SCOTTSDALE, Ariz., May 12, 2016 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ:JYNT), a national operator, manager and
franchisor of chiropractic clinics, today reported results for the quarter ended March 31, 2016.
Financial Highlights
- Revenue increased 70% in the first quarter of 2016 to $4.3 million, up from $2.5 million in the same quarter last year.
- System wide Comp Sales1 in the first quarter of 2016 were 32% over the comparable period in the previous
year.
- 331 total clinics in operation as of March 31, 2016, an increase of 19 clinics during the first quarter, and an increase of
78 clinics from March 31, 2015.
- Company-owned or managed clinics increased by 7 during the first quarter of 2016, to 54 as of March 31, 2016. All 7 were
newly-developed (greenfield) clinics.
“Our first quarter results showed a strong start to the year and a continuation of our growth and operating
strategy,” said John B. Richards, chief executive officer of The Joint Corp. “We expanded in the Chicago, Los Angeles and Orange
County, California markets by adding newly-developed clinics as well as franchised clinics during the quarter. Operational
influence on sales performance across the portfolio of acquired company-owned or managed clinics has been strong, evidenced by
revenues from clinics acquired and owned or managed for at least nine months increasing by 28% on average in the first nine months
under our management. In addition, the performance of clinics that we have operated for greater than 48 months continued their
strong comp clinic revenue growth, growing by 17% in the first quarter of 2016 over the prior year period.”
Richards added, “I am also pleased to announce the addition of Peter Holt as chief operating officer. Peter brings
a wealth of operational and development experience to us at a critical time in the company’s growth. His appointment underscores
our continued commitment toward overall operational excellence and service to our important franchise system as we move toward
profitability and continue the expansion of our exciting concept.”
First Quarter 2016 Financial Results
Revenue for the first quarter of 2016 increased 70% to $4.3 million from $2.5 million in the first quarter of the
prior year due primarily to the addition and growth of 42 company-owned or managed clinics and the addition of 36 franchised
clinics since March 31, 2015.
Cost of revenue in the first quarter of 2016 increased 36% compared to the first quarter of 2015, due primarily to
an increase in regional developer royalties driven by the continued growth in sales and openings of franchised clinics.
Selling and marketing expense decreased to $0.7 million in the first quarter of 2016, compared to $1.0 million in
the same period last year, due to the timing of the Company’s national marketing fund expenditures.
General and administrative expense increased to $5.7 million in the first quarter of 2016, compared to $2.8 million
in the first quarter of 2015, due to payroll and occupancy expenses at the Company’s 54 owned or managed clinics, and to increases
in the number of employees to support the company’s growth initiatives and public company operations.
Depreciation and amortization expense increased for the first quarter of 2016, compared to the same period last
year, due to the addition of property and equipment and intangible assets relating to acquisitions of franchises and regional
developer rights, as well as the growth in the number of greenfield clinics.
Operating loss in the first quarter of 2016 was ($3.5) million, compared to an operating loss of ($1.9) million in
the first quarter of 2015. Net loss in the first quarter of 2016 was ($3.5) million, or ($0.28) per share, compared to a net loss
of ($1.9) million or ($0.20) per share in the same period last year.
Adjusted EBITDA in the first quarter of 2016 was ($2.7) million, compared to ($1.5) million in the same quarter the
prior year.
As of March 31, 2016, cash and cash equivalents were $10.4 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 and net new clinic openings and
adjusting guidance for Adjusted EBITDA as set forth below:
- Total revenues will remain in the range of $19 million to $21 million
- Net new clinic openings will remain in the range of 68 to 72
- Adjusted EBITDA loss in the range of ($8.9) million to ($8.2) million, compared to the previously expected range of ($6.6)
million to ($6.4) million
Conference Call
The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, May 12, 2016, to discuss the
first quarter 2016 results. The conference call will be accessible by dialing 844-464-3931 (U.S.) or 765-507-2604 (international),
and referencing 93144858. A live webcast of the conference call will also be available on the investor relations section of the
company’s website at www.thejoint.com. An audio replay will be
available two hours after the conclusion of the call through May 19, 2016. The replay can be accessed by dialing (855) 859-2056 or
(404) 537-3406. The passcode for the replay is 93144858.
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 expense. The company
defines EBITDA as net income (loss) before net interest, taxes, depreciation and amortization expense.
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)
The Joint is 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 330+ clinics nationwide and more than 3 million
patient visits annually, The Joint is an emerging growth company and key leader in the chiropractic profession. For more
information, visit www.thejoint.com, 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 California, Colorado,
Florida, Illinois, Minnesota, New Jersey, New York, North Carolina, Oregon and Tennessee, The Joint and its franchisees provide
management services to affiliated professional chiropractic practices.
1 Comp Sales refers to the amount of sales a clinic generates in the most recent accounting period,
relative to the amount of sales it generated in a similar period in the past, and (i) includes sales only from clinics that have
been open at least 13 full months and (ii) excludes any clinics that have closed.
THE JOINT CORP. AND SUBSIDIARY |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
10,367,496 |
|
|
$ |
16,792,850 |
|
Restricted cash |
|
|
|
457,267 |
|
|
|
385,282 |
|
Accounts receivable, net |
|
|
|
1,645,429 |
|
|
|
743,239 |
|
Income taxes receivable |
|
|
|
38,960 |
|
|
|
70,981 |
|
Note receivable - current portion |
|
|
|
48,763 |
|
|
|
60,908 |
|
Deferred franchise costs - current portion |
|
|
|
630,900 |
|
|
|
605,850 |
|
Prepaid expenses and other current assets |
|
|
|
445,030 |
|
|
|
366,033 |
|
Total current assets |
|
|
|
13,633,845 |
|
|
|
19,025,143 |
|
Property and equipment, net |
|
|
|
7,968,588 |
|
|
|
7,138,746 |
|
Note receivable, net of current portion and reserve |
|
|
|
10,710 |
|
|
|
15,823 |
|
Deferred franchise costs, net of current portion |
|
|
|
1,342,148 |
|
|
|
1,534,700 |
|
Intangible assets, net |
|
|
|
2,607,342 |
|
|
|
2,542,269 |
|
Goodwill |
|
|
|
2,466,937 |
|
|
|
2,466,937 |
|
Deposits and other assets |
|
|
|
642,049 |
|
|
|
638,710 |
|
Total assets |
|
|
$ |
28,671,619 |
|
|
$ |
33,362,328 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
|
$ |
1,564,406 |
|
|
$ |
1,996,971 |
|
Accrued expenses |
|
|
|
288,424 |
|
|
|
375,529 |
|
Co-op funds liability |
|
|
|
104,532 |
|
|
|
201,078 |
|
Payroll liabilities |
|
|
|
663,442 |
|
|
|
1,493,375 |
|
Notes payable - current portion |
|
|
|
461,350 |
|
|
|
451,850 |
|
Deferred rent - current portion |
|
|
|
279,251 |
|
|
|
334,560 |
|
Deferred revenue - current portion |
|
|
|
2,714,134 |
|
|
|
2,579,423 |
|
Other current liabilities |
|
|
|
96,290 |
|
|
|
54,596 |
|
Total current liabilities |
|
|
|
6,171,829 |
|
|
|
7,487,382 |
|
Notes payable, net of current portion |
|
|
|
- |
|
|
|
130,000 |
|
Deferred rent, net of current portion |
|
|
|
1,140,780 |
|
|
|
457,290 |
|
Deferred revenue, net of current portion |
|
|
|
3,799,867 |
|
|
|
4,369,702 |
|
Other liabilities |
|
|
|
206,744 |
|
|
|
238,648 |
|
Total liabilities |
|
|
|
11,319,220 |
|
|
|
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 March 31, 2016, |
|
|
|
|
|
and December 31, 2015 |
|
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value; 20,000,000 shares |
|
|
|
|
|
authorized, 13,118,336 shares issued and 12,584,336 shares outstanding |
|
|
|
|
|
as of March 31, 2016 and 13,070,180 shares issued and 12,536,180 |
|
|
|
|
|
outstanding as of December 31, 2015 |
|
|
|
13,118 |
|
|
|
13,070 |
|
Additional paid-in capital |
|
|
|
35,465,555 |
|
|
|
35,267,376 |
|
Treasury stock (534,000 shares as of March 31, 2016 and |
|
|
|
|
|
December 31, 2015, at cost) |
|
|
|
(791,638 |
) |
|
|
(791,638 |
) |
Accumulated deficit |
|
|
|
(17,334,636 |
) |
|
|
(13,809,502 |
) |
Total stockholders' equity |
|
|
|
17,352,399 |
|
|
|
20,679,306 |
|
Total liabilities and stockholders' equity |
|
|
$ |
28,671,619 |
|
|
$ |
33,362,328 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
condensed consolidated financial statements. |
|
|
|
|
|
|
THE JOINT CORP. AND SUBSIDIARY |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March
31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
(unaudited) |
Revenues: |
|
|
|
|
|
Royalty fees |
|
|
$ |
1,368,831 |
|
|
$ |
1,015,513 |
|
Franchise fees |
|
|
|
514,800 |
|
|
|
348,000 |
|
Revenues and management fees from company clinics |
|
|
|
1,658,553 |
|
|
|
387,453 |
|
Advertising fund revenue |
|
|
|
265,721 |
|
|
|
285,516 |
|
IT related income and software fees |
|
|
|
221,134 |
|
|
|
203,975 |
|
Regional developer fees |
|
|
|
147,537 |
|
|
|
217,500 |
|
Other revenues |
|
|
|
88,460 |
|
|
|
49,941 |
|
Total revenues |
|
|
|
4,265,036 |
|
|
|
2,507,898 |
|
Cost of revenues: |
|
|
|
|
|
Franchise cost of revenues |
|
|
|
694,735 |
|
|
|
507,566 |
|
IT cost of revenues |
|
|
|
45,228 |
|
|
|
37,695 |
|
Total cost of revenues |
|
|
|
739,963 |
|
|
|
545,261 |
|
Selling and marketing expenses |
|
|
|
738,683 |
|
|
|
967,024 |
|
Depreciation and amortization |
|
|
|
575,544 |
|
|
|
122,596 |
|
General and administrative expenses |
|
|
|
5,696,507 |
|
|
|
2,788,240 |
|
Total selling, general and administrative expenses |
|
|
|
7,010,734 |
|
|
|
3,877,860 |
|
Loss from operations |
|
|
|
(3,485,661 |
) |
|
|
(1,915,223 |
) |
|
|
|
|
|
|
Other income, net |
|
|
|
4,924 |
|
|
|
11,500 |
|
|
|
|
|
|
|
Loss before income tax expense |
|
|
|
(3,480,737 |
) |
|
|
(1,903,723 |
) |
|
|
|
|
|
|
Income tax expense |
|
|
|
(44,397 |
) |
|
|
- |
|
|
|
|
|
|
|
Net loss and comprehensive loss |
|
|
$ |
(3,525,134 |
) |
|
$ |
(1,903,723 |
) |
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
Basic and diluted loss per share |
|
|
$ |
(0.28 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
Basic and diluted weighted average shares |
|
|
|
12,567,901 |
|
|
|
9,662,502 |
|
|
|
|
|
|
|
Non-GAAP Financial Data: |
|
|
|
|
|
Net loss |
|
|
|
(3,525,134 |
) |
|
|
(1,903,723 |
) |
Interest expense |
|
|
|
4,451 |
|
|
|
528 |
|
Depreciation and amortization expense |
|
|
|
575,544 |
|
|
|
122,596 |
|
Tax expense (benefit) penalties and interest |
|
|
|
44,397 |
|
|
|
- |
|
EBITDA |
|
|
$ |
(2,900,742 |
) |
|
$ |
(1,780,599 |
) |
Stock compensation |
|
|
|
197,669 |
|
|
|
132,287 |
|
Acquisition related expenses |
|
|
|
30,861 |
|
|
|
142,709 |
|
Adjusted EBITDA |
|
|
$ |
(2,672,212 |
) |
|
$ |
(1,505,603 |
) |
|
|
|
|
|
|
The above table presents the reconciliation of net income (loss) to Adjusted EBITDA for the three months periods ended March 31,
2016 and 2015.
THE JOINT CORP. AND SUBSIDIARY |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March
31, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
Net loss |
|
|
|
$ |
(3,525,134 |
) |
|
$ |
(1,903,723 |
) |
Adjustments to reconcile net loss to net cash |
|
|
|
|
732,113 |
|
|
|
84,730 |
|
Changes in operating assets and liabilities |
|
|
|
|
(2,966,707 |
) |
|
|
475,932 |
|
Net cash used in operating activities |
|
|
|
|
(5,759,728 |
) |
|
|
(1,343,061 |
) |
Net cash used in investing activities |
|
|
|
|
(545,684 |
) |
|
|
(2,370,792 |
) |
Net cash used in financing activities |
|
|
|
|
(119,942 |
) |
|
|
- |
|
Net decrease in cash |
|
|
|
$ |
(6,425,354 |
) |
|
$ |
(3,713,853 |
) |
|
|
|
|
|
|
|
Investor Contact: Peter Vozzo peter.vozzo@westwicke.com 443-213-0505 Media Contact: Inna Lazarev Public Relations Manager Inna.lazarev@thejoint.com
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