Good morning, ladies and gentlemen, and welcome to Neighbourly Pharmacy Inc.'s Q2 Results Conference Call. At this time, all lines are on listen-only mode. Following the presentation, we will conduct a Q&A session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, October 26th, 2021. I would now like to turn the conference over to Mr. Chris Gardner. Please go ahead. Thank you, operator, and good morning, everyone. Welcome to Neighbourly Pharmacy Inc.'s Conference Call to discuss our financial and operating results for the Q2 of 2022. I'm Chris Gardner, Neighbourly's Chief Executive Officer, and I'm joined this morning by Terri Smyth, our Chief Financial Officer. Before we begin, I would like to note that some of our comments today will contain forward-looking information and statements under applicable securities law, laws that reflect management's current views with respect to future events. Any such information and statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in forward-looking information and statements. Please refer to the various materials Neighbourly has filed with Canadian securities regulators for a broader description of operational and risk factors that could affect the company's performance. I also want to note that during our commentary, we will reference several non-IFRS financial measures. Although we believe these measures provide useful insights into our performance, they do not have standardized meanings and should be considered as a supplement to, rather than a substitute for, IFRS financial measures. Reconciliations between the two can be found in our regulatory documents, which are available on our website, which is www.neighbourlypharmacy.ca. Finally, I want to highlight that our discussion this morning will align with our earnings presentation for the Q2 of 2022. This presentation is also available on our website. We are very pleased with Neighbourly's results for the Q2, which we previewed on October 7th alongside the announcement of our treasury and secondary offerings. Both our revenue and adjusted EBITDA again improved by more than 50%, primarily due to the success of our acquisition and integration strategy. We have continued to execute upon this strategy since the conclusion of the Q2, adding a total of 26 pharmacies to our expanding network. On October 7th, we announced our acquisition of 20 locations in Alberta. Upon completion of this acquisition, Neighbourly will become one of Alberta's largest community pharmacy operators with 51 locations located throughout the province. The purchase price for these 20 locations was approximately CAD 41 million, which is consistent with the multiples at which we've acquired new pharmacies in the past. We estimate that these locations, in combination with an additional independent pharmacy whose acquisition we also announced on October 7th, will generate total annualized adjusted EBITDA of approximately CAD 7 million based upon their most recently completed fiscal years and the implementation of synergies upon integration. Today, we are pleased to announce that we have acquired an additional five pharmacies for a purchase price of approximately CAD 21 million. We estimate that these locations will generate total annualized adjusted EBITDA of approximately CAD 3 million based on their most recent completed fiscal years and the implementation of our synergies upon integration. Considering the contribution from these 26 pharmacies, Neighbourly would generate pro forma annualized revenues of approximately CAD 484.2 million and pro forma adjusted EBITDA of CAD 60.3 million. We have now acquired 40 locations since the beginning of the fiscal year, slightly exceeding our historical pace of acquisition. I'll speak further to our pipeline and growth strategy in a moment, but first I'd like to pass the call to Terri, who will review our quarterly results in greater detail. Following our prepared remarks, we look forward to taking questions from the analysts on the line. Thank you. Good morning, everyone. Neighbourly's results for the Q2 of 2022 comprised a 12-week period. These strong results were in line with our expectations and continue to demonstrate the effectiveness of our acquisition and integration strategy. Revenue for the Q2 was CAD 90.7 million, a 54% increase from the Q2 of 2021. This improvement was primarily driven by the 51 pharmacies we added to Neighbourly's network over the prior four quarters. Revenue from these locations accounted for CAD 30.2 million, or 94.9% of our quarterly revenue increase. Adjusted EBITDA for the Q2 was CAD 10 million, a 51.5% increase from the prior year. This improvement was also primarily the result of our new locations. Our adjusted EBITDA margin for the Q2 was 11%, a slight decline compared to 11.2% in the prior year. This decrease was primarily due to an increase in corporate costs associated with becoming a public company. Turning to operational metrics, Neighbourly's pharmacies filled a total of 1.6 million prescriptions during the Q2, a 48.4% increase from the prior year. Pharmacy revenues, which are primarily the revenue generated by these prescriptions, represented 78.2% of our total revenues, which is within our historical range. These metrics highlight the strength of our patient-focused strategy and how serving their pharmacy needs provides the foundation for Neighbourly's business. Corporate general and administrative costs were as expected at CAD 3.6 million during the Q2, which equated to 4% of revenues. This compares to CAD 2.2 million or 3.7% of revenues during the prior year. As previously discussed, these costs now reflect an increase associated with our growth into a public company. We anticipate that these incremental costs will total approximately CAD 2 million on an annualized basis. With this increase now included in our results, we do not anticipate any significant further changes to the fixed components of our corporate cost structure. Our corporate G&A costs will continue to increase as our network grows, but at a lower rate than our revenue growth. Therefore, over time, our corporate G&A costs as a percentage of revenues, and correspondingly, our adjusted EBITDA margin, will display gradual, consistent improvement as our network expands. This operating leverage is one of the key advantages of Neighbourly's highly scalable platform. Before I conclude, I'd like to speak briefly to the company's capital structure. Neighbourly continues to operate from a secure financial position. This security was further enhanced by our recent treasury offering, which provided us with net proceeds of approximately CAD 27 million, and was accompanied by a secondary offering that will increase the liquidity of our equity. After the completion of the offering, and taking into consideration the cash payments associated with our three recently announced acquisitions of a combined 26 pharmacies, Neighbourly will have over CAD 32.7 million cash on hand and CAD 150 million of undrawn debt capacity. With our current debt level, including the estimated lease liabilities of our announced acquisitions and pro forma adjusted EBITDA of CAD 60.3 million, our leverage will be 2x, providing us with significant financial flexibility. I'll now turn the call back to Chris to discuss how this financial position supports Neighbourly's acquisition strategy as well as our same-store metrics. Thank you. Thank you, Terri. Historically, Neighbourly has recorded remarkably consistent same-store sales and prescription growth. However, this consistency was interrupted by the onset of COVID-19. While the impact of the pandemic was most pronounced during the final quarter of 2020 and the Q1 of 2021, it did persist through the Q2 of that year. As a result, this impact has continued to create some volatility in our year-over-year comparisons. By far, the greatest contributor to this volatility was the temporary 30 day fill policy that most provinces implemented at the onset of the pandemic. This policy, which I discussed in detail during our last conference call, temporarily increased prescription counts and decreased average prescription value during the Q1 of 2021 and the beginning of the Q2 of 2021. As we now move through the Q3, our business has fully lapped the volatility created by these acute one-time events. Going forward, new prescription volumes remain below pre-pandemic levels, but we continue to witness measured and consistent growth across our network. It is estimated that only 45% of physicians have returned to consistently seeing patients within clinic settings, and we are certainly seeing that reflected in the number of new prescriptions being filled in our pharmacies. This is particularly evident in those pharmacies that are located in or co-located with primary care physicians. We have also noticed that new diagnosis of diabetes, cardiovascular issues, hypertension, and cardiovascular issues are lower than pre-pandemic levels. We do not believe that these chronic conditions are less prevalent than prior to the pandemic, but rather that they are not being diagnosed due to the pandemic, either preventing or discouraging patients from visiting an appropriate healthcare setting. The majority of our pharmacy volume is chronic medication refills, which have been very stable and growing throughout the quarter. Before I move on to the impact of COVID-19, I'd once again like to acknowledge the role Neighbourly's pharmacy teams have played in Canada's recovery from the pandemic. Our teams have now administered approximately 90,000 COVID-19 vaccinations, including more than 31,000 during the Q2. As anticipated, with the higher percentage of the Canadian population now vaccinated, this quarter saw COVID-19 vaccinations slow when compared to the Q1. As our pharmacy teams shift to help protect Canadians from influenza, we anticipate administering over 60,000 influenza vaccines this winter, in addition to further COVID-19 testing, vaccinations, and boosters. These selfless individuals are the backbone of our company and embody Neighbourly's greatest value, patient-focused care. Pharmacies that share this value represent our most attractive acquisition targets, and I'd like to conclude this morning's call by returning to the subject of acquisitions. As we've discussed in the past, the short-term timing of acquisitions is inherently unpredictable. For example, we have recently witnessed increased opportunities as a result of the pandemic, which delayed some owners' plans for retiring or divesting of their locations. Regardless of what external events may occur, we are confident that we can maintain our pace of acquisition over the long term, as we have already done during this year, and continue to execute upon our strategy of growth through acquisitions and integration. To do so requires the presence of two factors. The first of these is a robust pipeline of promising targets. Canada's highly fragmented market contains approximately 3,600 independent pharmacies that meet our acquisition criteria. Beyond sharing our values, the ideal locations and additions to our network would be operated within smaller markets or established medical clinics, serve as significant healthcare providers within their communities, derive the majority of their revenue from prescription medication, and possess meaningful scale. I'm pleased to add that we are in active dialogue with many independent owners whose locations meet these criteria. The second factor necessary to maintain our pace of acquisition is financial flexibility, which enables Neighbourly to move decisively when attracting attractive opportunities present itself. As Terri mentioned, we recently bolstered our financial flexibility through a CAD 30 million treasury offering and are pleased with the strength of our capital position. Given these two factors, we are very confident in our ability to continue executing upon our strategy of acquisitions and integration. This strategy drove significant growth during our Q2, as it has done since Neighbourly's inception. We look forward to building upon the momentum as we move forward and delivering sustainable value for our shareholders as a result. I'll now turn the call back to the operator for questions. Thank you. Operator, we're gonna turn it back to you for questions. Thank you. Ladies and gentlemen, we will now begin the Q&A session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order that they are received. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift your handset before pressing any keys. One moment for your first question. Your first question comes from Irene Nattel with RBC Capital Markets. Please go ahead. Thanks, and good morning, everyone. I'm wondering, Chris, if we could just spend a couple of minutes talking a little bit more about the M&A pipeline. You know, we're now at 40 this year, and we're just early in Q3. Can you talk a little bit about sort of what the pipeline looks like? Is it a lot of singles? Do you have some chunkier ones in there? As we think kind of further forward, you know, the 35-ish that you had earlier talked about maybe looks a little conservative. You know, maybe if you could just walk through some of this, please. Sure. No problem. Good morning, Irene. Yeah, I mean, obviously, we've been thrilled with the pace of acquisition so far year-to-date and the amount of acquisitions that we've been able to announce and close and integrate. In fact, we have acquired a pharmacy this morning in Alberta and are very positive about the robust pipeline that we have going forward. That pipeline, you know, it's inherently difficult to predict the timing of when acquisitions will close, but what I can tell you is similar to what, you know, I've indicated on prior calls, that the pipeline is as robust as it's ever been and is as strong as it's ever been. We are in active dialogue with both single store pharmacy operators and multi-store pharmacy operators right across Canada. We continue to see that pace, you know, certainly meeting and potentially exceeding historical levels. The timing of acquisitions is inherently difficult to predict. I mean, generally, you know, through Christmas and the early part of the calendar year, you tend to see a little bit less activity and then kind of resuming a little bit after February. We're very optimistic about the future growth just given the depth of our pipeline and the quantity of active dialogues that we have today right across Canada. Does that help, Irene? Yeah, that does. Thank you. The acquisition that you announced this morning in Western Canada, which provinces? Um, it is in? I apologize if I missed that. There's a lot going on today. No problem. It's five locations located in B.C. that strengthens our position in B.C. to over 50 locations. We would be the second largest pharmacy retailer actually in the province as a result of that acquisition. Very exciting. Just one more for me, if I may. I think last quarter you said that Rx volume was about 15% below pre-pandemic levels. You noted that it's improving. Just wondering where we are today. Sure. I was referring to new prescription volume, Okay not prescription volume, but new prescription volume. Right. Yes. Yes. Yes. Yes. Yeah. New prescription volume is certainly still down, though we have seen a bit of an increase, period over period. More specifically heading into Q3, we saw kind of the largest single period of new prescriptions that we've seen kind of in recent periods. New prescriptions used to represent about 35% of our prescription mix. Post-pandemic or through the pandemic, it's been in and around 30%. You know, it is down notably. Refills make up the majority of our volume. Obviously, with you know, historically would be about 62% to 63% of the mix and closer to 70% of the mix now. It has been improving period over period. Certainly, as children have returned to school, as more workplaces have opened in many provinces, you know, that is certainly being reflected in some, you know, cough and cold numbers and flu numbers and other kind of minor ailments. We are seeing a bit of a measured step-up in new prescription. That being said, you know, I think we mentioned we were probably down about 15%, you know, in the last quarter that we reported. We are still down, you know, slightly under that number, so slightly better, but still has, you know, a little ways to go to get to pre-pandemic levels. That's very helpful. Thanks, Chris. No problem. Thanks, Irene. Your next question comes from Peter Sklar with BMO Capital Markets. Please go ahead. Hi, good morning. It's Emily Fu with Peter. Just to drill down on M&A again. In the recent offering that you had, there was a small treasury component. We were wondering if you foresee that the M&A activity that you'll pursue will require cash flow that's above and beyond that's generated by the company for this year and potentially beyond. Yeah. Thanks, Emily. Appreciate the question. So, you know, we did want to strengthen our balance sheet, which, you know, Terri kind of talked about with that secondary offering because our pace of acquisition has certainly been quicker than we had historically anticipated. And so we're certainly moving quicker and with higher quantity, you know, than we had kind of initially kind of indicated through the IPO process. So, with the addition of the additional CAD 30 million through the treasury offering, it certainly allows us to continue to grow at our historical pace of acquisition, which is, you know, in and around that 35 mark. You know, acquisitions, the timing of acquisitions and the quantity of acquisitions as demonstrated through the first half of the year is inherently choppy. Sometimes we move quicker, sometimes we move slower. If we were to move quicker with a larger scale of acquisitions, then you know, perhaps we would contemplate you know, additional equity offering to ensure that you know, we maintain the financial flexibility to be able to close on those acquisitions. If the pace goes slower or equal to our historical rate, then we should be able to continue to fund acquisitions with free cash flow as well as existing debt capacity. I think a long answer to your question, but it really depends on the timing of acquisitions and how quickly we move you know, through Q3, Q4 and heading into our next fiscal year. Does that answer your question, Emily? Yes, that's very helpful. To move on to my next question. For the acquisition that was announced today, were there other interested buyers or, were you approached by the seller or if you've already had a long-term relationship prior to this transaction? We're just wondering if you could give us a little bit more about the lead up to this transaction. Thanks. Sure. I mean, it is a network that we were aware of and did know the pharmacy sellers. It was a competitive bid process and we ultimately were the successful bidder to close on that acquisition. You know, it was competitive. There were a couple of other players at the table looking at that network. We're very pleased that the pharmacy owner decided to select Neighbourly as the buyer to proceed with. You know, we feel those five locations as well as the staff, as well as the management of those pharmacies really kind of embody our values. We saw both a cultural fit and operational fit to having those five pharmacies join our network. Does that help provide clarity, Emily? Yes, it does. Thanks very much. Those are my questions. Okay. Thank you. Your next question comes from Patricia Baker with Scotiabank. Please go ahead. Yeah, good morning, everyone. I have two questions, and my first question is somewhat related to what Emily just asked, but maybe slightly different. Chris and Terri, I'm just curious whether with the recent acquisition, the one you announced this morning, the 20 or 21 that you announced just before the bought deal, are you seeing anybody different at the table since you've become public? 'Cause there's been some chatter about there being some interest, you know, a greater interest now in community pharmacies. Are you seeing any different players at the table or is it pretty much as it has been for the last several years? I would say the quantity of players that have been, you know, looking or that we've come across have been, you know, relatively similar. Mm-hmm G enerally every acquisition, you know, that we see, if it's a competitive process, it tends to be different players, you know, that we're competing against or that we think may be looking at the assets. But we certainly haven't seen an increase of activity from, you know, from any player that's looking at community pharmacies. You know, the competitors and the competitive set that we've seen have been pretty consistent, I'd say quarter over quarter and really haven't seen kind of any increased activity, you know, especially when it's a competitive process. Okay, excellent. I guess an important point about the larger acquisition that you made is that you actually did remove an M&A competitor from the market by acquiring those 20 pharmacies. Am I correct? That is correct, yeah. Okay. You know. And then No, and that's typical for, you know, as we Mm-hmm continue to buy, you know, some of those chunkier acquisitions and acquire some of those the chunkier networks within, you know, within provinces. Those are typically networks that, you know, we would be competing against as we look at pharmacy assets within specific provinces. You know, as we've been acquiring, you know, larger, more sophisticated networks, we're often, you know, buying a competitor that we would typically be competing on pharmacy assets within, you know, specifically within certain geographies that those networks would play. Would it be fair to say, Chris, that as you continue to gain scale and grow the network, that increasingly you're making it maybe a little bit more difficult for those 20, 25 store players to participate more actively in ongoing M&A? Well, I mean, it's still a pretty fragmented, you know, market. I mean, there is, you know, as we mentioned prior, you know, 3,600 pharmacies that, Mm-hmm that kind of meet our criteria. You know, it's a pretty broad market. There's lots of, you know, M&A activity, I think for, you know, smaller players as well as larger players. Like ourselves. You know, as we acquire more, you know, sophisticated multi-store operators, you know, we eventually think we'll see less competitive activity, you know, within those individual provinces that, especially when we're taking out, you know, larger, more sophisticated competitors. But I think, you know, inherently, just because we get bigger, I don't think it makes it necessarily, you know, any less difficult for, you know, a single operator to buy a second store or somebody that has five pharmacies maybe to buy a sixth store. Other than the fact that, you know, our reputation continues to grow in those markets and, you know, with every acquisition that we do and every successful acquisition that we do, we continue to strengthen our position as an acquirer of choice and, you know, for independent pharmacies right across Canada. Okay, fair enough and well said. My second question or topic is just, can you just address what you saw front of store. You had 1.6% same-store sales. You're up against pretty tough comp last year. Was there anything notable in the front of store performance in the quarter? Yeah. I'd say the only thing notable is that we're starting, and certainly this is probably more evidenced at the end of the quarter and probably be more prominent in Q3, which is certainly a notable uptick kind of in cough, cold, and flu sales. You know, last year on the same quarter and especially going into Q3, you know, cough and cold and flu was you know virtually nonexistent with you know people staying home, you know, schools operating virtually, workplaces largely you know closed or employees working from home. We have seen over the last couple of weeks a pretty notable increase in cough, cold, and flu sales. We're certainly comparable to higher you know front of store sales, which you referenced. I mean, we're up against, you know, Q2 of last year with close to 7% same-store sales improvement on the front of store. Certainly, you know, our front stores were certainly reflecting that kind of year-over-year growth this current quarter. Q3, we expect kind of results to kind of normalize a little bit more, especially as more markets have gone into kind of full reopening or closer to full reopening, and we're starting to see a little bit of strength kind of in our front of store business. We have seen similar to kind of, I would say, other traditional retail, you know, some change kind of in mix and shopping pattern. We're starting to see, you know, increase in the amount of transactions but kind of returning to normal of the average basket. You know, certainly through the first couple of quarters in the pandemic, transactions were down considerably, but average basket was up considerably. You know, while less customers were coming into our stores, what they were buying was a significantly higher shop and higher basket than they would've historically been buying. We're starting to see a little bit more kind of resumption to normal, which is what we would expect, you know, as kind of economies open, as you know, restrictions are lifted and more essential and non-essential retailers are presumed to return to open. Does that make sense, Patricia? Absolutely. Thank you so much, Chris. You're welcome. Your next question comes from Paul Stewardson with iA Capital Markets. Please go ahead. Good morning, Chris and Terri. Thanks for taking my question. Just calling in for Chelsea. I'm just wondering about these five pharmacies. Can we get some more color in terms of, you know, compared to your overall portfolio, what's the mix in terms of front of store versus prescriptions and so forth? Sure. The five acquisitions, as I mentioned, on a prior question are located in B.C. They are a little bit higher mix of community pharmacy locations, but also, I'd say two of the five are co-located with primary care physicians. You know, probably a little bit higher than our 78% typical pharmacy mix and maybe a little bit lower than that with a little bit of a stronger front of store offering. Pretty consistent with our community format stores. It's a very complementary acquisition in the sense that, you know, kind of it fits both of our criterias of locating clinic locations co-located with primary care physicians or kind of larger community, you know, smaller community-focused pharmacies. Perfect. Thanks for that. Just one more from me. In terms of, you know, the lower net new prescriptions that you were discussing earlier, and in terms of, you know, looking at things like flu vaccines, are you seeing that sort of a lot of these metrics are, you know, over the next year or so coming back to what we saw pre-pandemic? Do you see that some of these might have a new normal in terms of, you know, we may have never quite as many net new prescriptions as we did two years ago, just because people are a little more healthcare averse or something like that? Do you have any sense of where there might be gaps compared to pre-pandemic levels, so, you know, we shouldn't necessarily rely on those? Yeah. No, sure. I mean, it's a great question. I mean, a couple of points I'd say I would add. I do think that new prescription volume, you know, while it's a little bit lower than pre-pandemic level, like We're very encouraged to think that it will likely return, you know, to pre-pandemic levels. The rates and prevalence of, you know, diabetes or cholesterol issues or hypertension, you know, cardiovascular issues certainly haven't gone down through the pandemic. I would argue that, you know, mental health and physical health probably for, you know, a lot of Canadians probably hasn't been worse than the last 18 months. You know, we do feel like there's likely a bit of pent-up undiagnosed conditions that will likely, you know, need to be treated once again physicians are seeing patients in person and, you know, requesting lab recs and identifying some of these issues. When it comes to things like vaccinations or expectations around vaccinations, you know, given the heightened level of awareness, you know, and around the importance of COVID-19 vaccinations, we think that's gonna trickle through to influenza vaccinations. While the timing may be a little bit different than last year, we anticipate that, you know, more Canadians are likely gonna get inoculated from influenza this year versus last year. Most provinces have increased, you know, their flu vaccine availability with additional quantities by province. You know, so there's likely, you know, some shopping patterns that will certainly change on the front of store, I think, and probably, you know, have changed certainly probably for the longer term. When it comes to prescription medication, you know, which the majority of it, you know, it's about around 70% of it is kind of a refill nature and, you know, that 30% plus that, you know, will be new medication, you know, will likely continue. Again, if you think about, you know, what the drivers of that is, you know, it's, you know, we still the underlying demographics haven't changed. We have an aging population, and that's not changing. You know, as we get older, we consume more prescription medication and that's not changing and that's fundamentally the overall driver, you know, of our business. We think that temporary mix of new prescriptions is just that. It's temporary, and we think, you know, that will continue to improve over time. We are seeing kind of that noticeably progressive step up in new prescription volume kind of period over period and the first period of Q3 actually was probably the highest it's been or it was the highest it's been in recent periods, and we think that trend will likely continue. Does that make sense? Fantastic. Yeah, absolutely. Appreciate your line of sight on that. Thanks very much. No problem. Thanks, Paul. Your next question comes from Zachary Evershed with National Bank Financial. Please go ahead. Thank you for taking my questions. A lot of them have been answered. You guys have been clear. Just two quick follow-ups on M&A. In some industries, we're seeing a kind of level of exhaustion among owner-operators from dealing with pandemic and pandemic restriction issues, and it's created a bit of a spike in sellers looking to exit. Are you seeing that in your pipeline? Follow up, do you worry that the pace of acquisitions will dial back once you move through that cohort looking to exit right now? That's a great question. On the first point, we are certainly seeing an increased amount of exhaustion amongst pharmacy operators and pharmacy owners. We've seen, you know, an increase of people that have been reaching out. Largely though, the ones that, you know, we find have been reaching out have been delaying a sale because of the pandemic, so some of this is just pent-up M&A activity that's been pushed off as those pharmacy operators kind of, you know, focused on supporting their communities, supporting their staff and kinda getting through, you know, the worst of the pandemic. As the pandemic, you know, has, you know, as we've kind of crested the worst of it and there's a little bit of a light at the end of the tunnel, many of those pharmacy operators have, you know, have re-engaged on discussions. We don't think this is kind of a pull forward at a future, you know, M&A activity, but really just kind of capturing kind of the pent-up demand over the last 18 months. The pipeline that we have is, you know, and I've kind of mentioned it before, but it's as robust as we've ever seen. You know, we think that pipeline is gonna continue to be very strong for many years just again, given kind of the age and demographic of pharmacy owners, which are, you know, generally, you know, a little bit older. A lot of pharmacy owners are Baby Boomers, and, you know, are thinking about retirement and exiting, you know, their pharmacies and kind of unlocking the value of their pharmacies. You know, we certainly don't see the pace, you know, slowing and we're very encouraged, incredibly encouraged by, you know, the strength of our pipeline, and how that looks today and how it looks going forward. Does that help, Zach? Zachary? Yeah, great answer. Thanks. Just one more for me. In terms of your ability to conduct due diligence on board and integrate, is your M&A team operating at or close to full capacity? How much more can they ramp up? No, we're operating, you know, with capacity for sure. I mean, given the fact that we've been doing a great combination of both, multi-stores and single stores, multi-stores are significantly, you know, more operationally efficient when it comes to onboarding diligence, commercial diligence, legal diligence and also integration and onboarding of staff and training of staff. You know, as long as we maintain, you know, that nice healthy mix of both multi and single, we have, you know, a lot of capacity to be able to, you know, continue to close, acquire, source, and meet with pharmacy owners, you know, right across Canada. You know, we don't see any limitation really around our M&A capability at this point. Excellent. Thanks for the answers. No problem. Thanks, Zachary. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Your next question comes from Chris Li with Desjardins Securities. Please go ahead. Good morning, Chris and Terri. Maybe just a quick follow-up to the last question about aging pharmacy owners and succession challenges. Just curious to see if that is more prevalent at the single pharmacy level, or is that equally a factor at the smaller chain level as well? Yeah. Good morning, Chris. It's a good question. I would say it's probably a bigger challenge for larger pharmacy owners, whether it be a large single pharmacy or multi-pharmacy owners, because the number, you know, of good pharmacy buyers that, you know, can afford to, you know, finance or pay for, you know, larger acquisitions, you know, continues to become less. I think it's a bigger issue for multi-store and larger single store operators because, you know, purchase prices are inherently higher because those pharmacies, you know, generate, you know, either scale EBITDA or more meaningful EBITDA in a single location, which makes it more difficult, you know, for an individual owner operator to finance or think about buying a pharmacy. A little bit easier, you know, for a single pharmacy operator who, you know, may have a pharmacy manager who, you know, is interested in maybe buying the location or partnering, you know, in that location over time with the intention of buying the business. You know, I'd say it's probably more on the larger pharmacies and networks that probably have more challenges. I would say generally, you know, every pharmacy owner, you know, that owns a pharmacy is kind of struggling with succession, like even those single pharmacy operators, because there is not enough new pharmacists that are coming out that are, you know, willing to finance, you know, a multi-million dollar business and, you know, willing to take on that financial risk and the financial burden of financing a business. You know, we're seeing less and less individual pharmacy owners that are willing, you know, or pharmacists that are willing to kind of finance their first store. Certainly we're seeing, you know, less and less sophisticated multi-store operators that are you know, willing or financially have the capability to be able to finance, integrate and diligence and successfully onboard larger groups of pharmacies. Does that help kind of provide some context, Chris? Yep, for sure. That's very interesting and helpful. No, thanks for that. And then another one I have is, you know, I think one unique aspect of your 20 store acquisition in Alberta that was announced early this month is that there are some interesting reverse synergies in terms of compounding and central fill. I guess my two questions in that is, number one, you know, how meaningful are those synergies for your Alberta network over time? Number two is for the files that are currently in your M&A pipeline, are there other potential acquisitions that offer, you know, those type of reverse synergies for your network? Yeah, certainly. I mean that Alberta acquisition certainly, you know, was unique to us and I think, you know, probably helped us advance some of the strategic things that we would like to do over time, you know, around centralizing compounding and centralizing maybe central fill of compliance packs and things along those lines. You know, there are some you know meaningful synergies that you know we would like to get over time in Alberta as we successfully integrate that network and onboard that network and then you know eventually be able to take advantage of that network either right away for you know for centralizing our compounding you know given the changing NAPRA guidelines and the the lack of pharmacies that are able to do compounding kind of within the province and over time take advantage of that central fill capability and kind of scale that out even further. You know that potentially becomes a bit of a roadmap for us in other provinces. I would say that less of our acquisition pipeline, you know, comes inherently with that capability and with that centralization, already in place, and that would be something that likely we would be building kind of over time as we continue to gain scale in certain provinces. Okay. Does that help, Chris? That's helpful. Yep, no, absolutely. My last question is, you know, just operationally, obviously there are lots of talks in the marketplace about inflation, supply chain disruptions and labor shortage and wage pressure. I would think Neighbourly is largely insulated from a lot of these challenges. Am I correct in that? Maybe if you can provide some update on what you're seeing in the marketplace to some of these headwinds. Yeah, for sure. I would say I'll probably break it down into a couple of buckets and one is the inflation that we see on pharmacy and pharmacy COGS. There really isn't any inflation and so you're right in the sense that we're somewhat insulated given the majority of our revenue has a regulated cost structure and a regulated retail structure. We're not seeing inflation kind of creeping through in pharmacy cost of goods. So, despite the inflation pressures that we hear in other aspects of retail, that's certainly something that's not impacting our pharmacy. That being said, you know, on our 22% of front store goods, we are certainly seeing inflation, you know, as are other retailers right across Canada, and we're reacting accordingly to, you know, adjust our retails, you know, as costs kind of creep up within our business. On the labor front, you know, we've been fairly fortunate, you know, on a number of fronts. One, pharmacy is an essential retailer, and you know, we've never closed. So our pharmacy teams, our front of store teams, you know, have been working and have been dedicated, and you know, have been really superstars throughout the last 18 months as they've been supporting their communities and supporting healthcare. The benefit of that is that we're not trying to recall a workforce that may otherwise have found other employment like some other sectors that you're kind of seeing that are experiencing some wage inflation and kind of other pressures. The other component that I think is a large benefit, you know, to us is that we operate in a lot of smaller communities, you know, right across Canada where we may be, you know, one of the few employees or one of the few service providers kind of in that province. Given that a very big portion of our workforce, you know, out of our 1,700 employees are pharmacists which are, you know, obviously designated individuals, you know, university educated, accredited and regulated. You know, those professionals have largely stayed in the workforce and stayed in their profession, which, you know, hasn't necessarily been the case in some other service sector roles. You know, we've been pretty fortunate, you know, given the nature of the healthcare nature, you know, of our business of retaining our workforce as well as the essential nature of the business, which has meant that our entire workforce, you know, save and except a few locations where, you know, there were more meaningful impacts as a result of COVID lockdowns, has largely been in place and stayed in place, you know, since March of 2020. Does that help, Chris? Yep. That's very helpful. Thanks for your answers and all the best. Thank you, Chris. There are no further questions at this time. Please proceed. Thank you, operator. So this concludes Neighbourly's Conference Call for the Q2 of 2022. I would again like to thank our over 1,700 team members for their incredible efforts in supporting patient care and Canadians' health and wellness since the onset of COVID-19. They are truly making a difference, and I could not be prouder of the work they are doing every day. For those of you who joined us midway, I'd encourage you to revisit our remarks at the beginning of the call related to forward-looking information. A replay of this call and the accompanying presentation will be both available via our website www.neighbourlypharmacy.ca. Thank you and have a great day.