Greenbrook Tms Inc

Welcome to the Greenbrook TMS Inc. Fiscal Year 2023 Q1 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 will be a question and answer session. Analysts and investors are reminded that any additional questions can be directed to company at investorrelations at greenbrooktms.com. This call contains forward-looking statements which reflect the current expectations or beliefs of the company based on current 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 20-F for the fiscal year ended December 31, 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, EDGAR, and on the company's website. Any forward-looking statement speak 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 Executive Officer of Greenbrook TMS, and Ernst Laubscher, Chief Financial Officer. Go ahead, please, Mr. Leonard.

Thank you, Joanna, and thank you to everyone for joining our conference call and webcast today. During Q1 2023, we predominantly focused on the planning and execution of our comprehensive restructuring plan. We are very pleased with our progress to date, and our Q1 2023 results illustrate green shoots of significant progress made. The company returned to positive regional operating income with significant cost reductions in respect of marketing and recurring corporate, general, and administrative expenses without proportionate corresponding impact on revenue. Revenue remained relatively steady quarter over quarter after adjusting for your typical seasonal factors of quarter one. We also made significant progress in respect of our EBITDA results, reducing adjusted EBITDA loss by 45% compared to Q4 2022, showing progress on our path to near-term profitability. We expect the restructuring plan will continue to allow us to rationalize our cost structure while further reducing business complexity, streamline our operating model, and drive operational efficiencies to improve our cash flows and ultimately achieve profitability in the future. Quarterly revenue increased by 52% to $19.9 million, up $6.8 million as compared to the first quarter of 2022, predominantly due to the completion of the success TMS acquisition in the third quarter of 2022 and a strong performance in our mature regions as compared to Q1 2022. Patient starts and treatment volumes both increased by 57% as compared to the comparative previous quarter. As I mentioned, The company has made significant progress on its restructuring plan during quarter one, 2023, by eliminating approximately 19 million of annualized costs from the business to date. The company will continue to focus on reducing expenses through the implementation of the restructuring plan. These savings are expected to fully reflected in late 2023 as the cost associated with executing these savings begins to dissipate. We believe the company is on track to achieve its previously announced target of $22 million to $25 million in cost reductions once the restructuring plan is fully implemented. From a macro perspective, we've also seen some positive momentum in the payer criteria on the TMS side, including the use of non-physician practitioners to prescribe TMS. Although not immediately impacting our operational regions, it's a positive sign for the industry as a whole. On the Profoto side, we are excited about the continued rollout of this program, to diversify our offering to patients. As of the date of this press release, the company has expanded its bravado offering to 45 treatment centers. Mental health remains a key focus in the United States, and the unmet demand for treatment remains at an all-time high. We continue to offer innovative solutions for the unmet need, and our leadership position and nationwide footprint continues to serve as a valuable platform to bring the needed help to patients struggling with depression. At the end of Q1 2023, the company had a footprint of 162 treatment centers. As of today, we have reduced our operating footprint to 133 treatment centers as a result of this restructuring plan. And now, for a more detailed review of the company's financial and operating performance, I will turn it over to our CFO, Ernst Loebscher. Thank you, Bo.

As Bo mentioned, quarterly revenue increased by 52% to $19.9 million. up 6.8 million as compared to the first quarter of 2022, predominantly due to the completion of the acquisition of success CMS in the third quarter of 2022 and strong performance in our mature regions as compared to Q1 2022. Patient start and treatment volumes both increased by 57% to 2,854 and 92,533 respectively as compared to Q1 2022. Average revenue per treatment decreased by 3% to 215 in Q1 2023 compared to Q1 2022. This decrease was primarily attributable to the change in payer mix and the geographical distribution of revenue. Same region sales growth was 26.8% in Q1 2023 as compared to 8.3% in Q1 2022. This was predominantly due to the strong performance in our mature regions paired with the weaker market conditions in the comparative prior period where we were impacted by the Omicron COVID variant. Q3 2021 saw a return to entity-wide regional operating income. Regional operating income was $0.7 million during Q1 2023 as compared to a $1 million loss in Q1 2022. The increase was primarily due to the execution of the restructuring plan. We believe we will be able to continue to achieve near-term operational synergies through the restructuring plan, resulting in a significant reduction in direct center and regional costs and further enhancing regional operating incomes. Corporate G&A, excluding one-time costs and the revaluation of the conversion instruments, increased by 20% compared to Q1 2022 due to the success in TMS acquisition, but decreased by 15% compared to Q4 2022 as a result of the restructuring plan execution. We believe we can reduce the corporate G&A costs significantly as part of the restructuring plan. The loss for the period and comprehensive loss increased by 16% to 9.3 million during Q1 2023. The increase is predominantly due to the increase in interest expense arising from the additional equity and debt financing completed in Q1 2023. The increase in the depreciation as a result of the completion of the success TMS acquisition in Q3 2022 and one-time costs associated with the execution of the restructuring plan. financing initiatives related expenses, and the success CMS related integration expenses. This was partially offset by the revaluation of the conversion instrument. From a balance sheet perspective, accounts receivable increased by 0.9 million to 14.8 million in Q1 2023 as compared to the end of Q4 2022. The increase in Q1 2023 as compared to Q4 2020 was primarily as a result of slower than anticipated collection activity, even when considering the typical seasonal factor in our collection cycle. We believe that we will benefit from the reversion to normalize levels in the second quarter, the second and third quarter of fiscal 2023. Cash at the end of fiscal 2022 was 8.05 million, including restricted cash. Moving to our core operating metrics. As at the end of Q1 2023, the total treatment centers increased by 9% to 162 from 148 a year ago. As mentioned previously, subsequent to the execution of the restructuring plan, we will be operating 133 treatment centers. Compared to Q1 2022, the number of consultations performed increased by 128 a percent to 7,975, while the number of new patient starts increased by 57% to 2,854, and the number of treatments performed increased by 57% to 92,533. These increases were predominantly due to the completion of the success TMS acquisition and strong performance in our mature regions as compared to Q1 2022, as I previously mentioned. We believe that devoting more resources and focus to our best performing centers through the restructuring plan and robust growth of the office provider program will be a catalyst for future revenue growth, despite the reduction in centers. Back to you, Bill.