THE JOINT CORP. The Joint Corp. | NASDAQ: JYNT | thejoint.com
Q3 2023
Financial
Results
As of September 30, 2023 | Reported on November 9, 2023
Safe Harbor Statements
Certain statements contained in this presentation are "forward-looking statements" about future events and expectations. Forward-looking statements are based on our beliefs, assumptions and expectations of industry trends, our future financial and operating performance and our growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Words such as, "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term,""long-term," "projections," "assumptions," "projects," "guidance," "forecasts," "outlook," "target," "trends," "should," "could," "would," "will," and similar expressions are intended to identify such forward-looking statements. . Specific forward looking statements made in this press release include, among others, our belief that the strength of our franchise concept to revolutionize access to chiropractic care remains strong; our strategic plan to leverage our biggest strength - our profound understanding of franchising - to drive long-term growth for both our franchisees and The Joint as a public company; our plan to refranchise or sell the majority of our company-owned or managed clinics and to retain a portion of the high-performing corporate clinics; our belief that with a focus on profitability, we are taking clear action to strengthen the health of our network, improve the performance of our public company, and increase our ability to reinvest in the business and create value for our stockholders; and our guidance for fiscal 2023 for revenue, adjusted EBITDA, franchised clinic openings, and company-owned or managed greenfield clinic openings. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage and an increase in operating expenses due to measures we may need to take to address such shortage; inflation, exacerbated by COVID-19 and the current war in Ukraine, which has increased our costs and which could otherwise negatively impact our business; the potential for further disruption to our operations and the unpredictable impact on our business of the COVID-19 outbreak and outbreaks of other contagious diseases; our failure to profitably operate company-owned or managed clinics; short-selling strategies and negative opinions posted on the internet, which could drive down the market price of our common stock and result in class action lawsuits; our failure to remediate future material weaknesses in our internal control over financial reporting, which could negatively impact our ability to accurately report our financial results, prevent fraud, or maintain investor confidence; and other factors described in our filings with the SEC, including in the section entitled "Risk Factors" in our Annual Report on Form 10-K/A for the year ended December 31, 2022 filed with the SEC on September 26, 2023 and subsequently-filed current and quarterly reports. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Business Structure
The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, District of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wyoming. The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices.
© 2023 The Joint Corp. All Rights Reserved.
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© 2023 The Joint Corp. All Rights Reserved.
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Building upon Foundation for Growth
8% | 0% |
Increase in | Increase in |
system-wide sales1 | system-wide comp sales2 |
Q3 2023 over Q3 2022 | for all clinics >13 months |
in operation | |
Q3 2023 over Q3 2022 | |
(5)%
Decrease in
system-wide comp sales2 for all clinics >48 months in operation
Q3 2023 over Q3 2022
Q3 2023 | Q3 2022 | |
Revenue | $29.5M | $26.5M |
Loss on disposition or | $905k | $264k |
impairment3 | ||
Operating (Loss)/Inc. | $(898)k | $732k |
Net (Loss/ Income | $(716)k | $731K |
Adjusted EBITDA4 | $2.9M | $3.1M |
Unrestricted cash $16.1M at Sept. 30, 2023, compared to $9.7M at Dec. 31, 2022
1System-wide sales include revenues at all clinics, whether operated or managed 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 revenues are the basis on which the company
calculates and records royalty fees and are indicative of the financial health of the franchisee base. | 2 Comparable sales include only the sales from clinics that have been open at
least 13 or 48 full months and exclude any clinics that have permanently closed. 3 Loss on disposition or impairment, including those corporate clinics that were announced to | be | |
held for sale in September 2023. 4 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. | © 2022 The J int Corp. All Rights Reserved. | 4 |
© 2023 The Joint Corp. All Rights Reserved. |
Q3 | Q3 | |||
2023 | 2022 | |||
Franchise | 12 | 12 | ||
Licenses Sold | ||||
Total New | 24 | 33 | ||
Franchised | ||||
Clinics Opened | ||||
Greenfield | 2 | 5 | ||
Clinics Opened | ||||
Franchised | 0 | 3 | ||
Clinics Acquired | ||||
Clinics in | 202 | 252 | ||
Development | ||||
26 New Clinics in Q3 2023
TOTAL CLINICS OPEN1 | 914 | ||||||||||||||
838 | 136 | ||||||||||||||
Franchise | Company Owned/Managed | ||||||||||||||
706 | 126 | ||||||||||||||
579 | 96 | ||||||||||||||
513 | 64 | ||||||||||||||
399 | 442 | 60 | |||||||||||||
370 | 48 | ||||||||||||||
312 | 47 | 778 | |||||||||||||
61 | 712 | ||||||||||||||
246 | 610 | ||||||||||||||
47 | 515 | ||||||||||||||
4 | 453 | ||||||||||||||
394 | |||||||||||||||
309 | 352 | ||||||||||||||
242 | 265 | ||||||||||||||
175 | |||||||||||||||
12 | 26 | 82 | |||||||||||||
2010 | 2011 | 2012 2013 | 2014 | 2015 2016 2017 | 2018 | 2019 | 2020 2021 2022 Sept. 30, | ||||||||
2023 |
1 In Q3 2023 and Q3 2022 , The Joint closed two franchised clinics for both periods. The
closure rate remains one of the lowest in the franchise community at less than 1 percent. © 2023 The Joint Corp. All Rights Reserved. 5
Pipeline for Growth
Franchise Licenses Sold Annually | Clinics in Active Development1 | |||||||||||||||||
283 | ||||||||||||||||||
156 | 253 | |||||||||||||||||
235 | ||||||||||||||||||
126 | 204 | |||||||||||||||||
121 | 202 | |||||||||||||||||
99 | 155 | |||||||||||||||||
75 | 112 | |||||||||||||||||
50 | ||||||||||||||||||
37 | ||||||||||||||||||
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,Sept. 30, | Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 30, | |||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
52% sold by Regional Developers in YTD 2023 | 68% of clinics supported by |
17 RDs as of Sept. 30, 2023 | |
Gross Cumulative
Franchise Licenses Sold1
1193 1243
1118
962
841
715
616
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,Sept. 30,
2017 2018 2019 2020 2021 2022 2023
RD territories cover 55% of Metropolitan Statistical Areas (MSAs) as of Sept. 30, 2023
1 Of the 1,243 franchise licenses sold as of Sept. 30, 2023, 202 are in active development, 778 are currently operating and the
balance represents terminated/closed licenses. | © 2023 ©The2022JointThe CorpJoint Corp. All.RightsAll RightsReservedReserv . |
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Implementing New Marketing Programs
Leveraging Data
Growing New Leads
and Patients
Increasing Lifetime
Patient Value
Growing Brand Equity
© 2023 The Joint Corp. All Rights Reserved.
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Q3 2023 Financial Results as of Sept. 30, 2023
$ in M1 | Q3 2023 | Q3 2022 | Differences | |
Revenue | $29.5 | $26.5 | $3.0 | 11% |
• Corporate clinics | 17.9 | 15.8 | 2.0 | 13% |
• Franchise fees | 11.6 | 10.6 | 1.0 | 9% |
Cost of revenue | 2.6 | 2.3 | 0.3 | 11% |
Sales and marketing | 4.1 | 3.3 | 0.9 | 27% |
Depreciation and amortization | 2.3 | 1.8 | 0.6 | 32% |
G&A | 20.2 | 17.8 | 2.4 | 13%0 |
Loss on disposition or impairment2 | 0.9 | 0.3 | 0.6 | NA |
Operating (Loss)/Inc. | (0.9) | 0.7 | (1.6) | NA |
Tax benefit | (0.2) | 0.0 | (0.2) | NA |
Net (Loss)/Income | (0.7) | 0.7 | (1.4) | NA |
Adj. EBITDA3 | 2.9 | 3.1 | (0.2) | (7)% |
- Due to rounding, numbers may not add up precisely to the totals.
- Loss on disposition or impairment, including those corporate clinics that were announced to be held for sale in September 2023.
3 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. | © 2023 The Joint Corp. All Rights Reserved. |
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YTD 2023 Financial Results as of Sept. 30, 2023
$ in M1 | YTD 2023 | YTD 2022 | Differences | |
Revenue | $87.1 | $73.6 | $13.5 | 18% |
• Corporate clinics | 52.8 | 42.9 | 9.9 | 23% |
• Franchise fees | 34.3 | 30.6 | 3.6 | 12% |
Cost of revenue | 7.7 | 6.7 | 1.0 | 14% |
Sales and marketing | 13.2 | 10.7 | 2.5 | 23% |
Depreciation and amortization | 6.9 | 4.6 | 2.3 | 51% |
G&A | 60.2 | 51.9 | 8.3 | 16% |
Loss on disposition or impairment2 | 1.1 | 0.4 | (0.8) | NA |
Operating (Loss)/Inc. | (1.9) | (0.7) | (1.2) | NA |
Tax expense (benefit) | 0.5 | (0.6) | (1.1) | NA |
Net Income/(Loss) | 1.3 | (0.1) | 1.4 | NA |
Adj. EBITDA2 | 8.2 | 7.5 | 0.6 | 8% |
- Due to rounding, numbers may not add up precisely to the totals.
- Loss on disposition or impairment, including those corporate clinics that were announced to be held for sale in September 2023.
3 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. | © 2023 The Joint Corp. All Rights Reserved. |
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Reiterating 2023 Financial Guidance
$ in M | 2022 | 2023 Low | 2023 High |
Actual | Guidance | Guidance | |
Revenues | $101.9 | $115.0 | $118.0 |
Adjusted EBITDA | $11.5 | $11.0 | $12.5 |
New Franchised Clinic Openings | 121 | 100 | 120 |
New Greenfield Clinic1 | 16 | 8 | 12 |
1 Historically, company-owned or managed clinic | openings included a combination of both greenfields and acquisitions. The |
company will continue to acquire previously franchised clinics. However, as these transactions are opportunistic, management will no | |
longer include the acquired clinic estimate in guidance. To provide greater clarity, the 2023 company-owned or managed guidance | |
includes greenfield clinic openings only. | © 2023 The Joint Corp. All Rights Reserved. |
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Disclaimer
The Joint Corp. published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 13:46:45 UTC.
