SmileDirectClub, Inc.

Greetings, and welcome to the Smile Direct Club first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jonathan Fleetwood, Director of Investor Relations. Thank you, sir. You may begin.

Thank you, operator. Good morning. Before we begin, let me remind you that this conference call includes forward-looking statements. For additional information on Smile Direct Club, please refer to the company's SEC filings, including the risk factors described therein. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today. I refer you to our Q1 2023 earnings presentation, for description of certain forward-looking statements. We undertake no obligation to update such information except as required by applicable law. In this conference call, we will also have a discussion of certain non-GAAP financial measures, including adjusted EBITDA and free cash flow. Information required by Regulation G of the Exchange Act with respect to such non-GAAP financial measures is included in the presentation slides for this call, which can be obtained on our website. We also refer you to this presentation for reconciliation of certain non-GAAP financial measures to the appropriate GAAP measures. I'm joined on the call today by Chief Executive Officer and Chairman David Katzman and Chief Financial Officer Troy Crawford. Let me now turn the call over to David.

Thanks, Jonathan, and good morning, everyone. Thank you for joining us today. I want to begin my comments by thanking the entire SPC team for continuing to deliver on both of our two key strategic initiatives through the enhancements and upcoming U.S. launch of our mobile scanning SmileMaker platform and the launch of our premium service Care Plus in four pilot markets, all while meeting our financial goals for the first quarter of 2023. Our focus on producing innovative technology-driven solutions while maintaining disciplined cost controls allowed us to deliver sequential revenue improvement over Q4 of 33 million, or a 38% quarter-over-quarter increase, and an adjusted EBITDA improvement of 21 million. The revenue increase was driven by an initial aligner shipment volume increase of 44%, which combined with our cost management not only improved the bottom line, but also delivered an improved free cash flow sequential performance of 23 million. Let me start by providing an update regarding the status of our two key transformative innovations that will drive meaningful growth. The first innovation is our SmileMaker platform. As a reminder, SmileMaker or SMP features our mobile 3D scanning technology that allows customers to begin their teeth straightening journey from their own mobile device. We successfully launched SMP in Australia at the end of November and are excited to announce our plans are on target for our US launch in the next two weeks. We have made numerous improvements to our SmileMaker platform based on the learnings from our Australia launch, both in technology updates as well as customer journey enhancements, which allowed us to develop a stronger solution and go-to-market strategy for the US. SmileMaker is our internally developed innovative AI technology that allows customers to digitally capture 2D images of their existing smile on a mobile device and submit the images to our enhanced AI engine, to develop an automated 3D draft treatment plan that allows customers to buy their aligners immediately after seeing their potential new smile. From a business perspective, this greatly shortens the timeline from initial customer engagement to making a buying decision from days or even weeks to mere minutes, while providing our customers with a great digital experience. As I mentioned, the US launch remains on track to launch in the next couple of weeks. Since the U.S. is a completely different market in terms of advertising channels, consumer preferences, as well as our back-end payment processor with SmilePay, our plans are to have a soft launch, introducing SmileMaker within select marketing platforms and gather learnings before full rollout. Our second growth initiative is our Care Plus offerings. This elevated service model allows both dentists and orthodontists, and specifically the underpenetrated general practitioners market, to utilize SDC aligners and our robust telehealth platform to meet the demands of the more traditional orthodontic customer, higher income households, and parent of teens. We desire added access to in-person dental professionals, but also want the convenience of telehealth for follow-up care. We believe that this offer will position SDC to capture a larger piece of the higher income consumer and teen market. as well as provide a premium option for our existing customers who want the option of both virtual and in-person care. From our initial research, which has been confirmed with the launch of our pilot markets, both customers and dental practices value the unique turnkey orthodontics as a service nature of our hybrid care plus solution. From a practitioner's perspective, this solution requires a minimal incremental investment for equipment and product training without any upfront fees paid to SmileDirectClub. For consumers, they value the opportunity to purchase a premium service offering at an affordable price with a higher level of direct access for in-person dental professional visits. From a go-to-market strategy, we also discovered that many of our partner network practices appreciated having Smile Direct Club team members on site to support the introduction and sale of the Care Plus offering. We have introduced Smile Direct Club sales specialists in targeted partner network practices to better educate customers on the differences between our two service offerings. CarePlus and our traditional virtual care offering. Based on these insights, we developed a dual journey offering that educates and allows customers with bookings at CarePlus partner network practices the option to choose between CarePlus and virtual care regardless of the initial appointment type book within the practice. We launched this premium service CarePlus offering at a price of $3,900 for our pilot phase to participating partner network doctors in Denver, Orlando, Sacramento, and San Diego. and plan to expand to more markets in the upcoming months. We continue to make progress with finding the right number of locations within our partner network program, the exclusive channel through which our customers will be able to receive our Care Plus offering. We ended the quarter with 1,095 active locations. It's important to highlight that we do not need to have coverage of every general practice in our network, but want to ensure that we have a foundational presence in all key markets that allows a customer a short commute for an in-person visit. A key part of the value proposition for the doctor's practice is the ability to leverage the sales and marketing firepower of SDC to drive customers to any of our partner network offices for our Care Plus offering. Early partner feedback has indicated SDC Care Plus leads are driving new foot traffic to their practice, providing an opportunity for the practice to turn these customers into patients of their own for further dental care. Additionally, some partners are benefiting from increased untapped revenue opportunities by selling the Care Plus solution to their existing partners. patient base, further monetizing chair time with their patients. Underlying the advancement of these strategic priorities is our commitment to rigorous financial discipline. Our first quarter bottom line results highlight our commitment to growing our business while keeping a focus on our cost controls. We took actions in January to reduce costs by approximately 120 million to drive positive adjusted EBITDA by Q3 and positive free cash flow by Q4. With the results of Q1, we are on target to achieve our objectives. In addition to our January cost actions, we recently announced in our March 8K filing our discussions with some of our existing convertible bondholders. For reference, we issued approximately $750 million in convertible debt in Q1 of 21, which is scheduled to mature in February of 26. Based on market conditions, we are exploring an opportunity to reduce some of this outstanding debt while also adding liquidity to our business. We are pleased to inform our investors that those negotiations have progressed with certain of the convertible debt holders with respect to a potential transaction. We anticipate being able to share more with our investors in the very near term. Any financing transaction the company would enter into will be focused on improving our capital structure by bringing in additional funding and lowering our overall debt. We continue to face a difficult and unpredictable macroeconomic environment. However, it's important to note that our dedication to maintaining financial discipline through our cost controls and cash deployment, regardless of top line results as we manage our business throughout 2023. We have the solutions, technology platform, team members, and financial discipline to achieve our operational and financial targets. And now I'll turn the call over to Troy, who will provide more detail on our Q1 results. Troy.