBITDA after rent. We are also encouraged to see that practice valuations continue to decline, down 6% in the fourth quarter 2023 over the same period last year, and 27% lower in the full year 2023 compared to 2022, all driven by the tightening of access to financing opportunities for many buyers across the industry. We remain the best positioned and capitalized player in the market as the partner of choice for independent dentists and will continue to be disciplined about the practices we acquire. Moving to slide five, you can see that our business continues to convert a high percentage of EBITDA into free cash flow. Without acquisitions, our business has the potential to drive our leverage down by a quarter to a half turn per annum to the mid to high ones over the medium term. On the next slide, you can see a comparison of valuation and free cash flow yields versus our peers. Since our IPO, we have seen a decline of over 10 times in our enterprise value to LTM EBITDA trading multiple compared to our Canadian consolidated peer group of 3.3 times and our healthcare peer group across North America of just under six times. At the same time, we are currently trading at a 10.4% free cash flow yield, compared to our Canadian consolidated peer group of only 3.2% yield, and our healthcare peer group of only a 4% yield. On slide seven, I'm pleased to report that our business delivered robust Growth with revenue of $362.2 million in the fourth quarter of 2023, up 9.4% over the same period in 2022, and adjusted EBITDA of $65.8 million, up 8.6% over the same quarter last year, with adjusted EBITDA margins coming in at 18.2%. We're extremely encouraged that same practice revenue growth was 6.7% for the quarter and 6.5% for the year, driven by strong patient visits. In addition, we have completed the vast majority of our planned corporate investments, which helped drive strong practice level performance in both the base business and our recent acquisition cohorts. The outcome was a strong adjusted free cash flow for the quarter of approximately $33.9 million compared to $30.1 million in the fourth quarter of 2022, despite increased financing costs driven by the historical rate increases we've experienced over the last 24 months, which are now from which we are now protected as 100% of our debt is capped through May 2026. As we look ahead to the full year 2024, we anticipate continued growth with revenues estimated to increase by 9.5% to 10.5%. Same practice revenue growth of 4% plus and adjusted EBITDA margin expansion of 20 plus basis points. We are also expecting to compete acquisitions representing pro forma adjusted EBITDA after rent of approximately 20 million dollars plus in 2024 continuing on our balanced approach to strategic growth and we are expecting adjusted free cash flow per share growth of 15 to 20 percent as the company continues to self-fund a significant part of our acquisitive growth as we look to the fourth quarter of 2024 we anticipate revenues to increase by four and a half percent to five percent of a Q1 2023 and same practice revenue growth of 2% to 2.5% as we lap a very strong and robust Q1 2023, which saw record volumes from a rebound in patient volumes due to a heavy flu season at the end of 2022. We expect adjusted EBITDA margins to remain consistent with those levels we experienced in 2023 during that first quarter. I will now pass the call over to Nate who will walk us through the details of our financial results And then I will share some closing remarks before we open the call for questions. Nate.
spk05: Thank you, Graham. The diversity in our dentist base allowed us to deliver on our quarterly results and demonstrates the strength and predictability of our business. Turning to slide eight, revenue for the three-month period ended December 31, 2023, as Graham mentioned, was $362 million compared to $331 million for the corresponding period last year. representing an increase of approximately 9.4%. The increase is attributable to our strong acquisitive and organic growth, including a positive contribution from the continued strong patient demand. As you can see, we reported fourth quarter adjusted EBITDA of approximately 65.8 million compared to 60.6 million in the same period last year and reported fourth quarter adjusted EBITDA margins of 18.2%. Same practice revenue growth was 6.7% over the same period in 2022 and 6.5% on the last 12-month basis. Looking forward, we continue to be confident about our ability to grow the business through acquisitions and organically. Turning to the next slide, you can see that our net leverage and liquidity as of December 31st, 2023. On a net debt basis, we are approximately 4.4 times levered at the end of the fourth quarter, consistent with Q3 2023. We ended the fourth quarter 2023 with liquidity of $392 million, comprised of $39 million in cash, and $353 million in undrawn debt capacity under our senior debt facilities. Fourth quarter and last 12 months adjusted free cash flow was $34 million and $127 million respectively, which supports our strong balance sheet position. On the debt side of the ledger, we increased the hedge portion of our bank debt from 75% to 100%. The debt exposure is carrying a fixed CEDAW rate plus margin for an all-in cost of 6.65%. Turning to the next slide, you can see our 2024 capital allocation program. We are committed to growing on a self-funded basis using free cash flow and expect little to no debt drawn for our 2024 acquisition strategy. Overall, we're pleased with our fourth quarter 2023 results. We increased organic growth in part through our insourcing efforts, created ongoing operating efficiencies, closed accretive acquisitions, and continued to develop our pipeline. With that, I'll turn the call over to Graham to provide some closing remarks. Graham?
spk00: Thanks, Nate. Turning to slide 11, you will see that we will remain highly confident about our opportunities going forward. Fiscal 2024 is shaping up to be an exciting year for Dental Corp and we don't anticipate slowing down thanks to our continued same practice revenue growth of over 4% plus and our disciplined approach to acquisitions. In tandem with this momentum, we are diligently keeping abreast of the developments related to the Canadian Dental Care Plan. As we prepare for its rollout in May, our team is actively updating our processes and ensuring that our practices are equipped to address patient needs. It's important to note, however, that there are still several unknowns regarding the specifics of the plan and its full impact on the dental sector. We are monitoring these developments closely. We're committed to adapting swiftly to ensure that we continue to provide the highest standard of care to our patients and support to our teams across the country. We believe that our balanced approach to growth to managing the business will continue to drive sustained double-digit growth in revenue, EBITDA, and free cash flow per share. and deleveraging throughout 2024 and beyond. I'd like to thank you all for taking the time to join our call today. This concludes the formal part of our presentation, and I would like to open the call to questions. Operator?
spk03: Thank you. At this time, I would like to remind everyone, in order to ask a question, press start and the number one on your telephone keypad. We'll go first to Brian Tanquilat at Jefferies.
spk01: Good morning. You have Taji Phillips on for Brian. Thank you for taking my question. So maybe first to start with the guidance, obviously we have the footprint for Q1, but maybe if you can talk about the expected cadence of earnings and obviously implied in the guidance, there's a step of a margin expansion. I see in the slide deck that you kind of have these three levers played out between labor procurement and technology platforms to help drive that. Maybe if you can talk about the magnitude of each and you know, where you see the most opportunity for upside.
spk05: Thanks for the question and good morning. Really what our main driver and focus here on driving operating leverage, and let's talk about really the last 24 months first, which will set the base for what we're to expect in the future. There's two things that really happened over the last two years. One is you had inflationary cost increases that affected multiple areas of the practice. And given the pricing dynamics in the dental industry, the price that is received in one year is always with reference to the inflationary growth in the prior period. So 2022, significant inflation. 2023 received the price to offset some of that inflationary growth. 2023, of course, the inflation, albeit, cooled down slightly. We were still in a higher elevated inflationary period than what we would otherwise experience historically. That price hasn't come in until 2024. So as inflation cools down and we continue to benefit from the positive dynamics of the dental industry, at the practice level, all those items that you mentioned, whether it be from the procurement technology as well as labor, all those cost items will allow for expansion of margin at the practice level. However, what we're very excited about as well is over the last 24 months, we've made significant investments in our technology stack with upgrades to our ERP system, our HRIS system, which helps us manage our labor pool of 10,000 plus individuals across the country. Those investments now will allow for us to significantly grow the business without any meaningful step ups. So the operating leverage that we're going to be able to drive from our corporate infrastructure is going to be one of the main contributors to the overall margin expansion that we'll experience at the enterprise level.
spk01: Great. Really appreciate the color, Nate. And then, Graham, maybe a question for you. I know back at our conference, we had talked about the opportunities in orthodontics and implants, right? Um, maybe just an update on where that stands today. Um, how much of the opportunity have you realized and, you know, how much more runway is there, um, to realize there?
spk00: Um, yeah, morning. Um, we have significant runway available to us still. Um, orthodontics, I'd say we have about a third of our practices operating, um, at a reasonable clip in terms of their insourcing agenda. So we've got another two thirds to go. We're currently running at around $40 to $50 million of orthodontic revenue out of our GP practices up significantly over the last couple of years since we started the program. So we see a significant upside potential in that regard, at least another $50 to $80 million plus over the long term. And at the same time, on our in-plant agenda, which is driven a lot by technology advancements which are making it easier for general dentists to provide implant technology to their patients as well as an aging population driving demand for more permanent solutions to their losing their teeth is an opportunity that we have just begun to forge our way forward on with training and development programs for our dentists. And we're at the very early innings of that, and we think that it's an opportunity over the medium to long term that's at least equal to the orthodontic opportunity. Great. Thank you. Early stages, long run, wait for growth.
spk01: Thank you.
spk03: We'll move next to Alan Lutz at Bank of America.
spk09: Good morning, and thanks for taking the questions. One for Nate. Team practice growth was 2.5% in 2022, and then you obviously saw the big step up in 23 to 6.5%, and now you're talking about 4%. As we think about the drivers of the step up in 2023, you benefited from the strong flu, and then I think there was a tailwind there from Omicron in 2022 that benefited 2023. As we think about this 4% plus number for 2024, you talk about that. as an intermediate term driver. Should we think about 4% plus as kind of the steady state growth algo for same practice revenue? And then how should we think about the composition of that 4% plus growth between volume and price? Thanks.
spk05: Hey, good morning. Yes, the 4% plus is the way that we think about it internally from our expectations on a go forward basis. really as the business and the investments we've made in our technology and our playbooks and the maturation of our ability to enhance the training and capabilities of our clinicians across our network. That gives us confidence in that figure on a long-term basis. From a composition perspective, as mentioned in the previous question, if we think about how the pricing dynamics work in the industry, it's been over the last 40-plus years. If you draw a line of what CPI is in any one year, the following year, that's really what the price is. is determined to be. So inflation was roughly calling that 3% range in 2023. So think of price being in an approximately around that 3%, that 3% level. As we look to the additional components, whether it's driving ultimately new patients, expansion of services, and expansion of frequency, that's going to make up an additional called 100 and 150 basis points of growth in any given year. So the components really would be price plus 100 to 150 basis points, which is comprised of additional services, frequency, and volumes.
spk09: Great. Really appreciate that color. And then Just a quick model question around seasonality. The flu is impacting 1Q. I get that. Are there any other seasonal dynamics between 2023 and 2024 to call out as we think about the model over the course of 2024? Thanks. No, no, no.
spk05: I think that's exactly it. It's just the flu from last year impacting kind of Q1 here when you think about it in that range. But outside of that, 2023 was representative from a seasonal perspective.
spk09: Great. Thank you very much.
spk03: We'll go next to George Dumais at Scotiabank.
spk04: Yeah, good morning, Graham and Nate. Can you talk a little bit about what trends you're seeing in the labor market when it comes to dentists and hygienists? And more generally, how should we think about cost inflation at the practice level for 24 versus 23?
spk00: Morning. Look, in terms of availability, we're starting to see things move to the positive on the supply side on the dental dentists side of things as well as the dental assisting side of things with schools catching up in terms of their graduating classes and a lot of programs that we have with those schools are starting to accrue to our benefit hygiene continues to be tight and we continue to find ways to collaborate with schools and and be creative around how we bring those folks in so i'd say on the on the cost side um You know, it's in line with where we thought things would be for 2024. We've just put through our price increases in the past couple weeks. We're not sensing a lot of negative feedback in terms of what we proposed, and so things are currently in line with our expectations. But there is still upward pressure.
spk05: um on labor costs which will continue we expect to continue to experience with balance of the year um but are able to manage accordingly yeah and just uh just to build on that slightly uh what what what grant was speaking to primarily around the hygiene side is there's many many hygienists left the profession uh in and around the covid period uh with uh the hygiene schools and the accreditation taking, call it anywhere between two to four years. So we really are on the tail end now of the replenishment of the hygiene pool across the country. We are seeing time to fill come down significantly. We are seeing sequentially now as far as hourly wage rates go, hiring at rates that were lower than the peak that was experienced over the last 24 months. Sitting here today, looking back over the last 24 months, we're in a far better position today than we were at any point in the last 24-month period and quite confident of the continued improvement of the labor availability, wage rates, and time to fills in our business. Yeah, thanks for that.
spk04: And when you look to the pipeline for 2024, how would you expect purchase multiples, pacing, and perhaps composition of deals to be any different, if at all, to 2023?
spk05: Yeah, so no real difference. Expectation of really that continued balanced approach to our growth, focusing on growth being funded through our free cash flow generation in that $20 million to $25 million range of after-rent EBITDA. As it relates to the timing, always very difficult to predict when acquisitions will take place. As you saw, roughly half of our acquisitions for 2023 took place in Q4. So we're very confident that the repeatability and predictability and looking at the pacing of how we did it in 23 is not going to be too dissimilar. From a valuation perspective, the market continues to look at us as the partner of choice from a valuation perspective in that seven to seven and a half times range. Really, what we experienced in 2023 is, again, from a modeling perspective, what and how we think about it internally.
spk04: Okay, if I can just squeeze one quick one in here. I think the longer-term algorithm is to deleverage 0.1 turns per quarter, I guess just under half a turn a year. Should we expect that pace in 2024? Thanks.
spk05: Yes, and again, that's going to be driven from an overall total dollar of debt. Our expectation is that it will remain consistent, maybe with slight drawdowns, but through acquisition of practices being primarily funded through free cash flow, that will increase our EBITDA and drive the deleveraging of the business. Great. Thanks for answering.
spk03: We'll take our next question from Stephen McLeod at BMO Capital Markets.
spk07: Thank you. Good morning, guys. Just a couple of follow-up questions here. Just in terms of, just to follow up on the last question about acquisitions, can you give a little bit of color as sort of what you're expecting in Q1 for acquisitions?
spk05: if we think about, uh, roughly the, the, the average pacing of the 20 million, uh, break that down, uh, across, uh, across the quarters, uh, generally speaking Q2 and Q4, uh, see slightly increased, uh, volumes of acquisition closing. So I'd say if you take 60 to 65% of acquisitions in Q2, Q4, and then Q1 and Q3 would be called in that 35, 35% range split evenly. Okay. That's a,
spk07: That's helpful. Thank you. Just thinking about the Canadian dental plan, and I know, Graham, you talked a little bit about it in your prepared remarks. Obviously, some unknowns out there. But just confirming, would you expect it to be a net positive to the business? And I'm wondering if you can just give a little bit of color as to how you expect that to impact volumes and earnings going forward.
spk00: Look, the headlines are that we believe it to be net neutral to modestly positive. We have a, I'd say about 20% of our patients are 65 plus. We don't have the income distributions. Sorry, I apologize, 10% are 65 plus. We don't have the income distributions, so that $90,000 headline below which people have coverage, assuming that they don't have employer-sponsored coverage. is is is unknown we we know the insurance piece but we don't know the their income piece so uh we're gonna have to navigate through that but we think that that is a net positive because it's gonna cost them less to go to the dentist um and in terms of folks that don't go to the dentist uh we think we see it as a net positive so we're in the midst of managing our volumes um and our capacity utilizations and as we learn more about the plan for which there are still several details unknown uh we'll be able to provide more color
spk07: Okay, that's great. Thanks, Graham. And then finally, just, you know, nice to see an expectation for EBITDA margin improvement in fiscal 24, leveraging some of those corporate investments. And you mentioned in your prepared remarks, you said before too, that those investment, that investment plan is largely complete. So just confirming, you know, is this something we should expect even beyond 2024? Just all those investments are in place. The infrastructure is built. You're just now levering and building on that going forward.
spk05: Absolutely. I think the way to think about it is we're going to grow the business from a top line and EBITDA perspective in double digits year in and year out. However, our corporate infrastructure will continue to grow. It's not going to be static. It'll grow, but at more of an inflationary rate. So there's going to be significant leverage on that investment that has been made.
spk07: Great. Okay. Thanks, guys. Appreciate it.
spk03: Next, we'll go to Daryl Young at Stifel.
spk08: Hey, good morning, everyone. First question is just a bit of a clarification around the free cash flow guide. Quite a strong number and appreciate the addition to your guidance. But is that a fully baked number after rent expense, after working capital and all in?
spk05: It's fully baked after rent. The one comment around working capital is we do report our adjusted free cash flow uh without the impact of working capital uh working capital was actually a net benefit of roughly nine million dollars in cash contribution in 2023 uh so if you were to include working capital our figures would actually be uh even stronger uh but it is fully baked for rent without the impact of working capital got it thanks and then just second uh around the federal dental plan um it's going to complicate the operating environment for the independent dentist
spk08: Are you seeing any indications that it could actually be a benefit for your value proposition and increased number of dentists looking to sell?
spk05: I wouldn't say it's going to be a driver for vendors to make that move. I think it will be a benefit for our network just given some of the additional administrative changes that would need to take place. There's going to be a learning curve as to how to implement this plan and how to ensure that you're providing the patients the best service and operating in the most efficient manner. Given, again, our corporate infrastructure and the teams that we have deployed across the country to support our practices, we do feel very confident in our ability to get our practices up the curve when the time is right to do so and to serve the patient base that ultimately this plan would benefit. So our positioning, our infrastructure, and our teams give us that advantage, but I don't see this having such a negative impact at all where it would drive vendors to start looking to sell their business.
spk08: Got it. That's good color. Thanks, guys, and congrats on a good finish to the year. Thanks, Daryl. Thank you.
spk03: And our next question comes from Scott Fletcher at CIBC.
spk06: Hi, good morning. A clarification question on the guidance. The full year 24 guide is calling for 9.5% to 10.5% revenue growth, which would sort of be equal to the total growth in 23 at the midpoint. But you have the acquired EBITDA total and same practice sales growth slightly down year on year. So is the dynamic there largely just due to the timing of M&A with 2023 being backloaded in terms of M&A? Or is there anything else to explain the top line growing at the same rate, but slightly lower on the M&A and same practice sales?
spk05: Yeah, there's two things impacting. Obviously, the number that you're multiplying the growth against is larger, given the growth that we experienced, 23 over 22. So that starting point figure is larger. And second to that is you nailed it. The growth from an acquisition perspective was backloaded in 23. So the contribution to reported revenue and reported EBITDA wasn't as large as obviously the total acquisitive number. But nothing really to discuss other than those two points.
spk06: Okay, thanks. That helps. And then just a question, it looks like you repaid, you actually made a repayment on the credit facility in the quarter. It doesn't look like that's in the capital allocation priorities in 24. Should we expect sort of, is that a one-off in the quarter or should we expect any repayments?
spk05: That was just a one-off. We were sitting with some excess cash and obviously looking to minimizing all financing expenses. And obviously we just paid down some debt. As we see opportunities to limit our total debt carrying costs, we'll do so. And as you saw, we just refinanced again in January, gave back some capacity, which lowered our standby fees significantly. and decreased our total finance charges on an annual basis by roughly $2 million plus and locked in our interest expense over the next while until May 26. So very, very focused on, again, driving that free cash flow and doing all things possible to optimize our capital structure and spend. Great. Thank you.
spk03: We'll go next to David Kwan at TD Securities.
spk10: Hey, guys. Wanted to also get a clarification on the guide, but for Q1, when you talk about the adjusted EBITDA margin guidance being in line with 2023, are you talking about Q1 2023 or for the full year? I know we're kind of splitting hairs here, but just want to get a clarification.
spk05: We're talking about rounding differences, David. It would be on a full year basis. Okay, perfect.
spk10: And then on, is it at least the M&A plans, you talked about kind of looking to spend within your free cash flow for this year. Are there any scenarios like if multiples fell below that target range of seven and a half times where you might get more aggressive on the M&A front and draw down on your credit facility?
spk05: I wouldn't say that we would become more aggressive and draw down our credit facility. I'd say if multiples go down and we continue to support valuations obviously coming down, that's going to drive return on invested capital for us. But we would be able to acquire more at lower valuations. Right now, our focus and our strategy is to continue to drive our acquisitive growth funded predominantly from our free cash flow, and we're going to stick to that through 2024.
spk10: Is that the plan going forward, then, to kind of spend within free cash flow? I think you talked about historically. Okay. Okay. And the last question, Graham, you talked about some unknown details as it relates to the Canadian Dental Care Plan. Can you talk about what some of those key details are that you're unaware of? Like my understanding is I think pricing is at least expected to be in line with the non-insured health benefits program. But I know what other key things that are still up in the air?
spk00: Look, in particular around administration of the plan, and our connection between the intermediary and the administrator for the plan, which is Sun Life. And so we're just working through some of those details, which are yet unknown. The government's moved quickly with this program, and they're a little bit behind in certain areas, in particular around administration. So we're working closely with the various parties to make sure that we're in sync for the launch of the program, which is still scheduled to be beginning of May.
spk10: That's great. Thank you.
spk03: We'll go next to Gary Ho at Desjardins Capital Market.
spk02: Thanks. Good morning, gentlemen. So when I look at your revenue guidance for 24 and assume you achieve your 18.4% EBITDA margin, that implies a 10 to 15% EBITDA growth. But you did provide a 15 to 20% free cash flow per share guidance. growth. Just wondering, you know, the five percentage point delta, you know, how are you able to better convert your EBITDA to free cash flow? Or is there some kind of one time in the prior year free cash flow we should normalize? Just want your thoughts on the faster free cash flow, quick share growth versus EBITDA growth.
spk00: Look, it's off a lower number. And as we grow our EBITDA, our cost of carrying debt remains the same, right, in terms of pure dollars. Because our debt number is remaining flat, we're using free cash flow to fund our acquisition activity. And so you get leverage to the – or you get a multiplier effect to your free cash flow per share.
spk02: Okay. Okay. And then my other question is when I look at your Q1 outlook comment, just remind me, do you get all your – within your practices when you put through your new fee guide, do all those come through on Jan 1st? Or are they implemented throughout January and February? Just want to gauge that two to two and a half percent same practice revenue growth. Can you wondering if you can break down the price versus volume that you've seen so far in Q1?
spk05: Yeah, that's a good question. So no, not all provinces are implemented Gen 1. I'd say roughly 30% to 35% do begin in February. What I will say is as you come through the holidays and the price is inputted in January, that ultimately doesn't really start probably until the third week of January as well. So I'd say... Again, 30% to 35% would be from February forward, and that would be called a midpoint in February implementation with the, call it 65% to 70% of the other provinces really happening at the end of January, so really being in place for roughly two-thirds of the quarter.
spk02: So as we stand today, all your practices would have put through the new fee guide then?
spk05: Yes, as we stand today here in March, yes. March would be called the first month that all the practices will have the increased price. Okay, perfect. Thanks. Those are my two.
spk03: And that does conclude today's question and answer session and today's conference call. Thank you for your participation. You may now disconnect.
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