--- title: "The Joint Corp. Reports Third Quarter 2022 Financial Results" url: https://burnaze.com/article/52d0abce-cd12-41ab-9fee-f2bc1d5fa0b4 source: "Franchising.com" original_url: https://www.franchising.com/news/20221104_the_joint_corp_reports_third_quarter_2022_financial_results.html category: "Boutique fitness" industry: "Fitness" segment: "Boutique fitness" topics: ["Finance & M&A"] published: 2022-11-04T12:00:00.000Z modified: 2026-10-31T20:34:25.701Z image: https://images.unsplash.com/photo-1526304640581-d334cdbbf45e?w=1600&q=80&auto=format&fit=crop --- # The Joint Corp. Reports Third Quarter 2022 Financial Results **TL;DR:** The Joint Corp. reported its third quarter 2022 financial results, including revenue growth of 27% to $26.6 million and system-wide sales increases of 18% to $110.4 million. The company opened 38 clinics, surpassing the 800 clinic milestone, and reported net income of $491,000. *originally published in Franchising.com on 2022-11-04. [Read the original](https://www.franchising.com/news/20221104_the_joint_corp_reports_third_quarter_2022_financial_results.html).* ## Key facts - The Joint Corp. grew revenue 27% to $26.6 million - System-wide sales increased 18% to $110.4 million - The company opened 38 clinics in Q3 2022 ## Story - ***Grew Revenue 27%, System-wide Sales 18%, and System-wide Comp Sales 6% vs. Q3 2021*** - ***Opened 38 Clinics, Up from 33 in Q3 2021*** - ***Surpassed 800 Clinic Milestone, Closing Q3 2022 with 805 Clinics, Including 115 Company-Owned or Managed Clinics*** ## Third Quarter Results SCOTTSDALE, Ariz., Nov. 03, 2022 // GLOBE NEWSWIRE // - The Joint Corp. (NASDAQ: JYNT), a national operator, manager, and franchisor of chiropractic clinics, reported its financial results for the quarter ended September 30, 2022. - Grew revenue 27% to $26.6 million. - Reported net income of $491,000, compared to $1.9 million. - Increased system-wide sales1 by 18%, to $110.4 million. - Reported system-wide comp sales2 of 6%. - Reported Adjusted EBITDA of $3.1 million, compared to $3.3 million. ## Growth Initiatives “During the third quarter of 2022, clinic openings were exceptionally strong, with new clinics continuing to perform well, resulting in our achieving the 800th clinic opening during the quarter. Our system-wide sales grew 18% to $110.4 million, despite this macroeconomic environment,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “The market for chiropractic care continues to increase and is now estimated to be $19.5 billion. To capture this increasing growth opportunity, we remain focused on key initiatives. We are implementing programs to attract new patients, franchise prospects, and the talent needed to staff our clinics and grow our footprint. To increase the pace of our buildout, we are penetrating underdeveloped and new markets. Overall, we are prioritizing optimizing clinic performance to support growth, profitability and lifetime patient value. Together with our robust underlying business model, we are driving long-term value for all stakeholders, including patients, team members, franchisees, regional developers and investors.” - Increased total clinics to 805 at September 30, 2022, 690 franchised and 115 company-owned or managed, up from 769 at June 30, 2022. Opened 33 new franchised clinics in Q3 2022, compared to 28 in Q3 2021. Opened five greenfield clinics in Q3 2022, equal to five opened in Q3 2021. Acquired four previously franchised clinics and sold one corporate clinic to a franchisee in Q3 2022, compared to no acquired or sold clinics in Q3 2021. Closed two franchised clinics in Q3 2022, compared to none in Q3 2021. - Sold 12 franchise licenses in Q3 2022, compared to 44 in Q3 2021. - Subsequent to quarter end, Reacquired the regional developer (RD) territory rights for the Philadelphia market. Acquired two previously franchised clinics and sold one corporate clinic to a franchisee. Opened two greenfield clinics. Revenue was $26.6 million in the third quarter of 2022, compared to $21.0 million in the third quarter of 2021. The increase reflects a greater number of franchised and corporate clinics and continued organic growth. Cost of revenue was $2.5 million, compared to $2.3 million in the third quarter of 2021, reflecting the increased number of franchised clinics, as well as higher RD royalties and commissions. Selling and marketing expenses were $3.5 million, up 23%, driven by the increase in the advertising expenses from the larger number of franchised and company-owned or managed clinics. Depreciation and amortization expenses increased for the third quarter of 2022, as compared to the prior year period, primarily due to the depreciation and amortization expenses associated with our continued greenfield development and acquired clinics. General and administrative expenses were $17.8 million, compared to $12.8 million in the third quarter of 2021, reflecting increases in costs to support clinic growth and in payroll to remain competitive in the tight labor market. Operating income was $500,000, compared to $1.3 million in the third quarter of 2021. Income tax benefit was $16,000, compared to a benefit of $614,000 in the third quarter of 2021. Net income was $491,000, or $0.03 per diluted share, compared to $1.9 million, or $0.13 per diluted share, in the third quarter of 2021. Adjusted EBITDA was $3.1 million, compared to $3.3 million in the third quarter of 2021. The company defines Adjusted EBITDA, a non-GAAP measure, as EBITDA before acquisition-related expenses, bargain purchase gain, net (gain)/loss on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses. Revenue was $74.1 million in the first nine months of 2022, compared to $58.8 million in the first nine months of 2021. Net income was $630,000, or $0.04 per diluted share, compared to $6.9 million, or $0.46 per diluted share, in the first nine months of 2021. Adjusted EBITDA was $7.5 million, compared to $10.5 million in the first nine months of 2021. Unrestricted cash was $10.3 million at September 30,2022, compared to $19.5 million at December 31, 2021. During the first nine months of 2022, investing activities of $14.9 million consisted of the acquisition of RD territory rights, clinic acquisitions, and greenfield developments, which were partially offset by $5.7 million provided by operating activities, caused the majority of the decrease in unrestricted cash. ## Financial Guidance For 2022, management modified financial guidance and reiterated guidance related to clinics. - Revenue is now expected to be between $100.0 million and $102.0 million, compared to guidance of $98.0 million to $102.0 million on August 4, 2022. Revenue for 2021 was $80.9 million. - Adjusted EBITDA is now expected to be between $11.5 million and $12.5 million, compared to guidance of $12.0 million to $14 million on August 4, 2022. 2021 Adjusted EBITDA was $12.6 million. - Franchised clinic openings are expected to be between 110 and 130, compared to 110 in 2021. - Company-owned or managed clinic increases, through a combination of both greenfields and buybacks, are expected to be between 30 and 40; compared to 32 added in 2021. The Joint Corp. management will host a conference call at 5 p.m. ET on Thursday, November 3, 2022 to discuss the third quarter 2022 financial results. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing (866) 652-5200 or (412) 317-6060 approximately 15 minutes prior to the start time. The accompanying slide presentation will be in the IR section of the website under Presentations and in Events. A live webcast of the conference call will also be available on the IR section of the company’s website at An audio replay will be available two hours after the conclusion of the call for one week. The replay can be accessed by dialing 877-344-7529 or 412-317-0088 and entering conference ID 4869368. 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. 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. 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 net income/(loss) to EBITDA and Adjusted EBITDA is presented in a table below. 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 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. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, the continuing impact of the COVID-19 outbreak on the economy and our operations (including temporary clinic closures, shortened business hours and reduced patient demand), inflation, exacerbated by COVID-19 and the current war in Ukraine, our failure to develop or acquire company-owned or managed clinics as rapidly as we intend, our failure to profitably operate company-owned or managed clinics, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage, short-selling strategies and negative opinions posted on the internet which could drive down the market price of our common stock and result in class action lawsuits, our failure to remediate the current or future material weaknesses in our internal control over financial reporting, which could negatively impact our ability to accurately report our financial results, prevent fraud, or maintain investor confidence, and other factors described in our filings with the SEC, including in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 14, 2022 and subsequently-filed current and quarterly reports. 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. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. Management has disclosed in our Form 10-K that our management concluded that our internal controls over financial reporting were not effective as of December 31, 2021, and our auditors expressed an adverse opinion on the Company’s internal control over financial reporting as of December 31, 2021, due to a material weakness. The details of this material weakness were provided in our 10-K filing. We have undertaken remediation measures to address the material weakness, which we expect will be completed prior to the end of fiscal year 2022. The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, it is the nation’s largest operator, manager and franchisor of chiropractic clinics through The Joint Chiropractic network. The company is making quality care convenient and affordable, while eliminating the need for insurance, for millions of patients seeking pain relief and ongoing wellness. With more than 750 locations nationwide and nearly 11 million patient visits annually, The Joint Chiropractic is a key leader in the chiropractic industry. Ranked number one on Forbes’ 2022 America's Best Small Companies list, number three on Fortune’s 100 Fastest-Growing Companies list and consistently named to Franchise Times “Top 400+ Franchises” and Entrepreneur’s “Franchise 500®” lists, The Joint Chiropractic is an innovative force, where healthcare meets retail. The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, District of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wyoming, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices. 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 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. ## Entities - Franchising.com (publication) - Fitness (sector) - revenue growth (topic) - The Joint Corp. (company) - financial results (topic) - Peter D. Holt (person) - clinic expansion (topic) --- Originally reported by Franchising.com (https://www.franchising.com/news/20221104_the_joint_corp_reports_third_quarter_2022_financial_results.html). Summarized by Burnaze (https://burnaze.com/article/52d0abce-cd12-41ab-9fee-f2bc1d5fa0b4).