Good morning and welcome to Dentalcorp's 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 Tchaplia, President and Chief Financial Officer of Dentalcorp. Please go ahead, sir. Thank you, Operator, and good morning, everyone. Welcome to the Dentalcorp 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 CAD unless otherwise indicated. Please note that statements made during this call may include forward-looking statements and information and future-oriented financial information regarding Dentalcorp 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 of the date hereof, and Dentalcorp 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 issued 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 Dentalcorp'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, Dentalcorp operates in a CAD 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. Dentalcorp expects to continue outpacing the broader Canadian dental services market by delivering +4% same practice revenue growth and taking advantage of multi-year CAD 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 CAD 1.6 billion of LTM pro forma revenue and approximately CAD 310 million of pro forma adjusted EBITDA for the same period. Last 12 months' adjusted free cash flow also came in strong at CAD 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 x from the same period last year to 3.77 x. 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 and free cash flow yields versus our peers. At the end of the quarter, we were trading at a level that implies a 4.7 x 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 CAD 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 CAD 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 CAD 44.3 million or CAD 0.22 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 with free cash flow for the eighth consecutive quarter. With respect to M&A, we acquired 12 practices in the first quarter for a total consideration of CAD 61 million. These practices are expected to generate CAD 8.3 million in pro forma adjusted EBITDA 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% over Q2 of 2024, while delivering 3%-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 CAD +6 million. 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. Nate? Thank you, Graham. In mid-March 2025, the Canadian government communicated that patients between the ages of 18 to 64 will be eligible to receive care under the CDCP in the beginning of June 1, 2025. This led to a deferral of appointments by certain eligible patients late in the quarter and into Q2. That said, the impact from deferrals has been more muted than 2024, as a majority of this age cohort benefits from employer-sponsored dental insurance. Additionally, 95% of our practices are now participating in the program compared to lower adoption during the initial rollout in 2024. Overall, we continue to see the CDCP as a favorable development for both Canadian public and dental professionals and expect it to be modestly positive to Dentalcorp. Our quarterly results, which met or exceeded expectations in most respects, demonstrate the durability and predictability of our business. Turning to slide nine, revenue for the three-month period ended March 31, 2025, as Graham mentioned, was CAD 409 million compared to CAD 372 million for the corresponding period last year, representing an increase of approximately 10%. The increase is attributable to our continued acquisitive and organic growth. As you can see, we reported first quarter adjusted EBITDA of approximately CAD 76 million compared to CAD 68 million in the same quarter last year and reported first quarter adjusted EBITDA margins of 18.5%, representing 20 basis points of margin expansion year-over-year as we continue to realize operating leverage in our fully built-out corporate infrastructure. Looking forward, we continue to be confident about our ability to grow the business through acquisitions and organically. Turning to the next slide, you can see our net leverage and liquidity as of March 31, 2025. On a net debt basis, we were approximately 3.77 x levered at the end of the first quarter, deleveraging by 0.57 x compared to the same period in 2024. First quarter adjusted free cash flow came in at CAD 44 million, representing a growth of 25.9%, further bolstering our already robust balance sheet. We ended the first quarter 2025 with liquidity of CAD 408 million, comprised of CAD 58 million in cash and CAD 350 million in undrawn debt capacity under our senior debt facilities. This quarter marks a sixth consecutive quarter-over-quarter increase in our interest coverage, as defined by our last twelve months' pro forma adjusted EBITDA after rent divided by net interest expense, which currently sits at 3.9 x, up from 3.6 x in Q4 2024. Overall, our first quarter 2025 performance demonstrates the strength and resilience of our business model. We delivered positive organic growth while successfully expanding margins through operational efficiencies. We continue to strengthen our financial position by deleveraging the balance sheet, completed accretive acquisitions, and realized operating leverage as we continue to expand margins. I will now pass the call over to Graham, who will share some closing remarks before we open the call up for questions. Graham? Thanks, Nate. As you'll see on slide seven—sorry, slide 11, apologies—our strong first quarter performance reinforces our confidence, enabling us to reaffirm our full-year 2025 guidance of 10-11% revenue growth and 3-5% same practice revenue growth, a 20% or 20 basis point improvement in adjusted EBITDA margins, acquisitions representing pro forma adjusted EBITDA after rent of CAD 25 million +, and +15% pre-tax adjusted free cash flow per share growth. I want to thank you all for joining our call today. This concludes the formal part of our presentation, and we'd now like to open the call to questions. Operator? At this time, I would like to remind everyone in order to ask a question, please press star, then the number one on your telephone keypad. We request that you limit yourself to one question and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Brian Tranquillette with Jefferies. Your line is open. Good morning. This is Meghan Holtz on for Brian. Congrats on another good quarter. As we look at Q2 guide and the full-year same practice revenue guide as well, can you provide some color of how much is expected to be driven by the CDCP patient volume versus underlying patient demand? Absolutely. Thanks for the question. As far as CDCP today, as we mentioned in some of my materials, you saw that we have seen today roughly 90,000 patients. If you look at the total number of patient visits, which we see in that CAD +5.5 million mark on an annual basis, which comes out from +2.3 million patients, albeit it is a small amount, it is helpful to our overall growth. Our expectations today in our Q2 guide as well as our full-year guide are not including any additional patient demand or patient growth that is coming from CDCP. Okay. Thanks for the color. As a follow-up, the 65% free cash flow conversion number that you guys did this quarter, is that sustainable, and how should we be thinking about it for the full year? Yeah. Not only is it sustainable, ultimately our expectation is that's going to continue to grow. As you've seen over the last six plus quarters, ultimately we funded all of our growth from our existing free cash flow. As we continue to grow both organically as well as acquisitively, currently our debt has not increased over that six-quarter period, and ultimately our free cash flow will continue to grow at that +15% range year over year. Thank you. Your next question comes from the line of Scott Fletcher with CIBC. Your line is open. Hi, good morning, and congrats on the quarter. Same practice revenue growth was strong in the quarter at the upper end of the range. Was the strength there largely additional volume after the deferrals in the prior year, or is there anything else you can call out on that stronger number? You know, I think there's some puts and takes. I think ultimately what we saw is a return to more normalized volume. Obviously, last year, Q1 2024 was impacted slightly by the CDCP, whereas this year we had that come through, albeit the announcement for the 18-64 rollout at the end of the quarter did see some deferrals. What we are seeing overall is strong patient demand, consistency in maintenance of appointment, and ultimately strong overall organic growth performance of the business, and that continues to be expected in Q2 and through the balance of the year. Okay. Thanks. And then on the deferrals, is it possible to quantify the impact in Q1 and maybe whether you expect the Q2 impact to be more or less? Obviously, there's some puts and takes in Q2 with the start date in June. Any color there will be helpful. Yeah. You know, I think as we wrap the end of the quarter, I'd say Q1 was limitedly impacted. I'd say we're seeing a slight increase in overall cancellation rates as we sit here at the midway point in Q2, albeit now by the end of Q2 or by June 1, we're going to be able to start seeing those patients. Very difficult to predict exactly how the balance of the rest of the month will go. However, we're very confident in that 3-5% range for Q2 as well as for the balance of the year. Okay. Appreciate it. Thank you. Your next question comes from the line of David Kwan with TD Securities. Your line is open. Thanks. Nate, just to clarify, I guess, on your comments, or I think I can't remember if you or Graham had talked about it, but just as it relates to the debt levels, obviously the actual absolute level of the borrowings is essentially being unchanged, I think, for the last year and a half or so. Just given the, I guess, timing of the cash outlays for M&A and then cash taxes later this year, it sounds like you're not expecting to need to increase your borrowings against your credit line, even if it's just temporary? Yeah. I think as we look through the end of the year, expectation is we're going to continue to delever, right? Ultimately, our medium-term target of 3-3.5 x leverage, we're sitting at 3.77 x leverage today. That really is our main goal and our main focus. If through to the balance of the year or into 2026, we might see a little bit of incremental debt dollars added. The real focus is driving deleveraging while maintaining that double-digit growth. Okay. That's perfect. Then just secondly, you noted in the presentation about the Ortho Acceleration Program, I think 330 dental practices at this point, up from 310 last year. Can you talk about the expected timing for the rollout to the other, I guess, non-specialty practices? Absolutely. I think as we sit here today and on the last call, we discussed the revamping of the Ortho Acceleration Program. We are now at the point where we are going to begin rolling it out to additional practice locations across our network. Through to the balance of the year, expectations is to roll it out to an additional 40-50 locations, and we will continue to update on that rollout as we continue through to the balance of the year. Great. Thanks. Your next question comes from the line of Daryl Young with Stifel. Your line is open. Yeah. Just following on David's question on the balance sheet and leverage, I'm just wondering if you've seen any opportunities amid the interest rate volatility to maybe consider some alternative longer-dated notes or anything at attractive financing rates that you might be considering? I guess just broadly, how are you thinking about structuring the balance sheet in the future? Thanks for the question, Daryl. We're constantly looking at ways to optimize our capital structure and ensure that our overall carry is as efficient as possible. As we sit here today, looking at our forward rates to call January 2028 capped at 6%, we have visibility to bring it down an additional 25 basis points if we get below 3.5x. Thinking about an overall carry somewhere in that five and three-quarter range on a medium-term basis, as we compare it to really other alternatives that are available to the market to us today, we find that this is the most efficient structure for us, most optimal for driving our adjusted free cash flow growth, and ultimately supporting our overall continued funding of our acquisitive program. Okay. Thanks. On CapEx, I'm splitting hairs a little bit here, but just Q4 and Q1 were maybe a little more elevated than they've been recently. Is there anything going on there or any additional spend we should be aware of? Slightly elevated, just a few larger projects, all on the growth side. Would not expect that to continue on a sustained basis quarter over quarter. From a CapEx perspective, the way that we still continue to look at the business and model it is roughly CAD 30,000 per practice location per year on a maintenance side. Frankly, over the last number of years, it has come in below that. Just a few projects that have come up over the last six months. These were all discretionary projects, nothing to update on that. Great. Thanks. Congrats on a good quarter. Thanks, Daryl. Your next question comes from the line of Allen Lutz with Bank of America. Your line is open. Good morning, and thanks for taking the questions. Graham, I want to talk about the visibility into some of the deferrals as we think about the trend beyond June 1. Do you have any visibility into patient scheduling as it relates to appointments that are beyond June 1? Is it fair to assume that 2Q, given the dynamic that we're seeing today, that that's going to be the lowest quarter for SPRG of the year? Thanks. Look, as we sit today and we look at our forward bookings on a consistent basis, we're not seeing much impact. We think that the forward-looking views on the business are pretty stable and in line with expectations. Not a big impact at all. Okay. Fair enough. As we think about acquisitions in the quarter and the valuations there, they've ticked up a little bit over the past few quarters, but they're still well below where they were a couple of years ago. Just would love the latest on the appetite out there for acquisitions. Are prospects coming to the table more than they were 3, 6, 12 months ago? Just any update there would be helpful. Thanks. Yeah. Look, our pipeline remains as robust as it's ever been. We continue to reaffirm our role in the marketplace as the acquirer of choice, which really comes down to execution and how partnerships and relationships are managed after acquisition. Multiples are pretty balanced, and there's a nice balance between supply and demand. We think that those multiples that we've been indicating to will continue to persist as far as we can see for the medium to long term. Nate, do you want to add anything? Yeah. I think we've had a great couple of years here from an acquisition perspective and from a valuation perspective. Internally, we've always guided to that 7.5 x range, and we continue to be very confident in that as we continue to see the balance into the year and into 2026. Great. Thank you both. Your next question comes from the line of Zachary Evershed with National Bank. Your line is open. Good morning, everyone. Congrats on the quarter. There was one disposal in the quarter. Could you give us an update on how you view your current mix of general versus specialist practices? Yeah. Thanks, Zach. It's a great question. The one disposal that we had this quarter was part of the standalone orthodontic group, which we have now almost entirely disposed of. There are two remaining standalone orthodontic practices which we continue to work to remove. As we think about that business itself, our standalone orthodontic business now is de minimis and frankly nonexistent. What we do have is ultimately 25 standalone specialty practices, which represent less than 5% of our total business. The way to think about our strategy on a go-forward basis is general practice family dentistry, which is consistent with our strategy of insourcing, our strategy of continuing to drive education for general dentist practitioners across the full gambit of modalities. Very small practice that was disposed of, a couple more that might come over time, but immaterial overall. Great, Color. Thanks. It sounded pretty clear, but I'll just check in and harp on that again. A little bit of noise given the CDCP launch date, but checking in on the overall macro environment, we did see unemployment tick up to 6.9% in April. Are you feeling any pressure on that front? You know, it's not something that we've seen come through overall on the patient demand side. It's something that we do watch very closely. One thing to highlight as we think about CDCP and unemployment, as they do go hand in hand, CDCP does become a bit of a natural hedge to the unemployment figure as we think about medium-term patient behavior, as they'll become eligible for the CDCP if they don't have employer-sponsored insurance. Nothing really to report on. Very strong organic performance in Q1. As we look at our forward bookings into Q2 and beyond, we're seeing levels that are at or above levels that we have expected, but something that we'll continue to monitor and report on. Thank you very much. I'll turn it over. Your next question comes from the line of Tania Armstrong with Canaccord Genuity. Your line is open. Hey, good morning, gentlemen. Congrats on the quarter. Following up on some of the other questions on M&A, you guys have just done a really good job executing Q1, and I think the commentary was that you're through 70% of your acquisition target for the year. Just wondering, why not take that number up for the full year? Is this just in an effort to be conservative if you do want to focus on paying down debt? Looking at Q3, Q4, it's pretty light in terms of M&A. How likely are we to exceed that 25 target? Thanks for the question, Tanya. As we looked at our M&A performance, 2024 was just over CAD 20 million. This year, we brought it up to CAD 25 million. As mentioned, the pipeline is frankly as strong as it ever has been. Our position in the market as the partner of choice has now been cemented. We do have the opportunity to bring that up. I think as we sit here today, that is just over 70% signed and closed. We continue to have the confidence as we continue through the balance of the year that there is opportunity to increase our acquisitive pacing if we so choose. Ultimately, as we stand here today, our expectation is to be in that CAD 25 million range, and we will continue to update on our progress around our pipeline as we continue through the balance of the year. Okay. Great. Thanks, guys. That's all from me. Your next question comes from the line of Nevan Yochim with BMO Capital Markets. Your line is open. Yeah. Thanks. Good morning, guys. You got Nevan on for Steve today. Hoping we can touch on margins. Your target for 20 basis points expansion this year, would you expect that to be spread out evenly through the remainder of the year? Can you provide some thoughts around your long-term margin target? Absolutely. Thanks for the question. Expectation as far as it being spread across, there's some slight seasonality, as you know, in the business where Q2 and Q4 are stronger performers from a total revenue perspective. Ultimately, that provides operating leverage on our fixed cost infrastructure. Outside of that seasonality impact, we do expect the 20 basis points margin expansion to be consistent quarter over quarter as we go through the year. As we think a little bit more long-term, expectation is we're going to continue to drive that operating leverage from our fixed cost infrastructure, as well as some modest margin expansion at the practice level. The reason being why it's modest is given the highly variable cost structure that dental practices do benefit from. As we think about it in 2026 going forward, that +20 basis points of margin expansion year over year is something that we expect over that medium term, which ultimately we define as that three to five-year period. Great. Thanks, Nate. Maybe just on taxes, my understanding is you guys could become taxable sometime later this year. Are you able to provide an update there on just your expected timing? Yeah. I think the timing remains consistent. We should become taxable in the back half of 2025. Ultimately, from an actual cash layout, that cash layout will not happen until early 2026. Ultimately, we do become taxable by the second half of the year. Perfect. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.