Core Viewpoint - The Joint Corp. has announced a stock repurchase program of up to $5 million, reflecting the board's confidence in the company's long-term strategy and projected cash flow generation [1][2]. Company Overview - The Joint Corp. is the largest provider of chiropractic care in the U.S. through The Joint Chiropractic network, with over 950 locations and more than 14 million patient visits annually [3]. - The company operates a retail healthcare business model that eliminates the need for insurance, making chiropractic care more accessible and affordable [3]. - The Joint Corp. has received multiple accolades, including being named "No. 1 in Chiropractic Services" by Entrepreneur and consistently ranking in Franchise Times' annual lists [3]. Business Structure - The Joint Corp. functions as both a franchisor and operator of clinics in various states, providing management services to affiliated chiropractic practices [4]. Stock Repurchase Program Details - The stock repurchase program is set to begin in August 2025 and will have a termination date of June 3, 2027. The program allows for repurchases through various means, subject to market conditions [2]. - The finance committee of the board will determine the timing, number, and amount of repurchases at its discretion [2].

Core Insights - The Joint Corp. reported a 7% increase in revenue from continuing operations, reaching $13.1 million in Q1 2025 compared to $12.2 million in Q1 2024, driven by a greater number of franchised clinics [7][8] - System-wide sales increased by 5% to $132.6 million, indicating economic resilience [8] - The company experienced a net loss from continuing operations of $506,000, compared to a loss of $399,000 in the same quarter of the previous year [11] Financial Performance - Adjusted EBITDA for continuing operations was $46,394, down from $424,708 in Q1 2024 [12][37] - Selling and marketing expenses rose to $3.5 million from $2.2 million in Q1 2024, reflecting the costs associated with transitioning to a new marketing team [8][10] - The cost of revenue increased to $3.0 million from $2.7 million, attributed to higher regional developer royalties and commissions [7] Operational Highlights - The company sold 9 franchise licenses in Q1 2025, a decrease from 15 in Q1 2024, due to the refranchising process [9] - Five new franchised clinics were opened, while two corporate clinics were refranchised and one was closed, bringing the total clinic count to 969 [9] - The company aims to enhance its digital marketing and patient experience to drive growth in new clinic openings and system-wide sales [5] Guidance and Future Outlook - The company expects system-wide sales to be between $550 million and $570 million for 2025, compared to $530.3 million in 2024 [19] - Comp sales for clinics open for 13 months or more are projected to be in the mid-single digits, up from 4% in 2024 [19] - Consolidated Adjusted EBITDA is anticipated to be between $10.0 million and $11.5 million, compared to $11.4 million in 2024 [19]

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]