The Joint Corp. · NASDAQ:JYNT
The Joint — JOINT — Q1 2019 Earnings Presentation
19 slides from The Joint's earnings presentation, May 9, 2019
Slide 1: Preliminary Q1 2019 Financial Results
REVOLUTIONIZING ACCESS TO CHIROPRACTIC CARE THE JOINT CORP. | NASDAQ: JYNT | thejoint.com PRELIMINARY Q1 2019 FINANCIAL RESULTS AS OF MARCH 31, 2019 REPORTED MAY 9, 2019 © 2019 The Joint Corp. All Rights Reserved.
Slide 2: Safe Harbor Statements
Safe Harbor Statements 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," "sho
Slide 3: 2019 Growth Strategy: Continued Momentum
3 © 2019 | NASDAQ: JYNT | thejoint.com Achi 2019 Growth Strategy: Continued Momentum ▪ Increasing franchise sales ▪ Leveraging RD strategy ▪ Accelerating corporate portfolio expansion in clustered locations • Build greenfield clinics • Acquire franchised clinics opportunistically Building nationwide
Slide 4: Continued Strong Improvements; Second Quarter of Positive Net Income
4 © 2019 | NASDAQ: JYNT | thejoint.com Achi Continued Strong Improvements Second Quarter of Positive Net Income Preliminary 1 Q1 2019 vs Q1 2018 System - wide gross sales 32% System - wide comp sales >13 months 2 25% System - wide comp sales >48 months 2 18% Revenue 24% Net Income $1.0M, up $1.0M Ad
Slide 5: Fueling Momentum, 14 Total Clinic Openings
5 © 2019 | NASDAQ: JYNT | thejoint.com Achi • 454 clinics at Mar. 31, 2019, up from 442 at Dec. 31, 2018 • 404 franchises including 12 openings less 1 corporate buyback and 1 closure in Q1 2019 • 50 corporate - owned/managed clinics, including 2 greenfields and 1 corporate buyback less 1 consolidati
Slide 6: Reducing Clinic Time to Breakeven
6 © 2019 | NASDAQ: JYNT | thejoint.com Achi Reducing Clinic Time to Breakeven • Clinics opened in 2019 at least as strong as 2018 • Reduced average time to estimated breakeven: 2018 clinics 6 months; 2017 ~ 9 months in 2017; 18 to 24 months historically * Based on average historical gross sales grow
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 21 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Mar. 31, 2019 • 21 RDs sold 100% of licenses in Q1 2019, compared to 89% in 2018 and 49% in 2017 • Franchise license sales: 2019: 30 i
Slide 8: Building a Robust Health & Wellness Brand
8 © 2019 | NASDAQ: JYNT | thejoint.com Building a Robust Health & Wellness Brand ▪ Evangelizing clear, consistent and recognizable marketplace identity using new brand architecture ▪ Employing robust SEO practice and digital marketing tactics ▪ Increased investment in awareness advertising ▪ Growing
Slide 9: Implementing AXIS, New IT Platform
9 © 2019 | NASDAQ: JYNT | thejoint.com Achi Implementing AXIS, New IT Platform ▪ Licensed SugarCRM ▪ Completed discovery phase ▪ Nearly completed design and development phase ▪ Entered testing and training phase ▪ Continue to be on track to complete rollout by end of 2019 Key Customers 9 © 2019 | NA
Slide 10: Q1 2019 Strong Sales Performance
10 © 2019 | NASDAQ: JYNT | thejoint.com Q1 2019 Strong Sales Performance ▪ System - wide gross sales up 32% to $49.8, from $37.0M in Q1 2018 ▪ System - wide comp sales 1 for clinics >13 months in operation 1 increased 25% ▪ System - wide comp sales 1 for clinics >48 months in operation increased 18%
Slide 11: Preliminary Q1 2019 Financial Summary
11 © 2019 | NASDAQ: JYNT | thejoint.com Achi $ in M 1 Q1 2019 Q1 2018 IMPROVEMENT Revenue Corporate clinics Franchise fees $10.7 5.6 5.0 $8.6 4.8 3.8 $2.0 0.8 1.2 24% 17% 31% Cost of revenue 1.2 1.0 (0.2) (24%) Sales and marketing 1.5 1.1 0.4 (37%) Depreciation 0.4 0.4 0.0 G&A 6.6 6.3 (0.3) (5%) Net
Slide 12: Unit Economics
12 © 2019 | NASDAQ: JYNT | thejoint.com Unit Economics • Approximate investment of $276K • $150K initial build - out cost • Franchisee pays 7% royalty on gross sales • Franchisee pays $450/month in software fees • Assumes breakeven at $25K monthly gross sales • Franchisee pays $39.9K per license, pr
Slide 13: Reiterating 2019 Guidance
13 © 2019 | NASDAQ: JYNT | thejoint.com $ in M 2018 ACTUAL 1 LOW HIGH Revenues $36.7 26% 32% Adjusted EBITDA 2 $2.9 67% 100% New Franchise Openings 47 70 80 Additional Company - owned/Managed Clinics 3 1 8 12 Reiterating 2019 Guidance 1 Financial statements for comparative periods have been adjusted
Slide 14: Opportunity in Highly Fragmented Market
14 © 2019 | NASDAQ: JYNT | thejoint.com Opportunity in Highly Fragmented Market Those who have visited a chiropractor for musculoskeletal pain and associated conditions are 49% 3 less likely to be issued or receive an opioid prescription $90B 1 spent on back pain $15B 2 spent on chiropractic care 1
Slide 15: 2019 Growth Strategy: Continued Momentum
15 © 2019 | NASDAQ: JYNT | thejoint.com 2019 Growth Strategy: Continued Momentum ▪ Increasing franchise sales ▪ Leveraging RD strategy ▪ Accelerating corporate portfolio expansion in clustered locations • Build greenfield clinics • Acquire franchised clinics opportunistically Building nationwide bra
Slide 16: Non-GAAP Measure Definition
Non - GAAP Measure Definition This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non - GAAP financial measures. EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they
Slide 17: Preliminary Q1 2019 Segment Results
17 © 2019 | NASDAQ: JYNT | thejoint.com Preliminary Q1 2019 Segment Results 2019 Q1 Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues 5,639$ 5,040$ 0$ 10,679$ Total Operating Costs (4,694) (2,651) (2,286) (9,631) Operating Income (Loss) 945 2,389 (2,2
Slide 18: Preliminary GAAP – Non-GAAP Reconciliation
18 © 2019 | NASDAQ: JYNT | thejoint.com Preliminary GAAP – Non - GAAP Reconciliation 1 1 Financial statements for comparative periods have been adjusted to reflect the consolidation of company managed clinics owned by profes sio nal corporations. Q1-17 Q2-17 Q3-17 Q4-17 FY17 Q1-18 Q2-18 Q3-18 Q4-18
Slide 19: The Joint Corp. Contact Information
19 © 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: