Financial Data and Key Metrics Changes - System wide sales increased to $129.6 million, up 2.6% compared to Q2 2024 [10] - Comp sales for clinics open for at least 13 months rose by 1.4% for the quarter [10] - Revenue from continuing operations grew by 5% to $13.3 million [23] - Consolidated adjusted EBITDA reached $3.2 million, a 52% increase compared to Q2 2024 [10][25] - Unrestricted cash and equivalents as of June 30, 2025, were $30 million [11] Business Line Data and Key Metrics Changes - The company refranchised 37 clinics, reducing corporate clinics from 13% to 8% of the portfolio [12] - The refranchising included the sale of 31 corporate clinics in Arizona and New Mexico for $11.1 million [12] - The company opened 7 franchise clinics and closed 6 during the quarter [22] Market Data and Key Metrics Changes - The company noted macroeconomic headwinds affecting new patient counts, impacting overall performance [14] - The focus on pain relief messaging is expected to attract more patients, as 80% of new patients cite pain as their reason for visiting [15][56] Company Strategy and Development Direction - The company aims to become a pure play franchisor and is pursuing "The Joint 2.0" strategy to enhance profitability and patient experience [9] - Initiatives include a shift in marketing focus from general wellness to pain relief, enhancing digital marketing, and optimizing pricing strategies [9][15] - The company plans to explore additional revenue streams and new markets in the future [28][80] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softer sales trends and macroeconomic challenges but expressed confidence in addressing these through marketing and pricing strategies [27][39] - The company revised its 2025 guidance for system wide sales to a range of $530 million to $550 million, down from previous estimates [27] - Management emphasized the importance of brand awareness and targeted marketing to improve patient acquisition [15][56] Other Important Information - The company plans to continue its stock repurchase program, authorizing up to $5 million through June 2027 [26] - Two new directors were added to the board, enhancing governance and strategic oversight [30] Q&A Session Summary Question: Details on the lowered comp guide - Management noted recent trends showed softness mainly in new patient counts, despite improved conversion rates and consistent attrition [36][39] Question: Impact of pricing increases - Management confirmed ongoing dynamic revenue management strategies, including smaller, more frequent price increases to maintain affordability [43][73] Question: Breakdown of EBITDA guidance - Management typically does not split guidance between continuing and discontinued operations but noted ongoing efforts to manage G&A expenses [45][46] Question: Effect of recent clinic sales on back office expenses - Management indicated potential reductions in G&A expenses as clinics transition to franchise operations, with long-term savings expected [70][71] Question: Exploration of additional products and services - Management is committed to exploring incremental products and services related to pain management while maintaining operational simplicity [78][80]

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]