JYNT - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen thank you for standing by and welcome to The Joint Corp. Q3 2020 Financial Results Conference Call. [Operator Instructions] As a reminder this conference call is being recorded. I would now like to turn the call over to Ms. Moriah Shilton. ma'am. you Thank ahead. Please go

Moriah Shilton

operator. of Good is you everyone. afternoon Investor Relations. Shilton LHA Moriah Thank This

On the Corp. ir.thejoint.com/events. today; update the using that financial summary third CFO, the can presentation and will Singleton its results quarter up Holt call Jake questions. Today close the for and ended President then and open call Peter provide with after detail the slide an will the of for will Joint Please September business. a note Peter the the market CEO, a close results financial XX, of found issued we at The are quarter be XXXX. review

a you of Relations press of section this can company's the If have release, website. Investor not the do copy be already it found in

on management. important on risks as filings present reports are as strategy, future based future may on and Factors statements these of or these Form operate be uncertainties to current on any COVID-XX made we statements actual in Risk discussion advised year assumptions as or impact the estimates any As Form Factors from include, could X, could reduced to forward-looking that make failure including for plans differences today's operations, hours of December forward-looking cause are will develop to we Throughout please outbreak quarterly discussion, as materially our patient anticipate statements. failure annual in factors affect described intend; today's statements to the subsequently temporary and results our some or the differ be company-owned and XXXX that to: but including including economy continuing The concerning subject material subsequent provided clinic factors includes the rapidly Slide revised also relating today. objectives the predictions, and are in to limited our and that our changes statements the with the clinics November our the to expectations, business contribute and described not closures, financial position for and operations, forward-looking updated company-owned clinics; they ended one on or may on SEC managed as our acquire filed managed other business our report filed we demand; and our X. profitably XX-K XX, shortened updated XX-Q in filing we

with you against result, of we our review undue results may market reliance filings for our other future a placing stock. our discussion these risks of to statements on As the affect caution that or price and the a you SEC and encourage these forward-looking factors

or company adjusted tax ourselves gain revise and net or income new in forward-looking defines Finally, uses or events. our of we underlying which as acquisition-related then and as presented Management more to expenses. are compensation performance. loss used and trends important are future gain net to expenses. or before expense, EBITDA operating the to income the measures amortization interest, not before loss, light in impairment of expenses, publicly purchase alone. by they company's net The depreciation management disposition results updates EBITDA bargain measures release. view EBITDA net statements a non-GAAP these provide any adjusted company transparent and financial and EBITDA adjusted release financial measures. They obligating assess EBITDA stock-based believes EBITDA are EBITDA they are performance Management operating presented to on GAAP defines The because of or Reconciliation press information is

the is Peter it to pleasure my call and to turn X over Holt. Slide to Turning

Peter Holt

Thank call. you the to everybody Moriah and I welcome

and care health is performance. quarter hold once thank by is an to momentum model's Chiropractic of service like impacted again so as reflected and by their third and our essential forced of our doctors models. seen the our the their all pandemic to patients negatively Joint. confidence which for growth care staff to patients service our thank I'd resiliency. foundation business for their rethink companies The many taking business our in Our We've is

The our has at Joint, Here to procedures sanitization staff. concept implemented unchanged our outside increased we core of remained in cleanliness that protect and patients

chiropractic that cannot the their This essential to experienced we've patients new the investors. rely serve is While on to of performance predict continued and patients our to pandemic health. attract what ability their we care to have deliver continues end as

The settings. We out need going chiropractic services in hours. them, to without membership-based convenient and concierge-style care. For that appointments point for with We're I'm or attractive located insurance provide Joint access revolutionizing is pricing retail to convenient the

strategy is build increase growth chiropractic new and of to care awareness our patients. attract Our brand

of We chiropractic continue and franchise care owner country. already of to the a fashion our open capital-light provider recognizable corporate in the new most clinics. clinics with model hybrid largest and in managed We're

itself. quarterly metrics questions. among to will the chiropractic providers, have like significant our detail opportunity and call the from share results of our continue activities greater comment CFO and after open which and the redefine level our market fragmentation financial the in high care review for expand the on Singleton and discuss I'll then Given market I'd to we we market increasing a as Jake

XXXX and XX%. XXXX XX%. making increased quarter. EBITDA And company's our our Revenue X. since $XX.X clinics for the XX%. million operations. been for that up throughout the flow in full quarter Comp XX, up million -- financial opened for each the XX quarter from compare public have unrestricted to reached to $XX.X I'll third metrics sales $X.X at XX from strongest Turning rose the at cash compared to million cash million primarily September grew Adjusted XXXX going were history XX%. System-wide it increase driven to in Today least XXXX. $XX.X to the month third June improved We at Slide sales up results reported solid quarter months

review Turning X, our to let's Slide portfolio.

have XX new into already Texas, franchise Georgia, expanded we Los new opened Carolina including Florida, clinics and During area nationwide. one the clinics a California. in quarter, the North Greenfield Angeles and footprint We our markets where primarily

We also closed franchise clinic. one

XX This the corporate. quarter XXXX. and XX% operation. had quarter quarter in XX% September a in composition company-owned for second compared quarter franchise new XXXX end XX we and XXX XXXX At clinics third at equal clinics XXX or clinics The we the to XX, to mix of clinics opened managed franchise and was XX

Turning to X. Slide

in of For new sold again, quarter the in XXXX XX great licenses. XX to Once third climate franchise for sold XX franchises this remarkable. and franchise sourcing is sales compared XXXX Year-to-date licenses XX we've thank third dedication In our be quarter we any of candidates. to we franchise business the system selling XXXX. their second team quarter franchise to

this that level business. our By extending our this believe our sales indicator of to environment long-term a growth. continue or continue current developers to powerful regional in is of accelerate our reach We for our achieving RDs outlook positive

In a a Joint welcomed wealth developer of and During purchased successful they XXrd former a were of has multiunit our rights who the minimum and the This the regional quarter in state territorial responsible August, RD was of has portion management The been a The end executive XXX sales. territory new new we Wisconsin for on XXXX. since XX foundation Illinois. commitment our franchisee XX% franchise aggregate, XXXX for growth. for XXXX. established franchise RD comes opening expansion clinics. clinics to by achieve to X,XXX the clinic XX-year clinic This of our goal of of bodes development clinics. since our We development XX-year requirement In territories the continued and total new remain large the sales well minimum of schedule track of

increased franchise for Our the clinic future strong license set openings. stage sales

Additionally, new all augment scale to corporate we this increases by expansion revenue, plan opening our of recognition. brand and greenfields which

slide to Turning X.

messaging a doing COVID-XX support. the We staff Joint what strong emphasis initial our in pandemic, reduce to The months risk During were communication in and clinics. on with the featured and about we're patients brand the our of frequent of and safety

The We routine. with also and This we care empowerment while summer and our This healthy promotion sale record chiropractic clinic. content tips essential foundation conversions focused coincided had lapsed which resulted healthcare patient of in Joint August, with a targeted membership members summer total of successful upon a to-date, new positioning an record our patients was the number per clinic a of In promotion third incentive. of with in a sale for service. per most message number built message as which lifestyle, annual QX, of special reclaiming recommendations maintaining on active

pandemic. promote month, Last thousands how As submissions benefits health improved testimonials our chiropractic we patients over the us their XXXX, media. we we'll chiropractic close care personal continue of asked and received social to out during routine send of their on to has the

sale chiropractic of membership future these to hold campaigns, Black December, the our be our continue patients efficacy and care. of will Some our grow year as and In end in annual Friday of we'll awareness we November featured promotion.

delivered to a and driven clinics. -- the strong for Over our sales significant campaigns have years strong value our these incremental patients

other our marketing intelligence, feedback platform. X, automation, improved among to patient review slide Turning business IT Axis features. systems, will systems, provide point-of-sale new new financial let's us capabilities Axis many

may nearly focus then the rollout to start COVID-XX. impact respond quarter, the to testing Axis. the In prior those third paused As attention who We Axis returned the recall, follow on we the our to we've helping to us our of completed community franchise and pandemic. development

franchisee new is platform critical is final and prepared trained the of for new for prepare every fully that tested this we As system. is that rollout acceptance and the it

Axis As the by with jeopardize to that It's or the half an will process over shortcutting artificial be it complete first now you. I'll rollout rushing of turn project, in the we it critical XXXX. Jake, complete will timeline. And this meet that not we anticipated to

Jake Singleton

you, Peter. Thank

X. slide to Turning

opened million were were the X%, compared from or to revenue year-ago up mature quarter same continued In months all the quarter quarter. revenues contributed XX%, up Peter to clinics pandemic, due the ago. year million greater XX% and of third compared $X.X or over million and royalties advertising Company-owned to Cost Selling up XXXX of ongoing more fund opened all System-wide million managed XX a sales of million, in $X.X expenses compared was were of the due of reflecting XX%. higher the to for indicated, of payroll for system-wide our period months to was for year-ago year. to $XX.X were increasing $XX.X of categories Revenue same greater expenses comp $X.X period million. both General growth same XX% million Franchise clinics million, revenue million or any operations clinics The the clinic Increased Comparing third over commissions. or last growth. for $X.X X% $X.X XX% As spend. million continued timing expenses period sales support clinics the last a related and marketing the year-over-year. clinics XX quarter. and increase up $X.X month for throughout each comp reflecting amount improve the quarter. and to sales to year to time organic developer opened period number number XX% year contributed $X XXXX, last system-wide the $X.X increased administrative primarily higher regional the and was XX% spite more is performance the in same clinics. up revenue to compared XX%

per last the to posted to of total record which same $X.X million $X.XX $X.X to clinic diluted Franchise our cost increased adjusted $X.X period adjusted million, a $X.X million income increased the year. reflecting delivered adjusted $X.X EBITDA $XXX,XXX expenses to last X% quarter, share period million. diluted EBITDA per for control million. We or For as $X.XX XX% of share, Corporate Company-owned we to adjusted clinic compared XX% net efforts. EBITDA EBITDA or compared year. increased of component decreased same XX% managed the or

Turning to slide XX.

compared of For XXXX, $XX.X pandemic $XX.X greater months the the Net million and or gross of a sales number months to clinics compared XX, was in at compared offset impact $X.X XXXX. ended period by XXXX. Adjusted of per XX% million the XXXX, to in quarter. up managed the nine revenue At million months XX, diluted share cash up million of or $X.XX diluted compared was income same XX% nine and XX, negative September franchise nine first partially had company-owned the $X.X unrestricted September $X.X increased million increasing December of million $XX.X XXXX. clinics, second per was XX% XXXX which $X $X.XX both first million in during at $X.X or reflecting the EBITDA to was million we to in share the

related which operating $X.X to months capital the cash XXXX totaling increase million, reach will greenfield inflows inflows the the During new nine were million September $X.X activities were greenfield ended accelerate near-term earnings until sheet, and $X.X breakeven. XX, million. With from cash our margins financing we in plan activities by from expenditures offset outflows cash The and bolstered compress operating of clinics to balance openings. number greenfields were

short-term impact to the impact clinics In guidance. we our the we expectations reestablished could results our that to of evaluate of have is provide long-term accretive results. year, the and review acquisitions on Based However, fourth the We the development. opportunistic benefit. nine-month meantime, rest the offset XXXX. quarter slide greenfield guidance worth will On well to financial financial we initial our XXXX guidance franchise of when deliver XX for continue plan to for

XXXX; company-owned compared between $X new to between clinics between due XX million clinic a compared adjusted XX revenue be rate $XX and combination acquisitions seven to the pandemic. of in guidance in the and XXXX. to reflects to openings $X.X franchise clinic compared between of the XXXX; million through second million expect million in XXXX; clinics quarter be and be of in reestablished to or XX we and XX $XX.X lower XXXX, to be EBITDA to XXXX For opening compared million million greenfields during to openings and and both $XX $X.X managed four franchise The to

back XXXX. turn pent-up However, end XXXX. quarter that in you now will by to fuel the believe call goal of will the of there continue fourth XXXX is X,XXX into demand opening and Peter. we over to our achieve Therefore believe clinics openings we we of the I will

Peter Holt

Thanks Jake.

more Turning experience. unexpected ever increase offering convenient nine into share than the of market the our of the most to and by than business The demonstrated faster resilience model as times. XX, slide months we've a for opportunity trying the nearly industry under we the is patients pandemic, and stronger growth affordable growth

is market compares a grow at nearly are with scale the our of the companies Although highly gain CAGR for chains of chiropractic on share with significant and about estimate Of opportunity practitioners standard procedures excel. the chiropractic that a care pain dentistry billion. $XX individual to we ourselves $XX at the next the expected the market are already only five which share. where Further, back multiple drivers to creates of billion growth. X% in Joint X.X demonstrating the spent for Currently fragmented There market. is annual to industry's of all U.S. care. on thousands for market accounts and industry years, is including over marketplace the industry This spending or tens to XX% the as favorable of X% path DSOs market account influence XX% is which

country the chiropractic College the that facing American acknowledging the and of a Chiropractic continuing of is long-term odds part Association and as with a have show to medicine who Association patients in this epidemic visit plague of that Physicians effectiveness country pain therapy chiropractor opioid back chiropractic first as the of decreased XX% increasingly a this First Also the first now or studies the American tragic of traditional Journal use. pain. early line such continues citing of as crisis lower Medical opioid American care

itself and predicts enduring is health as pursuing well-being. choosing health consumer to room and A education to safety and emergency they're a consumer driver pandemic-driven of and slouch care concerns The more avoid impact from overcome we unfamiliarity pain interest Americans. McKinsey Company patients the to on pandemic changes as rising for about COVID-XX with efficacy well care continue the behavior year Another is measured towards the key this chiropractic market report from is in study and earlier the chiropractic in the as the shift of a couch wellness. so & chiropractic these this address to that of lingering chiropractic. to Even they're a emphasize into by tap home the accomplish trends as relief. people the work from to consumers To turning many to

publisher and of with awareness reinforced grow as And our on patients. the the care, public. continue Joint sanitization to The also chiropractic enhanced general we procedures of largest We among our chiropractic information online

to quality how can improve scale Our help the understand care and voice of comparative us affordable routine their life. people gives chiropractic

Our Joint the typically Traditional who to everyone. to The without mission boomer of accessible demographic coverage attracts hassles the providers a have prefers serve is that population chiropractic make whereas baby insurance broader service affordable convenient insurance.

ago. XX Our years old years to patient continues base just XX to age the two with younger median compared edge

today patients the our fact technologies after the population. of implications pursue we to reach has segment were tactics In XXXX. vital born XX% this of and This on

during is have drive franchise on to our last who to CAGR colleagues slide and corporate why nine years closing I our community, express again efforts dedication RD, teams In to all to country, humbling. and system-wide our like depicted team, XX, Joint pandemic. the sales The chiropractic is the selflessly appreciation across I expansion XX%. our my to over Their these our As this Joint once continued mission deepest serve you. illustrate our to thank to To our would

truly difference in the You making the all to begin lives touch. I'm Q&A. a that are ready we Charlie,

Operator

with line sir. Instructions] Capital. ROTH you, [Operator David comes Bain question from first the Thank The of

line is open. Your now

David Bain

you. Thank Great.

done. First Very congratulations continued on execution. nicely

like at margin record. looking guide should EBITDA be another Just seems

margins think inferring are XX%. I around

of be you're normalized by it these we about units there in openings Is -- think year. some Obviously, margin And to could a kind of coming get to at point? get XXXX average a as after per going larger unless XX%-plus or sort evenly is store just sort that that of openings As X,XXX of we margin even in then per we point, of average open up XXXX? the end at calling the XXX loaded that stores we half on for a the XX of mix to it greenfields Is is cadence? assume point. uptick back it to from to going annum --

Peter Holt

questions you great of forward-looking as all know them. it guidance Dave Yes, to margins. -- relates that. as Thanks we don't We for give

those developed look and we reach I'm would margins that but We that lever. And I there's with some so at As that our structure perspective over of overhead to overhead obviously time. to over four-wall we've That's the margin say they us looking time a reduce the expect field that time, over how four-wall expect time. clinic from at outside operating we'll over expand corporate that we segments. XX%-plus two do lever how would kind that

is segment non-operating for very franchise that Our that will time. that time just something Until we RD large which territory overhead pretty last part we is just then a overall us. margin the margin business that under monitor much maintain that XX% And the of is contribution. carefully corporate recapture such a over

got So, that franchise of us. traction openings, out cadence that work as our do we that models do relates system and other it that has accelerate accelerate over they and awareness, to we've as you're cut to gain the expect to just expect our time brand right, for the that as We as overtime.

David Bain

Okay. bifurcated -- And model. three Great. just not parts. straightforward The my into follow-up is then it's economic

mean of of forward the general? for of bit declined costs, franchises declines at new grease have all sort they location given I greenfield strip openings? a terms potential and In retail skids does it in

Jake Singleton

lease especially assuming what that's costs. to it as relates is everybody Well

much we've clinics I in build-out don't building changing costs, just have the conditions build-out we've a the been because California that the California What the in in little some think higher-than-average of see overtime. cost market. of I noticed

flexibility XXXX the you It's they'll to the first when empty places, Challenging that, that site. you'd lease competitive see anchored pandemic this we what that's half supermarket. I center, and we're site. you feet by best is We're the places commercial costs it's think anchor we're give of at look in or is very is a assume and so the the square going with in going the and that would fact all landlords. to still line greater impact is that they're having lost going not that

down think time, think a We pretty it a it's still just those little relates But will be labor, leases, over to build-out overall bit competitive. see stable. we bit. little it's costs So going I the coming to as

David Bain

so you Okay. Great. Thank much.

Peter Holt

congrats. for the Thanks

Operator

line question the next comes of Hamblin Your from with Jeremy Craig-Hallum.

Ryan Kimbrel

about promotion. of several Ryan But quarter June What lot the is had want those and some it relates to retention guys we great successful This last as guys. you in to to seeing new months? Congratulations customers patient get of in in months I'm pretty trial on with you just the have the particularly time, exposure first if start Jeremy. are a on new as I you during are and and were for Hi, will passed. foremost. able as guys that coming wondering terms you from summer spoke

Jake Singleton

was great was June August sale promotion. done. most summer patients, was targeting promotion we're Yes, That we that successful you're was the a that the promotion where our as we've trial. our also which right. free mentioned lapsed of

your So seeing high-quality our The question strength seeing also answer clinics. patient driving attrition and a we're and we in numbers. are in to we're is great record thing really conversions the

So on us the bringing longer. that with we're on staying are patients

actually So numbers now. members we clinic active across experiencing system are right our per record of

trend a getting and high-quality with staying us a great we're is patient us. the through for they're which door So

Ryan Kimbrel

it Can news talk of what geographies? seeing that about has guess fluctuated pretty by are some you you're in Last last about geographies wondering Great. consistent of hit to actually the And sort had you gone stayed me. hardest some performance has time, across as a bit little or of share in for good then I has COVID. performance time I'm by? terms

Jake Singleton

system. a our quarter, comps XX.X% same The stat system and represented around regions this When and of a was at was XX.X%. last we that four were actually XX.X% looked total time quarter we those those Texas we Last and four of it's we did Arizona, system comps as had analysis over little states about at XX% gave which Yes California, Florida approximate our improved. of XX%.

average we're even strength in again the of seeing a and those across disparity we're overall So still system seeing those "hotspots." large So in they've not of better type overall, geographies hotspot some actually gotten locations. than kind

Ryan Kimbrel

it guys. again, Great. Congrats me. for That’s

Jake Singleton

Thanks a lot, Ryan.

Operator

Sinderen Your of the with next Riley. Van line B. question Jeff comes from

Jeff Van Sinderen

Hi, let Multi-part my me everyone. And add question. congratulations.

Your really you more maybe the trend in strong monthly the comps QX. to are progression in speak can

thinking more promotion, around QX any what you saw curious to with this color Just And marketing promotions reluctance us as give comps? comps last you go might could change about planned then COVID the you're for recent on probable in given any they emergency the the how the And the and August in How year to plans, there? year? surge also near-term versus evolve you QX pointed out to room?

Peter Holt

and Friday the say two I as would anticipating a questions, and in the promotions. that major those Great quarter, system of fourth the that, for Black are congrats. Jeff Sale Yes. execution then in in the that marketing to we strategy QX we sale better not Membership the do thanks consistently promotions and our in December. two about traditional changes is we for no, getting are And better talk any

dollars more quarter. have we to support behind that it think I this marketing in it

I huge we to can't to we continued So to we promotions would your expect as is ties guide on QX expect And quarter those on relates then what compared don't That those really what seen of influence. we impact it have from in would and to business think terms have year a we the -- as that about question lowest the hit comps the continually an comps that on, time performance numbers because on when last metrics the improvement run in directly see improvement since that new we've talked in at, is key terms patient consistently to year. the and we comp finished when month-over-month quarter, looking seen key we use rates in last we've we metrics pretty the the April counts the in of we at as the look out nadir promotions.

the can in long far deep goes All knows that. mean, it one a that first today, obviously, us to so how the were is months our they goes our going the knows they to pandemic if this in, feel doctors to ability because their who of health of is, come in have the middle that for it's been have pandemic in year are standing clear what's they're I that we doctors great whether levels ago is door. come last. is to the becomes it unsafe this patients, where than our provide patients, but they be coming this to it's or essential patients And no and unsafe continued going patients service of see where Now see if nine their the in patients you essential patients, period. it and doing their how higher not treating that this to care really are they're none say And as serve. and -- your it treatment at up same to would their

Jeff Van Sinderen

what performance company-owned most a you're versus a bit corporate little terms of unit open seeing franchise next us about as And anything greenfield then elaborate more follow-up, Great. clinics recently? tell in then you could And more to on plans Okay. can you performance year?

Peter Holt

Sure.

par seen little like-for-like comparatives on corporate so how in our stores network. we performed age with bit do pandemic system. month is are is quicker. the so our always the their clinics kind rebounding stores operation. historically, at franchise of What corporate comparatives, first the at look have The you if class Historically, we that far performed the look we've franchise When part through a against

performance. I rebound now this again, we're question what quicker corporate reflected you So in bit some Jeff? that in there a second quarter. of the the kind the segment right of And margins outpacing so seeing was part think see little they're core on the metrics And

Jeff Van Sinderen

about point want say this at Just more clinics year. greenfield to corporate if wondering there's any you to plans open next

Peter Holt

put of end bit little of the a Yeah. my in comments. commentary back I

activity significantly really in investing because greenfield our liquidity development, increase pulled pace that bolster We just position. to the will back here of on we XXXX

think I sheet of we're balance more pace of a have and now kind we the ready to growth. back rapid into get

Jeff Van Sinderen

Thanks success.. continued Okay. enough. for question my and Fair taking

Peter Holt

for the support. Thanks, Jeff. Thanks

Operator

Capital. of from Your next O'Neil Brooks Street line Lake comes question the with

open. now is line Your

Brooks O'Neil

I ask commented I guys. on late, advance. little about I got I in bit confess afternoon so something on apologize Good you you if a

Peter Holt

problem. No

Brooks O'Neil

Just we've sale as going units complex to number seeing would three just recently? very And describe some been through you to three, opposed traffic opening ask guess, this back increase can curious, much. comment clinics kind with as pandemic as on three franchise you I for you've I'm in normal? any you questions. to to Number do simple time period? the see you about two, you're of anything Thank of one, breakeven questions you moved Number

Peter Holt

our in normal, first terms normal for has you're calling years inroads because answer what but I if it been you Sure. And comps the your the XX%. XX%. were if would to traffic reported for and at at normal, know like feel us normal, like for then of in is is some QX say, on not negative four X%, there. We back comps comps at comps we we're QX compared To XX%, last question depends answer almost no, great that's we've made our to as where

we that just we upon draw right -- I really No, compare last that to measure. any the but across not headed almost we our there, metric increased are we're you period, performance that year that quite same certainly we're think same have continuing building to momentum I So pre-pandemic? saw Do if direction. we've in that

there we number be going be on course to was for just the it that increase no number in say, there's pandemic else. know at our that. believe being need of more with is get the second other that's and looking I've of be any is, that theoretically, is I've of anything not increase do that know sold. than we are -- to seen opportunities have units Your that clinics in franchisees of all something you the got it who could pressure possible out. clinics And -- on if Jake what sale an seen question that because certainly just that seen reality financial to the I you've of I could don't for the that

Jake Singleton

No.

Peter Holt

last your year. transfers the see question But impact say, expecting time we And the is breakeven. par any that a less we comment the last to would it's would to I or that in or on on see normal kind of be

we quarters the are of record XX as performance seeing time a of even even up are even in are I breakeven we the the call, shorter same pandemic than first those And it year. that in did Midland last XXXX. operation, and If this through of shattered talked seeing a to opened in record-breaking them broken sales frankly quite think some we which we've three for basically clinics level months I in of period like across we in had have consistently would XXXX times in we the this us open is two look -- say just that first clinics the that or of breakeven any $XX,XXX every that clinic of -- class higher I middle XXXX, compare to to I or that operating that have. when broke

Okay.

Brooks O’Neil

that's Wow, Keep fantastic. up. for you. incredible. it Good That's

Peter Holt

support. Appreciate the Brooks. Thanks a lot

Operator

of line Company. Max the next comes question Rakhlenko from with Cowen Your &

now is Your open. line

Max Rakhlenko

guys. taking question. a again, for my Hey, Thanks the on congrats And quarter. lot

So And just Anything out the thoughts accelerated position cash then maybe you closures? Thank competitor potential environment we have M&A? improved can pointing there? future liquidity you're to And on given talk seeing a follow-up. any you. to competitive your just first,

Peter Holt

Sure.

our support those how an practitioner make independent any see we've a of during independent how kind this can to for And work the But on it's own not practitioners. our increases competing are just that difficulties times would is, increases in would you sure in the that additional obviously, our loan, is our opening. an as this that all I market. just of of imagine that what to we're more patients, the the how more new from kind I use we hours, can with those the imagine, coming are competitively, competitive seen to marketing of to coming industry if seeing practice, and you own from. continuing what some In close, they number patients And of that stats uncertain the those your clinics it our has and see environment tough face. environment, number system, a is franchise clinics – environment, on and that system we're all down their in specifically these terms trying calling numbers all chain they if in a that, of the thing and a in dominates and that would of because you're come industry anecdotal to that, to your market in of say is we coming either in patients clinic are are not part time things or to to because you're do doctors that you of to up shutting than get I'm clinics a this PPP us market, increases and us, the XX,XXX that in

terms we're clinics – and I of our the in driving our see organic to that's in I So both would of terms sales. market say new in continuing – growth, expand

I that, handful terms Your quite starting of acquisitions out our and a that that somewhat in chains second to units somewhere frankly, that given are have, XX between is model. of in a question don't related there market X know, are are

justify So we're that there or of market bit an little a in would But nothing that size of seeing acquisition. the that. a would be

opportunities, So in would be what it us or relates the not to reality terms and mergers of acquisitions a lot. available the to is pure it industry what of as

Max Rakhlenko

you in those plan concentrated color be separately, located? where for would regions? they do Will just be more any it be Got then understood. any new Greenfields, to the great. openings And Just

Jake Singleton

got Georgia the now have to Coast also New Carolina, Sure. Yeah. area. The mostly and already infill, continue Southern South corporate mix. we that clinics, target to be a Mexico. next We're so in territory California, East the will some terms on We've Arizona of where really going year

So there will have we territory, be into those as some true some plans to other Greenfield well. almost But expand regions. infill sprinkled across do

both. it be of a So will mix

Max Rakhlenko

Thanks guys. a Great. lot,

Peter Holt

Max. lot, a Thanks

Operator

Instructions] Group. of Maxim Anthony next the Vendetti comes [Operator with from Your line question

is now open. line Your

Anthony Vendetti

went and people – follow-up other some about questions of offering on you couple free asked my and have been originally, you've went you promotions. I when offered of into were promotions. those. promotions the situation the Most into know you. know, when I Thank asking COVID all answered, we were a but I a just some had

of track gauge us if very regular of much in marketing up of COVID-XX, everything been you As get percent you customers, end the to can you those out sign package. go that your customer? you customers back, that then trying has of a the I'm as they pretty in becoming sign-up – a come for how about They give customers those, know or for it? they changed is marketing? of same What those well terms a sure, sign-up, you strategy I front percent up new regular potential customer, light And define the in or whatever the

Peter Holt

Well, a of we how promotions call typically does to answer affect, what don't we but that conversion, that the on guide for your about talked conversion question and about we impact the patients. summer examination the well, for had the rate that, example We in patients. new promotion new for free offering where we're adjustment we those talked XX% any that, consultation call

the we've broader conversion that package. And came again, we history highest the impacts they I pandemic, is measure had seen when system. of if one term a them – rates across experience, you're first the all door not XX% board. And who experience. we've member who's rate of the in it or a go is conversion pandemic seen fact coming to a a in And quality the ever we've So to during to or who driving a company in part for a our want is you concerned of the say, from us what's in that of patient, as that is is for the a I'm our I'd the would first is – that thoughts time for door and converted than the the of those people chiropractor maybe about higher patient that, what whether not that say seen are is, or higher sure, sure time pandemic if you're the a patient the

open you you're door your go If that and actually you outside committed. do house

that as And level for so that record-breaking it's is system. of us seeing said, I think a conversion like I as we're

haven't – seen and of not rate. out seen those still have patients attrition we're a few We same dropping the – at any into again, we a at call this, higher months what we

In we've it rate as is the fact on flatter the call pandemic. that, measured earlier Jake our through attrition is either said, or improving

the bringing new the members of highest We're clinic this as in record-breaking say our moment. of numbers said in overall having patients So at promotions, network. the in. that, company from we're those I would been it's And Jake numbers the at across is, history effective per

Your second question is that...

Jake Singleton

Any changes planned...

Peter Holt

canceling, there promotion on providing out done adjustment to frozen I on of freezing for consultation been Changes doing response yes, a have example them that say, their And to as membership we -- in we've have our marketing And strategy. June special and instead of bring those back members our would in examination try who a lot and been. froze members promotions a membership. to The of for a promotion, national free before a never -- as for national join reinstate basis.

that in so marketing overall our strategy. a change very again was And clear

metrics increase we've the that those in And face all most our that's in talking we if it on in impacted XXXX. is our to our do changes and been the that was still is would so are new of count. is numbers it record call, is business know it support that tell from he and VP making that isn't If where on you're these we strategy, saw you much focusing one patient really you safety at the it's were seen we Market because marketing April, of while what

them understanding on out think it's that so of of number we're keeping And one safety we focused COVID. clinics. our really And what's just

and on so in. to is sanitization the comfortable our And the be come safety media feel clinics social marketing able should the you the platforms focusing that a lot both of of our to cleanliness on

Jake Singleton

bedrock promotions Anthony only are was our there our the you and what the I those summer August upcoming us. look for we at sale have in plan The that of add Yes. in would Black when is you the end thing year, Friday at and wellness promotion at look that

with the back I core things been bedrock year. June the But note promotions that to messaging? of half those changed this So core it's Have that kind really think post important we has done. unchanged activity our promotional we've anything for are of Yes.

Anthony Vendetti

right. All Unchanged.

So Jake the rate promotions. ever was XX% promotions in were for at the you or said Peter maybe on highest doing What example? you these the conversion, for it's when conversion XXXX

Peter Holt

at today, XXs. I XXs And specific upper our right patient first overall looking would not be who And and been promotion they've XX%. in after would be was the think convert board as said in new but -- is conversion new running patients the we're conversion the time I so then the now in our just over network. a lower existing low as actually promotion for patients new our across conversion for in -- our that overall that for the patient conversion that's XX%

Anthony Vendetti

was how clinic I then so. and the when much? now how minutes that little yes -- great. that? minute to lastly they the of Okay, went five in just have between that two And or been impressed the that the walk treat bit by treat it talk can it patients, indeed out a by that? in efforts. you things so Does mean, And on to door the fact check-in, with could have my you increase treat to implement that one when they always sanitation And a first about or me I Joint Has or it from patient a increased time? sanitation happen you able door efforts the the if

Peter Holt

they'll okay then -- time. generally, that know patients, just washing typically between between it's sanitizing in but don't we'll that we've stated patients, their their when and are doctors that I text the metrics X.X having is them they And we tables to and that said when then say it's we're hands in minutes, would I to now check by go call and have Sure. increased yes, or car are people come where

treat that's So is one it's a that I minutes XX more more bit there say -- two definitely but patient. be be would require whether to time time, little would minute going to there seconds, would

As you know, are clinics capacity. nowhere so near many of our

we've and times. even fact, system number know a don't we what about full capacity of is our talked In of that yet

of what have so, we of on across are impact And to treatment of COVID, these specifically number little procedures. say an we're ensure -- because the time patients even a the seen that not all between taking we patients, though would more we're board, of I bit the doing

talked coordinator that a at in role. doctor really busier can a some think cleanliness somebody so fact the of we stay clinic, on focused I position in hired primary about we've the and lower that just those level have may in wellness focusing clinics sanitization is on their

say patients. I an have more our is come, overall as treat in would to what that there's enough on additional not immediate but we fact these using we're to So procedures capacity been system impact our the that

Anthony Vendetti

Great. it. a Okay. lot. Appreciate Thanks

Jake Singleton

Anthony. Thanks,

Peter Holt

support. the for Thanks

Operator

continue. no Instructions] showing [Operator question at Presenters And please time. this further I'm

Peter Holt

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Operator

this Ladies concludes and today's gentlemen, conference you for call. Thank participating.

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The Joint Corp. (JYNT) 8 Nov 202020 Q3 Earnings call transcript