Earnings Call Transcript - JYNT Q2 2024

David Barnard, Investor Relations

Thank you, Nick. Good afternoon, everyone. Again, this is David Barnard of Investor Relations. Joining us on the call today are President and CEO, Peter Holt, and CFO, Jake Singleton. Please note we are using a slide presentation that can be found at https://ir.thejoint.com under the Events section. Today, after the close of market, the Joint Corporation issued its results for the quarter ended June 30th, 2024. If you haven't already have a copy of the 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 a 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 Form 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 the results or publicly release any updates to these forward-looking statements in light of new information or future events. Management uses EBITDA and adjusted EBITDA, which are non-GAAP 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 trends than GAAP 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, barge and purchase gain, net gain or loss on disposition or impairment, costs related to restatement filings, restructuring costs, litigation expenses, consisting of legal and related fees for specific proceedings that arise outside of the company's ordinary course of business and other income related to the employee retention credits. Management also includes commonly discussed performance metrics. System-wide sales include revenues at all clinics, whether operated by the company or by franchisees. While franchise 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. System-wide comp sales include the revenues from both company-owned or managed clinics and franchise clinics that in each case have been open at least 13 full months and exclude any clinics that have closed. Turning to slide three, it is my pleasure to turn the call over to Peter Holt.

Peter Holt, President and CEO

Thank you, David, and I welcome everybody to the call. The Joint continues to revolutionize access to chiropractic care. Our nationwide network of 960 clinics, 86% of which are franchised, provides affordable concierge-style membership-based services in convenient retail settings. During Q2 2024, we furthered our strategies to improve unit economics and to refranchise the vast majority of our corporate clinics. We also continued to deliver growth even amid the ongoing macroeconomic pressure. Q2 2024 revenue increased 3% and same-store comps grew 2% compared to the prior year period. Q2 adjusted EBITDA was $2.1 million and in a moment, Jake will provide greater detail on our financials. To increase clinic profitability, we're embracing new innovations in operations, IT, and marketing that leverage the size of our network on national and local levels. Turning to slide four, I'll review the recent activity. As we approach having 1,000 clinics, we increased our purchasing power, which we are leveraging to the benefit of our clinics. For example, our unique economics task force created a clinic-in-a-box to optimize the time and cost of our new openings. We redesigned interiors with lower-cost materials and sizes that can be shipped more economically. Now our vendor can produce and ship all the elements to open a clinic. We expect to both shorten the time to opening and significantly lower the build-out cost. In IT, we're supporting more financial tools that help franchisees automate and manage their businesses. Our recent patient innovations include adjusting elements of our business model to better align with current consumer preferences. An important part of growing patient loyalty is creating a frictionless experience. While our patients love the convenience of our model, we've learned a subset of patients would like to schedule their first visit to ensure that they can get in, out, and on their way. To answer this need, and after testing earlier this year, we launched the initial visit booking system-wide last month. Patients who booked their first visit indicated that booking was both a positive experience and important to their choosing The Joint. We've extensively tested our enhanced digital intake forms, now enabling new patients to use their own mobile devices when completing their intake form, with a plan to roll this out system-wide later this month. Our trials have proven this process is easier and less time-consuming for patients as well as our wellness coordinators. We're aggressively developing our mobile check-in, and in Q4, we'll beta test the app. Additionally, we'll be evaluating different membership options and policies. We're assessing pricing and discount strategies, such as our walk-in rate, changes to hours and days of operation, as well as our legacy pricing policy. Turning to slide five, I'll review our refranchised goals and efforts. As discussed previously, we're focused on driving long-term growth by selecting the most effective partners for our refranchised clinics. In May, we engaged Capstone Partners, a full-service middle-market investment bank with specialization in refranchising, and recently finalized the confidential information memorandum package for marketing clusters of our clinics. In the meantime, we've received considerable interest in the number of markets. Currently, two transactions with nine clinics have been approved and are moving through the letter of intent process. In Savannah and Kansas City, these transactions will address two smaller clusters that we can tie to existing franchisees. Also, based on earlier conversations during the quarter, we sold two clinics in California and Arizona to existing franchisees for net proceeds of $224,000. We're well on our way to generating capital to be reinvested in brand marketing, RD territory acquisitions, and/or stock purchases, among other options. Turning to slide six, I'll review our marketing efforts. In the last nine months, we've conducted significant research and formulated programs to amplify patient acquisition and retention, engage new patients, increase referrals, and improve conversion and nutrition. We realized we need to optimize our marketing investment to better support the marketing funnel and shift resources from lead generation toward consideration and awareness campaigns. This is an important adjustment to our marketing strategy as 49% of adults in the United States have never been to a chiropractor, even though 80% have back pain at some point in their lives. Similarly, while The Joint has 1.67 million active patients, which represents less than 1% of adults in the United States, we're constantly working to educate more people about the efficacy of chiropractic care. Currently, we have a first-mover advantage and our goal is to make The Joint synonymous with chiropractic, just as tissues are with clinics, as we focus on building our brand strategy that defines and leverages our unique strengths to grow clinic profitability and patient loyalty. Additionally, we know an important part of driving patient loyalty is affordability. In June, we began offering our five-plus-one summer sale, giving our patients access to a free month of care when they purchased five months in advance. This promotion exceeded our expectations. What makes these results even more impressive is that this year the sale was not valid for legacy-priced memberships. This exclusion is part of our ongoing commitment to drive clinic-level profitability, and even without the discounting of legacy members, we had strong demand for the promotion. We've continued to work with our co-ops to provide a more robust marketing-level strategy, leveraging what we know about patients new to chiropractic and those not new to chiropractic with our behavior. We worked with our largest co-ops and implemented new channels and tactics. This increase includes a TikTok spend market-wide to reduce costs and increase impressions, as well as the introduction of new channels aimed at driving awareness and consideration and lowering patient acquisition costs. Turning to slide seven, let's discuss our clinic metrics. In Q2 2024, we opened nine franchise clinics, refranchised two clinics, and closed three clinics, one franchise and two corporates, for a net increase of six clinics. In the same period a year ago, we opened 23 franchised and three Greenfield clinics, acquired three previously franchised clinics for a corporate portfolio, and closed six clinics, four franchised and two corporates, for a net increase of 20 clinics. On June 30th, 2024, our total clinic count reached 960, consisting of 829 franchised and 131 corporates. The clinic portfolio mix remains at 86% franchise and 14% company-owned or managed, although it's expected to shift during the year as we execute our refranchising strategy. Turning to slide eight, I'll review our franchise license sales. As previously indicated, we expect franchise license sales to be impacted by our refranchising strategy. During Q2, we sold seven franchise licenses compared to 21 in Q2 2023. Of the licenses sold, 73% of the franchisees were new to The Joint. At June 30th, 2024, we had 158 franchise licenses in active development, as well as 17 regional developers with an aggregate ten-year minimum development schedule for 674 clinics. In July, for approximately $0.5 million, we reacquired the Maryland DC RD territory, with 17 open clinics and a potential for another 31 clinics. This reduced the number of RDs to 16, covering approximately 59% of the network. With that, I'll turn it over to Jake.

Jake Singleton, CFO

Thank you, Peter. Let's turn to slide nine. I'll review our clinic comps for Q2 2024, compared to Q2 2023. System-wide sales for all clinics opened for any amount of time increased to $129.6 million, up 8%. System-wide comp sales for all clinics opened for 13 months increased 2%. System-wide comp sales for mature clinics, opened 48 months or more, decreased 4%. Revenue was $30.3 million, up $1 million, or 3%. Revenue from franchised operations increased 10%, contributing $12.6 million. Company-owned or managed clinic revenue decreased 1%, contributing $17.7 million. Cost of revenues was $2.8 million, up 9% over the same period last year, reflecting the associated higher regional developer royalties and commissions. Selling and marketing expenses were $5.4 million, up 15% year-over-year, reflecting the costs associated with the in-person national conference and the timing of advertising spend. Depreciation and amortization expenses decreased $805,000, or 35%, compared to the prior year period. This reflects the accounting for corporate clinics that are being held for sale as part of the refranchising efforts. The G&A expenses were $22.6 million, up 13%, compared to the same period last year, primarily due to the increased expense to support more clinics, plus $1.5 million in legal expenses associated with the class action settlement related to time and wages in the state of California, which reflects the ongoing complexity of doing business in California. Loss on disposition or impairment was $1.4 million, related to two corporate clinic closures, and our quarterly analysis of clinics held for sale as part of the refranchising effort. This compares to $144,000 in Q2 2023. Income tax expense was $178,000, compared to an income tax benefit of $161,000 in Q2 2023. Net loss was $3.6 million, including the aforementioned $1.5 million litigation expense, $1.4 million in loss on disposition or impairment, and the expense associated with the in-person national conference for a loss of $0.24 per share. This compares to a net loss of $320,000, including loss on disposition or impairment of $144,000, or a loss of $0.02 per share in Q2 2023. Adjusted EBITDA was $2.1 million, compared to $3.2 million. Franchise clinic adjusted EBITDA was $4.7 million, compared to $5.1 million, reflecting the increased marketing expense related to the national conference. Company-owned or managed clinic adjusted EBITDA increased 15% to $2.5 million. Corporate expense as a component of adjusted EBITDA was $5 million, compared to $4.1 million in Q2 2023, reflecting ongoing IT maintenance and higher legal and professional service expenses related to our refranchising efforts. On to slide 10, to review our balance sheet and cash flow. At June 30th, 2024, our unrestricted cash was $17.5 million, compared to $18.2 million at December 31st, 2023. Cash flow from operations for the six-month period was $1.8 million. Additionally, the net proceeds from the sale of two clinics were partially offset by ongoing IT CapEx and a $2 million Q1 repayment on the line of credit with JP Morgan Chase. Through this facility, we have retained immediate access to $20 million through February of 2027. On to slide 11, a review of our financial results for the six months ended June 30th, 2024, compared to the same period in 2023. Revenue was $60 million, up 4%. Net loss was $2.6 million, including $1.8 million in loss on disposition or impairment, the aforementioned $1.5 million litigation expense, and the cost of the in-person National Franchise Conference for a loss of $0.18 per share. This compares to a net income for the first half of 2023 of $2 million, which included the $3.9 million employee retention credit and $210,000 on loss of disposition or impairment, or $0.13 per diluted share. Adjusted EBITDA was $5.6 million, compared to $5.3 million in the same period of 2023. On slide 12, with the strong comps in July and anticipation of our fourth-quarter promotions, we are reiterating all elements of our guidance. System-wide sales are expected to be between $530 and $545 million, compared to $488 million in 2023. System-wide comp sales for all clinics open 13 months or more are expected to increase in the mid-single digits, compared to an increase of 4% in 2023. New franchise clinic openings, excluding the impact of refranchised clinics, are expected to be between 60 and 75, compared to 104 in 2023. The difference reflects the impact of our refranchising efforts. With that, I'll turn the call back over to you, Peter.

Peter Holt, President and CEO

Thanks, Jake. In late May at our annual Franchisee Conference, we discussed strategies to increase clinic profitability and recognize clinics with outstanding performance. Our conference theme, Inspire, Influence, and Imagine, captured the passion of our franchisees, RDs, and employees. As franchising is about like-minded people building a brand, we're thrilled to be partnered with some of the most talented franchisees and doctors of chiropractic in the United States. During our 2020-2024 awards ceremony, we honored over 180 inspirational clinics that generated over $750,000 in 2023. This compares to recognizing 14 high-performing clinics with sales exceeding $550,000 in 2015. This year's award winners included 56 gold clinics with sales between $1 million and $1.49 million, a marked increase from the only one clinic at this level in 2017. And this year, we honored two platinum clinics with sales over $1.5 million. Part of the success is attributed to the substantial improvement in our chiropractic community's perception of The Joint. Since 2018, we've taken action to influence the views of chiropractic care in general and The Joint in particular. We've endeavored to forge better relationships with chiropractic schools and associations and have educated them about our model, our commitment to patient service, and our mission to improve quality of life through routine and affordable chiropractic care. Now, with a growing number of The Joint doctors participating in the school's preceptorship programs, which mentor undergraduate doctors of chiropractic, is increasingly sought after. We also foster these relationships by providing support for educational, athletic, and relief programs. Between 2018 and May 2024, The Joint has donated over a million dollars to chiropractic schools, including a recent student scholarship endowment. We've grown to be the largest provider of information on chiropractic on the internet, which contributes to the fact that over 36% of our new patients in 2023 had never been to a chiropractor before. This also means around 65% have chosen The Joint over other providers. Now, I'll look to the future. With our better relationships and enhanced marketing, we're approaching having 1,000 clinics open. The more clinics we open, the more patients we serve, the more referrals we receive, and the more people we educate about the power and efficacy of chiropractic. Currently, about 16% of adults in the U.S. have utilized chiropractic care in the last year, according to the Palmer Gallup study. Imagine what would happen to our business when these numbers reach 18% or 20% and beyond. That's when chiropractic care becomes a mainstream choice, and we truly begin to experience exponential growth. As more and more people discover chiropractic care, our reach is boundless. In summary, in 2024, our highest priorities are refranchising the corporate clinics and improving unit economics. Through streamlined operations, resource optimization, and continuous improvement, we expect to maximize profitability at the unit level while delivering exceptional experiences to our patients. Before we begin, I'd like to invite you to visit us at the B. Riley Seventh Annual Consumer and TMT Conference in New York City in September. And with that, Nick, I'm ready to begin the Q&A.

Operator, Operator

Thank you. Now I'll start the question and answer session. The first question will be from JP Wollam at ROTH Capital Partners. Please go ahead.

JP Wollam, Analyst

Great. Hi, Peter, hi, Jake, thanks for taking my questions here. If we could maybe just start on the refranchising, not sure exactly kind of what you want to share or how much you'll share on the process, but I'm just hoping, we're a bit into the process here. And I think maybe the number of refranchises is a little lower than where we might have thought at this point in time. But I was hoping you could maybe just talk about how the conversations are going. It sounds like you've got a couple more units that are about to be under LOI. But just talk broadly about, you know, are you finding more success with existing franchisees? Are people looking to do just larger scale transactions that are taking more time? Any details and kind of information you could share about the process would be great.

Peter Holt, President and CEO

Sure. It's good to talk with you. The process has probably taken a little longer than we would expect. I would have loved to be further along in this process than we are. And it's really a combination. We have that portfolio of roughly 131 clinics that we've broken up into clusters. We're talking to our existing franchisees who want to pick up maybe a couple of clinics that are around them. The reason we went into the relationship with Capstone is to really widen the market. You do have a number of multi-unit operators out there that are looking to diversify and invest in other franchise concepts. They are looking for that larger cluster of clinics, and so it's taking us some time to put together the SIM that we're using to market the program. We're really now aggressively starting to market to some of those larger players. At the same time, we have a couple of very large players in our own system that are also interested in the acquisition of clinics. It has taken a little longer than anticipated. I think that there is obviously a lot of interest in these clinics. These are well-performing clinics, so this isn't a fire sale where we're just trying to get them off the books. These are valuable assets that we obviously want to put in the hands of the franchisees who can most effectively run them. Those are the real drivers of this process we are going through.

JP Wollam, Analyst

That's very helpful. Regarding the innovation and the discussion about the changes to the box and IT advancements, I would like to focus more on the box. You mentioned reducing costs and the time to open. Can you share any way to quantify the impact on a cash-on-cash return basis going forward?

Peter Holt, President and CEO

Well, I'm not really ready to give out specific numbers, but what we've done is that we've really streamlined the whole process of the build-out of the clinic. Our build-out is relatively simple. This isn't, you know, a QSR where we have a lot of equipment that's required to open up the clinic. I mean, it's really a very simple operation. We have, for example, been building the front desk, which is a big segment of the build-out, individually for each clinic. What we've done is streamline that process so it's modular, so that it's easy to ship, and it can be easily installed without having to be built uniquely for each of the clinics that open. We've looked at every element of what is part of that build-out and tried to find ways to streamline it, lower its cost, and make it easier to install. We're able to lower the cost, and also we had all these different elements, whether they were tables or the desks we were building, coming from different vendors. When you're trying to consolidate that or trying to ship to the clinic's location, that's increasing your cost. So we've significantly reduced the shipping costs associated with the build-out. Because everything is consolidated, you can really build that clinic out in a faster manner. Is that faster by a month or two months? We'll see as we go forward with this program. We're really excited about what that does for streamlining the process of getting these clinics open and at a lower cost.

JP Wollam, Analyst

Okay, understood. And if I could slide one last one in, just on maybe this is for Jake, but just in terms of the comp improvements in the back half of the year to kind of get us to that mid-single digit, I would think maybe it sounds like July was performing well. I think there's maybe a little bit of an easier comp in Q3, but are there any kind of meaningful levers that are needing to be pulled to kind of get to comp guidance in the back half? Or is it really the easier comp and then the seasonal promotions that you mentioned?

Jake Singleton, CFO

Yes, I think you've got most of the pieces there. July did start off strong with us. We posted a greater than 5% comp for the system with our franchisees closer to 6%. So happy to see how the third quarter is starting out. Really, from a lever's perspective, it's really, like you mentioned, a softer Q3 in the 2023 period. We're rolling over an easier comp there. Theoretically, we always perform well in terms of our fourth-quarter promotions that are planned. As Peter mentioned, we're consistently looking at the pricing levers to see if that's something that we need to address. Those are potentials that we're in evaluation mode right now, looking at whether the legacy policy, walk-in pricing, and things of that nature. We have those levers at our disposal. Additionally, we have the ability to layer on an incremental promotion should we need a little boost, so we're mostly leveraging the existing things that you mentioned.

JP Wollam, Analyst

Great, really appreciate it. Best of luck, guys.

Peter Holt, President and CEO

Thanks. Great to speak with you.

Operator, Operator

Thank you. Our next question will be from C.J. Dipollino from Craig Hallum Capital Group. Please go ahead.

C.J. Dipollino, Analyst

Hey, guys, C.J. Dipollino, on for Jeremy Hamblin. I want to touch again on the refranchising. Sounds like you're just starting to get going with some of these larger transactions. I want to see, is there a world where you get any of these larger transactions done in 2024, or are you looking more out towards next year?

Peter Holt, President and CEO

Ideally, we'd like to see as much done in the end of 2024 as possible. The larger the deal, typically, the more due diligence you're doing, the more difficult the time it takes to get everybody aligned on price and legal structure. We're now pushing as hard as possible to complete all these deals, while minimizing the time it takes just because of the uncertainty it creates for your employees and outside support. Can we get everything done by the end of the year? Can we get significant things done by the year? I think it's possible. Will this go into 2025? I think it's probable.

Jake Singleton, CFO

Yes, C.J., the only thing I would layer on there is we have taken considerable time to create an exceptionally detailed SIM, and we've had a lot of time now to kind of get the work rooms and due diligence materials in place. We feel confident that as we have strong interest, we've put together a lot of materials and resources to streamline that process as best as we can. But as Peter mentioned, larger transactions by nature are going to take a little bit more time.

C.J. Dipollino, Analyst

Got it, okay, that makes sense. And then, moving towards comps and more specifically, traffic, a lot of peers have called out sort of slowing traffic starting in May, going into June. Could you maybe just give a little color on the cadence of comps through Q2?

Jake Singleton, CFO

Yes. We did see a slowing of comps throughout the quarter. A little bit nuanced for us in this particular quarter, as Peter mentioned in his prepared remarks. We have a promotion that we run in June, which is a forward buy promotion. Our patients are buying six months of care for the price of five, if you will. That recurred year-over-year. But as Peter mentioned, we did not honor any of our legacy pricing as it relates to that promotion. What that means for us in this particular period was that we had a slightly lower uptake in terms of people capitalizing on the promotion. But what that does for us is means they stay on their current plan and then their recurring billings roll into the following months. This resulted in a slightly lower comp for June, but I think it's helping us here in July, which I mentioned the strong comps that we've seen so far.

C.J. Dipollino, Analyst

Great. Okay, that's very helpful, thank you. I'll hop back in the queue. Best of luck with the rest of the quarter.

Jake Singleton, CFO

Thank you.

Operator, Operator

Thank you. The next question will be from Nick Sherwood, Maxim Group. Please go ahead.

Nick Sherwood, Analyst

Good evening. My question is, can you talk about the loss in sales for the mature clinic comps? And are you seeing that rebound in July or are you seeing a lot of that expected comp sales growth to be from new clinics?

Peter Holt, President and CEO

Yes, all of our comp metrics improved in July. As it relates to the results for the quarter, Q1, we posted a 3% total system comp, negative 3% for mature, and each of those metrics fell by a percent in the second quarter. So, 2% for the system, negative 4% as it relates to the mature clinics. The softness that we continue to see is in that new patient metric. If we're getting them in the door, we're still converting at a great rate, and our attrition is as good as it's ever been. It's really just that new patient traffic that we're trying to consistently draw. That's where we saw the headwind and have seen it in recent periods. We have seen a nice rebound here in July.

Nick Sherwood, Analyst

So, do you have any plans going forward to stabilize the comp sales for these mature clinics? Or do you think we're still looking at contraction going through the rest of the year for the mature clinics?

Peter Holt, President and CEO

No, absolutely. That was some of the things we talked about. For example, we've seen great success with what we're calling our initial visit bookings. Instead of just coming in as a new patient, you can now actually book an appointment. We find that has significantly increased the new patient counts in the clinics that have been testing with that, and we're now rolling that out across the system. We are looking at all the different ways that we market this business to those new patients and to our existing patients. One of the areas we've been focused on is those lapse patients. We talked about we have 1.67 million active users. Of those, many are lapse patients. They could be just walk-ins or individuals we can re-contact using some automated marketing programs we put in place to bring them back. The average patient stays with us for about six months on membership, and we know that 25% of them will return within the next six months because their pain comes back. Through this automated marketing, we can specifically try to draw those in earlier. Given that mature clinics have such a huge membership base, they have a greater base of potential patients compared to a newer clinic.

Nick Sherwood, Analyst

Understood. Thank you. And my last question is, how are you managing your sales and marketing spend going into this third quarter and beginning of the fourth quarter with the presidential election, and which generally you see advertising expenses going up. And so, how are you ensuring that these promotions are effective without overspending on customer acquisition due to these higher advertising costs?

Jake Singleton, CFO

Sure, you have to think about the full funnel in terms of how we drive new patient traffic. As a healthcare services business, we have a lot of referral traffic, which really isn't influenced by advertising price points. The largest channel for us right now is in the digital space. We may see a slightly higher uptick in overall dollars in our national marketing fund spend or those of our co-ops. Each of our franchise units has a requirement to spend as much as $3,000 per month per clinic on their local advertising. As we go through this cycle, could we see some higher costs? A lot of that doesn't flow through our corporate P&Ls, and we have various channels in the mix concerning how we disperse that marketing spend.

Peter Holt, President and CEO

Some of these new channels like TikTok or programmatic have shown results. We've done some work with influencers that are somewhat outside of that traditional spend saturated by national elections. It’s something we are watching carefully, but we have a series of venues, especially in the digital space, to spend and generate new patients.

Nick Sherwood, Analyst

Sounds great. Thank you for all the detail. I'll return to the queue.

Jake Singleton, CFO

Thank you.

Peter Holt, President and CEO

Thank you very much. In April, we announced The Joint Influencer Campaign, where athletes shared their authentic stories about how chiropractic helps them enhance their athletic performance. We're excited to report that one of the joint influencers, track and field athlete Cherie Hawkins, qualified for the 2024 Olympics in Paris. At the U.S. Olympic team trials in Eugene, Oregon, Cherie finished second in the heptathlon with a career high. In addition, she achieved personal records in three of the seven events: the 800-meter run, the javelin, and the shot put. Please join me in cheering on Cherie and all the athletes in the Paris Olympics. Thank you and stay well adjusted.

Operator, Operator

Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.