The Joint Corp.

Please note this event is being recorded. I would now like to turn the conference over to David Barnard of Alliance Advisors Investor Relations. Please go ahead.

Thank you, Drew. Good afternoon, everyone. Again, this is David Barnard with Alliance Advisors Investor Relations. Joining us on the call today are President and CEO Sanjeev Razan and CFO Jake Singleton. Please note we are using a slide presentation that can be found at https backslash ir.thejoint.com under the events section. Today, after the close of the market, the Joint Corp issued its results for the quarter ended March 31st, 2025. If you do not already have a copy of this press release, it can be found in the investor relations section of the company's website. As provided on slide two, Please be advised that today's discussion includes forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be considered forward-looking statements. Although the company believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, it can make no assurances that such expectations or assumptions will prove to have been correct. Actual results may differ materially from those expressed or implied in forward-looking statements due to various risks and uncertainties. As a result, we caution you against placing undue reliance on these forward-looking statements. For discussion of the risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements, please review the risk factors detailed in the company's reports on Forms 10-K and 10-Q. as well as other reports that the company files from time to time with the SEC. Finally, any forward-looking statements included in this earnings call are made only as of the date of this call, and we do not undertake any obligation to revise our results or publicly release any updates to these forward-looking statements in light of new information or future events. The results of operations of the corporate clients' business segment have been classified as discontinued operations for all periods discussed. and the following comments represent continuing operations unless otherwise stated. Management uses EBITDA and adjusted EBITDA, which are non-financial measures. These are presented because they are important measures used by management to assess financial performance. Management believes they provide a more transparent view of the company's underlying operating performance and operating trends than gap measures alone. Reconciliation of net income to EBITDA and adjusted EBITDA is presented in the press release. The company defines EBITDA as net income or loss before net interest, tax expense, depreciation, and amortization expenses. The company defines adjusted EBITDA as EBITDA before acquisition-related expenses, which includes contract termination costs associated with reacquired regional developer rights, stock-based compensation expense, bargain purchase gain, net gain or loss on disposition or impairments, costs related to restatement filings, restructuring costs, and litigation expenses, consisting of legal and related fees for specific proceedings that may arise outside of the ordinary course of our business. Management also includes commonly discussed performance metrics. System-wide sales include revenues at all clinics, whether operated by the company or by franchisees. While franchised sales are not recorded as revenues by the company, management believes the information is important in understanding the company's financial performance because these sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base. Comp sales include the revenues from both company-owned or managed clinics and franchise clinics that in each case have been open for at least 13 full months and exclude any clinics that have closed. Turning to slide three, It's my pleasure to turn the call over to Sanjeev Razdan.

Thank you, David, and I welcome everyone to the call. Turning to slide four, I'm excited to speak with you today to review progress we are making. For those new to the call, our mission is to improve the quality of life through routine and affordable chiropractic care. After we execute our strategy to become a pure play franchisor, grow sales, reduce overhead, and improve profitability, we will strive for our new big, bold vision to become America's most accessible health and wellness services company. As part of our transformation journey, in April, we hosted an incredibly productive franchisee spring convention during which we discussed next steps and continued to improve franchise relationships. Before I elaborate, I'll summarize our Q1 2025 financial results compared to Q1 2024. System-wide sales were $132.6 million, up 5%, demonstrating resilience in this economic environment. Comp sales for all clinics open 13 months were 3% for the quarter and 4% in March. Revenue from continuing operations increased 7%. Adjusted EBITDA from continuing operations was $46,000 compared to $425,000 in quarter one, 2024. Jake will provide greater detail in a moment. Turning to slide five, I want to acknowledge the dynamic consumer environment that we're in. While we monitor the situation closely, we are pushing ahead with our transition plan. As unveiled on our March call, we have constructed a multi-year phased approach. The changes we're making increase the potency and flexibility of our model. To become a pure play franchisor, we are re-franchising. We have signed LOIs for 93% of our corporate clinics and we are well into the due diligence phase for many. When we reach binding asset purchase agreements, we intend to make public announcements. In the Joint 2.0, we are focused on strengthening our core, reigniting growth, and improving clinic and company-level profitability. We will initiate dynamic revenue management, strengthen our digital marketing and promotional calendar, and upgrade our patient-facing technology. Turning to slide six, the Franchisee Spring Convention was aptly named the Pulse Summit. Since I joined, we have been taking a pulse check of the business. At the summit, we reviewed the joint's pulse with our franchisees, regional developers, and our employees. We seized the opportunity to reinvigorate, to create momentum through collaboration, to ensure we're working as one team and to identify ways to become stronger, bigger, and faster so we can care for more patients more effectively. And we must always remember that when patients stay at the center of our focus, the business grows, profitability follows, and everyone wins. And to do that well, we know we have to level up across the board with a stronger brand, sharper marketing, better operations, and higher impact training. During the summit, our team and franchisees signed a franchise partnership pact. That is a shared promise between franchisor and franchisee to lead with clarity, act with integrity, and stay true to the values that define the joint. During the summit, we discussed near and longer-term initiatives, including marketing execution with our new marketing agency and strategies to increase new patient leads, our plan to regain patient momentum, and our new brand architecture. Operational execution with our priority focus on excellent patient experiences and clinic economics, our new clinic launch best practices, and toolkit updates and our new clinic report cards that provide qualitative data and diagnostics on patient satisfaction, operational efficiency, and sales. As well as training, we are introducing the Joint Chiropractic Elite Academies. Think of it as our version of the joint university. We have planned the inaugural academy for doctors of chiropractic to be launched in 2025. Events like the summit enable us to synchronize with our franchisees, improve relationships with them, and strengthen our operating culture. Turning to slide seven, let's review dynamic revenue management. We must be intentional and balanced when reviewing price increases. We promise affordability as part of our mission, and it's a key determination among our patient demographic. since our last meaningful price adjustment in March 2022, labor costs have increased significantly, squeezing clinic-level margins. Working to alleviate the pinch, we have begun testing elasticity for different prices for various packages and wellness plans. We are reviewing the entire model, including legacy plans. Nothing is sacred. Our goal is to create an innovative, flexible pricing model that more accurately aligns with treatment plans and patient usage during all phases of care, from acute to maintenance. Options include premium memberships with more visits in their first month of care, new price options for our wellness plans, and increases for our packages. For example, for patients in acute pain that need to be adjusted more than one time per week, For their treatment plan, we will begin offering prepaid visit pricing in the second half of this year. Turning to slide eight, let's review strengthening our digital marketing. We are working with our new marketing agency to drive brand awareness and consideration, as well as improve our SEO performance with enhanced content and technical strategies. Our new content strategy aims to increase relevance and foster trust. Our new user-generated content is focused on building authority and community validation. The early tests are delivering encouraging results. Turning to slide nine, let's review strengthening our promotional calendar. In February, we implemented our new Step Into Wellness promo to encourage target existing patients to buy into wellness plans. We offered them the first month at $45 and then the rest of the membership at the standard rate. Although this impacted revenue in February, we increased active membership conversion significantly during the month. The Joint's Buy Five, Get One wellness promo begins on Monday, June 3rd and will provide patients with an affordable way to commit to their treatment plan and stay on the path to good health. This has been a very successful promo in the past, and I look forward to reviewing the results with you next quarter. Turning to slide 10, let's review patient-facing technology. We polled patients, wellness coordinators, and doctors of chiropractic to ensure the most essential elements for the users are included in our mobile app. Features include Clinic Finder, which doctor is in clinic, in clinic check-in, and push notifications. Ultimately, all will benefit when we communicate to patients directly using in-app push notifications. For example, we can remind them that they have X number of adjustments remaining for the month, which would strengthen usage and engagement. Regarding the app, our beta is going well, and we expect to be in the app stores by June With that, I'll turn the call to Jake.