The Joint Corp. · NASDAQ:JYNT
The Joint — JOINT — Investor Presentation (November 2017)
29 slides from The Joint's investor presentation, Nov 15, 2017
Slide 1: The Joint Corp.
THE JOINT CORP. | NASDAQ: JYNT | thejoint.com
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: Fast Growing Leader in Revolutionizing High Quality Chiropractic Care
THE JOINT CORP.: Fast Growing Leader in Revolutionizing High Quality Chiropractic Care $ 15 billion U.S. chiropractic market 2 389 clinics vs. 242 at IPO in Nov. 2014 3 100 % non - insurance model Headquartered in Scottsdale, AZ Number of employees: 252 4 1 The Joint Corp. System Wide Database | 2 I
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Slide 7: Chiropractic is a Large, Dynamically Growing Market
Chiropractic is a L arge, Dynamically Growing Market • $ 90 billion spent on back pain each year 1 • 62 million Americans saw a chiropractor in last 5 years, 35.5 million in last 12 months 2 • $ 15 billion growing chiropractic market 3 1 Bureau of Labor Statistics, U.S. Department of Labor, Occupati
Slide 8: Management Has Extensive Experience in Building and Supporting Large Franchise Systems
Management Has Extensive Experience in Building and Supporting Large Franchise Systems POSITION EXPERIENCE UNITS 1 PRESIDENT & CEO Peter D. Holt 5,100+ VP, OPERATIONS Jorge Armenteros 17,100+ VP, MARKETING Donna Smith 4,500+ VP, FRANCHISE SALES Eric Simon 5,745+ 8 1 Represents total franchised and/o
Slide 9: The Joint is Revolutionizing Traditional Chiropractic Care
The Joint Corp. is Revolutionizing Traditional Chiropractic Care FEATURES PROBLEMS (INDUSTRY) SOLUTIONS (THE JOINT) Affordability (per appointment) $ 74 Average 1 $ 24 Average 2 Convenient Locations Medical Centers / Offices Retail Locations Multiple Locations Limited Locations 389 Units 3 Walk - in
Slide 10: The Joint's Solutions are Working
The Joint Corp.’s Solutions are Working • Industry CAGR 1.2% 1 vs. The Joint Corp. 84% 2 • 1+ million patients served 4 • 4.1 million patient visits in 2016 4 • 21% of our customers are new to chiropractic 3 • 75% of revenue from recurring memberships 4 1 IBIS World Chiropractors Market Research Rep
Slide 11: Opportunity: Chiropractic is a Highly Fragmented Market
OPPORTUNITY: Chiropractic is a Highly Fragmented Market CLINICS 1 STATES 1 FRANCHISE OWNED OR MANAGED INSURANCE PRIVATE PAY The Joint Corp . 389 30 ط ط ط HealthSource Chiropractic 264 34 ط ط ChiroOne 41 1 ط ط AlignLife Chiropractic 23 7 ط ط ChiroWay 8 2 ط ط Simply Chiropractic 8 5 ط ط NuSpine 3 2 ط
Slide 12: Opportunity: Ability to Grow to 1,700+ Clinics
OPPORTUNITY: Ability to Grow to 1,700+ Clinics Based on Current Usage Patterns Projected Core Customer & Trade Area Potential GOOD BEST FAIR POOR 12
Slide 13: Business Model: Transformative for Chiropractors
BUSINESS MODEL: Transformative for Chiropractors INDUSTRY THE JOINT Starting Salary $ 30K - $ 40K 1 $ 50K - $ 60K plus bonus potential 2 Accessibility • Appointments required • Medical centers and offices • Traditional office hours • No appointments • Clustered, h igh - visibility retail locations •
Slide 14: Business Model: Company-Owned or Managed & Franchised Units
1 Total Investment includes clinic development costs and working capital to breakeven | 2 Breakeven is achievable at $22K in monthly gross sales and operating expenses, with 243 active patients at 13 months in opera ti on growing sales at historical rates. Breakeven varies on a clinic by clinic basi
Slide 15: Strategic Growth: Company-Owned or Managed & Franchised Units Model
STRATEGIC GROWTH: Company - Owned or Managed & Franchised Units Model COMPANY - OWNED OR MANAGED UNITS FRANCHISED UNITS Focused expansion in strategic markets Accelerates growth utilizing franchisee capital to increase market penetration and brand development Strong clinic economics with achievable
Slide 16: Strategic Growth: Building Upon a Robust National Footprint
STRATEGIC GROWTH: Building Upon a Robust National Footprint 389 Clinics 1 30 States 1 Franchised Clinics Company - Owned or Managed Clinics 16 1 Clinic and state counts as of 9/30/17
Slide 17: Strategic Growth: A Proven Model
STRATEGIC GROWTH: A Proven Model TOTAL UNITS (U.S. ONLY) 2016 SALES (WORLDWIDE) 4,669 Total Units 1 1,163 Franchised / 3,506 Company - Owned $ 3.3 Billion 2 23,853 Total Units 1 18,184 Franchised / 5,669 Company - Owned $ 82.7 Billion 2 303 Total Units 1 190 Franchised / 113 Company - Owned $ 1.2 Bi
Slide 18: Q3 2017 Financial Summary
THE JOINT CORP.: Q3 2017 Financial Summary Q3 2017 • 389 open clinics vs . 354 at the end of Q3 2016 • Revenue up 19% to $ 6.5 million, up from $ 5.5 million in Q3 2016 • Total system gross sales up 26% to $ 32.2 million, up from $ 25.6 million in Q3 2016 • Total s ystem - wide comp sales were 17% a
Slide 19: Financial Highlights: Franchise Licenses Sold and Clinics Open
THE JOINT CORP.: Financial Highlights GROSS CUMULATIVE FRANCHISE LICENSES SOLD TOTAL CLINICS OPEN 340 439 515 557 579 2012 2013 2014 2015 2016 82 175 242 265 309 4 47 61 2012 2013 2014 2015 2016 Franchise Company Owned/Managed 246 312 370 19
Slide 20: Financial Highlights Continued: Revenues and Gross Sales
$2.8 $6.0 $7.1 $13.8 $20.5 2012 2013 2014 2015 2016 REVENUES ($ millions) THE JOINT CORP.: Financial Highlights CONTINUED GROSS SALES ($ millions) $8.1 $22.3 $46.2 $70.1 $98.6 2012 2013 2014 2015 2016 20
Slide 21: 2017 Guidance
GUIDANCE ELEMENTS LOW HIGH Net New Clinic Openings 1 40 50 Revenues ($ millions ) $ 24.0 $ 26.0 Adjusted EBITDA ($ millions ) ( $ 0 .5 ) $ 0.5 THE JOINT CORP.: 2017 Guidance 1 Net New Clinic Openings includes New Franchised clinics and New Company - Owned or Managed clinics and excludes acquired cli
Slide 22: Investment Summary: Stable Operating Model with Significant Growth Potential
INVESTMENT SUMMARY: Stable Operating Model with Significant Growth Potential 1 IBIS World Chiropractors Market Research Report; August 2016 | 2 The Joint Corp. System Wide Database – 7 Year CAGR | 3 The Joint Corp. System Wide Database, 2016 Actuals • $ 15 billion growing chiropractic market 1 • Exp
Slide 23: Appendix
APPENDIX 23
Slide 24: Appendix: Unit Economics of Owned or Managed vs. Franchised
APPENDIX: Unit Economics of Owned or Managed vs. Franchised Cash Contribution ($ thousands) 24 • Franchise l icense income included in Yr. 1 • Gross sales growing at The Joint Corp. total system average historical rates 1 • Model assumes $ 22K average monthly operating expense for owned or managed c
Slide 25: Appendix: Quarterly Financial Highlights
APPENDIX: The Joint Corp. Quarterly Financial Highlights 25 GROSS SALES ($ millions) $4.3 $5.0 $5.5 $5.8 $5.7 $6.0 $6.5 $(2.7) $(2.0) $(1.7) $(1.4) $(0.5) $(0.3) $0.3 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Revenue Adj. EBITDA REVENUE & ADJ. EBITDA 1 ($ millions) $22.0 $23.8 $25.6 $27.2 $28.1 $30.
Slide 26: Appendix: Quarterly Comp Sales
APPENDIX: The Joint Corp. Quarterly Comp Sales 26 • Q3 - 17 Total system - wide comp sales were 17% and 9 % for clinics > 4 years in operation 1,2 1 Comparable Sales include only the sales from clinics that have been open at least 13 full months and exclude any clinics that ha ve closed | 2 The Join
Slide 27: Appendix: 2017 Segment Performance
Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 2,930$ 3,616$ -$ 6,546$ Operating Expenses (2,747) (1,945) (1,763) (6,455) Depreciation and Amortization (379) - (90) (469) Operating Income (Loss) (196) 1,671 (1,853) (378) Other (Income) Expense, net
Slide 28: Appendix: 2016 Financial Summary
APPENDIX: 2016 Financial Summary 1 Comparable Sales include only the sales from clinics that have been open at least 13 full months and exclude any clinics that ha ve closed | 2 The Joint Corp. System Wide Database 2016 Actuals | 3 Reconciliation of Adjusted EBITDA to GAAP earnings is included in th
Slide 29: Contact Information
The Joint Corp. Contact Information The Joint Corp 16767 N. Perimeter Dr., Suite 240 Scottsdale, AZ 85260 (480) 245 - 5960 Peter D. Holt President and CEO peter.holt@thejoint.com John P. Meloun Chief Financial Officer john.meloun@thejoint.com 29 https :// www.facebook.com/thejointchiro (@ thejointch