dentalcorp Holdings Ltd.

Good morning and welcome to Dental Corp's fourth quarter and full year 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 this time, simply press the star key, then the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. At this time, I'd like to turn the call over to Mr. Nate Chaplea, Chief Financial Officer of Dental Corp. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to the Dental Corp fourth quarter and fiscal 2023 results conference call. I'm joined here by Graham Rosenberg, our CEO. Before we start, we would like to remind you that all amounts disclosed and discussed on this call are denominated in Canadian dollars unless otherwise indicated. Please note that the 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 the date hereof, and Dental Corp assumes no obligation to update or revise them to reflect events, disclosures, or circumstances except as otherwise 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 and future oriented financial information section of our public filings without limitations our mdna and our earnings press release issued today for additional information. For those of you have dialed into the call the company's prepared a series of slides to complement our prepared remarks. These slides are available on the investor relations section of our website and the events and presentation 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 with you today to review Dental Corp's recent developments, as well as our financial and operating results for the three and 12 months end of December 31, 2023. For today's call, I'm going to share a number of those developments with you, and I will then hand the call over to Nate, who will discuss our financial results in detail, after which I will provide some 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, and insulated from disintermediation by technologies. More importantly, Dental Corp expenditures have experienced strong relative growth during periods of higher than average inflation. Accordingly, and in the context of the current macro environment, we believe that Dental Corp'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 the $22 billion Canadian dental industry. Our confidence in the business is supported by our fourth quarter and four-year results, which met our expectations and provide a constructive outlook for the coming year. I am very pleased with our results for this quarter. for which our base business results were modestly ahead of expectations and included strong practice level performance underpinned by strong patient volumes with acquisitions that met our expectations for the full year. On slide three, you will see that this performance has been made possible by our deep and diverse network of nearly 10,000 healthcare practitioners across the country. Our teams continue to deliver the highest standards of care during the reporting period, supporting more than 2.1 million active patients and managing over 5.1 million patient visits annually. You'll see that we completed the fourth quarter into December 31, 2023 with approximately $1.5 billion of last 12 months pro forma revenue and $274 million of pro forma adjusted EBITDA. On the next slide, You will see that we continued with our balanced approach to drive sustained double-digit growth, and we intend to continue growing our business organically through accretive mergers and acquisitions and by driving overall business efficiencies and operating leverage over the medium to long term. This is a program that we've meticulously built over the last decade, and we believe we are able to thrive in any economic climate. With respect to M&A, We acquired 12 practices in the fourth quarter for a total consideration of $65 million. These practices are expected to generate $9.3 million in pro forma adjusted EBITDA after rent. We are also encouraged to see that practice valuations continue to decline, down 6% in the fourth quarter 2023 over the same period last year, and 27% lower in the full year 2023 compared to 2022, all driven by the tightening of access to financing opportunities for many buyers across the industry. We remain the best positioned and capitalized player in the market as the partner of choice for independent dentists and will continue to be disciplined about the practices we acquire. Moving to slide five, you can see that our business continues to convert a high percentage of EBITDA into free cash flow. Without acquisitions, our business has the potential to drive our leverage down by a quarter to a half turn per annum to the mid to high ones over the medium term. On the next slide, you can see a comparison of valuation and free cash flow yields versus our peers. Since our IPO, we have seen a decline of over 10 times in our enterprise value to LTM EBITDA trading multiple compared to our Canadian consolidated peer group of 3.3 times and our healthcare peer group across North America of just under six times. At the same time, we are currently trading at a 10.4% free cash flow yield, compared to our Canadian consolidated peer group of only 3.2% yield, and our healthcare peer group of only a 4% yield. On slide seven, I'm pleased to report that our business delivered robust Growth with revenue of $362.2 million in the fourth quarter of 2023, up 9.4% over the same period in 2022, and adjusted EBITDA of $65.8 million, up 8.6% over the same quarter last year, with adjusted EBITDA margins coming in at 18.2%. We're extremely encouraged that same practice revenue growth was 6.7% for the quarter and 6.5% for the year, driven by strong patient visits. In addition, we have completed the vast majority of our planned corporate investments, which helped drive strong practice level performance in both the base business and our recent acquisition cohorts. The outcome was a strong adjusted free cash flow for the quarter of approximately $33.9 million compared to $30.1 million in the fourth quarter of 2022, despite increased financing costs driven by the historical rate increases we've experienced over the last 24 months, which are now from which we are now protected as 100% of our debt is capped through May 2026. As we look ahead to the full year 2024, we anticipate continued growth with revenues estimated to increase by 9.5% to 10.5%. Same practice revenue growth of 4% plus and adjusted EBITDA margin expansion of 20 plus basis points. We are also expecting to compete acquisitions representing pro forma adjusted EBITDA after rent of approximately 20 million dollars plus in 2024 continuing on our balanced approach to strategic growth and we are expecting adjusted free cash flow per share growth of 15 to 20 percent as the company continues to self-fund a significant part of our acquisitive growth as we look to the fourth quarter of 2024 we anticipate revenues to increase by four and a half percent to five percent of a Q1 2023 and same practice revenue growth of 2% to 2.5% as we lap a very strong and robust Q1 2023, which saw record volumes from a rebound in patient volumes due to a heavy flu season at the end of 2022. We expect adjusted EBITDA margins to remain consistent with those levels we experienced in 2023 during that first quarter. 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 for questions. Nate.