Good day ladies and gentlemen, and thank you standing by. Welcome to The Joint Corporation First Quarter 2017 Results Conference Call. [Operator Instructions] As reminder, this conference is being recorded. Now it's my pleasure to welcome and turn the call to Mr. Peter Vozzo, Investor Relations for The Joint Corp. You may begin.

Thank you, Carmen. Good afternoon, everyone. Today after the close of the market The Joint Corp released financial results for quarter ended March 31, 2017. Before we begin, if you do not already have a copy of the press release announcing these financial results, it can be found in the Investor Relations section of our website at www.thejoint.com. Please be advised that today's discussion includes forward-looking statements, including predictions, expectations, estimates, and other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business which could affect these forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause actual results to differ materially from the statements we make today. As a result, we caution you against placing undue reliance on these forward-looking statements and would encourage you to review our filings with the SEC for a discussion of these factors and other risks that may affect our future results or the market price of our stock. Finally, we are not obligating ourselves to revise our results or publicly release any updates to these forward-looking statements in light of new information or future events. With that, I will turn the call over to Peter Holt, Chief Executive Officer.

Thank you Peter, and thanks everyone for joining us on today's call to discuss our 2017 first quarter results. Joining me to present is John Meloun, our Chief Financial Officer. I will provide the financial and operational highlights for the quarter and then provide an overview of clinical operational improvements going forward and then John will discuss our financial results in more detail. For the benefit of those of you who are listening to our quarterly call for the first time, our purpose of The Joint is to improve the quality of life for the patients we serve. We do that through our network of over 370 retail clinics utilizing over 800 fully licensed chiropractic doctors who performed more than 4 million chiropractic adjustments last year. Our doctors provide patient care focused on pain relief and ongoing wellness to promote healthy active lifestyles. As a retail concept, one of the most important measures of health of the business is systemwide comp sales and overall revenue growth. Comp sales simply means comparing retail sales to the same clinic or clinics, to the same period one year earlier to measure whether sales are expanding or contracting. In the first quarter of 2017 our systemwide comp sales were up 19% and our revenue of $5.7 million was up 33% compared to the same period last year. Comp sales includes only those sales from clinics that have been opened for at least 13 full months and excludes any clinics that have been closed. Additionally, we'll continue to make progress toward profitability demonstrated by the fact that our adjusted EBITDA continues to improve year-over-year. Adjusted EBITDA for the first quarter of 2017 was a loss of $0.5 million, a meaningful improvement compared to the loss of $2.7 million in the same period last year. During…

Thanks Peter. We have provided detail on our financial performance for the quarter ended March 31, 2017 in the press release issued earlier today. I will now take a few moments and discuss some of the highlights broken down by the two operating segments, Corporate Clinics, and Franchise Operations, as well as our unallocated corporate overhead. This segment data will be available in our 10-Q which we'll file tomorrow May 12. Revenues increased 33% or $1.4 million to $5.7 million compared to the same period last year. $0.8 million of the increase is from the corporate clinic segment and $0.6 million from our franchise operations. Revenue growth in the corporate clinic segment is attributed to increasing sales in our existing clinic portfolio and from the six clinics that were acquired since the end of the first quarter of 2016. Franchise segment revenue increased due to higher sales from both existing clinics and from a net 49 clinics added since the end of the first quarter of 2016. The improvements in both our corporate clinic segment and franchise segment revenues are driven by strong comp sales that our clinics continue to experience as they mature. With clinics in the first year of comp sales, that is those in the 13 to 24 month category growing at a fastest rate and notably those clinics over four years old still growing at a rate of 11% in the first quarter all on a very stable cost structure. Cost of revenues of $0.7 million in the first quarter of 2017 were virtually flat compared to the first quarter of last year, as lower regional developer commissions from fewer clinic openings were offset by higher regional developer royalties in the first quarter of 2017. Selling and marketing expenses increased by 30% or $0.2 million to…

Thank you, John. We remain on track to achieve our 2017 financial operational goals and our first quarter 2017 results show a continuation of our overall positive growth and operating strategy. This progress would not be possible without the commitment and perseverance of our franchise community and employees. And I want to thank each and every one of them for their efforts. We indeed are very passionate about our business and excited about the opportunities ahead. And with those comments, we'd like to open the floor to questions.

[Operator Instructions] And our first question is from the line of Mark Smith with Feltl and Company. Your line is now open.

First off, just a couple of housekeeping things. Was the impairment charge the 418,000, was that all due to clinics that were previously sold or closed or was there anything else in that line?

The impairment charge was related to all clinics that were closed and the leases for those clinics.

And do we expect anything else going forward from those closures as far as impairment charges?

At this point in time we have no expectations of additional charges.

Okay. Then just one more housekeeping. When would you expect to get some maybe [indiscernible] with the pretax loss or do you expect the tax kind of which you report into to stay at this current rate?

Expectations of that will stay at the current rate.

Okay, perfect. And then more big picture - it’s good to see you on track to hit the opening guidance with franchisees, a couple of questions on that. First, how do you feel your relationship with your franchisees is today, and then secondly, anything that you can speak to as far as the health of the franchisees and the franchise system?

Sure, Mark, it's Peter. First of all I would say that I think our relationships with the franchisees are continuing to improve and that - quite frankly was one of the first reasons that I was brought in almost a year ago is to really work with our franchise community to improve those relationships which quite frankly had gone [frail] [ph]. And my experience is that with any franchise system, the management of that relationship between the franchisee and the franchisor is absolutely the most important responsibility that we have as a franchisor. And it’s not something that you have a national conference or you have a good speech and that they're solved, it’s something that you work on every day to improve. And when you have that trust and that relationship with those franchise community, it is remarkable what can be unleashed in that franchise system. And my view is that we have made great progress in improving relationships with our franchise community and that we're not done yet and we will continue to do so. Related to your relationship with your franchise community, its profitability, unit economics, I mean as a franchisee my experience is even if they may have a kind of troubled relationship with their franchisor if their business is doing well and they’re profitable, it’s a lot easier to deal with those challenges than that we’re dealing with other issues. And certainly in the time that I've been with this company and looking at fundamental unit economics of this business model is that they’re very, very strong for that small box retail environment. And when I say small box retail what I’m talking about is that 1,000 square feet in line anchored by a supermarket where most of our clinics are located and that I think that we have some very, very strong unit economics that drive our business. That doesn't mean that we can’t continue to improve them, to increase the time to breakeven in a new clinic that’s opening, but it’s a strong base to work from.

And then last one from me, I think last quarter you guy spoke a little bit to this but do you still feel like you can get to positive EBITDA perhaps here in the first half or and maybe in third quarter?

Well as I said in my comments, we are working as aggressively as possible to get there and with changes in Chicago by transferring six of the franchise clinics to our top franchisees, closing the five and three in New York that diminished our cash usage and absolutely increased the timeframe to profitability and that we're working very aggressively to get there.

[Operator Instructions] And our next question is from the line of Ken Bachman, sorry. And I'm not showing any further questions in the queue.

Okay. Well I thank all of you for participating in today's call and for your questions. We look forward to keeping you informed and update on our progress. Have a great day. Thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program and you may all disconnect. Have a wonderful day.