GBNH - Earnings call 3 2023 | Greenbrook TMS Inc.

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Operator

Welcome to the Greenbrook TMS Inc. FY 2023 Q3 Results Conference Call and Webcast. [Operator Instructions] 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 Investors section, Events. [Operator Instructions] Analysts and investors are reminded that any additional questions can be directed to the company at investorrelations@greenbrooktms.com. This call contains forward-looking statements, which reflect the current expectations or beliefs of the company based on currently 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. on actual are events Factors XX, discussed the authorities annual U.S. cause from differ section the XXXX, could the and the company's expectations for Canadian company's current in report filed and that in results ended other to or materially of fiscal the Factors year XX-F materials December with Form the regulatory Risk securities and time, to Securities and the are on company's SEDAR, from website. Exchange which EDGAR available time Commission

date the or of which as any only speaks statement company law. intent forward-looking made is any forward-looking by the obligation on and required Any it update statement disclaims unless to

I would Officer. please, Mr. Executive meeting Chief Officer to now of Leonard. Greenbrook Go Mr. ahead Peter the Financial over Bill TMS; Leonard, Interim and to like President and turn Willett,

William Leonard

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

to we and progress the During we continued very of plan, to pleased are QX focus with the our restructuring on XXXX, date. execution

success as million, in compared active increased QX or predominantly XXXX, XXXX connection that revenue was remain marketing $XX the plan. Quarterly XXXX. XXXX, in removed company $XX.X $XX completed headcount, centers annualized by recurring administrative to effectively treatment rationalization has The plan reduction and from million, QX by $X.X XX% of expenses restructuring costs corporate, to general at restructuring acquisition extinguishment in other lease million spend, compared as revenue $XX of million reduction targeted the of decreased million cost a liabilities the $XX centers as and Year-to-date to TMS execute with the our about due the in the XX range closure to remaining despite as to reductions. of the July our the achieving XX% components of of XX% future of QX to We we optimistic XXXX. the million treatment on of in down

resilient mentioned treatment at in any total revenue approximately generate. in proved able liquidity despite XX prohibiting to general revenue marketing revenue and achieved XXXX resilient provided be QX which centers quarterly the above were to XX% investment year-to-date, we of impacted the XXXX QX -- meaningful constraints, of closure the

revenue provides to level present marketing encouraging significant very base a future and including investment program, of post back great for our prove our cost believe restructuring buy-and-bill business. this continued in profitability, context enhance quarterly to this, structure. optimal of continues reverting the contract of foundation to Despite more levels and will newly focus rationalized TMS the We a of our goal. path The a launch holistic with payers on rollout negotiation SPRAVATO especially

the commenced to Medication build have to program results rollout revenue has on stream as already business. a which yielded We Management of positive and internal also mechanism pipeline, additional patient an the

in are While self-sufficiency constraints confident our our to still us liquidity to drive we have recent to our as by with lender. -- financing ability continued financial to insiders and supportive transaction access remain, capital evidenced

strategy beneficial various closed partnership mutually care access with leadership expanding centers. patient it redeploying continue as implement Neuronetics' side, treatment work On the to recently to strategic from awareness, closely we effectively at levels TMS systems relates enhancing to and a to

into program, mental increase an our access very their health increase patients Better further launch the should patients. allow show about pilot new on Me believe from in averages and historical booked of pilot excited We're consults results translate the disorders. also will to Early of Guarantee we which us to leads which suffering

announced previously the savings, our achieved we on execute continue have annual we cost plan. restructuring the of remaining to Although components

our further operating XXXX, partially continue reduction structure in and to us while rationalize the execution, and the our QX operational business costs expect Given to will model allow complexity, new drive cost, only in reflected efficiencies. we ongoing streamline nature were of operating reducing

We fundamentals an investment our unmet and at the serve potential growth our the States, high the opportunity business treatment the believe unmet remains with Management SPRAVATO are and network demand with health key demand. mental of streamlined than the stronger our to We for increase in of United including option, program, to remains well Medication a positioned introduction the ever all-time believe the in treatment of future business, focus the marketing that psychedelics. treatment centers

of the QX company XXXX, XXX At a centers. the of had footprint end treatment

XX plan. to have company's rollout a XX centers will turn expect our detailed we we have over today, Peter through operating for and and of Willett. it Interim more financial an the SPRAVATO, offering review year to treatment CFO, XX offering end And by of treatment now to the performance, As SPRAVATO accelerated centers the of I

Peter Willett

Thank you, Bill.

As down of at with XX QX treatment closure mentioned, XXXX. the million as XXXX revenue $XX decreased plan Bill treatment QX approximately by XX% in connection XXXX restructuring of XX% centers $X.X to in QX active to compared as despite the million, or centers

revenue reduced of quarterly revenue XX% million, of XXXX, achieved in XXXX treatment Year-to-date up revenue year-to-date marketing spend in Success spend, acquisition QX our total remained in XX was of XX% QX mentioned and centers the million above due the as closure approximately that marketing to XX% which compared a XXXX, July by despite by $XX.X XXXX. significantly $X.X represented TMS completed Furthermore, XXXX. resilient increased to XXXX to predominantly QX

and increased attributable mix, modalities quarter-over-quarter and payer treatment per by The XXXX. consistent in in geographical revenue X% $XXX to to the $XXX was increase distribution revenue. year-to-date treatment in Average remain at changes primarily of QX XXXX

of removed stabilized general its costs liabilities extinguishment compared the expenses, lease operating the as reduction to XXXX. to implemented in a of spend, effectively cost marketing result reductions revenue of With annualized reduction generate of in lower regional income XXXX, restructuring connection the as plan. with the we corporate, Despite headcount, significant levels in structure recurring million rationalization administrative quarter other continue for company third in consecutive and $XX QX cost QX has and and entity-wide

during QX of direct XXXX to resulting reduction the compared QX $XX.X a costs from due restructuring regional and reduction plan. center the a XX% expenses to spend marketing of headcount, Direct execution center rationalization decreased XXXX by in in to million and other

nature ongoing the in costs fiscal by execution, restructuring reflected will of XXXX QX of fully reduction the plan but Given end associated were XXXX. realized only partially be the in the

center TMS and XX% the plan increased by by mentioned. cost relation costs Direct predominantly regional compared execution in during previously the to partially savings million to as of XXXX, restructuring Success to $XX.X the offset year-to-date to XXXX the year-to-date due acquisition,

was income to described. of during compared of XXXX operating the and Entity-wide loss compared significant regional $X.X of as were million XXXX XXXX an regional to entity-wide XXXX. entity-wide generated result reductions during entity-wide as million operating previously in increases regional operating $X.X year-to-date loss QX income a QX operating $X.X an regional million $X cost the year-to-date primarily of during million Both company

decreased to Corporate, increased as G&A, QX QX to XX% by Success XXXX XX% execution, year-to-date XXXX result instruments the by compared plan excluding by a XXXX compared restructuring to offset XX% TMS onetime conversion and compared of execution. and of by the but as due revaluation costs to the plan restructuring acquisition

and remaining part plan. plan. G&A reduce The as can $X.X G&A execute loss restructuring of the comprehensive by We XXXX period a and down costs to loss the decreases QX million, on the income to we continue as execution in of restructuring decreased primarily million XX% XXXX, $XX.X components operating as corporate, the to the believe for in due of QX increase corporate, regional the compared to in we

of additional primarily year-to-date period The and XXXX, fiances, termination, million debt share-based up XXXX, and compensation onetime increased the the the compared completion as depreciation expenses loss increases to on costs, and the TMS regional income million the the restructuring associated the for comprehensive plan. acquisition as with the X% loss in result $XX.X expense, costs increases of cost partially to in interest the offset increase the device Success in by operating due $X.X the loss increase in year-to-date from savings the and of a for arising contract to by execution

as receivable $X.X of cash sheet RCM and was the QX balance including a have Cash optimized generate at end remains perspective, fairly our million, cash. stable function XXXX revenue. now we restricted effectively From accounts

Subsequent to in and remain supportive to received QX capital move to company our financing We lender from ability access investors. business. confident in the to to self-sustaining $X.X XXXX, continue a our million various

defined earlier. than more we profitability to we base described ever, believe completely with have pathway a Now Bill stable as cost

metrics. operating core our to Moving

decrease by noted. number to XX% by These of to As year at a QX decreased active to new of decreased and centers end Compared decreases predominantly ago. due the centers treatments X% performed XXX starts number in total the XXXX, X,XXX, number by were XXXX, the patient treatment performed XX% to treatment by XXX from decreased QX XX% of while of consultations decreased XX,XXX. previously the to to X,XXX

starts consultations of the reformed patient to XXXX, XXX,XXX. the were XX% increased the by predominantly XX,XXX, increased while These treatments year-to-date to to Compared of the XX% number increased of by to acquisition. of Success and TMS increases X,XXX, performed XX% by number to completion due the number new

conversions. and We measured and performing revenue TMS focus to core with through strong in a past future of catalyst to centers a approach the will more believe growth our boost will continued paired plan be will centers. SPRAVATO that building our reduction This the despite growth resources increased restructuring business increase a our program marketing for

Bill. Back you, to

William Leonard

Thanks, Peter.

the this challenges shown Our facing a spite business in has of remarkable resilience we've year. been

once the in results regional restructuring XXXX, activities the will the in the of solidify profitability QX phases our to of reductions the resume execution plan quarter we're income. third and to support our yield our structure final cost anticipate path to positive including company to revenue operating able plan of growth. business investment Our restructuring commitment The to consecutive to is in made the continued

Management current our to of our to buy-and-bill further to complement and announced and program, and excited treatment modalities, newly allowing administer previously Medication continue which us SPRAVATO enhance including will our new introduced our our observe We're rollout patients. programs access pilot

the focus that believe the and United remains demand unmet in key a for the States, an treatment health high. remains all-time mental We

leadership bring continues nationwide struggling to need with a to continue patients offer position innovative footprint the help needed to our valuable serve this as We to for and unmet depression. solutions and platform

would a moment As to our always, to amazing take thank I like team.

importantly, proud making of recent turbulence. a are deliver they we're to the that We of as continue level know difference. them we through care extremely Most highest some

have XX,XXX now treatments with patients We million more performed. over X.X than treated

lives of many Thank of on company. health time significant to mental on you the We disorders. today. from so positive a suffering the look for people keeping updated are your you We forward impact the having progress

we Blair, And that, with now take will questions.

Operator

first We Instructions] Capital the of our have [Operator question Street Lake Frank Markets. line Takkinen from from coming

Frank Takkinen

going business was about are What that? we program. some I a more we talking hoping should with you forward? the should learnings? out Bill, early expect little impact bit What NeuroStar how of see pilot expect that to could just the start to And

William Leonard

you. of we've Frank. from Thanks, about a kicked the reality with Neuronetics. rigorous care. excellence is thought of off into level The Good focuses the of of to criteria There Yes. in practices pilot clinical on to select lot hear group that really We're it it. to achieve put adheres kind highest a really that patient excited was

Key the of that the customer patient and areas advertising University, play XX brought path NeuroStar that awareness both this, see to where like into really through patient and of we Neuronetics on kind service that come Greenbrook. to of by treatments And up kind to attending of patient. remission we're getting through going significant see through addressing

weeks said, While we're in some translating into those our and booked an averages historical it, only consults shown extremely has pilot to X I where, increase consults, the leads we're patients. about starting see of on like into early,

at for awareness for levels our ability and really care center more our so to those and patients gives to attract an and local personnel into to the patients have the the centers. opportunity the close convert get patients them access me, And Greenbrook expand for having us to

forward Neuronetics, look our So and we kind full watching this learnings. to as of work of enhance pilot continue to I'm the with appreciative excited the them and from help we

Frank Takkinen

be just it. savings we in was now we Got need about to update me. place more you initiative level? reach thinking the could us maybe do EBITDA have hoping on then much cost in on that put growth how That's helpful EBITDA Congrats reaching breakeven we that for should How breakeven new I your just one more place. color. And that you level? infrastructure

Peter Willett

Yes.

be from, nice From we from is question. closer the And previously Frank, our to EBITDA think year hear revenue breakeven. million great guided next perspective, million breakeven, that to $XXX in we I you. mark as it's $XX.X and towards flow cash to look also,

Operator

Our next from the line David question comes of Martin Bloom from Burton.

David Martin

patient looking into fully and costs in and corporate wasn't direct lines, $XX the third quarter. I'm costs, the we reduction quarter, regional G&A. how cost that see various in reduction fourth center annual mentioned can in You million wondering, care the expense the much

Peter Willett

Absolutely. what range, end up $XX think Dave, mark to the end to higher it. QX of that exceed your is we point, I expect or the towards million towards

you'll see the yet, in cost come G&A baked costs where the been think bit in a I of core not savings with a in, little lot will have that well. in as be regional

David Martin

how then you'll much take out more you of cost the beyond QX, Okay. think And do structure?

Peter Willett

right the as think I are tell. call, remain our too ability the evaluate structure. calls appropriately and we to it's relating our continue costs. always our mentioned But we business rationalize point, to in And to our think business early on I to evaluating we make at this cost and confident

David Martin

you when said for up year? a broke revenue Okay. what That's a breakeven? to million $XXX Related of line question, need Frank's bit kind my you

Peter Willett

previously -- we're ago, of towards target as for on our a mentioned call that breakeven that's our quarters still is Yes, couple cash.

David Martin

strategy, buy-and-bill cost a Or the the flow-through? profit just per higher The is is patient? Okay. drug

Peter Willett

It's higher on revenue contribution as cost. and well as

So higher -- our to point, is a have around your $XXX. reimbursement currently you Dave,

on of increase current we sizable pilot, to significant increase a launch to in costs. our But with the we While be our from from to tell, a early standpoint, a closer it's expect contribution again, expect, contribution. $X,XXX based

essentially just for a is flow-through. it's It side. a So us a from not contribution win

William Leonard

access also because unless And to care add it I SPRAVATO, a marketplace to care because fact, just not allow think move to contracts tied buy David, patient participate bill with buy creates some do to more The important. to payer part in it's of specific to you in the want is and that I and bill. you're

David Martin

on million year, need contract early $X.X that down timing this that for There's that? what's this pay the year, later device you Is -- Great. to Okay. terminations. that's

Peter Willett

QX That completed in by of end XXXX. will be

David Martin

What corporate Okay. personnel personnel and corporate this And counts, press count? head give -- wasn't head is I the last release thing, see time. in usually didn't you it it the

Peter Willett

be with would consistent fairly It quarter. last

William Leonard

Yes.

of I David, kind down we're that think from staff year-over-year a members XXX over basis, of north time.

David Martin

corporate? Over the just not entire business,

William Leonard

Correct.

Operator

[Operator Instructions] line Alliance We the from of Haynor next our question from Global. have Ben coming

Benjamin Haynor

hear restructuring. to on the progress the Nice

well? program that point Medication a is Management. existing for that, the for them there off me, way for on in First base? upset pilot that Or referral your pain Is could any any worry of as sort

William Leonard

there of this. No, because care that lot think great actually question, from and they can't out I of I boatload we the think is wait that's a offices to a access at spent time through are perspective, a due patients And our looking to treated there list. not psychiatric gain being

perspective, access allows care. to from So our more this

cash payer think really have lot of on our I pay of what company And business is to doctors in, the involved all like a those the contracts. kind we're and

really that our about. this excited kind initial of upset seeing kind in it haven't So we cart point. apple insurance of having we're some but is results early are we by panel, really at the pilot, And

patients Number med And cross multiple that of in first to our seen to been to who qualify out the into we've TMS for shorten med refer and criteria kind trials. failed med meet in needed TMS management the able one, both We've the weeks to to addition, who and patients that additional SPRAVATO, able ability to that TMS have and center. already we've been trials pathway where kind and SPRAVATO. X SPRAVATO of get hopefully

Benjamin Haynor

Okay.

patients that desirable refer with it's maybe more tailwind more themselves. that you a may difficult deal do just that and So be have it less to may and for even be not are in likely you to for they to those

William Leonard

have different this who like direct-to-consumer because even us. marketing ways, into spend, TMS have allows kind it we but have it about if viable in makes us that to to patient it about talk for it a the that a is This didn't you of I spend more program. significant the of a been not take interested to fact our even may get couple think enhances Yes. yet, mean upside

other us, that The it's a treatment. for pathway shorten going interesting to is, point to particular

X industry much probably can I great now X to generating of patient think think care pursue pathway in meds, the we TMS failed or shorten SPRAVATO paradigm. in the earlier after average possibly the that TMS will SPRAVATO or treatment or we a is through cycles

Benjamin Haynor

Okay.

kind and into gets that So next -- then question. of my

are patients if And -- typical that you what's handful are there the extent failed for these Management, that a these failed X? meds makes On cycles sit? with -- typical that sense? the Medication to of cycle cycles Or they it it? where there do do attract of they considered a at is the into Is

William Leonard

that I a look tell in next question, the will few just because more cup to I It's forward you and What on off we're good this. weeks into answer the a call. really detail only

You're their to obviously and suffering a of first from have going that first are going been gamut drugs have who some that depression, time to crisis the not them. to their of for there patients get multiple through have calling kind helped health introduction mental

all now. over the it's board right So

Operator

time. now call Leonard There are at Mr. closing comments. back no further I'd final to turn to questions this the over for like

William Leonard

about Thank a the a wish you, happy Thanksgiving on our I feel appreciate look Blair. everyone to happy our this to We good continued healthy joining company. We and really forward want and I everyone future quarter. call our opportunity. holiday progress season.

Operator

concludes participating please and this call you gentlemen, a ask your today. We Have thank and lines. your day. Ladies you sir. that you, disconnect Thank conference for for lovely

Greenbrook TMS (GBNHF) 9 Nov 232023 Q3 Earnings call transcript