Mr. Graham Rosenberg reports

DENTALCORP REPORTS THIRD QUARTER 2023 RESULTS

Dentalcorp Holdings Ltd. has released its three- and nine-month financial and operating results for the period ended Sept. 30, 2023. All references to dollar values in this press release are in Canadian dollars, unless otherwise indicated.

"I am pleased to report that our base business results for the third quarter are in line with our expectations. During the quarter we delivered strong same-practice revenue growth underpinned by continued strength in patient volumes despite sustained economic headwinds. This underscores the non-discretionary nature of our predominantly general dentistry business," said Graham Rosenberg, founder and chief executive officer. "Despite continued inflationary pressures, particularly relating to labour costs, we delivered adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] margins consistent with the first half of 2023, demonstrating our disciplined approach to costs and overall growth.

"Our modest acquisition pacing in the third quarter of 2023 is related to the timing of closings. We remain on track to achieve the acquisition target we set for the second half of 2023 of $10-million in PF [pro forma] adjusted EBITDA after rent. In the fourth quarter, we expect to deliver revenue growth of 9 per cent to 1 per cent and same-practice revenue growth of 5 per cent to 6 per cent while maintaining adjusted EBITDA margins consistent with YTD 2023, despite persistent inflationary pressures."

Financial and operating results for the three and nine months ended Sept. 30, 2023:

• Revenue for the third quarter 2023 of $336.9-million, an increase of $24.8-million or 7.9 per cent over the third quarter 2022. This increase was driven by same-practice revenue growth and incremental revenue from acquired practices.
• Same-practice revenue growth of 5.2 per cent compared with the third quarter 2022.
• Adjusted EBITDA growth for acquisitions completed in prior period was 12 per cent, driven by overall demand for services, the company's insourcing initiatives and the efficacy of the company's integration program.
• Adjusted EBITDA increased to $60.9-million in the third quarter 2023, an increase of 2.4 per cent compared with the third quarter of 2022.
• Adjusted EBITDA margin of 18.1 per cent in the third quarter 2023 is consistent with margins in the first half of 2023.
• Adjusted net income for the quarter was $20.1-million, an increase of 41.5 per cent compared with $14.2-million in the third quarter of 2022.
• Adjusted free cash flow for the quarter was $26.3-million, compared with $26.5-million in the third quarter 2022.
• The company acquired three dental practices during the third quarter 2023, representing $1.4-million in PF adjusted EBITDA after rent, for total consideration of $7.8-million. As at Sept. 30, 2023, the company owned 535 dental practices in Canada, compared with 538 practices at Sept. 30, 2022. The number of practices owned as at Sept. 30, 2023, included the divesture of 17 stand-alone orthodontics and specialty practices in 2023 as part of Dentalcorp's program to rationalize certain non-core stand-alone specialty practices.
• The company ended the third quarter of 2023 without drawing on additional debt facilities in the quarter and with liquidity of approximately $776.4-million, comprising approximately $102.5-million in cash, and $673.9-million in undrawn debt capacity under the senior debt facilities. Approximately $1.1-billion of the company's senior debt facilities were drawn at quarter-end. Approximately 75 per cent of the company's bank debt exposure, or $800-million, is carrying a fixed Canadian-dollar offered rate plus margin for an all-in cost of approximately 6.4 per cent.

Conference call notification

The company will hold a conference call to provide a business update on Wednesday, Nov. 8, 2023, at 8:30 a.m. ET. A question-and-answer session will follow the business update.

Live conference call details

Date: Wednesday, Nov. 8, 2023

Time: 8:30 a.m. ET

Dial-in number: 1-888-660-6396 or 1-929-203-0889

Reference No.: 9097710

Replay available for two weeks after the call

Dial-in number: 1-800-770-2030 or 1-647-362-9199

Reference No.: 9097710

About Dentalcorp Holdings Ltd.

Dentalcorp is Canada's largest and one of North America's fastest-growing networks of dental practices, committed to advancing the overall well-being of Canadians by delivering the best clinical outcomes and unforgettable experiences. Dentalcorp acquires leading dental practices, uniting its network in a common goal: to be Canada's most trusted health care network. Leveraging its industry-leading technology, know-how and scale, Dentalcorp offers professionals the unique opportunity to retain their clinical autonomy while unlocking their potential for future growth.

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