The Joint Corp. (JYNT) 7 Mar 242023 Q4 Earnings call transcript

Good afternoon, everyone, and welcome to The Joint Corp. Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Kirsten Chapman with LHA Investor Relations, a division of Alliance Advisors. Please go ahead.

Jamie. you, Thank everyone. Good afternoon, Kirsten of Chapman Relations, is LHA of Advisors. division Alliance a This Investor

Joining call note, year quarter on found The and a us Joint the XXXX. presentation ended at CFO, Peter and slide results the Jake December Holt; ir.thejoint.com/events. CEO, issued Today, XX, Singleton. market can its and Please that we after using today are be are closed, President the for

section find that on of press the Relations website. can You the company's release Investor

please advised of other the Act that X, Securities includes Slide may statements within of All discussion than Reform on meaning forward-looking historical fact, safe be provided As statements, be of of XXXX. Litigation the considered today's statements the forward-looking provisions harbor Private statements.

expectations statements forward-looking implied these reflected may no Actual and uncertainties. the and differ will can or make correct. from Although assumptions are or to that it to those the forward-looking in such expectations various prove results risks statements materially assurances due assumptions believes in reasonable, been company have that expressed

result, placing the undue statements. reliance a we against forward-looking caution on As you

of factors discussion company's on actual the to those as well Forms company from statements, with that and the in files could the or a to the time differ time For risks from and results SEC. expressed review please as XX-Q, forward-looking detailed implied the in risk uncertainties cause XX-K reports other reports the

the as light are publicly information we only or to events. call Finally, updates our do obligation this in any of or of date any any undertake revise of release statements new forward-looking included statements call, future to not made the any this and in forward-looking results

because they performance These in is important expense, interest, and which financial a measures. The operating they used the believes more management net to or Management view expenses. the financial operating net and adjusted are GAAP amortization of the and income EBITDA by and company's provide EBITDA, net as the underlying are EBITDA reconciliation EBITDA than adjusted assess tax company uses to trends are transparent of Management defines performance. depreciation measures A presented non-GAAP EBITDA income press before measures alone. loss presented release.

includes associated related before reacquired retention The company acquisition-related restructuring regional to gain, which filings, developer adjusted with as termination compensation other expense, purchase to costs EBITDA rights, employee EBITDA restatement expenses, of net disposition gain income related or contract costs impairment, stock-based defines costs and bargain on credits. loss

company commonly metrics. at includes franchisees. by also discussed clinics, or performance sales System-wide revenues by operated all Management the uses whether

sales company-owned System-wide case months opened have includes franchisee full not this records and which are closed. the as are that comp health managed franchise sales exclude in been financial management that royalty and any the are performance company's these clinics of franchise base. and based or been revenue fees by sales revenues and company, at important because indicative believes clinics the XX have the both company the from financial clinics on recorded of While information of the understanding in is the each least calculates

go is Holt. it the my X, pleasure Slide turn over to Peter to ahead, Turning Please to call Peter.

and Kirsten, you, Thank welcome the everybody to I call.

strategies count our patient Also, our existing new number to number system-wide sales, we they engagement. existing In enhanced new to targeted patients commitment demographic, as corporate to am team, we among ongoing steadfast review our uncertainty their of a wellness and growth revenue, adjusted our our I more impressed increasing rates. acknowledging and treated. conversion EBITDA, of patient of attrition doctors, of for our proud developers we by I'd patient begin XXXX, patient and patient improved I'm market regional patients, in coordinators, embraced As franchisees the how like whole marketing supporting the improving and delivered even patients. employees,

are beginning we're gain and to campaign. efforts by our year-end Our augmented traction,

care And concept The in to providing portable, concierge-style Joint membership-based retail convenient a franchise services chiropractic remains this by strong. revolutionizing is settings. access

at In at fact, that franchisees of place them. there's -- announced put end thoughtful are hands year. effectively last we of most into been significant We in a interest these in the strategy process as our can last the clinics to refranchising the ensure who getting our we run

to chiropractic. I advanced like As life to elaborate. and we routine review our we've But will the our first, metrics. affordable XXXX improve vision and of XXXX, renewed into to chiropractic we've Jake move of and through care, mission be I'd our operating quality champion

new XX.X adjustments, of at million patient from Joint million were up chiropractic patients, XXXX. visiting visits XX.X from unique We During The in new in The patients of Joint. from people XXXX. X.XX XXX,XXX up million in our X.X XXXX. approximately or the patients, before approximately doctors up new been XXX,XXX And the over treated, XXX,XXX never million those performed to XX% patients, -- to had Of year, treated chiropractic

users. market chiropractic is model the expanding literally Our of

our gross contributed XXXX, of our sales, memberships Finally, up during system-wide XXXX. in XX% monthly from XX%

Slide to System-wide Turning XXXX. for grew $XX.X over cash year to Comp the $XXX to for XX, XXXX. to sales $X.X X, XXXX, to highlights million X% sales was X% to compared at compared XX, million, that increased XXXX, year. has full million clinics Revenue EBITDA review XXXX. increased December for than financial open last XX% December XXXX. was full Adjusted increasing up million At XXXX. more months unrestricted been our our I'll compared XX XX% $XX.X compared

opened, less changed. with the some XX than greenfields. I'll units, of X% X to X, We is which This opened XXX conditions metrics XX This the corporate Slide to reflects XXXX. portfolio. clinics clinic Turning XXX our for and closed franchise franchise and that and market We our clinic franchise XXX compares clinics: greenfields. XXX fact discuss XXXX XX of

XX, improve We corporate previously profitability a clinics performance tenant example, clinic slightly shifted in December managed impact XXX site. XX% had X clinics number to center XXX and XX% to managed financial we're to demographic XXX of XX% anchor of our a may the For XXXX, of our initiatives franchise retail franchise mix that, clinics. the and At Having and other an we clinics on XXXX. portfolio from operation, franchised consisting viability XX% clinics. at changes to or company-owned lose of company-owned or said portfolio. working of end The added

As we significantly. our portfolio mix will execute refranchising strategy, shift the more

Regarding portfolio, that being corporate pursuing our greenfield of strategy, proactively a clinics X process greenfield actively no supporting in opened. while we're the the longer we're are expansion

our and uphold will their to various related build-outs. We obligations leases

franchise Slide to our -- Turning our regarding strategy. X, refranchising

to are value. best will that we value, As high quality of noted allow of before, these and assets clinics necessary many time the capture

intend the initial has for majority of broadened marketing Our our the have and of net at We potential sales are negotiations. to the run clinics clinics franchisees franchisees sale various and units buyers sell of to disclosure effectively We framework to the gave our of clusters them. organized existing comprehensive the outside clinics. stages corporate most efficiently. existing preference for who our prepared corporate these generated package community. We've Joint The to team and majority can

other our purposes, marketing, as used best-performing territories of significant received is the for generate the marketing for with brand in at such can reinvesting we've options. stock, be franchisees, to Vegas. conference many Later our month, Las franchise this clinics RD in get and/or we'll goal the information. Today, requests capital multi-unit these reacquiring among hands XXX that Ultimately, be in interest over repurchasing

let's franchise X, sales. to Turning our Slide review license

refranchising we expected, slowdown experienced As franchise when license announced strategy, new sales. we our in new a

in speed will the purchase be with new of While new expect to impacted swing. a full to sales want there continue and some licenses, that while be we refranchising to franchisees is start brand-new the clinic franchise

During higher our belief strong to XXXX. in year-over-year to refranchising franchisees rates, interest to to sold, licenses, we rates, strategy. were XX% our inflation, in impact sold reflecting in franchise franchise year-end, development. employment At XX in newly QX, Of announced had licenses change bringing The XXX business. addition -- the reinvested the XXXX the sold The their Joint, existing X reflects continued of license active who we XX sales compared in licenses

our nationwide in brand-building efforts. built marketing I'll Our moment, are a more efforts, to detail which support

consistent. remains strategy developer regional Our

We continue such, years share not execute criteria is fees as natural RD territories. RD an royalty can additional XXXX ended XX, We count to rights. over is RD schedule those the time, of development territories to and the development plan franchise do we'd with XX-year of certain expect We reacquisition the met. past progression of acquire that minimum several decrease to have And lead to XXX. RD add aggregate as as RD RD we we'll and the demonstrated over the territory regions, for

Turning to Slide X.

new indicators. to improved attrition. performance measures key taken patient patient In we our that rose marketing counts to XXX new We've conversions rates, hard compared we're Also, new review review counts. patient XX work conversion XX.X%, our our I'll X. attrition by on increase Slide increase basis to to points points XXXX, great XX%. to and patient related and to our lower basis continuing to grow XXXX Let's efforts

exciting patients year-end and Friday wellness end promotional to mind. Back months XXXX, compared XX received in XXXX. both start compared X a for shaping convenient media packages This by up In annual promotions membership sales our and year for including an strong working at mix sales even of Joint chiropractic resulting totals initiatives record-breaking XX% Joint our Lori sales marketing the efficiency our the affordable, adjusted the led new increasing wellness enabled focused to free. areas. XX% of in Total with This of our adjusting to several prospective patient The were year Habib. new channel XXXX, Friday pairs increased message with ensure delivering in for us in wellness on XXXX. care likely the Back Total increased The reach by end-of-year drive new new consumers. purchase be patients sale we're months to our helped that and to our to mix promotion it's CMO, media patients our strategy to media patients. year spend increasing We most as more -- those to Abou

and differences, directly of store by providing for promotions marketing tactics To take system. more new our local new advantage programs we're more creating and nuanced local at aimed adding offers proven robust patients. tools plan we Additionally, our

patients. that patients, we're learning patient Finally, is an to that subset prospective to initial bookings, our of maximize we our to ensure something convenience enable we're initiative for a important testing

engagement. existing Additionally, patient on lapsed we're and putting greater a focus

reengaging critical our to awareness. aimed co-op In apply cycle and journey. our Moreover, new our phases synergies to promotions and retain channels about increase new overall brand marketing to patients we'll during at of introduce testing automated will learnings life messages former partnership the we're with We patient their co-ops, patients. programs the

architecture. The working expanding marketing on brand's been hard team the has

and brand advantage. competitive deepen positioning continue the evolve We to essence our defining to our brand

More brand. workshops leverage several define a had our opportunity this unique benefits current recently, with we perceptions, had We're areas incorporate and positioning. into consumer we an consumers we work to offer defining impact QX, process. language can new franchisees target their refining During to to to feedback our the that and as

efforts to We XXXX. have expect a on positive these in our impact performance

call with the I'll Jake. And over that, turn to

Thanks, Peter.

continued from to clinic was was franchised months represent commissions. higher opened million reflecting and year-over-year compared turn up the all sales I'll sales $X.X increased of Let's for XX%, comp Cost Slide any the Company-owned QX The XX. franchise clinics System-wide increased clinic $XX.X revenues over review $XX.X opened sales or for in XX%. X%. and 'XX developer million, 'XX. same clinics increased million, corporate contributing last comps associated for million, XX%. decreased regional contributing both amount System-wide opened million. $XX.X to Revenue increased the Revenue up time the all revenue million. to XX X%. QX period XX% $X.X months, growth more, or year, our XX X%, System-wide of clinics comp royalties portfolio. mature $XXX.X for managed increases or up base operations for

year-over-year, were compared X% expenses down the 'XX. and QX XX% offset $X.X and year. spending marketing selling and QX our to marketing This Selling efforts million, reflects to cost management in up earlier

of part year XX% the period, decreased prior held corporate refranchising sale clinics being Depreciation or reflecting that $XXX,XXX and to compared the the expenses for are efforts. as amortization

travel expenses were the $XX.X increases, clinic reflecting administrative and cost support were elimination These and to compared offset by increased $XX.X cost the hire count. of initiatives million, partially control noncore General such million to projects. reductions the as

held which Loss increase for efforts, additional 'XX. compared of were announced disposition million related November be in our impairment that is was QX refranchising $XX,XXX corporate on $X.X to to those clinics in The XXXX. include or sale to

$XXX,XXX Operating to the XXXX, compared loss million aforementioned of in income operating was charges. impairment reflecting $X.X QX

accounting assets. deferred $XX.X During recorded to tax entry allowance is QX, deferred valuation A valuation against noncash a tax our allowance against noncash existing we record a assets. of reserve million a

prudent regarding When benefit refranchising future timing guidance accounting of earlier, introduce are our as uncertainty assets, this you that such and it's realizability those transactions. we we that in the allowance indicates to time note be at maintain or to resolved, uncertainties record Until the valuation mentioned assets. review return to the still more time. these GAAP from future will important they potential you should a profitability. uncertainty, our the those to we available tax As to is ability there It's tax utilize

a was As result, $XX.X tax QX to $XXX,XXX income expense compared million XXXX. in

XX% was share. XX% loss both million compared per $X.XX $XXX,XXX or XXXX share million. QX XXXX XXXX. $X.X per to EBITDA $XXX,XXX as $X EBITDA Company-owned net higher up to increased at $XX.X related $X.X for XXXX adjusted QX EBITDA adjusted component net support increased a $X.XX clinic the to larger clinic EBITDA of million $X.X to QX income was or was expense than head XXXX diluted count and QX or clinic million. adjusted of Corporate Franchise managed Adjusted count. million, was

XX increased opened XX%. mature comp increased or ended sales System-wide XXXX. to all for System-wide amount comp sales or clinics Slide XXXX, time clinics compared for for to more opened opened System-wide the December any for months of X%. X%. XX for On sales XX, clinics more decreased all XX months year

of up $X.XX $X.XX XXXX net up the $XXX,XXX was $XXX,XXX $XX.X valuation share. XX%. million, income or per including Adjusted loss, million, compares allowance $XXX.X basic or or was Revenue diluted EBITDA to million $X.X XXXX million X%. net This share. was or $XX.X per noncash

of compared at cash and employee assets. in net clinics December $X.X of our On improvement including reflects in investment and balance $X.X sheet clinic greenfield our $X.X XXXX. corporate clinics million the to million from $XX.X XX, unrestricted the million, development receipt retention operations, of review XX, December At of cash of credits flow. existing the million of was million acquisitions, This XXXX, and cash $XX.X

credit our December proceeds $X the of drawn million decided interest refranchising Since closing At strategy, XXXX, with we cash XX, our our and to JPMorgan line balance on credit repaid million expense projected $X based Chase. balance. from reduce we had our the high line of on year-end, and

line of to through to credit continue million access immediate We have with $XX JPMorgan Chase. of cash additional this

for XX, of Slide to our review On a guidance.

and sales timing strategy. we are of refranchising we clinic sales discussed, revenue impact Peter the our As well financial system-wide will into adjusted to the corporate Because system-wide in of and uncertain is comp sales. gross guidance the and EBITDA XXXX, have modified be

on We clinics. the will provide refranchised continue excluding to impact of openings, guidance new franchise

million are an are million to mid-single to be months sales sales XXXX. in in compared comp for System-wide in XXXX. all increase $XXX to $XXX opened more of clinics or and X% expected between $XXX expected million to compared XX System-wide digits the increase

XXX reflects in the impact openings, compared to XX the the efforts. between clinic XX, franchise The to New XXXX. refranchising are refranchised of of expected be excluding and impact clinics difference

the the impacts remain efforts, fees, refranchising regional is it our sales static. of about to developer that cost to please think primarily financial note fairly of related we and we As expect

advertising. expect to per of We local spend our sales month and as the our clinic decrease reduce corporate portfolio. our corporate marketing $X,XXX in we scale clinics about expenses per Currently,

X-wall our operating corporate Regarding expenses reduced unallocated portfolio. X-wall be see expenses reductions scale our and general These to the in our expenses significant the proportionately of reduce expect outside level, expenses, as in and will clinic administrative we we or corporate overhead.

in G&A long our while be and G&A gradual these of reductions to incremental. our revenue, operating timing line reductions Overall, margins the we expand we increase run. reduced the in and top such, profitability will expect As

in better while to create proceeds our better it's of on will Finally, a impairment charges, may clinic underperforming for the note clinic however, clinic some result valuations important noncash -- that higher the the sale. the opportunity and performs sales gain it performs,

to that, Peter, back you. over with call And will the turn I

you, Thank Jake.

their the expanded the on noted this providing our expanding to As the champion access call, chiropractic chiropractic care and to meets I consumers services improve by of health. be demands onset vision that we've of

our brand, our are pillars people, our strategic Our and performance.

patient stay Joint, to patient new plan To improving our increase increase to and by The lengthen and and to local book by and patients we'll drive -- Also, brand initial process booking the awareness, intake new marketing. elevate visit strive count campaigns time active with the to leveraging testing visit -- leads. clinic by new messaging media automated engaged We optimizing our employ to by patients patient reactivate lapsed new intend additional promotions. our content, we equity

we ensure to and team. retain the assemble is goal Our strongest

of lead for evaluating chiropractic professional and including platform by benefits, pipeline our our our share mentoring first franchise to and whole building relationships incentives continually to and system We're continuing doctors enhanced doctors. cultivating are our programs. education creating Joint's We with The recommending

vision. employing programs staff better our that with Additionally, we're align experience patient

These initiatives are being our performance. improve implemented to

patient to drive increasing system expect We by total counts sales optimizing patient. sales per and new

strong we're products. line expect level. extensions Ultimately, to we company unit and foster and evaluating franchise clinic our improve productivity the and at ancillary margins increase economics, expand base, Additionally, the

Finally, #XX States. consistently for excellence. recognized XXX Joint United for recently, The the the is franchise systems our #X chiropractic top services, in Entrepreneur Joint in ranked franchise Most Magazine and of veterans, #XX The

this the I'm ready us to begin month Orange you like meet And to questions, in Growth ROTH we invite that, Annual at to with I'd Conference Q&A. County. Before the take later Jamie,

question MKM. Our from [Operator George Instructions] ROTH today from comes first Kelly

sort your you're your And is feel it's the the the about scope was I slide interpret start in I fair process trying the deck with that the interest for of comment, it as just as process, broadening initial lacked should refranchising to just I'll interpret think, in and well, get how in to there -- expectation? just a that Or presentation? comment those a remarks, Maybe prepared like curious, of And has of how maybe the previous potential businesses. I'm buyers underway.

question, topic, sense year-end the the process a is thing? of should second be this of have be -- several it And same complete? part comfortable? Or then a better you Should Are timing be years? when do you this could

that our What first clinics selling by interested questions. the not our interest broadening for of books, closely of franchisees the also them lower it in balance clinics, our of -- created, recognize off we're of them. of also most is run And get great thing that can reflection community, off To our get the the hands working we recognized acquiring with interest the somehow these absolutely answer franchise effectively in they to open X potentially be but not. to some important that idea people we've same to in a franchise us these that that as alternatives. George, time of but just our franchisees, most the we've in some sense, it your question at expected than makes could clusters other who is terms

really was in we're for best sure looking scope that purpose what we're the the getting franchisees that there. broaden the so to the system. of It's to And just make

question was the better a a in we're getting little still it. Your that, would second timing And process. sense say of I the of early

this our see franchisees. expect, into our let's -- I also would should a significant we're XXXX. done exact have we've sold place, As you, but by all That the but go to year, I amount in our got say, I we expect the of would in timeline this said, we've clinic don't systems it of I conversations give to with clustering,

if had. growth. in seen has you months a helpful. for And just sales what be it that's reported the couple this if kind And of gave, far consistent? the maybe year. you there key -- are question Or those more observations what And little metrics you. then so on in curious of could improved is from QX? that's it I any would you Just just on could all you've just give just But appreciate year, helpful, I you same-store just guidance the X Wondering for other in

of as -- patient But If XXXX, outside corner of first George, turn is in look typically, look and of of would I the counts. kind quarters. in not -- call, referenced we're kind do in seeing guide we say in new a at the our you that the I it X we we're months

seeing so improvement I some we that for and this we're And forward as beyond. look year think

Meyers And Lake from our next Street question Capital. comes from Ryan

-- last bit Just the same-store opening it follow-up a a But XX through than in I saw slight slide sales. decline mature little as the a looks the more deck, one clinics, to of look greater like months, greater question. is

there's could more there? unpack or a you commentary little wondering that if you bit Just any can if provide maybe

Consistent to Yes. last results quarter, Ryan.

the that's increasing We the prospects, in have only for on lapsed why engagement and rebound seen but of quarters, trend of existing to our trying I marketing see our those continued the efforts, or you also emphasis on focus couple to that think our last try our new not patient base. show increase patient

from As your in amount kind and a you the will, if prospects attrition greater an markets clinics more you refill of mature dense, order standpoint. of become bucket, have to

So has critical terms interest I heard remain ours. some focus of initiatives. to you think our in and marketing in And those of of a focus that renewed it

like remains And then brief just that to question. marketing strategy Got mentioned. the kind you of a priority, as just of kind follow-up Obviously, a it.

initiative, seeing trends are those there? pay results been has have you how newer this some a As off? you of seen positive And

Absolutely.

'XX In said, new the we to patient look we're below was count the patient talked counts, we've metric key most it at new And the 'XX, the at key about within count. in and business: if 'XX. full we're XX%. improving, the X that And for were as we've for XXXX, As metrics where X compared conversion it, 'XX, we our attrition. I metric look -- in year had patient certainly X% and X of challenge our we

new negative had So 'XX. a in our the patient In an X months, counts are we X% last from improvement flat.

XX had in month So new XXXX, look per if XX at per patients XXXX. compared we to we clinic

curve, in that in to a think see putting the new that programs CMO of continue is we of taking that marketing flattening place I start some improve our effect. really So seeing are we'll

focus looking we little way over period. longer just member, a We're simply now, X new more with Right months. we making a but us patient that on those in at before, a a average focusing patients, also keep stays a the not sure patients really that for at as hadn't done

Lori is new so putting And period. in extend will that programs that help

And the is pain final we're part also membership, X come, so but lapsed on of of really patients months. with is us them we the months, away, what focused XX% next those know that they roughly their with that X come because we stay see when our patients and their -- goes very can about they back often, will in

really we've got to programs they to otherwise patient would. in sure than to them focus that And designed that are we're that lapsed sooner on make so bringing being

opportunities think some there develop to I So we in real have XXXX.

question Jeff next Van from B. Our comes Sinderen Riley. from

expect do considered, refranchising licenses I this realize you sell think all but year? many would things a range due tough sell some the a targeted or little be there be helpful. of to new these efforts, how questions to you would may Maybe

in interest that do impacted rates, for environment, kind that and of been we franchise the know. guide between know relationship the XX sales sales, about year the the some the economic Jeff, had growth employment, 'XX. always because is sales. -- we things unemployment those franchise there's higher thanks just on of high that new question, and a not the let's say, full for as And talked sales you We we

there 'XX of lot to a 'XX. had where there's compared so sold in that factors we we've 'XX, impacted licenses. XX And were

of we're that to 'XX, sales expect kind in of we And and XX be. so we an that expecting to there in impact 'XX, when new you say license we kind had triangulate be where on

so kind it. that's look would at And the I way of

the know cadence then bit the doing will but refranchised And sales lines target, helpful. continue is And is to That's I so XXXX, there? I reported try it again, based help just FY sort you into rate I same can decline realize you a of little said help or work you of I maybe can to and levels, us for give of just this mean, but but the us there magnitude a you're there on sales, at interest moving there. a 'XX, gave get guidance. guess, way a know -- that Any far understand. system-wide maybe I order along you of the line

revenues I part, for XXX% that's The to stream GAAP the mean, from the execute a going a are as recognized location move transactions. Jeff. Yes. tough we corporate to being royalty

decline of these the and depth some which so perspective on And be for really size that made really of the XXXX. and the the GAAP of transactions, breadth revenue guidance from a predicated pace hard determine will to a early it thing

figures saw have the And guidance sales where so change that's that's metrics now. overall why you to because in we the predictability

those transactions. it's So on the predicated of we're not going because really to basis put out a target timing revenue from a so GAAP

we terms EBITDA right back to just that and on least for to give -- the of metrics we can traditional get you guide in we there's on. relevant us, uncertainty to I much now -- how just too unfolds it's think finish this, revenue. Once guidance at this be able But

and terms degree And color you us channels. just I'm you if wondering, And know you're for there us to how could is marketing? to that. other maybe But any I minute, there? you give want marketing then to can shift in shifting know we a you new Understood. to, can mentioned just any spoke other of give the I that the you -- color

fresh a of disciplines. different just really brings She I exciting place. And course, to think SONIC. that's of frankly, she it's best eyes, coming have we programs, Sure. strong to She and CMO see, was brings CMO quite the

are things first just on We'll audit them. vendors marketing of buys program with some sure designed where there, phase, new effectively go RFPs of power to them more all most it business, that make that make be our with of in that to one doing to full we putting working the be to the key working some in can out getting going influencers. done an she's and So of our sure support and she's that those that some of that do we're we're a partner is media is

lot on she's great focused have think a power we I co-ops. these And of really of the our clusters.

And to that uncompetable that else, when frankly, an they put because market, their that, funds those in compared is if market independents quite all you put together anybody impact in that to local can have your on, than that it's XX or to contributing that you're can a you clinic. practitioner trying spend which very spend, XX to if marketing you sole units, market all different local

that of be we'll things really So pipe and details go a down exciting I as get think coming the will forward. lot there's we more

on patients we time X lapsed years, also stay last focused that always I or can experience our if and time to patient we've been trying -- could patients to so that on you the X the that about just have us. that with last on really And extend focusing the have that implications patient and better patient that mean, we so for focus think spent making on on huge could longer us. new it's on and the haven't for I think keep

on is bottom Quite real on focus we clinic So frankly, there's opportunities, some that unit the are really should focused of improving that. I economics What you the highly on be level. line. hearing think, improvement to

some challenges had some had on last We with we've new we've years. know several costs labor the know higher We issues patients. with over

economics on as our laser-like well. those and for stay as incumbent really improving us to franchiser a corporate our upon franchisees, course, units of it's unit so And focus

Dipollino from from question next our Capital. Craig-Hallum And comes CJ

color that to Dipollino about from quick new we drop sales a give like it year? Could ask sequentially QX down for about QX. how and Jeremy it $X little think you on It CJ I a marketing. maybe should looks question and the wanted into then on million to Hamblin. about was

Sure.

and as terms I to think bit you'll we tried see the a spend our the little that in normalize bit. put 'XX, in the hot -- we of we it a X year planned in for quarters Through overall running sales marketing. of first were little commentary

just So that normalize. QX, of you saw some

to As each about is fund, goal really spend pool national that our we think the period. entire marketing

the of into some expenses natural of of so you in you've the kind see year, QX. kind parts And a accelerated when step your back earlier of

play just I out through the really, quarter-to-quarter think you're timing seeing that of So XXXX.

as into back bit the that normalize a QX QX a and again cadence. little are are quarter-by-quarter and you'll get heavier, that QX I think bit we lighter. as little falls see So Where XXXX, typically QX usually into

it's remember think is to place always completely P&L. takes is the important in of marketing, which off I store that our bulk the case, is our the franchise local and that also that certainly, system, marketing in

are that seeing but average, local runs each we $X,XXX more yes, really where it that those the is marketing. spending, as store so on in And real marketing NMF month, the through to that franchisees of you're our a or relates it's have P&L, spend franchisees

forward, P&L. jumped on 'XX, about XX%, like G&A Thinking 'XX? about sales. more moving you about And to up it X just XX% forward then in of the it would think 'XX, in looks that How moving

the Again, start consolidated timing the is burden I G&A refranchising with overall, organization. overall that predicated on those timing to when strategy, of transactions. of G&A Again, see for can think we reduce to refranchising considerably really the reduce the the we expect the

we'll begin X-wall and on we move through. unallocated the that the we'll and then those as really will as we off and focus clinic of we'll books that. critical 'XX through overhead, overhead we And as and the that execute for accordingly, on the costs all have the outside to curtail focused curtail that's to the of G&A come to work, expect as the G&A 'XX management, refranchising, to begin the to move corporate So well strategy expenses we stay understanding reduce level

comes Maxim Group. question final our Thomas from from McGovern And today

So retention. I employee that real wanted of touch on back to quick, some

articles industry there that of in seen reduction be to my I've considerable research, going a fairly skilled a lot coming suggesting on over is years. based professionals So medical the

So of color keep maybe plans some more to that bit keep if high? could and you into doing retention go your rate a little just on attractive

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just of of of The X,XXX time. a you full between we the the are schools market today a look doctors at under a umbrella graduate overall the X,XXX that the Joint doctors of part little If in graduate of chiropractic, our the accredited either and doctors X.X-year usually over If clinics schools XX back about who XX States doctors at United there's chiropractic. with Joint, It's and year. roughly X,XXX or program, year, had The end to XXX those come we

does that suggest to And so us.

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that there's know are XX,XXX roughly active. we So about

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guys you that thing, XXXX. the of in reduced portfolio XX% company-owned mentioned mix call clinics XX% last versus So are slightly, your total on

just clinics You mix, also dramatically more if total a the as you percent dust a come you company-owned mentioned settles, when going or initiative. portfolio that move as to refranchising maybe you targeted the expect to shift that have -- this through opened? guys expect that's wondering to that's I -- logically, to of guys was going in where you guys

We the corporate haven't, majority expected our refranchise. on we an said very percentage. what's portfolio, to any in is guided we've of way, clear expect But

going have year ended it's talking of And last refranchised. more a with ultimately say, would majority than XXX, I by we're fact, XX%. to final be those we number, about in vast so but the if corporate be We don't majority, units will,

So to you that can is where that, be pretty significantly XX%. lower at see today than is going it number

any the over back time, management And turn remarks. this like I'd ladies to for floor at and gentlemen, closing to

we week. annual Joint during February, We ran social on each The In of share The Jamie. campaign, our Love of comments our media. their patients posts our Thanks, which Joint thousands received

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that, and we'll for you We be with Ladies do thank today's concluding conference call gentlemen, joining. and presentation.

now may You your disconnect lines.