The Joint (US:JYNT)2024-03-08 03:17Financial Data and Key Metrics Changes - Revenue increased by 16% compared to 2022, reaching $30.6 million in Q4 2023, up $2.9 million or 11% year-over-year [8][44] - Adjusted EBITDA for 2023 was $12.2 million, up 6% from the previous year [8][76] - The company reported a net loss of $11.0 million or $0.75 per share for Q4 2023, compared to a net income of $763,000 or $0.05 per diluted share in Q4 2022 [20][76] - Unrestricted cash at December 31, 2023, was $18.2 million, compared to $9.7 million at the end of 2022 [8][48] Business Line Data and Key Metrics Changes - System-wide sales for all clinics increased by 12% to $488 million in 2023, with same-store sales for clinics open 13 months or more increasing by 4% [34][21] - The company opened 114 clinics in 2023, consisting of 104 franchise and 10 greenfield clinics, compared to 137 clinics opened in 2022 [35] - Monthly memberships contributed 85% of system-wide gross sales, up from 84% in 2022 [7] Market Data and Key Metrics Changes - System-wide sales for all clinics opened for any amount of time in Q4 2023 increased to $133.1 million, up 11% [44] - System-wide comp sales for all clinics open 13 months increased by 5% in Q4 2023 [44] - System-wide comp sales for mature clinics open 48 months or more decreased by 1% [21][44] Company Strategy and Development Direction - The company is focusing on a refranchising strategy to shift the clinic portfolio mix, with an expectation that the majority of corporate clinics will be refranchised [10][39] - Marketing efforts are being enhanced to drive new patient counts and improve existing patient engagement, with a focus on local store marketing [14][42] - The company aims to improve unit economics and increase productivity at both the clinic and corporate levels [52] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about seeing a turn in new patient counts in early 2024, indicating potential improvement in patient engagement [58] - The company acknowledged challenges in attracting new patients and emphasized the importance of retaining existing patients [62] - Management expects to see significant reductions in general and administrative expenses as the refranchising strategy progresses [78] Other Important Information - The company recorded a non-cash valuation allowance of $10.8 million against deferred tax assets due to uncertainties related to refranchising transactions [46] - The Joint was recognized as the number one franchise in chiropractic services by Entrepreneur Magazine [81] Q&A Session Summary Question: Can you provide insight into the refranchising process and interest levels? - Management clarified that broadening the scope of potential buyers is not due to lower interest but to ensure clinics are placed in capable hands [55][82] Question: What are the expectations for same-store sales growth moving forward? - Management noted that same-store sales for mature clinics have seen a slight decline, emphasizing the need for renewed marketing efforts [60][62] Question: How many new franchise licenses are expected to be sold this year? - Management refrained from providing specific guidance but noted that economic conditions have impacted franchise sales [66][68] Question: What are the plans for employee retention in light of industry challenges? - Management highlighted efforts to create an attractive work environment for doctors and maintain strong recruitment channels [100] Question: What is the expected portfolio mix after the refranchising initiative? - Management indicated that the majority of corporate clinics will be refranchised, significantly reducing the percentage of company-owned clinics [102]