JYNT - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the Joint Corporation Q2 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remark, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now speaker, hand Mr. would to conference I first your Instructions] like the to over [Operator David Investor Relations. [sic Bernard - David Barnard], LHA you. Thank Please go ahead.

David Barnard

of Good is Thank everyone. LHA Barnard Robert. Investor you, Relations. afternoon, David This

second are market, business. using close for be financial today; and call open call guidance. financial provide Corporation Peter ended review metrics and we XXXX. On with Singleton quarter on will the performance quarter the that President XXXX Today Please and June issued the slide update questions. can results will a note, found a Jake after Holt the presentation the summary Then the its CEO, https/ir.thejoint.com/events. at for will Peter XXth, close results our CFO, of an our Joint and detail

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

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

any on As or filing in Form August reports described for or revised filings. anticipate June filed material other any Xth. changes XXth, updated on subsequently SEC XX-Q XXXX our XX-Q We quarterly

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

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

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

Peter Holt

model you Thank this I'm several to broke continues of delighted records you, call. David quarter. strength I inform and and to broke record welcome to The the we business that everybody - deliver our

to expected build to foundation. continue to we and growth accelerate our importantly, More upon financial

XX opened XXXth including we achieved clinic. clinics, and a opening During of greenfield the our April, clinics, X significant quarter, we milestone in second

we XX as to the investors. our have welcome to longer-term mid-term expansion. and quarter. drive during Joint's for by X,XXX chiropractic The supports well goal This clinics of our access I'd metric franchise the licenses end like as to care. sold our XXXX pause Additionally, in new revolutionizing operation

pricing located We clinics convenient hours. insurance are Our appointments in concierge-style membership-based without with for settings. or the retail services provide need convenient attractive and

open of strategy to the most We're already the of care, brand, patient of efficacy Our experience our the is an care chiropractic chiropractic provider increase largest awareness recognizable and growth more exceptional deliver in country. build clinics.

chiropractic in billion care we're nearly highly market. this X% fragmented account However, for $XX only approximately

continue We significant and expand share, refine market itself. the our to as market increase to opportunity have a we further

To quarter Slide and combined will comparison QX QX is include provide to context, XX% compared to to sales second X, XXXX, few I'll highlights in on further million our our business. Jake and detail. a nadir had In QX System-wide was XXXX of XXXX. well. a of as a sequential moment, our I'd strong XXXX. Turning the $XX.X increasing which XX% COVID-XX to the compared enhanced like comparisons to discuss our We grew XXXX financial results. the It of review results to QX the impact

XXXX. XXXX XX, December QX XXXX. and EBITDA to up was XX% increased QX XX% million prior XX% been comp $XX.X And period in XX% comp X% the million, compared Adjusted for XX-month million, from grew compared compared months our to Revenue XXXX, XXXX QX clinics unrestricted for June year. to grew to compared sales up same have sales from on at to and QX to cash least QX compared And Our XXXX, at XX QX that opened grew XXX% full $X.X XXXX. XX, XXXX. $XX.X

portfolio. X, review like Turning to Slide I'd our to

Regarding clinics.

X in our last XX compared opened record-breaking clinics clinics, franchised cluster compared strongholds half X-month XX X, Mexico. a XXXX in in XX and greenfields, brings XX of to first New of quarter XXXX. the greenfields we California in XX the a our of and QX, Arizona, XX and to total opened During were in same X half respectively year. This to and the first

in our southeast expands from digital in by This advancements presence Our brand Xth improvement. over first is operational a the supported corporate investments grand greenfield clinic in five recently, our in benefited marks important a and program Most marketing. opening our we've in market milestone in Virginia, new continuous years. and

Scottsdale franchised to clinic and of clinics, headquarters our line. were possible in North acquired Once the the During in X reported clinics X of the clinics of our were acquired broadening franchise Carolina, sales close the months the RD April further of immediately of quarter, clinics we territory they X go-early Phoenix, two accretive opened and in clinics XX,XXX region. again, clinics X first greenfield made over achieved means, expanding southeast. patients X our repurchase XXX corporate our clinics Xst, acquired franchised the in quarter. in which managed status, April, XXX in operation, by XXX operation. state, previously corporate-owned not did region, clinics. On In this summary, any had in the which the consisting were market, presence that the June or in bottom we attracted over at of XXXX, XX XX, we

and compares had quarter XXX to increased and increasing agreements XX, our shifted franchise the we March mix XX% the Our to end, At franchised our at XXXX, interest representation adjusting XXX to development. corporate clinic system. some signed reflects in X% in slightly total portfolio our of the This XX%. level with clinics of

greenfield Turning our One through Slide build goal to to support X,XXX open openings. upon our clinic by in tracking and And Armed our end to X, to the commitment natural base the confident mid-term our franchises we're Forces. expansion clinics to of XXXX. we're continued of of customer extension our is

- to Army our our will & we across providing bring Air We with the care base community. of entire honor the better discounts our them our In serve Force services Exchange clinics. continue July, chiropractic partnership on military members by to announced to Service, military

government work Air initial active Arizona; who world. retirees Force military target sites include has service around and veterans New more civilians Jersey. the facilities the their an duty along members, in with families, serves of Phoenix, XX eligible Our of base and Trenton, Exchanges X,XXX disabled million on and bases The Florida; customer exchange families, Tampa, than installations. their clinic

Turning quarter This franchise of bringing license to the In the first XX. sales sales compares XX our X quarter for the months' half to we XXXX, to franchise XXXX, XX record-breaking a and of licenses, XX sold and second Slide respectively. X. second

brand well continues attract capitalized records. Our sophisticated, to franchisees proven with track

XX, RD territories regional increases XX% of XXXX, quarter, clinics. agreements licenses, During to the June Areas for our In areas. since to the with XX-year to those XXXX our minimum our which XX May, new schedule franchise X supported clinics opportunities continue in elected This XX% renew Metropolitan continued the or RDs, RD they accelerate developers Statistical by sold development were At - we our aggregate MSAs. growth. second covered of XX% increase XXX established to and growth

portion in is mind, keep this sales foundation provides count our Now, expansion a but continued fuel already opened, that clinic growth. to a still large clinic and of

Slide marketing. Turning discuss to this X,

national consecutive campaign to who was of I'm directed Particularly new win-back fourth and impact XX,XXX rise from records set to of XX% May learning. the marketing over and new remote direct contributions launched The emphasizing work kicked relevant our year, In the and marketing chiropractic report June to during for interviews posture. campaign XXXX. the that the regional is their country May, XX a acquisitions advertising patient this our drive supported patients strong months This on visitors new increased and was of number monthly rose and our positive In a by good off and to co-ops. marketing media the unique posture website. confidence, of versus membership continue of we patients. around campaign our with benefit executing we're reactivated to consumer awareness radio reflects we've June, TV the pleased April, history. We QX This inactive in promotion the best our growing distance happy

reap QX initial through to all-time lead the to their XXXX, our chiropractic. digital Finally, performance platform, our new nurturing in an XXXX. in improving our out teams enables guide digital rolled our reached benefits - QX we XXXX. we conversion technology lead their our journey In to continue This compared patient which to clinic of XX% digital leads high,

X.X, new our successfully X, team Turning live our the are extraordinary nationwide. review AXIS to the our announce to July, efforts initiative to in Thanks first that of pleased franchise we our by launched IT iteration infrastructure. and to we our community, improve platform. I'm let's now Slide implementation IT

built any phase go must a through. IT our the IT transition continuous debugging from typical to CRM As to platform over improvement. moved clinics new licensed foster have to magnitude that We this result, now XXX our transitioned of former homegrown

a marketing intelligence, automation, the Looking with and portal, platform forward, power was to future phase mobile CRM preparing enhancements our check-in patient critical great we're the I'm that, business incredibly with you. first And make everyone this new it our include that in This unleash of to to of turn network more. accomplishment. that improved reality. Jake, And over I'll this for grateful dedication efforts a help

Jake Singleton

to Thank XX. you, Peter. turning Slide And

system-wide XXXX, sales in open X% for clinics XX% and comp XXXX. QX for in sales in or record-breaking XX% negative provide As XXXX review positive year. any clinics open as XXXX, To a a QX compared a were to system-wide were XXXX. context, well XXXX XX% our QX XX color for XX% XX statement, XX% a operating Peter all that positive and mature for comp year-over-year up compared open quarter. XXXX. last I million, XXXX pandemic in from in months of negative XXXX account business months and XXXX, increased take line impact in When amount in stated, our system-wide to I'll the provide as clinics on in time all item. regarding XXXX, QX X% XX% in a QX $XX.X to more XX% into was sales the our by variances or and had sales typically to compared reviewing more XXXX

QX all as comparison franchises a XXXX. both well the QX clinics, company-owned favorable For XXXX, of and as or of managed reflect to our increased number variances

period factors. up million. revenue and managed year. $XX.X period same expenses million, operations additional $X.X $X.X to clinics. of clinics XXXX QX Franchised XX% the as was the such, the base in over increase revenues same revenue $XX.X the G&A Selling quarter XX% expenses managed compared year. million This over $X well was reflects will XX% and in million, or million, contributed clinic contributed was year. the company-owned I marketing to As second same $XX.X fund million, local down timing G&A up XXXX. Cost $X.X period up or franchise the compared were our marketing XXXX. or speak increasing XX% XX%. Company-owned the last were by million, of a in to Revenue XX%, only spend percent QX XX% from million, expenditures of $X.X last national up last as larger marketing from of as an

proxy quarters While we the G&A percent believe due is a believe will for system, opening increase level the the end openings. to the of expense a the the of we of mature pace good next of the several greenfields of QX related accelerated XXXX greenfield revenue June, over as operating year and the X in at opening those upfront latter of a half

as reflected Company-owned costs $X increased tax compared which EBITDA of same - $XXX,XXX and million, to XXXX. benefits a $X.X of share note adjusted or In now XXXX. component same $XX.X of million, will EBITDA our $X We the same XX% XXX% is was in addition, ended compared for expense will $X.X EBITDA longer and acquisitions period XXXX. million, months diluted same on Slide now of $X.XX increased was results that a $X.X quarter financial of up accretive $X.X review for in the Net capitalized million be up compared million. period XXXX, an in Revenue Operating certain was On in loss Corporate in increased in to of adjusted compared XX% the six period income component Xst. exercise to licensing second June period million, year. a or XX, compared of tax was of the the million Income options. to $XX.X adjusted April XXth, XXXX. from of $XXX,XXX live XXXX. was million, to diluted our delivered compared to development the no to income cash driven supported last was to clinic $X income Axis increased the On be EBITDA the million XXXX. to And expense million. compared half or per adjusted XXX% operating million, by please to platform $X.X primarily be million, now $XX.X $XX.X compared total was in excess to of same to At XX% tax review. March compared compared of up XXth, XXX% IT as December XXXX, the expense. XXXX. XXst, and and $X.X at $X stock quarter XXXX. at sheet $X.XX costs $XXX,XXX to June adjusted our first Net EBITDA flow cash share, in and unrestricted will Income income benefit was million second clinic was to the benefit XXXX. $XX.X XXX,XXX million million, XXXX balance period XXst, per $XXX,XXX by managed the the XXX% the the to Operating Franchise

reflects of investing elements increased of our by to million, During the now now operating Protection guidance and increase midpoint QX up franchise guidance. our between company-owned million, up cash March a a We increase we the now activities, XXX. clinics The updated for XX in compared are $X.X adjusted managed to of we combination million or between provided from and includes both the midpoint greenfield franchise purchases in clinic expenditures, compared of XXXX, million by openings EBITDA through to compared XX from our XXXX. XXXX. XX, updated XXXX. the in a expect expect and raising greenfields midpoint we reflects performance, $XX.X and The be to reflects be as full openings heavily million, all greenfield $XX consisting be million expect weighted for and review be million. impact between IT X.X million out of increase We On $XX would to million. up loan to The months now updated over to XX% well $XX.X year. half a on to capital $XX the XX. guidance in first revenue turn to the as million midpoint Program net that be openings activity, to Please from the $XX.X of of that Peter. the opened activities than offset greenfield The times XX% of XX $XX.X acquisitions, X XX in up XXXX XXXX. XX% was from a of of repaid that, $XX.X and greater strength We We which March to $X franchise is back Based XXXX. of six this note, year XX between number I'll our of was a more million took now XX, updated call greater to to as you, under With the in that XXXX. well as repayment the Paycheck clinic $X.X second Slide XXX, the development expect

Peter Holt

Jake. you, Thank

Turning XX. so develops I repeatedly implements growth and identifies, programs. who team proud delivers of for community who initiatives, to on am speak and franchise The our Slide numbers themselves. these our the

even is future brighter. Our

X% from increase our XXXX. billion of market We The an in and the trends $XX.X our of plenty X,XXX end report have increase X.X% our share, Market so model business to estimates alone. we of industry annualized the rate by users chiropractic to opportunity IBIS beyond mid-term revenue, With revenue patient clinics. room - expand much XXXX goal far June to have growth. industry existing there's annualized our base approximately support the to

category of seen in Joint the addition, just new only US to half there's knows market in and before. visited patients of the XX% million the The number grow nearly that increasing XX% In population increase chiropractic XX% about users. Notably, XXXX, care. people a the bring demonstrating chiropractic overall room to as XXXX, who our grow of ability from them chiropractor have This into a never new

the macroeconomic Market the that's Report, dynamics rate be for Insights the mouthful, Given year. Care The X.X% per and consistently Joint in industry. a forecast Kentley Research climate the XXXX June outperforms to five Chiropractic years revenue a growth next industry the industry

the fact, average clinic seen $X.X clinic rates. was our the average revenue million. $XXX,XXX, approximately approximately In XX-year top $XXX,XXX. The system-wide the And these of XXXX, annual is sales cites Joint's CAGR in revenue level per currently gross clinic performers XX% In dwarf our with over industry

knowledge key franchisees hiring our increasingly the operating sophisticated utilize our brand. many training attract create We and reflects regional and attract footprint. models. business build finest national and helping accelerating implement national to and our leveraged We success doctors efficient Our differentiators. us to We practices and experience effective to marketing support programs the

In education attract never before. addition general efforts, care we patients which chiropractic who've lead public the tried

out invest draw in sports continue to Vanderbilt to our University chiropractic enable and the ability Relationships It the performance the Joint to largest chiropractic natural online also to in doctors Miami, like recently, chiropractic scoreboard Most with schools clinics. connections athletic Life exposes our fact, deepen these and between XX the recently, schools In to University which associations Florida future. educate and athletic Overall, of increases The world. a official the to of the the of with such our and in opportunities accredited information most to States. Houston, we employment audience. provide brand wider relationships of University. internships and University's complements its standing The we South University Also, sponsorships engage us about student we our to chiropractic body sponsor, United the as is became our continue of Joint, the publisher

like decisions profitability. our and impact clinics to short-term growth, focus position greenfield are expected on awareness, and that brand our increasing long-term market expand fact, In our

X,XXX We Robert, their and point system, the our we improving the and to begin coordinators, the quality staff, our patients. that XXXX ready of our are operation wellness phase franchisees, goal our and to we're tipping with mission long-term regional next in like recognition thank the national end be to entire dedication for for to Q&A. by doctors, our clinics expansion. corporate ignite of that will our accelerated toward that, marching expect of life our of of I'd developers

Operator

Instructions] Mr. line have ROTH coming [Operator first We'll our the with you. from ROTH Thank - Capital question George Partners]. Kelly [sic Capital of Partner

open. is line Your

George Kelly

my on Hey, quarter. congrats everybody. a and for taking Thanks questions nice

Peter Holt

Thanks, George.

George Kelly

for a So questions few you.

second given I sales maybe turn played what of growth it's it kind for the back talk you First, unique half. growth back real When of year, there? just flattening guidance kind there full anything are that anything any through back Or same-store you be the the half of won't to talk Can quarter a you of my just to, and about provided. of model in into year? or the in the in can repeated you've promotions

Jake Singleton

yeah. Sure,

there more know, you I guidance that I our of is greenfield prepared mentioned the the weighting terms in as in element of the remarks, think, the of I development. so George, in think issue

to So know, as we amount short-term greenfield development, of anytime earnings. large suppression going you have a a do you're on your

a I at clinic expanded going well, when year. greenfields cadence so, we're that, there corporate the portion to and weighted large that And you those end is be what are to back our we look guidance of basically, notice signaling the as

so know, anything the you're of non-recurring of half seeing kind is of other greenfields second suppress that promotions any nature. And that what versus in going macro, you or year, that to the earnings are of pipeline the there really,

Peter Holt

That the I the to rest XX% point by last comps very and also or the for was obviously we XXXX number was also the - know expect this the impacted fact that had pretty But a to unrealistic pandemic. quarter. QX remarkable for think was that year. our that it's to of we QX impact as lowest

at So comps, do of looking specifically performance expect the to we QX. to decelerate that we're compared

George Kelly

different me, topic. understood. next then, Okay, for And question

this any patient I if in second your was What few would helpful. wondering And could new that about dig quarter acquisition - you around conversion the be lead a more. and acquisition just You things. mentioned, surging quarter. improving patient digital into exactly the in of talked new kind you other quantification

if what but just have could it. in driving is view that? something then given what And your I you - exactly really think you may repeat

Jake Singleton

the you digital certainly factor. in of things. you think as you consumer second I I for increased quarter, know, there's overall sentiment a patients know, the is sophistication the have few Yeah, acknowledge driving you One, But of we in George, quarter know, me, to the strength think new at, look know, a that, tactic overall was to our me, I increased.

think I of wind back to had have at So we our it as we to environment. kind acknowledge that relates that macro some

The our second, you think brand the awareness of in system. increasing have scale know, I we

so, through And we've always our said that we're storefronts. build going to

so marketing that scale that acquisition. And greater there the out and to and continuing patient have dollars we awareness awareness is new aid

those be in then probably dollars and coops our would our Next it's we continue be they're the around large have, digital tactics. sophisticated you of think now And we factor, are sophistication putting work to I that contributing to the coops, country. XX know, more local

think I those new patient combined it's leading all So that to figures. are those strong

George Kelly

& last from for Okay, with announcement the the And about Army just Exchange Force me, then last question week Air great. Service.

get basically Does what up start opportunity? mean? what all of those facilities Or sort Thank for TAM And could had. to locations? think exactly relationship then So be of And of that location this does you to it you you and do that's scout that certified? sort I open for you.

Peter Holt

that have signed is George. I mentioned, clinics X that. on that is that, that you, agreement answer question, opportunity yes, agreement And those to calls there Force the Thank Sure. for we bases an on Air expand and to then -

base really of work that is contract a contract. bases is across negotiate then And that that or X,XXX the we has there's to the that what yes, in the be Exchange clinic they number world, give term While, that base. to the that adding we're chiropractic on the to to facilities fact, with an approval want, do they each

And so, it's really incremental.

realized. So know expand a is at on to X, committed opportunity approval that bases we continue we the as will And we the other there's formal through are you base-by-base. interest go process moment, the to know

Operator

with Jeremy the question you. be from Hamblin coming of All right, Next Instructions] thank Craig-Hallum will [Operator Capital. line

Your line is open.

Jeremy Hamblin

add strong. can building I'll you here? you you for does at imply, here were, to some I of guidance in you're of deceleration, versus it to assumptions moment contexts can color a that making know, terms not on expectations five understanding into kind terms line And really of impressive putting any the any just repeating Thanks. my certainly from congratulations you kind performance. your know, QX, still come kind around behind modest trends want you know, of the is the clinics back Is you a but here your maybe what expectations implications, know, in around the top Because revenue, first of there more weeks performance? on of growth QX, that know, notable share understand

Jake Singleton

know, obviously for of Sure, factors you half yeah. a back I that and into, mean, there's go the lot estimates this year beyond.

continued positive You know, what counts comp we do expect clinic and growth. is increased

as revenue a know, got typical you trend. we've those the side, on So

I sequential in the still have that So, you implies - revenues. it's still improvement know, we'll

you go then have and earnings overall think, flow back to I the through. at look

lot greenfields in lot of And we've got of working that so a the signaling coming you and with that year, of second burn. a half know, the capital those in again, associated are

leases got got we've so already that XX we've another are out executed, And are there. XX that LOIs

with we continued have know, earnings. you short-term development. confidence our in So have that, greenfield But suppression you that of

that's think I really macro. So the

that The make have know, we're continue infrastructure. to thing the way the do that appropriately be sure we to smart this, we're you resourced and want we is, in going other to

a lot so factors of there. in go that And

we've and bit there beyond. G&A, the IT the element come of moving to got of mentioned an half also that now little a We increased will through cost platform so year in second the

the know, that weighing an acknowledge that, to you are factors those and of of I you lot element in, a uncertainty there's have era, So, COVID still and there. think we've got

so of those the all playing into forward estimates those things in And guidance.

Jeremy Hamblin

And, okay.

know, you still you're could to-date trends, the comp performance? expecting sequentially answer quarter on maybe the up. on system-wide So But you revenues question

Jake Singleton

won't Yeah, comment we far. on QX so

You guidance we're for we'll know, of the to and excited about the QX half the then results, year. back point the forward

Jeremy Hamblin

Okay.

the of over marketing though, sales the on G&A let qX? marketing me couple I higher the point know, basis out that fund want to costs the there. your national and follow-up know, understand, QX then, So spend more expectation, though, here next selling than did as marketing in you spent and what and I you get you just timing to are just ramp in understand of trend quarters greenfields is QX the the an likely an you on absolute costs,

Jake Singleton

of timing element, Yeah, really think part QX we in little bit important a I late the is right, QX. that were

know, you you there, now favorability seen some know, relates as it those some, QX, some and had we So to higher of you've into QX. costs rolled costs

expect the a those at the even day, lot Now, for we of out. to us, costs end of

So we perfectly yes, is spread know, perfect we're would those year, the coincides and where just have out there of the that development tactics to, an the throughout you in a timing and element dollars. but world, deploying those

And full our So, did you know, I that to spend And national the think spend second know, you is, QX the the you full largest the that we components that's clinics. is that of again, have try, local pool X% of into funds thing marketing then the I'll - would expect, element timing, there we highlight are largely year. know, of line for contributed always fund. each our

cost more coming marketing got clinics have it. opening associated those, each we've a we grand of to online, Now,

so to with want the on we know, And right that, foot. they start sure you make

opening additional sales that And and going as so marketing those well. from to through come you're efforts see some grand

in of to we then the as little were of late kind kind you've rest in a a the bit consider QX timing year. that's we And bit it, know, you that throughout element. other has factors got the know, QX, as of little you excess move So,

Jeremy Hamblin

the on, Axis then you system. too to just follow-up want know, And great. Okay,

In normal, you you you've the on a that, Peter, of that, system. one, when mentioned fits CRM of know, terms starts know, of you I implementation kind think you know, and new turn

where working You I know, wasn't another will that bugs know know, the fall going into of ability. of Jake, G&A line you that cost to one, anything is know, expense that your line to to and in into? you terms I in just or don't that two, understood top impacting it's just Is for sure there impact out, felt, you falling make I where make want item fall? to Or that that want sure revenues is, you likely that category? And if the cost? IT know, that I

Peter Holt

We with know training is simply use not system managing And leads question. new that, helps CRM just Jake to The business, is I believe that going know, spent you is at that answer the XXX% on let sales? going that on That the going level. will you and huge no. it. me, for we challenges we question we implementation of This creating system know system flow working our of we're we as they as the there's But through with you all a a is this you're use you POS it that utilizing and work top data get programs even impact it time amount line have of patients, the community, system, know, through is go is believe to that, that our us do this through, okay, so we're system. patient how bugs Okay, a with that do to franchise our learning to a the that and to going your the platform clinic in to that's absolutely. answer to use to IT our analytics that - it

that to the these through And inevitable the And testing them. in you're homegrown minimize to try going get so, bugs new research CRM period. our business just size - platform have the homegrown in got - from and and we'll we've that this conversion to cleanups platform, just our that you given and of this our it's

effectively. remarks. for look formal I at over of really Right there's, lot impact what programs I have really that's my that and we on absolutely the rest in that nothing suggest seen new that the this that would there's top say that it I'd I - is capacity unleash to know add that just sales. the seeing can we We're start the lift going as very And getting do be there's to the is way of we're clearly we going comfortable everybody time. into And shift, on to now this so, and mentioned would built that this can then platform working focused line describing a year

So Jake, for you.

Jake Singleton

them up A of through cloud. lot we that's costs, lot through, portion kind cost Sure. And we of webhosting a a two-fold. will capacity need data, more the it'll IT then costs of as And be generalized revenue. lot therefore and come got get in where the will those that to in got a of come We've the right. patients, of we

lot the second really, come cost licensing And for So the revenue. that'll the in in know, in things be like and corporate you the a and us. of and that'll through headcount to IT that, overhead piece

So G&A. in and the non-operating that's segment,

Jeremy Hamblin

perform for here Thanks color on to guys best strongly. Great, wishes thanks. and so continuing

Peter Holt

Jeremy. Thanks,

Operator

be will coming of Van question from the Sinderen B. Riley. next with line Jeff Our

open. line is Your

Jeff Van Sinderen

congratulations. Hi, everyone and me add let my

so a or that the - Any guess to you've how phase, to I the in that and maybe it the there. clinics this Just great at sort debugging any of of franchisees implement way, working implementation, far phase? follow-up color got so software it out far? are - bit what it new corporate hear you're are And running timeframe by on more your with on sense seeing

Peter Holt

spend amount a an say would on we this to really Jeff, to of enormous all because brand - time knew new system. I new we how we Yeah, educating took going users of that. system, our use did we're

of two You it. know, to we parts kind have

what the the was. probably Coordinator all platform original closer our for they're to front back using that the But that patients brand the platform. new front the it the have back are our Wellness where office to office office, doctors have we a office and visiting, is We is that document

go requirement users this am XXX% would had I that process, we that the start of so and before did. through say had the And we they this train to delighted that to

network as possible. we much So and helping energy spent this prepare our time for make - in this has so as seamlessly there's go to and to entire

concerns am programs often in that excited happens new a a group so of know hearing? And really it's experienced. You think people know I all of have people the some or they've it's are from who I I'm that so, bugs group the of what changes. you who hearing like this, about hearing I'm

majority vast patients. the that using it is every day our think to I service

really would be remarkably have from And as challenges those find it transition, does so, the pain-free bugs through. something use work them you're taking out that some say perspective, minimizing of way little complex to I and facing, addressed. time without was out, any as in my that And it's turned that a take because it around you we went to just

over don't it. that And so the in do And is things initially platforms what other the my like see that, take it'll or up it that then experience big they're up come you'll little where you you know this hotfix, time see right you'll ones because obvious. get will we'll front, fix

can So because improving have of kinds that then first part we process, be going way going all ongoing already. be first But how that to quarter, and there's refining of we a designed then it's half lot. the the and improve probably ways go part to we're significantly. to And that's going the down initially of the other we continually

fundamental part for that a how will so entirety. ongoing utilize platform be we of its And this continuous improvement

Jeff Van Sinderen

that how you me think you from may which And that? manifesting customer benefit new more the ask you also system? would then great. customer but retention. software Or improve efficiency, to Okay, software I that it you might speak the this. we new guess Would - experience, benefits improves see let Can

Peter Holt

how benefit mobile visits portal, we left out that from I patient have example, membership monthly side. patient your enormous rolled out rolled where roll your But there be that's on can the the our patient and consumer many that's not you think when question quite no we we when side, that's tracking out here. when the check-in, will membership. you That's be on there's you for know

those some in - moment. we not that will specifically that the that's experience. get absolutely again, those are that's place there that I are those just that's - we're this not the are to. so, features patient But at the - steps we're going patient's But today. enhance believe - And We're of forward-facing to

Jeff Van Sinderen

Just obviously, with Okay. would behavior anticipate to variant? And there's a you your about still there or COVID? And Delta the any protocols as pandemic change then of result uncertainty where then, in Delta? change safety out any customer the

Peter Holt

believe, the going have thing to variant the The what main us, importantly, your is on It's into not a I businesses? there lives, healthcare great the same have clinic. be question impact because to ultimately base their that continue that healthcare, patient was is, the our to exceeding that think we COVID on such Delta you for in serve that have to this essential to But continue everybody And expect impact experience how our a the talked the came for, I impact I come is, before. maybe that we're we patient would essential about, we've to up really, seen yes, on out in - to-date? as has country, is, what just kind of count ever our patient recovered And see we've draw we had to new we our across of most and our stayed open, really did to, I on new I in blows clinic would we've that you doctors so. an an heard - lot count? greatest on expect service this that and, If experienced our numbers - and absolutely. patients this - as call

your so, - I us. And part best have with I of in expect I happen think of a the And wherever all terms do which is that's the we second concern for variant, question with of the what Delta go to

Jake Singleton

protocol. Safety

Peter Holt

were I we have protocols continually what With would also from at but maintained safety that, we say the And looking safety protocols. our is, beginning.

as still we're we their or our And guided that out a wear know in. And CDC very And clinics are issue are have, who came changed. clear is wear the who guidelines, removed all well was also by example, when requirement it make, not in doctors, whatever a I healthcare states state wellness healthcare to the with to staff coordinators in But the the communities So, wasn't for that, you there's there's CDC that service. required to masks required that services that they that network, directive mask. their the is we're that requiring, our hasn't still made masks. a of community follow and we know operating wear will that patients, - always

So we follow continue protocol. to that

And you numbers have is, how you of on know I way the as in this saw in where continually to we'll unfold. it's we'll What takes say we know we so And that any do are to things them the to-date. depending QX taking that see rest year. and us not it's, go the know, to we we as at protocols would look pandemic forward lessened our continues that in improved place and

Jeff Van Sinderen

Right.

taking for Thanks and success. questions my Okay. continued

Peter Holt

you Thank for very much. support. Thanks your

Operator

coming Instructions] question the Lake will next O'Neil line be [Operator Street from of Brooks Capital. Our with

Your open. is line

Unidentified Participant

[ph] in in Howard] Brooks. [Michael question regards to filling is This platform. first is IT Hi. My the for new

X,XXX to to think invest general to you the where beyond? able do about be need and when you to infrastructure, So business scale clinics

Peter Holt

by make. as we business the for That, very achieve units. XXXX, we think opening greenfield, need that X,XXX end of the you it's we is clear. end clinic the be to continue I think XXXX? and the to if between of accelerating be the that We're to possibility. to in Well year, made real clear, it's able greenfield where and I Well, of huge this we've accelerate expect that going our of you That's know, asking go to forward part this a investment know investment we do pretty to invest you're that's now about a obviously, the do is

Joint a that The making buying those the for into aware of and to and a continue about their And in why this learning good family lives. franchise of and be so so people we'll interested what franchise investment our could in and other franchised, and their community invest is part

to this. of side in the continue we'll franchise so And invest

business, to is that it have piece from the IT an an operations other The at business, perspective. the fueling that from continue a marketing whether to looking that, from really of this improve we just perspective, perspective, is operations

more investing more resources in our in IT have marketing operations department and accelerated we been resources resources our our more support department, So continually this to and growth. in department

that buckets to those real the we're going investments are those make in. So

Unidentified Participant

- helpful that's Okay

Peter Holt

Jake if add now, anything to have that to And that? you

Jake Singleton

ahead, Michael. go No,

Unidentified Participant

here? And to like can the drivers expect growth really great if outsized to talk corporate strong quarters the Can you we store you And more a see looks in had stores? with then corporate it openings.

Jake Singleton

in of Absolutely. anticipated QX, them got Yeah, signaling X up, of we year. back openings you corporate lot we've had a the greenfields half of lot that the half in know, opened again, a but store of that second the

that through, as So, know, guidance acceleration, this to much of release. going see increased you'll very come you that part and and that we is corporate clinic

think you'll I that. see yes, So, definitely

We have to continued increasing and looking forward confidence that we're pace.

Peter Holt

on to there. additional emphasis that Real resources why full that the And make side part to and reinvest. continue and Construction. giving that we'll again, last hiring we've VP, added sure the we're That's the And of of Estate our on we business call, was, new talked about

Unidentified Participant

guys. QX do know then, that half year? comps the feel will back you the comps. Thank really normalize you I guys of Okay. And strong where on had you,

Peter Holt

not Well, XX%. a

to, you from don't for then four very XXXX, not we guide almost be XX% guide most went - We a at forward. compare let's it if as quarter year-over-year because and XX%. were for full COVID. just year that was to we a by you And that historically, I rationalized to period, Let I the think comps and it pre-pandemic more the going accounts think year at look QX, say if year, XXXX But know, comps, to that look full clear. of that's we our don't impacted quarter the a into on is was pandemic that, you way stack the Michael, X% year. over in year of

QX - what QX know Our XXXX you QX can think 'XX XXXX XXXX I that XX%. XX with - QX to

me on you that taking we're a - QX into that's an expect indicator think I give what the reasonable not number to and going account the we the extrapolate Could I so, use And pandemic? assumption. think rely in for to you no. I if forward, to could QX know, impact of

Unidentified Participant

my and taking questions quarter. Perfect. you great for a on Thank congratulations

Peter Holt

Thank much. you so

Operator

coming be with Vendetti of line Maxim Next will the question Anthony from Group.

is line open. Your

Unidentified Participant

that? on should RDs this think you've how had you about Anthony. our and XX% of we a in for with about have areas. obviously question - developers area? cover Hi, expanding [ph] the your I Metropolitan coverage [Matt] regional just lot that you is mentioned a think your they a for XX% plan of I about success And past, had Do

Peter Holt

selling going years expect that see forward? accelerate I accelerate expect I power happen, years. markets, of know, No. It's RDs of a are question. I RDs you 'XX Are go that level you the for know, value at, there we looking know, say this. the also the know, would we like that as in the corporate - RD and is that year interesting don't at we that that last, mix there to partner out that you still But that You perspective would in certain XX a truly to growth back so yes, you the markets there a more sense in in from or XXXX-XX believe couple RD would we the of see expect? we concept great model could growth we could you are And RD can RD not markets with certain and are market. if pace ago, year, have so development, - those with you a I but But were in say for corporate X to right a that that if growth. opportunities we're us make a do there markets

Unidentified Participant

of year, think at helpful. pretty of then Great, good one the it's expansion just a last that's And development over clinics in quarter What's large at rule follow-up, XXX end. obviously, quick the should of be open in you maybe in terms and to in to basis we percentage of a development development quarterly expect opened? a thumb would on expect what clinics when clinic your

Peter Holt

a openings quarterly we on basis. an guide annualized guide basis, on don't we Well, on obviously it

development, that have so a group we and lot of that of signed And you in of do of some are of XXX extrapolate that, kind agreements operations. multiunit from form can - And, that.

I site opening up time selection And example, a, straight that about then that's used say, clinic a line first the XX-month process. think of in a about use negotiation. if their gets so, just average, from I up probably And opening let's for contact to if the and lease bulk actually doors,

so, let's expect not pack, of up five that sign licenses the I is I that five for those clinics clinic. meeting in timeline I every has open say working put And required one something a nine just sure And that open. would and example, that's a framework on we're in a to with to if would with all closely franchisee that timelines. we to which the those sold to franchisees so months, timeframe they're expect But agreement that and make they're will them a one open

that just contracts. out them of so tied multiunit in extended And that a are lot there's of XXX, to an timeline because they're

You of said unit. XX those March we should March open? many XXX, me, - we with opened XXX. do had had the end don't of I and XX kind franchise can of, how so percentage And we of of have I a say, of end And XX, excuse XXXX, the yourself okay, have we XXX okay, if at QX, QX, in math XX,

So that at something. you give numbers there's least some

Unidentified Participant

I'll queue. Absolutely, very in hop back the helpful.

Operator

floor time. is have we the this any And don't yours. back questions further Peter, at

Peter Holt

Service Iraq very care. to “I veteran wrote, that very got in Army for a with I call we're he And and it's my Thank at a XXXX chiropractic paraphrase from signed out Exchange we you served time July, for Conference Lake of & array me hindered you vast Growth September. Ideas sustained recently. And to very we that today. fitting that contract in from a present very a all to during Army XXXX. deployment, Street's was much. thought going Best This your with at Force end given the decade the Thank virtually you of with I injuries today's before sought thank the in which long up fall, US War Air note I a the

my many For struggled reoccurring head nights. pain with years sleepless from resulted to I in feet

I you provided enough staff could I care with Over me to keep given adjustments improved Joint's amazing didn't Joint dramatically Chiropractic. no care for chiropractic of clue well look me doesn't I The I their in and do known I and doctors earlier have due me. much. Thanking few the at My and outlook suffer could the going had had the if the wish years, have adjusted. to for relief. received was doctors past just so I what my care so forward chiropractic doing life in I care.” much job. The not seem doctors stay because they're Thank so their not has

Operator

And you this your participation. all concludes today's call. Thank for

You now may disconnect.

The Joint Corp. (JYNT) 8 Aug 212021 Q2 Earnings call transcript