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Revenue: $397.5 million in Q4 2024, up 9.7% from Q4 2023.
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Adjusted EBITDA: $73.9 million in Q4 2024, up 12.3% from Q4 2023.
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Adjusted EBITDA Margin: 18.6% in Q4 2024, an improvement of 40 basis points over Q4 2023.
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Same Practice Revenue Growth: 2.7% for Q4 2024.
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Free Cash Flow per Share: $0.20 for Q4 2024, an increase of close to 16%.
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Adjusted Free Cash Flow: $39 million in Q4 2024, up approximately 16% from Q4 2023.
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Acquisitions: 12 practices acquired in Q4 2024 for $75 million, expected to generate $10.3 million in pro forma adjusted EBITDA after rents.
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Net Leverage: Reduced by 0.6 times to 3.8 times as of December 31, 2024.
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Liquidity: $433 million at the end of Q4 2024, including $80 million in cash and $353 million in undrawn debt capacity.
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Dividend: Quarterly dividend of $0.025 per share declared, payable on April 22, 2025.
Release Date: March 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Dentalcorp Holdings Ltd (DNTCF) operates in a highly fragmented $22 billion market with only 7% consolidation, providing significant growth opportunities.
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The company reported strong financial performance with Q4 2024 revenue of $397.5 million, up 9.7% year-over-year, and adjusted EBITDA of $73.9 million, up 12.3%.
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Dentalcorp Holdings Ltd (DNTCF) achieved a high free cash flow conversion rate of 63% of GAAP EBITDA, indicating strong cash generation capabilities.
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The company successfully reduced its leverage by 0.6 times to 3.8 times, marking the fourth consecutive quarter of deleveraging.
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Dentalcorp Holdings Ltd (DNTCF) completed acquisitions of 12 practices in Q4 2024, expected to generate $10.3 million in pro forma adjusted EBITDA, exceeding expectations.
Negative Points
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The Canadian Dental Care Plan (CDCP) rollout caused some patients to defer appointments, impacting patient visits and revenue growth.
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There is uncertainty regarding the start date for CDCP eligibility for patients aged 18 to 64, which may continue to disrupt patient behavior.
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Despite strong performance, the company faces competitive pressures in the M&A environment, requiring disciplined acquisition strategies.
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Dentalcorp Holdings Ltd (DNTCF) anticipates starting to pay cash taxes in 2025, which could impact free cash flow.
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The company is still working on fully implementing its partnership with VideaHealth, with only 100 practices currently using the technology, indicating room for improvement in rollout speed.
Q & A Highlights
Q: How is Dentalcorp balancing its capital structure with M&A and the new dividend? A: Graham Rosenberg, CEO, stated that Dentalcorp has sufficient free cash flow to support a $0.025 dividend, amounting to approximately $15 million in fiscal 2025. The company plans to maintain its M&A pace while deleveraging, targeting a leverage ratio of 3 to 3.5 times. Nate Tchaplia, CFO, added that the dividend's impact on leverage is minimal, allowing continued organic growth and acquisitions.