UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form 8-K
______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): May 10, 2018

The Joint Corp.
(Exact Name of Registrant as Specified in Charter)

Delaware001-3672490-0544160
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

16767 N. Perimeter Drive, Suite 240
Scottsdale, AZ 85260
(Address of Principal Executive Offices)

Registrant's telephone number, including area code:
(480) 245-5960

 
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ X ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ X ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On May 10, 2018, The Joint Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2018. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The Joint Corp (the “Company”) is posting an earnings presentation to its website at http://ir.thejoint.com/events-and-presentations/upcoming-events.  A copy of the earnings presentation is being furnished herewith as Exhibit 99.2. The Company will use the earnings presentation during its earnings conference call on May 10, 2018 and also may use the earnings presentation from time to time in conversations with analysts, investors and others.

The presentation is furnished by the Company pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

The information contained in Exhibit 99.2 is summary information that is intended to be considered in the context of the Company’s filings with the Securities and Exchange Commission (“SEC”). The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01. Financial Statements and Exhibits.

(d)       Exhibits

Exhibit
Number
 Description
   
99.1 Press Release dated May 10, 2018.
99.2 The Joint Corp Earnings Presentation, May 2018.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 The Joint Corp.
   
   
Date: May 10, 2018By: /s/ Peter D. Holt        
  Name: Peter D. Holt
  Title: President and Chief Executive Officer
  


EXHIBIT INDEX

 

Exhibit Number Description
   
99.1 Press Release dated May 10, 2018.   
99.2 The Joint Corp Earnings Presentation, May 2018.

EdgarFiling

EXHIBIT 99.1

The Joint Corp. Reports First Quarter Financial Results

- Increases Annual System-Wide Gross Sales 32%, Compared to First Quarter 2017 -
- Grows Revenue 29%, Compared to First Quarter 2017 -
-  Improves Net Loss by $1.4 Million, Compared to First Quarter 2017 -
- Posts Third Consecutive Quarter of Positive Adjusted EBITDA -

SCOTTSDALE, Ariz., May 10, 2018 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ:JYNT), a national operator, manager and franchisor of chiropractic clinics, reported financial results for the three months ended March 31, 2018.    

First Quarter Highlights: 2018 Compared to 2017

Peter D. Holt, president and chief executive officer of The Joint Corp, said, “Our disciplined business strategy, improved operations and enhanced marketing together drove another quarter of strong growth. Additionally, the time for reaching the break-even point for new clinics continues to decrease. 

“We are proud to contribute to our patients’ well-being and will continue our pursuit to deliver quality, convenient and affordable chiropractic care. Many industry studies indicate the number of people experiencing pain and actively looking for drug-free management is increasing. We are perfectly positioned to meet this increasing demand. By broadening our footprint through accelerating our franchise sales, expanding our regional developer program and adding corporate owned or managed clinics in a strategic and measured fashion, we expect to continue to deliver shareholder value.”

First Quarter Financial Results: 2018 Compared to 2017

Revenue grew 29% to $7.1 million, compared to $5.5 million in the first quarter of 2017, due primarily to increased sales at company owned or managed clinics and a greater number of franchised clinics.

Cost of revenue was $1.0 million, up 40% compared to the first quarter of 2017, due to higher regional developer royalties from increased gross sales in regional developer territories.

Gross profit was $6.1 million dollars, increasing 27% from $4.8 million in the first quarter of 2017.

Selling and marketing expenses were $1.1 million, up from $1.0 million in the first quarter of 2017, reflecting higher marketing expenses related to our company owned or managed clinics. General and administrative expenses were $5.1 million, up 11% compared to the first quarter of 2017 due to increased payroll, which was partially offset by lower depreciation and amortization expenses.

Net loss was $(387,000), or $(0.03) per share. First quarter of 2017 net loss, including a charge of $418,000 related to the disposition/impairment of non-operating leases, was $(1.8) million, or $(0.14) per share.

Adjusted EBITDA income was $156,000, an improvement of $753,000, compared to Adjusted EBITDA loss of $(597,000) in the same quarter last year.  The company defines Adjusted EBITDA, a non-GAAP measure, as EBITDA before acquisition-related expenses, bargain purchase gain, loss on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income (loss) before net interest, tax expense, depreciation, and amortization expenses.

Balance Sheet Liquidity

Cash and cash equivalents were $4.0 million at March 31, 2018, compared to $4.2 million at December 31, 2017.  Pursuant to the terms of the Company’s credit agreement, during the first quarter of 2017, the Company borrowed a required $1.0 million on its line of credit, which remains unused as part of cash and cash equivalents on the balance sheet as of March 31, 2018.

2018 Financial Guidance

Management reiterates its full year 2018 financial guidance and franchise opening expectations as set forth below:

Conference Call

The Joint Corp. management will host a conference call at 5 p.m. ET on Thursday, May 10, 2018, to discuss the first quarter 2018 results. The conference call may be accessed by dialing 765-507-2604 or 844-464-3931, and referencing conference code 1394097. A live webcast of the conference call will also be available on the investor relations section of the company’s website at www.thejoint.com. An audio replay will be available two hours after the conclusion of the call through May 17, 2018. The replay can be accessed by dialing 404-537-3406 or 855-859-2056. The passcode for the replay is 1394097.

Non-GAAP Financial Information

This earnings release includes a presentation of 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, as management believes they provide a more transparent view of the Company’s underlying operating performance and operating trends. Reconciliation of net loss to EBITDA and Adjusted EBITDA is presented in the table below. The Company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, loss on disposition or impairment, and stock-based compensation expenses. The Company defines EBITDA as net income (loss) before net interest, tax expense, depreciation, and amortization expenses.

EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operations, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with the Company’s financial statements filed with the United States Securities and Exchange Commission (“SEC”).

Forward-Looking Statements

This press release contains statements about future events and expectations that constitute forward-looking statements. 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. 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 failure to develop or acquire corporate clinics as rapidly as we intend, our failure to profitably operate corporate clinics, and the factors described in “Risk Factors” in our Annual Reports on Form 10-K as filed with the SEC for the year ended December 31, 2017.  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. 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.

About The Joint Corp. (NASDAQ:JYNT)

Based in Scottsdale, Arizona, The Joint is an emerging growth company that is reinventing chiropractic by making quality care convenient and affordable for patients seeking pain relief and ongoing wellness. Its no-appointment policy and convenient hours and locations make care more accessible, and affordable membership plans and packages eliminate the need for insurance. With over 400 clinics nationwide and nearly 5 million patient visits annually, The Joint is a key leader in the chiropractic profession. For more information, visit www.thejoint.com or follow the brand on Twitter, Facebook, YouTube and LinkedIn.

Business Structure

The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, Florida, Illinois, Kansas, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee and Washington, The Joint and its franchisees provide management services to affiliated professional chiropractic practices.

Media Contact: Molly Hottle, The Joint Corp., molly.hottle@thejoint.com
Investor Contact: Kirsten Chapman, LHA Investor Relations, 415-433-3777, thejoint@lhai.com

 
THE JOINT CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
      
   March 31, December 31,
    2018   2017 
ASSETS  (unaudited) (as adjusted)
Current assets:     
Cash and cash equivalents  $4,033,730  $4,216,221 
Restricted cash   134,189   103,819 
Accounts receivable, net   1,047,540   1,138,380 
Income taxes receivable   -   - 
Notes receivable - current portion   176,262   171,928 
Deferred franchise costs - current portion   522,123   498,433 
Prepaid expenses and other current assets   733,502   542,342 
Total current assets   6,647,346   6,671,123 
Property and equipment, net   3,719,459   3,800,466 
Notes receivable, net of current portion and reserve   306,132   351,857 
Deferred franchise costs, net of current portion   2,422,698   2,312,837 
Intangible assets, net   1,636,978   1,760,042 
Goodwill   2,916,426   2,916,426 
Deposits and other assets   594,213   611,808 
Total assets  $18,243,252  $18,424,559 
      
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:     
Accounts payable  $935,658  $1,068,668 
Accrued expenses   197,812   86,959 
Co-op funds liability   134,189   89,681 
Payroll liabilities   846,919   867,430 
Notes payable - current portion   100,000   100,000 
Deferred rent - current portion   173,010   152,198 
Deferred franchise revenue - current portion   1,986,524   1,994,182 
Deferred revenue from company clinics   905,625   867,804 
Other current liabilities   388,354   72,534 
Total current liabilities   5,668,091   5,299,456 
Notes payable, net of current portion   1,000,000   1,000,000 
Deferred rent, net of current portion   750,010   802,492 
Deferred franchise revenue, net of current portion   9,602,898   9,560,242 
Deferred tax liability   57,191   136,434 
Other liabilities   106,562   411,497 
Total liabilities   17,184,752   17,210,121 
Commitments and contingencies     
Stockholders' equity:     
Series A preferred stock, $0.001 par value; 50,000     
shares authorized, 0 issued and outstanding, as of March 31, 2018,     
and  December 31, 2017   -   - 
Common stock, $0.001 par value; 20,000,000 shares     
authorized, 13,607,838 shares issued and 13,593,754 shares outstanding     
as of March 31, 2018 and 13,600,338 shares issued and 13,586,254     
outstanding as of December 31, 2017   13,607   13,600 
Additional paid-in capital   37,460,828   37,229,869 
Treasury stock 14,084 shares as of March 31, 2018 and     
December 31, 2017, at cost   (86,045)  (86,045)
Accumulated deficit   (36,329,890)  (35,942,986)
Total stockholders' equity   1,058,500   1,214,438 
Total liabilities and stockholders' equity  $18,243,252  $18,424,559 
      


 
THE JOINT CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
     
  Three Months Ended
  March 31,
   2018   2017 
Revenues:    (as adjusted) 
Revenues and management fees from company clinics $3,256,624  $2,496,334 
Royalty fees  2,273,988   1,706,073 
Franchise fees  348,337   295,540 
Advertising fund revenue  659,030   598,436 
Software fees  307,475   267,013 
Regional developer fees  135,011   64,146 
Other revenues  117,450   79,605 
Total revenues  7,097,915   5,507,147 
Cost of revenues:    
Franchise cost of revenues  872,768   634,855 
IT cost of revenues  99,564   58,861 
Total cost of revenues  972,332   693,716 
Selling and marketing expenses  1,102,304   958,706 
Depreciation and amortization  387,417   577,987 
General and administrative expenses  5,074,927   4,564,078 
Total selling, general and administrative expenses  6,564,648   6,100,771 
Loss on disposition or impairment  -   417,971 
Loss from operations  (439,065)  (1,705,311)
     
Other (expense) income, net  (11,194)  (19,465)
Loss before income tax expense  (450,259)  (1,724,776)
     
Income tax benefit (expense)  63,355   (40,609)
     
Net loss and comprehensive loss $(386,904) $(1,765,385)
     
Loss per share:    
Basic and diluted loss per share $(0.03) $(0.14)
     
Basic and diluted weighted average shares  13,587,837   13,042,595 
     
Non-GAAP Financial Data:    
Net loss $(386,904) $(1,765,385)
Net Interest  11,194   23,820 
Depreciation and amortization expense  387,417   577,987 
Tax (benefit) expense  (63,355)  40,609 
EBITDA $(51,648) $(1,122,969)
Stock compensation expense  207,641   95,065 
Acquisition related expenses  -   12,650 
Loss on disposition or impairment  -   417,971 
Bargain purchase gain  -   - 
Adjusted EBITDA $155,993  $(597,283)
         



 
THE JOINT CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
     
  Three Months Ended
  March 31,
   2018   2017 
    (as adjusted)
Net loss $(386,904) $(1,765,385)
Adjustments to reconcile net loss to net cash  516,203   1,127,243 
Changes in operating assets and liabilities  (162,402)  (640,418)
Net cash used in operating activities  (33,103)  (1,278,560)
Net cash used in investing activities  (142,343)  (29,317)
Net cash provided by financing activities  23,325   952,777 
Net decrease in cash, cash equivalents and restricted cash $(152,121) $(355,100)
     

_____________________________

1 Comp sales refers to the amount of sales a clinic generates in the most recent accounting period, compared to sales in the comparable period of the prior year, and (i) includes sales only from clinics that have been open at least 13 full months and (ii) excludes any clinics that have closed.


EdgarFiling

EXHIBIT 99.2

 

 

REINVENTING CHIROPRACTIC CARE THE JOINT CORP. | NASDAQ: JYNT | thejoint.com Q1 2018 FINANCIAL RESULTS AS OF MAY 10, 2018

 

 

Safe Harbor Statement Certain statements contained in this presentation are "forward - looking statements." We have tried to identify these forward - look ing statements by using words such as "may," "might," " will," "expect,” "anticipate,'' "'believe,“ "could," " intend," "plan," "estimate," "should," "if,“ "project," and similar expressio ns. All statements other than statements of historical facts contained in this presentation, including statements regarding our growth strategies, our vision, future operations, future financial posi tio n, future revenue, projected costs, prospects, plans, objectives of management and expected market growth and potential are forward - looking statements. We have based these forward - looking statemen ts on our current expectations and projections about future events. However, these forward - looking statements are subject to risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from our expectations and projections. Some of these risks, uncertainties and other factors are set f ort h in this presentation and in other documents we file with the United States Securities and Exchange Commission (the "SEC"). Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward - looking statements. Projec tions and other forward - looking statements included in this presentation have been prepared based on assumptions, which we believe to be reasonable, but not in accordance with U.S. Gene ral ly Accepted Accounting Principals (“GAAP”) or any guidelines of the SEC. Actual results may vary, perhaps materially. You are strongly cautioned not to place undue reliance on su ch projections and other forward - looking statements. All subsequent written and oral forward - looking statements attributable us or to persons acting on our behalf are expressly qualifie d in their entirety by these cautionary statements. Except as required by federal securities laws, we disclaim any intention or obligation to update or revise any forward - looking statements, whether as a result of new information, future events or otherwise. Any such forward - looking statements, whether made in this presentation or elsewhere, should be considered in the cont ext of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed above. In addition to results presented in accordance with U.S. GAAP, this presentation includes a presentation of EBITDA and Adjust ed EBITDA, which are non - GAAP financial measures. EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as mana gem ent believes they provide a more transparent view of the Company’s underlying operating performance and operating trends. Reconciliations of net loss to EBITDA and Adjusted EBITD A a re presented where applicable. We define EBITDA as net income (loss) before net interest, taxes, depreciation and amortization expenses. We define Adjusted EBITDA as EBITDA before acq uisition - related expenses, bargain purchase gain, loss on disposition or impairment, and stock - based compensation expenses. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operat ion s, as determined by GAAP. While EBITDA and Adjusted EBITDA are frequently used as measures of financial performance and the ability to meet debt service requirements, they are n ot necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with our financial statements filed with the SEC. Business Structure The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, Florida, Illinois, Kansas, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, and Tennessee, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices. 2 © 2018 | NASDAQ: JYNT | thejoint.com

 

 

3 © 2018 | NASDAQ: JYNT | thejoint.com Achi • Increasing clinic scale through franchise sales and regional developers • Reengaging in company - owned/managed clinic acquisition or build - out, first purchased in April 2018 92% CAGR (7 year) SYSTEM - WIDE GROSS SALES ($ in Ms ) Leader Executing Growth Strategy: 400+ Clinics 3 © 2018 | NASDAQ: JYNT | thejoint.com 12 26 82 175 242 265 309 352 359 4 47 61 47 47 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018 312 370 246 406 TOTAL CLINCS OPEN 399 $1.3 $2.8 $8.1 $22.3 $46.2 $70.1 $98.6 $126.9 $37.0 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018

 

 

4 © 2018 | NASDAQ: JYNT | thejoint.com Achi Another Strong Quarter of Improvements 2018 vs 2017 System - wide gross sales 32% System - wide comp sales >13 months 1 26% System - wide comp sales >48 months 1 17% Revenue 29% Net loss $(387)k, up $1.4M Adjusted EBITDA 2 $156k, up $753k Cash and equivalents at Mar. 31, 2018 $4.0M 1 Comparable Sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinic s t hat have closed 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix SYSTEM - WIDE GROSS SALES ($ in Ms ) 4 © 2018 | NASDAQ: JYNT | thejoint.com

 

 

5 © 2018 | NASDAQ: JYNT | thejoint.com Achi $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Avg. Monthly Gross Sales Month In Operations Historical Ramp* 2016 Class (64 Clinics) 2017 Class (41 Clinics) Reducing Clinic Time to Breakeven • 2017 Clinics continue to grow in gross sales and ramp above the historical performance • 2018 Clinics in the early months exceeded the historical and the 2017 clinic ramp Breakeven Range * Based on average historical gross sales growth rates from January 2013 through March 2018 5 © 2018 | NASDAQ: JYNT | thejoint.com

 

 

6 © 2018 | NASDAQ: JYNT | thejoint.com Achi RDs Accelerate Franchise License Sales 8 11 13 16 18 18 Q4 2016 Q1 2027 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Franchise sales through April 2018 were 27, compared to 37 for all of 2017 NUMBER OF REGIONAL DEVELOPERS 6 © 2018 | NASDAQ: JYNT | thejoint.com GROSS CUMULATIVE FRANCHISE LICENSES SOLD 1 1 Of the 632 franchise licenses sold at March 31 st , 2018, 114 have not been developed

 

 

7 © 2018 | NASDAQ: JYNT | thejoint.com IT Supports Franchises, RDs & Corp. Clinics ▪ Launched a new sophisticated cloud - based franchise management software and communication platform ▪ Provides access tools, documents, resources; disseminate communications, assign tasks, join events, engage and contribute feedback ▪ Improves lines of communication with franchisees ▪ Streamlines by integrating or replacing multiple, preexisting communication platforms ▪ Implementing Atlas 2.0 upgrade

 

 

8 © 2018 | NASDAQ: JYNT | thejoint.com Digital Marketing to Drive Growth ▪ Strive to lead best practices and innovation within health & wellness and small box retail ▪ Overhauled SEO strategy including new consumer facing website ▪ Yielding strong gains in web traffic, leads and new patient conversion ▪ Helping fuel sales growth, accelerate new clinic ramp to profitability, optimize advertising spend ▪ Pursuing performance in paid search, paid social, email and SMS ▪ Diversifying branded video to increase traffic from and engagement on social platforms

 

 

9 © 2018 | NASDAQ: JYNT | thejoint.com Q1 2018 Operational Summary • System - wide gross sales up 32% to $37.0M, from $28.1M in Q1 2017 • System - wide comp sales 1 for clinics >13 months in operation 1 increased 26%, compared to 19% in Q1 2017 • System - wide comp sales 1 for clinics >48 months in operation increased 17%, compared to 11% in Q1 2017 • 406 open clinics vs. 373 at the end of Q1 2018 vs. Q1 2017 • 359 franchises • 47 corporate clinics • 31 buybacks • 16 greenfields • System - wide gross sales since the month prior to acquisition increased on average 68% through March 2018 2018 Q1 1 Comparable Sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinic s t hat have closed

 

 

10 © 2018 | NASDAQ: JYNT | thejoint.com Achi $ in Ms Q1 2018 Q1 2017 IMPROVEMENT Revenue Corporate clinics Franchise fees $7.1 3.3 3.8 $5.5 2.5 3.0 $1.6 0.8 0.8 29% 30% 28% Inc. revenue contribution • 48% Corp. • 52% Franchise Cost of revenue 1.0 0.7 (0.3) (40%) Inc. gross sales and RD fees Gross profit 6.1 4.8 1.3 27% Sales and marketing 1.1 1.0 (0.1) (15%) Higher corp. clinic marketing Depreciation 0.4 0.6 0.2 33% Lower depreciation G&A 5.1 4.6 (0.5) 11% Higher payroll Loss from ops (0.4) (1.3) 0.9 66% Net loss (0.4) (1.8) 1 1.4 78% Adj. EBITDA 2 0.2 (0.6) 0.8 Inc. contribution: 76% corp. clinics, 77% franchise, (53)% unallocated corp. Cash & equivalents were $ 4.0M at Mar. 31, 2018, compared to $4.2M at Dec. 31, 2017. Q1 2018 Financial Summary 10 © 2018 | NASDAQ: JYNT | thejoint.com 1 Q1 2017 included a charge of $418,000 related to the disposition and impairment of non - operating leases. 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix

 

 

11 © 2018 | NASDAQ: JYNT | thejoint.com $ in Ms LOW HIGH New Franchise Openings 40 50 Additional Company - owned or Managed Clinics 1 0 5 New Clinic Openings 1 40 52 Revenues $31.0 $32.0 Adjusted EBITDA 2 $2.5 $3.5 Driving Shareholder Value: 2018 Guidance 1 Existing clinics are acquired from franchisees and are neutral to the total clinic count 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the appendix

 

 

12 © 2018 | NASDAQ: JYNT | thejoint.com Opportunity in Highly Fragmented Market • $650B in pain costs • $90B in back pain alone • 78% of adults in the US prefer drug - free pain management 3 • 79% of surveyed significantly reduced pain and disability using utilizing manipulation or mobilization 4 $15B 1 on chiropractic care 39,000 2 independent practitioners 1 IBIS World Chiropractors Market Research Report; August 2016 2 Kentley Insights, The 2017 Office of Chiropractors Market Research Report 3 Gallup - Palmer College of Chiropractic Report 2017 4 The SPINE Journal 2018

 

 

13 © 2018 | NASDAQ: JYNT | thejoint.com 2018 Growth Strategy: Driving Scale • Accelerate franchise sales • Leverage Regional Developers • Reengage growth of company owned/managed units • Acquire buyback clinics opportunistically • Build greenfield clinics in clustered locations Building nationwide brand to deliver shareholder value

 

 

14 © 2018 | NASDAQ: JYNT | thejoint.com Stable Model, Significant Growth Potential 1 IBIS World Chiropractors Market Research Report; August 2016 2 For the year - ended December 31, 2017 • $ 15B growing chiropractic market 1 • Experienced, proven management • 1,700+ clinic national footprint opportunity • 92% 7 - year CAGR in system - wide gross sales 2 • 22% of The Joint patients are new to chiropractic 2 • 76% of revenue from recurring memberships 2 • High returns, self funding growth strategy

 

 

Non - GAAP Measure Definition This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non - GAAP financial measures. EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they provide a more transparent view of the Company’s underlying operating performance and operating trends. Reconciliations of net loss to EBITDA and Adjusted EBITDA are presented where applicable. The Company defines EBITDA as net income (loss) before net interest, taxes, depreciation and amortization expenses. The Company defines Adjusted EBITDA as EBITDA before acquisition - related expenses, bargain purchase gain, loss on disposition or impairment, and stock - based compensation expenses. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operations, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are frequently used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with the Company’s financial statements filed with the SEC. 15 © 2018 | NASDAQ: JYNT | thejoint.com

 

 

16 © 2018 | NASDAQ: JYNT | thejoint.com Q1 2018 Segment Results & GAAP Reconciliation 2018 Q1 Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 3,257$ 3,841$ -$ 7,098$ Total Operating Costs (3,146) (2,027) (2,365) (7,537) Operating Income (Loss) 111 1,815 (2,365) (439) Other (Income) Expense, net (1) 13 (23) (11) Loss before income tax expense 110 1,828 (2,388) (450) Total Income Taxes - - (63) (63) Net Income (Loss) 110 1,828 (2,324) (387) Net Interest 1 (13) 23 11 Income Taxes - - (63) (63) Total Depreciation and Amortization Expense 303 0 84 387 EBITDA 414 1,815 (2,281) (52) Stock Based Compensation Exp - - 208 208 Bargain Purchase Gain - - - - Loss on Disposition/Impairment - - - - Acquisition Expenses - - - - Adjusted EBITDA 414 1,815 (2,073) 156

 

 

17 © 2018 | NASDAQ: JYNT | thejoint.com Peter D. Holt, President and CEO peter.holt@thejoint.com John P. Meloun, Chief Financial Officer john.meloun@thejoint.com Kirsten Chapman, LHA Investor Relations thejoint@lhai.com The Joint Corp. Contact Information https://www.facebook.com/thejointchiro @ thejointchiro https://twitter.com/thejointchiro @ thejointchiro https://www.youtube.com/thejointcorp @ thejointcorp The Joint Corp. | 16767 N. Perimeter Dr., Suite 240 | Scottsdale, AZ 85260 | (480) 245 - 5960