The Joint Corp. financial results reported for Q3 of 2024

The Joint Corp., national operator, manager and franchisor of chiropractic clinics, reported its financial results for the quarter ended Sept. 30, 2024.

The Joint Corp. financial results were noted in a Nov. 7 press release.

Highlights: Q3 2024 compared to Q3 2023

• Grew revenue 2% to $30.2 million.
• Reported net loss of $3.2 million, including $3.8 million in loss on disposition or impairment, compared to net loss of $716,000, including loss on disposition or impairment of $905,000.
• Reported adjusted EBITDA of $2.4 million, compared to $2.9 million.
• Increased system-wide sales¹ 8% to $129.3 million.
• Reported system-wide comp sales² of 4%.
• Sold seven franchise licenses in both Q3 2024 and Q2 2024, compared to 12 in Q3 2023, reflecting the impact of the refranchising process.
• Increased the total clinic count to 963 – 838 clinics franchised and 125 clinics company-owned or managed – at September 30, 2024. During Q3 2024, The Joint
• Opened 14 franchised clinics;
• Refranchised one clinic; and
• Closed 11 clinics: three franchised being relocated, three non-traditional corporate units on Airforce bases; as well as three franchised and two company-owned or managed that were underperforming.

“As the category leader with a premier national brand, attractive asset-light franchise model and approximately 1% share of the $8.5 billion being spent annually out-of-pocket on chiropractic care, The Joint’s long-term opportunities far exceed the near-term consumer headwinds,” said President and CEO of The Joint Corp. Sanjiv Razdan.

“To lead The Joint’s next phase of growth, I will leverage my strategic business acumen, branding expertise and extensive experience leading successful multi-site consumer service companies and franchise businesses,” he continued.

The board and I are committed to our refranchising efforts; elevating patient care; ensuring strong clinic economics; strengthening our people, capability and culture; and fueling innovation to drive growth and improve profitability,” Razdan added. “With the power behind The Joint franchise concept, our strategies to improve clinic economics, increase patient count and drive growth will increase profitability and create shareholder value. I am confident we will emerge a stronger company.”

The Joint Corp. financial results for Q3 2024 compared to Sept. 30, 2023

Revenue was $30.2 million in the third quarter of 2024, compared to $29.5 million in the third quarter of 2023. Cost of revenue was $2.8 million, compared to $2.6 million in the third quarter of 2023, reflecting the associated higher regional developer royalties and commissions.

Selling and marketing expenses were $4.8 million compared to $4.3 million, reflecting the timing of advertising spend. Depreciation and amortization expenses decreased 47% for the third quarter of 2024, as compared to the prior year period, primarily due to the impact of corporate clinics being held for sale in connection with refranchising efforts.

General and administrative expenses were $20.8 million, up from $20.2 million in the third quarter of 2023.

Loss on disposition or impairment was $3.8 million, related to the quarterly impairment analysis of clinics held for sale as part of the refranchising efforts, compared to $905,000 in the third quarter of 2023.

Income tax expense was $63,000, compared to income tax benefit of $188,000 in the third quarter of 2023. Net loss was $3.2 million, including $3.8 million loss on disposition or impairment, or $0.21 loss per share. This compares to net loss of $716,000, including the $905,000 loss on disposition or impairment, or $0.05 loss per share, in the third quarter of 2023.

Adjusted EBITDA was $2.4 million, compared to $2.9 million the third quarter of 2023.

Financial results for nine months ended Sept. 30, 2024 compared to Sept. 30, 2023

Revenue was $90.2 million in the first nine months of 2024, compared to $87.1 million in the same period of 2023. Net loss was $5.8 million, including $5.6 million loss on disposition or impairment and $1.5 million in employee litigation in the second quarter of 2024, or $0.39 loss per share. This compares net income for the first nine months of 2023 of $1.3 million, including the $3.9 million in other income related to the net employee retention credit and $1.1 million of loss on disposition or impairment, or $0.09 earnings per diluted share.

Adjusted EBITDA was $8.1 million for the nine months ended Sept. 30, 2024, compared to $8.2 million for the same period of 2023.

Balance sheet liquidity

Unrestricted cash was $20.7 million at Sept. 30, 2024, compared to $18.2 million at Dec. 31, 2023. Cash flow for the nine-month period ended Sept. 30, 2024, includes $5.3 million from operations and the net proceeds of the sales of clinics offset by ongoing IT capex and the $2.0 million first quarter 2024 repayment of the line of credit to JP Morgan Chase. Through this facility, we have retained immediate access to $20 million through Feb. 2027.

2024 guidance

The company adjusted its guidance to account the potential impact of ongoing consumer headwinds.

System-wide sales are expected to be between $525 million and $535 million, adjusted from $530 million and $545 million and compared to $488.0 million in 2023.

System-wide comp sales for all clinics open 13 months or more are expected to be between 3% and 4% adjusted from in the mid-single digits in 2024 and compared to 4% in 2023.

New franchised clinic openings, excluding the impact of refranchised clinics, are expected to be between 55 and 60, adjusted from 60 and 75 and compared to 104 in 2023.

Conference call recording

In connection with The Joint Corp. financial report, management hosted a conference call at 5:00 p.m. ET, Thursday, Nov. 7, 2024, after the market close. The recorded webcast of the call with accompanying slide presentation can be accessed in the IR events section ir.thejoint.com/events and will remain available for approximately one year.

About The Joint Corp.

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 over 900 locations nationwide and more than 13 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 thejoint.com. To learn about franchise opportunities, visit thejointfranchise.com.