dentalcorp Holdings Ltd.

Good morning and welcome to Dental Corps' first quarter 2025 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 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, President and Chief Financial Officer of Dental Corp. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to the Dental Corp first quarter 2025 results conference call. I'm joined here by Graham Rosenberg, our Chief Executive Officer. Before we start, we would like to remind you that all 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 the 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 and 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 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 months ended March 31, 2025. 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 forward-looking remarks about how our business is trending. As highlighted on slide three, Dental Corp operates in a $22 billion highly fragmented market that is only 7% consolidated. Dentistry is a highly recurring essential cash pay healthcare service, and it is resilient through economic cycles and insulated from disintermediation by technologies. Dental Corp expects to continue outpacing the broader Canadian dental services market by delivering 4% plus same practice revenue growth, and taking advantage of multi-year Canadian dollar supply contracts with our key suppliers, resulting in minimal direct tariff or foreign exchange exposure. When combined with our proven repeatable M&A engine, we have delivered predictable double-digit growth across all key financial metrics since our IPO in 2021 and expect to continue to deliver that double-digit growth moving forward. Our confidence in the business is supported by our first quarter results, which exceeded expectations and reinforced our confidence in the full year outlook. On slide four, you will see that we completed our first quarter March 31, 2025 with approximately $1.6 billion of the LTM pro forma revenue and approximately $310 million of pro forma adjusted EBITDA for the same period. Last 12 months adjusted free cash flow also came in strong at $161 million. Our teams continue to deliver the highest standards of care to more than 2.3 million active patients, 92% of which are recurring, and visit our practices over 5.6 million times annually. As you can see on the next slide, we continue to convert a high percentage of our EBITDA into free cash flow in any given period and expect this conversion to increase as we continue to delever and realize network-wide operating leverage and efficiencies. Our business operates with robust and expanding margins, low capex requirements, and capped interest rate exposure on 100% of our existing debt outstanding. In our last 12 months, free cash flow conversion increased to 65% in the quarter, up from 59% in Q1 of 2024, resulting in 16% year-over-year adjusted free cash flow growth per share. On slide six, as expected, we reduced our leverage by 0.57 times from the same period last year to 3.77 times. Q1 2025 marks the sixth consecutive quarter of deleveraging, and we continue to work towards our medium-term target band of three to three and a half times. On the next slide, you'll see a comparison of valuation of free cash flow yields versus our peers. At the end of the quarter, we were trading at a level that implies a 4.7 times discount to our peer group on an EV to LTM EBITDA basis. And at the same time, we're currently trading at an 8.7% free cash flow yield compared to our peer group of 3.9%. Turning to slide eight, I'm pleased to report that our business delivered revenue of $409.4 million in the first quarter of 2025, up approximately 10% over the same period in 2024, underpinned by strong same-practice revenue growth of 4.6%, and a 91.5% recurring patient visit rate, reflecting the strong predictability and continued demand for routine care underlying our business. Adjusted EBITDA was 75.9 million, up 11.5% over the same quarter last year, with margins coming in at 18.5%, an improvement of 0.2% over Q1 of 2024. Increased operational efficiency, delivered adjusted free cash flow of $44.3 million, or 22 cents on a per share basis, representing growth of 26% and approximately 16%, respectively, over the same quarter last year. This enabled us to fund the entirety of our acquisition program but free cash flow for the eighth consecutive quarter. With respect to M&A, we acquired 12 practices in the first quarter for total consideration of $61 million. These practices are expected to generate $8.3 million in pro-form adjustability without after rent. We remain as the best positioned and best capitalized partner for independent dentists, and we will continue to be disciplined about the practices we acquire. Looking ahead, we anticipate second quarter 2025 revenues to increase by between 9% and 10% of Q2 of 2024, while delivering 3% to 5% same-practice revenue growth. We expect adjusted EBITDA margins to increase by 20 basis points over the second quarter of 2024 and anticipate completing acquisitions representing pro forma adjusted EBITDA after rent of approximately $6 million plus. 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 calls for questions.