GBNH - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the TMS Second Quarter 2022 Financial Results. [Operator Instructions] I would now like to remind everyone that this call is being recorded on Wednesday, August 3, and I’ll turn the conference over to Glen Akselrod. Please go ahead.

Glen Akselrod

Thank you, Joanna, and thank you, everybody, for joining the Greenbrook TMS Q2 2022 Results Conference Call.

As noted, I’d 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 Investors section Events. investors to that to the e-mail investorrelations@greenbrooktms.com. and can additional the Analysts at directed be company’s Instructions] are any reminded questions company’s [Operator website or or statements, current the information. the This based available which contains the company forward-looking current call expectations beliefs of on reflect

regulatory the company’s the website. are Officer. which statements securities EDGAR made, Officer intent Executive law. of the available of on any Canadian or unless which annual may company is to the forward-looking only are President statements the results as Greenbrook to the ahead, over year and on differ XX, XXXX, Risk disclaims speak the to Factors authorities and and and on are from cause Uncertainties those time, to it in and section of the the XX, Mr. with U.S. Exchange management that Any in materially Factors materially from a December Go actual and the to forward-looking and that turn results actual risks XX-F date the call and in number from please, fiscal Chief filed to Forward-looking for other the company’s required any SEDAR, of TMS; time discussion Commission of the of of ended Risks statements. I’d materials Securities forward-looking Loubser, analysis statements obligation or and update by report the current could in section period for to like Leonard. June discussed uncertainties subject Leonard, XXXX, differ Financial Chief now Mr. cause events the company’s the Form company discussed expectations and Erns ended company’s and Bill

Bill Leonard

to joining you webcast and today. for conference Thank everyone thank our call and you, Glen,

excited market as treatment to the and and compared volumes XXXX. Despite a consolidated our and TMS to of achieved labor XXXX, in well as revenue quarterly be of tight in $XX.X date. factors, proved challenging, macroeconomic record to revenue QX business which million QX During performed are recapitalization consultations the we to as very the record X% largest uncertain highest quarterly Quarterly the two increased industry. by report to quarter, QX the providers a XXXX consolidation successful the of we

performed increased volumes XXXX treatment as XXXX While QX QX to X% during XX,XXX compared treatments by XX,XXX with in XXXX. in QX

believe fiscal reform, to also We to condensation X,XXX which record into as provide third quarter the will of XX% we momentum X,XXX in achieved a by in compared high quarterly strong which XXXX, increased QX XXXX.

Providing and from We our utilizing SPRAVATO excess continue our TMS about long-term continued our ongoing competing to enhancing centers and which to and patients to existing deliver of business margins. our network treatments plan the MDD suffering program to new mental innovative through excited in profit QX. us be existing thereby enable of TMS highlights This centers rollout SPRAVATO affirms health our disorders. program, other of to leverage centers,

centers TMS has As offering previously XX, we the of On XXXX, of Success expanded of completed the XX acquisition to the across June its company TMS. XX, U.S. SPRAVATO July announced

existing profitability scale one the company’s United XX TMS The operational which accelerate to line synergies. to As through TMS line are the our acquisition Success acquisition largest expected near-term in our and TMS network, is footprint. to is significant the providers added potential and the complementary States, to add of expected growth centers operating time existing therapy to top

year basis. a has generate acquisition more a that consolidated in million than expect combined potential company on to $XX revenues the We to full

credit states, our flow LP entities, as million agreement development management previously business substantial to XXX repay the of structure entered deal Asset in Using Finance. its outstanding million the positive cash and has line company a with announced million the into a agreement We the to that also aligns company’s centers the believe shareholder as balance incentives self-sufficiency. to build to credit also secured loan concurrently of The a near-term believe for combined operations, to this in value centers combined XXXX, consisted XXXX. XXX XX, our recapitalized of facility $XX existing June effectively an $XX We funded towards its Oxford therefore, all-equity of the $XX.X time move affiliated Management term From credit June perspective, footprint accelerating proceeds, from owing closing. XX with -- under and EBITDA at effort facility entity. up

added mentioned turn As our of our existing acquisition TMS brings XXX on network, existing combined the more financial for to review footprint platform to our will it centers TMS to And and previously, XX and I Loubser. detailed the Success centers. CFO, to now, operating Erns TMS our performance, complementary company’s over

Erns Loubser

Thank Bill. you,

to XXXX negative by XXXX was TMS of entity-wide the the attributable business. the compared labor million loss XXXX, due $X.X mix QX loss as to for in X% regional a completed $X.X on million to year-to-date million to to was to record XXXX tight June Revenue operating active focus This year-to-date operating XXXX as of XXXX, geographical Average compared XXXX Entity-wide XXX $XXX predominantly XXXX This distribution million X% sales associated million XX, during XXXX. as attributable a were Corporate increased as revenue to during as due results QX treatment loss $X.X compared $XX.X centers high to change $X.X X.X% during year-to-date XXXX. QX X% operating and $XX.X Same-region TMS and the a to decreased and XXXX XXXX, QX as to demonstrating on with the primarily compared per to growth operating increased and to challenging year-to-date to primarily and during of centers of a QX operating TMS was TMS decrease to Central -- of compared of by in year-to-date As XXXX million increased by and X% to with as QX Success the coupled X% active environment, in that recapitalization QX XXXX. decreased year-to-date East flattening QX QX year-to-date the year-to-date matures. payer for costs decreased entity-wide as XXXX $XX.X compared was acquisition, $XXX the and as G&A created by million compared QX $X.X company Will XXXX. time XXXX, acquisition was decrease market XX, of revenue. predominantly June XXX Achieve an to for to as by million X% management’s to G&A compared a XXXX. The as in mentioned, by revenue to income which XXXX. was of XXXX. compared

as QX QX see perspective, momentum receivable the QX continue off planned contribution We increased a period as and to time compared X% and and a from XXXX decreased acquisition TMS compared the ramp for X% strong XXXX during in to continue XXXX as and increased HX to line from to by near-term balance and during by XXXX, comprehensive sheet to to our have Success we spend profitability. operating the revenue platform XXXX the year-to-date loss QX leverage in compared balance XXXX the collections, accounts XXXX. supports From cash XXXX. loss The building QX year-to-date

XX, of $X Our million cash as balance was June XXXX.

we the after Madryn the As million end. $XX a reminder, shortly recapitalized Credit the business through Facility quarter

with are company we we which time accelerated mentioned, expect the profitability potential TMS occurred Bill to Success QX XXXX, As about will very near-term through provide synergies. which excited transaction, subsequent operational to line

metrics. operating Moving to core our

we end in our of quarter catalyst increased to starts, QX fiscal that strong a increased ago. by the consultations Back number performed number momentum Bill. of treatment third record the XX,XXX accelerated The to number acquisition QX, treatments XX% to new TMS growth. X,XXX. with XX% TMS increased is The believe X,XXX an from the going to centers of the be to a number XXXX, starts of of a SPRAVATO and to continued year program a QX consistent number as performed record quarterly compared you, XXX patient of We X% for patient into XXXX. in by XXXX. indicator of the As X% the will increased coupled by total XXXX, by of XXX highs record and rollout Compared anticipate consultations our future of which Success to

Bill Leonard

revenue in Thanks, Challenges operating in Erns. aside, we to record and see results core growth our QX XXXX. continue across metrics

needed start the Board TMS Klein, Success about are to team, and management of journey as primary capitalization health acquisition move further CEO, and operations very flow the is ability a Ben facility credit and specifically to We and member on grow give with Officer the EBITDA-positive our the goal. our Chief to platform of Operating The accelerate Success joining Madryn which us self-sufficiency, success expand expected and closing Greenbrook the is company’s our towards cash mental Directors. to of excited

adds program suffering to disorders. and patients the of disorder plan to from health treatments building innovative platform long-term its utilizing depressive our as center network repertoire of company’s SPRAVATO on business other serve Our a major mental

have driver expect network. and not We now yet which TMS Success their core to going expand a be introduced forward, the growth platform, a the SPRAVATO we across into to this has opportunity

believe a the highest environment. business our that levels. challenging team to is demand care needed We Mental our we deliver extremely of patient proud one. dedicated are health that unprecedented importantly, at continue in is of treatment operating a Most level

Credit the an sound. mental the of than become support serve remain the United market, Madryn positioning our to better acquisition us we of health the ever Facility, the business unmet more prominent fundamentals for across States. and TMS need the with we believe player through business in recapitalization will health And behavioral even Our Success

now that, And keeping the we’ll and patients a are many closing positive questions. from your so million We the of forward performed, significant mental on operator, XX,XXX time the in We look lives you take company. on today. on have X Thank updated treatments now health treated for suffering disorders. progress with to of over you impact patients

Operator

from question First Instructions] Securities. at Clarus [Operator comes Noel Atkinson

Noel Atkinson

facility, the the few credit new Well have ones quick Success done on closing I here. and a great. that’s acquisition

Okay.

In what try to that those Hadn’t procedures experiencing, you many you you’ve be been completed? and to could would been experiencing of to provide of terms that? how do labor have more shortages the been pressures going you’re rectify labor to a sense able

Bill Leonard

Yes. Noel. Thanks,

improving been case, patient of it’s know, But we’re coverage seeing you certain this creating issues a in we’ve centers. labor issues market. staffing tight experienced As some market. some labor our In

go So -- we as we into QX.

As number, definitely but still some just for have don’t with I have the patients we staffing those table challenges. some a opportunities left depression. will you, Disappointingly, that specific answer on the

into with can rebound and them we get of them kind believe I So centers. back the

Noel Atkinson

Okay.

metrics? Was prior profitability TMS achieving it? Secondly, of Success acquisition of business, able positive your be terms EBITDA to it some the you in could provide to

Erns Loubser

publicly have TMS. financials the Success disclosed We not of

We business will issue a those. acquisition that highlight will report

certainly basis, -- of but a -- And business. with a forma trending was synergies, terms that towards on it’s profitability. a pro In on profitable stand-alone basis,

You essentially breakeven a point. at

Noel Atkinson

should finally, rate average Okay. for trends existing just scale Great. of And you per procedure And here Success so in portfolio? average we acquisition? then across as think about rate, up the your -- terms how following

Erns Loubser

the outlook stable. remain think would I fairly

lower reimbursement I As slightly rates. mix from look is modeling, and my we But do outlook their higher operating that is medicare slightly got markets stable perspective. as lower. They’ve with a higher rates our reimbursement reimbursement at

Operator

from Bloom from comes Martin David question Next Burton.

David Martin

what close of some noticed those combine should going we from some regions? from decreased the number regions accounts XXX And result centers? number forward to XX you a of moves? of did that of I both XXX and XX. to as for? expect And savings Is cost you some your Did that centers

Bill Leonard

Thanks, Yes. David.

closed center, based in which quarter, and minutes within terms had West from the this that one marketplace Hartford. both to center. apart, center merged Massachusetts and just East In we two close We proximity centers acquisition, in were did larger Achieve two another of we locations that combined we the into XX the centers roughly together is on one

in Nothing region don’t I’ll numbers are the you have mind that to to concerned, I changed. get As for any believe of my the on back changed. one. regions

David Martin

have the must I wrong Okay. number.

a to other Second bought despite the year. of there growth well macro the do this QX. at factors, the QX this year-over-year slowed really of of year, last more COVID in year’s question, impact and I’m And has seem you wondering, this year Achieve an last QX. you the fact end last year, impact was bit versus like

Erns Loubser

last we QX and in bit I think little COVID waves had a we had of -- between year, and treated. pent-up some demand a gap that

issues the So alluded obviously, it good the a of this the labor quarter, a really biggest going to, the probably better, success. combination Bill we’ve lot and we we momentum those on the -- where for staffing with alluded macro recapitalizing little bit then where business patients, as start we as some And is of, into believe getting also facility, to some coverage on a merger but we was a couldn’t what as lost resolve impact, QX. Madryn was got we had factor a Bill quarter patients a tight through issues, in quarter, achieved those mentioned focus the lot to, market and us. shortages Bill of due

David Martin

year’s So this stronger the QX negative were QX. impacts versus last year’s

Erns Loubser

-- but would I would compare, say so. would it’s difficult I I to --

Operator

GMP. Keywood Stifel Next question Justin comes from at

Justin Keywood

new towards to on able to those correctly, were there’s guess, up facilitate are Are on us if impacts assuming labor the I execute that’s I Just we’ll requesting tight you emerging on to high coming some an procedures. labor market the tight or subsides maybe a far Omicron but the as follow as up subsiding, as in market be metric how these patients wanted and a as point the this if treatment shows QX, able procedures. of a ahead, now headwinds quarters as ability understand still maybe, there this that as affecting And in there’s bit? growth. headwinds I to far order a backlog understood

Bill Leonard

metrics it tight Justin. you, with that Thanks, we’ve This With To market existence. honest at is Yes. the said, this even in been first has time shows level. that kind ability put forward be and them the attract to in experienced really that labor still market, highs going record it we labor patients tight as the show. the have with consultations of and

that about moving excited forward. we’re So

and kind the some discussed, kind QX, as we stronger conditions of us. of better of into get kind labor for we seeing As we’re -- we’re moved seeing

consider happened this an us ongoing get we time. to just It So don’t issue. this

a most lot As the especially labor over about a been have a year, last has companies. of the talked X years, for challenge

Erns Loubser

Yes. of the to sorting with won’t just labor with done the number patient the pointing in force conversion and And go number labor rates the record up. -- we’ve consultations coverage with -- out

leads, if the I good terms the So you in eye kind an a and momentum through keep on indicator think of of going consultations in the is that’s what quarter. leads, next

Operator

at Canaccord from Genuity. comes question Armstrong Next Tania

Tania Armstrong

will a what of time I’m you on the could wondering well look integration look as of the as TMS, like Just line Success will what if provide like. estimate rough integration costs

Bill Leonard

on guidance kind Thanks, Tania. Yes. but We’ve that, kind not provided provide, an regarding of to I’ll to overview be the key buckets of the synergies. happy

cost. you So that were they G&A as buckets, with X at we we recurring that I and corporate the had, departments looked same think really kind key if the HR. large of look at and And -- a and is as company is legal it, such

need a marketing. will you dollars kind what you less you raising be of prices there. we those won’t From we of we so compete need as only marketing opportunities dollars And standpoint, for keywords. both have -- on some but significant companies kind have to, get get both to Not were spending obviously, to

represent our us the for this the third we’ve kind we Success area of significant of call leverage opportunities company now, really throughout us a the the The do market area, which is probably center. believe landscape. their new provide we the that is biggest last well, the through kind purchasing something intake optimization. area team does in is some just And has the fact portion power really of created is kind of which done going That operations streamline to to well-oiled allow is

Erns Loubser

have XX-month X to costs, -- X- full there’s which And time quarters. line execute that, probably to period. to of those. the a the if see through running to with full some we’ve ground you and XX-month perspective, will not really starting expectation overnight, Tania. From a it’s integration Obviously, within come first add happen and and period to initial going the to I’ll then be have going And synergies realization in a

Operator

comes Street Instructions] [Operator at Markets. Capital Lake question from Next Takkinen Frank

Frank Takkinen

just to a last versus your quarter. XXX this quarter about question sites some and with now wanted for around XXX of comments network Obviously, the reporting of combining sites Greenbrook network there’s a if any sites couple with start heard potential at it’s in a big me. optimization. Just I I XXX

that now So you network XXX the just have umbrella, around that? optimization improve under of anything like any or any combining commentary or to profitability sites

Bill Leonard

addition is best of synergies, But best that think I at just our look of just in take the took definitely that, We’ll you combined companies. the going Frank. the Yes. as took both -- to to entity part

excited extremely in we’re their about this. they SPRAVATO said, model. I had So like never Obviously,

we community. in something That generated about addition, relationships our Success is from the team XX% business physician have In of in place. not did the

there’s there. So upside we think

optimize numerous to their we’re programs about call their talked through center I’ve going ability As their leads times, to add and is soon. something

to a there’s the the look Florida, growth market. did side There us. state. -- think is we add, was thing And new that examples Coast center it’s So synergies overlap One states on the to of it in look continue of at some centers and of going added the that on stronger at opportunity the East state, about conversion from model. we were a case-by-case side it also there was optimize they XX of perspective. to the Coast in were And centers, kind area. we no you still even then and we’re more in a XXX to West both from at We’ll available in performance SPRAVATO see

think was merge at that to bucket, growth that’s profitability of kind scenario quickly opportunity existing at as possible. towards always footprint. of Ben towards I drive and drive looked as terms look every I and to and But something every the So we’ll in

Frank Takkinen

maybe And might bring both that strategy around conversion mean, into on helpful. know look I leads, little on or you’re bit sharing I into specific comfortable any a Could Greenbrook marketing. best go-forward the but that, That’s of just what then like strategy Okay. deeper little us metrics you bit basis? don’t deeper? marketing a like one just if for a anything

Bill Leonard

Yes.

going look we’re think each at bucket. I to

from marketing with you looked successful strong We side, going if we a in we So expertise company. digital to we’re sales optimization call field look perspective digital, overlay We Greenbrook, also Success Again, better offering obviously the some that with team at done our various kind buckets. believe in leads had kind taking and actually really the kind a their digital radio, utilize their combining we were and community-based easy those utilize network an close, they of now. business. stronger to they center field. if our while intake kind of that the so the create relationships stronger, of you and And to now with a at utilize looked but doctors at through of will we’re opportunities then we’ve those become

So that’s kind the of area.

we’ve forward go leads drove we’re and going effective bucket the manner. each that most looked with to ones at, actually most the So

Operator

questions. further proceed. Please no are There

Bill Leonard

I’d earnings November. you enjoy on thank and our summer call like Obviously, great the talking a of next call to again sometime have to -- and everyone in to day. for forward your have joining rest Thanks, our today. all, look

Erns Loubser

Thank you, all.

Operator

disconnect gentlemen, lines. ask that concludes for We call we please and and you your Ladies your for this thank you participating, conference today.

Greenbrook TMS (GBNHF) 7 Aug 222022 Q2 Earnings call transcript