The Oncology Institute, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Oncology Institute's second quarter 2023 earnings conference call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Mark Hippel-Fisher, General Counsel at TOI. Please go ahead, sir.

The press release announcing the Oncology Institute's results for the second quarter of 2023 are available at the investor section of the company's website, oncologyinstitute.com. A replay of this call will also be available at the company's website after the conclusion of this call. Before we get started, I would like to remind you of the company's safe harbor language. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risk and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC. This call will also discuss non-GAAP financial measures, such as adjusted EBITDA. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website. Joining me on the call today is our CEO, Dan Vernick, and our CFO, Mihir Shah. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn the call over to Dan.

Thank you, Mark. Good afternoon, everyone, and thank you for joining our second quarter call. I'm honored to have the opportunity to serve as the next CEO of the Oncology Institute. As noted in our June announcement, I took over as CEO on July 1st, and Brad Hively transitioned to the role of vice chairman, where he remains on our board and continues to provide strategic support for the organization. Since this is my first earnings call as CEO of the Oncology Institute, I want to start by expressing my gratitude to our exceptional group of physicians and care teams. Their dedication to clinical care has made a profound impact on the lives of the patients we serve each day. It is because of their commitment that we achieved outstanding results in Q2 of 2023. Starting with the top line, I am thrilled to share that in the second quarter, we achieved 32% revenue growth versus Q2 of 2022. Importantly, our organic growth rate was 24%, and our same-store sales growth was 18%. This strong revenue growth demonstrates the continued demand for our innovative care model among both our patients and our payer partners. Now moving to gross profits. On the first quarter call, we mentioned the pressures we were experiencing on our IV drug margins. I'm happy to report that through a heightened focus on our drug procurement efforts, we saw a return to expected levels in Q2, bolstering our gross margin performance by 40 basis points over Q1 of 2023. These strong results paved the way for our path to profitability as we head into the second half of 2023. As we previously mentioned, we anticipate reaching profitability in 2024. Now, I would like to highlight a few operational achievements from the second quarter. First, we are delighted to announce the acquisition of Southland Radiation Oncology, a multi-site radiation oncology practice. This strategic move strengthens our position in Southern California, expands our product offering, allows us to provide even better care to our patients, and will enhance our operating margins in this critical market. Second, we have successfully acquired a pharmacy in Southern California, a strategic move aimed at bolstering our drug dispensing capability. We are currently in the process of obtaining approval from the pharmacy board, which we anticipate will take approximately 60 days. Once approved, this pharmacy license will enable us to fulfill oral prescriptions for our Medi-Cal patients. a service we have been unable to provide since January of 2022. This development alone is expected to generate upwards of $7 million in additional annual revenue on patients that we already treat, representing a substantial growth opportunity for us. Additionally, I'm happy to announce that plans are underway to open three additional dispensaries this year, one in Fresno, California, and two in South Florida. Finally, we are proud to unveil a few important partnerships that have been finalized and will help drive our growth to margin expansion efforts moving forward. Our partnership with Massive Bio will enable us to leverage the power of artificial intelligence in optimizing clinical trial randomizations. We have also signed an agreement with HouseRx to optimize our pharmacy operations and growth strategy. These developments reflect our commitment healthcare provider. In terms of management team focus, we have four key goals that will enable us to enhance shareholder value and continue as a leader in value-based oncology. Goal number one, eliminate cash burn. We are committed to eliminate our cash burn by the end of 2024, ensuring a financially stable and sustainable future for our organization. Our restructuring efforts from the first half of 2023 are on track to deliver $1 to $3 million in in-year 2023 SG&A reductions. Full year, we expect $6 to $10 million in realized reductions. Goal number two, expanding patient lives under care. In our legacy markets of California, Nevada, and Arizona remains a priority. as we strive to enhance profitability and solidify our position as a leading healthcare provider in these regions. Goal number three, improving new markets. In our expansion markets of Florida and Texas, we are committed to growing our patient base and improving our value-based model that is both clinically excellent and financially viable. Goal number four, leading the value-based oncology market. We take pride in our position as leaders in the value-based oncology market. Guided by clinical innovation and a steadfast commitment to outstanding patient care, we aim to set new standards for excellence in this industry. By relentlessly pursuing these goals, we are confident in our ability to achieve sustainable growth and deliver even greater value to our patients, partners, and stakeholders. Now, I'll turn the call over to our CFO, Mahir Shah, to provide additional details on our second quarter financial results.