UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form 8-K
______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): May 7, 2020

The Joint Corp.
(Exact Name of Registrant as Specified in Charter)

Delaware001-3672490-0544160
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

16767 N. Perimeter Drive, Suite 110
Scottsdale, AZ 85260
(Address of Principal Executive Offices)

Registrant's telephone number, including area code:
(480) 245-5960

 
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par Value Per ShareJYNTThe NASDAQ Capital Market LLC
 
 

Item 2.02. Results of Operations and Financial Condition.

On May 7, 2020, The Joint Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2020. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

            The Company is posting an earnings presentation to its website at https://ir.thejoint.com/. A copy of the earnings presentation is being furnished herewith as Exhibit 99.2. The Company will use the earnings presentation during its earnings conference call on May 7, 2020 and also may use the earnings presentation from time to time in conversations with analysts, investors and others.
           
            The information furnished in this Item 7.01 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

            The information contained in Exhibit 99.2 is summary information that is intended to be considered in the context of the Company’s filings with the SEC. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01. Financial Statements and Exhibits.

(d)     Exhibits

Exhibit
Number
 Description
   
99.1  Press Release dated May 7, 2020
99.2 The Joint Corp. Earnings Presentation, May 2020

 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 The Joint Corp.
   
   
Date: May 7, 2020By: /s/ Peter D. Holt        
  Name: Peter D. Holt
  Title: President and Chief Executive Officer
  

EdgarFiling

EXHIBIT 99.1

The Joint Corp. Reports First Quarter 2020 Financial Results

- Grows System-Wide Sales 24% and Comp Sales 15%, Compared to Q1 2019 - 
- Increases Total Clinic Count to 530 -
- Sells 24 Franchise Licenses -

SCOTTSDALE, Ariz., May 07, 2020 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ: JYNT), a national operator, manager and franchisor of chiropractic clinics, reported its financial results for the first quarter ended
March 31, 2020.

First Quarter Financial Highlights: 2020 Compared to 2019

First Quarter 2020 Operating Achievements

“Given our robust unit growth and focus on operational improvements over the past four years, we are better prepared to manage the uncertainty related to COVID-19,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “Chiropractic care is viewed by most states’ directives as an essential healthcare service, and we are committed to remaining open wherever and whenever it is possible. At the end of April, approximately 90% of our clinics were open, treating our patients.  

“Strong growth momentum continued for first two- and one-half months of 2020.  As a result, we increased gross system-wide sales, grew revenue, opened 17 clinics and sold 24 franchise licenses during the first quarter of 2020. Since the outbreak of COVID-19, our core patient base remains engaged and appreciative that we are open. Member attrition has been fairly stable. While new patient conversion is up, we have experienced a significant drop in our new patient counts compared to prior periods. In April 2020, we maintained approximately 60% of our expected patient visits, reflecting the importance of chiropractic to our patients; however, gross sales are down over 30% compared to pre-COVID-19 expectations. Given today’s uncertainties, we are preserving our cash liquidity by deferring capital expenditures, slowing the pace of our corporate clinic expansion, negotiating with landlords for rent abatements, and analyzing other opportunities to reduce costs.

“While no one can accurately predict the full impact of this pandemic, we believe that people will continue to seek more noninvasive, holistic ways in which to manage their pain and we will be ready to treat them. We are confident in the long-term viability and the value proposition of our business model,” concluded Holt.

First Quarter Financial Results: 2020 Compared to 2019

Revenue was $13.6 million in the first quarter of 2020, compared to $10.7 million in the first quarter of 2019, reflecting a greater number of clinics and increased gross sales at both franchised and company-owned or managed clinics.

Cost of revenue was $1.5 million, compared to $1.2 million in the first quarter of 2019, reflecting the success of the RD program resulting in increased commissions and royalties.

Selling and marketing expenses were $2.1 million, compared to $1.5 million in the first quarter of 2019, resulting from a greater number of company-owned or managed clinics. General and administrative expenses were $8.7 million, compared to $6.6 million in the first quarter of 2019, primarily due to an increase in payroll and related expenses to support revenue growth and the increased clinic count.

Net income was $815,000, or $0.06 per diluted share, compared to $953,000, or $0.07 per diluted share, in the first quarter of 2019.

Adjusted EBITDA was $1.7 million, compared to $1.6 million in the prior year quarter. 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 before net interest, tax expense, depreciation, and amortization expenses.

Balance Sheet Liquidity
Unrestricted cash was $10.7 million at March 31, 2020, compared to $8.5 million at December 31, 2019, reflecting the $2.0 million drawn on the revolving line of credit with J.P. Morgan Chase Bank N.A. The $5.5 million developmental line of credit can only be accessed for development, not for general corporate purposes.  The accordion feature related to the revolving facility is uncommitted, and, therefore, is not unable to be utilized it at this time.  At March 31, 2020, the company did not have any other debt financing available. In April, the company secured a $2.7 million loan through J.P. Morgan Chase Bank under the CARES Act U.S. Small Business Administration Payroll Protection Program, bringing unrestricted cash to $13.6 million as of April 14, 2020. The increased liquidity enhances the company’s ability to maintain payroll and weather the disruptions caused by the COVID-19 pandemic.

2020 Guidance for Financial Results and Clinic Openings Withdrawn
As announced on March 20, given the uncertainties of the potential impact from the COVID-19 pandemic, the company withdrew 2020 financial and clinic opening guidance. The Company is not providing an update at this time.

Conference Call
The Joint Corp. management will host a conference call at 5 p.m. ET on Thursday, May 7, 2020, to discuss the first quarter 2020 results. The conference call may be accessed by dialing 765-507-2604 or 844-464-3931 and referencing conference code 1889797. A live webcast of the conference call will also be available on the IR section of the company’s website at https://ir.thejoint.com/events. An audio replay will be available two hours after the conclusion of the call through May 14, 2020. The replay can be accessed by dialing 404-537-3406 or 855-859-2056. The passcode for the replay is 1889797.

Non-GAAP Financial Information

This release includes a presentation of non-GAAP financial measures. System-wide sales include sales 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 sales 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.

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 the table below. The company defines Adjusted EBITDA 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.

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
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. 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), 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, and the other factors described in “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC for the year ended December 31, 2019, as updated for any material changes described in any subsequently-filed Quarterly Reports on Form 10-Q, as they may be revised or updated in our subsequent filings.  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.

About The Joint Corp. (NASDAQ: JYNT)
The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, 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 500 locations nationwide and over 7 million patient visits annually, The Joint is a key leader in the chiropractic industry. Named on Franchise Times “Top 200+ Franchises” and Entrepreneur’s “Franchise 500®” lists, The Joint Chiropractic is an innovative force, where healthcare meets retail. For more information, visit www.thejoint.com. To learn about franchise opportunities, visit www.thejointfranchise.com.

Business Structure
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, Massachusetts, 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.

Media Contact: Margie Wojciechowski, The Joint Corp., margie.wojciechowski@thejoint.com
Investor Contact: Kirsten Chapman, LHA Investor Relations, 415-433-3777, thejoint@lhai.com

1 System-wide sales include sales 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. 
2 Comp sales include the sales 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.


THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
CONDENSED CONSOLIDATED BALANCE SHEETS
    
 March 31, December 31,
 2020 2019
ASSETS(unaudited)  
Current assets:   
Cash and cash equivalents$10,712,846  $8,455,989 
Restricted cash 256,623   185,888 
Accounts receivable, net 1,835,522   2,645,085 
Notes receivable, net - current portion 89,004   128,724 
Deferred franchise costs - current portion 789,968   765,508 
Prepaid expenses and other current assets 1,140,551   1,122,478 
Total current assets 14,824,514   13,303,672 
Property and equipment, net 8,059,393   6,581,588 
Operating lease right-of-use asset 12,430,910   12,486,672 
Deferred franchise costs, net of current portion 3,692,387   3,627,225 
Intangible assets, net 2,863,172   3,219,791 
Goodwill 4,150,461   4,150,461 
Deposits and other assets 393,284   336,258 
 $46,414,121  $43,705,667 
    
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:   
Accounts payable$1,946,474  $1,525,838 
Accrued expenses 436,512   216,814 
Co-op funds liability 256,624   185,889 
Payroll liabilities 1,117,086   2,844,107 
Operating lease liability - current portion 2,497,097   2,313,109 
Finance lease liability - current portion 46,607   24,253 
Deferred franchise and regional developer fee revenue - current portion 2,817,069   2,740,954 
Deferred revenue from company clinics 3,288,156   3,196,664 
Other current liabilities 481,338   518,686 
Total current liabilities 12,886,963   13,566,314 
Operating lease liability - net of current portion 11,856,766   11,901,040 
Finance lease liability - net of current portion 156,227   34,398 
Debt under the Credit Agreement 2,000,000   
Deferred franchise and regional developer fee revenue, net of current portion 12,508,515   12,366,322 
Deferred tax liability 55,457   89,863 
Other liabilities 27,229   27,230 
Total liabilities 39,491,157   37,985,167 
Commitments and contingencies   
Stockholders' equity:   
Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of March 31, 2020 and December 31, 2019 -   - 
Common stock, $0.001 par value; 20,000,000 shares authorized, 13,949,772 shares issued and 13,933,759 shares outstanding as of March 31, 2020 and 13,898,694 shares issued and 13,882,932 outstanding as of December 31, 2019 13,950   13,899 
Additional paid-in capital 39,846,177   39,454,937 
Treasury stock 16,013 shares as of March 31, 2020 and 15,762 shares as of December 31, 2019, at cost (114,815)  (111,041)
Accumulated deficit (32,822,448)  (33,637,395)
Total The Joint Corp. stockholders' equity 6,922,864   5,720,400 
Non-controlling Interest 100   100 
Total equity 6,922,964   5,720,500 
Total liabilities and stockholders' equity$46,414,121  $43,705,667 
    

 

THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
    
 Three Months Ended
 March 31,
 2020 2019
Revenues:   
Revenues from company-owned or managed clinics$7,294,295  $5,639,076 
Royalty fees 3,718,230   3,026,815 
Franchise fees 512,751   417,073 
Advertising fund revenue 1,057,618   891,567 
Software fees 645,725   365,236 
Regional developer fees 207,642   183,858 
Other revenues 208,225   155,751 
Total revenues 13,644,486   10,679,376 
Cost of revenues:   
Franchise cost of revenues 1,417,491   1,117,053 
IT cost of revenues 68,664   88,888 
Total cost of revenues 1,486,155   1,205,941 
Selling and marketing expenses 2,055,289   1,505,988 
Depreciation and amortization 654,249   365,678 
General and administrative expenses 8,694,250   6,552,904 
Total selling, general and administrative expenses 11,403,788   8,424,570 
Net loss on disposition or impairment 1,193   105,193 
Income from operations 753,350   943,672 
    
Other income (expense):   
Bargain purchase gain -   19,298 
Other expense, net 4,337   11,645 
Total other (expense) income (4,337)  7,653 
    
Income before income tax benefit 749,013   951,325 
    
Income tax benefit (65,934)  (1,319)
    
Net income and comprehensive income$814,947  $952,644 
    
Less: income attributable to the non-controlling interest$-  $- 
    
Net income attributable to The Joint Corp. stockholders$814,947  $952,644 
    
Earnings per share:   
Basic earnings per share$0.06  $0.07 
Diluted earnings per share$0.06  $0.07 
    
Basic weighted average shares 13,890,673   13,751,196 
Diluted weighted average shares 14,483,584   14,256,006 
    


THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
    
    
 Three Months Ended
 March 31,
 2020 2019
Net income$814,947  $952,644 
Adjustments to reconcile net income to net cash provided by operating activities 856,566   600,919 
Changes in operating assets and liabilities (199,691)  (1,094,052)
Net cash provided by operating activities 1,471,822   459,511 
Net cash used in investing activities (1,221,493)  (1,201,573)
Net cash provided by financing activities 2,077,263   84,601 
Net increase (decrease) in cash$2,327,592  $(657,461)
    


THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
RECONCILIATON FOR GAAP TO NON-GAAP
    
 Three Months Ended
 March 31,
Non-GAAP Financial Data:2020 2019
Net income$814,947  $952,644 
Net interest 4,337   11,646 
Depreciation and amortization expense 654,249   365,678 
Tax benefit (65,934)  (1,319)
EBITDA$1,407,599  $1,328,649 
Stock compensation expense 250,392   171,771 
Bargain purchase gain -   (19,298)
Net loss on disposition or impairment 1,193   105,193 
Adjusted EBITDA$1,659,184  $1,586,315 

EdgarFiling

EXHIBIT 99.2

 

© 2020 The Joint Corp. All Rights Reserved. 1 Q1 2020 Financial Results As of March 31, 2020 | Reported On May 7, 2020

 
 

Safe Harbor Statement © 2020 The Joint Corp. All Rights Reserved. 2 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," "should," "if,“ "project," and similar expressions. All statements other than stateme nts of historical facts contained in this presentation, including statements regarding our growth strategies, our vision, future operations, future financial position, future revenue, projected costs, prospects, plans, obje cti ves of management and expected market growth and potential are forward - looking statements. We have based these forward - looking statements on our current expectations and projections about future events. However, these forw ard - looking statements are subject to risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from our expectations and projections. Some of these risks, uncertainties and other factors are set forth in this presentation and in other documents that we file with the United States Securities and Exchange Commission (the “SEC”), including those described in “R isk Factors” in our Annual Report on Form 10 - K for the year ended December 31, 2019 filed with the SEC on or around March 6, 2020, as it may be revised or updated in our subsequent filings. These risk factors include, b ut 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) 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. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward - looking statements. Projections and other forward - looking statements included in this presentation have been prepared based on assumptions, which we believe to be reasonable, but not in accordance with U.S. Generally Accepted Acc oun ting Principals (“GAAP”) or any guidelines of the SEC. Actual results may vary, perhaps materially. You are strongly cautioned not to place undue reliance on such projections and o the r forward - looking statements. All subsequent written and oral forward - looking statements attributable us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Exc ept as required by federal securities laws, we disclaim any intention or obligation to update or revise any forward - looking statements, whether as a result of new information, future events or otherwise. Any such forward - looking sta tements, whether made in this presentation or elsewhere, should be considered in the context of the various disclosures made by us. Accounting Adjustments Related to the Consolidation of the Operations of the PCs In those states which require a licensed Doctor of Chiropractic to own the entity that offers chiropractic services, the Comp any enters into a management agreement with a professional corporation (PC) licensed in that state to provide chiropractic services. To increase transparency into operating results and to align with accounting rules, the Compan y w ill now consolidate the full operations of the PC. This will result in increases to our revenue and G&A expenses by an identical amount and would have no impact on our bottom line except in instances when the PC has sold trea tme nt packages and wellness plans. Revenue from these packages and plans will now be deferred and will be recognized when patients use their visits. The Company has previously consolidated its clinic operations in Non - PC states such as Arizona and New Mexico, and the deferred revenue around packages and plans in those states was already reflected in its financial statements. Therefore, these adjustments are isolated to the man age d clinics in PC states. These adjustments will have no impact on cash flow. Business Structure The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, D ist rict of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wyo ming, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices.

 
 

Our Mission is to Improve Quality of Life through Routine and Affordable Chiropractic Care 3 Q1 2020 vs Q1 2019 Revenue $13.6M up 28% Net Income $815k vs $953k Adjusted EBITDA 2 $1.7M, up $0.1M Unrestricted cash $10.7 M at Mar. 31, 2020, compared to $8.5M at Dec. 31, 2019 1 Comparable sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinic s t hat have permanently closed, but include clinics that are temporarily closed due to COVID - 19. | 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. © 2020 The Joint Corp. All Rights Reserved. 24% Increase in sy stem - wide sales Q1 2020 over Q1 2019 15% Increase in comp sales 1 for clinics >13 months in operation Q1 2020 over Q1 2019 10% Increase in comp sales 1 for clinics >48 months in operation Q1 2020 over Q1 2019

 
 

Continued Clinic Growth © 2020 The Joint Corp. All Rights Reserved. 4 26 82 175 242 265 309 352 394 453 469 4 47 61 47 48 60 61 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Total Clinics Open Franchise Company Owned/Managed 513 370 399 442 530 312 246 Opened another greenfield in February 2020, bringing the corporate portfolio count to 61

 
 

Increased RDs to 22 in March 2020 5 1 Of the 865 franchise licenses sold as of March 31, 2020, 212 are in active development, 530 are currently operating and the b ala nce represents terminated/closed licenses. • 79% of clinics supported by RDs • RDs cover 57% of Metropolitan Statistical Areas (MSAs) in the US Pipeline of 200+ Undeveloped Licenses & LOIs at March 31, 2020 % of Sales by Regional Developers Gross Cumulative Franchise Licenses Sold 1 37 99 126 24 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Mar. 31, 2020 Franchise Licenses Sold Annually 616 715 841 865 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Mar. 31, 2020 © 2020 The Joint Corp. All Rights Reserved. 49% 89% 89% 92% Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Mar. 31, 2020

 
 

COVID - 19 Response 6 Preparing for the Challenge • Increasing communication to franchisees and clinic teams • Instituting a COVID internal hotline • Enhancing clinic sanitation and cleanliness policies & procedures • Adapting content marketing • Improving access to key PPE and cleaning supplies © 2020 The Joint Corp. All Rights Reserved. Franchisee Communication Feedback Survey • 88% either very positive or mostly positive about their association with The Joint • 90% either extremely confident or somewhat confident about the future of the business Supporting Franchisees • Waiving the minimum r oyalty requirement for all franchises for the remainder of 2020 • Waiving the minimum l ocal ad spend requirement through the end of Q2 • Waiving the monthly tech fee for clinics closed 16 days or more in that month

 
 

Q1 2020 Financial Results 7 $ in M 1 Q1 2020 Q1 2019 Increases Revenue • Corporate clinics • Franchise fees $13.6 7.3 6.4 $10.7 5.6 5.1 $2.9 1.7 1.3 28% 29% 26% Cost of revenue 1.5 1.2 0.3 23% Sales and marketing 2.1 1.5 0.5 36% Depreciation 0.7 0.4 0.3 79% G&A 8.7 6.7 2.0 31% Net Income / (Loss) 0.8 1.0 (0.1) - 14% Adj. EBITDA 2 1.7 1.6 0.1 5% 1 Due to rounding, numbers may not add up precisely to the totals. 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. © 2020 The Joint Corp. All Rights Reserved.

 
 

$1.3 $2.8 $8.1 $22.3 $46.2 $70.1 $98.6 $126.9 $165.1 $220.3 $60.6 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Mar. 31, 2020 © 2020 The Joint Corp. All Rights Reserved. 8 People will continue to seek more noninvasive, holistic ways in which to manage their pain. We will be ready to treat them. Business Model Continues to Drive Long - term Growth System - wide Gross Sales ($ in M) 77% CAGR 1 (2010 - 2019) The Joint Corp. 9 - yr. CAGR 77% 1 vs. Industry CAGR 1.2% 2* 1 For the period ended Dec. 31, 2019 | 2 IBIS World Chiropractors Market Research Report; February 2019 * and 5 - year CAGR

 
 

Non - GAAP Measure Definition 9 This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non - GAAP financial measures. EBITDA and Adjus ted 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 than GAAP measures alone. Reconciliations of net loss to EBITDA and Adjusted EBITDA are presented where applicable. The Company defines EB ITDA as net income before net interest, tax expense, depreciation, and amortization expenses. The Company defines Adjusted EBITDA as EBITDA before acquisition - related expenses, bargain purchase gain, loss on disposition or impairment, and stock - based compensation expenses. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operat ion s, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are fr equ ently used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily compara ble to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjus ted EBITDA should be reviewed in conjunction with the Company’s financial statements filed with the SEC. © 2020 The Joint Corp. All Rights Reserved.

 
 

Q1 2020 Segment Results 10 2020 Q1 © 2020 The Joint Corp. All Rights Reserved. Corporate Clinics Franchise Operations Unallocated Corporate The Joint Consolidated Total Revenues $ 7,294 $ 6,350 $ 0 $ 13,644 Total Operating Costs (6,510) (3,506) (2,875) (12,891) Operating Income (Loss) 784 2,844 (2,875) 753 Other Income (Expense), net (1) 3 (6) (4) Loss Before Income Tax Expense 783 2,847 (2,881) 749 Total Income Taxes - - (66) (66) Net Income (Loss) 783 2,847 (2,815) 815 Net Interest 1 (3) 6 4 Income Taxes - - (66) (66) Total Depreciation and Amortization Expense 578 0 76 654 EBITDA 1,361 2,845 (2,798) 1,408 Stock Based Compensation Exp 1 5 245 250 Bargain Purchase Gain - - - - Loss on Disposition/Impairment 1 - - 1 Acquisition Expenses - - - - Adjusted EBITDA 1,363 2,849 (2,553) 1,659

 
 

GAAP – Non - GAAP Reconciliation 11 © 2020 The Joint Corp. All Rights Reserved. Q1-18 Q2-18 Q3-18 Q4-18 FY18 Q1-19 Q2-19 Q3-19 Q4-19 FY19 Q1-20 Total Revenue 8,647 8,805 9,242 9,968 36,662 10,679 11,170 12,726 13,875 48,451 13,644 Total Cost of Revenue 972 1,052 1,085 1,202 4,310 1,206 1,299 1,427 1,634 5,566 1,486 Gross Profit 7,675$ 7,753$ 8,157$ 8,767$ 32,351$ 9,473$ 9,871$ 11,300$ 12,241$ 42,885$ 12,158$ Sales & Marketing 1,102 1,294 1,195 1,229 4,820 1,506 1,769 1,793 1,845 6,914 2,055 Depreciation/Amortization Expense 387 405 389 375 1,556 366 404 538 591 1,899 654 Other Operating Expenses 6,269 6,119 6,820 6,625 25,833 6,658 7,209 8,324 8,465 30,656 8,695 Total Other Income (Expense) (11) 19 (11) (31) (34) 8 (15) (20) (16) (43) (4) Total Income Taxes (63) 6 (50) 70 (38) (1) 10 7 33 49 (66) Net Income (Loss) (32)$ (51)$ (208)$ 437$ 147$ 953$ 462$ 617$ 1,292$ 3,324$ 815$ Net Interest 11 11 11 14 47 12 15 17 18 62 4 Income Taxes (63) 6 (50) 70 (38) (1) 10 7 33 49 (66) Depreciation and Amortization Expense 387 405 389 375 1,556 366 404 538 591 1,899 654 EBITDA 303$ 371$ 142$ 895$ 1,712$ 1,329$ 892$ 1,179$ 1,934$ 5,333$ 1,408$ Stock Based Compensation 208 139 123 159 628 172 179 186 184 721 250 Bargain Purchase Gain - (30) - 17 (13) (19) - - - (19) - Loss on Disposition/Impairment 0 251 343 - 595 105 (18) 30 (2) 114 1 Acquisition Expenses - 3 1 - 4 (0) 3 33 11 47 - Adjusted EBITDA 511$ 734$ 609$ 1,072$ 2,926$ 1,586$ 1,056$ 1,428$ 2,126$ 6,196$ 1,659$

 
 

Jake Singleton, CFO jake.singleton@thejoint.com The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | (480) 245 - 5960 https://www.facebook.com/thejointchiro @ thejointchiro https://twitter.com/thejointchiro @ thejointchiro https://www.youtube.com/thejointcorp @ thejointcorp Peter D. Holt, President and CEO peter.holt@thejoint.com The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | (480) 245 - 5960 Kirsten Chapman, LHA Investor Relations thejoint@lhai.com LHA Investor Relations | One Market Street, Spear Tower, Suite 3600, San Francisco, CA 94105 | (415) 433 - 3777 12 The Joint Corp. Contact Information © 2020 The Joint Corp. All Rights Reserved.