The Joint Corp. (NASDAQ:JYNT) Q4 2022 Earnings Call Transcript

Jake Singleton: What I would say is that the goal is still there. If you just look at where we are at the end of the year with the 838 clinics and that the guidance we just provided in terms of greenfield and corporate, our, our, our franchise units is suggest that we are going to be a little short. And we said all along is, while that’s an important goal, it’s not a goal that we would compromise the quality of the franchisee or the quality of the site just to hit a number. Obviously in 2022, we had some, some of the headwinds that that slowed down a little bit. Some of the franchise sales for example. But we are anticipating that we will still be able to achieve that goal, but more, more likely it’s going to be not at the end of 2023, but closer to, some early 24.

Anthony Vendetti: Okay. That’s helpful. And then is there anything on the macro, is there anything on the macro economic landscape or any other headwinds are that you see or that you’re facing in terms of opening up these clinics?

Jake Singleton: Well, I would say nothing that’s new. That what we’re seeing is with, landlords that they seem to be slower in, in, in negotiating and finalizing leases. Even though I don’t know we are in this post-COVID environment, we are still experiencing slowdowns with getting the permitting process. We have a really simple build out. So, we are not hugely impacted by supply chain issues, but from time to time there’s issues around that. But this is, none of that is new in 20 that I’m anticipating any different in ’23 that we experienced in 2022.

Operator: Next question will be from George Kelly Roth MKM. Please go ahead.

George Kelly: Hi everybody. Thanks for taking my questions. So first one I’m kind of confused. So throughout 2022 there was very steady EBITDA margin expansion ending, I think it was 14% in Q4. And if I just play through your guidance, it looks like you’re calling for a step down year-over-year and sequentially it would reflect a pretty steep step down. So just curious what’s changed and are you just seeing a lot of pressure in 1Q or what’s led to that?

Jake Singleton: Yeah, I wouldn’t categorize it as pressure in the first quarter. I think a lot of the guide reflects some of the uncertainties that are out there. So as we look at the potential impacts the top line performance are continued investment in our people. Whether that be our doctors or our corporate support staff it’s a tight labor market across the board. And we’re making those investments in people to make sure that we’re growing in the right way. And so I think all of those things are kind of factored into the guide. I would really more categorize it as holding steady in 2022, you saw that significant compression related to the investing cycle when you do 36 new corporate clinics and their drag on the consolidated performance you’re going to see that overall step back.

I think I would categorize ’23 as more of a steadying of that. We are moderating the pace of those green fields and then in doing so, that should allow for that margin expansion as those units continue to grow and mature.

George Kelly: Okay. And then second question I don’t know if you’re going to want to say much, but can you just high level say anything about your expectations for comp growth in ’23 and what’s, what do you bake into your, your guidance? What helps form your full year revenue guidance?