SCOTTSDALE, Ariz., May 04, 2023 // GLOBE NEWSWIRE // -- The Joint Corp. (NASDAQ: JYNT), a national operator, manager, and franchisor of chiropractic clinics, reported its financial results for the quarter ended March 31, 2023.
“We entered 2023 with a fortified foundation, and we performed well during the continued economic uncertainty in the first quarter of 2023,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “Steadfast in implementing our corporate initiatives to forge the chiropractic dream, harness the power of our data and accelerate the pace of clinic growth, we are gaining traction. Our educational outreach to associations and schools of chiropractic increased over the past couple of years and delivered more interest than ever from doctors in the recent graduating class. In data, we have launched our business intelligence and analytics reporting tool, and we are preparing to begin our automated marketing program. And we increased the number of our clinics opened year-over-year and have positioned the network for expansion as the economy improves. With only 16% of Americans using chiropractic care and spending $19.5 billion dollars on it annually, the chiropractic patient need is expanding as is our market opportunity. We are committed to growing the overall chiropractic care market as well as capturing greater share.”
Revenue was $28.5 million in the first quarter of 2023, compared to $22.4 million in the first quarter of 2022. The increase reflects a greater number of franchised and company-owned or managed clinics and continued organic growth. Cost of revenue was $2.6 million, compared to $2.3 million in the first quarter of 2022, reflecting the associated higher regional developer royalties and commissions.
Selling and marketing expenses were $4.2 million, up 27%, driven by the increase in advertising expenses from the larger number of clinics, an increase in local marketing expenditures by the company-owned or managed clinics, and the timing of the national marketing fund spend. Depreciation and amortization expenses increased 44% for the first quarter of 2023, as compared to the prior year period, primarily due to the increase of the development of greenfield clinics and the acquisition of franchised clinics.
General and administrative expenses were $19.9 million, compared to $15.4 million in the first quarter of 2022, reflecting increases in costs to support clinic growth and in payroll to remain competitive in the tight labor market.
Operating loss was $678,000, compared to a loss of $176,000 in the first quarter of 2022. Income tax expense, including the impact the employee retention credits, was $842,000, compared to $13,000 in the first quarter of 2022. Other income of $3.8 million included net employee retention credits of $3.9 million in the first quarter of 2023. Net income was $2.3 million, or $0.15 per diluted share, compared to a net loss of $206,000, or $0.01 per basic and diluted share, in the first quarter of 2022.
Adjusted EBITDA was $2.0 million, compared to $1.8 million in the first quarter of 2022. The company defines Adjusted EBITDA, a non-GAAP measure, as EBITDA before acquisition-related expenses, stock-based compensation expense, bargain purchase gain, net (gain)/loss on disposition or impairment, and other income related to employee retention credits. The company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses.
Unrestricted cash was $14.8 million at March 31, 2023, compared to $9.7 million at December 31, 2022. During the first quarter of 2023, cash provided by operating activities was $6.0 million, including the receipt of the employee retention credits mentioned above partially offset by investing activities of $1.2 million for the development of greenfield clinics and improvements of existing clinics.
2023 Guidance
For 2023, management reiterated financial and clinic opening guidance.
Note: Historically, guidance for company-owned or managed clinic openings included a combination of both greenfields and acquisitions. While the company will continue to acquire previously franchised clinics, these transactions are opportunistic, and management will no longer include them in guidance. In 2023, company-owned or managed guidance includes greenfield clinic openings only.
The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, May 4, 2023 to discuss the first quarter 2023 financial results. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing (833) 630-0823 or (412) 317-1831 and ask to be joined into the ‘The Joint’ call approximately 15 minutes prior to the start time.
The live webcast of the call with accompanying slide presentation can be accessed in the IR events section https://ir.thejoint.com/events and will be available for approximately one year. An audio archive can be accessed for one week by dialing (877) 344-7529 or (412) 317-0088 and entering conference ID 8635209.
his release includes a presentation of commonly discussed performance metrics. System-wide sales include revenues 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 revenues 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.
This release also includes a presentation of 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. Reconciliation of net income/(loss) to EBITDA and Adjusted EBITDA is presented in the table below. The Company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses. The company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, net (gain)/loss on disposition or impairment, stock-based compensation expenses, and other income related to employee retention credits. 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 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, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage, and an increase in operating expenses due to measures we may need to take to address such shortage, inflation, exacerbated by COVID-19 and the current war in Ukraine, which has increased our costs and which could otherwise negatively impact our business, the potential for further disruption to our operations and the unpredictable impact on our business of the COVID-19 outbreak and outbreaks of other contagious diseases, 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, 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 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, 2022 filed with the SEC on March 10, 2023 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.
The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, it is the nation's largest operator, manager and franchisor of chiropractic clinics through The Joint Chiropractic network. 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 850 locations nationwide and over 12 million patient visits annually, The Joint Chiropractic is a key leader in the chiropractic industry. Ranked number one on Forbes’ 2022 America's Best Small Companies list, number three on Fortune’s 100 Fastest-Growing Companies list in 2022 and consistently named to Franchise Times “Top 400+ 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.
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.
– Financial Tables Follow –
THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
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THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
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THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
RECONCILIATION FOR GAAP TO NON-GAAP
(unaudited)
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1 System-wide sales include revenues 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 revenues 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 revenues 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.
SOURCE The Joint Corporation
The Joint® Chiropractic is reinventing chiropractic care. Our vision is to become the largest, most respected provider of chiropractic services globally.