The Joint (US:JYNT)2025-03-13 21:00Financial 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]