Press Releases

The Joint Corp. Reports Second Quarter 2016 Financial Results; Names Peter D. Holt Chief Executive Officer

The Company Added 29 Total Clinics in First Six Months

SCOTTSDALE, Ariz., Aug. 11, 2016 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ:JYNT), a national operator, manager and franchisor of chiropractic clinics, today reported results for the quarter ended June 30, 2016.  Concurrently, the Company’s board of directors announced the appointment of Peter D. Holt as chief executive officer and as a member of the Company’s board of directors, effective immediately.  

Second Quarter 2016 Financial Highlights

  • Revenue increased 45% in the second quarter of 2016 to $5.0 million, up from $3.4 million in the same quarter last year.
  • System wide Comp Sales1 in the second quarter of 2016 were 27%.
  • 341 total clinics in operation as of June 30, 2016, an increase of 10 clinics during the second quarter and an increase of 79 clinics from June 30, 2015.
  • Company-owned or managed clinics increased by 7 during the second quarter of 2016, to 61 as of June 30, 2016.

“Strong revenue growth for the second quarter of 2016 was driven by the addition of 79 clinics over the last 12 months, including 38 company-owned or managed clinics,” said Peter D. Holt, chief executive officer of The Joint Corp. “I am pleased to report that during the second quarter we continued the expansion of our exciting concept, made progress toward profitability and strengthened our commitment to operational excellence. As we previously mentioned, we will not be adding any additional company-owned or operated clinics for the rest of the year.  This will allow our new classes of 2015 and 2016 greenfield clinics an opportunity to mature while we manage our capital and growth accordingly.” Holt added, “In addition, it’s an honor to be appointed CEO and to lead The Joint team into its next chapter of growth.”

“I am happy to announce that the board of directors has unanimously approved Peter’s appointment as CEO,” said Richard Kerley, lead director of The Joint Corp. Board of Directors. “This decision was based not only on his previous executive and industry experiences, but also on the leadership qualities he has displayed while in the role of chief operating officer and acting chief executive officer of The Joint Corp. We are very pleased that Peter has accepted this position and are confident that his in-depth knowledge of our industry as well as his proven franchising and operating capabilities in the retail industry are exactly what we need to lead the organization going forward.”

Second Quarter 2016 Financial Results

Revenue for the second quarter of 2016 increased 45% to $5.0 million from $3.4 million in the second quarter of the prior year due primarily to the addition and growth of 38 company-owned or managed clinics and the addition of 41 franchised clinics since June 30, 2015.

Cost of revenue in the second quarter of 2016 decreased 8.1% compared to the second quarter of 2015, due to a decrease in openings of franchised clinics and the termination of franchise licenses.

Selling and marketing expenses increased to $1.2 million in the second quarter of 2016, compared to $0.5 million in the same period last year, due to an increase in the number of company-owned or managed clinics and the timing of the Company’s national marketing fund expenditures.

General and administrative expenses increased to $5.6 million in the second quarter of 2016, compared to $3.7 million in the second quarter of 2015. This increase was driven by additional payroll and occupancy expenses associated with having more clinics open in the second quarter of 2016 compared to the same period the prior year.

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

Operating loss in the second quarter of 2016 was ($3.2) million, compared to an operating loss of ($1.9) million in the second quarter of 2015. Net loss in the second quarter of 2016 was ($3.3) million, or ($0.26) per share, compared to a net loss of ($1.9) million or ($0.19) per share in the same period last year.

Adjusted EBITDA in the second quarter of 2016 was ($2.0) million, compared to ($1.3) million in the same quarter the prior year.

As of June 30, 2016, cash and cash equivalents were $6.1 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, Adjusted EBITDA and net new clinic openings as set forth below:

  • Total revenues in the range of $19 million to $21 million.
  • Adjusted EBITDA loss in the range of $(8.9) million to $(8.2) million.
  • Net new clinic openings in the range of 58 to 63, including greenfields which make up 8 of the 14 company-owned or managed clinics added during the first six months of 2016, and 50 to 55 franchised clinics.

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.

Conference Call

The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, August 11, 2016, to discuss the second quarter 2016 results. The conference call will be accessible by dialing 765-507-2604 or 844-464-3931 (toll-free), and referencing 58534173. A live webcast of the conference call will also be available on the investor relations section of the Company’s website at  An audio replay will be available two hours after the conclusion of the call through August 18, 2016. The replay can be accessed by dialing (404) 537-3406 or (855) 859-2056. The passcode for the replay is 58534173.

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 expenses. The Company defines EBITDA as net income (loss) before net interest, taxes, 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 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)

At The Joint we are 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 340+ clinics nationwide and more than 3 million patient visits annually, we have become a key leader and innovator in the chiropractic profession. For more information, visit, 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 Arkansas, California, Colorado, Florida, Illinois, Kansas, Michigan, 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.

      June 30,   December 31,      
        2016       2015        
  ASSETS   (unaudited)          
  Current assets:              
  Cash and cash equivalents   $   6,118,763     $   16,792,850        
  Restricted cash       565,175         385,282        
  Accounts receivable, net       1,807,783         743,239        
  Income taxes receivable       38,814         70,981        
  Note receivable - current portion       46,500         60,908        
  Deferred franchise costs - current portion       578,800         605,850        
  Prepaid expenses and other current assets       359,695         366,033        
  Total current assets       9,515,530         19,025,143        
  Property and equipment, net       8,171,315         7,138,746        
  Note receivable, net of current portion and reserve       18,327         15,823        
  Deferred franchise costs, net of current portion       1,252,950         1,534,700        
  Intangible assets, net       2,727,232         2,542,269        
  Goodwill       2,945,263         2,466,937        
  Deposits and other assets       626,073         638,710        
  Total assets   $   25,256,690     $   33,362,328        
  Current liabilities:              
  Accounts payable   $   1,135,052     $   1,996,971        
  Accrued expenses       107,093         375,529        
  Co-op funds liability       104,363         201,078        
  Payroll liabilities       538,688         1,493,375        
  Notes payable - current portion       550,400         451,850        
  Deferred rent - current portion       277,041         334,560        
  Deferred revenue - current portion       2,599,896         2,579,423        
  Other current liabilities       68,614         54,596        
  Total current liabilities       5,381,147         7,487,382        
  Notes payable, net of current portion       -          130,000        
  Deferred rent, net of current portion       1,391,965         457,290        
  Deferred revenue, net of current portion       3,499,387         4,369,702        
  Other liabilities       269,456         238,648        
  Total liabilities       10,541,955         12,683,022        
  Commitments and contingencies              
  Stockholders' equity:              
  Series A preferred stock, $0.001 par value; 50,000               
  shares authorized, 0 issued and outstanding, as of June 30, 2016,              
  and December 31, 2015       -          -         
  Common stock, $0.001 par value; 20,000,000 shares               
  authorized, 13,262,016 shares issued and 12,728,016 shares outstanding            
  as of June 30, 2016 and 13,070,180 shares issued and 12,536,180              
  outstanding as of December 31, 2015       13,262         13,070        
  Additional paid-in capital       36,089,128         35,267,376        
  Treasury stock (534,000 shares as of June 30, 2016 and               
  December 31, 2015, at cost)       (791,638 )       (791,638 )      
  Accumulated deficit       (20,596,017 )       (13,809,502 )      
  Total stockholders' equity        14,714,735         20,679,306        
  Total liabilities and stockholders' equity    $   25,256,690     $   33,362,328        

    Three Months Ended Six Months Ended  
    June 30,   June 30,  
      2016       2015       2016       2015    
Revenues and management fees from company clinics   $   2,137,252     $   783,016     $   3,795,805     $   1,170,469    
Royalty fees       1,428,548         1,098,190         2,797,379         2,113,704    
Franchise fees       524,209         876,259         1,039,009         1,224,259    
Advertising fund revenue       356,580         339,462         622,301         624,978    
IT related income and software fees       229,400         197,214         450,534         401,189    
Regional developer fees       225,080         50,750         372,617         268,250    
Other revenues       72,972         81,855         161,432         131,796    
Total revenues       4,974,041         3,426,746         9,239,077         5,934,645    
Cost of revenues:                  
Franchise cost of revenues       668,851         743,592         1,363,586         1,251,158    
IT cost of revenues       58,888         48,226         104,116         85,921    
Total cost of revenues       727,739         791,818         1,467,702         1,337,079    
Selling and marketing expenses       1,174,178         534,298         1,912,861         1,380,924    
Depreciation and amortization       637,115         278,502         1,212,659         401,098    
General and administrative expenses       5,625,996         3,668,187         11,322,502         6,576,826    
Total selling, general and administrative expenses       7,437,289         4,480,987         14,448,022         8,358,848    
Loss from operations       (3,190,987 )       (1,846,059 )       (6,676,647 )       (3,761,282 )  
Other income (expense), net       3,075         (9,811 )       7,999         1,689    
Loss before income tax expense       (3,187,912 )       (1,855,870 )       (6,668,648 )       (3,759,593 )  
Income tax expense       (73,470 )       -          (117,867 )       -     
Net loss and comprehensive loss   $   (3,261,382 )   $   (1,855,870 )   $   (6,786,515 )   $   (3,759,593 )  
Loss per share:                  
Basic and diluted loss per share   $   (0.26 )   $   (0.19 )   $   (0.54 )   $   (0.39 )  
Basic and diluted weighted average shares       12,672,974         9,768,230         12,620,438         9,734,115    
Non-GAAP Financial Data:                  
Net loss   $   (3,261,382 )   $   (1,855,870 )   $   (6,786,515 )   $   (3,759,593 )  
Interest expense       4,225         -         8,676         -     
Depreciation and amortization       637,115         278,502         1,212,659         401,098    
Income tax expense       73,470         -          117,867         -     
EBITDA   $   (2,546,572 )   $   (1,577,368 )   $   (5,447,313 )   $   (3,358,495 )  
Stock based compensation       559,726         157,212         757,394         289,499    
Acquisition related expenses       18,958         136,544         49,818         279,253    
Adjusted EBITDA   $   (1,967,889 )   $   (1,283,612 )   $   (4,640,100 )   $   (2,789,743 )  

 The above table presents the reconciliation of net income (loss) to Adjusted EBITDA for the three and six month periods ended June 30, 2016 and 2015.


    Six Months Ended  
    June 30,   
      2016       2015    
Net loss   $   (6,786,515 )   $   (3,759,593 )  
Adjustments to reconcile net loss to net cash     1,636,564       180,692    
Changes in operating assets and liabilities       (2,905,287 )       1,035,333    
Net cash used in operating activities       (8,055,238 )       (2,543,568 )  
Net cash used in investing activities       (2,465,949 )       (5,648,224 )  
Net cash provided by financing activities       (152,900 )       (25,000 )  
Net decrease in cash   $   (10,674,087 )   $   (8,216,792 )  

Investor Contact:
Peter Vozzo
[email protected]

Media Contact:
Inna Lazarev
Public Relations Manager
[email protected]

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Source: The Joint Corp.