Press Releases

Added 7 Company-Owned or Managed and 12 Franchised Clinics in First Quarter

SCOTTSDALE, Ariz., May 12, 2016 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ:JYNT), a national operator, manager and franchisor of chiropractic clinics, today reported results for the quarter ended March 31, 2016. 

Financial Highlights

• Revenue increased 70% in the first quarter of 2016 to $4.3 million, up from $2.5 million in the same quarter last year.
• System wide Comp Sales¹ in the first quarter of 2016 were 32% over the comparable period in the previous year.
• 331 total clinics in operation as of March 31, 2016, an increase of 19 clinics during the first quarter, and an increase of 78 clinics from March 31, 2015.
• Company-owned or managed clinics increased by 7 during the first quarter of 2016, to 54 as of March 31, 2016. All 7 were newly-developed (greenfield) clinics.

“Our first quarter results showed a strong start to the year and a continuation of our growth and operating strategy,” said John B. Richards, chief executive officer of The Joint Corp. “We expanded in the Chicago, Los Angeles and Orange County, California markets by adding newly-developed clinics as well as franchised clinics during the quarter. Operational influence on sales performance across the portfolio of acquired company-owned or managed clinics has been strong, evidenced by revenues from clinics acquired and owned or managed for at least nine months increasing by 28% on average in the first nine months under our management. In addition, the performance of clinics that we have operated for greater than 48 months continued their strong comp clinic revenue growth, growing by 17% in the first quarter of 2016 over the prior year period.”

Richards added, “I am also pleased to announce the addition of Peter Holt as chief operating officer. Peter brings a wealth of operational and development experience to us at a critical time in the company’s growth. His appointment underscores our continued commitment toward overall operational excellence and service to our important franchise system as we move toward profitability and continue the expansion of our exciting concept.” 

First Quarter 2016 Financial Results

Revenue for the first quarter of 2016 increased 70% to $4.3 million from $2.5 million in the first quarter of the prior year due primarily to the addition and growth of 42 company-owned or managed clinics and the addition of 36 franchised clinics since March 31, 2015.

Cost of revenue in the first quarter of 2016 increased 36% compared to the first quarter of 2015, due primarily to an increase in regional developer royalties driven by the continued growth in sales and openings of franchised clinics.

Selling and marketing expense decreased to $0.7 million in the first quarter of 2016, compared to $1.0 million in the same period last year, due to the timing of the Company’s national marketing fund expenditures.  

General and administrative expense increased to $5.7 million in the first quarter of 2016, compared to $2.8 million in the first quarter of 2015, due to payroll and occupancy expenses at the Company’s 54 owned or managed clinics, and to increases in the number of employees to support the company’s growth initiatives and public company operations.

Depreciation and amortization expense increased for the first quarter of 2016, compared to the same period last year, due to the addition of property and equipment and intangible assets relating to acquisitions of franchises and regional developer rights, as well as the growth in the number of greenfield clinics.

Operating loss in the first quarter of 2016 was ($3.5) million, compared to an operating loss of ($1.9) million in the first quarter of 2015. Net loss in the first quarter of 2016 was ($3.5) million, or ($0.28) per share, compared to a net loss of ($1.9) million or ($0.20) per share in the same period last year.

Adjusted EBITDA in the first quarter of 2016 was ($2.7) million, compared to ($1.5) million in the same quarter the prior year.

As of March 31, 2016, cash and cash equivalents were $10.4 million, compared to $16.8 million at December 31, 2015.

2016 Financial Guidance

For full year 2016, The Joint Corp. is reiterating guidance for total revenues and net new clinic openings and adjusting guidance for Adjusted EBITDA as set forth below:

• Total revenues will remain in the range of $19 million to $21 million
• Net new clinic openings will remain in the range of 68 to 72   
• Adjusted EBITDA loss in the range of ($8.9) million to ($8.2) million, compared to the previously expected range of ($6.6) million to ($6.4) million

Conference Call

The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, May 12, 2016, to discuss the first quarter 2016 results. The conference call will be accessible by dialing 844-464-3931 (U.S.) or 765-507-2604 (international), and referencing 93144858. 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 19, 2016. The replay can be accessed by dialing (855) 859-2056 or (404) 537-3406. The passcode for the replay is 93144858.

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, bargain purchase gain, and 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 our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC. 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)

The Joint is reinventing chiropractic by making quality care convenient and affordable for patients seeking pain relief and ongoing wellness. Our no-appointment policy and convenient hours and locations make care more accessible, and our affordable membership plans and packages eliminate the need for insurance. With 330+ clinics nationwide and more than 3 million patient visits annually, The Joint is an emerging growth company and key leader in the chiropractic profession. For more information, visit www.thejoint.com, follow us on Twitter @thejointchiro and find us on Facebook, You Tube and LinkedIn.

Business Structure

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

¹ Comp Sales refers to the amount of sales a clinic generates in the most recent accounting period, relative to the amount of sales it generated in a similar period in the past, and (i) includes sales only from clinics that have been open at least 13 full months and (ii) excludes any clinics that have closed.

The above table presents the reconciliation of net income (loss) to Adjusted EBITDA for the three months periods ended March 31, 2016 and 2015.

Investor Contact:
Peter Vozzo
peter.vozzo@westwicke.com
443-213-0505

Media Contact:
Inna Lazarev
Public Relations Manager
Inna.lazarev@thejoint.com

Released May 12, 2016