Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Joint Corp (JYNT, Financial) reported an 8% increase in systemwide sales for all clinics open for any amount of time, reaching $129.3 million.
- Franchise operations revenue increased by 9%, contributing $12.7 million, reflecting the increased number of clinics in operation.
- The company opened 14 franchise clinics and refranchised one clinic in Q3 2024, with a total clinic count reaching 963.
- The initial visit bookings platform rollout to 500 clinics showed strong results, increasing new patient digital lead conversion from 46% in July to 49% in September.
- The Joint Corp (JYNT) celebrated its 25th anniversary and was recognized in the Franchise Times' TOP200 list, moving up 18 spots to position 150.
Negative Points
- The company experienced a net loss of $3.2 million in Q3 2024, including a $3.8 million loss on disposition or impairment.
- Systemwide comp sales for mature clinics opened 48 months or more decreased by 2%, indicating challenges in maintaining growth in established locations.
- The refranchising strategy impacted franchise license sales, with only seven licenses sold in Q3 2024, the same as the previous quarter.
- The company adjusted its guidance due to ongoing consumer headwinds, expecting systemwide sales between $525 and $535 million, reflecting a cautious outlook.
- Marketing expenses increased by 11% year over year, reflecting higher advertising spend, which may pressure profitability if not matched by revenue growth.
Q & A Highlights
Q: Can you elaborate on the pricing changes you mentioned and their expected impact?
A: Sanjiv Razdan, President and CEO, explained that the pricing changes are focused on the walk-in prices, which will not only provide incremental revenue but also make recurring revenue packages more attractive to patients. He is also evaluating all pricing levers to maximize revenue while maintaining affordability.
Q: What specific consumer headwinds have you observed that led to the guidance revision in comp growth?
A: Jake Singleton, CFO, noted a slight cooling in comps within the quarter due to economic headwinds and the ongoing election period. They launched a promotion in October to counteract these effects and adjusted guidance to reflect a more prudent outlook.
Q: Can you provide an update on the refranchising efforts and any challenges faced?
A: Sanjiv Razdan mentioned that he is still familiarizing himself with the refranchising process and will provide more specific updates later. Jake Singleton added that they received several indications of interest and are conducting management presentations, with some delays due to the CEO transition.
Q: What are your primary focus areas during your first 100 days as CEO?
A: Sanjiv Razdan emphasized elevating patient care, strengthening clinic economics, driving innovation, and building culture and capability as his main focus areas during the initial period.
Q: Are there plans to add new services or expand the platform in clinics?
A: Sanjiv Razdan acknowledged the potential for leveraging core infrastructure to explore adjacencies that could add shareholder value. He is currently evaluating these opportunities and will provide more insights in future discussions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
