Good day, ladies and gentlemen, and thank you for standing by. Welcome to The Joint Corporation's second quarter 2020 financial results conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star then one on your telephone keypad. As a reminder, this conference call is being recorded. If you require any further assistance, please press star and zero. At this time, I would like to turn the conference over to Ms. Moriah Shilton. Thank you. Ma'am, please begin.
Thank you, operator. Good afternoon, everyone. This is Moriah Shilton of LHA Investor Relations. On the call today, President and CEO, Peter Holt, will review our second quarter and provide an update of the business. CFO, Jake Singleton, will detail our financial results. Peter will close with a summary and open the call for questions. Please note, we are using a slide presentation that can be found at ir.thejoint.com/events. Today after the close of the market, The Joint Corp issued its financial results for the quarter ended June 30th, 2020. 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 today's discussion includes forward-looking statements, including statements concerning our strategy, future operations, future financial position, and plans and objectives of management.
Throughout today's discussion, we will present some important factors relating to our business that could affect these forward-looking statements. The forward-looking statements are made based on our current predictions, expectations, estimates, and assumptions, and are also subject to risks and uncertainties that may cause actual results to differ materially from the statements we make today. Factors that could contribute to these differences include, but are not limited to, the continuing impact of the COVID-19 outbreak on the economy and our operations, including temporary clinic closures, shortened business hours, and reduced patient demand. Our failure to develop or acquire company-owned or managed clinics as rapidly as we intend. Our failure to profitably operate company-owned or managed clinics.
The other factors described in Risk Factors in our A nnual Report on Form 10-K, as filed with the SEC for the year ended December 31st, 2019, as updated for any material changes described in any subsequently filed quarterly reports on Form 10-Q, as they may be revised or updated in our subsequent filings, including the one we anticipate filing on August 7th. As a result, we caution you against placing undue reliance on these forward-looking statements and 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 obligated ourselves to revise our 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 operating 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 the net interest, tax expense, depreciation, and amortization expenses. The company defines adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, net gain or loss on disposition or impairment, and stock-based compensation expenses. Turning to Slide three. It is my pleasure to turn the call over to Peter Holt.
Thank you, Moriah, I welcome everybody to the call. I'd like to start by thanking all of our doctors and staff who in the middle of this pandemic are providing essential healthcare services to our patients who truly see chiropractic care as essential to their healthcare needs. By utilizing chiropractic care to help reduce their pain, we're able to alleviate some of the pressures on our country's overtaxed emergency rooms and hospitals. It's hard to imagine it's only five months ago that our lives were overturned by COVID-19. As I reflect on the performance of The Joint, I'm humbled and gratified by the resiliency of our business model.
As we witness so many other retail concepts urgently reinventing themselves to survive, the strategic vision and the operating model of The Joint continues to perform, as illustrated by the fact that 99% of our clinics are open, the strength of our overall financial performance, our continued growth in both franchise and greenfield clinic openings, as well as our ongoing franchise license sales. While no one can predict the course of COVID-19 with certainty, we remain confident in our ability to adapt, to serve, and to grow in this unique environment. While Americans spend over $15 billion a year on chiropractic care, The Joint continues to revolutionize access with convenient retail settings, concierge-style membership-based services, attractive pricing and hours, and without the need for insurance or appointments. Our growth strategy is to open new clinics which build our brand, grows familiarity with chiropractic care, and attracts new patients.
Already, we're the largest and most recognizable provider of chiropractic care in the country. We utilize a franchise model as well as company-owned and managed clinics to expand in a capital-light fashion. As noted on our last call, at the onset of the pandemic, we undertook measures to enhance the cleanliness and the sanitization procedures to protect and support our patients, our doctors, and our staff. As we learn more, we continue to evaluate and improve upon the procedures and protocols. For example, we now require the use of masks by all of our doctors and staff in all of our clinics across the country. We've also reduced the number of seats in the reception areas, and in some clinics, removed adjustment tables from the open bay area to ensure our ability to maintain social separation.
In the process, we've demonstrated that we can serve the same number of patients, even though we're reducing the number of people at any one time in our clinics. As the need for pain relief grows, our patients continue to validate that chiropractic care is essential to their healthcare. Franchisees increasingly understand the strength of our value proposition. That is why in the middle of this pandemic, we're able to sell licenses in open clinics. Our business model remains unchanged, which is the foundation for our long-term growth. We continue to march toward our goal of reaching 1,000 clinics by the end of 2023. In addition to enhanced safety procedures that provide assurance to our patients, we've implemented new marketing promotions with two areas of focus. First, to welcome existing patients back from membership freezes, and second, to invite new patients to try our services for the first time.
The whole month of June, we offered a free initial visit to all new patients, resulting in one of the highest average new patient counts per clinic for any single month in the history of our company. I'll go into more detail on the promotion, but I'd first like to review our quarterly metrics. Later, Jake will discuss our financial results in greater detail. After which, I'll open the call for questions. Turning to Slide four, while COVID-19 negatively impacted the second quarter 2020 compared to the second quarter 2019, the resiliency of our business model is reflected in our results. System-wide sales increased 2% in spite of the impact of our promotions, including the first free visits in June. Comp sales for clinics that have been open for at least 13 full months decreased by 6%. Revenue increased 13%. Adjusted EBITDA was flat at $1.1 million.
Unrestricted cash was $14.6 million on June 30, 2020, compared to $10.7 million on March 31, 2020. Turning to Slide five, let's review our portfolio. At June 30, 2020, we had 539 clinics, of which 99% were open. The clinic composition at quarter end was 477 franchises and 62 company-owned or managed. The mix remained 88% franchise and 12% corporate. During the first full quarter of the pandemic, our clinic count increased by nine, including one new greenfield and 12 new franchise clinics, net of the four franchise clinics that closed. The closures consisted of one clinic in the process of being relocated that will reopen, one non-traditional clinic located in Relax The Back store, and two of our lowest-performing clinics. We're now returning to new clinic growth. As of June 30, we opened 30 clinics in 2020, one more compared to the same period last year.
Our new clinics are performing well. In fact, a new clinic in Texas, which opened in June, reached aggregated sales of over $75,000 in its first two months of operation, creating another company record. Turning to Slide six, for any franchise system to be selling licenses in this current climate is remarkable, making our franchise sales results all the more impressive. During the second quarter, we sold 11 new franchise licenses, bringing the total to 35 year- to- date. We believe that to achieve this level of sales under the current environment is indicative of the positive long-term outlook of our business. I applaud our sales team, including our 22 regional developers, for this performance. Our RDs continue to fuel our growth and are responsible for 80% of our franchise sales in Q2 2020. This is in addition to the opportunity to continue to accelerate the growth of our system.
Our momentum continues. For example, in July, we're back to double-digit system-wide comp sales for all clinics open 13 months or more at 10%. We sold 14 licenses in July, and we opened six franchise clinics. We continue to expand corporately in the Los Angeles area, opening our third greenfield clinic for this year. Through the end of July, our total franchise and corporate clinic count increased to 546. We know that meeting our goal of 1,000 clinics by the end of 2023 requires more than concentrating solely on franchise growth. We're also focused on corporate expansion with more greenfields. While our greenfields are performing well, it's important to note that greenfields suppress total earnings in the short- term until they reach their break-even point. We believe the short-term impact on bottom line is well worth the long-term benefit of revenue growth, greater scale, and increased national recognition.
Turning to Slide seven, one of our earliest and most decisive actions in the initial days of COVID-19 was to support the positioning of chiropractic care as an essential healthcare service. This became a critical point of differentiation versus other retail service concepts. It also served as a rallying cry for our doctors and our staff. It helped to guide our approach to the pandemic that now, more than ever, we need to be open to treat our patients. Being an essential healthcare service is also reflected in our marketing communications. Through video and blogs, emails and texts, clinic signage, and PR, we increased the frequency of our messaging, not only to reassure our patients that we remained open, but that we're taking the necessary precautions to ensure their safety. Additionally, our content focused heavily on best practices for maintaining a healthy lifestyle, including the benefit of routine chiropractic care.
With so many consumers facing anxiety related to health and finances, we recognize that accessible, affordable chiropractic care is more important than ever. In March and April, we made it easier for our members to freeze their accounts. In May and June, we launched two important promotions to provide patients with more opportunities to obtain the care they need. Turning to Slide eight, our direct marketing promotion, launched in May, encouraged members to unfreeze their accounts in exchange for the incentive for the first month they came back. We moved over 22% of our frozen members to active status during this month-long promotion. Our national marketing promotion, launched for the month of June, offered every new patient in the United States the opportunity to get moving with chiropractic at no charge of their initial visit. During the month, we gave away over $1.7 million in chiropractic care.
We converted those patients to packages and memberships at record levels, which underscores a considerable demand for chiropractic care during this pandemic. By the end of the promotion, our average number of members per clinic, which is one of the most important clinic performance metrics, surpassed all-time records, including any pre-COVID number. We're grateful to do our part to help so many patients access chiropractic care at The Joint during this difficult time. Turning to Slide nine, we recently updated our patient demographics based on those who visited The Joint in 2019. We continue to see a nearly even gender split, with 49% of our patients being female. We found our patients' median age moved from 39 years old to 37. The percentage of millennials who visited increased from 39% to 44%, with another 11% from Gen Z.
This data reaffirms our concept is resonating with an increasingly younger audience who values convenient, affordable chiropractic care at The Joint. With that, Jake, I'll turn it over to you.
Thank you, Peter. Turning to Slide 10. As we review the performance of 2020 compared to 2019, keep in mind that the COVID-19 impacts included the effects of reduced new patient traffic in the early part of the quarter, frozen memberships, and discounts associated with the marketing promotions that Peter reviewed. Notably, our performance improved throughout the quarter, and the trend continues. Comparing the second quarter 2020 to the second quarter 2019, even taking into account the discounts related to our two promotions, system-wide sales for all clinics open for any amount of time increased 2% to $53.5 million. System-wide comp sales for all clinics open 13 months or more decreased 6%. System-wide comp sales for mature clinics open 48 months or more decreased 10%. Revenue was $12.6 million, up $1.4 million, or 13%.
Company-owned or managed clinics contributed revenue of $6.9 million, increasing 19% from the same period a year ago. Franchise operations contributed $5.7 million, up 6% compared to the same period last year. Increased revenue for both categories is due to the greater number of clinics and continued organic growth, offset by the impacts of COVID-19. Cost of revenues was $1.4 million, up 5% over the same period last year. The increase was in line with the total increase in franchise sales and reflective of higher regional developer royalties and commissions. Selling and marketing expenses were $1.8 million for both periods, reflecting the timing of our advertising fund spend. General and administrative expenses were $8.5 million compared to $7.2 million, primarily due to an increase in payroll and related expenses to support revenue growth and increased clinic count.
We continue to operate our corporate clinics and headquarters without any furloughs or layoffs while working to increase sanitary measures to ensure patient and employee safety. Also, as previously discussed, increases in corporate clinics will require additional resources to ensure our high operational standards. We continue to believe that the increase in our corporate portfolio, and particularly our greenfield clinics, will provide long-term bottom-line growth despite compressing operating margins and earnings in the near- term. This is important to remember as we return to growth and increase the pace of development. For the quarter, we posted net income of $116,000 or $0.01 per diluted share, compared to $462,000 or $0.06 per diluted share for the same period last year. Total adjusted EBITDA was $1.1 million, increasing 5% compared to the same period last year. Franchise clinic adjusted EBITDA decreased 4% to $2.5 million, reflecting the impact of COVID-19.
Company owned or managed clinic adjusted EBITDA was $1.1 million, up 25% compared to last year, even with the expenses associated with the new clinics. Corporate expense as a component of adjusted EBITDA was $2.5 million in both periods, reflecting our cost control measures. As of June 30th, 2020, we had $14.6 million in unrestricted cash, compared to $8.5 million at December 31st, 2019. During the six months, cash flows from operations was $3 million. As previously discussed, we took measures to fortify our position and increase our financial flexibility. In March, we drew $2 million on our revolving line of credit. Meeting the CARES Act PPP loan requirements, we applied for assistance and received $2.7 million through JPMorgan Chase.
The goal of the program is to maintain jobs in the small business sector. We used the PPP loan proceeds to ensure we could retain our employees and fund payroll. The Joint operates 62 clinics. As a franchisor, supports 477 franchised small businesses in 33 states. With our support, the vast majority of our franchisees also received PPP loans. In March, we withdrew our financial and clinic opening guidance. Due to the continued uncertainty around the impacts of COVID-19, we will not reiterate guidance at this time. Turning to Slide 11.
For the six months ended June 30th, 2020, revenue was $26.2 million, increasing 20% compared to the $21.8 million in the same period of 2019, reflecting a greater number of clinics and increased gross sales at both franchise and company-owned or managed clinics during the first quarter, which was partially offset by the negative impact of the pandemic during the second quarter. Net income was $931,000 or $0.06 per diluted share compared to $1.4 million or $0.10 per diluted share in the first six months of 2019. Adjusted EBITDA was $2.8 million compared to $2.6 million in the first six months of 2019. With that, I will turn the call back over to you, Peter.
Thanks, Jake. Turning to Slide 12. As noted, our resilient model is driving growth and our long-term opportunities continue to expand. As a nation, we're looking for more natural, holistic ways to get out of pain. The U.S. chiropractic market's already $15 billion, and 50% of Americans still don't even know what the word chiropractic means or how it can help them. As we increase awareness, our new patient base continues to grow. With many working from home slouched on their couch or using non-ergonomic chairs, more people than ever are experiencing pain. The Joint will be there to help them out, and with our newest tagline says, we truly have got your back, baby. In closing, I'd like to once again express my deepest gratitude to all of The Joint Chiropractic teams who have continued to selflessly serve during this pandemic. Their dedication to our mission is awe-inspiring.
To our franchise community, our RDs, our corporate team, and The Joint colleagues around the country, I thank you. You're truly making a difference in all the lives that you touch. Howard, I'm ready to begin the Q&A.
Ladies and gentlemen if you have a question or comment at this time, please press star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press the pound key. Again. If you have a question or comment at this time, please press star, then one on your telephone keypad. Our first question or comment comes from the line of Jeff Van Sinderen from B. Riley. Your line is open.
Hello, this is Richard Magnusen in for Jeff Van Sinderen. First, congratulations on performing so well in spite of the COVID impact. Can you give us some insight into what your current expectations of 3Q revenue are compared to your pre-COVID expectations?
Hey, Richard. Thanks for the kind words. We appreciate it. Jake?
Yeah. As you know from the remarks, we're not reiterating or providing any forward-looking guidance. In the release and in the comments, we did refer to the momentum that we're seeing in July, back to double-digit comps of 10%, licensed sales and openings picking back up. I think we'll refer to those comments in terms of any forward-looking projections.
Okay. You communicated with the patient base frequently during the early stages of COVID, and it seems to have paid off. Can you provide us any metric or feedback from patients on how successful these efforts were at making patients feel safe and how it may have strengthened their relationship with The Joint? How much higher was the conversion rate of new patients during the campaign in June that offered the free initial visits to the new client?
Sure. There's no question, as the pandemic broke out, and we're all wondering what to do, how to respond, what does this mean to our patient base, what does this mean to our franchisees? On every level, we leaned in to a greater level of communication. With our franchisees, we had all kinds of different calls that we set up, town hall calls, webinars, helping them get their PPP loans. We had the same reach out to our patients. Our patients were reaching out to us. They were going online. They were expressing their concerns. They were asking about what is our protocols, our procedures. What we did, in fact, both through text, with email to our patient bases, expressed to them what some of the changes that we're doing, making sure they understood that we remained open.
There are so many businesses that were closing, it's always not clear whether you were open or not. At one point, as we talked about in earlier calls, about 10% of our network was, in fact, closed for a period. Today, 99% is open. That in terms of the conversion rate, our historical conversion rate has been running, let's say, in the later 40s as a system, and that since COVID, is that aside from just the promotion, we have seen consistently a higher conversion rate, well over 50% on average across the network, in light of this COVID environment. When we looked at it for the promotion itself, it was even a little bit higher than that 50% mark. We were bringing more people into the clinic and then converting them at a rate that we have not seen before historically as a company.
Wow, that's pretty strong. Then for my final question, considering where we are in this prolonged pandemic environment and considering what has worked for you recently, can you provide any more details or direction on your marketing message to new patients and existing patients going forward?
The main message to our patients going forward is that we're there, we're open, we're there to serve you. We'll continue to make sure they understand the increasingly important protocols of cleanliness and sanitization. We've obviously, as I outlined in my conversation there, that there's a number of changes we've made in the way in which that we treat our patients and how many we allow in the clinic at any given time, the number of seats in the reception area, removing or limiting the number of people in the open bay. We'll continue to share that message with our patient base. The other thing is that we believe this is a real opportunity for chiropractic. 60% of the American people right now are teleworking, and they're not in their ergonomically sound chairs. They're slouched over the couch. Their spines are a mess.
That we believe that we're in a space that we can bring them in, show them the benefit of chiropractic care, and it's affordable, and it's accessible, and it's convenient at a time when there's so many things that are going crazy in this environment, that we believe that that's a really important message that we'll continue to share as we go forward through the rest of the year.
All right. Very good. Thank you.
Thank you very much, Richard.
Thank you. Our next question or comment comes from the line of Frank Takkinen from Lake Street Capital. Your line is open.
Hey, guys. Congrats on all the strong progress and the continued resiliency of demand in the quarter. Got a couple for you today. First, I kind of want to focus in more on the conversion rate you were just previously speaking about. What else do you think was behind that 50% conversion rate, aside from the promotional activity? Is there something occurring in the competitive environment where maybe some of your less-funded mom-and-pop shops weren't able to stay open and you're seeing conversions from some of those people? What else is driving that high conversion rate in the quarter?
Hey, Frank. Thanks for the kind words. That is such a great question. What I really truly believe is that one of the reasons we've, through this pandemic, experienced such a high conversion rate, not just because of the promotion. In fact, actually, to be very frank, there was a concern that if we're offering free visits in the month of June, historically, you bring in a patient that's more of a tire kicker, not really serious. Okay, they get their free adjustment, are they really going to stay with us as a patient? Is it worthwhile for our doctors to be busy with these patients that ultimately won't stay on as a member? What we found is obviously the opposite. We were converting at a rate that we really were surprised by.
I really believe that more than anything else, that's because of those patients who are going out into chiropractic care today are in probably more pain and more serious about it because of the pandemic. You may be concerned about going to get your coffee or going to a fast food restaurant or some of the other places, a bar, which is, I think, one of the worst places you can go in light of COVID. If you're going to a chiropractic care clinic for the first time, it's because you're in pretty significant pain. I think that in some ways, it was self-selecting and that those patients who really ventured out and came into our clinics for the first time and not really knowing what to expect, were the ones that really needed us.
That's reflected in the conversion rate that we saw throughout this pandemic, and particularly the promotion.
Got it. That's very helpful. On the second question, I was hoping we could talk about the comp sales a little bit. It was encouraging to see that jump back into the double- digits as quickly as it did in July. How are you guys thinking about comp sales for the rest of the year, and do you feel that we may have a linear outlook from the lows that were probably experienced in April, May timeframe?
Yeah, Frank, great question. If you think trajectory, as we mentioned, obviously we had the deepest impacts in the early part of the quarter, and we've seen those trends improve. I think, the same reason we're not reiterating guidance, I think there's still uncertainty that remains out there. Really, as we look at the momentum that we picked up in the latter half of the second quarter and into July, we're optimistic that those trends will continue. I think uncertainty remains, which is why we're not providing that longer-term guidance at this time.
The one thing I'd add to that, though, Frank, is that if you look at our network, and we go back into the early part of this pandemic, is that the parts of the country that were most impacted were Northern California, were the New York corridor, and places where we had the least amount of clinics. As we've come into these new hotspots or surges or whatever you want to call it, is that you're looking at clinics in Southern California, Arizona, Texas, Florida, all of which areas where we obviously have a significant portion of our clinics. In fact, probably about half of our clinics are in those four states alone. As we're analyzing, we gave the number for July, and we typically never break down our comp sales by region.
When we looked at the July numbers and the overall rate for any clinic open more than 13 months, as we said, was over 10%. We analyzed just those four states. It was, I think, 9.4% for those four states that were in the heart of this impact. While we're still not clear, because no one can really give us certainty the course of this pandemic, we're heartened by the trends that we've seen as we move through this pandemic.
Got it. All right, I'll hop back in queue. Thanks so much for taking my questions.
Thanks, Frank.
Thank you. Our next question or comment comes from the line of Brian Finley from ROTH Capital. Your line is open.
Hi, this is Brian Finley. I work with Dave Bain. We were hoping if you could discuss if COVID has accelerated any plan to accelerate the diversification of your mix of greenfields or acquisitions from a geographic standpoint? Also, as we hopefully exit COVID, your business has proven extremely resilient, adding to overall confidence in our view. Does that change your calculus to be even more aggressive with greenfields or acquisitions as we think about next year? Or is the 2021 plan pretty much the same as pre-COVID? Thank you.
Yeah, Brian, thanks. Those are great questions. I'll start with the second one first, in that I think overall, the trends and the resiliency of the model have given us confidence. We mentioned a couple of times in the comments that we are returning to growth. Another thing that Peter mentioned is that as we look at the model and our strategic direction, is that we really didn't have to pivot off of that. Our growth strategy in terms of the franchise and corporate mix, is still the same as it was. The underlying model and the economics makes sense for us to continue to grow our corporate portfolio and balance that against the continued franchise growth. I think through the pandemic, we've just seen the resiliency, which provides us more confidence to get back into that growth and increase our development.
We reiterated the goal to reach 1,000 by the end of 2023. With the slight pause here in the second quarter, the slowdown, we're going to have to get back on that to reach that goal, but it's very much attainable for us. I think the resiliency has provided us continued confidence to move forward. As it relates to the geographies, the core concept is still the same, right? We would always look to cluster where we have existing corporate clinics, so we can leverage that overhead. The model is sound. As we look at regions, as Peter mentioned, or different states throughout the country, the model, the consumers wanting chiropractic care, is proving to be something that we see viable across the entire country. We will continue to deploy the regional developer model and complement that with our corporate clinic development.
Great. Thank you.
Thank you. Our next question or comment comes from the line of Anthony Vendetti from Maxim Group. Your line is open.
Thanks. Good afternoon or good evening. I missed part of the call, but I heard the part, and I just want to make sure I have this right. About half your clinics, Peter, are in Florida, Texas, Arizona, California. For those clinics, did you say patient visits or patient volume was up 9.4%? Was that for the quarter, if that's the correct percentage, or was that for the month of July?
Yes. What I was saying is those were comp sales for those four states, and I guess what Jake was just correcting me that our system-wide comp sales for any clinic open for 13 months, in the month of July, we said it is 10%. It is actually 10.2%. That in our analysis, and this is just looking at comps, not visits, but just comp sales. In our analysis, we took four states, California, Arizona, Texas, and Florida, which represents roughly 50% of our network, where we have seen as a country, some of the biggest impact in these resurgences or hotspots of COVID-19. We looked at the comp rates in July and for those four states separate. I said the number was 9.4%, but Jake just corrected me and said that actually the number was 10.1%.
Wow.
Correct
outbreak-
Correct. Exactly.
it's pretty close to what you're seeing for all your other clinics.
Correct. It's a 10.1% versus a 10.2% across the whole country.
Right. Okay. That's impressive. Okay.
Also, I think, Anthony, excuse me, but I think that's really reflective of kind of the whole message that we've or one of the messages that we've been talking about today is the resiliency of the model, that the chiropractic care is essential to healthcare, but not just because I say it, because our patients need it. Our patients are coming in. The patients are coming in from the promotions. They're coming off freezes. They truly see this as essential for them. Of course, that gives us comfort with this model going forward.
Sure. I don't know if this was mentioned before, but just in terms of COVID-19 for whether it's your franchise owners, the corporate-owned clinics, or the chiropractors that you employ, what has been the level of positivity or what's been the level of positive tests? Then how many of your employees, and then how many of the franchise owners' employees, particularly at the chiropractic level, have contracted COVID-19?
It's a great question. As a straightforward number, I don't have that. I can certainly know how many have caught it within our corporate office and with our own corporate network.
Okay.
What I would say is that we definitely have seen it. We've seen a few cases in our corporate office. Our corporate office is relatively closed. We're in phase I, we call it. Normally we'd have 50 people in the office here, and that we are only allowing 10%, 10 people in the office at any given time, and we have a series of procedures that we put in place to protect the staff. On our corporate level, again, not a significant number, but yes, that we have had doctors and wellness coordinators who have tested positive. We've had patients who've called in and said, Listen, I just got tested positive. We followed all the local health procedure or the local health authorities in how you proceed when you have these positive cases.
It's happening out there, but not to any measurable degree, the way I would say that. I think on the franchise side, I have a little less visibility into that since these obviously are independently owned and operated businesses. I think that their experience has been reflected similar to the corporate.
Okay, even though there's been some cases, what you're saying is that it hasn't had a material impact on your business thus far, correct?
No. That's a very fair statement. With the number of employees or staff or doctors or franchisees who've been positive to COVID-19, it has not materially in any way impacted the business.
Okay, great. Thanks. I'll hop back in the queue.
Thanks, Anthony.
Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star then one on your telephone keypad. Our next question or comment comes from the line of Ryan Sigdahl from Craig-Hallum. Your line is open.
Hey, guys. Congrats on the quarter. I understand the environment is wildly different right now, but can you talk about the 13 clinics you opened in the quarter and how the current ramp rates of those new clinics compare to your more typical ramp rates?
Sure. Ryan, thanks for the question. I'll point to the comment that we made within Peter's section with kind of the post-COVID example. We opened a clinic in Texas that opened in June. In June and July, the cumulative sales were $75,000, which is an all-time system record for us. While that is obviously the record and the outlier, the clinics are starting strong. Again, the resiliency of the model, I think is the message that patients still need this chiropractic care and the affordable and convenient way that we're providing it is resonating. We are seeing this post-COVID environment with strong starts.
Okay, great. Maybe if you guys could provide some color on the success of the free trial program in June. As the second part, I guess, we're seeing a second wave of sorts across the country in terms of COVID cases. I guess, if you could provide some color on what you're hearing from customers and sort of the differences between customer behavior during the initial onset of COVID in March and compared to sort of what you're seeing today, that'd be great.
Sure. I'm going to start with your second question, kind of the customer behavior, how it started in March and how it is today. We talked a little bit about this on the earlier quarter call, is that what was interesting is that our attrition rate, and that's the rate in which our members drop, remained steady or dropped during the initial part of the COVID pandemic through to today. We've seen a consistency in that attrition rate. I would've expected, quite frankly, that we would've seen an increase. Now we did see an increase in freezes, but it was not translated into attrition or drops of people canceling their membership. While we may see a little bit more of that as we go forward, the message then is that we have not, in fact, seen an increase in attrition to date.
We have also, as I've already talked on the call, seen during this period, and particularly during the June month promotion, an increase in the conversion rate. Again, I think that's reflective of those patients who are actually opening that door for the first time are really in need of our services and that they're converting at a rate historically that we have not seen before, which is again, very positive. The one area that we had seen a particular drop into one of the key metrics that we measure, especially if we go back to Q1, was in fact our new patient counts.
Also makes sense to me because if you're a new patient, you've never been to the chiropractor, or you've never been to The Joint, and then you're in the middle of a pandemic, and you really wow, how much pain do I have to be in before I'll open that door and try out this service? Our existing patients who knew what to expect, they're getting the emails and the texts in terms of our increased sanitization and cleanliness procedures. They're coming in and being comforted. If you're new to it, you don't know what to expect. I can see the reluctance of not coming in. That was really the purpose of both those two promotions.
One, the freezes, which we talked about 22% of our patients that froze came out of freezing from that promotion by giving a discount on their first month of membership. Quite frankly, the June promotion exceeded our expectations. If we measure our new patients count per month on average across the board, as I said in my remarks, when we looked at the June new patient count, our average across our system, it was almost the best month we have ever had in new patients. There was one month earlier in 2019 that actually beat it by half a patient on average across the network. The impact of that new promotion was quite solid. What was interesting, not only were they coming in, but they were converting at the higher rate, which makes them members.
Okay, yes, we gave away the $1.7 million in that initial patient visit, but what we're seeing is that connection as they've joined as a member and then stay with us going forward. I would say that both promotions were achieving exactly what we're hoping them to do, to help unfreeze our patients maybe a little earlier than they would have, and to bring new patients in the door that hadn't been there before. As we talked about, is that you've got all these new people coming in, are working at home in pain, all these challenges they're facing, and it's making them, I believe, more open to that conversation to try chiropractic care than we've ever seen before.
Great. Thanks for taking the questions and congrats again.
All right. Thank you.
Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Holt for any final comments.
Thank you, Howard. Thank you all for your time today. Please note that we plan to participate virtually in the Lake Street Best Ideas Growth Conference and LD 500 later on this quarter. Typically, I like to end the call with a patient story. Today the patient's from Portland, and I'm quoting, Right before COVID, I flew a lot for work, and it triggered an old back injury. When shelter in place started and I was working from home, I was in a lot of pain. However, I was worried that where could I go to get treatment? My friend recommended The Joint. With their sanitary protocols and masks, I felt comfortable getting adjustments. I've continued treatment, and my pain has significantly improved. With my pain nearly gone, I've been able to work in my home office, exercise and garden. End of quote.
Thank you, and stay well adjusted.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Stay safe.