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01:56 Thank you, and good morning, everyone. Welcome to our third quarter twenty twenty one earnings call.

With me today is our Chief Financial Officer, Andrew Mok. The third quarter exceeded our expectations.

Our strong financial results once again demonstrated how the successful execution of our growth strategy has transformed our revenue and earnings profile. We delivered significant year-over-year growth in revenue and adjusted EBITDA, driven by a number of factors.

The contributions from the SmartMeds and Rexall acquisitions that were completed earlier this year, the initial contribution from our acquisition of the Medical pharmacies long-term care pharmacy business, which we closed in August and importantly, from an acceleration of organic growth. 02:42 As the reduction in COVID related impacts on our sector has allowed us to get more traction in our efforts to acquire new customers.

I want to emphasize that a key driver of our strong financial performance is that each of the four acquisitions we have made the past year is contributing in line with or ahead of our expectations. This is a testament to the M&A capabilities we have built and to our team's ability to execute and integrate.

Integration of the Medical Pharmacies acquisition is well underway. And we continue to believe that we are on track to achieve at least five million dollars in synergies from that transaction.

03:21 Third quarter revenue grew fifty six percent from the same period last year to just over seventy one million dollars. Growth was driven primarily by a sixty six percent increase in the average number of bed service to eighty one thousand eight hundred and sixteen up fifty four percent from fifty three thousand one eighty four for the second quarter of this year.

This growth was driven primarily by the addition of beds from the Medical Pharmacies acquisition, which closed part way through the quarter. 03:50 In addition, as I mentioned, our bed count growth was also helped by an acceleration of organic headwinds.

During the quarter, we won more than three five hundred new beds. Approximately two thousand two hundred of which were onboarded during the third quarter.

These wins include approximately eighteen hundred beds in Western Canada that were formerly serviced by Rexall and were not included in the partial acquisition we completed earlier this year. 04:17 Our bed count at the end of September with ninety five thousand two hundred and forty and our bed count at the end of October grew to ninety six thousand two hundred and seventy two.

We are optimistic that if the sector continues to normalize after the challenges associated with the pandemic, we can continue to accelerate organic growth in the quarters ahead. 04:38 Adjusted EBITDA for the third quarter was six point nine million dollars a year-over-year increase of seventy nine percent again, primarily due to the acquisitions that were completed during the year, as well as the quarterly contribution of the three million dollars in annualized cost savings synergies from last year's Remedy’s acquisition that we fully realized in the first quarter of this year.

05:01 As I mentioned on August twenty three, we completed our acquisition of the Medical Pharmacies long-term Care pharmacy business, our largest and most significant transaction to date. It added approximately thirty six thousand beds and further solidified the leadership position we have established in the sector over the past several years.

It is expected to contribute run rate annualized revenue of approximately one hundred and fifty million dollars and adjusted EBITDA between ten dollars and twelve million dollars before the realization of any cost saving synergies. The integration of the business and the team is underway and on schedule.

We have already begun consolidation of facilities located in the same geographic areas with one completed during the third quarter and four more expected before year end. Accordingly, we expect to begin to realize a portion of the expected minimum five million dollars in annual synergies in the fourth quarter of this year.

With achievement of the full five million dollars expected to be realized within the first twelve months after closing. 06:03 Importantly, beyond the significant financial contribution, strategically, this acquisition brings together two companies both leaders in the sector and will enable us to uniquely deliver a superior service offering to our home operator partners and their residents.

I have been so impressed by the strength and capabilities of the Medical Pharmacies team. The teams are fitting together very well, and our combined experience, depth and leadership abilities are creating a meaningful competitive advantage that I believe will allow us to integrate with excellence drive further growth and support our customers and the sector in a way that no other pharmacy partner can do.

06:43 With the completion of the Medical Pharmacies acquisition it is worth taking a step back to put our progress into perspective. In Q3 of twenty eighteen the quarter during which we announced our transformation and growth strategy.

We were servicing fewer than thirty thousand beds and our quarterly EBITDA was below breakeven. Three years later, we are servicing almost one hundred thousand beds and have recorded quarterly adjusted EBITDA of almost seven million dollars, and I will note that the Q3 performance reflects only partial contribution and no synergies from the Medical Pharmacies acquisition.

We have made incredible progress and as I will discuss in a few minutes, we are confident that there are continued organic and acquisition opportunities available to us that will allow us to continue our growth trajectory in the quarters and years ahead. 07:33 There were some other notable developments during the quarter that I would like to highlight.

First, the largest of our organic wins during the quarter came from the expansion of an existing contract with an Ontario-based seniors home operator. The expanded contract is expected to add approximately fifteen hundred new retirement and long-term care beds across nineteen seniors housing communities.

All of which will be serviced through our existing infrastructure. Onboarding of these beds was completed in October.

08:04 Second, you will recall that earlier this year, we partnered with Think Research, a leader in integrated digital health Software Solutions and deliver virtual healthcare care to seniors. The goal of that partnership is to provide seniors easy and secure access to a network of physicians and specialists from the comfort of their home residents with our specific role being to provide same day fulfillment of any prescription medications, a resident requires following a virtual appointment.

After a very successful pilot program in selected Chartwell retirement residences, in September, we expanded that program to deliver this virtual healthcare solution broadly to all Chartwell locations in Ontario, British Columbia and Alberta. Rollout of the program began last month and will continue through early next year.

08:51 Third, during the quarter, we were also pleased to announce the positive results of a pilot study for the Karie device. As a reminder, Karie is a home based automated drug delivery device, designed to simplify complex medication regimes by automatically delivering prescription drugs in the correct dosage and at the right time to individuals taking multiple medications and in particular seniors living independently or without full time care.

We are an equity investor in AceAge, the company that makes Karie and we are their preferred partner in the commercialization of the device in Canada. 09:25 The study involving independent resident at three seasons retirement communities located in Ontario, demonstrated a very impressive ninety seven percent compliance rate, which represents a significantly higher medication adherence rate than the baseline for this demographic broadly.

We are very encouraged by the success of the study and look forward to supporting seasons and AceAge with the rollout of Karie in all of seasons retirement communities as a next step. 09:50 I would now like to turn the call over to Andrew to discuss our Q3 results in more detail.

Andrew?

09:56 Thank you, David, and good morning, everyone. Before I begin, a reminder that our financial statements and MD&A for the third quarter have been filed with SEDAR and are also available on our website.

Revenue for the third quarter of twenty twenty one increased twenty five point seven million dollars or fifty six percent to seventy one point three million dollars from forty five point six million dollars for the same period in the prior year. This increase was primarily due to the contribution of the SmartMeds and Rexall acquisition that we completed during the second quarter of this year as well as the partial quarter's contribution of sixteen point five million dollars from the Medical Pharmacies business, which was acquired on August twenty three.

10:42 As David noted, this contribution is consistent with the expected run rate annualized revenue of approximately one hundred and fifty million dollars for that business. Revenue further increased in the quarter as a result of organic growth that was achieved, including two thousand two hundred beds that were onboarded during the quarter.

Adjusted EBITDA for the third quarter increased three point one million dollars or seventy eight percent, the six point nine million dollars from three point eight million dollars for the same period in the prior year. 11:12 Again, growth was driven by the SmartMeds, and Rexall acquisitions completed in Q2 as well as the partial quarter's contribution from the acquired Medical Pharmacies business.

The medical pharmacies contribution to adjusted EBITDA was higher than our expected annualized run rate of ten million dollars to twelve million dollars and this was primarily the result of two factors. One, non-recurring benefit from certain operating costs that were not incurred during the first partial month post-closing.

And two, the absence of certain costs that will not be incurred until the completion of the shared services agreement with a vendor in the first quarter of twenty twenty two. Normalized for these non-recurring and short-term benefits.

Adjusted EBITDA for the Medical Pharmacies business was in line with our expected annualized a run rate of ten million twelve million dollars. 12:02 Turning to our balance sheet as of September thirtieth was thirty nine point nine million dollars up from eleven point four million dollars at the end of the second quarter of this year.

The increase is primarily related to the receipts upon closing of the Medical Pharmacies transaction on August twenty of the sixty three point three million dollars in proceeds from the bought deal and concurrent private placement of subscription receipts that we closed in May, which were in escrow and until the closing of the transaction. A portion of those funds are used to satisfy part of the cash consideration for the Medical Pharmacies acquisition and related transaction costs.

12:39 And I will note here that both the ending cash balance and cash provided by operating activities for the quarter benefited from certain working capital movements. With the most notable being just over eight million dollars in payments of trade payables that would have ordinarily been processed at the end of September, but which did not occur until the following day.

While we expect to continue to generate positive cash flows from operations going forward. These cash flows maybe impacted by cost concurred related to the Medical Pharmacies integration in the next few quarters.

13:11 Also, concurrent with the closing of the Medical Pharmacies transaction, we entered into an amended and restated credit agreement with our senior lender crown private credit partners to refinance our existing credit facility. A total of sixty million dollars in new credit facilities were advanced approximately thirty seven million dollars of which was used to pay a portion of the cash consideration to the Medical Pharmacies acquisition and related transaction cost.

13:37 The remainder of these funds were used to repay the previous facility and associated fees. The terms of the new senior debt facility as well as the amendments the existing subordinated facility that I discussed in our last call, each contribute to lowering our overall cost of capital.

Net debt at September thirty was fifty seven point three million dollars up from forty seven point eight million dollars at the end of the second quarter. However, with the additional contributions from the Medical Pharmacies acquisitions, net debt to annualized run rate adjusted EBITDA is two point one times down from two point eight times at the end of June.

14:12 And with that, I will now turn the call back over to David for some concluding comments. David?

14:16 Thank you, Andrew. As I mentioned earlier, our growth strategy has been incredibly successful during the past couple of years and has truly transformed the company.

Now just in terms of our revenue and earnings profile, but even more importantly, in terms of the service and partnership that we can provide to our customers. We are on the verge of reaching our stated goal of one hundred thousand resident service, equal two years ahead of our original aspirational target.

I want to emphasize very strongly, however, that we are just getting started. Growth opportunities lie ahead of us that are just as significant as what we have already realized.

Our market share is still less than twenty five percent, and we believe that we are building the team capabilities and service offering that will make up a significantly larger part of this sector in the coming years. 15:06 As I mentioned, organic growth opportunities have re-emerged after the challenges of the pandemic.

We won three thousand five hundred new beds during Q3 alone, most of which have now been onboarded. We are confident in our ability to continue this recent momentum.

In addition, our acquisition pipeline remains very robust and increasingly active, and we expect to continue our track record of making disciplined accretive and highly synergistic additions to our national operating platform. The key as always is to provide exceptional service to our customers and to ensure that our additional size, scale and capabilities are translated into an increasingly superior pharmacy services offering.

We have confidence and momentum, but we also have the humility to recognize that we need to support our customers and earn their trust each and every day. If we do this, and we continue to pursue our missions to enhance the health of Canadians with unique or complex medication needs.

I am very confident that our success and our growth trajectory will continue. 16:07 In closing, I want to thank our exceptional team, including all those who have joined us as part of the recent acquisitions for the commitment, responsiveness and service orientation that they display on a daily basis.

From the challenges of the pandemic to the demands of integration to the day-to-day need to go above and beyond to take care of our customers. Our people have consistently stepped up and are the primary reason for all our success.

16:32 With that, I would now like to open the call to questions. Operator?

Operator?

17:41 Hi, good morning David and Andrew and congratulations on a great execution in the quarter. I guess a two pronged question.

First of all, you talked about market share in Canada at ninety six thousand below at twenty three percent. I'm assuming the biggest chunk of that seventy seven percent or large chunk anyway would be in Quebec.

So, can you talk a little bit about maybe do you want to enter that province? And or where do you see the rest of the beds coming from and can you put a sort of number on aspiration where you want to get to a or where you think you can get to in terms of numbers of beds in the long-term care.

And then part two, I guess, Is there an ancillary market that you find attractive that you think could be your next [Indiscernible] of growth? Thanks.

18:28 Sure. Good morning and thanks Doug.

Yes, on the target and setting a new target, I think we're, our team is really focused on getting across the line on one hundred thousand bed. So I'm a big believer that sort of run through the finish line of the ratio and before you new ones.

So where we're almost there. So I don't think we're going to sort of make a specific target, but obviously based on my comments during the call thus far, we're very bullish.

We believe even without getting outside our existing geography that the kind of organic growth rate that we delivered in Q3, which if you annualize is, you're talking about a double digit organic growth rate. Those are where we set our internal target even within existing geographies, there's still a lot of beds available.

On geographic expansion, yes, we have our focus thus far has been about synergistic growth in the markets in which we operate. We are taking a hard look at every single province that we either don't operate in or have a very light presence in, and so nothing to announce or guide to now, but I do think you will see us enter other geographies in Canada, in the next couple of years years.

Yeah. and then in terms of ancillary target, there are as you know, Doug, there are other congregate care settings that have a similar not exactly the same, but a similar dynamic in terms of the extent to which their residents are dependent on the facility for care and have some complex mitigation needs things like corrections facilities, group homes we serve some of those, but we have not historically taken as concerted or run at penetration in that space.

So, I think we traditionally quote our market size as just seniors housing. We think the addressable market is bigger than that and we have opportunities to increase penetration there.

And all of that, I think adds up to some pretty bullish growth forecasts without even getting to the idea future acquisitions, which we continue to pursue.

20:26 Okay, Great. My final one just for Andrew.

Maybe can just free cash flow. I mean there's great visibility given where your bed [Indiscernible] and the stability of revenue per bed.

Can you talk about what we can expect in terms of CapEx or other words, what's the flow through of EBITDA to free cash flow for next year?

20:46 Good morning, Doug. Yes, I think that the next couple of quarters they'll really be focused on the integration work and as we've talked about prior calls.

There's some costs associated with that, we typically forecasted about a one-to-one ratio in terms of the integration costs, compared to the synergies we expect to realize. I think that where we're forecasting to both complete the integration work not only in terms of getting those cost over the way, but obviously realizing on those synergies, and we expect that by Q4 of next year we'll be generating positive free cash flow and really start to improve our cash conversion on EBITDA from there.

21:25 Okay, great. Thanks very much.

That's it for me.

21:28 Thanks, Doug.

21:36 Thank you. Good morning, David and Andrew.

Congratulations for the quarter. My first question will be from can you discuss the non-recurring benefit from [Indiscernible] not required until signing the stress of the OEE with our medical pharmacy, maybe just some color behind and is there catch up?

And if we normalize for those, I think medical pharmacy contribution in the quarter was one million to one point two million which imply a normalized EBITDA of five point nine million dollars to six point one million dollars this quarter?.

22:06 Thank you for your question. Good morning.

I think Andrew can provide those additional granularity if necessary. But I think at the highest level, the best way to think about this is remember that we purchased not a full company, but we purchased a division that was part of a broader company.

So as it happens, I think that was the case with our remedies deal and our Rexall deals. So when that happens, there is a bit of complexity carving out the division from the broader entity.

And so I would say in terms of most of those non-recurring costs. The first month of medical pharmacies is I think [Indiscernible] there were just certain aspects of the cost structure that I think weren't representative of what the full run rate what will be and that continued a little bit some extent September.

And then the other factor is that we do have a shared service agreement with Medical Pharmacies whereby, their corporate office is continuing to provide some services on a transitional basis while we create those capabilities and those resources inside our company. And so to some extent our cost structure is lower than it ultimately will be.

So those are the two main drivers. I think your math on the normalization, I think it's right, I think it probably could be a little bit higher in terms of what the Medical Pharmacies contribution is it really, I guess, depends on whether it lands closer to the twelve million dollars or the ten million dollars in the range, but obviously really encouraging in terms of what the first six weeks or so been, we're not ready to declare any sort of permanent overperformance, but we're encouraged by what the business has done thus far.

23:44 Thank you. That very helpful.

And my next question will be from organic growth, so you want thirty five hundred [Indiscernible] in this quarter including fifteen hundred beds from the Ontario contract. Can you please break down the remaining ones, whether they from new homes or extensions of the clicks home or maybe an increase an [Indiscernible] that functional care homes and how you think that would progress throughout our Q4 and next year?

24:06 Sure. So high level, the three thousand five hundred were all new beds.

So the Ontario based contract was one and as I mentioned during the call, the other large driver of it was about eighteen hundred beds. We won in Western Canada that for the most part were former served by Rexall and became available by Virtue of Rexall strategic decision to exit the market.

So there's a few smaller wins as well, but those were the two big ones. Over and above that, I think in terms of your question about occupancy, we are seeing continued normalization of occupancy rates.

I think we said on the last call that we thought we were about fifteen hundred beds short of what we regard as normal occupancy rate. I would – we would estimate that about five hundred of about fifteen hundred normalized over the course of the quarter.

So it’s a precise science, but we're somewhere around we believe about one thousand beds short of what the pre-COVID occupancy levels would look like.

25:11 That's it. Thank you.

And maybe just last one of please. The revenue per backdrop dropped two eight seventy six this quarter, I think is slower compared to your historical range of nine twenty, two thirty.

Can you please discuss the right behind us and how we should think about modeling this going forward?

25:26 I'll ask Andrew to field that one?

25:30 Yeah. I think it's a couple of factors.

I think firstly, number that using would just be the weighted average across all of our beds. I think some of the beds that we onboarded in the quarter, particularly in the west would probably be on the lower end of that range in terms of what contributes to the average that probably brought it down a little bit.

As you know the funding models while more on a level playing field across the provinces and bedtime types now, but some of the beds particularly long term care in the west. They are slightly lower in terms of annual revenue.

So, that was a primary driver. I think that the colored stub period first month of MPGL probably contributed a little bit to that as well.

I think that using that something around nine hundred, nine twenty five million is still the right number to use on an overall basis. They may change from quarter to quarter just depending on where the bulk of any beds onboarded were.

26:24 Thank you. That’s it for me.

26:27 Thank you.

26:37 Good morning and congrats on the continued execution. Just quick question regarding the combined entity and the potential for integration of the technology back end.

Can you walk us through some potential operational efficiencies then maybe established from basically whether it's integrating some of the management software that MGCL had in terms of the pharmacy management solutions or maybe some of the access you guys have to the SmartLink software? Would love to know a bit more color on potential operations there?

27:10 Yeah, good morning and thanks for your question. Yeah.

I don't think we're going to get that far down the road publicly on too much on the technology side, I would say. The important thing to emphasize is that our minimum synergy target that we guided to does not contemplate anything as it relates to technology enabled efficiencies or innovation, but you're right, that there are part of our integration work is about looking at the various software and technology platforms that the two companies use and making decisions about standardizing towards one of the other.

And so we believe the benefits of that standardization and best practices I think are going to make our operations more efficient and also I think provide a more consistent service offering to our customers. I think over and above that we do believe that there, our technology related opportunities to drive further automation and further efficiencies in our facilities, particularly as some of these facilities start to service, a significant number of beds.

We have, we'll have facilities one we're finished that are servicing as many beds as some of the companies we acquired serviced in total nationally, but I think we're going to go one step at the time here, the main focus right now getting the physical consolidation done, and we'll continue to provide more guidance as it relates to how technology can be used to further drive both better service to our customers and margin mentioned over the course of twenty twenty two.

28:38 Excellent. I appreciate the answer there.

Thank you.

28:40 Thanks.

28:49 Hi, good morning. Thanks for taking my call.

I noted in the press release, there was mentioned on the annualized revenue and adjusted EBITDA for the MPGL pharmacy business expected to be one hundred and fifty million dollars and ten million dollars to twelve million dollars in EBITDA and that doesn't include the cost synergies and there's a few moving parts in general. I'm wondering if you have just a broad range of what the overall business could be doing on a run rate basis for revenue and EBITDA?

29:23 I mean based on what we've seen so far, Justin, I think the revenue number is pretty much spot on. I think the bed count, the Medical Pharmacies bed count with a little bit higher than we forecast.

So that's guys create a bit of an uptick. I think we're going to hold to the ten million dollars to twelve million dollars range.

Obviously, if you annualize Q3 it would be a higher amount than that. But as Andrew mentioned, there are some aspects of the cost structure, but we don't think would be recurring.

So, I think we're going to hold it ten million to twelve million dollars. Obviously, there's probably an indication that hopefully it's fair to assume that it least be closer to the high end of that range, but I don't think we're going to declare victory here prematurely and so we have more more actual results under our belt.

30:07 And just the consolidated operations as a whole, are you able to give any color there?

30:13 In terms of overall EBITDA?

30:16 Yes.

30:17 Yeah, I think, I believe that to the analyst setting where you, for the most part, you guys do a good job at modeling. I think both where we are and where we'll be fully integrated.

I think you can, I think you can comfortably extrapolate the run rate of the core business by now, and I think we've guided to what the Medical Pharmacies number will be, and I think the five million dollars in synergies were feel very good about I think that we believe it should probably, probably be realized on a fairly even progressive basis starting in Q4 and running through next year. And so really the main variable is just how much additional growth we can put through our platform, and we're obviously focused on trying to repeat the Q3 performance going forward.

30:58 Okay, fair enough. And then just in general, we hear about all the supply chain disruptions and a tight labor market difficult hiring people, I'm just wondering if that's it all being impacted to CareRx and if so, what are some of the initiatives to manage through that?

31:18 Yes. good question.

Not to a significant degree. I think we're fortunate on the supply chain side and that we have a great relationship with our preferred wholesaler and distribution partner.

And so the medication supply chain been far away, the most important one for us and they've done a wonderful job from the early days of the pandemic of getting us what we need. So, I would not had any thankfully any supply chain related issues that would mirror some of the things we're hearing about the broader economy.

Similarly on the inflation and labor side, again, our labor force is a bit different than the “average” one in the sense that, it's heavily populated by pharmacy professionals, pharmacists – pharmacy technicians and pharmacy assistance. I wouldn't say that the broader labor market trends would mirror that professional.

We all we see at any given time and usually geographically isolated where the market for pharmacy professionals gets hot and we have challenges, but nothing that I think would be driven by the broader economic situation and then lastly on inflation in general, again, fortunately, the biggest drivers of our cost structure are the cost of medication and the cost of labor. So, we're not seeing pressures there.

On smaller aspects of our cost structure, insurance costs and other things, for sure, we are seeing some inflation, but I wouldn't say at this point that it's material in our overall cost structure.

32:53 Understood. Thank you for taking my questions.

32:55 Thanks, Justin.

33:07 Good morning guys. And thanks for taking my call.

Just calling in for [Indiscernible]. Congratulations on the quarter.

It's really good to see. We've been seeing a lot of indications that net new prescriptions were down during the pandemic.

So, just kind of wondering if that bounces back now is that something that would impact margins in terms of more medications per person increasing costs? Or how do you look at that?

33:32 Yes, it's a good question. I think it's in my three years here, we've always tried to prognostic or make assessments there.

But I would tell you in general, in the space we're in and the seniors housing residents, but we've seen nothing but stability in terms of what prescription looks like over the course of a residence tenure in a long-term care retirement. So, I think to the extent that we are remodeling anything.

I think we can safely say it's pretty stable. We're obviously focused on driving revenue per bed up, but most of that is by doing things like providing ancillary services, like medical supplies, medical cannabis.

But I think on the pure prescription front, I think our sector relatively stable from a prescription perspective.

34:23 Okay. Thank you.

And just one more maybe a brief update in terms of where the Canopy dispute is and any color on how Vancouver is going for pharmacy at your door and where you're looking next?

34:37 Sure. Good question.

So on Canopy, not a lot to update I would say, as I said on the last call, unfortunately the entire cannabis sector and medical cannabis in particular has underperformed versus the initial commercial expectations. And I don't think our partnership is unique in any way there.

But we're having very constructive discussions with Canopy. I think our teams are working very well on the front line, and we're seeing some traction in some growth.

And so, I think my sense is both parties are disappointed, but want the partnership to continue and I believe we're all pretty committed to making the next three years better than the first three years. So feeling positive on that front.

Yeah on pharmacy, yeah, we are now in both Alberta and in the Vancouver market. Our monthly patient served, and revenue continues to track upwards.

I would say those right now, just given the magnitude of the integration work underway, we've got to be selfish and focusing on the core business and making sure that integration gets done and done with excellence. So, I don't think at this point, we're contemplating any near term expansion to any other markets for pharmacy at your door.

35:50 Okay, that's good to know and good to hear. Thanks guys.

35:53 Thanks, Paul.

36:03 Hi, guys. Thanks for taking my question and congratulations on the quarter.

Yes, my first question is, there's obviously been some pretty dramatic changes in your industry over the last year versus year acquisitions as well as COVID. And now that the medical facilities acquisition is closed, I was curious about what kind of or if there is any changes in terms of your conversations with clients and is there a different dynamic in the marketplace now?

Those two kind of large events have come to pass? And then my second question is the Think Research deal or expansion of that.

Could you help sort of size that opportunity and what is going to mean for potentially getting incremental beds?

36:52 Sure thanks Stephan for your question. On the first point, yeah, I won't – I never try to speak for the long-term care home operators because they've obviously been through an incredible amount and some of them are publicly traded and to make their own comments.

But obviously, I think there's a cautious optimism that the worst is behind us from a COVID perspective. I think a lot of lessons have been learned.

Not just by the home operators, but I think a lot of provincial governments across country have recognized that their support for long-term care was not at the level it needed to be. I think you're seeing a very healthy reengagement by provincial government to support the long-term care sector better and I think that's long overdue and necessary.

From a pharmacy perspective, I would say to the extent of their silver lining and all this. I think we do benefit from that in terms of just governments recognizing in the first instance just what role we play in the sector and how important we are.

There's been a history of governments looking at long-term care pharmacy as a source of budget cut, I think they're really re-examining that and understanding the value we play in the sector and that if the sector is underfunded then the last thing they should be doing is under funding pharmacy. 38:07 Again, we speak for the long-term care operators, but I do think there is a recognition that when time to get top and it's not been – it's not been any tougher than it's been the last few years.

You need to have a scaled sophisticated partner that has multiple sites, that has multiple levers to pull in order to support the business. And we hope and believe that more home operators will be looking for those, the larger scale national providers to be able to really hand their pharmacy needs to in a way that, you know [Indiscernible] we can do what they need, and they can focus on resident care.

But I adding a lot of that stories don't written in terms of what the aftermath of COVID will be. But for us, we're happy with what we accomplished and now, we're just focused on telling the story to the customers that don't work with us about why we believe it's in their best interest to do so.

39:00 And then sorry, the second question on Think Research. Yeah, the best way to think about this is as we talked about before, unlike a long-term care facility in a retirement home, residents get their medications a whole host of ways.

Some of them used our medication management services. Some of them, source their medications independently or they still drive and drive to their local retail pharmacy.

So, I mean the most important part of the Think Research partnership has nothing to do with us. It's really about making sure there's a physician presence in these homes, which is unfortunately challenged at some points are having a virtual network of physician so that people can be seen on a timely basis.

That's the most important thing for us from a business perspective though. The advantages, all of these folks who don't tend to use our medication management services, we'll use us for prescription.

So, we look at it really an additional driver of bed count growth. But more importantly, it's a service offering that we think differentiates us in terms of offering.

They the most innovative value add partnerships to our retirement home customers.

40:12 Great. Thanks a lot.

40:14 Thanks, Stephan.

40:30 Thank you. Yes, just a couple of follow-up from me.

So as you go into the medical pharmacies and Rexall and real synergy, can you talk about the pass ahead or the realizing margins by quarter, please provide a road map on the next four, five, six quarter until you reach the twelve percent, thirteen percent?

40:48 Yes. I good question.

I think that's the first analyst follow-up question. I've ever got to your first.

I don't know that we're going to provide numerical guidance. I think we've already, we've made clear what we think the endpoint target will be and that hasn't changed.

I think your best to think about it as a progressive escalation from Q4 hitting the kind of fully integrated margin at some point in Q4 of next year I think that's all we would say at this point just because obviously the exact timing of integration and when the benefits at the P&L are still a little bit uncertain in terms of which month and which quarter?

41:26 Thank you for that. And on the M&A front, I know that you are still suggesting the Medical Pharmacies acquisition.

But is there as you are getting worn inbound calls from your corporate development teams being the acquired choice of either tuck in for other acquisitions? And are you seeing any change evaluation?

41:44 You see, on the first point, we are, as I mentioned the pipeline is active and actually increasingly active in the last few months. I think you're right.

I think we are, we've established ourselves as the acquirer of choice. And so although obviously future deals are likely to be much smaller than the Medical Pharmacies deal.

The advantage of that is you can do more of them and you can integrate them more successfully. So yes, we're very committed and we expect to do more deals in the quarters ahead and evaluation.

I think from our perspective, we've established what the market price should be for both small tuck ins and larger platforms and we don't see any inflation in that and candidly we're just too disciplined. We're not willing to chase anything above where we believe that the right economics work for us.

42:36 Thank you so much.

42:37 Thanks.

42:46 Thank you and thank you, everyone for participating on today's call and for your continued interest in CareRx. We look forward to reporting on our continued progress next quarter.

Thank you.