GREENBROOK TMS ANNOUNCES RESTRUCTURING PLAN TO REDUCE COSTS, STREAMLINE OPERATIONS AND ACHIEVE PROFITABILITY

Rhea-AI Summary

On March 6, 2023, Greenbrook TMS Inc. (NASDAQ: GBNH) announced a comprehensive restructuring plan aimed at boosting profitability and operational efficiency. The plan includes closing 50 treatment centers, impacting about 20-25% of the workforce, and will focus on the most profitable centers contributing nearly 90% of Q4 2022 revenue. Anticipated annual cost savings range from US$22 million to US$25 million. Despite the workforce reduction, the company prioritizes patient care quality. The restructuring and related costs are estimated between US$1 million and US$2 million, expected by the end of 2023.

Positive

• Estimated annual cost savings of US$22 million to US$25 million.
• Focus on 133 treatment centers generating about 90% of Q4 2022 revenue.

Negative

• Closure of 50 treatment centers.
• 20-25% workforce reduction expected.

TORONTO, March 6, 2023 /PRNewswire/ - Greenbrook TMS Inc. (TSX: GTMS) (NASDAQ: GBNH) ("Greenbrook" or the "Company"), announces today that it is embarking on a comprehensive restructuring plan (the "Restructuring Plan") that aims to strengthen the Company by leveraging its scale to further reduce complexity, streamlining its operating model and driving operational efficiencies to achieve profitability.

The Restructuring Plan is aimed at focusing operations to the Company's most profitable treatment centers across the United States, streamlining of patient engagement and delivery of care while reducing facility and logistical overhead. These changes also include a workforce reduction that is expected to impact approximately 20-25% of the Company's current staff. The Restructuring Plan is also expected to enable Greenbrook to concentrate marketing spend for more effective outreach, while continuing to serve patients in all of its current core markets more efficiently through reduced staffing requirements, all without compromising quality of care.

As part of this initiative, the Company plans to decrease its operating footprint by closing 50 treatment centers over the next 45 days, allowing management to focus on the remaining 133 treatment centers, which have generated approaching 90% of the Company's total revenue in Q4 2022. The remaining treatment centers will continue clinical offerings of Transcranial Magnetic Stimulation ("TMS") and a select and growing number of centers will continue offering Spravato® therapy, and we expect that these remaining centers will provide a strong foundation to innovate and develop new product lines.

This Restructuring Plan is intended to fortify the Company's path to achieve sustainable profitability and long-term growth. Together, these reductions to the Company's footprint, headcount and operating expenses are estimated to result in cost savings of between US$22 million and US$25 million on an annualized run-rate basis when fully implemented. Restructuring and related charges associated with these actions are estimated to be in the range of US$1 million to US$2 million and are expected to be substantially incurred by the end of 2023.

Quality of care is a top priority at Greenbrook. The Restructuring Plan includes provisions to ensure continuity of care for current patients, as well as continued support for our clinicians.

"Greenbook is committed to helping our patients regain wellness and improving quality of life", said Bill Leonard, President and CEO. "We believe this restructuring initiative will enable us to continue to deliver the best quality TMS and Spravato® treatments to patients across the country with the goal of achieving profitability for the overall business despite the challenges of the current economic environment."

About Greenbrook TMS Inc.

Operating through 183 Company-operated treatment centers (prior to completion of the Restructuring Plan), Greenbrook is a leading provider of TMS therapy and Spravato® (esketamine nasal spray), FDA-cleared, non-invasive therapies for the treatment of Major Depressive Disorder ("MDD") and other mental health disorders, in the United States. TMS therapy provides local electromagnetic stimulation to specific brain regions known to be directly associated with mood regulation. Spravato® is offered to treat adults with treatment-resistant depression and depressive symptoms in adults with MDD with suicidal thoughts or actions. Greenbrook has provided more than one million treatments to over 27,000 patients struggling with depression.

Cautionary Note Regarding Forward-Looking Information

Certain information in this press release, including statements regarding the Restructuring Plan, such as statements related to the expected benefits of and timing of completion of the Restructuring Plan, and the expected costs and charges associated therewith, constitute forward-looking information within the meaning of applicable securities laws in Canada and the United States, including the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, risks relating to our ability to satisfy cash requirements necessary to operate our business and remain in compliance with our credit facility, macroeconomic factors such as inflation and recessionary conditions, as well as the factors described in greater detail in the "Risk Factors" section of the Company's annual report on Form 20-F for the fiscal year ended December 31, 2021, in the "Risks and Uncertainties" section of the Company's management's discussion and analysis for the three and nine months ended September 30, 2022, and in the Company's other materials filed with the Canadian securities regulatory authorities and the United States Securities and Exchange Commission from time to time, available at www.sedar.com and www.sec.gov, respectively. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

View original content:https://www.prnewswire.com/news-releases/greenbrook-tms-announces-restructuring-plan-to-reduce-costs-streamline-operations-and-achieve-profitability-301763091.html

SOURCE Greenbrook TMS Inc.

FAQ

What is Greenbrook TMS's restructuring plan announced on March 6, 2023?

Greenbrook TMS announced a restructuring plan to streamline operations, close 50 treatment centers, and reduce its workforce by 20-25%.

How much does Greenbrook TMS expect to save from the restructuring plan?

The company anticipates annual cost savings between US$22 million and US$25 million.

How many treatment centers will Greenbrook TMS operate after the restructuring?

After the restructuring, Greenbrook TMS plans to focus on 133 treatment centers.

What percentage of revenue do the remaining treatment centers contribute?

The remaining treatment centers are expected to contribute nearly 90% of Greenbrook's total revenue for Q4 2022.

When will the restructuring costs be incurred by Greenbrook TMS?

Restructuring and related charges are expected to be incurred by the end of 2023, estimated between US$1 million and US$2 million.