The Joint Corp. Reports 2015 First Quarter Financial Results
-- Acquires 15 Company Owned or Managed Clinics and Three Regional Developer Licenses for Corporate Development Year to Date --
SCOTTSDALE, Ariz., May 14, 2015 (GLOBE NEWSWIRE) -- The Joint Corp. (Nasdaq:JYNT), a national healthcare operator and franchisor of chiropractic clinics, today reported financial results for the first quarter ended March 31, 2015.
First Quarter Results Highlights
- Revenues increased 65.8% to $2.5 million.
- Total clinics in operation numbered 253 as of March 31, 2015, an increase of seven clinics from December 31, 2014, and an increase of 61 clinics from March 31, 2014.
- Company owned or managed clinics increased to 15 as of May 5, 2015.
- Company re-acquired three regional developer licenses year-to-date for future corporate development
"The Joint Corp. has delivered strong results to start 2015. We are executing well against our strategy of becoming the leader in the national market for core chiropractic adjustment services through the development of conveniently located, private pay, cash/credit cards-only, clinics that truly provide affordable and convenient care," remarked John Richards, chief executive officer of The Joint Corp. "We have opened 13 franchised clinics in the first quarter, bringing the total number of clinics open as of March 31, 2015 to 253. The total number of clinics include 15 company owned or managed clinics acquired through the buyback of franchises, with 12 acquired in the first quarter alone.
Mr. Richards continued, "These franchise acquisitions, coupled with our strategic reacquisition of regional developer licenses means we have now set the stage to penetrate top Metropolitan Statistical Areas in the country with further development, demonstrating our commitment to build a strong national concept and brand rapidly."
First Quarter 2015 Financial Results
Revenues for the first quarter of 2015 increased 65.8% to $2.5 million from $1.5 million in the first quarter of the previous year as the number of clinics increased by 61, or 32%, to 253 at March 31, 2015, compared to the same period a year ago. Revenue growth was partially offset by a reduction in initial franchise fees as the result of four fewer franchised clinics opening during the first quarter of 2015 compared to the same quarter the previous year.
Total cost of revenues in the first quarter of 2015 increased 2.8% due primarily to higher royalties paid in regional developer territories as the number of units opened and the overall unit performance in these territories increased over the prior year. Total cost of revenues as a percentage of sales decreased to 22.0% in the first quarter of 2015 from 35% in the first quarter last year as incremental revenue was received in 2015 for company owned or managed clinics along with lower regional developer commissions due to fewer clinics opened during the period.
Selling and marketing expenses increased to $967,024 in the first quarter of 2015 compared to $119,944 in the first quarter last year due to marketing commitments recognized in the first quarter of 2015 related to the development of our national marketing campaign and expenses related to our annual national franchise convention held in January 2015.
General and administrative expenses increased to $2.8 million in the first quarter of 2015, compared to $979,690 in the first quarter of 2014, due to an increase in the number of employees to support our growth initiatives, an increase in professional fees for both acquisition related expenses and public company operations.
Depreciation and amortization expenses increased for the first quarter of 2015, compared to the same period last year due to the addition of fixed assets and leasehold improvements associated with the addition of company owned or managed clinics through the repurchase and acquisition of franchised clinics.
Operating loss in the first quarter of 2015 was $(1.9) million, compared to an operating loss of $(157,000) in the first quarter of 2014. Net loss in the first quarter of 2015 was $(1.9) million, or $(0.20) per share, compared to a net loss of $(127,894) or $(0.03) per share in the same quarter last year.
Adjusted EBITDA in the first quarter of 2015 was ($1.5) million, compared to ($0.1) million in the same quarter the prior year.
As of March 31, 2015, cash and cash equivalents were $17.1 million, compared to $20.8 million at December 31, 2014.
2015 Financial Guidance
The Joint Corp. is adjusting full year 2015 revenue guidance due to the introduction of company owned or managed clinics in Professional Corporation (PC) states and their associated revenue treatment as detailed below, and is otherwise re-affirming the balance of its previously issued 2015 guidance including Adjusted EBITDA and the number of new clinic openings that it originally provided in March 2015. PC states are those states where clinical chiropractic services are owned and operated by a licensed chiropractor.
- Total revenues are expected to be in the range of $13 million to $14 million, a change from previous guidance of $14 million to $15 million. This change reflects the required treatment of certain revenue and related expenses associated with clinics operating in the 21 PC states. PC states are regulated by those states' chiropractic boards. This change has no impact on operating profit or Adjusted EBITDA.
- Adjusted EBITDA loss will remain in the range of $(7.1) million to $(7.5) million.
- Net new clinic openings will remain in the range of 65 to 75, including 38 to 42 company owned or managed clinics and 45 to 55 franchised clinics.
Conference Call
The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, May 14, 2015 to discuss results for the 2015 first quarter. The conference call will be accessible by dialing 844-464-3931 (U.S.) or 765-507-2604 (international), and referencing 31460212. 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 21, 2015. The replay can be accessed by dialing (855) 859-2056 or (404) 537-3406. The passcode for the replay is 31460212.
Non-GAAP Financial Information
This earnings release 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 within the tables below. The company defines adjusted EBITDA as EBITDA before acquisition-related expenses, as well as stock-based compensation expense. The company defines EBITDA as net income (loss) before net interest, taxes, depreciation and amortization expense.
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.
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 The Joint Corps.' Registration Statement on Form S-1. 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.
Based in Scottsdale, Ariz., The Joint…the chiropractic place® is reinventing chiropractic care by making quality alternative healthcare affordable for patients seeking pain relief and ongoing wellness. Our membership plans and packages eliminate the need for insurance, and our no-appointment policy, convenient hours and locations make care more accessible. The Joint performs more than two million spinal adjustments a year across 253 clinics nationwide. For more information, visit www.thejoint.com, follow us on Twitter @thejointchiro and find us on Facebook, YouTube and LinkedIn.
| THE JOINT CORP. AND SUBSIDIARY | ||
| CONSOLIDATED BALANCE SHEETS | ||
| March 31, | December 31, | |
| 2015 | 2014 | |
| ASSETS | (unaudited) | (audited) |
| Current assets: | ||
| Cash and cash equivalents | $ 17,082,930 | $ 20,796,783 |
| Restricted cash | 338,561 | 224,576 |
| Accounts receivable, net | 775,669 | 704,905 |
| Income taxes receivable | 395,814 | 395,814 |
| Note receivable - current portion | 24,598 | 27,528 |
| Deferred franchise costs - current portion | 579,800 | 622,800 |
| Deferred tax asset - current portion | 208,800 | 208,800 |
| Prepaid expenses and other current assets | 80,326 | 375,925 |
| Total current assets | 19,486,498 | 23,357,131 |
| Property and equipment, net | 1,587,544 | 1,134,452 |
| Note receivable | 27,942 | 31,741 |
| Deferred franchise costs, net of current portion | 2,432,900 | 2,574,450 |
| Intangible assets, net | 1,084,583 | 153,000 |
| Goodwill | 1,821,040 | 636,104 |
| Deposits and other assets | 86,051 | 585,150 |
| Total assets | $ 26,526,558 | $ 28,472,028 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 1,575,614 | $ 1,271,405 |
| Co-op funds liability | 298,561 | 186,604 |
| Payroll liabilities | 627,467 | 617,944 |
| Note payable - current portion | 115,000 | -- |
| Deferred rent - current portion | 98,053 | 93,398 |
| Deferred revenue - current portion | 2,008,106 | 1,957,500 |
| Other current liabilities | 41,575 | 50,735 |
| Total current liabilities | 4,764,376 | 4,177,586 |
| Note payable - net of current portion | 140,000 | -- |
| Deferred rent, net of current portion | 432,317 | 451,766 |
| Deferred revenue, net of current portion | 7,037,500 | 7,915,918 |
| Other liabilities | 296,448 | 299,405 |
| Total liabilities | 12,670,641 | 12,844,675 |
| Commitment and contingencies | ||
| Stockholders' equity: | ||
| Series A preferred stock, $0.001 par value; 50,000 | ||
| shares authorized, 0 issued and outstanding, as of March 31, 2015, | ||
| and December 31, 2014 | -- | -- |
| Common stock, $0.001 par value; 20,000,000 shares | ||
| authorized, 10,265,019 shares issued and 9,731,019 shares outstanding | ||
| as of March 31, 2015 and 10,196,502 shares issued and 9,662,502 | ||
| outstanding as of December 31, 2014 | 10,265 | 10,197 |
| Additional paid-in capital | 21,553,194 | 21,420,975 |
| Treasury stock (534,000 shares, at cost) | (791,638) | (791,638) |
| Accumulated deficit | (6,915,904) | (5,012,181) |
| Total stockholders' equity | 13,855,917 | 15,627,353 |
| Total liabilities and stockholders' equity | $ 26,526,558 | $ 28,472,028 |
| THE JOINT CORP. AND SUBSIDIARY | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| Three Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| Revenues: | ||
| Royalty fees | $ 1,015,513 | $ 608,327 |
| Franchise fees | 348,000 | 464,000 |
| Revenues and management fees from company clinics | 387,453 | -- |
| Advertising fund revenue | 285,516 | 86,734 |
| IT related income and software fees | 203,975 | 199,625 |
| Regional developer fees | 217,500 | 108,750 |
| Other income | 49,941 | 45,401 |
| Total revenues | 2,507,898 | 1,512,837 |
| Cost of revenues: | ||
| Franchise cost of revenues | 507,566 | 458,776 |
| IT cost of revenues | 37,695 | 71,748 |
| Total cost of revenues | 545,261 | 530,524 |
| Selling and marketing expenses | 967,024 | 119,944 |
| Depreciation and amortization | 122,596 | 40,066 |
| General and administrative expenses | 2,788,240 | 979,690 |
| Total selling, general and administrative expenses | 3,877,860 | 1,139,700 |
| Loss from operations | (1,915,223) | (157,387) |
| Other expense | 11,500 | -- |
| Loss before income tax benefit | (1,903,723) | (157,387) |
| Income tax benefit | -- | 29,493 |
| Net loss | $ (1,903,723) | $ (127,894) |
| Loss per share: | ||
| Basic and diluted loss per share | $ (0.20) | $ (0.03) |
| Basic and diluted weighted average common shares outstanding | 9,662,502 | 4,811,561 |
| Non-GAAP Financial Data: | ||
| Net loss | (1,903,723) | (127,894) |
| Interest expense | 528 | -- |
| Depreciation and amoritzation expense | 122,596 | 40,066 |
| Tax expense (benefit) penalties and interest | -- | (29,493) |
| EBITDA | (1,780,599) | (117,321) |
| Stock compensation | 132,287 | 15,600 |
| Acquisition related expenses | 142,709 | -- |
| Adjusted EBITDA | (1,505,603) | (101,721) |
| THE JOINT CORP. AND SUBSIDIARY | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| Three Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| (unaudited) | (unaudited) | |
| Net loss | $ (1,903,723) | $ (127,894) |
| Adjustments to reconcile net loss to net cash | 84,730 | 55,664 |
| Changes in operating assets and liabilities | 475,932 | 122,009 |
| Net cash (used in) provided by operating activities | (1,343,061) | 49,779 |
| Net cash used in investing activities | (2,370,792) | (542,654) |
| Net cash used in financing activities | -- | -- |
| Net decrease in cash | $ (3,713,853) | $ (492,875) |
CONTACT: Investor Contact:
Peter Vozzo
peter.vozzo@westwicke.com
443-213-0505
Media Contact:
Marcia Rhodes
mrhodes@acmarketingpr.com
480-664-8412, ext. 15
Source: The Joint Corp.
Released May 14, 2015