Release Date: August 08, 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 a 3% increase in revenue and a 2% growth in same-store comps for Q2 2024 compared to the prior year period.
- The company is leveraging its network size to improve clinic profitability through innovations in operations, IT, and marketing.
- The Joint Corp (JYNT) has introduced a new initial visit booking system, which has been positively received by patients and is expected to enhance patient loyalty.
- The company has successfully refranchised two clinics and sold two others, generating net proceeds of $224,000.
- The Joint Corp (JYNT) is actively working on refranchising efforts with Capstone Partners, aiming to select effective partners for its clinics.
Negative Points
- The refranchising process is taking longer than expected, with fewer transactions completed than anticipated.
- Mature clinics saw a 4% decrease in system-wide comp sales, indicating challenges in maintaining growth in established locations.
- The company reported a net loss of $3.6 million for Q2 2024, including significant litigation expenses and losses on disposition or impairment.
- Franchise license sales decreased significantly, with only seven licenses sold in Q2 2024 compared to 21 in the same period last year.
- The Joint Corp (JYNT) faces ongoing legal and professional service expenses related to its refranchising efforts, impacting overall profitability.
Q & A Highlights
Q: Can you provide an update on the refranchising process and how conversations are progressing?
A: Peter Holt, President and CEO, explained that the refranchising process has taken longer than expected. They are engaging with existing franchisees and multi-unit operators interested in larger clusters of clinics. The company is aggressively marketing these opportunities and expects significant progress, although some transactions may extend into 2025.
Q: Can you elaborate on the innovations in clinic build-out and their impact on costs and opening times?
A: Peter Holt noted that they have streamlined the build-out process by making it modular, reducing shipping costs, and simplifying installation. This approach is expected to lower costs and shorten the time required to open new clinics, although specific numbers were not provided.
Q: What are the expectations for comp sales improvements in the second half of the year?
A: Jake Singleton, CFO, mentioned that July started strong with over 5% comp growth. The company expects easier comps in Q3 and strong performance from planned promotions in Q4. They are also evaluating pricing strategies to support comp growth.
Q: Are there plans to stabilize comp sales for mature clinics, and how are you addressing new patient traffic?
A: Peter Holt stated that they are implementing initial visit bookings and automated marketing to attract new and lapsed patients. These strategies are expected to help mature clinics by leveraging their existing patient base and improving new patient traffic.
Q: How are you managing sales and marketing spend amid rising advertising costs due to the upcoming presidential election?
A: Jake Singleton explained that they focus on digital channels and referral traffic, which are less affected by advertising price fluctuations. They also utilize new channels like TikTok and influencer marketing to reach potential patients without overspending.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
