Shares of The Joint, Corp. (NASDAQ:JYNT) Up On Reports of Third Quarter 2016 Financial Results

National operator, manager and franchisor of chiropractic clinics, The Joint, Corp. (NASDAQ:JYNT), reports results of Q3, 2016 earnings.

SCOTTSDALE, Ariz., Nov. 10, 2016 (GLOBE NEWSWIRE) — The Joint Corp. (JYNT), a national operator, manager and franchisor of chiropractic clinics, today reported results for the quarter ended September 30, 2016.   

Third Quarter 2016 Financial Highlights

    Revenue increased 33% in the third quarter of 2016 to $5.5 million, up from $4.1 million in the same quarter last year.

    System wide Comp Sales1 in the third quarter of 2016 were 26%.

    354 total clinics in operation as of September 30, 2016, an increase of 13 clinics during the third quarter and an increase of 77 clinics from September 30, 2015.

“Our performance in the third quarter reflects strong revenue growth, which was driven by the addition of 77 clinics over the last 12 months, and significant improvement in reducing general and administrative expenses, which positively impacted our Adjusted EBITDA guidance for full year 2016. Furthermore, we continue to focus on opportunities to effectively manage our costs as we build our business,” said Peter D. Holt, chief executive officer of The Joint Corp. “Our company-owned or managed clinic buybacks are currently cash positive and our greenfield clinics are making progress towards profitability. However, the growth of our Chicago-area clinics continues to underperform our expectations. While we are working to improve the operating performance of the Chicago area clinics, we are also exploring strategic alternatives for those clinics that are in the best interest of our shareholders. In addition, we are considering non-dilutive financing options to strengthen our financial position.”  

Holt added, “After careful review, I am very pleased to announce the promotion of John Meloun to chief financial officer. He brings to the role a solid base of knowledge, including significant financial and operational experience. John joined The Joint Corp. in early 2015 as director of financial planning and analysis. Since then, his financial and business insights have added great value and will be instrumental to the continued growth of our company.”

“I am also pleased to announce the addition of Eric Simon to lead our franchise development team. Eric has an impressive track record of helping brands grow through franchise sales and development, which will be a tremendous benefit to the Company as we see franchise sales as an integral part of our expansion. To further accelerate our growth, Eric will play a key role in re-energizing and expanding our regional developer program. Our regional developer program accelerates growth by allowing qualified developers to assist in selling franchises and providing ongoing support to the franchisees in specific markets. I’m confident Eric’s franchise development experience and his commitment to operational excellence will be a major asset to The Joint Corp. and its franchisees.”

Third Quarter 2016 Financial Results

Revenue for the third quarter of 2016 increased 33% to $5.5 million from $4.1 million in the third quarter of the prior year due primarily to the addition and growth of 32 company-owned or managed clinics and the addition of 45 franchised clinics since September 30, 2015.

Cost of revenue in the third quarter of 2016 decreased 4% compared to the third quarter of 2015, due to a decrease in regional developer related clinic openings as well as a decrease in the number of terminations of undeveloped franchise licenses.

Selling and marketing expenses increased to $1.3 million in the third quarter of 2016, compared to $0.5 million in the same period last year, due to an increase in the number of company-owned or managed clinics.

General and administrative expenses increased to $5.4 million in the third quarter of 2016, compared to $4.5 million in the third quarter of 2015. This increase was driven by occupancy expenses associated with having a greater number of clinics open in the third quarter of 2016 compared to the same period the prior year, as well as an increase in real estate development costs for halting expansion of greenfield clinics.

Depreciation and amortization expenses increased for the third quarter of 2016, compared to the same period last year, due to the addition of property, equipment and intangible assets in acquisitions of franchises and regional developer rights, as well as growth in the number of greenfield clinics.

Operating loss in the third quarter of 2016 was ($2.6) million, compared to an operating loss of ($2.1) million in the third quarter of 2015. Net loss in the third quarter of 2016 was ($2.6) million, or ($0.21) per share, compared to a net loss of ($1.7) million or ($0.17) per share in the same period last year.

Adjusted EBITDA in the third quarter of 2016 was ($1.7) million, compared to ($1.2) million in the same quarter the prior year. In addition, third quarter 2016 Adjusted EBITDA is an improvement from Adjusted EBITDA of ($2.0) million in the second quarter of 2016 and ($2.7) million in the first quarter of 2016.

As of June 30, 2016, cash and cash equivalents were $3.4 million, compared to $16.8 million at December 31, 2015, $10.4 million at March 31, 2016, and $6.1 million at June 30, 2016.

2016 Financial Guidance

For full year 2016, The Joint Corp. is updating guidance for total revenues and Adjusted EBITDA, and reiterating guidance for net new clinic openings as set forth below:

    Total revenues in the range of $20 million to $21 million, compared to the previously expected range of $19 million to $21 million.

    Adjusted EBITDA in the range of $(7.9) million to $(7.3) million, compared to the previously expected range $(8.9) million to $(8.2) million.

    Net new clinic openings in the range of 58 to 63, including greenfields which make up 8 of the 14 company-owned or managed clinics added during the first six months of 2016, and 50 to 55 franchised clinics.

Full year 2016 guidance excludes potential non-cash charges relating to any strategic alternatives that the Company may undertake for its Chicago area clinics, including restructuring and related initiatives.

1 Comp Sales refers to the amount of sales a clinic generates in the most recent accounting period, compared to sales in the comparable period of the prior year, and (i) includes sales only from clinics that have been open at least 13 full months and (ii) excludes any clinics that have closed.

Conference Call

The Joint Corp. management will host a conference call at 5:00 p.m. ET on Thursday, November 10, 2016, to discuss the third quarter 2016 results. The conference call may be accessed by dialing 765-507-2604 or 844-464-3931, and referencing 96996768. A live webcast of the conference call will also be available on the investor relations section of the Company’s website at www.thejoint.com. An audio replay will be available two hours after the conclusion of the call through November 17, 2016. The replay can be accessed by dialing 404-537-3406 or 855-859-2056. The passcode for the replay is 96996768.

Non-GAAP Financial Information

This earnings release 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 provide a more transparent view of the Company’s underlying operating performance and operating trends. Reconciliations of net loss to EBITDA and Adjusted EBITDA are presented within the tables below. The Company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, and stock-based compensation expenses. The Company defines EBITDA as net income (loss) before net interest, taxes, depreciation, and amortization expenses.

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 the United States, or GAAP. While EBITDA and Adjusted EBITDA are frequently used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with the Company’s financial statements filed with the SEC.

Original Source

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The Joint, Corp. (NASDAQ:JYNT) shares have moved +2.36% on the news thus far today and have traded in the range of $2.43 – 2.69 during the current session. In order to take a look at where the stock might be headed longer term, investors often look to research firms that cover the stock. Sell-side research firms currently have a consensus one-year price target of $5.50 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  The sell-side analysts are projecting earnings per share of $-0.10 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.97 per share according to First Call.

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In looking at where the stock is trading on a technical level, the stock is trading +3.71% away from its 50-day moving average of $2.51.  Based on the most recent available data, the equity is -58.80% off of its 52-week high of $6.31 and +40.54% away from its 52-week low which is $1.85.

Today, the stock opened at $2.55 and the last bid at the time of writing stood at $2.60.  During the session thus far, the equity dipped down to $2.43 and touched $2.69 as the high point.  The Joint, Corp. (NASDAQ:JYNT) has a market cap of $33.10M and has seen an average daily volume of 32,860 over the past three months.

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