SCOTTSDALE, Ariz., Feb. 24, 2022 // GLOBE NEWSWIRE // - The Joint Corp. (NASDAQ: JYNT), a national operator, manager, and franchisor of chiropractic clinics, reported its preliminary financial results for the quarter and year ended December 31, 2021.
Grew total clinics to 706 at December 31, 2021, 610 franchised and 96 company-owned or managed, up from 579 at December 31, 2020. During 2021, the company acquired 12 franchised clinics and closed 3 clinics. It also opened 110 franchised and 20 corporate greenfield clinics, for a total of 130 new clinics in 2021, as compared to 73 new clinics opened in 2020 and 76 in 2019.
“During 2021, The Joint demonstrated remarkable resilience to pandemic pressures, continued to accelerate momentum, and delivered record openings, new patients, revenue, and Adjusted EBITDA,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “As the market continues to expand, we continue to fuel our growth, as illustrated by our increasing number of patients, franchisees, clinics, and franchise license sales. In 2022, we are focusing efforts on three key enterprise growth initiatives: forging the chiropractic dream, by offering the best career path for chiropractic doctors; harnessing the power of our data, by leveraging our new CRM platform; and accelerating the pace of clinic growth, through a continuous improvement in our comprehensive franchise sales and clinic opening strategy. We ended 2021 with 706 clinics and are well positioned to achieve our goal of 1,000 clinics in operation by the end of 2023, creating the foundation for continued future growth.”
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1 System-wide sales include sales 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 sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base.
2 Comp sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
Revenue was $22.4 million in the fourth quarter of 2021, compared to $17.0 million in the fourth quarter of 2020. The increase reflects a greater number of franchised and corporate clinics and continued organic growth. Cost of revenue was $2.4 million, compared to $1.9 million in the fourth quarter of 2020, reflecting the associated higher regional developer royalties and commissions, the increase in franchised clinics, and the higher website hosting costs related to the new IT platform, which went live in July 2021.
Selling and marketing expenses were $2.9 million, up 38%, driven by the larger number of franchised and company-owned or managed clinics, the grand opening expenses for 9 greenfields, and the timing of the national marketing fund spend as well as the new brand campaign.
Depreciation and amortization expenses increased for the fourth quarter of 2021, as compared to the prior year period, primarily due to the amortization of development rights reacquired in December 2020 and January 2021, the amortization of intangibles related to the 2021 clinic acquisitions, and the depreciation expenses associated with the new IT platform and greenfield development.
General and administrative expenses were $14.6 million, compared to $9.5 million in the fourth quarter of 2020. The increase was primarily driven by an increase in company-owned or managed clinic expenses, an increase in payroll to remain competitive in the tight labor market, professional fees, and IT expenses to support continued clinic count and revenue growth.
Operating income was $663,000, including the impact of the accelerated greenfield development and depreciation and amortization from reacquired development rights. This compares to $2.8 million in the fourth quarter of 2020. Income tax expense was $424,000, compared to a benefit of $7.9 million in the fourth quarter of 2020, which included the reversal of the tax valuation allowance of $8.9 million. Net income was $224,000, or $0.01 per diluted share, compared to $10.6 million, or $0.72 per diluted share, in the fourth quarter of 2020.
Adjusted EBITDA was $2.7 million, compared to $3.7 million in the fourth quarter of 2020. The company defines Adjusted EBITDA, a non-GAAP measure, as EBITDA before acquisition-related expenses, bargain purchase gain, net (gain)/loss on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income before net interest, tax expense, depreciation, and amortization expenses.
Revenue was $81.2 million for 2021, compared to $58.7 million in 2020. Operating income and net income were $6.0 million and $7.2 million, compared to $5.5 million and $13.2 million in 2020, respectively. Adjusted EBITDA was $13.3 million, compared to $9.1 million in 2020.
These fourth quarter and full year 2021 results are preliminary, unaudited, and subject to adjustments. As a result of the foregoing, certain information provided herein is subject to change.
Unrestricted cash was $19.5 million at December 31, 2021, compared to $20.6 million at December 31, 2020. The change reflects net cash provided by operating activities of $15.2 million offset by $14.1 million of investing activities consisting of acquisitions, greenfield developments, and IT capital expenditures, as well as the $2.0 million of net cash used in financing activities primarily driven by the repayment of the Paycheck Protection Program loan in March 2021.
Management provided 2022 guidance for revenue, Adjusted EBITDA, and clinic openings.
The Joint Corp. management will host a conference call at 5 p.m. ET on Thursday, February 24, 2022, to discuss the fourth quarter and year-end 2021 financial result. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 765-507-2604 or 844-464-3931 and referencing code 3285473 approximately 15 minutes prior to the start time.
The accompanying slide presentation will be in the IR section of the website under Presentations and in Events. A live webcast of the conference call will also be available on the IR section of the company’s website at https://ir.thejoint.com/events. An audio replay will be available two hours after the conclusion of the call through March 3, 2022. The replay can be accessed by dialing 404-537-3406 or 855-859-2056. The passcode for the replay is 3285473.
This release includes a presentation of non-GAAP financial measures. System-wide sales include sales at all clinics, whether operated 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 sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base. Comp sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
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. Reconciliation of net income/(loss) to EBITDA and Adjusted EBITDA is presented in a table below. The company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, net (gain)/loss on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income 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 SEC.
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, the continuing impact of the COVID-19 outbreak on the economy and our operations (including temporary clinic closures, shortened business hours and reduced patient demand), our failure to develop or acquire company-owned or managed clinics as rapidly as we intend, our failure to profitably operate company-owned or managed clinics, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage, 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 the current or 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 for the year ended December 31, 2021 to be filed with the SEC and subsequently-filed current and quarterly reports. 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.
Management will be disclosing in our Form 10-K that our management concluded that our internal controls over financial reporting were not effective as of December 31, 2021, and we expect our auditors to express an adverse opinion on the Company’s internal control over financial reporting as of December 31, 2021, due to a material weakness. The details of this material weakness will be provided in our upcoming 10-K filing. We have undertaken remediation measures to address the material weakness, which we expect will be completed prior to the end of fiscal year 2022.
The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, the company is making quality care convenient and affordable, while eliminating the need for insurance, for millions of patients seeking pain relief and ongoing wellness. With more than 600 locations nationwide and over eight million patient visits annually, The Joint is a key leader in the chiropractic industry. Named on Franchise Times “Top 200+ Franchises” and Entrepreneur’s “Franchise 500®” lists, The Joint Chiropractic is an innovative force, where healthcare meets retail. For more information, visit www.thejoint.com. To learn about franchise opportunities, visit www.thejointfranchise.com.
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.
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SOURCE The Joint Corp.
The Joint® Chiropractic is reinventing chiropractic care. Our vision is to become the largest, most respected provider of chiropractic services globally.