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Good morning, everyone, and welcome to CareRx Second Quarter 2021 Financial Results Conference Call.Please note that this call is being broadcast live over the Internet and the webcast will be available for replay beginning approximately 1 hour following completion of the call. Details of how to access the webcast replay are available in yesterday's news release announcing the company's financial results as well as on the company's website at www.carerx.ca. Today's call is accompanied by a slide presentation. Those listed on their phones can access the slide presentation from the company's website in the Investors section under Events and Presentations by loading the webcast and choosing the non-streaming audio option.Certain matters discussed in today's call or answers that may be given to questions asked could constitute forward-looking statements are subject to risks or uncertainties relating to CareRx's future financial and business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in CareRx periodical results and registration statements, and you can access these documents in the SEDAR database under www.sedar.com. CareRx is under no obligation to update any forward-looking statements discussed today, and investors are cautioned not to place undue reliance on these statements.I would now like to turn the call over to David Murphy, President and CEO of CareRx Corporation. Please go ahead, Mr. Murphy.
Thank you, and good morning, everyone. Welcome to our second quarter 2021 earnings call. With me is our Chief Financial Officer, Andrew Mok.The second quarter was perhaps the most eventful quarter we have ever had as a company, and it represented yet another meaningful step in the execution of our growth strategy. We once again delivered strong year-over-year growth in both our top and bottom lines. During the quarter, we closed 2 acquisitions, the SmartMeds acquisition at the beginning of the quarter and the Rexall LTC Pharmacy acquisition towards the end. And most significantly, we announced the signing of a definitive agreement for our largest and most meaningful acquisition to-date, that of a long-term care pharmacy business of Medical Pharmacies.The success of our growth strategy was once again evident in our financial results. Second quarter revenue increased 25% year-over-year to just shy of CAD 50 million. Growth was driven primarily by an increase in the average number of bed service, up 27% to 53,184 from 41,754 in the second quarter of last year, and up 9% from 48,703 in the first quarter of this year. The year-over-year increase in average bed service is primarily the result of the Remedy's acquisition, which was completed partway through the second quarter of last year and the SmartMeds acquisition that closed on April 1 of this year.Notably, the increase in average bed service from the first quarter to the second quarter also includes an increase of approximately 750 beds from the gradual normalization of occupancy rates for our home operator customers. Despite this increase, we have still not yet reached pre-COVID occupancy levels in the homes we service. We estimate that our normalized bed count based on a return to pre-COVID occupancy rates would be approximately 1,500 beds higher than our current level.Finally, average bed service for the second quarter were helped marginally by the closing of the Rexall LTC acquisition 9 days before the end of the quarter. Approximately 2,500 beds from the Rexall acquisition were on-boarded prior to the end of the second quarter, and the remaining 1,500 beds from that acquisition were on-boarded in July.Adjusted EBITDA for Q2 increased 54% year-over-year to CAD 4.3 million, with growth, again, driven by the increase in the average number of bed serviced as well as the full quarterly contribution of the CAD 3 million in annual cost saving synergies from the Remedy's integration.The second quarter continued the very busy start to 2021 for our company. On April 1, we closed the SmartMeds acquisition that we announced in late January. As a reminder, SmartMeds added approximately 2,400 beds in Ontario. SmartMeds is expected to contribute run rate annualized revenue and adjusted EBITDA of approximately CAD 13 million and CAD 1.5 million, respectively, prior to any benefits from the integration of the operations of the 2 businesses. And the first quarter contribution as part of CareRx was very much in line with our expectations.Towards the end of the quarter, on June 21, we also closed our previously announced acquisition of a portion of the Long-Term Care Pharmacy business of Rexall, which prior to their strategic decision to exit the business was the fourth largest provider in the market. The Rexall acquisition added approximately 4,000 beds across Ontario and Northern Alberta. It also included a fulfillment center in Sudbury, Ontario. It is expected to contribute run rate annualized revenue of approximately CAD 14 million and nominal adjusted EBITDA prior to any benefits from the integration of the operations of the 2 businesses.In addition to closing these 2 tuck-in acquisitions, we took the first step toward our most meaningful acquisition to-date, signing a definitive agreement to acquire the Long-Term care Pharmacy business of Medical Pharmacies. The Medical Pharmacies LTC business will add approximately 36,000 beds, taking our total bed count upon closing to approximately 92,000 events. This acquisition alone expands our bed count by about 70% and further cements the leadership position we have been building in the sector over the past few years.The Medical Pharmacies acquisition is expected to contribute run rate annualized revenue of approximately CAD 150 million and adjusted EBITDA of between CAD 10 million and CAD 12 million. In addition, we are estimating cost saving synergies to be a minimum of CAD 5 million. Finally, I am pleased to report that last week, we received clearance from the Competition Bureau to move forward with the acquisition. The transaction remain subject to other customary closing conditions, and we expect to complete the acquisition by mid-September.I would now like to turn the call over to Andrew to discuss our Q2 results in more detail. Andrew?
Thank you, David, and good morning, everyone. Before I begin, a reminder that our financial statements and MD&A for the second quarter have been filed with SEDAR and are also available on our website.Revenue for the second quarter of 2021 increased CAD 10 million or 25% to CAD 49.7 million from CAD 39.7 million in the second quarter of 2020. This increase was attributable to the larger contribution in Q2 of this year from the Remedy's business, from which we only had a partial contribution last year as it was acquired partway through the second quarter of 2020 as well as the contribution of the SmartMeds acquisition that closed on April 1. This growth was partially offset by the continuing temporary reduction in the number of beds serviced due to COVID-19. As David noted, occupancy levels at the home suite service are continuing to gradually improve. However, they have not yet returned to pre-pandemic levels. I'll also reiterate David's comments that due to having closed 9 days prior to the end of the quarter, the Rexall acquisition do not meaningfully contribute to the quarter's results.Adjusted EBITDA for the second quarter increased CAD 1.5 million or 54% to CAD 4.3 million from CAD 2.8 million for Q2 of last year. Growth was again driven primarily by the full quarter contribution from the Remedy's business this year as well as the quarterly contribution of the more than CAD 3 million in annualized cost saving synergies achieved from the consolidation of certain fulfillment centers and other operating costs as part of the Remedy's integration, in addition to the contribution from the SmartMeds acquisition. Adjusted EBITDA growth was partially offset by the continued temporary reduction of the number of beds serviced due to COVID-19.In terms of the incremental beds on-boarded during the quarter, it is important to note that as most of these beds, including the SmartMeds beds and the beds being serviced out of our recently acquired Thunder Bay and Sudbury locations are being serviced out of new incremental pharmacy locations, and they do not provide for an expansion of our adjusted EBITDA margin in the same way that they would have if they were serviced out of an existing location. We believe that following the completion and integration of the Medical Pharmacies acquisition, our optimized national fulfillment network will be well-positioned to realize on significant operating efficiencies while being able to service incremental bed growth, which will drive further expansion in our margins.Turning to our balance sheet. We ended Q2 with CAD 11.4 million in cash compared to CAD 28.7 million in cash at the end of the first quarter of this year. This does not include the net proceeds of the CAD 63.3 million bought deal and concurrent private placement of subscription receipts that we closed on May 19. As a reminder, that combined offering, which included the full exercise of the upsize options, consisted of just over CAD 12.5 million subscription receipts issued at $5.05 per share. These will be used to fund a portion of the cash component of the purchase consideration for the Medical Pharmacies acquisition and associated transaction costs. Those funds are being held in escrow until the closing of the Medical Pharmacies acquisition, which, as David mentioned, is targeted to occur by mid-September.The sequential Q1 to Q2 decrease in cash was a result of a number of expected and nonrecurring cash outflows, including the payment of the cash consideration of the Rexall acquisition and the payments of the earn-outs and deferred consideration related to the Remedy's acquisition. The decrease is also the result of the use of cash in operations of CAD 5.7 million during Q2, which, in addition to the impact of the timing of certain working capital movements, such as incremental inventory purchased towards the end of the quarter in anticipation of the acquired Rexall contract coming on-board, included several nonrecurring items, such as the remaining payment of the settlement of the previously disclosed arbitration related to a historical acquisition and transaction costs associated with the acquisitions signed and closed during the quarter.Net debt at the end of Q2 was CAD 47.8 million, which was up from CAD 29.5 million at the end of the first quarter and is reflective of the lower cash position. That increased our net debt to annualized run rate adjusted EBITDA to 2.8x from 1.8x at the end of Q1. This is expected to return to the levels achieved in previous quarters following the closing of the Medical Pharmacies acquisition and associated subscription receipt financing.During the quarter, we entered into a binding commitment letter with our senior lender, Crown Capital, to refinance our existing senior credit facilities, providing for a new CAD 60 million senior debt facility, which is also scheduled to close concurrently with the closing of the Medical Pharmacies acquisition. The proceeds from the refinancing will be used to repay the existing senior credit facility and fund a portion of the Medical Pharmacies' cash consideration.In addition, we expanded our subordinated facility with Yorkville Asset Management by CAD 6 million during the quarter and amended certain terms, including the extension of the maturity date to the later of March 31, 2026, and the fifth anniversary of the closing of the Medical Pharmacies acquisition, and a reduction in the interest rate from 12% to 10.5% per year. Combined with the aforementioned refinancing, this nets up to CAD 39 million in incremental debt. It is important to note that the terms of the new senior debt facility as well as the amendments to the existing subordinated facility, both result in the lowering of our overall cost of capital.I will now turn the call back over to David for some concluding comments. David?
Thank you, Andrew. With the successful execution of our growth strategy, we have expanded our current bed count to over 56,000. The addition of the Medical Pharmacies LTC business and its 36,000 beds will further transform our revenue and earnings profile. Upon closing of the Medical Pharmacies acquisition, our total bed count will stand at approximately 92,000. That's up about 188% or 60,000 beds from our total at the end of the first quarter of 2020. This increase and the corresponding growth in revenue will afford us the opportunity to drive a meaningful improvement in operating margin as we execute on integration activities in the next 6 to 12 months.In addition to cost synergies from individual acquisitions, such as the Medical Pharmacies transaction, we have a broader opportunity to leverage all of our recent acquisitions to optimize our fulfillment network and drive operational efficiencies. We estimate that as we complete these integration initiatives, run rate adjusted EBITDA margin will continue to increase over the next 6 quarters until they reach 12% to 13% at some point during 2022. Beyond that, our 92,000 beds represent less than 22% of the approximately 425,000 seniors housing beds in Canada today. A number that I will remind you is forecasted to more than double over the next 15 years to more than 1 million beds.In short, despite our significant expansion over the past 1.5 years, we still have tremendous growth ahead of us, a growth opportunity that will enable us to continue to improve our operating margins. We have never been better positioned to capitalize on these opportunities. We have a significantly expanded national footprint, already the largest in the country and to be further enhanced by the Medical Pharmacies acquisition, enabling us to even better address the needs of both existing customers as well as potential new customers. As we drive efficiencies, standardization and automation in our operations, we will be able to leverage these improvements to create a market-leading differentiated service offering to our customers, built on quality, technology and clinical and service excellence.I would now like to open the call to questions. Operator?
[Operator Instructions] First question comes from David Newman with Desjardins.
First question here, just on the margins, they dipped a little bit, kind of niggling, but they dipped down to 8.7%, and it looks like it was on the step-up in employee costs and other OpEx. Maybe just some color on the OpEx. I know you haven't closed MPGL and all that. But -- and I know that will lead to big margin leverage. But maybe just -- maybe a discussion around the OpEx. And is it just noise, or Remedy's and SmartMeds and bringing on costs ahead of revenue sort of thing?
Yes. I'll let Andrew get into more detail. But I think, David, yes, I mean, we look at it as a pretty flat quarter-over-quarter margin performance. I think it's fair to say now that the fully synergized Remedy's -- post Remedy's EBITDA margin is in and around 9%, should have been a bit higher if we didn't have the COVID impact on bed count, but I think that's where we're at. And although there'll always be a bit of variability from quarter-to-quarter. I think one of the sources of variability in Q2 was we did start-up a new location in Thunder Bay, Ontario. And as you said, had some onboarding of a couple of acquisitions. I think that's the main driver. But I think fair to think about the starting point here is about 9%. And as you say, it's really now all about integration optimization and putting new beds through our network to drive the increase up to that 12% to 13% that I mentioned. But Andrew, maybe if you want to provide any additional color on OpEx specifically?
Sure. David. Yes, I think that David, Murphy captured all of the components there and is primarily related to bringing on those new locations. Proportionately, the increase on the OpEx side is also driven -- 2 other factors there. One, with the SmartMeds acquisition, as we said, it came onboard and it performed exactly as we expected it to. But there is going to be a little bit of a ramp there as we realized not just on the site consolidation synergies, but a little bit of the operating cost synergies as well, which we did not plan to undertake in the first quarter post acquisition. So proportionately, you will see, not just because of the MPGL closing, but just over the course of the rest of the year that OpEx as a percentage of revenue continue to go down as well.
Okay. And are you -- like when you bring on Medical Pharmacies and Rexall, are you from a resourcing point of view, do you have the corporate structure in place that can handle that? Or do you need to add bodies on the OpEx side? Like can you handle all the 92,000 beds with what you've got? Or do you need to build?
Yes. On the Medical Pharmacies side, David, it's one of the many great things about that deal is we're getting tremendous depth and capabilities in terms of the Medical Pharmacies team. So we're very comfortable. As you would expect, our integration plan is fully -- pretty fully developed at this stage, and it doesn't include bringing on any additional resources. We believe that the combination of the integration team that handled the Remedy's deal last year on our side, plus the Medical Pharmacies team that we can more than handle both the integration activities and the day-to-day in parallel.
Very good. And then a second one, just to do with sort of the reopening of the economy here. You did flag that the number of bed services was just a little bit shy of where it should be given COVID vaccines in arms and things like that. The other part of the equation is obviously organic growth has suffered, I guess, because you can't really get in and do what you want to do. How are the RFPs and potential contracts? Are they coming back on the front burner? And were you incurring any extra cost throughout COVID on logistics servicing homes and things like that, which could also add to the margins? Maybe just the top line and maybe the bottom line there.
Yes. So I'll answer the last question quickly first. The extra costs related to COVID were pretty nominal. And I think we offset them by managing cost elsewhere. So I don't think that's a major factor in the P&L. But on activity levels, yes, the summer is always a bit slow. And obviously, this summer, in particular, you have home operators and their staff who are recovering from an incredibly difficult year, they have used up vacation, et cetera. But we are seeing a lot of really good indications of normalcy on multiple fronts. As you said, the occupancy levels are going up. We are seeing significantly more activity on RFPs and on just contract -- engagement with customers on potential extensions or new contracts. So yes, we're seeing a lot of evidence. We believe the fourth quarter will be the most active one we've had in a couple of years as it relates to being able to sign some deals and add new business. There's a couple of large opportunities that we've talked about in the past, they're still likely to be early '22, 2 opportunities. But as a reminder, the vast majority of this market is 1,000 bed or less type contracts. And we're seeing tons of movement and tons of discussions on that front now that we're heading towards normalization.
Okay. And then last one for me is just on your the Rexall. I think part of the equation of Rexall was to start looking at going direct and signing some of those contracts up in British Columbia. Any movement on that front or just too early days, because it was 9 days before the end of the quarter when you actually closed it.
Yes. There actually has been more after the quarter, David. But yes, we continue to have good discussions with Rexall customers. As you know, they've communicated broadly their intention to exit the market. And so in some cases, that means they're continuing to service their existing contracts until expiry. But in British Columbia, we've had good discussions with customers. And we've actually, at this point, signed contracts for, I believe, 900 beds. Most of those are still yet to be on-boarded. But so far, the tally is an additional 900 beds that we've been able to contract on a go-forward basis.
Your next question comes from Kyle McPhee with Cormark.
On the closing of the Medical Pharmacies acquisition, can you offer any color on the updated time line that I think is a bit slower than prior expectations? And more importantly, does this new closing time line impact your expectations for when that -- and the integration synergies should start showing up versus the past guidance you gave us on that front?
Yes. A Good question, Kyle. I mean it's not a huge movement. I think the Competition Bureau was always the one that was the most uncertain. We hoped that would have been July, but it came beginning of August, so not a big movement. What's left now is almost entirely things that are within the party's control. So I feel like that is mid-September is a conservative, I don't want to say worst case, but something close to it. So we're working hard to get things done in advance of that, if possible. And on integration, we're ready. We're ready to hit the ground running to contrast this integration with the Remedy's integration as much as we executed very well on the Remedy's integration. We didn't have you start until somewhere around the 90-day mark in terms of the heavy lifting on integration. In this particular situation, we're ready to go day 1. So I think the 6 to 12 month time line starting from close, that hasn't changed for us. And so we still feel like we'll get a fair bit of work done before the end of 2021 got it.
Got it. Okay. And then on the ongoing M&A front, I'm wondering if the focus now shifts a bit to integration and inorganic growth? Or are you still actively allocating some of your time looking at deals, whether it be any sizable ones up in the sector or just the tuck in opportunities? Any color there would be helpful in terms of kind of what to expect near and medium-term here?
Good question. I think for sure, it is the case that our #1 priority is both integration and organic growth. And as I've mentioned earlier, we see finally the kind of reopening of more robust opportunities on the organic growth. So I would say, though, that, as you know, Kyle, we've built a pretty strong M&A offense and pipeline. And so there's still tuck-in deals that we're interested in. I think probably more likely that, that would be a 2022 thing than a 2021 thing, but I still think you can expect us to do additional tuck-ins at the right price. There are still some assets out there that we would value.
Your next question comes from Sepehr with Eight Capital.
And congrats on the continued operational excellence. Just a quick question from me regarding your expectations for some of your ancillary growth levers that you're piloting like Pharmacy At Your Door, the Karie Device and SmartLink software. I'm wondering if you're expecting to expand the rollout of any or all of these offerings after the close of the Medical acquisition? Or if you expect they'll remain in the pilot stage for now as you focus on integration?
Yes. A good question. So I think I'll quickly take each one in turn. I think Pharmacy At Your Door is really a separate initiative from the institutional pharmacy business. Although we have had some traction in the more independent part of retirement homes. So I think there could be an opportunity post Medical Pharmacies just to get access to a broader number of those. But for the most part, I would continue to characterize that as something that's going well, but we're scaling it up province by province, and I wouldn't expect it to be a material contributor to our earnings for a little while. On Karie, we're actually getting very nice traction now on -- as much as that company has had great success in Europe. Canadian sales have been pretty slow, just mostly because it wasn't the main market focus for them. We're getting really good traction now in the retirement space in Canada. And so we would expect that by virtue of our bed count going up by 70% after this acquisition, that we will have access to more homes. Still, I would caution anything too robust in terms of modeling, but we're feeling really good about both the evidence that, that device is being able to generate where it is being used and what the upside might be in the market. And then on SmartLink, I think that's still early days. It's definitely a great technology that the SmartMeds customers value. We also, I should point out, we'll get access to some interesting and different technology platforms because of the Medical Pharmacies transaction. So I think it's part and parcel of how we think about optimizing our fulfillment network in the next year, figuring out which platforms and which technologies to lead with will be something we'll have to decide. And I think that's still to be determined.
Got it. That's great color. I appreciate that. And just one more question from me on the broader trends post-COVID in terms of the scope of practice for pharmacists. I'm wondering if that has any read-throughs for your pharmacists in terms of being able to provide some higher-margin services once we get back into these homes?
Yes. So on scope of practice, I mean, there are -- I guess, I would say, there are differences across the country in terms of the provincially permissible scope of practice. And so first and foremost, is just a desire to allow pharmacists to contribute as much as they can to the health care system and how that comes. We would obviously be in favor of an expansion of the scope of practice. It does, to the extent that happens it does trickle through into additional ancillary revenue for us. But as I said, that's probably not the main driver. It's not a financial argument. It's more about just, I think being the right thing for the pharmacy profession to be able to add value. But that's certainly something that's on our list of regulatory changes we'd like to see happen in the near future.
Your next question comes from Justin Keywood with Stifel GMP.
Just maybe a question for Andrew to kick it off. On the working capital requirements in the quarter related to the Rexall contracts, are you able just to specify what that amount was? And also, do you anticipate any working capital requirements for the Medical Pharmacies acquisition?
Sure. Justin, I think just to clarify, it was really more of a -- as it relates to Rexall, it wasn't unique specifically to the business, more of a timing issue of we had closed the deal 9 days before the end of the quarter. It really only just came with that one Sudbury location and then a number of contracts across the country that didn't come with any location or working capital. And so really, it was an inventory purchase in anticipation of those beds coming on, about an incremental CAD 1 million for the quarter as it relates to the working capital movement there. I wouldn't anticipate any similar requirements as it relates to the MPGL transaction.
Okay. That's helpful. And I think the working capital was a bit higher than we were expecting, just in general, anything to account for that?
Yes. Are you talking about -- sorry, just to clarify, you're talking about the actual balance sheet balances? Are you talking about the movement in the quarter on the cash flow?
The movement in the quarter.
Yes. So there are a couple of things for Q2 specifically, as I mentioned earlier on the call. So the second half of that arbitration award related to that historical acquisition that we had, the confidential arbitration, there was another about CAD 2.3 million payment there. That's one factor. And then there were some prepayments as it relates to some of the transaction fees and the commitment fees on the financing for the MPGL transaction that were also paid in the quarter, about CAD 800,000.
Okay. That helps.
Let's say your normal working capital movement.
Okay. That helps clarify it. And then I just had a question, a follow-up on the acquisition opportunity. Obviously, there's still an opportunity to increase that market share. I think I heard it could be around 22%. But I'm wondering if there's an opportunity outside of the long-term care and retirement space to perhaps acquire some of the retail pharmacies that are out there?
It's a good question. I think at this point, Justin, our focus is in the congregate care settings in the institutional pharmacy space, and we still think we have lots of runway there. Beyond that, I think, as we get closer to our 100,000 bed target, we're going to achieve that target a couple of years in advance of where we've targeted. So we're obviously -- we think of ourselves as a pharmacy company and so the pharmacy ecosystem is where we do business and Pharmacy At Your Door is an example of that. Obviously, the retail pharmacy space is very different, very competitive, but also very interesting. So I wouldn't rule it out, but I would say it's not a current plan for us right now.
And is there a market share percentage that you anticipate where the business could reach maturity? Or we saw that the recent acquisition was past the Competition Bureau requirements. Like do you anticipate running into any of those issues a bit further along as the business matures?
Yes, I don't think that we would anticipate any further Competition Bureau scrutiny, just by virtue of those generally tend to be triggered by acquisitions, and there's not really, I think, a likely acquisition target that would be big enough to trigger that. So I don't think there's any regulatory issues. And hard to speculate on how big is mature. But certainly, from our perspective, we believe we could comfortably get 150,000 beds or higher before there's any indication that growth projections should be adapted to reflect a more mature market share. So that would be what, definitely more than 30%, 35% market share before I would consider kind of “normal #1 leadership position”.
And any indication on time line when you could achieve that expanded market share?
I think at this point, we probably will set out a more robust sort of 2 to 3-year bed count target before the end of the year. At this point, though, we're still -- we're almost there, but we're not at that 100,000 number. So I think our focus as a team is getting to that, hopefully, by the end of the year. But you can expect we'll probably set out more robust targets on how we get to that 150,000 or whatever the kind of medium-term target is before the end of 2021.
[Operator Instructions] And with that, your next question comes Chelsea Stellick with iA Capital.
It appears that most of the questions were asked, a lot pressing of star 1 apparently. But just one question in terms of the Canopy dispute. I'm just curious to know how long it's going to take to get through the arbitration process, and if it means that you'll end your supply agreement here?
Yes. Yes. A good question, Chelsea. I think to be clear, we're not in arbitration now. So I think at this point, I would characterize it as, I think both parties are sorting out what the path forward is. It's an unfortunate situation because we're disappointed. We worked really hard to try to drive commercial success in that particular partnership. And unfortunately, like most aspects of the cannabis industry, I think the sales expectations have fallen pretty short of what the cannabis industry projected. But it's still relatively early days. So I think at this point, we're having constructive discussions with Canopy on where the partnership goes from here. And I think both parties desire is to keep it alive and have more success in the next 3 years than we had in the first 3 years.
We have a follow-up question from David Newman with Desjardins.
Just a quick follow-up on guys. Just on VirtualCare with Think Research, any update on how that's rolling out across your various homes?
Yes. A good question, David. I think probably, I'd say stay tuned for updates on that because it's going quite well. I think we're finding, whether it's because of COVID or that's just part of the reason that the places we've piloted that VirtualCare offering in partnership with Think Research in the retirement homes that we partnered with have gone really well. And so almost all of the situations where we've run pilots, we're talking about pretty robust expansions of that pilot into a more full-blown rollout. So I think we're feeling very good about it. I think for the retirement resident and the home, it's a great ability to increase access to physicians and access to timely care. And then obviously, for us, there's follow-on prescription benefits. Usually, for residents who don't traditionally use our medication management services. So I think nothing to announce yet, but I would say it's our expectation that our larger national customers are going to embrace that in a more full way over the course of the remainder of the year.
And you've got the plumbing all sort of sorted out in terms of fulfillment on your side and linked in with their VirtualCare platform?
Yes, for sure. It's actually -- the technological piece is done. And for the most part, these are homes we're already servicing. So operationally, it's not that difficult.
Okay. And how long could you get it across the entire footprint?
I think we probably provide some indication or guidance on that or announce in our press release in the next couple of months. But we believe national rollout with at least 1 or 2 customers is something that could happen before the end of the year, potentially?
Excellent. So you're quite pleased with the relationship so far?
Yes. It's been a great success thus far, for sure.
There are no further questions at this time, Mr. Murphy, you may proceed.
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.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.