Greenbrook TMS (GBNHF) 15 Aug 232023 Q2 Earnings call transcript

Welcome to the Greenbrook TMS, Inc. Fiscal Year 2023 Q2 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]

This call contains forward-looking statements, which reflect the current expectations or beliefs of the company based on currently available information.

in to the of company actual materially those subject that and to are from cause statements. may results discussed statements a risks number uncertainties differ Forward-looking forward-looking the of the

that Securities for current are of the ended from the fiscal cause differ Factors authorities and report annual XX, materials the other Commission expectations filed the and results company's the events time, the regulatory year discussed U.S. or Factors to the could company's on to on materially in and company's time website. XXXX, Risk available SEDAR, Exchange and in Canadian section actual from Form December with are XX-F securities which EDGAR

company as the obligation Officer. it Officer speaks or over ahead, on of Greenbrook to statement statement to and Financial update only and forward-looking Leonard, go any Loubser, meeting the Executive Any like required to would Leonard. of now any Bill Mr. Chief I Please disclaims President Erns by forward-looking turn law. intent and date the unless which is TMS; made, Chief

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

to cost to date. the XXXX, spend, our plan, with with from corporate, to in execution to $XX effectively with total structure the we marketing million QX lease the of removed employees the reduction During we reduction recurring XXX has restructuring compared has million pleased business date. million approximately general focus amounting costs Furthermore, $XX our a approximately of rationalization stabilized expenses other and XXXX as annualized of are of annualized very extinguishment administrative savings The to of liabilities savings. a cost and its QX of and $XX progress in company continue effectively on now a annualized headcount

the closure was and despite and restructuring completed meaningful outreach XXXX XXXX success $XX.X treatment constraints XXXX. respectively, impacted in marketing marketing million, a of and in that in in to general in TMS resilient revenue XX% QX significantly total with predominantly of provided year-to-date, the the due quarterly XXXX to the increased XX% at and QX million revenue XXXX year-to-date in connection by any to spend. liquidity able to revenue acquisition Revenue QX achieved XX% of and XXXX. by $XX.X The significantly investment July approximately patient the prohibited we this plan XX lack reduced generate centers were QX

level quarterly our achieved to for and in be the of proved context This base clear our it of presents investment. Bill. this, our profitability. the We our refined newly and restructuring business was a marketing rationalized without and any revenue program, the measured significant meaningful will to believe to TMS especially clear Buy post path marketing investment SPRAVATO launch of base to Despite structure. path encouraging opportunity a a realistic revenue including strategy rollout a as paints very It profitability, continued enhance on cost in build

revenue stream additional We a we an patient which an of internal and longer results program the yield pipeline, commenced have to rollout to medication the management mechanism in a also run. as build expect

drive lender recent strengthened access also and with through support now have sheet insiders to of to us financing self-sufficiency. to capital transactions balance to our We our continued and see expect

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

and key service program training a our effort have NeuroStar leverage Additionally, better an patients. operators attended to University education in to strong

streamline operating structure year business have with the the second rationalize as will benefit our complexity, to full continue reducing us reflect only associated cost Although the half will restructuring new substantially allow the further of been plan costs in the model all-time we to efficiencies. to key executed while high focus network remains expect believe of treatment with We serve well the our demand. drive in a an mental United centers for health the that unmet this and operational positioned remains demand our unmet treatment operating States, and

streamlined We are med with business opportunities, of introduction psychedelics. increase fundamentals our ever investment growth stronger of in of program, to potential marketing the future the and management believe than SPRAVATO the opportunity the including our business,

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

the accelerated SPRAVATO As of to XX we we XX centers treatment the through treatment SPRAVATO have today, expect by plan. offerings an rollout offering and of XX centers year end have to

the for a over I now Loubser. will to And our performance, operating Erns company's more CFO, it of and detailed financial review turn

Thank you, Bill.

Bill acquisition that was mentioned, completed $XX.X and XX% respectively, XX% million XXXX XXXX to by by in TMS to year-to-date increased and million, due As QX $XX.X revenue July the predominantly to success XXXX. in

revenue quarterly despite QX QX plan spend. treatment in Furthermore, proved XXXX, with at marketing revenue XX XX% of closure a achieved of connection the approximately restructuring XXXX the and the centers reduced in total significantly resilient

less the attributable change in in decreased revenue. This pay revenue The marketing X% in year-to-date of decrease the $XXX to and by XXXX in mix decreased to and QX of treatment QX represented distribution than was per QX in by geographical marketing $XXX XXXX. XX% to Average spend X% primarily spend XXXX XXXX.

in of we with connection operating levels regional generate restructuring the to cost QX implemented continue significant entity-wide revenue the lower in positive a plan. Despite as reductions income XXXX, result

spend, rationalization a cost G&A cost and effectively lease has with to of annualized That in million $XX a now million as totals employees headcount XXX removed extinguishment liabilities company $XX structure effectively amounting The savings savings compared in to approximately corporate other reduction annualized date. of Furthermore, to in cost annualized recurring of $XX million marketing XXXX. QX its has of achieved reduction stabilized savings. the

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

compared compared QX condensed evidencing XXXX restructuring. costs footprint to and QX through Furthermore, XXXX. regional post our XX% gained regional decreased other XX% to efficiencies XXXX, incentive QX as Also support

as QX year-to-date cost described. operating the $X compared reductions $X.X million ongoing will the a XXXX, million QX income significant of nature XXXX reflected in regional fully restructuring income loss QX realized during by result regional Regional reduction million be was but and partially to costs execution, end XXXX plan fiscal only associated the loss operating $X.X to of year-to-date of the were million Given XXXX. XXXX in during previously during as $X.X a operating compared as XXXX, the of

year-to-date due excluding and Corporate to to to due an conversion of -- success predominantly compared G&A, as acquisition. the the XXXX, QX onetime XXXX, XX% costs TMS revaluation XX% instruments, by the compared to increase increased

XXXX of More restructuring reduce importantly, continue the believe We restructuring a of G&A QX plan. we corporate to result have to plan. we costs a compared as XX% our decrease seen can part as

for as in XXXX due XXXX. success million year-to-date increased for $XX.X up The and XXXX. million up increase in The are debt to TMS the loss of loss financings predominantly conversion to $XX.X $X.X of an in as XX% to XXXX a increase and partially million period million, of QX XX% by additional in compensation completed QX the costs, and compared increased to the XXXX, the instruments. share-based completion comprehensive offset to in from compared revaluation increase The result expense, acquisition the interest $X.X year-to-date QX the QX increases depreciation as onetime expense the arising XXXX, by cost

and a now From remained as accounts stable balance have sheet our generate RCM effectively cash revenue we perspective, shortened. collection as cycle our receivable function fairly optimized

further Cash of XXXX, debt and company at restricted cash. Madryn. to financing objective including execute on $X financing have capital, to we continue our with access can million secured on-par QX of million, the $X.X liquidity profitability. from XXXX Greybrook with achieve end to secured restructuring These transactions Subsequent QX position an an the plan was Health to

access in to business. move self-sustaining remain capital a We ability confident to to our

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

operating core to Moving our metrics.

mentioned. treatments the the XX% XX% XXXX of to performance performed increased XXXX, the new by patient to QX XX,XXX. the while performed the starts while were of starts completion number of XX,XXX, XXXX. regions to and the treatment to decreased and by These X,XXX. number As XXX X% of ago. performed increased to previously acquisitions TMS increased XXXX, XX% And And the to a of increased performed the year centers I end to number to consultation XXXX, of year-to-date to in as number year-to-date, XXX from by increased by patient XXX% number Compared consultations the XXXX, Compared XXX% due mature of XX% QX treatments success strong predominantly as of our new increases QX of total by to number compared to increased XXX,XXX. the

that for devoting be resources with core TMS Back incentives. program believe in despite our increase restructuring and centers the you, best-performing a focus approach through We more brand to boost reduction SPRAVATO to revenue to our strong measured paired marketing This, a will growth business conversions. the will future increased continued and Bill. growth catalyst will for

reduce continues that to regional Thanks, profitability. entity-wide our the well sufficiently positioned positive we income Erns. believe operate The structure to cost execution are and plan yield to we continue restructuring of including operating results, business to

of and business treatment the recent through in increase transactions, including psychedelics. through continue strengthen and the the We our the including introduction future opportunity have SPRAVATO potential us the secured to our ability investment now marketing sheet management program, growth of insiders with with lender medication financing to future and providing to capital, our business, balance opportunities, strengthened streamlined supportive access to our

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

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

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

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

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

now We the of mental progress keeping will so on questions. the significant many Michelle, updated are of people the positive company. with suffering We you from impact having on your you that, take for disorders. And Thank forward we today. look lives time to health

[Operator from The first question comes David Martin Bloom of Instructions] Burton.

Yes.

wondering quarter center think Erns, benefit partially the in to question, count when fully the was only restructuring the I that during of mentioned was the XXX. trimmed I'm you First QX.

So wondering at future center, expect savings further what corporate quarters levels. I'm regional the in should also we and

a really David. good That's question,

at were it to the as end of closure centers, relates So those substantially of QX. complete

force, so centers. as see contribution regional, hundred relates costs, personnel effect the the So well G&A, each XXX,XXX to in and included other -- lag we'll revenue as to it staffing corp in between items of in expenses for removed. is what subsequently those line we been as a didn't any thousands in as to relates care really obviously closed patients that of see those reduction it center direct that of couple probably a has it's XXX each There's

Okay.

Okay.

do cash you breakeven? when flow reach expect So to

want we we as that XXXX. from basis. year. equity unlevered to firm aim realistically see then So on cash We QX an to free in kind burdened flow cash And exit of to fully flow the a see want early to

Okay.

rate steady capacity to grow growth what's What And XXX? at the in centers. those the in I'm opportunity now kind expecting? those state is are what you're wondering with of So centers? you XXX utilization

can as invested -- that. the in obviously it centers we've The and fairly in revenue. of That's well of capacity to million the moment. $XX money for underutilized terms utilization north in I the generate So look current marketing. immediate at capability the base has in The of Bill we hardly at is future, reason any mentioned, is

quarters, So we've in we the constraints that over really invested with experienced marketing. few the last liquidity haven't

amount And will of on Now that the believe happen. business. extent, of program, significant also we've revenue. to those will a base two marketing million TMS drive of to that and a revenue kind a can SPRAVATO things of will accelerate certain drive base us are We'll generated $XX.X significant self-sufficient catalysts the that the reinvestment stabilized drive top that -- we we will growth TMS which to in two that cash this -- -- flow drive continue we've can

add. let David, just And me

med excited In extremely addition, later to roll paradigm treatment phone, The on us treatment X to that patient start in a and a to TMS one, kind It the our failed discussed and it pilot. center into as get that also the paradigm. out management of allows control of get health. of opportunity kind the options with ability we X, us into X, treatment the that the to of is, along number journey pilot mental med we're Today, patient tends introduction their the from lines in significant. patient that value TMS SPRAVATO, to management allows having probably SPRAVATO, X, meds, after like that's that sooner centers shortens

we're of that, So just launching excited really about we which kind have.

do will and our week, first launch area And -- have will Bill. with upside, in we this and Buy still first we the Alaska center

So there's some that terms to platform. of in us really excited we're upside our

rightsized. it's So been

Now there's a really opportunity. good growth

management before off? starts it med cost pay Is going lot to a to you

very to cash position, a obviously, in context of -- we measured a approach liquidity From start taking, our that.

a already in lesser got extent, some have those codes. of and we've infrastructure the built So certain to regions,

approach. measured So we're a taking very

there's no cash the for investment. -- we So initial moment,

to learnings Based existing there our you that although pilot, out. manage requirement, we're do roll will a measured expand approach would obviously taking are to that to be from but sure today, -- we interesting adequately. We every would it we if we make to a more it providers at cash that the much staff, on center liquidity have using broader, but

last in. it I Okay. TMS devices The slide Great. can And XXX. installed were question my if at

only that's down your I think X peak. from

closed of to quarters? in Or substantially are Or a that contracts? what's contracts expect Do that are lease per reduced month number centers. obligated the situation? click? to You've you future keep are per lease you on they them And be bunch

base as a Bill of with significant very ours. So which Neuronetics, a is installed mentioned, partner got, close obviously we've

be redeploying will We devices. those

our more productive footprint, we are condensed centers. we higher-volume but capacity As said, shifting to

As all it just that cut an could installed yet. relates negotiate reduction base, cord you see a the yes, the naturally why come that's seen to overall But we and that you'll it's slowly haven't immediately, to dissipating leases end. we as significant not

the on or leases month based use are or something And per per else?

based treatment? So our of a kind predominant per on usage is installed base

The next of question Capital. Street comes Lake from Frank Takkinen

Wanted with is rollout One, point to that you the the a And you that and kind you when going how model? Can the referenced feel with Bill a we and could impacting can SPRAVATO. prepared give -- Buy roll finer of in how on remarks start out give again. just maybe addition. us of that newest could two, us see a

obviously, standpoint, have XX From centers operating. we Yes. a now SPRAVATO

that full of just by time kind of end this of at the centers the expect year. XX We only number year, end that to -- of north At reach the to XX in we play. the last roughly had XX

kind some So it's staggered a -- approach, Frank. still of

support patients that We about modality a Janssen complementary with to center. as to the allows transition the the excited wider It very We're other. have expand ability and one centers from having to a full SPRAVATO this a opportunity. with great relationship the They're SPRAVATO well, patients. to range of are us between now other, both kind year started TMS organizations. with of one terms the out capture treatment who've doing and relationship in We're SPRAVATO two of working extremely

Bill far biggest really Bill. is it's do Spravato as As are does Buy what for will the marketplaces area two payers not allow to specific that there and and you Buy things. you certain provide in patients unless with us, One,

roll that So want to out. we definitely

week. this be Our rolled in just to that first out going location Alaska, is

XX% side course contribution per that. of see a going uptick From with we're treatment Erns, probably time I the to an believe of over

out marketplaces sheet of in learn of And at some we'll roll the So the to and to country. the position we're distributors, a vendors put obviously, in we then -- strengthen Buy across and begin that terms to the going from ourselves as begin Bill. balance with

wanted then one of Okay. And That's to the patient helpful. metrics. ask some on I

was QX consult implications some the from if up QX, consult at If then quarter, any some a a talk you're to occurred revenue was you good it but conversions maybe new hoping were looking really expectations? I patient were number of quarter-over-quarter treatments could nicely quarter-over-quarter, down maybe treatment? that to in of basis, looks quarter-over-quarter dynamics on that like there And basis. the consults maybe challenged into

Yes, absolutely.

So and legacy -- of Success been of marketing kind approach has we as integrating, Platform the platform. Greenbrook of have a the product kind a this between

little conversion outreach So comes higher a that changed lower our generates but rate. strategy lead broader marketing a bit has a that volume,

I'll start in uptick seeing let Bill to rates really a due bit to speak more we've to from conversion marketing our little QX we expect this, learnings now marketing. in but and our those approach, optimization of an optimized

of So although like-for-like not am lead encouraged, the completely yes, I in volume. terms it's

leads saw convert into a to is I going in increase of the we big QX. think such it that ability kind and those encouraging

Yes.

think marketing, a and resilient that were the really November, Frank, saw weren't to fact -- when we we that our range add attracting think I spending we said, wide on some to with was patients. but I that, of we good dollars significant business base stories early December,

Some TMS close, probably patient kind or just of as wasn't tuned into conversions SPRAVATO. didn't of those that

including learned terms based at I Obviously, think the SPRAVATO. looking TMS offering both having and pipeline network pipeline, and on and network to now Medicare driving we particular in of center, the performance us obviously, customizing that the physician us. product at the coverage, ability are, lessons to spend our a in patients the patient from of what's terms centers in offer the at regions,

that smarter conversions we've increasing So how it's dollar, we I gotten based and by to profitability on going I our that. spend think with think maximize

and QX there what the put you off a line go can margin one. finer out of there some maybe that of looked It And regional below regional income in onetime helpful. the like likely QX? operating And into to fair should amount be kind I of corporate parse How to then we point about last corporate thinking a That's as -- is G&A is on line? my QX? fall income for expense operating aggregate Okay. for then in just a financials. G&A just you wanted was

sure. Yes,

So first dealing income. with regional operating

support element fully two is the dynamic I going going QX. reduction cost, see regional are to in into other center it. regional forces the elements center reduce going costs. as care and the patient to on that And -- there's the So you're said, we, be to like growing There's same expenses core and direct the to realized personnel and

going to we Regional probably liquidity going way issue a now. into is marketing to is return the investment obviously marketing in to with better regional position a on expense measured boost flex start as a other -- That, investment revenue. have turn,

QX. So we ramp can the want profile. want to how it, on can close depending see we can to income into the operating -- see that up or that, we and least in do go at QX, the sooner sooner we And running up quickly get get regional the to we teens

[Operator are Leonard time. no Bill call Instructions] I closing remarks. to the questions further There this back will for at turn

back about about med really no business feel and progress we've learn business. side terms some see with Yes. for good resilient about of marketing Thanks, light business how about and marketing Michelle. Again, TMS supportive the cost of we're future footprint, Really -- excited the our the excited the our of management trial getting SPRAVATO performance of excited really in normalizing to the in with our addressed pleased made. TMS to the expansion we

the Thanks. time Have and enjoys today, appreciate the your everyone summer. of a we great hope rest So summer.

the you does ask this participation call We that lines. gentlemen, you for thank your disconnect conference your conclude today. for and please Ladies and