Greenbrook Tms Inc

Welcome to the Greenbrook TMS Inc. Q3 2022 results conference call and webcast. All lines are currently on mute to prevent any background noise. I would like to remind you that this conference call is being recorded today and is also being webcast on the company's website at www.greenbrooktms.com under the investor section events. After the speaker's remarks, there'll be a question and answer session. Analysts and investors are reminded that any additional questions can be directed to the company at InvestorRelations at GreenbrookTMS.com. This call contains forward-looking statements which reflect the current expectations or beliefs of of the company based on currently available information. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations are discussed in the risk factors section of the company's annual report on Form 20F for the fiscal year ended December 31, 2021, and in the risk and uncertainty section of the company's management's discussion and analysis for the period ended September 30, 2022, and in the company's other materials filed with the Canadian Securities, regulatory authorities, and the U.S. Securities and Exchange Commission from time to time, which are available on CDAR and EDGAR. And on the company's website, any forward-looking statement speaks only as of the date on which it is made, and the company disclaims any intent or obligation to update any forward-looking statement unless required by law. I would now like to turn the meeting over to Mr. Bill Leonard, President and Chief Financial Officer of Greenbrook TMS, and Ernst Loescher, Chief Financial Officer. Please go ahead, Mr. Leonard.

Thank you, Colin, and thank you to everyone for joining our conference call and webcast today. Q3 2022 was a very busy and exciting quarter for the company. The success TMS acquisition added significant operating scale and top-line growth to the business and allowed us to achieve a record quarterly consolidated revenue, as well as our highest quarterly treatment volumes and consultations performed to date. Furthermore, we recapitalized the business with a supportive debt partner in Mandarin Asset Management. Revenue for Q3 2022 increased by 58% to a record high of $20.8 million. as compared to Q3 2021. Quarterly treatment volumes in Q3 2022 increased by 74% to a record high of 95,046 as compared to Q3 2021. Most exciting, consultations performed in Q3 2022 increased by 156% to a record high of 8,797 as compared to Q3 2021. while new patient starts increased by 87% to 2,848 as compared to Q3 2021, outpacing the revenue growth. We believe that these increases in consultations performed and new patient starts provide strong momentum into the fourth quarter of fiscal 2022. We are also very excited about the ongoing rollout of our Spravato program at select TMS centers which continue through Q3 2022. The program supports our long-term business plan of utilizing our existing network of TMS centers to deliver new and innovative treatments to patients suffering from MDD and other mental health disorders. Providing Spravato at our TMS centers enables us to leverage excess capacity in our existing centers, thereby enhancing our profit margin. As at September 30th, the company has expanded its offering of Spravato to 35 TMS centers across the U.S., up from 25 TMS centers as of June 30th. While I'm reviewing our highlights, I'll repeat that we completed the previously announced acquisition of success TMS on July 14th, 2022, and concurrently entered into a credit agreement for 75 million secured credit facility with Mandarin Assets Management and its affiliated entities. drawing down $55 million term loan at closing on July 14, 2022. From a development perspective, as of September 30, 2022, our footprint consisted of 184 centers in 20 states, up from 131 centers at September 30, 2021. The success TMS acquisition added 47 TMS centers to our network, all complementary to our existing footprint. During the quarter, management focused on integration of the combined business and the execution of near-term operational synergies with a focus on accelerating the company's timeline to profitability, which included reducing our TMS center footprint by seven. We are very pleased with the progress of the integration and synergies realized to date, but our work is not finished. We see significant synergies that we can take advantage of over the next 12 months. And for now, a more detailed review of the company's financial and operating performance. I'll turn it over to our CFO, Ernst Lübscher.

Thank you, Bill. Before I move into a detailed financial results review, it's important to contextualize the Q3 2022 results. We consolidated two independent businesses with fully-fledged cost structures, and although we've made solid progress on executing on synergies, we have not had the time to fully realize the material synergies available to us. The current cost structure therefore still includes the significant duplication of costs, which we believe when removed can make a material impact to the company's profitability profile. As Bill mentioned, revenue for Q3 2022 increased by 58% to a record high of 20.8 million as compared to Q3 2021 and 26% to 48 million for year-to-date 2022 as compared to year-to-date 2021. This was driven predominantly by the completion of the success TMS acquisition in Q3 2022 and the achieved TMS e-central acquisitions in Q4 2021. Average revenue per treatment decreased by 10% to 218 in Q3 2022 as compared to Q3 2021 and decreased by 4% to 222 in year-to-date 2022 as compared to year-to-date 2021. This decrease was primarily attributable to the geographical distribution of revenue. We're happy to report that same region sales growth came in at 17.1% in Q3 2022 as compared to 9.4% in Q3 2021 as a result of the growth in our mature regions. Same region sales growth was 6.9% in year-to-date 2022 as compared to 14.9% in year-to-date 2021. as a result of the growth in our mature regions. The decrease in the year-to-date figure was predominantly due to tight labor market coupled with prevailing inflationary environment. Q3 2020 resulted in entity-wide regional operating loss of 0.8 million as compared to an entity-wide regional operating income of 0.2 million during Q3 2021. entity-wide regional operating loss was $2 million during year-to-date 2022 as compared to $0.3 million during year-to-date 2021. As mentioned earlier, the decrease predominantly relates to the duplicate cost associated with a success TMS acquisition and a challenging economic environment earlier in the period. Corporate G&A for Q3 2022 increased by 87% to 9.6 million as compared to Q3 2021, an increase by 29% to 20.4 million during year-to-date 2022 as compared to year-to-date 2021. It's very important to note that these increases predominantly reflect the one-time professional and legal fees related to the success TMS acquisition and the Madron credit facility. and the revaluation that the equity-based conversion instruments in connection with the Mandarin credit facility. Excluding one-time costs and equity-based conversion instruments, the increase in growth of corporate G&A was 31% and 17% during Q3 2022 and year-to-date respectively. This indicates a relatively lower growth rate as compared to the growth in revenue, illustrating that the business is scaling into its centralized business infrastructure. Once again, bear in mind, we still believe that we can execute on material synergies, which we believe will rationalize the cost structure even further. Our operating leverage and planned revenue ramp from the success team acquisition supports a near-term timeline to profitability. The loss for the period and comprehensive loss increased 386% to 16.8 million during Q3 2022 as compared to Q3 2021, an increase by 78% during year-to-date 2022 as compared to year-to-date 2021. This increase similarly was predominantly due to incurring duplicate costs of the combined business after the acquisition of success TMS arising from operational synergies not yet executed as previously mentioned. Also, increased interest expense, depreciation and amortization on acquired net assets, loss on extinguishing of loans, and the revaluation of equity-based conversion instruments played a major role in the increased loss. From a balance sheet perspective, accounts receivable balance in Q3 2022 increased by 3.4 million as compared to Q4 2021, primarily due to the acquisition. As Bill mentioned, the company completed the previously announced acquisition of Success Team S on July 14, 2022, The company also concurrently entered into a credit agreement for its previously announced 75 million secured credit facility with Madron Asset Management and its affiliate entities, drawing down 55 million term loan at closing on July 14th, 2022. Importantly, the proceeds from the credit facility were used as follows. 15.4 million to repay the Oxford credit facility, 15.1 million to repay previously loans held by Success TMS, 3.1 million in financing and closing costs, 2.9 million to normalize vendor payment aging resulting from cash management practices prior to strengthening our balance sheet, and 2.3 million in cash investment in new TMS center locations added on the Success TMS side, leaving leaving a remaining balance on the proceeds in respect to the Madden CREBS facility of 16.2 million. The cash balance of 11.2 million as at September 30, 2022. Moving to our core operating metrics, as of the end of Q3 2022, the total CMS centers increased by 40% to 184 from 131 a year ago. Compared to Q3 2021, the number of consultations performed increased by a significant 156% to a record 8,797, while the number of new patients starts to increase by 87% to 2,848, which we believe will provide strong momentum into the fourth quarter of fiscal 2022. The number of treatments performed increased by 74% to a record 95,046, as compared to Q3 2021. These increases were predominantly due to the additional TMS centers acquired by the company in connection with the success TMS acquisition, as well as operational changes to our intake process. We anticipate that our record highs in quarterly consultations and patient treatment starts coupled with a success TMS acquisition and the continued rollout of our provider program to be a catalyst for accelerated future growth. Back to you, Bo.