The Joint Corp. (JYNT) 7 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to The Joint Corp.

Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to David Barnard, LHA Investor Relations. Please go ahead.

Thank you, Wyatt, and good afternoon, everyone. of Investor Barnard David is Alliance Relations. Advisors This

be today and Singleton. Please September Today, CEO, us that we on Joint Razdan; after ended President issued call the can presentation the slide Jake Joining the Sanjiv close under market, quarter are and its using results a XX, at the of XXXX. found https\ir.thejoint.com are The Events. note, Corporation CFO, for

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

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

and interest, or The measures our related amortization on and publicly and of income company expense, or as loss made developer defines EBITDA any as net management this depreciation to of revenues that legal Reconciliation fees and which press undertake measures the forward-looking includes franchisees. costs operating is events. Management operating credits. Management more reacquired call, or new arise before income any gain, and restructuring acquisition-related EBITDA provide these employee release. The company or expenses, commonly net of are rights, to ordinary the by non-GAAP any to not EBITDA, measures. forward-looking in EBITDA assess they of retention are than view restatement loss as System-wide in light at Management whether results uses metrics. performance. includes or by date future in release proceedings EBITDA related associated GAAP they clinics, compensation all Finally, of alone. and sales we other transparent trends the call tax or the to include regional defines because adjusted of costs, underlying included the performance used expense, company EBITDA gain to and of operated a financial net expenses, for information to impairment, EBITDA earnings stock-based believes expenses. specific the revise contract only adjusted adjusted statements termination updates costs are bargain important litigation purchase of also out financial performance with These related presented course which statements this disposition consisting our do company's are discussed business income net obligation filings, presented before

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to over the to Razdan. Sanjiv call turn pleasure to Slide It's X. Turning now my

acumen The the my and portfolio, and led COO, my level turnaround operations developing while Vice which for the the profitability. countries. I unit branding call expertise drive their approached for about and Coffee am profitability. of my enthusiast. call. and of out. like my immediately was results support joined franchise President Thank welcome I with transformation. I about Joint. Leaf, leverage for XX David, to use its A company. of as of was transforming and across the ensure extensive the ago, which strong begin sustainable cafes to division's over also Most delivered a building The teams in you for The was to as level I was and I consumer because multisite energizing and e-commerce decade. Similarly, personal culture, X,XXX passion sweetgreen, business connection. efficiency I in division I growth businesses. The platform served years cultures interested gym, as rapid franchise-owned my strategic margins And to and service franchise and goods leading has care I I at unit Tea because reviewing today repairing and President & everyone at predominantly I Bean Joint, more EBITDA companies cafe, first was growth business Americas to restaurants, approached the X,XXX-plus by I COO responsible Senior strong optimizing excited conference and states. When why By operating employees. meet Joint franchisees the packaged helped you, XX strongest and Applebee's, consumer I led my relationships, few successful I'm experience while improve I'd have my India to back I threw my recently, a lead background. I all operating at in chiropractic learning

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past I the for imagine, plans. quite bit can asked you about weeks, have been a X.X my As

team. I I immersion my to meet While with joined analyze of our and a data making corporate my changes. employees. I rank our chiropractic, will investment. I initiatives details I meet first return and will I wellness to of doctors will variety on coordinators based learn listen operations conduct and their capabilities, perspective regional is developers, significant and expanding then days as potential business franchisees, on and impact our will some the prior ideas, XXX business of

to While the Board I with we granted state drive me strategic clearly redesign latitude ahead to are our has refranchising. the continuing can plan,

and Turning innovation to clinic know Slide economics, to culture. elevating X. care, we It everything to and is also driving patient people capability building do dedicated I in important strengthening am

and I a we create result, will profitability As shareholder increase am confident value.

to Turning X. Slide

opportunity refranchising economics capital on the reinvesting our business, As of to to value. and efforts their our executing clinic intent shareholder and noted, focus The our the into I simplify committed franchisees, raised a Joint. with drive am grow great It's

We far corporate most are marketing along the of clinics. in

have interest. We seen broad

continue new to transactions and will pursue existing We with franchisees.

They LOIs Regarding in diligence. X of for the entered Savannah and Kansas last quarter, clinics and with these City. transactions in are process due were X announced the existing franchisees now conducting

I'll X. marketing start Slide our to Turning review.

Our to consumer is challenge new patient increase biggest counts.

this do stronger through generation will and lead We lead conversion.

results conversion. feedback rolled increase testing the the summer, and has improving on patients focused exceeding has positive marks. our out patient intake Our enabled lead patient scheduling bookings visit After experience platform initial team first Qualitatively, platform XXX are strong. The of we our sessions. been team visit and the to clinics initial new bookings are this to the the new

This seen, cared they success. New patients and indicated heard translated into well have quantitative feel for. has

to education with first positive This bookings XX% interactions. Also, an today, patient September. With continue reporting rollout we our to mobile are like Patients devices. data, own basis, ongoing consumer-facing time in-clinic visit frictionless the data provide lead channel mobile to I'd with continue user intend of chiropractic to of enable improvement, process, note doctors While serve we which able will on and complete intend app. process as patient we new conversion well. on from will clinic, are testing, to diligently focus enable be to We to working pleased patient clinics. it new the using app are we extensive July in forms check-in. a Patients features satisfaction our of present don't to initial work greater patient will the on the them coordinators to began as a experience update digital their wellness in increased all late and XX% intake After this will To see the regarding August. create our this our time. are over to in we mobile in for enhanced continuing new to digital rollout are

I'll of shifting and awareness X. generation, To the Turning spend top lead our acquisition to to funnel. review are patient brand the improve new Slide we marketing efforts.

rolling on a strategies. paid audiences on Max system. Performance Google's on have types to efficacy we includes specific platform. platform of accelerate our interaction of is working We channel. metrics, market program our been shift within have out the a spend follows initiatives the co-op improve It across based leveraging Google key this and test in to properties, media within and The This fantastic ad mix started showing

the drive optimizing to with relevance audiences. these are we Additionally, content new creative

people from itself. are chiropractic and other both new providers to we marketing the Now to switchers

Finally, Friday our we rate. Black for plan pricing our November, special are Black we in for options. In Friday to on introduce time walk-in new evaluating pricing

value XXXX, levels, are build potential call Jake. for we we further in updates. and patient base. With turn plan Additionally, I'll our legacy our reviewing lifetime to to to In the that, policies patient growing membership addition packages

turning Slide X. Thanks, to Sanjiv. And

and metrics. discuss clinic. clinic XXXX, franchise opened refranchised Let's XX QX our X In we clinics

had reached a to Air clinics than On later QX continue X clinic and quarter. clinics X our XXXX. franchise last increase franchised, portfolio included being XXX XXXX, rate the This test. In clinics of XX are were percentage our point & to than that relocated of nontraditional the XXXX, mix as well higher total of clinics experience clinic we reopened Force quarter. with development less of XX% as September Exchange in compared QX X that XX, X% portfolio corporate a and X to part the Service in XXX We shifting closures net with Army X closure franchise count

franchise I'll Slide review XX. sales. Turning license to

expect As previously by our be indicated, we franchise sales strategy. to impacted license refranchising

QX in X During QX, franchise to we X sold XXXX. compared licenses

buyers This license XX% The Joint. of quarter, the franchise new were to

we we XX potential territory As September regional approximately their the announced approximately licenses had D.C. development. XX had in for previously reacquired $XXX,XXX. and had end, clinics. At active July, is XXX XX, clinics we XXXX, the another Maryland quarter It developer the rights At regional coverage XX of network. developers and in XX% franchise open for

we're at a XX, the the Franchise Slide clinic was X%. access from corporate spend. or $XXX,XXX, lower The line efforts. G&A for flow. a $XXX,XXX compares balance QX review were by ongoing to the $XX.X growth same XXXX, to on Turning XX, $X.X $X.X are and as clinic guidance. X%, headwinds QX $XX.X income clinics operations same $XXX year, in cash or to X% increased Corporate were loss $X.X or contributing clinics million XX% unrestricted EBITDA increased amount $XXX.X compared income and CapEx XX, increased revenues in consumer marketing expenses of million to to disposition through reflecting managed time sale the million costs $X.X Net XX, of compared EBITDA February reflecting review operations with $X.X $X.XX increased part $X.X tax XXX compared loss up was for clinics, X sheet million million XX for million At loss XXXX. developer efforts was XXXX. Adjusted operation. Cost months the million of prior $XXX,XXX per loss in QX $XX.X of XX% System-wide efforts. a of of in (sic) number QX refranchising in loss employee million was the million for flow $X.X $XXX to or to million, loss compared are the JPMorgan all are to XXXX. million, of including points facility, $XX immediate adjusting million or reflecting XXXX. On or sales in $X.X expense results Depreciation was in million period. On financial expense and a million Cash from System-wide that $X.X more sales $X.X basis reflecting of or in economics, million all litigation newer million. EBITDA or to increased held $X.X the million, including the partially impairment to the result December $XX.X compared ended share. year of of retention as between X%, retained sales the credit to loss million, million September decreased offset associated Company-owned Slide mature for clinics our to on of X% sales period, $XX,XXX compared System-wide our XXXX. compares of on over contributing to million. of Net share. up to results to in $X.XX component opened period are $XXX diluted X% for compared being $X.X compared X%. net period impairment XXXX. Income QX Company-owned this for on part to utilities quarterly million I'll Slide million, higher of This year, million improved the the refranchising amortization million, increase revenue was in our financial on analysis royalties and including impairment comp we've held by as reflecting XX. and [ clinic to $XX.X all refranchising months increased XXXX. Revenue last commissions. or QX year XXXX. $XX.X compared X% prior clinics XX cash for year-over-year, and more compared disposition million. adjusted of clinics million. the the to up accounting net be per clinics due the clinic of Revenue our continued for tax of the $X.X were increase up XXXX, fewer for per on or facilities period net XXXX. and the period the credit reflecting disposition IT QX timing million up clinics XXXX compared franchise $X.X expected in loss $X.X Selling to to same-store to XX our $XX.X adjusted million, expenses regional any million in sale an million million decreased repayment last million of advertising $X.X X%. improved the compared $X.X as for or elements the EBITDA that sale System-wide or period Slide per QX our $X.XX the expenses X-month XXXX. On impacting XX, was in clinics for was expected $X.X of was and same System-wide million, X% to all decreased benefit both $X.X to or comp Loss adjusted comp I'll million, review XXXX. impairment X%, sales related a XX Revenue $X.X This clinics was opened expense $X over share. to X% between of million, X% September or of loss Adjusted opened XXXX QX $XXX,XXX opened ]. X% to sales months Through $XX.X months of of for operation. to in impairment net including loss a EBITDA $X.X $X.XX disposition of offset was $XXX,XXX X or ongoing the to Chase. and was same managed share disposition the proceeds

less are efforts. In the work in to openings improve, and we compared market call impact openings, franchise refranchising sales between and yet turn XXXX. of XXX refranchised as the excluding economic of reflects our to XXXX, you, over we clinic believe likely through New be XX headwinds The license clinic that, are Sanjiv. with to refranchising consumer XXXX will the impact XX to than I'll of difference years. And over last the clinics, impacts our franchise be the the and the efforts X back expected

Thanks, Jake.

XXth network retail to affordable anniversary membership-based In access of chiropractic by proudly services care our to The concierge-style providing Turning settings. Joint convenient celebrated XX. Slide October, in revolutionizing chiropractic

In on at up we were Tank's recognized Annual a year. I a the our XX addition, moving franchise-focused XXX we over over believe being In Top significant Position have been in years. XXX patient-centric consistently will us the a list company that top last Franchise X XXXX, recognized for stronger spots company. make year for XXX, third

our Our quality a and testament patient opportunity and chiropractic care our to awards performance value and the longevity are our of franchise satisfaction, franchise concept.

am Our opportunities headwinds. I growth, am our The power exceed strategies will by and a committed behind clinic stronger confident very our team talented company. I am economics Joint near-term refranchising franchise long-term that encouraged with the and we far drive concept, to and meeting emerge the improve members I market

the category combined. and clinics, is several With than dominates care copycats competitors chiropractic scale our XXX and market the over units hundred are We other larger leader. the

white large of space XX presence approximately a and the leverage X% chiropractic We District care the into Columbia in have in to as asset and the market to the of well. With intend have created a premier which we being of we nationwide we and this a brand very billion U.S. spent Puerto states, pocket Rico, potentially with on expand in share. out have a U.S., $X.X opportunity, market annually internationally base

especially decisions to attractive fourth meantime, our We building to do value, In our the and XXXX drive driving be results. everything capability increasing patient expect market to our and asset-light principles we share, shareholder quarter with strategy when strengthening go-forward franchise innovation guiding economics, improve culture. care, will elaborating create and profitability capture on model. I report elevating more we we in continue as clinic consistent forward of to look people our

us Valley meet Q&A. begin Deer questions, you we like ROTH that, in the I'd ready begin operator, with December. Before I'm to to invite to at And Conference

question the ROTH And Kelly first from comes Instructions] with [Operator George Capital.

the Sanjiv, congrats on new role.

Thank you.

was Sanjiv. this for question, I First is hoping --

You mentioned how think, be? in curious pricing, additional go changes taking significant pricing and pricing, if like. expect you you through of I to all-in your a I various taking levers. basis, prepared remarks could that those sort of you're on sort was the And do it contemplating sounded

Yes.

of So sure our the our have as leverage incredible that way efforts pricing demonstrate patient construct our proposition value to marketing that price new how part we is. works, a we make we

even that but some We there prices. revenue, to a some package our price revenue of walk-in kind predominant the or recurring make will access come have pricing addition the what a a recurring where price. The opportunity price model, packages more giving is of on our patients. incremental through us our walk-in to that of patients for does, are after that, And taking is an volume we attractive patients to revenue a component in subscription

impact of that. about excited So we're the very

maybe I'm pricing I legacy there And correct else wrong, maybe contemplating you're or you thought was that I also if misheard. something taking me hinted

of way the all what the also care, And but of mission for think to pricing. our effective being will my the evaluating levers potential all and to I might affordable evaluating we're true maximizing part of we of providing chiropractic immersion learning be available aspects us, As most revenue. including be XXX-day business,

at looking those So of levers. we're all

last ongoing -- Can think the I more the Okay. maybe Understood. July, to little And comps I second a just since mentioned topic on you conference growth. was you've cover seen specific consumer and guide be then headwinds hoping the accelerated. call is in just what that comp down you

you've what curious quarter I'm So September so in maybe well. August and far saw and seen this what you as

see cool the comps little going within bit quarter. some the Again, did obviously, Yes. headwinds a there, We on. election economic

I that of an -- and just been think we've still years. the it's time couple over still experiencing interesting last for us

opportunities of in So see slight about might launch and flow We did frame promotion that the over that. how we're we did October that through a very a cooling time excited time. the

from revision forward. to prudent low just slight be a moving Just downward a and really construct that better provide side

just an of you're or is Maybe Capstone. that And facing Okay. know you Could then still or to what in on don't it's isn't new if your just kind me process. update give I there's issues the last or -- not on sort were of challenges there one for refranchising. the the pricing just us expectations

respect timing the on Just of process? any kind with added detail to

I am Yes. it wrapping arms to give we've At done what at a making later specific just around date. the this far, confident more timing thus we've and stage, how approached feel that to I a my response sure you

over So learning you happening. our time, share to able with more I'm phase But still be of efforts. what's refranchising just on the playing we'll sort in of just

Yes, of right? is a full I of our number think would timing marketing. the of Capstone only did their indication interest. thing receive George, we We which the did I in interest, received indication add

of the step and process wanted to the those presentations Sanjiv with those back groups Obviously, management bidders. to take go potential that we in through We CEO allow and are to meet starting transition, a the process.

to through their delay and So and we'll a that there, full bit Capstone with work little continue a force. allowing continue process of

Riley Van from B. next question The Jeff FBR. comes Sinderen with

maybe little I But me things, you've these could And days? most a in focused sort time, far? into I that. and couple Yes. on I to your follow-ups then welcome, say questions. us guess only And really a guess let are realize a and you just leaning of you're you've Sanjiv. tough been And be short some there learned so what XXX first of I on what have more give to

Yes.

I'm really finding and I here my appreciate enjoyable it. very First of you, enriching. all, thank Jeff. time

I in the and shared know, but you care, we're the our is -- distillation X.X elevate patient had affordable provide right, patient principles, X weeks, which been what as that in to the is think, accessible we of to is, in have care. I've I mission

for think number me, I that's one.

the be. is every clinic to stronger I we're going economics strengthening off The of think core will the at that be, franchise. better

are Our happier. going be to franchisees

So the I that of is area second think focus.

think be is culture what innovation have we across going to the world I we're third to do, to thing not fueling that a to got behind innovate constantly the all our we've of but building where more certainly certainly we live around and aspects continue going we invest in and forward. capability And last network. least,

those are my as areas I So focus the part more XXX me as of first days. for learn

the you then I becoming And And weeks. thinking few Okay. out there that I you might And curious are services a platform. I'm what is layer other to a innovation, adding again, what of fair. it's just you realize might that, know clinics? be That's about around thinking platform. you about just talked only since mentioned your

recognizing for you thank Jeff, that.

X time, evolved even right? before out an joined evolved has previous popped me think I there chiropractic One think that years. I And was before over here. right, took to that available study opportunity care itself And category. I treatments from are at came I have one clinical The the today things Joint,

that's -- a there's think I one. So

us certainly think and for platform. -- came add value Secondly, would might be all I certain for are are shareholder landscape, look us the evaluating the worth infrastructure for that around of should that adjacencies we was when opportunities at levers core what growth. into business, our clearly, I before That to think contemplate a being there leverage I

and again, in the the think you it time see I'm, be the learn part we conversation. from more to Now give able speak when what's X as inside, a informed happening, I business, quarter opinion that to I'm taking we'll next of

This I to Instructions] any closing concludes question-and-answer back conference for remarks. would session. Razdan, the Sanjiv [Operator over to turn like our CEO,

and a you that forward us. at roadshows. at to Thank Joint, look day your we back. non-deal good know have conferences know Have joining The for getting always and I you to

has now for conference attending concluded. presentation. The today's Thank you

now may You disconnect.