The Joint Corp. · NASDAQ:JYNT
The Joint — JOINT — Q3 2018 Earnings Presentation
18 slides from The Joint's earnings presentation, Nov 8, 2018
Slide 1: Q3 2018 Financial Results
REVOLUTIONIZING ACCESS TO CHIROPRACTIC CARE THE JOINT CORP. | NASDAQ: JYNT | thejoint.com Q3 2018 FINANCIAL RESULTS AS OF SEPTEMBER 30, 2018 REPORTED NOVEMBER 8, 2018
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: Q3 18: Another Strong Quarter of Improvements
3 © 2018 | NASDAQ: JYNT | thejoint.com Achi Q3 18: Another Strong Quarter of Improvements Q3 18 vs Q3 17 System - wide gross sales +31% System - wide comp sales >13 months 1 +26% System - wide comp sales >48 months 1 +18% Revenue +23% Net Loss $152K, up $0.3M Adjusted EBITDA 2 $665K, up $0.4M Cash a
Slide 4: Industry Leader Executing Growth Strategy
4 © 2018 | NASDAQ: JYNT | thejoint.com Achi 12 26 82 175 242 265 309 352 374 4 47 61 47 48 2010 2011 2012 2013 2014 2015 2016 2017 Q3 2018 TOTAL CLINICS OPEN Franchise Company Owned/Managed • Increasing clinic scale through franchise sales and regional developers • Expanding company - owned/managed
Slide 5: Reducing Clinic Time to Breakeven
5 © 2018 | NASDAQ: JYNT | thejoint.com Achi Reducing Clinic Time to Breakeven • Clinics opened in 2018 on track to achieve breakeven in less than 6 months, down from approximately 9 months in 2017 & 18 to 24 months historically • Clinics opened in 2017 continue to ramp above the historical performan
Slide 6: RDs Accelerate Franchise License Sales
6 © 2018 | NASDAQ: JYNT | thejoint.com Franchise sales through June 2018 were 34, compared to 37 for all of 2017 • 60 franchises sold January - September 2018, compared to 37 for 2017 and 22 for 2016 • 83% of licenses sold by RDs in 2018, compared to 49% in all of 2017 • 20 RDs as of October 31, 201
Slide 7: First & Dominant National Chiropractic Brand
7 © 2018 | NASDAQ: JYNT | thejoint.com Achi First & Dominant National Chiropractic Brand Credible patient experience + empathetic approach to care create critical brand equity Local Sports Partnership: ▪ Official chiropractor at University of Houston Athletics, Division 1 program Google Reported: ▪
Slide 8: Implementing New IT Platform
8 © 2018 | NASDAQ: JYNT | thejoint.com Achi Implementing New IT Platform ▪ Evaluated IT options ▪ The Joint approaching critical mass ▪ Third - party SaaS CRM costs decreased ▪ Cyber - security risks increased ▪ Licensed SugarCRM ▪ Completed discovery phase ▪ Expect complete rollout by end of 2019 ▪
Slide 9: Q3 2018 Operational Summary
9 © 2018 | NASDAQ: JYNT | thejoint.com Q3 2018 Operational Summary • System - wide gross sales up 31% to $42.2M, from $32.2M in Q3 2017 • System - wide comp sales 1 for clinics >13 months in operation 1 increased 26%, compared to 17% in Q3 2017 • System - wide comp sales 1 for clinics >48 months in
Slide 10: Q3 2018 Financial Summary
10 © 2018 | NASDAQ: JYNT | thejoint.com Achi $ in M* Q3 2018 Q3 2017 IMPROVEMENT Revenue Corporate clinics Franchise fees $8.1 3.7 4.4 $6.5 2.9 3.6 $1.5 0.7 0.8 23% 25% 22% Increase revenue contribution • 49% Corp. • 51% Franchise Cost of revenue 1.1 0.8 (0.2) (29%) Increasing RD fees Gross profit 7
Slide 11: Reaffirming 2018 Financial Guidance
11 © 2018 | NASDAQ: JYNT | thejoint.com $ in M LOW HIGH New Franchise Openings 40 50 Additional Company - owned or Managed Clinics 1 1 1 New Clinic Openings 1 40 50 Revenues $31.0 $32.0 Adjusted EBITDA 2 $2.5 $3.5 Reaffirming 2018 Financial Guidance 1 Existing clinic acquired in April 2018 from fran
Slide 12: Opportunity in Highly Fragmented Market
12 © 2018 | NASDAQ: JYNT | thejoint.com Opportunity in Highly Fragmented Market Adults in the U.S. want more options for neck and back pain 3 : ▪ 67% see healthcare professional for neck or back in their lifetime ▪ 25% in the last 12 months ▪ 79% prefer no prescription drugs ▪ 22% of The Joint’s 201
Slide 13: 2018 Growth Strategy: Driving Scale
13 © 2018 | NASDAQ: JYNT | thejoint.com 2018 Growth Strategy: Driving Scale • Accelerate franchise sales • Leverage Regional Developers • Reengage growth of company owned/managed units • Acquire franchised clinics opportunistically • Build greenfield clinics in clustered locations Building nationwid
Slide 14: Stable Model, Significant Growth Potential
14 © 2018 | NASDAQ: JYNT | thejoint.com Stable Model, Significant Growth Potential 1 IBIS World Chiropractors Market Research Report; August 2018. 2 For the year - ended December 31, 2017 • $ 16B growing chiropractic market 1 • Experienced, proven management • 1,700+ clinic national footprint opport
Slide 15: 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 16: Q3 2018 Segment Results & GAAP Reconciliation
16 © 2018 | NASDAQ: JYNT | thejoint.com Q3 2018 Segment Results & GAAP Reconciliation 2018 Q3 Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 3,675$ 4,387$ 0$ 8,063$ Total Operating Costs (3,234) (2,257) (2,762) (8,254) Operating Income (Loss) 440 2
Slide 17: GAAP – Non-GAAP Reconciliation
17 © 2018 | 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. Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Net Income (Loss) (3,652)$ (3,255)$
Slide 18: The Joint Corp. Contact Information
18 © 2018 | 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: