JYNT - Earnings call transcript Q4 2021

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Operator

Good day, and thank you for standing by. Welcome to The Joint Q4 2021 Financial Results Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Kirsten Chapman, LHA Investor Relations. Please go ahead.

Kirsten Chapman

Lori. you, Thank everyone. Good afternoon, Kirsten Chapman Relations. is LHA of This Investor

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

press Relations be in and and preliminary If you do subject of not section full are adjustments. already These this it the year found release, have fourth Investor unaudited company's to of a website. the results quarter XXXX can copy

subject provided of result a As is the certain information herein to foregoing, change.

to on that financial are today. The As discussion, important future make includes differences not these concerning operations, estimates may we uncertainties our could subject cause forward-looking future Slide today's will closures, or profitably but the managed posted staff including hours and differ today's our market part and results class from our the on to of risks our labor that clinics and the statements statements expectations, drive operations, to some actual to selling relating shortened our opinions the other inability reduced limited company-owned that business we are these could our affect the common recruit which as current nationwide clinics; short forward-looking demand; acquire qualified as contribute to assumptions enough personnel shortage; and develop include, predictions, and operate outbreak economy made strategy, to continuing patient to management. in based including our statements. also managed discussion Internet, suits. present advised company-owned clinics of impact and are intend; Factors materially to, to failure forward-looking objectives our stock Throughout temporary statements, action COVID-XX failure that negative and result to in on factors our statements business rapidly and we provided could plans identify of or position please chiropractors and price and down due be clinic X, and strategies or to

current negatively internal or weaknesses reporting, fraud, control ability which investor results, our SEC, XX-K prevent risks other year filings annual maintain report to December be described financial and our filed failure to the material future XXXX, remediate financial the in quarterly or current the reports. including to with and filed over could Our in impact with confidence our XX, in on for section Risk our Factors our Form SEC report entitled the ended subsequently and accurately

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

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

Peter Holt

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

even XXX grow demonstrated continued we fourth by XXXX, the the variant. chiropractic During and owner long-standing with by managed strategy both our executed X,XXX clinics, new retail-based operation resilience to opening as the for ended evolves retail We achieve end franchise pandemic foundation to positioned setting. strength quarter, concept the greenfield clinics Throughout clinics our successfully corporate creating continued XXXX, clinics clinic and future of Omicron in our with and well of the growth. year our goal

care. rationale. convenient chiropractic go services. to I in is setting, our summarize The our the without clinics concierge-style I'd investment provide Before hours retail in access to greater and of membership-based revolutionizing detail, from appointments. benefit pricing our attractive or our like need new convenient Located Joint Patients investors welcome insurance

country, already for chiropractic build market. strategy the recognizable account increased provider this patient we the chiropractic of awareness largest of X% to care growth exceptional nearly approximately highly an our yet efficacy and only more experience care, deliver and $XX in open brand, clinics. fragmented of and Our of the is chiropractic We're most billion

increasing As refine itself. as market and to such, the continue expand have opportunity we we market share further significant our a

strategy. advancing we're our critical turn X our our efforts areas. them to growth we Each are As attention focusing initiative. call We on XXXX, key to enterprise

offering Our by best first doctors. chiropractic chiropractic for dream career initiative path forging the is the

third growth of new moment. a our our go harnessing is initiatives CRM of and is And the the opening the strategy. data franchise our power I'll detail initiative finally, on initiative in platform. accelerate comprehensive by pace enterprise second through leveraging of the improvement to our continuous The clinic more sales in XXXX clinic

XXXX. the million, respectively. up record-breaking performance unique our million in number adjustments $X.X in total operating patients review and XXXX metrics The XXXX. year in in memberships The I'll Joint, performed $XX.X million total XX% XXXX The XX X. the and to same XXXX. and increased clinics X franchise XX% sales clinics, X.X Slide significantly in XXX,XXX XXXX. And and XXX,XXX in franchise to $X.X million XXX XX, middle from This XXX,XXX XXX XXX,XXX number from XXXX, corporate and our system X visited respectively. sold greenfield reached in up million, and new patients XXX came XXXX. XX of from We XXXX performance of respectively. our outlook. from XXXX, patients X.X XXXX up monthly very even Turning the to during licenses, reached and of up in of from and model gross new XXXX as in high-level opened treated in XXXX a in and we XXXX and positive up up XXXX, We in pandemic the from our up XXX from long-term indicates validates up the from and business

review Turning highlights. to results Slide our our I'll discuss Jake in XXXX will financial detail. Later, X.

For to XXXX, system-wide sales to compared XX%. XXXX grew increasing $XXX.X million,

been XX%. cash XXXX million to December growth on XXXX. $XX.X compared And Our full up comp $XX.X to in December opened sales unrestricted EBITDA record have to Adjusted XXXX, XX, to for to months, clinics grew $XX.X for XX% million, at increased rose our XX, XX%. $X.X Revenue was XX of million least million. that compared

X. to Turning Slide

portfolio. our review Let's

franchise X XX during XXXX. up total the expansion, clinics, clinics XXXX, QX clinic we opened opened XX and greenfields, from XX in Regarding of QX

XXXX. Our closed the fourth and XXXX we full full closed for year and to quarter XXXX, X This compares year X clinics. X QX in

exceptionally low have to less X% closure continue We annually. than rate of

of franchise XX from During opened in number acquired clinics clinics, of XXXX, opened up up and greenfield and X XXX in acquired reached we XXXX. XX XXXX. franchised XXXX, clinics, X greenfield consisting the previously total new from XXX, In XX clinics clinics

focuses clinic previously our in expansion markets opening accretive in greenfield franchise clinics Our be new will purchasing and to strategically clusters our that corporate and on existing P&L. presence enlarging finally

During XXXX, Southern corporate we portfolio Virginia, our across we our Southeast Throughout Mexico foothold and clinic corporate year, in New reach California, in extended the region. the established Arizona.

mature the line, therefore, they greater have when company contributed compared greenfield clinic top repeatedly we've consolidated XXX% their of stated, economic corporate can and franchise As clinics that for to financials. bottom benefit a

when to in opened XXXX. X margins greenfields the we they quarter expect XX the XXXX, In of opened. we greenfields fourth first However, compress

XX, margin XXXX, to XX approximately we XX, effect As new greater was and consisting points the in clinics December system. had In as percentage quarter XX, accelerated franchise corporate This XXX X openings ongoing clinics At XXX our December mix the company-owned the we development. such, number Compared shifted clinic strong XXXX, well in and pipeline portfolio and end, of active corporate figure as pressure XXX a interest franchise operation, to to franchise managed in This openings franchise the franchise September licenses of both reflects clinics. at the XX, September had in on XX% XXX increased of for clinics and franchise at fourth summary, XX% clinic quarter. demonstrates compares the clinic. XXX XXXX. or

licenses after In franchise number Turning XX demand XXXX, to XX in XXXX Slide the we pent-up reflecting compared to XXXX, sold QX X. QX disruption. with the excess COVID

XXX franchise XXXX XXXX license franchise from increasing and total license reached in in Our XXX sales XXX sales XXXX.

and franchise multiunit our sophisticated, continues increasing concept Our we're well-capitalized experiencing franchisees, to attract in licenses. interest

very XXXX, to reinvesting is the in of the the existing strong brand, were owners XX% a of franchise licenses business. which During validation

XX territories they the covered growth. The the new RDs areas, been XX, has by by XXXX. licenses or performance XXXX, franchisees XX% MSAs. regional the of our statistical year. the and XX% during supported trend XX% remains developers half the clinics strong note, to XXXX, our our our At since in licenses fact, of our accelerate than of their continue metropolitan existing of more In as were sold December franchise Also RDs

but schedule a development unopened count is large clinic our growth. clinics. expansion sales is territories of Our a aggregate mind Keep and foundation still XX-year proportion to since new XXXX remaining XXX already in continued the that minimum the open, provide fuel RD these clinics for established clinic

Turning to Slide X.

targeting package review membership we promotion. success Significantly, affordable as our both potential launched the practices. XX% Back On marketing limited December with This Let's new a well annual as X, the engagement beat teams of clinic power XX%. and Back Joint's lives marketing care of as consumers year time Friday the with our and best growing End-of-Year best offering. and demonstrates our millennial message continued targeting The launched growing our our In promotions, and well Friday we sale living the campaign performance holiday brand chiropractic our efforts. national promotions growth and their convenient prior promotions as year-end of our our QX, of

streaming national part print You. buyers Do Pain. XXXX, materials, The channels. regional a campaign, our our we the throughout media new of platforms, ads featuring will Don’t TV work reaching spots, to updated all and featured Do tagline, promotional new new prospects produced other As our television and X brand be

previous these public. new unaware was regional well our awareness patients Speaking of cohorts. visited investment the chiropractic efficacy growing our vision care. prospects. power fund initially This national recognition to funded are as and recent it XXXX, that ability greater breaking of build in which conducted with new XXXX no name that demonstrates year our patient who This number our our a brands survey, by increased independently our In In tactics of patients In benefit marketing the chiropractic. XXXX, fulfilling of experience XX%. population the are and continues boosted first this consumer of educating Tactics XX%. we our of XXXX, like XX% the the attract chiropractic. of help clinics growing and with we annual about of in driving In to who as market our care, most growth of who larger reach proportion found was patient chiropractic to activity the survey, record new marketing is in just consumers had

to review infrastructure. improve Turning our technology our like to to Slide initiatives X. I'd

receive overnight As you clinic we achieved platform, network we last of can IT any may our in our launching to platform to after an entire testing, extensive chiropractic original It AXIS switch their platform from call patients required instead regional know, was which were to our visit the rollout. July, AXIS. we new milestone our of system a Because time the to care undertaking. our quite

legacy disruptions. without is launch security. accomplish for iteration system to patients reporting accounting greatly process. It's only thank again, users this scalable franchisees homegrown and throughout our migrating a a primarily improved important clinic shift functionality caused course, major that their lift in this with of first the updated and to systems remember to AXIS, bumps, our from our but we pleased licensed platform few a And I this were to want Of and and

in routine Our XXXX/'XX in performance. as chiropractic over and elevated leadership promotional platform sustain our welcome service road to as a risk and Technology years the We development, Jake, has convenient financial I'll turn look forward his automation, IT mission. our and The help business new to and this user you. improvements XX improve experience, additional to to growth initiatives marketing to affordable that, health it unlock control and capabilities, and data advanced technology mobile care trailblazer native Chief his care map Officer, team excited Nelles He bring new app Charles than of These contribution our our measures. greater utilize has our spearhead will our team, a pursues us nation. Joint industries. innovations leverage to that position analytics, I'm across who opportunities enhanced With newest will in our also include layering lead of will member Charles experience more value.

Jake Singleton

Peter, second XXXX third remember, impacted our actions the you, Slide fourth by quarters turn enabled and XXXX. rebound while of and swift pandemic, of to we'll quarter Thank Please XX. to in the The was Joint the

strong continue to performance we XXXX in our The delivered in accelerate performance XXXX, spite COVID-XX. gained momentum delivering a full in financial financial year-to-date. result, As XXXX strongest any year for of

continued mature we the managed primarily period, were platform to fund clinic same million, and new Cost review XXXX. This developer increased $XX.X to or higher our for the year well The clinics any expenses million. and all in regional clinic up by $XX.X comp $XX.X clinics quarter the national fees XXXX. or XX% new clinics, and spend quarter opening up were XX franchise XX% fourth commissions QX The and and year. and the million, the website managed increase with payroll labor all period larger to associated XX%. the or operations market intangibles QX royalties I'll number as to related remain months System-wide for XXXX driven clinics fourth IT or for preliminary of of brand contributing clinics contributing for to and over growth. prior higher the required hosting the revenues and compared XX XX%, reflecting company-owned greenfield increase $X.X due managed revenue during company-owned timing IT franchised up and or Selling sales the of expenses openings. of was amortization G&A period clinic to System-wide competitive comp million, marketing of $X.X was increased December XXXX increased months greenfield more the opened our sales the expenses and opened was of related increase up million clinic and Depreciation amortization anticipate last amount expenses to rights XX%, X new time more were depreciation costs as professional compared We new expenses $XX.X Revenue marketing with and pace million acquired Company-owned development. development grand to amortization an same XX%. opened January XXXX the $X.X as X over XX%. up of compared greenfields XX%. in campaign. the increased increase tight million, count reflects or in revenue increased XX%. in and to primarily an support acquisition million. for sales Franchise the $XXX.X for year, platform. System-wide First, XXXX of million, expenses the in associated and IT $X.X were expenses last marketing greenfields, the opened

decreased clinic million million, $X.X was December million unrestricted tax XX% costs $XX.X reflecting at decreasing XX, and XXXX. was $X.X increased review. with $X.X down EBITDA the million, tax per over we clinics. up in XXXX. to income our in development to margin $X.X million, increase to $XX.X new of EBITDA to At $X of On million G&A period the of $X.X XX% greenfields increase million to the $XXX,XXX QX benefit $XX.X remain Slide in loss million and Company-owned in the million. year was compounded to new rights million Net to $X.XX such, market, depreciation to in the reacquired million share several $X.X for compared review December allowance Adjusted income a was which of adjusted of our in financial XX, Income million. And sheet the adjusted $X expect Net December adjusted last to diluted XXXX a same million for was million and acquisitions. cash On or million. $XXX,XXX, income $X.X XX% XX% expenses tax was the Operating of million, XX% year. next flow to period EBITDA from to in as Corporate by compared Franchise up QX per XXXX, XXXX, share $XXX,XXX adjusted labor included was $X.X development which XX reversal reflects as X% income percentage $XX.X component This competitive XXXX. was benefit million. $X.XX $X.X cash XXXX, opening the compression increased to in a expenses million, to XX, an compares Revenue balance XXXX, our which amortization and same to compared QX greenfield opening the a the valuation corporate EBITDA $XX.X $X.X million, the $X.X clinic XXXX. of up to or related managed the diluted in expense Operating in reflecting was payroll QX accelerated required compared XXXX. QX. EBITDA ended $XX.X or tax revenue compressed from in compared quarters. from of included XXXX. aforementioned million, As margins to increase tight XX% to and compared the in $X.X million year the compared labor and compared for results preliminary income $XX.X compared clinic

activities million flow by greenfield the IT as included Paycheck activities, by $X of offset activities, of and cash which XXXX, in was million primarily the by investing $XX.X loan of XXXX. well as Protection cash $XX.X acquisitions, capital million used in expenditures consisting provided March financing developments driven During Program activities operating of repayment net of

annual the with our our financial During as December XXXX, due team reporting management, a weakness. along controls over of audit audit effective material that determined were internal XX, not to

remediation We undertaken will the measures to expect we the fiscal be which address XXXX. to of completed prior end material weakness, year have

adverse of review our rising a for in We our December experienced opinion XXXX. our we necessitate our on many status quo. internal to express guidance a costs, company's XXXX, filing On about concepts provide upcome increase will like XXXX. controls, for price XX-K The maintain to which so XX, retail the Slide expect labor auditors In to period details will Joint which for an ended the XX,

an will of our our is XXXX, tenets in of March core every increases raise X, packages. price implement However, Effective price the one in price plan reflected a and system individual on affordability. visit, increase. will memberships our which Therefore, be modest we to clinic

unchanged Our $XX. new will patient at special remain

and increase XXXX. price did market markets in XXXX, the implement in Joint we XXXX this since undertaken The first several adjustments national price While has is certain

be and to of for expect significant patients at subscriptions months. X our the we price, grandfathered lift addition new incremental do gradual patient not will existing approximately be and with revenue impact the X to will our incremental current As

our strong Our on XXXX performance is position. market based and guidance

from $XXX to XXXX, revenue midpoint the million with in expect year. XX% equal We the prior between be $XXX up million a over million, and increase $XX.X to

$XX.X will increase margin mature. between EBITDA. to We of expect compression and adjusted be increase to XXXX number greenfields those adjusted clinics until XX% $XX the $XX increased Once million the midpoint our EBITDA with million XXXX million to compared again, a equal from

between be in to XXX openings XXX from XXX, XXXX. clinic franchise and expect up We

franchise and XX% through in We clinics you, managed of call clinic by company-owned that, XX expect from turn to XX now a I the to combination with purchases, greenfield Peter. up XXXX. increase between openings our back will and or over And

Peter Holt

Thanks, Jake.

to Joint The pressures. resilience demonstrated During remarkable the pandemic XXXX,

managing delivered patients, this, openings, While EBITDA. new we and adjusted revenue still record

expands, by illustrated franchisees, and we fuel As the sales. as clinics growth continue patients, number franchise market chiropractic our to our growing license of

much we frequently Increasingly, such frankly, The as diabetes. energy XXXX a chiropractic XXXX, pandemic, While Gen nation, the pain, other generations elements gainer. care from defense. In to the time as first patients on focus year Z, that and in biggest facing, more XX% XX% to choose seek obesity there these treat -- and that younger. way epidemics XX% millennial holistic of being COVID-XX are the were more serious also Gen younger so other This our and average we're age XXXX. continues in visited line who our of patient with and of trend is Z up or as

As focus into to key XXXX we've brand entered with I enterprise earlier, growth. a advancing on our stated X initiatives,

forge that provide and chiropractic. to a employers, some development the market offer fit a well experience. and market initiative employment We a provide are the by doctors path employer resignation. as labor of our is would needs community of the most can as challenging DCs must-have professional choice chiropractic brand exceptional relevant financial interest, high-volume we great are with unrivaled career connected navigating dream. modern, opportunities advantages considerable experience hands-on creating we of leveraging calling leader, By first a that their building Like and that are and success Our as

Our is data. the power of harness second our to initiative

and revenue and growth. you beyond. new the CRM to the in and business XXXX and optimization experience, turning As allocated utilization drive security to to now We're build updating -- foundation sustain accounting, transform the accumulated data years, we considerable discussed our fortified fortified upon several attention progress. technology, towards with our we've to excited on past forward we resources patient platform we're of we reporting have improved the and And over our innovation the look our

real clinic faster, enabling can our optimization reduce and time location in initiative accessible the maintain affordable brand chiropractic is of additional open direction utilizing expansion, our we're new our our us shorten clinics to franchisees. through implementing quality estate for and profiles innovation We're an of our costs to that development accelerate We're the strategies In growth. to strengthening pace line, clinical team. provide care. and third Our development evaluating

For agreement X micro example, we're highly and franchisee fall, typically bases of the at looking the opening serve the owned urbanized military clinics our to markets the Army forward. in we've where basis, on chiropractic about and market, excited to in and and up Air leveraging by is already Force Last are opportunity Exchange Service. open bases going on opened clinics more doctor

looking on closely working are the drive with The only both proven down we're open These that their repeatedly area, to their and accessibility tentative and trade up to growth their of and clinics leverage who high-performing existing the they time, clinic. development. by uphold patient by clinic second Increasingly, sales We're are wait lowering even end within addition, XXXX. doubling our increasing can some a a in clinic Joint's further franchisees mile adding away. sales density In franchisees pace new are operators existing and X,XXX

U.S. we stepping of as the internationally. comparing we profile demographic goal appropriate near-term across at a as part the and the further This analysis, stone our previously both domestically for patient them year, development, psychographic to all see As a and reanalyzed MSAs discussed, time

With care, X,XXX is chiropractic also we've realize now expansion. actual this minimum our we XX% potential Yet broadened this to derived upon based clinics. to of our leaves clinic usage count as chiropractic room new a patients new much additional result, for a of As of today.

business population significant of chiropractic only I'm educate ready consumers that, confident the knows care. U.S. efficacy and we value. long-term we chiropractic to to have opportunities drive With about grow is, begin our ability care more to As what Q&A. Lori, growth I'm our stakeholder the of the XX% as in

Operator

[Operator Instructions].

the from of line comes D.A. Linda Davidson. question first Bolton-Weiser Our of

Linda Bolton-Weiser

they So performing are just the are early Are in historical with opening? maybe as you they historically? Or pace how worse they be can greenfield better performing? this they stages comment and would openings, of or ramping accelerated than

Jake Singleton

Yes, Linda, great question.

at each I way no ramps exception. last of seen those all look XXXX cohorts really several from As annual quicker, comparing was and XXXX, the the cohort ramp continue we've to XXXX years, through

in to So seeing further give us still greenfield because that just accelerating successful ramps. confidence the we're our continues development

Linda Bolton-Weiser

biggest to and Okay. And in you related more? then statement of the income the show the we the it it us impact marketing where greenfield? selling where or Or Is costs G&A up can see or does higher do in just remind both?

Jake Singleton

to majority The Sure. of through G&A the expenses line. clinic were our going come

see some we openings with have we of opening sales through marketing when process. marketing, and in specifically additional a that will greenfield are You flow because loaded those kind chunk have expenses large that of grand front

But the that level of large did number up little So line level quarters a majority we for greenfield like see have in fourth of payroll, mostly expenses, G&A us. clinic those come openings bit. a of where you'll our we costs, in clinic the quarter some tick year, through this

Linda Bolton-Weiser

some hand, And expenses, of your -- mean, and line Okay. guess but those I leverage grows top you in one your I'm other you curious on the I with as then that point, revenue on expenses can have the hand, those bigger.

can leverage up? that the higher do actually think to offset from So in G&A go actually do goes ratio G&A such a XXXX, you Or you expense openings bit? you down that ratio with the expect

Jake Singleton

at going in breakeven X of only point have not leverage and suppression When that months through we maturity early opportunity you're see of back-end significant the much with XXXX, weighted, the development you're XXXX, or as reaching little to part necessarily I come right? given but projecting think not that think that the the talk less mark. for curve, about pace the being XXXX bit development a I we're

short-term get leverage ramps you when greenfields XXXX, like in great. great full it's that use So a back-end the pace cycle going still period. be in to But that hard said, of an accelerated so to capital. in still many and weighted I XXXX have are It's

of work have you kind just through. have suppression short-term that to You the

Linda Bolton-Weiser

additions corporate when the you Okay. the XXXX, to can't anticipate And opportunities. about XX in obviously, expectation you acquisition talk then XX I really mean, for

be of XX is you no kind there's it acquisitions, are like XX actually more will be So it greenfielded? if can there's actually that than or that seeing

Jake Singleton

it strategy. Yes, piece I an of of hard They'll just you had right. It's think be acquisition to the opportunities. still forecast number our opportunistic

robust that some terms or way that ourselves the left were we to much of great not if time greenfield we just slow We with have ability to a so give opportunistic that pipeline have XXXX acquisitions that having in travel development period. the accelerate here a control those enough in But to there. we project

Linda Bolton-Weiser

to And talked Fitness' franchisees longer call, to down order have experiencing different on they're -- up pandemic they a the just open as about you not? today, are that things things takes that certain your longer a I gym. well Are like slowing that as opening franchisees approvals They they Planet just doors. new but taking for are little, maybe in or like Okay. know get business, it

Peter Holt

I would say, yes.

I a think always that that. scale it's matter of in

what have square can that to Planet they're it's municipality couple wall the as doing. with versus look a X,XXX smaller and and you imagine to compared that if so And at to of the adjustment a permit. foot get Fitness we to build-out, go also false all build-out same a you our But tables, easier

to inflationary lease process. have this we the slower landlords of kind so are in I And to our negotiation the who, whole deal with responding think, period

XXXX at will think could Yes, that macro I it the such a we while just didn't those but our because development. simpler at I and look call build-out. scale just issues on that experience think out, about a that also impact So have think that, part of we it's as smaller we

Linda Bolton-Weiser

for affected how Okay. your say? much doesn't Is really like sound it But expectation grow XXXX. you that to fair I in it could mean

Peter Holt

that say said would of we took we've open these into we we'll XXXX. that issues some obviously, than in account really I we that believe we control don't we our that more in XXXX guidance guidance. did Well, macro as clinics And set our

concept. I these think of we didn't it saying take are than by impacted out it So of that some complex that I'm less not more that build-outs but account, into do are we

Linda Bolton-Weiser

percentage how average can make? us individual remind And price increase, on you then much price you're the then you visit? the revenue of increase And a to your give is subscriptions Okay. just expecting that versus can on the

Jake Singleton

our Sure. of Yes. gross subscription. from all comes our XX% sales of

vast of be markets, the lot our In gross of up $XX. we price through offering. still is our is tiers will that sales So a by majority the that moving coming

$XX, where $XX, a they $XX, $XX, were So $XX, mix country. across you'll the see $XX

Operator

line And the Hamblin Jeremy of Capital. our next of comes question from Craig-Hallum

Jeremy Hamblin

XX to a of little new wanted bit this strong impact a on I details into year. units quarter. company-operated of EBITDA and locations more to total XX Congratulations the on based year of the get really

openings at a it FY XX from of we part an I new carryover based think a $X 'XX looking year guess, maybe your drag last But year, this as is on at the opening of maturity -- of give about the average units on end new year the XX EBITDA? million if well. prior a total can your us in curves and for to loss you I estimate $XX,XXX on new expectation about X, stores

Jake Singleton

in think carryover I to given from those. weighting just factor do XXXX, back-end the Yes, of you have the

to in period. a of but through XX it X loss didn't of kind be $XX,XXX split there. the terms that capital working many work in of have out So are to has We in have right in you XX that terms around greenfields, how to year factored you type

scaled going on they open. when are again, be those to depending Now

it you get of those you're may QX breakeven and If end a into to some feel All until the strain start back to maturity going have offset opening, they of weighting. curve. is those that reach the

put those hard got think I correct. the quantified of pieces you've without So a it variables, on to some number but

Jeremy Hamblin

Okay.

So sounds the depending like acquisitions. we're it ballpark on in

around to expectations a Okay. quick have wanted hitter also tax. on I here And then

XX% you I might just have think look missed we at it, rate. that mentioned tax I

Jake Singleton

Correct. Yes. footprint. blended The a federal our rate for range percent is in XX%, the rate across state us X-plus

So I a estimate. fair pretty think that's

see still come will with out XXXX. utilize, this of year of and We kind we NOLs lot as to eaten up some move we'll that a through of

Jeremy Hamblin

of terms kind the with lot significant now to -- back COVID throughout impact of recovery. businesses What's retail in of January started then and see impact of a December this surge, Great. And half some were or and last you the you give traffic they had you what sense of in whether the impact, where of at versus December. trends kind us a patterns maybe of today not your any stand where had saw can beginning

Peter Holt

terms it's say, of us our the impact of bit growth. on I a probably that in Well, had Jeremy, is little what suppressed is accelerated

the promotions XX% last was to than XX% than compared The our fourth it X promotion and our As year-end year. year-end Back higher I year. big was last quarter, mentioned, Friday we have, our The higher Friday, promotion. Back

we've numbers. to pretty suggests it strong you So had some that

due the there I'm I think wasn't that. have -- been if we would -- saying not the or it the Delta whether there impact some also or to Omicron pandemic it stronger was before was

reluctant I COVID are their from it pandemic is beginning when resilient, be incredibly see? point, what essential while coming is our Joint. other think in that are things The care to experience and health to to that to that I we marketplace XXXX, saw patients we is of the is to talked see in comes did remain counts. We if they that may we we to do the about that patient where as record-breaking this in reflect this they new And really

it's first but come patients, existing had the into our time. we just for patients new The very Joint So XXX,XXX not

what me, new really and that were just last most got to were just part patients survey in our The that came XX% we is exciting chiropractic. XX%. okay, we we new did to the back survey, recent those of year, saying, of our XXXX, Now is most new in was

continuing by those putting more We're to of and working. retail setting. efficacy and is in model educate it more chiropractic the the consumers So about power

think as XXXX, the what's that and as impact impacted certainly their on can -- there, we're of us. permitting or of macro say, pretty is they or kind I as in knows municipalities, the people we've through Is the when whether on on out so the issues through go issues, think go those going of are the issues in we that that reflect But would of been inflation are don't -- we I about going resilient. addressing to I Ukraine. there with pandemic pandemic who have have an by impact macro And we Linda to be I some with or talking terms

Jeremy Hamblin

Great. Last one Okay. me. for

having So for labor staff What's and sense us your run that well. costs, your as you're to give the... pay can clinicians a you administrative up the for rates

Jake Singleton

Yes.

I think we're seeing it on -- Yes. sure.

of both any are it I when And do there again. at But across well. for highly competitive, was have or driving look country probably of wage competitive you wellness front increase positions out the to doctor it, factors. we seeing given coordinators if a Those that position. Tougher part-time whether the potentially and sort average desk. base then think we're labor, quantify to a you on either be retail we're the specialized a of rate terms in roughly hourly fronts, as XX% as of the coordinator the wellness chiropractic which element some increasing footprint chiropractor going of for have becoming at rate a or the that's blended or the it remain to one

it's of it's phenomenon that's fronts. of also both couple our And staff. mean a core a I really our it's different us quite So on affecting roles. honestly, corporate

Operator

line the of next question Partners. our ROTH Capital comes And of George Kelly from

George Kelly

was could an opening. question So average to I that you for hoping walk another through you. And start us greenfield just

-- want spend be you invested but can, line, the And hit much give what marketing is you of if the could months, So sort time us to would after if then don't if just I helpful. X of of what you is specify breakeven it that you as average? as amount know until on or that quantify kind kind preopening

Jake Singleton

on. a peg preopening you're marketing, probably number, can at would looking per. The there's different Again, we market by on capitalize But that rounded Yes. $XX,XXX. Sure. that around I $XX,XXX tactics I think

for your structure market. Virginia think in again, $XX,XXX clinic, average breakeven is say varies at an cost I different $XX,XXX of is -- a rent I it rent kind than point as But your be going point. California. my to breakeven by to of would a Your you're My in looking month

really you for point, so get say is your can we us, quickly And breakeven ramp which it's months revenues that above how X less. to or would

Peter Holt

days. our created marketing particularly you're that, think add the in pre-pandemic, that what with that a taking these to the -- everybody And want we department don't do off is for this recognize had I that more up increasingly early we days, of grand has have at into free moment we pandemic idea pandemic then I opening of part to going a mean strategy, big pandemic. adjustments this to is that kind the and sophisticated just blow the effective all account and And in X for there. the tail X jammed clinic from

I seen time out added series spread over And they've of that board. digital they've month, to a think which side, of and on so breakeven the on new then the period the a we've programs whole increasingly a improve specifically -- across

it that process effective in I getting clinics. in our more opening So think our grand we're we're and better seeing

George Kelly

I was the do that us question between you And and have the wondering Great. next could just something G&A so with question. unallocated share a everything breakdown for on your Okay. me, call of but quarterly if modeling Q, that's in corporate for you It's that? else, then your curious Ks,

Jake Singleton

me it of at I in have front moment. George, don't the

George Kelly

Okay.

guess, with are we based question seen pricing impact volume anything or else then -- me happened? or changes was about I past you mean, the thinking -- last enough. like really and last Fair the pricing. for I as gives some how what you're to competitors? What with what last in an And just you happened there you this gap confidence back your increase? And of approach Okay. across-the-board what any with you've pricing the took just price Like Is doing time broad is when a now?

Jake Singleton

then just a adjustments certain Yes, The that an is wholesale last price XXXX-ish XXXX. increase What markets of across-the-board the was each in did And grandfather to rates. moving did did typically really we market in one happens launching the up we we existing on XXXX in X. time similar last we'll those question. the scenarios, But great a we frame, it's in back was increase tier. time always be March the

pricing your such you will that that on go-forward an if So basis a be member, time cancel. existing until you're

KPIs, or But rush we get pricing looked a and offer the we we really, look conversions look little our patient in sign-ups those people hang under forward factors as price benefit always we what of increase longer. onto to new as kind as that a kind rate. and is slight at the window to really results some we phenomenon kind of model people at rates lot lock monitor subscription retention When before then bit there's retention. nice of of that delay of for that kind a higher So does buy of new some that. and the a kind that on that to is to get at The you of interest,

we've far, favorable So through seen gone metrics very time that. we've any that

always carefully. we that something do very it's So

As we tenet a script be. the we mentioned is core affordability different in always and do of times, few will a what

felt that you're So we price. needed to facing of we labor we adjustment touch But some we time have to very be anytime remain mindful that pressures competitive. where make a frame in to we are, the that

Operator

And Riley. our Jeffrey Van B. Sinderen line the of from next question of comes

Jeffrey Van Sinderen

kind you're larger I gross Any the some planned for anything the terms franchise your G&A, give could you in thinking those number half assumptions. insight the how And margin, first us of to kind us expecting of kind of amidst -- and just give weighting elements? of quarterly you're of you're a model guess around and new Just number you clinics there's that of considering progression could greenfield half further circle of we second open? of any can if buybacks a that or if in about wondered selling, annual or to marketing, back baking assumptions

Jake Singleton

within so growth, we Jeff, element lots and to on there, The count performance, is one usually that we right? expect top Yes, line been then more strong predictable comps, work can model to through. unit have the continued We've accelerated our organic variables fortunate opening. of

So project tied on to I throughout the Cost that. is incremental gradual a build line, for top largely of revenue would the us quarters.

line. predictable fairly a So

national fund that marketing, dependent and of -- large our down You timing that get is driver a of sales on spend. such is to marketing and the largely

harder do So ask that perfectly I that year. always throughout spent ratably go he to my It's Chief just to that. and Officer Marketing the

bit clinic-level preopening do of And to of have some marketing when those mentioned, that see spend. activities, you opening will we back-end fund national on marketing, expenses. we contingent marketing typically, as then So little be grand those weighting that a

would I went As more it we with bit I weighted now, like. little back-end variability that same too don't into than stands ended assumption, But much right openings. between project saw, as our a XXXX we greenfield up and

still they So are of working the through some largely the build. clinics as that. to fluctuations But G&A tied

best can a So I brush. do it's the probably on broad

Jeffrey Van Sinderen

then I can applications an Okay. in to, business, you're plans to those have Understood. you of when working interested some hit on and leverage And patient expect to on and When to then system, to to developing on I software just guess, the applications if we to timing begin especially guess, can layer the new the start data. newer some begin you and year. impact touch on or this mine of

Peter Holt

have think is new it's and great map. we refine And on, Charles us to really I Jeff. question, who us for really it our and really helping Nelles, And are excited Sure. just so obviously, a that we're CTO, one road incremental is focused to that

as And so we progression. see really this a

really users end see frankly, issues, won't to more be have that later, creation And in that develop. does so mobile be of warehouse. of cleanup that that to a of that's time just It will quite little user-friendly early definitely check-in, this still system power terms in that but probably the patient unleashing existing start year, the going some that working take data, on we making we're a our and portal data doing for the we bit

what and and So lift then as that we and But say, over the in expecting through and we gosh, oh, we'll power road out I'm QX improve okay, starting to I'm time, add continually not that my more huge impact that here and map. refine this shift is sitting more build got and see you XXXX.

as I we very sharing would certainly with have that of Street. a So out, we're on. and lot the detail give they them be and doesn't you we it projects around And roll specific it, working think but you develop

Operator

question [Operator Group. we Maxim Anthony have And from Instructions]. Vendetti a of

Anthony Vendetti

Two questions. AXIS the One on material on then weakness. the and IT platform one

we'll weakness. material And the start so with maybe

the for to have auditors expect exactly So satisfy material need you do up. Is financial announced that sounds I it's the do the when results. right? like And the And because finish of then audited to you you to controls, reason concern? It numbers? what auditor's guess have preliminary weakness, do to

Jake Singleton

outside are it's elements internal still And question, fair audit with It's Anthony. a Yes. you're the right, of we And through our controls. working final our auditors. our

we remember, auditors changed of QX in XXXX. you If

to that So with their audit year as our this internal our audit is financial the as first through first SOX working controls year well full subject of of XXX(b) compliance and them. we're

time any first deadlines. an going our an audit these go through the you're through accelerated you first through, time So to that. go Not some time mention it's as of accelerated to with filer

So going come it. to we're to down

have March -- is deadline our filing X. We

So and audited up that file. to that get work we'll auditors through continue deadline to financials with there and our out

Anthony Vendetti

on the among I it. AXIS the as any clinics, how then tweaks the curious rolled has was heard the so Okay. to And out, what feedback, reception how has IT that any been -- franchisees. you've Great. far. just And platform,

Peter Holt

of system, you never in listen Absolutely, feedback. Anthony. franchise a are Sure, short

with us and are concerns of the that on they we community, and as active all a going and very their robust things well. have So franchise positive share

of have bugs roll thousands taking an have in so minimizing where And disruptions be system, those you're then to get you new testing users and making until you and the you're you existing language. and you asking to the to the using patient are as of of ensure that system these you're new And this of I course, things get sure records everybody there's that this you But these going it all time into to go any can't know, learning going really all out. you cleaned face millions to like any as overnight think to little are of do up. almost upfront

tell from accomplish that And that. just it is platform, that that that their rolled was everybody went and the existing we in thing they've seen out, relieved little said fact say that just ever love would now overnight significant the to best that to life platform a our we I And flexibility the are and was so important franchise what's is you that were start we really And that But happy. and really it flipping unleashing able been working franchisees some just with that change line to I'd the I on could how one complex really reasons system through disruption, through that community. less new new level you in excited that the quite more from frankly that we're of position. am such the with little make and I to not really tell upgraded that excited power. to we're that little give changes But our with that overall, a there it's

our We CTO. new have

can need less community for here of understanding franchise but been get order month, real he's really to them. with continuing to so the do He's that meet watching continue out that think than we need system. to a our I we working it the to what to a do reach needs just to the and of and

its career. in my So least issues, at this an we're deal any with you environment never I've to but at go issues of in it. about it's time had this, excited fewer the through transition, got level like If really

was with make that pleased done conversion. work I'm to this So the

Operator

questions will remarks. CEO, to there for closing Holt, now at back And you. this Thank call over are I further time. no Peter turn the his

Peter Holt

and your today. for Thank you thank you, Lori, all time

to Joint our stability affordable in were doctor performance Franchise look Consumer of ROTH cooperative in deliver forward all doctors, help their our all strength, seeing mission and life. Our Magazine, March. our Times improving an honored the is Review, corporate care both close patients time our best the coordinators story. the Davidson to growth, and teams, in Franchise life inclusion The the outstanding we and wellness again, culture their to you financial live and Annual to Conference Conference foster Business best our at We recognizing power. I'd The D.A. and of our with staff, RDs, work our the chiropractic brand Growth I'm with quality and Entrepreneur franchisee like retain for proud Joint who We franchisees, recently

One Joint doctors of our XXXX. in started The

became love director chiropractor I a he's I stated, chiropractic is is The and clinic operator. Joint First, owner nothing because he becoming before a franchisee chiropractic the industry, I the easy a providing in game. anything then franchisee a It delivering And a like model care. else allowed understood doing the operating insurance model do hassle of and me simple without to for what

thank you well adjusted. and So stay

Operator

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

now disconnect. may You

The Joint Corp. (JYNT) 25 Feb 222021 Q4 Earnings call transcript