SCOTTSDALE, Ariz., Nov. 09, 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 September 30, 2023.
“The strength of our franchise concept to revolutionize access to chiropractic care remains strong, although ongoing economic uncertainty and continued cost pressures have impacted our corporate clinic portfolio performance. We are implementing a strategic plan to leverage our greatest strength – our capacity to build a franchise – to drive long-term growth for both our franchisees and The Joint as a public company,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “After evaluating options for improvement, the board has authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics and to retain a portion of the high-performing corporate clinics. With a focus on profitability, we are taking clear action to strengthen the health of our franchise network and increase our ability to reinvest in the business to create value for our stakeholders.”
Revenue was $29.5 million in the third quarter of 2023, compared to $26.5 million in the third quarter of 2022. The increase reflects a greater number of franchised and company-owned or managed clinics. Cost of revenue was $2.6 million, compared to $2.3 million in the third quarter of 2022, reflecting the associated higher regional developer royalties and commissions.
Selling and marketing expenses were $4.3 million, up 22%, 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 32% for the third 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 $20.2 million, compared to $17.8 million in the third quarter of 2022, reflecting increases in costs to support clinic growth and in payroll to remain competitive in the tight labor market.
Loss on disposition or impairment, including those corporate clinics that were announced to be held for sale in September 2023, was $905,000, compared to $264,000 in the third quarter of 2022.
Operating loss was $898,000, compared to operating income of $732,000 in the third quarter of 2022. Income tax benefit was $188,000, compared to the benefit of $24,000 in the third quarter of 2022. Net loss was $716,000, or $0.05 per share, compared to income of $731,000 or $0.05 per share in the third quarter of 2022.
Adjusted EBITDA was $2.9 million, compared to $3.1 million in the third quarter of 2022.
Revenue was $87.1 million in the first nine months of 2023, compared to $73.6 million in the first nine months of 2022. Net income, including net employee retention credits of $3.8 million and loss on disposition of impairment of $1.1 million, was $1.3 million, or $0.09 per share, compared to a net loss of $137,000, or loss of $0.01 per share, in the first nine months of 2022. Adjusted EBITDA was $8.2 million, compared to $7.5 million in the first nine months of 2022.
Unrestricted cash was $16.1 million at September 30, 2023, compared to $9.7 million at December 31, 2022. During the first nine months of 2023, cash provided by operating activities was $11.3 million, including the receipt of the employee retention credits mentioned above, partially offset by investing activities of $4.9 million, which included $1.1 million of clinic acquisitions and $3.8 million of development of greenfield clinics, improvements of existing clinics and corporate assets.
For 2023, management reiterated financial and clinic opening guidance.
The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, November 9, 2023 to discuss the third quarter 2023 financial results. Stockholders 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 7032664.
This 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. System-wide 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 historical 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, net (gain)/loss on disposition or impairment, stock-based compensation expenses, and other income related to employee retention credits.
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.
Information reconciling forward-looking Adjusted EBITDA to net income/(loss) is unavailable to the company without unreasonable effort. The company is not able to provide a quantitative reconciliation of adjusted EBITDA to net income/(loss) because certain items required for such reconciliation are uncertain, outside of the company's control, and/or cannot be reasonably predicted, including but not limited to [the provision for (benefit from) income taxes. Preparation of such reconciliation would require a forward-looking statement of income and statement of cash flows prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort.
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. 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. Specific forward looking statements made in this press release include, among others, our belief that the strength of our franchise concept to revolutionize access to chiropractic care remains strong; our strategic plan to leverage our biggest strength – our profound understanding of franchising – to drive long-term growth for both our franchisees and The Joint as a public company; our plan to refranchise or sell the majority of our company-owned or managed clinics and to retain a portion of the high-performing corporate clinics; our belief that with a focus on profitability, we are taking clear action to strengthen the health of our network, improve the performance of our public company, and increase our ability to reinvest in the business and create value for our stockholders; and our guidance for fiscal 2023 for revenue, adjusted EBITDA, franchised clinic openings, and company-owned or managed greenfield clinic openings. 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 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/A for the year ended December 31, 2022 filed with the SEC on September 26, 2023 and subsequently-filed current and quarterly reports. 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.
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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.