dentalcorp Holdings Ltd.

Good morning and welcome to Dental Corp's third quarter 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 that time, simply press the star then the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by the two. At this time, I would like to turn the call over to Mr. Nate Chaplia, Chief Financial Officer of Dental Corp. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to the Dental Corp third quarter 2023 results conference call. I'm joined here by Graham Rosenberg, our CEO, and Guy Amini, our president. Before we start, we would like to remind you all that amounts discussed on this call are denominated in Canadian dollars unless otherwise indicated. Please note that 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 a date hereof, and Dental Corp assumes no obligation to update or revise them to reflect events, disclosures, or circumstances, except as 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 in our future-oriented financial information section of our public filings. Without limitations, our MD&A and our earnings press release issue today for additional information. For those of you who have dialed into the call, the company has prepared a series of slides to complement our prepared remarks. These slides are available on the Investor Relations section of our website in the Events and Presentations section. I will now turn the call over to our Chief Executive Officer, Graham Rosenberg, for opening remarks. Graham?

Thanks, Nate, and good morning, everyone. We're pleased to be here with you today to review Dental Corps' recent developments, as well as our financial and operating results for the three and nine months ended September 30th, 2023. For today's call, I'm going to share a number of those developments with you, and I'll then hand the call back over to Nate, who will discuss our financial results in more detail. after which I will provide 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, insulated from disintermediation by technologies, and more importantly, dental expenditures have experienced strong relative growth during periods of higher than average inflation. Accordingly, in the context of the current macroenvironment, We believe that DentalCorp'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 a $20 billion Canadian dental industry. Our confidence in the business is supported by our third quarter end-year-to-date results, which met our expectations and provide a constructive outlook for the remainder of the year. I'm pleased with this quarter's results. for which our base business results were in line with our expectation and included strong practice level performance underpinned by strong patient volumes with acquisitions on track to meet our expectations for the second half of 2023. On slide three, you will see that this performance has been made possible by our deep and diverse network of nearly 10,000 healthcare professionals from coast to coast. And our teams continue to deliver the highest standards of care during the reporting period, supporting more than 2.1 million active patients and managing more than 5.1 patient visits annually. You'll see that we completed our third quarter into September 30th with approximately $1.4 billion of LTM pro forma revenue and $263 million of pro forma adjusted EBITDA. You'll see on slide four that we continued with our balanced approach to growth. and we intend to continue growing our business organically through accretive M&A and driving overall business efficiencies and operating leverage over the medium to long term. This is a program we have meticulously built over the past decade, and we believe we are able to thrive in any economic climate. With respect to M&A, we acquired three practices in a quarter for a total consideration of $8 million. These practices are expected to generate $1.4 million in pro forma adjusted EBITDA after rent. For the second quarter in a row, our acquisitions were self-funded. And during the third quarter, as part of Dental Corps' program to rationalize certain non-core standalone specialty practices, we completed the sale of another standalone orthodontic and specialty practice, bringing the total to 17 so far in 2023. We are also encouraged to see that in the third quarter, Practice valuations are declining in Canada as access to financing opportunities tighten for many buyers across the industry. We remain the best positioned and capitalized, and as the partner of choice for independent dentists, and will continue to be disciplined about the practices we acquire. On slide five, you can see that our business continues to convert a high percentage of EBITDA into free cash flow, and without acquisitions, our business has the potential to drive our leveraged down buyer quarter to our half-term per annum to the mid to high ones over the medium term. Turning to slide six, I'm pleased to report that our business generated revenues of $336.9 million in the third quarter of 2023, up 7.9% over the same period in 2022, and adjusted EBITDA of $60.9 million, with adjusted EBITDA margins coming in at 18.1%. We'll also encourage that same practice revenue growth was approximately 5.2% for the quarter and 6.3% on a year-to-date basis. And same practice EBITDA growth was 10% for the quarter and 6.5% on a year-to-date basis, driven by strong patient visits. During the quarter, we also delivered 12% growth in the EBITDA of our 2022 acquisitions over their comparable performance. driven by our purchasing efficiencies and the effectiveness of our integration programs. In addition, we have completed the vast majority of our planned corporate investments, which has helped to drive strong practice-level performance in both the base business and our recent acquisition cohorts. The outcome of all this was a strong adjusted free cash flow for the quarter of approximately $26.3 million, compared to $26.5 million in the third quarter of 2022. despite increased financing costs driven by the historical interest rate increases we have experienced over the last 18 months. As we look ahead to the fourth quarter of this year, we anticipate continued growth with revenues estimated to increase by 9% to 10%, adjusted EBITDA margins consistent with our year-to-date 2023 results, and same-practice revenue growth of 5% to 6%. We are also expecting to complete acquisitions representing pro forma justity after rent of approximately $8.5 million in the fourth quarter, in line with the expectations that we sent for the second half of 2023. 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 to questions. Nate?