The Joint Corp. · NASDAQ:JYNT
The Joint — JOINT — Q4 2018 Earnings Presentation
21 slides from The Joint's earnings presentation, Mar 7, 2019
Slide 1: Q4 2018 Financial Results
REVOLUTIONIZING ACCESS TO CHIROPRACTIC CARE THE JOINT CORP. | NASDAQ: JYNT | thejoint.com Q4 2018 FINANCIAL RESULTS AS OF DECEMBER 31, 2018 REPORTED MARCH 7, 2019 © 2019 The Joint Corp. All Rights Reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation are "forward - looking statements." We have tried to identify these forward - look ing statements by using words such as "may," "might," " will," "expect,” "anticipate,'' "'believe,“ "could," " intend," "plan," "estimate," "shou
Slide 3: 2018 Growth Success Fueling Momentum
3 © 2019 | NASDAQ: JYNT | thejoint.com Achi 2018 Growth Success Fueling Momentum • Accelerated franchise sales • Built upon RD strategy • Reinitiated growth of company - owned/managed clinics • In clustered locations • In a deliberate and measured manner 37 2017 99 2018 22 % 2017 26 % 2018 399 2017
Slide 4: Continued Strong Improvements: Positive Net Income for the First Time
4 © 2019 | NASDAQ: JYNT | thejoint.com Achi Continued Strong Improvements Positive Net Income for the First Time Q4 18 vs Q4 17 2018 vs 2017 System - wide gross sales +29% +30% System - wide comp sales >13 months 1 +24% +25% System - wide comp sales >48 months 1 +16% +17% Revenue +32% +28% Net Incom
Slide 5: 2018 Growth Success Fueling Momentum
5 © 2019 | NASDAQ: JYNT | thejoint.com Achi • 442 clinics at Dec. 31, 2018, up from 399 at Dec. 31, 2017 • 22 clinics opened - mo st franchised clinic openings in a quarter since being public - and 2 franchised clinics closed in Q4 2018 • 47 clinics opened, 1 acquired from a franchisee and 4 closed
Slide 6: Reducing Clinic Time to Breakeven
6 © 2019 | NASDAQ: JYNT | thejoint.com Achi Reducing Clinic Time to Breakeven • Clinics opened in 2018 reduced average time to estimated breakeven to 6 months, down from approximately 9 months in 2017 & 18 to 24 months historically • Clinics opened in 2017 continue to ramp above the historical perfo
Slide 7: RDs Accelerate Franchise License Sales
7 © 2019 | NASDAQ: JYNT | thejoint.com Franchise sales through June 2018 were 34, compared to 37 for all of 2017 8 18 21 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 • 99 franchise licenses sold in 2018, compared to 37 for 2017 and 22 for 2016 • 89% of licenses sold by RDs in 2018, compared to 49% in a
Slide 8: Building a Robust Health & Wellness Brand
8 © 2019 | NASDAQ: JYNT | thejoint.com Building a Robust Health & Wellness Brand ▪ Creating clear, consistent and recognizable marketplace identity ▪ Using new brand architecture to guide our strategic initiatives, operational training and consumer advertising ▪ Strengthening digital marketing pract
Slide 9: Implementing AXIS, New IT Platform
9 © 2019 | NASDAQ: JYNT | thejoint.com Achi Implementing AXIS, New IT Platform ▪ Licensed SugarCRM ▪ Completed discovery phase ▪ Actively in the design and development phase ▪ On track to complete rollout by end of 2019 Key Customers 9 © 2019 | NASDAQ: JYNT | thejoint.com
Slide 10: Q4 2018 Strong Sales Performance
10 © 2019 | NASDAQ: JYNT | thejoint.com Q4 2018 Strong Sales Performance ▪ System - wide gross sales up 29% to $46.5M, from $36.1M in Q4 2017 ▪ System - wide comp sales 1 for clinics >13 months in operation 1 increased 24% ▪ System - wide comp sales 1 for clinics >48 months in operation increased 16
Slide 11: Q4 2018 Financial Summary
11 © 2019 | NASDAQ: JYNT | thejoint.com Achi $ in M* Q4 2018 Q4 2017 IMPROVEMENT Revenue Corporate clinics Franchise fees $9.1 4.3 4.8 $6.9 3.0 3.9 $2.2 1.3 0.9 32% 43% 23% Cost of revenue 1.2 0.9 (0.3) (30%) Sales and marketing 1.2 1.3 0.1 4% Depreciation 0.4 0.5 0.1 20% G&A 5.3 4.4 (0.9) (21%) Net
Slide 12: 2018 Strong Sales Performance
12 © 2019 | NASDAQ: JYNT | thejoint.com 2018 Strong Sales Performance 1 Comparable Sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinic s t hat have closed. • System - wide gross sales up 30% to $165.1M, from $126.9M in 2017 • System - wi
Slide 13: 2018 Financial Summary
13 © 2019 | NASDAQ: JYNT | thejoint.com Achi $ in M* 2018 2017 IMPROVEMENT Revenue Corporate clinics Franchise fees $31.8 14.7 17.1 $24.9 11.1 13.8 $6.9 3.5 3.3 28% 32% 24% Cost of revenue 4.3 3.2 1.1 34% Operating expenses 27.3 25.0 (2.2) (9%) Net Income / (Loss) 0.3 (3.4) 3.7 Adj. EBITDA 1 3.0 (0.
Slide 14: 2019 Guidance
14 © 2019 | NASDAQ: JYNT | thejoint.com $ in M 2018 ACTUAL LOW HIGH Revenues $31.8 26% 32% Adjusted EBITDA 1 $3.0 67% 100% New Franchise Openings 47 70 80 Additional Company - owned/Managed Clinics 2 1 8 12 2019 Guidance 1 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the appendi
Slide 15: Opportunity in Highly Fragmented Market
15 © 2019 | NASDAQ: JYNT | thejoint.com Opportunity in Highly Fragmented Market Adults in the U.S. want more options for neck and back pain 3 : ▪ 62% see healthcare professional for neck or back in their lifetime ▪ 25% in the last 12 months ▪ 79% prefer no prescription drugs ▪ 26% of The Joint’s pat
Slide 16: 2019 Growth Strategy: Continue Momentum
16 © 2019 | NASDAQ: JYNT | thejoint.com 2019 Growth Strategy: Continue Momentum ▪ Continue to focus on franchise sales ▪ Further leverage RD strategy ▪ Accelerate the expansion of corporate clinics portfolio within clustered locations • Build greenfield clinics in clustered locations • Acquire franc
Slide 17: Non-GAAP Measure Definition
Non - GAAP Measure Definition This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non - GAAP financial measures. EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they
Slide 18: Q4 2018 Segment Results & GAAP Reconciliation
18 © 2019 | NASDAQ: JYNT | thejoint.com Q4 2018 Segment Results & GAAP Reconciliation 2018 Q4 Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 4,321$ 4,751$ 0$ 9,072$ Total Operating Costs (3,250) (2,587) (2,300) (8,136) Operating Income (Loss) 1,071
Slide 19: 2018 Segment Results & GAAP Reconciliation
19 © 2019 | NASDAQ: JYNT | thejoint.com 2018 Segment Results & GAAP Reconciliation 2018 Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 14,673$ 17,115$ 1$ 31,789$ Total Operating Costs (13,136) (9,032) (9,416) (31,584) Operating Income (Loss) 1,537
Slide 20: GAAP – Non-GAAP Reconciliation
20 © 2019 | NASDAQ: JYNT | thejoint.com GAAP – Non - GAAP Reconciliation 1 1 All periods shown are restated in new accounting standards related to ASC606, which was adopted at the beginning of 2018. Q1-17 Q2-17 Q3-17 Q4-17 FY17 Q1-18 Q2-18 Q3-18 Q4-18 FY18 Net Income (Loss) (1,765)$ (1,022)$ (432)$
Slide 21: The Joint Corp. Contact Information
21 © 2019 | NASDAQ: JYNT | thejoint.com Peter D. Holt, President and CEO peter.holt@thejoint.com Jake Singleton, CFO jake.singleton@thejoint.com Kirsten Chapman, LHA Investor Relations thejoint@lhai.com The Joint Corp. Contact Information https://www.facebook.com/thejointchiro @ thejointchiro https: