Financial Data and Key Metrics Changes - System wide sales for Q1 2025 were $132.6 million, up 5% compared to Q1 2024, indicating resilience in the current economic environment [10] - Revenue from continuing operations increased by 7% to $13.1 million compared to $12.2 million in Q1 2024 [29] - Adjusted EBITDA from continuing operations was $46,000, a significant decrease from $425,000 in Q1 2024 [10][29] - Net loss from continuing operations was $506,000, compared to a loss of $399,000 in Q1 2024 [30] Business Line Data and Key Metrics Changes - Comp sales for all clinics open for at least 13 months were up 3% for Q1 2025 and increased to 4% in March 2025 [10][24] - Comp sales for mature clinics (open for at least 48 months) were down 2% [24][82] - The company refranchised two corporate clinics and opened five franchise clinics during Q1 2025, with a total of 969 clinics, of which 847 (87%) are franchise clinics [25][26] Market Data and Key Metrics Changes - The company expects system wide sales for 2025 to be between $550 million and $570 million, compared to $530.3 million in 2024 [32] - Comp sales for clinics open for 13 months or more are expected to be in the mid-single digits for 2025 [32] Company Strategy and Development Direction - The company aims to become a pure play franchisor, with 93% of corporate clinics under Letters of Intent (LOIs) for refranchising [12][51] - The strategy includes dynamic revenue management, strengthening digital marketing, and enhancing patient-facing technology [12][19][22] - The company is focusing on pain-centric messaging to attract new patients, as 74% of new patients cite pain as a reason for visiting [35][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a dynamic consumer environment and is closely monitoring the situation while pushing ahead with the transition plan [11] - The company anticipates a transformative financial impact as clinics shift from company-owned to franchise clinics, leading to increased franchise royalties and fees [34] - Economic headwinds, inflation, and volatile consumer sentiment are expected to impact the beginning of 2025, but the company remains optimistic about future profitability [34] Other Important Information - The company has welcomed new executives to enhance legal strategy and operations, aiming to improve clinic quality and economics [41] - The Joint has been recognized as one of the fastest-growing franchises and ranked in the Franchise 500 [41] Q&A Session Summary Question: New patient ad metrics and retention trends - Management noted that new patient volumes have been affected by overall consumer sentiment, but retention rates remain stable [44][46] Question: Metrics on profitability and overhead reduction - Management is not ready to provide specific metrics but expects profitability to improve as G&A expenses are reduced [47][49] Question: Timeline for refranchising process completion - Management intends to exit 2025 as a pure play franchisor and hopes to accelerate the refranchising process [51] Question: Comp sales performance and dynamics - Management did not disclose April comp sales but confirmed a return to 4% in March [57] - Franchise clinic comp performance mirrors consolidated comp, with corporate clinic comp trailing slightly [59] Question: Dynamic pricing opportunities - Management is exploring various pricing models, with potential for double-digit impacts on system wide sales [61] Question: Selling and marketing expenses normalization - Management expects selling and marketing expenses to normalize by Q3 2025 after a dual agency transition [68] Question: Strategies for mature clinics to improve comp sales - Management is implementing operational strategies and marketing tactics aimed at strengthening existing clinics [83][85]

Financial Data and Key Metrics Changes - System wide sales increased to $530.3 million, up 9% in Q4 2024 compared to 8% in Q3 2024 [15] - Revenue for continuing operations increased 14% in Q4 2024, up from 10% in Q3 2024 [16] - Consolidated adjusted EBITDA was $3.3 million for Q4 2024 and $11.4 million for the full year 2024 [17][34] Business Line Data and Key Metrics Changes - System wide comp sales for all clinics opened for thirteen months were 6% in Q4 2024, up from 4% in Q3 2024 [15] - System wide comp sales for mature clinics opened for 48 months were modestly positive for Q4 2024, improving from negative 2% in Q3 2024 [15][26] - Revenue from franchise operations reached $14.4 million in Q4 2024, compared to $12.7 million in Q4 2023, reflecting a 14% increase [29] Market Data and Key Metrics Changes - The company served approximately 950,000 new patients in 2024, with 36% of them being new to chiropractic care [10][25] - The annual spending on chiropractic care is estimated at $20.6 billion, with out-of-pocket spending increasing from 37% to 42% [37] Company Strategy and Development Direction - The company aims to strengthen its position as a leading chiropractic care provider and become a pure play franchisor [9][12] - Plans include refranchising to reduce overhead and increase operating leverage, with a focus on dynamic revenue management and enhancing digital marketing [18][21] - The company is exploring new revenue streams, including B2B opportunities and additional clinical services [19][86] Management Comments on Operating Environment and Future Outlook - Management noted that consumer behavior is being affected by stubborn inflation and economic uncertainty, impacting patient demographics [47][48] - The company expects 2025 to be a transition year as it shifts from corporate-owned clinics to a franchise model, which will enhance profitability [35][90] - Management is focused on reducing G&A expenses to improve the bottom line significantly in the coming years [29][92] Other Important Information - The company opened 57 franchise clinics in 2024 and closed 18, resulting in a total of 967 clinics, with 87% being franchise clinics [27] - The company has received accolades, including being recognized as number 38 on the Fast and Serious 2025 list of the smartest growing franchises [44] Q&A Session Summary Question: Comments on potentially slower consumer behavior in Q1 metrics - Management acknowledged signs of consumer response to inflation and economic uncertainty, particularly affecting their target demographic [47][48] Question: Retention rates and trends - Retention rates remained stable, with strong conversion rates for new patients and slight upticks in attrition typical for January [51][53] Question: Status of refranchising efforts - The company has 125 corporate clinics, with the majority under LOI negotiations, aiming to complete refranchising in the first half of the year [55][80] Question: Trends in same store sales - Year-to-date trends are consistent with Q4 figures, with expectations for Q1 to align with previous trends [60][61] Question: Valuation of LOIs for refranchising - Management indicated that bidders are looking at a multiple of EBITDA for the corporate clinics, with ongoing negotiations [62][64] Question: Customer acquisition costs and revenue growth - Increased marketing spend is aimed at driving new patient acquisition, with a focus on optimizing customer acquisition costs [66][68] Question: Pricing strategy and legacy customer rates - The last wholesale price increase occurred in March 2022, with 80% of active members on standard rates and 20% on legacy rates [72][74] Question: Timing for new services and retail products - Exploration of new services and retail products is ongoing, with a focus on strengthening core operations before launching new initiatives [86]