- Grew Q1 2024 Revenue 5%, System-wide Sales 9%, and System-wide Comp Sales 3% vs. Q1 2023 -
- Opened 23
- Sold 15 Franchise Licenses, Tripling Sales Compared to Q4 2023 -
Financial Highlights: Q1 2024 Compared to Q1 2023
- Grew revenue 5% to
$29.7 million . - Recorded operating income of
$1.1 million , compared to operating loss of$653,000 . - Reported net income of
$947,000 , compared to$2.3 million , including the receipt of the employee retention credits of$3.9 million in Q1 2023. - Increased system-wide sales1 9% to
$126.3 million . - Reported system-wide comp sales2 of 3%.
- Reported Adjusted EBITDA of
$3.5 million , compared to$2.0 million . - Sold 15 franchise licenses, compared to 17 in Q1 2023 and five in Q4 2023.
- Expanded total clinic count to 954, up from 935 clinics at
December 31, 2023 .- 819 franchised clinics at
March 31, 2024 : Opened 23 and closed four during Q1 2024. - 135 company-owned or managed clinics at
March 31, 2024 .
- 819 franchised clinics at
“With the vision to be the Champions of Chiropractic, we began 2024 focused on increasing new patient counts, improving existing patient engagement and refranchising the vast majority of our corporate portfolio, and we are making solid progress,” said
Financial Results for First Quarter Ended
Revenue was
Selling and marketing expenses were
General and administrative expenses were
Loss on disposition or impairment was
Income tax expense was
Adjusted EBITDA was
_______________
1 System-wide sales include revenues at all clinics, whether operated or managed by the company or by franchisees. While franchised sales are not recorded as revenues by the company, management believes the information is important in understanding the company’s financial performance, because these revenues are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base.
2 System-wide comp sales include the revenues from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
Balance Sheet Liquidity
Unrestricted cash was
2024 Guidance
The company reiterated all elements of its guidance.
- 2024 System-wide sales are expected to be between
$530 and$545 million dollars , compared to$488.0 million dollars in 2023. - System-wide comp sales for all clinics open 13 months or more are expected to be in the mid-single digits in 2024.
- 2024 new franchised clinic openings, excluding the impact of refranchised clinics, are expected to be between 60 and 75, compared to 104 in 2023.
Conference Call
The live webcast of the call with accompanying slide presentation can be accessed in the IR events section https://ir.thejoint.com/events and will be available for approximately one year. An audio archive can be accessed for one week by dialing (877) 344-7529 or (412) 317-0088 and entering conference ID 8179924.
Commonly Discussed Performance Metrics
This release includes a presentation of commonly discussed performance metrics. System-wide sales include revenues at all clinics, whether operated by the company or by franchisees. While franchised sales are not recorded as revenues by the company, management believes the information is important in understanding the company’s financial performance, because these sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base. System-wide comp sales include the revenues from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.
Non-GAAP Financial Information
This release also includes a presentation of 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 provide a more transparent view of the company’s underlying operating performance and operating trends. Reconciliation of historical net income/(loss) to EBITDA and Adjusted EBITDA is presented in the table below. The company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses. The company defines Adjusted EBITDA as EBITDA before acquisition-related expenses (which includes contract termination costs associated with reacquired regional developer rights), net (gain)/loss on disposition or impairment, stock-based compensation expenses, costs related to restatement filings, restructuring costs and other income related to employee retention credits.
EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operations, as determined by accounting principles generally accepted in
Forward-Looking Statements
This press release contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of industry trends, our future financial and operating performance and our growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Words such as, "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term," "long-term," "projections," "assumptions," "projects," "guidance," "forecasts," "outlook," "target," "trends," "should," "could," "would," "will," and similar expressions are intended to identify such forward-looking statements. Specific forward looking statements made in this press release include, among others, our vision to be the Champions of Chiropractic; our belief that we are making solid progress in 2024 with respect to increasing new patient count, improving existing patient engagement and refranchising the vast majority of our corporate portfolio; our belief that since a majority of buyers are new to The Joint, it validates our franchise concept; our belief that working together with
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Business Structure
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– Financial Tables Follow –
CONSOLIDATED BALANCE SHEETS | |||||||
2024 | 2023 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,742,884 | $ | 18,153,609 | |||
Restricted cash | 923,958 | 1,060,683 | |||||
Accounts receivable, net | 3,265,800 | 3,718,924 | |||||
Deferred franchise and regional development costs, current portion | 1,046,156 | 1,047,430 | |||||
Prepaid expenses and other current assets | 2,926,719 | 2,439,837 | |||||
Assets held for sale | 17,726,238 | 17,915,055 | |||||
Total current assets | 44,631,755 | 44,335,538 | |||||
Property and equipment, net | 10,303,746 | 11,044,317 | |||||
Operating lease right-of-use asset | 12,214,619 | 12,413,221 | |||||
Deferred franchise and regional development costs, net of current portion | 5,016,644 | 5,203,936 | |||||
Intangible assets, net | 4,573,725 | 5,020,926 | |||||
7,226,701 | 7,352,879 | ||||||
Deferred tax assets ( | 960,621 | 1,031,648 | |||||
Deposits and other assets | 755,743 | 748,394 | |||||
Total assets | $ | 85,683,554 | $ | 87,150,859 | |||
CONSOLIDATED BALANCE SHEETS (CONT) | |||||||
2024 | 2023 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | (unaudited) | ||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,281,198 | $ | 1,625,088 | |||
Accrued expenses | 1,964,005 | 1,963,009 | |||||
Co-op funds liability | 923,958 | 1,060,683 | |||||
Payroll liabilities ( | 4,511,015 | 3,485,744 | |||||
Operating lease liability, current portion | 3,750,477 | 3,756,328 | |||||
Finance lease liability, current portion | 25,763 | 25,491 | |||||
Deferred franchise fee revenue, current portion | 2,528,468 | 2,516,554 | |||||
Deferred revenue from company clinics ( | 4,603,602 | 4,463,747 | |||||
Upfront regional developer fees, current portion | 340,040 | 362,326 | |||||
Other current liabilities | 585,110 | 483,249 | |||||
Liabilities to be disposed of ( | 12,832,986 | 13,831,863 | |||||
Total current liabilities | 33,346,622 | 33,574,082 | |||||
Operating lease liability, net of current portion | 10,606,889 | 10,914,997 | |||||
Finance lease liability, net of current portion | 31,471 | 38,016 | |||||
Debt under the Credit Agreement | — | 2,000,000 | |||||
Deferred franchise fee revenue, net of current portion | 13,316,975 | 13,597,325 | |||||
Upfront regional developer fees, net of current portion | 940,662 | 1,019,316 | |||||
Other liabilities ( | 1,235,241 | 1,235,241 | |||||
Total liabilities | 59,477,860 | 62,378,977 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders' equity: | |||||||
Series A preferred stock, | — | — | |||||
Common stock, | 14,967 | 14,783 | |||||
Additional paid-in capital | 47,991,362 | 47,498,151 | |||||
(867,037 | ) | (860,475 | ) | ||||
Accumulated deficit | (20,958,598 | ) | (21,905,577 | ) | |||
Total | 26,180,694 | 24,746,882 | |||||
Non-controlling Interest | 25,000 | 25,000 | |||||
Total equity | 26,205,694 | 24,771,882 | |||||
Total liabilities and stockholders' equity | $ | 85,683,554 | $ | 87,150,859 | |||
CONSOLIDATED INCOME STATEMENTS (unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Revenues: | |||||||
Revenues from company-owned or managed clinics | $ | 17,537,504 | $ | 17,127,957 | |||
Royalty fees | 7,587,547 | 6,866,023 | |||||
Franchise fees | 655,873 | 754,425 | |||||
Advertising fund revenue | 2,166,473 | 1,952,406 | |||||
Software fees | 1,386,776 | 1,210,005 | |||||
Other revenues | 387,993 | 390,004 | |||||
Total revenues | 29,722,166 | 28,300,820 | |||||
Cost of revenues: | |||||||
Franchise and regional development cost of revenues | 2,341,765 | 2,140,835 | |||||
IT cost of revenues | 374,311 | 333,850 | |||||
Total cost of revenues | 2,716,076 | 2,474,685 | |||||
Selling and marketing expenses | 3,886,113 | 4,160,244 | |||||
Depreciation and amortization | 1,403,906 | 2,215,055 | |||||
General and administrative expenses | 20,263,692 | 20,038,476 | |||||
Total selling, general and administrative expenses | 25,553,711 | 26,413,775 | |||||
Net loss on disposition or impairment | 362,103 | 65,469 | |||||
Income (loss) from operations | 1,090,276 | (653,109 | ) | ||||
Other income, net | 35,630 | 3,821,162 | |||||
Income before income tax expense | 1,125,906 | 3,168,053 | |||||
Income tax expense | 178,927 | 841,889 | |||||
Net income | $ | 946,979 | $ | 2,326,164 | |||
Earnings per share: | |||||||
Basic earnings per share | $ | 0.06 | $ | 0.16 | |||
Diluted earnings per share | $ | 0.06 | $ | 0.16 | |||
Basic weighted average shares | 14,801,354 | 14,566,185 | |||||
Diluted weighted average shares | 15,011,286 | 14,861,734 | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 946,979 | $ | 2,326,164 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,403,906 | 2,215,055 | |||||
Net loss on disposition or impairment (non-cash portion) | 362,103 | 65,469 | |||||
Net franchise fees recognized upon termination of franchise agreements | (39,456 | ) | (73,095 | ) | |||
Deferred income taxes | 71,027 | 733,390 | |||||
Stock based compensation expense | 493,395 | 266,210 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 453,124 | 385,629 | |||||
Prepaid expenses and other current assets | (487,954 | ) | (1,370,390 | ) | |||
Deferred franchise costs | 201,718 | (27,255 | ) | ||||
Deposits and other assets | (7,349 | ) | 801 | ||||
Assets and liabilities held for sale, net | (911,166 | ) | — | ||||
Accounts payable | (348,824 | ) | (1,189,662 | ) | |||
Accrued expenses | 996 | 818,784 | |||||
Payroll liabilities | 1,025,270 | 1,540,498 | |||||
Deferred revenue | (102,277 | ) | 437,838 | ||||
Upfront regional developer fees | (100,940 | ) | (47,116 | ) | |||
Other liabilities | (150,222 | ) | (57,727 | ) | |||
Net cash provided by operating activities | 2,810,330 | 6,024,593 | |||||
Cash flows from investing activities: | |||||||
Proceeds from sale of clinics | 50,100 | — | |||||
Purchase of property and equipment | (395,046 | ) | (1,200,215 | ) | |||
Net cash used in investing activities | (344,946 | ) | (1,200,215 | ) | |||
Cash flows from financing activities: | |||||||
Payments of finance lease obligation | (6,272 | ) | (6,011 | ) | |||
Purchases of treasury stock under employee stock plans | (6,562 | ) | (2,637 | ) | |||
Proceeds from exercise of stock options | — | 138,457 | |||||
Repayment of debt under the Credit Agreement | (2,000,000 | ) | — | ||||
Net cash provided by (used in) financing activities | (2,012,834 | ) | 129,809 | ||||
Increase in cash, cash equivalents and restricted cash | 452,550 | 4,954,187 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 19,214,292 | 10,550,417 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 19,666,842 | $ | 15,504,604 | |||
Reconciliation of cash, cash equivalents and restricted cash: | 2024 | 2023 | |||||
Cash and cash equivalents | $ | 18,742,884 | $ | 14,773,225 | |||
Restricted cash | 923,958 | 731,379 | |||||
$ | 19,666,842 | $ | 15,504,604 | ||||
RECONCILIATION FOR GAAP TO NON-GAAP (unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Non-GAAP Financial Data: | |||||||
Net income | $ | 946,979 | $ | 2,326,164 | |||
Net interest expense | (35,630 | ) | 49,725 | ||||
Depreciation and amortization expense | 1,403,906 | 2,215,055 | |||||
Tax expense | 178,927 | 841,889 | |||||
EBITDA | 2,494,182 | 5,432,833 | |||||
Stock compensation expense | 493,395 | 266,210 | |||||
Acquisition related expenses | — | 141,693 | |||||
Loss on disposition or impairment | 362,103 | 65,469 | |||||
Restructuring costs | 157,035 | — | |||||
Other (income), net | — | (3,870,887 | ) | ||||
Adjusted EBITDA | $ | 3,506,715 | $ | 2,035,318 | |||
Source:
2024 GlobeNewswire, Inc., source