The Joint Corp. · NASDAQ:JYNT
The Joint — JOINT — Q4 2017 Earnings Presentation
22 slides from The Joint's earnings presentation, Mar 8, 2018
Slide 1: Reinventing Chiropractic Care: Q4 & FY 2017 Reported
THE JOINT CORP. | NASDAQ: JYNT | thejoint.com Reinventing Chiropractic Care Q4 & FY 2017 Reported March 8, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 © 2018 | NASDAQ: JYNT | thejoint.com Certain statements contained in this presentation are "forward - looking statements." We have tried to identify these forward - looking statements by using words such as "may," "might," " will," "expect,” "anticipate,'' "'believe,“ "could,
Slide 3: Transformation Delivering Results
Transformation Delivering Results 3 © 2018 | NASDAQ: JYNT | thejoint.com 2017 ACHIEVEMENTS • 41 new clinics opened, bringing Dec. 31, 2017 total to 399 • 10 regional developers signed, bringing Dec. 31, 2017 total to 18 • • 2 consecutive quarters of positive Adjusted EBITDA • • $5M non - dilutive li
Slide 4: Reducing Clinic Time to Breakeven
Reducing Clinic Time to Breakeven 4 © 2018 | NASDAQ: JYNT | thejoint.com 9 month average breakeven for the clinics opened in 2017, down from ~18 months for clinics opened in 2016 Breakeven Range * Based on average historical gross sales growth rates from January 2013 through December 2017
Slide 5: Consecutive Quarter of Improvements
8 th Consecutive Quarter of Improvements $1.3 $2.8 $8.1 $70.1 $46.2 $22.3 $98.6 $126.9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 77% CAGR (8 year) SYSTEM - WIDE GROSS SALES ($ in Ms) 5 © 2018 | NASDAQ: JYNT | thejoint.com $ in Ms 2017 vs 2016 System - wide gross sales 29% System - wide
Slide 6: Reinventing Chiropractic Care
Reinventing Chiropractic Care 400 th clinic opened Jan. ’18 • Bringing quality, convenient, affordable chiropractic care to retail • Employing proven subscription - based, walk - in, no - insurance hybrid model • Company - owned/managed • Franchised • Serving patients seeking pain relief and ongoing
Slide 7: Opportunity in Highly Fragmented Market
Opportunity in Highly 7 © 2018 | NASDAQ: JYNT | thejoint.com • $650B in pain costs • $90B in back pain alone • ~ 80 % of those surveyed want a non - pharmacologic approach to physical pain 3 • 55% reduction in the likelihood of people filling prescriptions for opioids in those who received chiroprac
Slide 8: Opened Clinics
Opened 12 Clinics in Q4 ‘17 82 175 242 265 309 352 47 61 47 2 0 12 2 0 13 2 0 15 2 0 16 2 0 17 Franchise 2014 Company Owned/Managed 8 © 2018 | NASDAQ: JYNT | thejoint.com 312 370 246 4 399
Slide 9: Sold RDs to Advance National Footprint
Sold 10 RDs to Advance National Footprint 8 11 13 16 18 Q4 Q1 Q2 Q3 Q4 2 0 1 6 2 0 2 7 2 0 1 7 2 0 1 7 2 0 1 7 Minimum 259 clinic for RDs to open and operate over 10 - year RD term NUMBER OF REGIONAL DEVELOPERS 9 © 2018 | NASDAQ: JYNT | thejoint.com 9 © 2018 | NASDAQ: JYNT | thejoint.com
Slide 10: 2018 Growth Strategy: Driving Scale
2018 Growth Strategy: 10 © 2018 | NASDAQ: JYNT | thejoint.com Driving Scale • Accelerate franchise sales • Leverage Regional Developers • Reengage growth of company owned/managed units • Acquire buyback clinics opportunistically • Build greenfield clinics in clustered locations Building nationwide b
Slide 11: Q4 2017 Operational Summary
Q4 2017 Operational Summary • System - wide sales up 32% to $ 36.1M, from $ 27.2M in Q4 2016 • System - wide comp sales for clinics >13 months in operation 1 increased 26%, the same as Q4 2016 • System - wide comp sales for clinics >48 months in operation 1 increased 17%, compared to 14% in Q4 2016
Slide 12: Q4 2017 Financial Summary
$ in Ms Q4 2017 Q4 2016 IMPROVEMENT Revenue $6 .9 $5.8 $1 .1 20% Inc. revenue contribution Corporate clinic 3 .0 2.4 0.6 25% • 53% Corp Franchise 3 .9 3.4 0.5 16% • 47% Franchise Cost of revenue 1.0 0.8 (0.2) (30%) Inc. gross sales and RD fees Gross profit 5.9 5.0 0.9 18% Sales and marketing 1 .3 1.
Slide 13: Full Year 2017 Metrics
$ in Ms 2017 IMPROVEMENT 2017 vs. 2016 Revenue $25.2 23% Gross profit $21.9 24% G&A $18.5 (28)% Net loss $(3.3) Up $11.9 Adjusted EBITDA 2 $(0.1) Up $7.6, 99% Cash and equivalents at Dec. 31, 2017 $4.2 Up $1.2 12 © 2018 | NASDAQ: JYNT | thejoint.com 13 © 2018 | NASDAQ: JYNT | thejoint.com Full Year
Slide 14: Driving Shareholder Value: 2018 Guidance
$ in Ms LOW HIGH New Franchise Openings 40 50 Additional Company - owned or Managed Clinics 1 0 5 New Clinic Openings 1 40 52 Revenues $31 .0 $32.0 Adjusted EBITDA $2 .5 $3.5 14 © 2018 | NASDAQ: JYNT | thejoint.com Driving Shareholder Value: 2018 Guidance 1 Existing clinics are acquired from franchi
Slide 15: Patient Demographic
Patient Demographic Extremely broad patient base, all walks of life 15 © 2018 | NASDAQ: JYNT | thejoint.com • 25 to 55, Market Penetration Index (MPI) of 117 - 174 • Gender slightly female skewed, similar to US population • 60% white collar / 40% blue collar • $50K - $100K household income, MPI 146
Slide 16: Projected Core Customer & Trade Area Potential
Projected Core Customer & Trade Area Potential (based on current usage patterns) 400k patient records • Analyze demographics and psychographics • Replicate of attributes • Roll across country 1700+ similar points of distribution Data Analytics Yields 1700+ Clinics 16 © 2018 | NASDAQ: JYNT | thejoint
Slide 17: The Joint Corp. Long-term Vision
▪ Be the premier provider of chiropractic care in wellness and health plans ▪ Accelerate our footprint through corporate and franchise strategy ▪ Be the career path of choice for chiropractors ▪ Build a world class organizational culture ▪ Foster a robust Regional Developer community ▪ Build and mai
Slide 18: Stable Model, Significant Growth Potential
Stable Model, Significant Growth Potential 1 IBIS World Chiropractors Market Research Report; August 2016 • $ 15B growing chiropractic market 1 • Experienced, proven management • 1,700+ clinic national footprint opportunity • 77% 8 - year CAGR in system - wide gross sales • 22% of The Joint patients
Slide 19: Contact Information
Peter D. Holt, President and CEO peter.holt@thejoint.com John P. Meloun, Chief Financial Officer john.meloun@thejoint.com Kirsten Chapman, LHA Investor Relations thejoint@lhai.com The Joint Corp. | 16767 N. Perimeter Dr., Suite 240 | Scottsdale, AZ 85260 | (480) 245 - 5960 The Joint Corp. Contact In
Slide 20: Non-GAAP Measure Definition
Non - GAAP Measure Definition 20 © 2018 | NASDAQ: JYNT | thejoint.com This presentation 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
Slide 21: Q4 2017 Segment Results & GAAP Reconciliation
Q4 2017 Segment Results & GAAP Reconciliation 2017 Q4 Corporate Clinics Franchise Operations Unallocated Corporate The Joint C on s o li d a t e d Total Revenues $ 3,019 $ 3,911 $ 0 $ 6,929 Operating Expenses ( 3 , 457 ) ( 2 , 147 ) ( 2 , 019 ) ( 7 , 623 ) Depreciation and Amortization 386 0 81 467
Slide 22: 2017 Segment Results & GAAP Reconciliation
2017 Segment Results & GAAP Reconciliation 2017 Corporate Franchise Unallocated Clinics Operations Corporate The Joint C on s o li d a t e d Total Revenues $ 11,125 $ 14,039 $ - $ 25 , 16 4 Operating Expenses ( 14 , 437 ) ( 7 , 796 ) ( 8 , 123 ) ( 30 , 356 ) Depreciation and Amortization 1 , 60 8 0