The Joint Corp. reports Q2 2024 financial results

On Aug. 8, The Joint Corp., a national operator, manager and franchisor of chiropractic clinics, reported its financial results for the quarter ended June 30, 2024.

Here are the highlights of Q2 2024 compared to Q2 2023,  according to a company press release:

• Grew revenue 3% to $30.3 million.
• Reported net loss of $3.6 million, including $1.5 million in litigation expense, $1.4 million in loss on disposition or impairment and the cost associated with an in-person national franchise conference, compared to net loss of $320,000, including loss on disposition or impairment of $144,000.
• Reported adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $2.1 million, compared to $3.2 million.
• Increased system-wide sales¹ 8% to $129.6 million.
• Reported system-wide comp sales² of 2%.
• Sold seven franchise licenses, compared to 21, reflecting the impact of the refranchising process.
• Increased the total clinic count to 960 – 829 clinics franchised and 131 clinics company-owned or managed clinics – at June 30, 2024. During Q2 2024, The Joint opened nine franchised clinics; refranchised two clinics; and closed three clinics: one franchised and two company-owned or managed.

“In 2024, our highest priorities are refranchising corporate clinics and improving unit economics. In the second quarter of 2024, we delivered topline growth and positive Adjusted EBITDA, even with the ongoing economic concerns,” said Peter D. Holt, President and CEO of The Joint Corp. “Based on early negotiations with existing franchisees, we refranchised two clinics in the second quarter and have over ten more in the letter of intent process, including five in the Kansas City market.”

Holt continued, “Having recently finalized our Confidential Information Memorandum package with Capstone Partners, a full-service middle market investment bank with specialization in refranchising, we are prepared to aggressively market clusters of clinics. To increase clinic profitability, we are embracing new innovation in operations, IT and marketing that leverage the size of our network on national and local levels,” Holt noted.

“Our educational efforts attracted over 930,000 new patients to The Joint in 2023, of which 36% were new to chiropractic care,” Holt added. “In 2024, we continue to positively influence the market, and as more and more people discover chiropractic care, our reach is boundless.”

Financial results for second quarter ended June 30, 2024, compared to June 30, 2023

Revenue was $30.3 million in the second quarter of 2024, compared to $29.3 million in the second quarter of 2023. Cost of revenue was $2.8 million, compared to $2.6 million in the second quarter of 2023, reflecting the associated higher regional developer royalties and commissions.

Selling and marketing expenses were $5.4 million, compared to $4.7 million, reflecting expenses related to the in-person national franchise conference and the timing of advertising spend. Depreciation and amortization expenses decreased 35% for the second quarter of 2024, as compared to the prior year period, primarily due to the impact of corporate clinics that are being held for sale in connection with the refranchising efforts.

General and administrative expenses were $22.6 million, up from $19.9 million in the second quarter of 2023, primarily due to $1.5 million in legal expenses associated with a class action suit related to time and wages reflecting the complexity of doing business in California as well as the increased expense to support more clinics.

Loss on disposition or impairment was $1.4 million, related to the quarterly impairment analysis of clinics held for sale as part of the refranchising efforts, compared to $144,000 in the second quarter of 2023.

Income tax expense was $178,000, compared to income tax benefit of $161,000 in the second quarter of 2023. Net loss was $3.6 million, including $1.5 million in employee litigation, $1.4 million of loss on disposition or impairment and the expense associated with an in-person national franchise conference, or $0.24 loss per share. This compares to net loss of $320,000, including the $144,000 of loss on disposition or impairment, or $0.02 loss per share, in the second quarter of 2023.

Adjusted EBITDA was $2.1 million, compared to $3.2 million the second quarter of 2023.

Financial results for six months ended June 30, 2024 compared to June 30, 2023

Revenue was $60 million in the first half of 2024, compared to $57.6 million in the first half of 2023. Net loss was $2.6 million, including $1.8 million of loss on disposition or impairment, $1.5 million in employee litigation and the expense associated with an in-person national franchise conference, or 18 cents loss per share. This compares net income for the first half of 2023 of $2.0 million, including the $3.9 million employee retention credit and $210,000 of loss on disposition or impairment, or $0.13 loss per diluted share.

Adjusted EBITDA was $5.6 million, compared to $5.3 million the first half of 2023.

References

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 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.

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.