Earnings call transcript Q1 2023

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Operator

Good day, and welcome to The Joint Corp.

First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to David Barnard of LHA Investor Relations. Please go ahead.

David Barnard

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

Jake at and Holt, performance note, can a results found will On business. and the a our and Please Peter and President today, CFO, the will on presentation XXXX slide be call guidance. review Then our close questions. CEO, first using open an that the update we will https://ir.thejoint.com/events. for Peter are Singleton, detail provide with financial metrics summary quarter call

after for March The financial Today, of Corp. Joint market, the the the close issued its XX, results ended quarter XXXX.

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

based statements financial statements these affect also risks As future today's our could that may important assumptions provided relating and on the and and X, position discussion, to materially statements uncertainties today. estimates be some factors cause subject Slide of our from forward-looking statements made to operations, we forward-looking current make we including are strategy, please management. future advised to differ that and includes The forward-looking plans business objectives concerning present Throughout will predictions, expectations, discussion results and actual are on statements. our today's

inflation, increased contribute as may negatively managed to our shortage; our address business part an or of in to measures qualified potential acquire and or in due other we chiropractors future other business, labor take could but need exacerbated are impact staff to could enough recruit and by outbreaks company-owned to the our unpredictable war clinics, in which of to to cost as to contagious not nation-wide current differences due our our increase that clinics to the Factors disruption include, and failure on expenses shortages inability personal these and outbreak COVID-XX rapidly limited Ukraine, diseases, we develop the the COVID-XX to, such operating for identify our the which our and and impact operations has intend. and otherwise to

to including maintain prevent XXXX could, filings financial quarterly XX, confidence ability market Our for negative which our to in and or control drive clinics report operate and entitled year current its down the Risk on XXXX which Internet, fraud opinions future Factors company-owned our action own in subsequently for and remediate report reporting, could which and could with impact on result weaknesses posted managed our common internal reports. the the material XX, accurately lawsuits, the our the SEC, investor failure our the SEC failure December in strategies on class filed price in our our over financial XX-K stock March to results, ended negatively profitably section factors and described other with for Form filed annual or

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

or we release publicly these light or to revise forward-looking Finally, ourselves not updates new of statements our obligating are any to information in events. results future

or used Management they Management to Reconciliation is in underlying operating because than adjusted net by presented are a the uses the EBITDA as net revenues includes defines include EBITDA whether release. also all performance. System-wide commonly gain, measures impairment acquisition-related more presented expenses, discussed sales net before EBITDA of are and operated expenses. performance gain company GAAP as clinics, view believes bargain income purchase trends income press of the The amortization operating other metrics. company's loss The and Management defines franchisees. on to These EBITDA which related compensation or and to adjusted they depreciation EBITDA and EBITDA by loss are net interest, performance financial alone. company or or at credits. disposition, before adjusted income expenses, retention measures. by financial provide employer assess non-GAAP EBITDA, tax transparent management measures and the company expense, important stock-based

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

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

Peter Holt

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

clinics As uncertainty in our as well economics the thrive QX, I'm growth. we unit as to expect as our to our during we financial a and and expansion longterm we XXXX pleased underlying to report noted on foundation and economic March improved. continued model clinic XXXX support robust markets Today, well XX enter performed with clinic

by setting. For those share style and who services chiropractic based new the retail are providing convenient company, is an Joint affordable revolutionising the access membership investors to care to cost

the grew XXXX. first slide quarter metrics for at first for open our sales compared wide quarter Comp increased to $X full System to least Adjusted XXXX improved EBITDA XX months X clinics Turning for sales financial Revenue been X%. XX%. million. have grew let's to review XX%.

XX, million million compared XX, on $X.X on was March And XXXX, cash our unrestricted December XXXX. $XX.X to

Turning metrics. discuss clinic to I'll our slide X,

XXXX. This franchising and to we XX Greenfield. Greenfield X in franchised and clinics XX, XX X QX, QX, compares clinics XXXX opened XX During

new look greenfield like rapidly capture build where capture solid a strategy they will be presence. pent Our where markets sites a clinic in they'll there up demand where can

clusters This quarter clinic Missouri in California, North we Carolina. augmented existing Georgia, and

which the XXXX, of we as portfolio moderating matures is first lowest rate at clinic existing one pace again, quarter franchise stated XXXX. clinic clinic previously franchise franchise X%. focusing That on and the community In we to of As compares one of it greenfield our first closing in are be our less in quarter of will closure openings. closed relocated. greenfield one Once XXXX, than the our supporting new in

active had is XXX our in clinics At clinics fourth and licenses managed conjunction clinics. Fort with at In XXXX March XXX consisting opened portfolio XXX one in operation, a This end solid or mix future on franchise for XX, The XXX or Subsequent in greenfield we New exchange Jersey. Army we we franchise clinic location the Air clinics. is Force owned owned April, of summary, clinics, clinic company opening. remained pipeline opened and which had franchise franchise end XX% managed and to quarter quarter and a XX% development, service. Dix, company

with XX Turning tenure and system. in as our to as territories schedule to clinics. X. compare aggregate This number the health powerful network our in viability is a it bought the same XXXX QX, at count past On QX, XX% In a brand. franchise XX, March model, even sold of business means slide minimum that [indiscernible] This involved in franchisees XXXX. XXXX, intimately established the the is which that those uncertain for development approximately we QX, XXXX, existing our and our licenses. quarter, This XXX are new demonstrating strength new the indicator of in of XX sold franchise our licenses of are licenses, the environments, reinvesting RD

X, slide marketing to Turning let's review efforts. our

New to be a patient acquisition continues focus.

We've February, gift and from approaches non effectively walk approximately average practices patient to team For franchisees created and in per X% marketing, new as joints leads done and multiple we prioritizing such clinic held and pay maximization To of love of media digital referrals. annual digital the care. patients awareness, marketing. lucky invested year guerilla one a guerrilla year ago. and new received free our was through new learning well the our social paid giveaway QX digital as marketing of In were the chiropractic further our best of campaign traditional conversions number quarter marketing, has XX a winners marketing, tactics, in XXXX modules same as channel improve

During XX,XXX In we National account overall XX,XXX XX,XXX this and than over more increases significant Instagram engagement in patient held our promotion, almost attracted March comments where our we followers. new and we in and saw gained contest. entries likes, the Joint new

the event. to incentivized $XX patient the referral promote assignments clinic cards and joints community team event new and This offer business partnerships local

March For compared prior network over to XX% three the average. increased the months new patients

capture we for launched doctor also In digital to as test technology, new to profiles a leverage medical efforts new sites leads. enhance well terms as a online leads on a an as of chat in chiropractic of source patient March, our

organic increased quarter, XX% site the traffic For year-over-year. the to

the brand to continue focus care As PR and Joint. of a of generate the we about benefits and chiropractic our effort, part on education awareness

billion PR editorial earned highs with over are QX and in impressions. new it you. X in I'll And strategies to that, turn Our reaching Jake, we alone, surpassed

Jake Singleton

Peter. you, Thank

million. Turning for XXXX up owned sales sales to managed wide or more million operations System revenue all XX QX, $XXX.X open $XX.X open XX% for all increased Revenue clinics XX.X time XX% million Company results review dollars for QX, was increased wide amount System up contributing more X, clinics any increased Revenue I'll XXXX. compared franchise contributing wide to clinics months or X%. or months System to for mature X%. $XX.X the XX%. financial XX open increased clinic for slide comp XX%. increased comp of or $X million. from million sales

expenses million expenses corporate compared $X.X Cost last of clinics regional from increase was to clinics $XX.X an labor the growth the period million increase to up of the increase owned or G&A payroll support marketing by and in in growth higher the funds commission. competitive over the continued greenfield marketing expenditures in and amortization to advertising our clinics by period acquired. million same represent increases and and Selling royalties The spend. in clinic driven due Reflecting timing increased managed to were both national primarily million, period, market. fund Depreciation increased reflecting base. the franchise number larger $X.X cost the local and franchise last XX%. up $XXX,XXX were XX% revenue of expenses up franchise and expenditures the marketing and XX% associated revenues company XX% higher year and year a the base of count up same over developer $XX.X year, portfolio the tight the compared remain in developed prior the

QX $XXX,XXX expensive. to loss of credits, $X.X other in XXXX. Adjusted $XX,XXX clinic driven was of $XXX,XXX $XXX,XXX of income per expensive $X of Income retention million diluted a a employee amortization of per loss to share, in reflecting million, employee XXXX. to was loss Net QX, Operating or was compared compared mostly retention XXXX, in to was same the $X.XX previously and diluted last of to increased mentioned compared year. receipt Other tax $X.X was the period income share $XXX,XXX Franchise QX the to net XXXX. $X.XX of EBITDA impact compared expense, the X% $X.X million, adjusted in million. the compared depreciation or higher in million, $XX,XXX EBITDA $X.X by including QX credits

of employee million X.X million. credits in upgrading These Morgan clinics at reflects million JP XXXX. to which $X.X million XXXX million Company retention $X.X $XXX,XXX million, Also, XX, the balance flow corporate additional portfolio, our to concentrated included or million owned effort operations from sheet $XX.X This To-date, X well than investment million drawn December as available. Chase. a million receipt or XXXX. our managed in to $X line cash the greenfield in the through clinics adjusted were to $X.X is and of labor. was a clinic QX, credit optimize a and have we've as an adjusted have to continue greenfield higher was Corporate and Onto we maturation opening $X.X our clinics. of access $XX expense EBITDA up of EBITDA net the of of unrestricted cash our XX% cash cash increased additional with existing component reflecting XX, at flow review of March compared in XX%

On slide our guidance X, we for XXXX. are reiterating

in We continue between XXXX. million revenue $XXX.X to million to compared and grow $XXX $XXX expect to million to

We in to expect between EBITDA million million and continue million compare $XX.X be $XX.X adjusted to XXXX. to $XX

a to Please XXX clinic guidance franchise combination XXXX. in expect or clinic and included compared be and to openings to for XXX both between owned greenfield XXX note acquisition. company managed historically, continue of opening We

continue to acquire no and While transactions longer clinics, previously are franchised we in included our are these opportunistic guidance.

compared XX X openings, clinic to continue in greenfield expect For XXXX. and we to open to XX between

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

Peter Holt

Thanks, Jake. Turn slide XX.

long inflation remain to today's can uncertain and on programs and economic drive control wage we improve growth. we what managing and performance conditions to execute continue While including pressure, focused term

to to continue initiative methodically corporate dream. multiyear We the implement ford our chiropractic

with several been past recruitment. schools years, to educational increasing our the we've associations awareness chiropractic Over and drive outreach and of support efforts

being with our As these are relationships the felt continue institutions endeavors across improve network these nationwide. to

franchise clinics. the in greenfield will we chiropractic of harness launching lapsed of ensure more patient right we're to interest To the launched to doctors clinic ever graduating to send reporting these analytical we and patients that and of classes our accelerate to existing sales In have intelligence reach pace fact, our time. we've recent the potential power we're focused from the and business marketing doctors right opening the our attracting our new and program. Joint. in data, This addition the at growth, surely we on message than an automated remain tool, right To

quarter, As opened increase number reported to clinics the this continue our we of year-over-year.

XXXX by are we models, term network clinic approaching positioned developing well-positioned the in our is chiropractic for with goal a frankly, of patient possibly international and potential. market term care it will spending term is patient and billion growing, clinics. rural, considerable. demographics, well using and our long Based clinic is of on the we target months network near in need XX base annually as on longer market our potential $XX.X economy opportunity XX% expansion Our our of our and expand and broaden chiropractic last urban We only XXXX current for improves, the Americans are

committed are to to market. ready overall capturing share growing a the We greater Dave day, the that and I'm With Q&A. begin

Operator

the Group. answer question Craig-Hallum begin Jeremy Instructions] go question Our We Capital [Operator ahead. Please first and from Hamblin now session. will comes with

Jeremy Hamblin

I it basis. sequentially asking wanted taking questions. marketing. amount the start sales a year-over-year QX was by about same about on so up Thanks much and that the for and $XXX,XXX from to about

You notice little you a bit differences spend. year impact what looking the fund how there that was we and the detail the if I how forward? see any it of the marketing other was if timing timing national may provide that rest a wanted of to should kind and expect change there's more in could on of

Peter Holt

a from the just Yes, Jeremy, of the is There great that increase would the is chunk I that say the really clinic And Right. timing question. increase just majority count. of collections is quarter-to-quarter. of that,

on the timing certain depends it pushing to or the campaigns we're when of out So collateral clinics.

front to continue And so that I in would categorize that expect as just we QX. as we on. a loading normalize slight But

time So there's there. of really out no kind call one item to

it's think timing variance. quarter-over-quarter slight just a I

Jeremy Hamblin

it. Got

get believe net Okay. bit was retention also the $X.X color wanted like And then just I employee a on little more credits, which million. to

related we've little with businesses, from provide I which to FICA you help on well. back credits think past is to just that's of a other bit that know I but don't see as what to if similar if in COVID the wanted color like could still, seen

Peter Holt

jobs of available. made credits to that Sure, And some it is act the yes. related were

was first qualification in XXXX. two Our period the periods of quarters four

And both so processing through particular the of to the funds so of receive in the IRS, and application the really first of just we timing our quarter the the 'XX then recognition. triggered kind which happen

Jeremy Hamblin

share per about like Got basis back it. normalized that EPS on the out, loss $X.XX a if would so. that's be we And or

Peter Holt

recorded That's that It's in net other about Yes. really X.X. right. that we income.

So it that have to but adjusted net neutral, EBITDA boost does income.

Jeremy Hamblin

nice step last if versus just of in operated on it of wanted a company seeing basis. get overall, little basis it franchisee thinking you're get saw look at wanted seeing what operated terms I franchise queue, you performance. wanted a, that from performance whereas you before royalties step hop let's earned on for here the average saw call of that I terms you're the clinic I'd revenue performance of least to bit we're just I maybe the to then clinic And forward per like a little maybe company clinics, corporate an down you it. sense Got like a franchise in in about versus to understanding a certainly out question, the what

Peter Holt

Yes.

within both I some think, it's system. use reflecting our in cases, of the

XX about portfolio, natural with we two another units the years, have added up the I you're last additions on the corporate think to made the of franchise quarter. our over just younger leg overall we're going So maturation. continuing number clinic average, in system our we've a on overall when talking greenfield connects based Again, growth, their

there so denominator a basis. that the as end on decrease per of number if of And again, to final revenue quarter going you're that's kind your clinic using

still sales And and disparity system. a as X% huge not we a of franchise there So again, performance. same posted store corporate between

pleased the there denominators, new as growth So we're you have the clinics look you at revenue system, But a fluctuation the could unit. think on with still the per the number we organic of clinic some get of basis. into coming I

Peter Holt

an I'd system then that that a equal better or for as and is bit that, some or slightly we we portfolio as parallel interesting coming and segment. that And operated we're franchise that 'XX saw corporate to little of that add into Jeremy was made And our is to our corrections. unusual the than end what a changed in historically, franchise that

performance year, our operating and portfolio franchise our of you And of so 'XX, 'XX, to kind the end look portfolio. if by or corporate got at we the that equal of overall particularly better the

about that equal made continues or dip we portfolio come corporate some seeing conversion, is to or of operations. we're that which those the until look I do now month we some So we per new better per that corporate, clinic to And count, patient patient our talking we metrics, kind portfolio the back of community. at franchisees that that whether seeing than through, went we're do continue have the a in than our seen than higher we're key attrition is one changes better so at that new the The our corporate area franchisees franchise focused on think moment. we're and where new have the

Jeremy Hamblin

it. Got That's great color.

patients one more of like you're And to of price get are Just kind of pricing know, legacy point that March, I can in could what seeing a there. a this that bit wanted terms degradation just of mature I in time? if you store little thinking you your of you here, on took terms comps sneak sense last a in in about increase plan at percentage

Peter Holt

Yes.

see quarter X% per continue to We shift about a members. our of active

to that new price on Moving point. that,

I an I still one trending But active is members to they're at in majority pricing look signup rate, have about of points. ago because XX% their one current do but year. mix some the we think think that year as on or the on price point. have now of being are system are now, policy legacy on legacy some existing ago, that below our grandfather the majority last higher the I year two we're The our that we those price

Jake Singleton

that we've in don't that time. And over group that moving for see there a it's XX% about been that's before probably that e talked Ye. around we time, long much

Jeremy Hamblin

much it. and for taking questions the best Thanks wishes. Got so

Peter Holt

much. very you Thank

Operator

B. Van Next with Riley. question comes from Please go Jeff Sinderen ahead.

Jeff Van Sinderen

And And are any patient It's backdrop? a apologize. I location search given there think lot attrition, in there changes on price more macro you ads? new what new you're influencing where it see were little then of me, then the make ask to terms ads, backup the congratulations. to patient new to the on I then patient around the color patient that? great seeing more that but you can a terms I know some get and in of any would wanted the to how share And bit with Multipart more patient you change will sense can faring promote X% add Google and guess there? comp. also, know questionnaire as metrics. if drive elements new power? maybe retention, do everyone, And you bear Hi,

Peter Holt

really components. I patient focused remember going new of saying you're on has, I'm mean, to course, try really all Jeff of those what is counseling. to I

that's if sources, of really we So where come at and talked are from. one number friends existing their patients our in we [indiscernible] accounts three refer of terms and to who patient source use counts. probably as medical referral look it's clinic. the patients They're of the Number all professionals you an a that, in about and new family come that's our one before. new And services do

a friend campaign the And have into for is that's averaging of of by on been because a basis part or new right is digital patient XX% time family. to count. they probably Well, referred coming watch the interesting us, are increasingly a marketing essentially it's clinic, around network our how over

roughly right us So XX% track our patients now, of new can digitally. have we that touched today

because So with increasingly because really measure and and to the Google TV you or SEO ad, little which always higher in coupon, change algorithm rating make but was in that's And you is push of that. series search, us. attribution when saw [indiscernible] whatever changes a or can to we we metric saw did that's it the a became that address higher a Web we up a if that patient and tricky, you the online, more where important go use to or

also our doing searches, and one really videos sure to [indiscernible] if Some and going that's front which search a of microsites with was overall so updated on got weight doing lot old photographs, been internet. And and effort to very wherever that that changes that and of patients backlinks the making the before much we've was got What algorithmic the because you, publishing can focused working helps your we've of our changes can't the in you've we the we've who's them very really sure ranking. your that make closely on days again, franchisees that given critical of order. to we're clinics they're got in that change we optimizing as that three in yet that do,

are But activity. online was it largest form And call chiropractic. short publisher changing. we the day we more continue And been what on this on that's to

that greater recognition greater we're so what's And seeing getting or now called long what is form. for doing you're waiting

we're changing getting you're on way we're online we're that that sure able list. in so that the which and top search of grab attention to to when And the being publishing make that

methodologies used we're we at before. haven't different looking also And that so,

a So May campaign we're TikTok that we've March now, where got a launched is have program actually or X. on just

So we'll at the automated month, also end marketing of that. see of results launching We're the our campaign. this

doing we're patients now message what them right specific patients, getting to are is time that that existing so those again So automatically the touching or right patients the patient direct the messaging our journey. can their that in website, their at lapsed or right we're to person we

the end to more at to of the that but see And launch of so this come really we're excited program, on that month. results

are these key to or that ensure so, And that patient the we're factor activities that some key doing of increasing count. we're

outreach that then store, It's gym aware in building that sign lives the the you're clinic, pain. relief customer they coupon us educating to XX I'll or sure hold on around to that that that that Guerilla the what need the that or marketing. who that it's when call last that minute five hospital an make potential other for works apartment to bucket there radius you're of that trial And from is patients it's new to drop, the to they're

what sure doing critical as questions just this make new relates the So But of it I are we're addressing that's count. to for most patient kind issue those of to the the we're I organization. your hope caught

Jeff Van Sinderen

And that color ended? QX last an can helpful. then us here color the versus really changes, underlying any Just there QX in year? quarter if that's you're seeing other or you Okay, since give any far seeing trend you're QX any so maybe are

Peter Holt

Well, everybody to we is we're in obviously, that. is that are don't it, we're you say don't for in comment failures three of a upcoming kind and I will get uncertainty. of what us all a thing, concern quarters, other months. of the because typically time on lot about economic a the of And we've not know there's recession, but spooking got I about But

And so we did.

us, figure quarter, out next of all the second quarter, in quarter. comes fourth for think to I trying third we're the the what

the we is And so on Jeff, what really things that control. all we're focused can

And effective our one that be new patient so our associated conversion as of membership. metrics, sure making possible can in is conversion, count, as which we're to that all new with key patients

XX% new membership. sales And last so were for year, of our

the so seeing, is conversion really for example, us. our was for high we're pace, happy very is is right quarter a rate XX%, new number for And we're very, over which our it

So that. we're really excited about

we did stay with The how drop the stay And so really very attention they us? do attrition is low to other to that metric that long rate, to rate we've they When attrition pay that continued off? or so improve. seen

and focus those things can beyond. what's really on, are to QX all to we as the so try And we that out figure happen going to

Jeff Van Sinderen

prioritize that, to to just that do go are they'd with and recession, going that when What handled. getting mean, we pain think as still into maybe you recession think Peter, what want a live will that just do you not a up in I we do people say then let's you probability follow even do to pain, think high

Peter Holt

give again, people that haven't follow feels ever they're logic, a recession. is to frozen And belts we to cup relief. Jeff, that be system through gone up really, decisions, willing are pain Absolutely. then But as and it of yogurt, or a making more like I that tightening then coffee that going full as their

through too, to is another whatever now is income going go uncertainty right and ideal we we think this think economic our that thing that XXX,XXX. be that I is about as family that between XX,XXX

high is our typical that customer person is end not who that or so And a patient.

go to do I you to to a fact into And trying very $XX top more no, capita, part means to open bottom and is relates their say, a think at there's going little It's up a But so, have income see changing or see decisions bit of up. bad I real a more spend, per quite a that often well we when no, really economic going like time's a my inexpensive the be? to those that think economy of think But that. thoughtful adjustment, funnel have are that the as adjustment. we'll adjustment to income concern filters per of funnel up $XXX I in that $XX is bit son And people not you funnel can that greater capita it's that what high it opened upper so opportunity of and too the that markets, the them. in for frankly for those little be we're is no, that are end how where

Jeff Van Sinderen

Makes sense.

thanks take for rest my offline. questions. taking I'll the Okay,

Peter Holt

you Thank much. very

Operator

comes question Kelly next Capital from Our ROTH ahead. Partners. Please go with George

George Kelly

Hey, for my taking question. everybody, thanks

So [indiscernible] segments. maybe a couple my start with to of

Just the there. of curious, whole the spotty. seems do have? of kind maturation these you It much of stores the new plan and visibility margin has like everything the How on profitability been improvement

income of quarter mixed I again. of that in kind operating was would call there negative in looks segment Another like that

the So margin rest in these year? visibility new I that from And do business? can clinics, guess there is, to of else the the for like you aside two maturation is what part question of what drive the

Peter Holt

Yes. question Good George.

lot in the to down trying maintain of a improvement through focus sequential going and clear effort, to level. key clinic have profitability. We a on And with drive we're individual that visibility

and that working so in curves. that's growth through still a have We're expectation. And lot really of young where portfolio still we their period units they're the in a

I you're throughout sequential as of the year suppression. improvement that, the remainder the going be going for with But have still to looking segment. to in that look am And we so margin

volumes given component. that trying we levels four our the to we're the also wall We at and that relates to transcript, as we're mentioned kind make to optimized of correct labor inside that staffing it in our the sure make looking it sure have optimization labor

And that's so more XX% you that those labor we're of on within of are age each a critical level way themselves. have component units when on that's we that's the depending a or focused that staying real your control profitability can cost, the unit because

improvement sequential a mature and But focus operators our for continue looking to going to as it's the clinics quarter-over-quarter. that. with to critical So that We're we're continue ours. work again, drive of

George Kelly

the legacy that of out still that new just that margin and clinics, has and is same it bit? then, seeing owned question, if store is the compressing second talks stabilized? base business, and Okay, your labor on about wall topic, but a still we kind stripped Or four pressure, is

Peter Holt

starting are some I there. stabilization think to we see

there. I'll at labor seen four look margin margin, four settle for over wall the as our wall in than as we've that base, for collected P&L four in I've mid Disclosure just the wall We last look and franchisees, doing Franchise of XXX item that at I years, As seen XX% the pressures margin factors again that in greater you two XX% my put and mature numbers were XX the up for call the years they kind look we're that it Document I P&L XXXX. I exercise. high as which, submitted item that And part think released at of still a our by think I XX,

units, off our for that overall about. four seeing potential at even always we've strong wall holding power maturity, putting and still that still talked we're margin So

see of news are the I some to start to labor pressures is starting plateau a the bit. think So good little we

line to We I'm the same to driving continue so that. on focus And growth by encouraged have those top clinics. just to

George Kelly

issue Okay, certain anything kind patients? any And just markets what in that's the discussion. or challenging, I Back that of new else, issues exactly specific that's have people I'm facing anything a there become sort that unclear there. impacting can to see arisen that guess, are or And to more little isolate the and new is competitive specific, be you you last patient then still one. more of helpful. you're

Peter Holt

for a this I performance small that never Sure, first system mover yes, competitors. an very has we that advantage franchise are are George, And localized. some or markets seeing competitive first second still a one, impact and greater and we I'm new higher are would I increasingly your than question very kind on seeing counts? have take going is answer that worked of to They I'll and of or is what say that patient

as I factor answer think of the I it product. would I an influencing that's so look been the no, if overall And at don't basis, performance a

I'm be out in impact there. the grow. time, But Atlanta competitors that the or in Chicago a itself. mean, I there. to some to market, that for I seeing over have other at would slow And not and growing. on presence seeing I'm surprised think I the how potential on them them they're yes, we But chain expect going there's market so market. overall so there's much a look specific we has market, definitely sure If And, a where specific then are market

think opportunity market. our grow I to biggest is the that's

Peter Holt

that they digital kind driving To answer there's on new our the of the question were new what's our the is that patients did the because changed when in more of that more becomes that question we by impact no that patient SEO patient algorithm the campaign is as important online marketing see your kind search. and driven of with really Google drive, majority

organic have we both search. Now paid and

seeing of paid Our a continued continues that's that stay close perform been to rate search We're strong. well. to

that a that But us. smaller us. for that's It's of organic patients. coming working new a portion online search those greater been are that's leads So will of portion with towards those

seeing so Google it their wasn't and first are that changes be made. last. we And that the the algorithm, changes made Google from This won't in recovery time

patient on as is making we digital only continually And and those can that that realm, critical terms more that changes in that in of just us we're which becoming you're more opportunity, focusing drive. for so specifically new maximize so

George Kelly

Thank you.

Operator

with Vendetti Please comes Maxim Anthony ahead. Group. Our from next question go

Anthony Vendetti

thanks. Yes,

I on on first the So patient the volumes. guess

something inflation a and of higher been coffee so, is rates? what's of have still just past And case that else Do up-to-date calls you of the I cup changed? I'm mentioned your Peter, likely if mentioned, treatment? forego well, joint months? think interest as coffee that with the because any that of you've forego Has or the feel patients how? You than the treatment So joint to their are in they this wondering, that's couple data with to and the transpiring last may cup more over

Peter Holt

COVID is, formed quick data relevant we've Anthony. were be in other we to challenges great conversation. And the a than sure sense gone dip question, the in never the the not which Well, period, through it's this recession that a XXXX, I'm the I in would of don't have company, a lot

I we a believe a have the as as overall the impact yet on traditional traditional as So time least organization our really it at of a high on out the I there rate, that recession economic a say this to yet. are could there sales. of of but is measurement well, And know, in give through one had we're would recession them that in what uncertainty, so terms we And you that. go data unemployment an people what of and lot there's imminent, a of being I not

about they're influencing [indiscernible] using in XXXX, increase had, we that decisions look into we're year that And again, talk coming on going uncertainty. okay, comp year had environment which X% whatever making an And we the last at, the what's in consumers. of clinic, sense this the gives kind we look if clinic we level, we so at can a our XXXX, that indication in the rate when of a services, overall was is of still for had as an QX, gives that's full comps. impact us of the what an Because X%

and right, other, and the that pain we the if what choices effective huge than is pain. and really is of that's more their it's concept tightening some people greater stay going that just these relief is I Pain make of success a is helping people than more of it's to drivers anecdotal of out driven. optional of take one this pain of they're we with weight their people think in and think, belief make about belt. And And issue, to not going choices that a you're a going start when But it it that data discretionary away. how again, income, manage

Anthony Vendetti

no, point. Yes, fair

Just measure I last things very digital question marketing closely. the initiatives. on know you

Which you same feel sites? What's of can get digital in one about And you measurement the spending dollars from and working spend this patient have as you're you type Just talk this like do interaction have transition to have marketing? another? do to on to where eventual better? conversion? and more you How you platforms environment,

Peter Holt

short marketing for issues word it's a about young would very around a is strategy of by marketing few and it ago, there's our a to answer years a yes, We effective TikTok us. evolving Really of great all kinds now seems it, the day. just billion be be talking wasn't question. think no, that but users digital And the even and whole is way

the so overall more that's putting before. I'd terms in than of And we're say dollars spin. where

not the doing sources But we're so much And that it's that see marketing having the those are where in spend. we into increasing reallocating you that see is what that a greater P&L we overall impact. is

point some more been frankly, allocating work more some that. increasing really we of that We've and we're and is didn't the meta that's the our on been spend are, quite we were. toward customers So was spin with of we've pulled doing seeing one some kind trends the being of back which one of that where seeing think at meta, positive our that really results of

in spend lot. we quarter maybe which going increase the YouTube to the an continue spend, to see we're so or a and meta forward on going next less And on two, do that

are been the you where idea I've evaluating those do never spend coming marketing when no of constantly in marketing it first into impact have would that's power from I the and we're but and have. my gotten discipline, so And this and what today leads career you

older and the And getting where radios that's and what time, impact. so more these very right that to essential We terms day digital automated And and Well, age, we're be say activities message, insurance. relates I hand we've measuring out and TV who's would A, our in time, person is patient marketing, whatever message not on sure at marketing say, of almost that customer, it can only B our right do a this making that I continually or is customer talked because okay, of their get period who's of platform of than in my this and at to can and a our I that about then change is this refining be return you, as do short project we're is message that everything measurable. I of are using effective important look fly the that do to the right its test using. whatever. to so the or and campaign, more X% get effectiveness more think the and on my hopefully looking message the before, that in Overarching

equally Z male age median and was millennials of The between We're female XX% patients almost and growing. Gen acquisition old. of XX.X years of X.X million XX%

when that to go chiropractor where to do they're and online. they're they're doing in are trying relief. out me They address looking for near home, search, pain to their I it, so figure putting from And alternative close pain

and And important, so of only are. that's why more our because where more I think continually be that's actually patients all will this

Anthony Vendetti

Thanks, Peter. queue. really hop great. in the I'll I that. back Okay, appreciate

Peter Holt

you Thank much. very Appreciate the sport.

Operator

Peter concludes Holt for This like any to I would closing to conference over our and session. question remarks. answer the turn

Peter Holt

Thank you.

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Operator

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

You now may disconnect.

The Joint Corp. (JYNT) 4 May 232023 Q1 Earnings call transcript