The Joint Corp. (NASDAQ: JYNT), a national operator, manager, and
franchisor of chiropractic clinics, posted operating highlights for
the second quarter ended June 30, 2023.
Q2 2023 Operating Highlights
- Increased system-wide sales1 by 13%, to $120.1 million.
- Reported system-wide comp sales2 of 5%.
- Sold 21 franchise licenses, compared to 17 in Q1 2023 and 24 in
Q2 2022.
- Grew total clinic count to 890, 756 franchised and 134
company-owned or managed, up from 870 clinics at March 31, 2023.
- Opened 23 franchised clinics and three company-owned or managed
greenfield clinics, for a total of 26 new clinics, as compared to
34 new clinics in Q2 2022.
- Closed four franchised clinics and two company-managed clinics,
as compared to one franchised clinic in Q2 2022.
- Subsequent to quarter end through August 8, 2023, opened nine
franchised clinics and one greenfield clinic, bringing the total
number of clinics opened to 900.
“In the second quarter of 2023, we posted system-wide sales
growth of 13% year-over-year supported by our ongoing franchise
license sales, clinic openings, and new patient acquisitions, even
during this environment of continued economic uncertainty,” said
Peter D. Holt, President and Chief Executive Officer of The Joint
Corp. “Continually striving to do better, we are enhancing national
brand building and implementing additional digital, automated and
traditional marketing strategies to drive new patient
acquisitions.
“Looking forward, our maturing corporate portfolio has reached
the natural point where we will critically evaluate unit
performance, and we may sell, close or relocate clinics due to such
factors as the loss of an anchor store in the strip center or
changes in the local retail markets. Importantly, these
transactions would be accretive and free key resources to be
applied in more productive areas. In addition, with critical
attention on G&A, we are focused on reducing our ongoing
expense run rate.
“That said, the underlying chiropractic care market fundamentals
and long-term growth drivers remain strong. The pain, opioid and
obesity epidemics continue to compel consumers to search for
holistic treatments, and Americans spend $19.5 billion a year on
chiropractic care. Overall, our team is committed to enhancing
clinic performance and capturing a greater market share by
educating consumers about the efficacy of chiropractic care.”
Financial Results Due to ongoing quarterly
review procedures being performed in conjunction with The Joint’s
independent public accounting firm, management has postponed the
issuance of its second quarter financial results as of June 30,
2023. The matter in question is related to our regional developer
arrangements and would have a non-cash impact to the company’s
financial statements.
Balance Sheet LiquidityUnrestricted cash was
$13.6 million at June 30, 2023, compared to $9.7 million at
December 31, 2022. During the first half of 2023, cash provided by
operating activities was $8.4 million, including the receipt of
$4.8 million in employee retention credits, partially offset by
investing $4.7 million in the development of greenfield clinics and
improvements of existing clinics, the acquisition of a previously
owned franchise, and the reacquisition of regional developer
territories.
Conference Call The Joint Corp. management will
host a conference call at 5:00 p.m. ET on Thursday, August 10, 2023
to discuss the second quarter 2023 operating 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 4930863.
Commonly Discussed Performance MetricsThis
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 franchise 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.
Forward-Looking StatementsThis 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, 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
any 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.
About The Joint Corp. (NASDAQ: JYNT) 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 900 locations
nationwide and over 12 million patient visits annually, The Joint
Chiropractic is a key leader in the chiropractic industry.
Consistently named to Franchise Times “Top 500+ Franchises” and
Entrepreneur’s “Franchise 500” lists and recognized by FRANdata
with the TopFUND award, as well as Franchise Business Review’s “Top
Franchise for 2023,” “Most Profitable Franchises” and “Top
Franchises for Veterans” ranking, 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 StructureThe 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.
Media Contact: Margie Wojciechowski, The Joint
Corp., margie.wojciechowski@thejoint.comInvestor
Contact: Kirsten Chapman, LHA Investor Relations,
415-433-3777, thejoint@lhai.com
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.
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