JOINT Corp
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
JYNT$6.85-7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001628280-24-046464
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 3Current report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001628280-25-023983
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 3The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 73 current paragraphs.
25 unchanged; 28 reworded; 19 added; 38 removed; 7 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
The following discussion and analysis of our financial results encompasses the results of our Franchise Operations business segment for the three months ended March 31, 2025, compared with the three months ended March 31, 2024. All financial results and metrics discussed below are on a continuing operation basis.
Current report
Total Revenues
Current report
For the three months ended March 31, 2025, as compared with the three months ended March 31, 2024, selling and marketing expenses increased due to an increase in expenses associated with our digital marketing transformation efforts.
Current report
Depreciation and amortization expenses increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to depreciation expenses related to development of internal use software made available for use in the first half of 2024.
Current report
General and administrative expenses decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to a decrease in payroll and other employee compensation expenses of $0.4 million, reflective of fewer employees in the first quarter of 2025 compared to the first quarter of 2024, including the departure of long-tenure employees with stock-based compensation during 2024. As a percentage of revenue, general and administrative expenses during the three months ended March 31, 2025, and 2024 were 53% and 60%, respectively.
Current report
Loss from Operations
Current report
•an increase of $0.3 million in our total cost of revenues; partially offset by
Current report
•a decrease of $0.4 million in general and administrative expenses.
Current report
Other income (expense), net increased during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the deployment of additional cash and cash equivalents into higher interest rate savings products resulting in increased interest income.
Current report
Our management does not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. These limitations include, but are not limited to, the following:
Current report
•Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
Current report
•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
Current report
•Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
Current report
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
Current report
•Adjusted EBITDA does not reflect the (gain) loss on disposition or impairment, which represents the impairment of assets as of the reporting date. We do not consider this to be indicative of our ongoing operations; and
Current report
•While not included in the presented periods, Adjusted EBITDA would not reflect any bargain purchase gain, which would represent the excess of the fair value of net assets acquired over the purchase consideration.
Current report
Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. You should review the reconciliation of Net loss to Adjusted EBITDA above and not rely on any single financial measure to evaluate our business.
Current report
Sources of Liquidity
Current report
Net cash used in operating activities for both continuing and discontinued operations increased by $6.5 million to $3.7 million for the three months ended March 31, 2025, compared to net cash provided by operating activities of $2.8 million for the three months ended March 31, 2024. The increase in net cash used was attributable to a change in working capital of $6.4 million for the three months ended March 31, 2025.
Removed paragraphs (38)
Previous report
Our principal business is to develop, own, operate, support and manage chiropractic clinics through direct ownership, management arrangements, franchising and regional developers throughout the United States.
Previous report
On June 24, 2024, we entered into an agreement pursuant to which we repurchased the right to develop franchises in various counties in Maryland. The total consideration for the transaction was $0.6 million. We carried an upfront regional developer fee liability balance associated with this transaction of $0.1 million, representing the unrecognized fee collected upon the execution of the regional developer agreement. We accounted for the termination of development rights associated with unsold or undeveloped franchises as a cancellation, and the associated upfront regional developer fee liability was netted against the aggregate purchase price. We recognized the net amount of $0.5 million as a general and administrative expense for the nine months ended September 30, 2024.
Previous report
Effective October 10, 2024, Peter D. Holt resigned as Chief Executive Officer of the Company and as a member of the Company's Board of Directors.
Previous report
Effective October 14, 2024, the Board of Directors of the Company appointed Sanjiv Razdan as President and Chief Executive Officer of the Company and as a member of the Company's Board of Directors.
Previous report
The following discussion and analysis of our financial results encompasses our consolidated results and results of our two business segments: Corporate Clinics and Franchise Operations.
Previous report
Total Revenues - Three Months Ended September 30, 2024 Compared with Three Months Ended September 30, 2023
Previous report
Revenues from company-owned or managed clinics decreased, primarily due to the divestitures of our company-owned or managed clinics in 2024. As of September 30, 2024 and 2023, there were 125 and 136 company-owned or managed clinics in operation, respectively.
Previous report
Total Revenues - Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023
Previous report
Revenues from company-owned or managed clinics decreased slightly, primarily due to the divestitures of our company-owned or managed clinics in 2024, partially offset by improved same-store sales growth in newer clinics. As of September 30, 2024 and 2023, there were 125 and 136 company-owned or managed clinics in operation, respectively.
Previous report
•Franchise fees decreased due to the impact of accelerated revenue recognition resulting from the terminated franchise license agreements in the current period compared to the prior period.
Previous report
For the three months ended September 30, 2024, as compared with the three months ended September 30, 2023, selling and marketing expenses increased due to increase in advertising fund expenditures from a larger franchise base and an increase in local marketing expenditures by the company-owned or managed clinics. For the nine months ended September 30, 2024, as compared with the nine months ended September 30, 2023, the selling and marketing expenses increase was driven by the in-person national franchise conference held in 2024 as well as by increased advertising fund expenditures from a larger franchise base and an increase in local marketing expenditures by the company-owned or managed clinics.
Previous report
Depreciation and amortization expenses decreased for the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, primarily due to no depreciation and amortization expenses recorded during the three and nine months ended September 30, 2024 related to the assets held for sale at September 30, 2024.
Previous report
General and administrative expenses increased for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due (i) an increase in payroll and related expenses of $0.5 million to support continued clinic count and revenue growth in both operating segments and the re-franchising efforts in the corporate clinic segment and (ii) an increase in professional and legal fees of $0.5 million mostly due to the costs incurred from the chief executive search partially offset by (iii) a decrease of $0.5 million utilities and facilities expense due to the discontinuance of amortization expense on ROU assets held for sale. General and administrative expenses increased for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to the litigation expenses, including settlement costs related to employment matters that were outside the normal course of business of $1.5 million, an increase in professional and legal fees of $0.5 million due to the chief executive search, and increases in the following to support continued clinic count and revenue growth in both operating segments and to support the re-franchising efforts in the corporate clinic segment: (i) payroll and related expenses of $2.2 million; (ii) professional and advisory fees of $0.7 million; and (iii) legal and accounting fees of $0.4 million partially offset by a decrease in utilities and facilities expenses in the corporate clinic segment of $1.9 million due to the discontinuance of amortization expense on ROU assets held for sale. As a percentage of revenue, general and administrative expenses during the nine months ended September 30, 2024 and 2023 were 71% and 69%, respectively.
Previous report
Loss from Operations - Three Months Ended September 30, 2024 Compared with Three Months Ended September 30, 2023
Previous report
Our corporate clinics segment had loss from operations of $2.7 million for the three months ended September 30, 2024, a decrease of $1.8 million compared to loss from operations of $931,366 for the prior year period. The decrease was primarily due to:
Previous report
•decrease in revenues of $0.3 million from company-owned or managed clinics; plus
Previous report
Our franchise operations segment had income from operations of $5.6 million for the three months ended September 30, 2024, an increase of $0.5 million, compared to income from operations of $5.1 million for the prior year period. This decrease was primarily due to:
Previous report
•increase of $1.1 million in total revenues; partially offset by
Previous report
•increase in selling and marketing expenses of $0.3 million driven by an increase in advertising fund expenditures from a larger franchise base; and
Previous report
•increase of $0.1 million in payroll-related expenses.
Previous report
Unallocated Corporate
Previous report
Unallocated corporate expenses for the three months ended September 30, 2024 increased by $0.9 million compared to the prior year period, primarily due to an increase of $0.7 million of professional services primarily related to the chief executive search and IT support plus increases in payroll-related expenses of $0.3 million partially offset by decrease in accounting and legal fees of $0.1 million.
Previous report
Loss from Operations - Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023
Previous report
Consolidated loss from operations increased by $3.7 million for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023, primarily due to an increase in unallocated corporate expenses partially offset by increased total revenues of $3.1 million for the nine months ended September 30, 2024.
Previous report
Our corporate clinics segment had loss from operations of $1.5 million for the nine months ended September 30, 2024, a decrease of $0.2 million compared to loss from operations of $1.3 million for the prior year period. The decrease was primarily due to:
Previous report
•decrease in revenues of $0.1 million from company-owned or managed clinics; plus
Previous report
•$0.5 million increase in payroll-related expenses; offset by
Previous report
•$0.2 million decrease in selling and marketing expenses; and
Previous report
•$0.2 million net decrease in operating expenses due to the re-franchising efforts with changes in the following: (i) a decrease in depreciation and amortization expense of $2.8 million, (ii) a decrease in utilities and facilities expenses of $1.9 million, and (iii) an increase in net loss on disposition or impairment of $4.5 million.
Previous report
Our franchise operations segment had income from operations of $14.9 million for the nine months ended September 30, 2024, an increase of $1.0 million, compared to income from operations of $13.9 million for the prior year period. This increase was primarily due to:
Previous report
•decrease of general and administrative expenses related to reacquired regional developer rights of $0.3 million; partially offset by
Previous report
•increase of $0.7 million in cost of revenues primarily due to an increase in regional developer royalties; and
Previous report
•increase of $1.5 million in operating expenses, primarily due to an increase in: (i) selling and marketing expenses resulting from a larger franchise base of $1.1 million, (ii) payroll-related expenses of $0.7 million, partially offset by (iii) reacquired franchise rights of $0.3 million in 2023.
Previous report
Unallocated Corporate
Previous report
Unallocated corporate expenses for the nine months ended September 30, 2024 increased by $4.5 million compared to the prior year period, primarily due to litigation expenses, including settlement costs related to employment matters that were outside the normal course of business of $1.5 million incurred for the nine months ended September 30, 2024 and no comparable costs for the same period in 2023 plus increases in state and local taxes of $0.1 million, increases in insurance costs of $0.1 million and increases in the following to support the re-franchising strategy efforts: (i) payroll and related expenses of $1.1 million; (ii) professional and advisory fees of $1.2 million; (iii) and legal and accounting fees of $0.5 million.
Previous report
Other income (expenses), net decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the recognition and receipt of the $3.8 million of ERC, net of the consulting fee, in the first quarter of 2023, partially offset by net interest income (expense) of $0.3 million.
Previous report
Income tax expense decreased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to decreased earnings before income tax expense and a change in the valuation allowance assessment as of December 31, 2023 at the Joint Corp, which was partially offset by increased earnings at the variable interest entities.
Previous report
Net cash provided by operating activities decreased by $6.0 million to $5.3 million for the nine months ended September 30, 2024, compared to $11.3 million for the nine months ended September 30, 2023. The decrease was primarily attributable to the receipt of the $4.8 million ERC in the prior period, in addition to an increase in general and administrative expenses over the prior year period.
Reworded paragraphs (28)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with ourunaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 8, 2024.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with ourunaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025.
Previous wording
We seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry through the rapid and focused expansion of chiropractic clinics in key markets throughout North America and potentially abroad.
Current wording
We are a rapidly growing franchisor that uses a private pay, non-insurance, cash-based model. We will continue our rapid and franchised focused expansion of chiropractic clinics in key markets throughout North America, and potentially abroad, as we seek to be the leading provider of chiropractic care in the markets we serve and to become the most recognized brand in our industry.
Previous wording
Key Performance Measures. We receive monthly performance reports from our system and our clinics that include key performance indicators per clinic, including gross sales, comparable same-store sales growth, or “Comp Sales,” number of new patients, conversion percentage and membership attrition. In addition, we review monthly reporting related to system-wide sales, clinic openings, clinic license sales, adjusted EBITDA and various earnings metrics in the aggregate and per clinic. We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees’ and clinics’ performance. 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. System-wide sales include sales at all clinics, whether operated by us or by franchisees. While franchised clinic sales are not recorded as revenues by us, management believes the information is important in understanding the overall brand’s financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base. Adjusted EBITDA consists of net income before interest, income taxes, depreciation and amortization, acquisition related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs, litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business) and other income related to the ERC. There were no costs related to bargain purchase gain for the three and nine months ended September 30, 2024 and 2023.
Current wording
Key Performance Measures. We receive monthly performance reports from our system and our clinics that include key performance indicators per clinic, including gross sales, comparable same-store sales growth, or “Comp Sales,” number of new patients, conversion percentage and membership attrition. In addition, we review monthly reporting related to system-wide sales, clinic openings, clinic license sales, adjusted EBITDA (Refer to Non-GAAP Financial Measures for more information on adjusted EBITDA) and various earnings metrics in the aggregate and per clinic. We believe these indicators provide us with useful data with which to measure our performance and to measure our franchisees’ and clinics’ performance. Comp Sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open for at least 13 full months and exclude any clinics that have closed. System-wide sales include sales at all clinics, whether operated by us or by franchisees. While franchised clinic sales are not recorded as revenues by us, management believes the information is important in understanding the overall brand’s financial performance, because these sales are the basis on which we calculate and record royalty fees and are indicative of the financial health of the franchisee base.
Previous wording
Key Clinic Development Trends. As of September 30, 2024, we and our franchisees operated or managed 963 clinics, of which 838 were operated or managed by franchisees and 125 were operated as company-owned or managed clinics. Of the 125 company-owned or managed clinics, 58 were constructed and developed by us, and 67 were acquired from franchisees.
Current wording
Key Clinic Development Trends. As of March 31, 2025, we and our franchisees operated or managed 969 clinics, of which 847 were operated or managed by franchisees and 122 were operated as company-owned or managed clinics. Our franchisees opened five clinics in the first quarter of 2025, compared to 23 clinics in the first quarter of 2024.
Previous wording
Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023 the board authorized management to initiate a plan to re-franchise or sell the majority of our company-owned or managed clinics. During Q3 2024, the Company expanded the re-franchising plan to include the full portfolio of company-owned and company-managed clinics, marketing the clinics in clusters grouped by proximity to larger private equity firms. This refined strategy will leverage our greatest strength - our capacity to build a franchise - to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the re-franchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We have given initial preference to existing franchisees and in Q3 2024 have expanded the marketing efforts to larger private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets. Our goal will be to generate significant processes that will provide us with value creating capital allocation opportunities. These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of RD territories, and/or a stock repurchase program.
Current wording
Our current strategy is to grow through the sale and development of additional franchises. After evaluating options for improvement, during 2023, the Board of Directors authorized management to initiate a plan to refranchise or sell the majority of our company-owned or managed clinics. During the third quarter of 2024, the Company expanded the refranchising plan to include the full portfolio of our company-owned or managed clinics, marketing the clinics in large clusters grouped primarily by geographic location. This refined strategy will leverage our greatest strength - our capacity to build a franchise - to drive long-term growth for both our franchisees and The Joint as a public company. We have created a robust framework for the refranchising effort, organizing clinics into clusters, and generating comprehensive disclosure packets for marketing efficiency. We had given initial preference to existing franchisees and, in the third quarter of 2024, we expanded the marketing efforts to larger multi-unit, multi-brand operators and certain private equity firms interested in purchasing and operating large market-based clinic clusters and have received significant interest to date in most markets. During the first quarter of 2025, we have received draft letters of intent ("LOIs") for our full portfolio of company-owned or managed clinics and as of the filing of this Quarterly Report on Form 10-Q are in the final stages of certain LOI term negotiations and due diligence.
Previous wording
The number of franchise licenses sold for the year ended December 31, 2023 was 55, compared with 75 and 156 licenses for the years ended December 31, 2022 and 2021, respectively. We ended the first nine months in 2024 with 16 regional developers who were responsible for 38% of the 29 licenses sold during the period. This strong result reflects the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the United States.
Current wording
The number of franchise licenses sold for the first quarter of 2025, was nine, compared with 15 licenses sold for the first quarter of 2024. We ended the first quarter of 2025 with 16 regional developers who were responsible for 56% of the nine licenses sold during the period. We will continue to leverage the power of the regional developer program to accelerate the number of clinics sold, and eventually opened, across the country.
Previous wording
We believe that we continue to have a sound business concept and will benefit from the fundamental changes taking place in the manner in which Americans access chiropractic care and their growing interest in seeking effective, affordable natural solutions for general wellness. These trends join with the preference we have seen among chiropractic doctors to reject the insurance-based model to produce a combination that benefits the consumer and the service provider alike. We believe that these forces create an important opportunity to accelerate the growth of our network.
Current wording
We believe that we continue to have a sound business concept and will benefit from the fundamental changes taking place in the manner in which Americans access chiropractic care and their growing interest in seeking effective, affordable natural solutions for general wellness. These trends join with the preference we have seen among chiropractic doctors to reject the insurance-based model resulting in a combination that benefits the consumer and the service provider alike. We believe that these forces create an important opportunity to accelerate the growth of our network.
Previous wording
Recent events that may impact our business include unfavorable global economic or political conditions, such as the Ukraine War, the Israel-Gaza conflict, labor shortages, and inflation and other cost increases. We anticipate that 2024 will continue to be a volatile macroeconomic environment.
Current wording
Recent events that may impact our business include unfavorable global economic or political conditions, such as uncertainties that come with changes to the presidential administration, labor shortages, and inflation and other cost increases. We anticipate that 2025 will continue to be a volatile macroeconomic environment.
Previous wording
The primary inflationary factor affecting our operations is labor costs. In 2023 and 2024, clinics company-owned or managed by us were negatively impacted by labor shortages and wage increases, which increased our general and administrative expenses. Further, should we fail to continue to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our patient service to suffer. While we anticipate that these continued headwinds will be partially mitigated by pricing actions, there can be no assurance that we will be able to continue to take such pricing actions. A continued increase in labor costs could have an adverse effect on our operating costs, financial condition and results of operations.
Current wording
The primary inflationary factor affecting our operations is labor costs. In 2024, clinics owned or managed by us or our franchisees were negatively impacted by labor shortages and wage increases, which increased our general and administrative expenses. Further, should we fail to continue to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our patient service to suffer. While we anticipate that these continued headwinds can be partially mitigated by pricing actions, there can be no assurance that we will be able to continue to take such pricing actions. A continued increase in labor costs could have an adverse effect on our operating costs, financial condition and results of operations.
Previous wording
•System-wide comp sales of clinics that have been open for at least 13 full months increased 4%.
Current wording
•Comp sales of clinics that have been open for at least 13 full months increased 3.1%;
Previous wording
•System-wide comp sales for mature clinics open 48 months or more decreased (2)%.
Current wording
•Comp sales for mature clinics open 48 months or more decreased 1.7%; and
Previous wording
•System-wide sales for all clinics open for any amount of time increased 8%.
Current wording
•System-wide sales for all clinics open for any amount of time grew 5.0% to $132.6 million.
Previous wording
There were no changes in our critical accounting estimates during the nine months ended September 30, 2024 from those set forth in “Significant Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There were no changes in our critical accounting estimates during the three months ended March 31, 2025, from those set forth in “Significant Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Total revenues increased by $0.7 million, primarily due to the continued expansion and revenue growth of our franchise base.
Current wording
Total revenues increased by $0.9 million, primarily due to the continued expansion and revenue growth of our franchise base and included:
Previous wording
•Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics. As of September 30, 2024 and 2023, there were 838 and 778 franchised clinics in operation, respectively.
Current wording
•Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics. As of March 31, 2025, and 2024, there were 847 and 819 franchised clinics in operation, respectively.
Previous wording
•increase in cost of revenue of $0.2 million driven primarily by an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics in regional developer regions,
Current wording
For the three months ended March 31, 2025, as compared with the three months ended March 31, 2024, the total cost of revenues increased primarily due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics in regional developer regions.
Previous wording
Consolidated loss from operations increased by $2.3 million for the three months ended September 30, 2024 compared with the three months ended September 30, 2023, primarily due to the re-franchising efforts in the corporate clinics segment.
Current wording
Loss from operations increased by $0.3 million for the three months ended March 31, 2025, compared with the three months ended March 31, 2024. This increase was primarily due to:
Previous wording
•$1.5 million net increase in operating expenses due to the re-franchising efforts with changes in the following: (i) an increase in net loss on disposition or impairment of $2.9 million, (ii) an increase in selling and marketing expenses of $0.2 million, (iii) a decrease in depreciation and amortization expense of $1.1 million, (iv) and a decrease in utilities and facilities expenses of $0.5 million.
Current wording
•an increase in selling and marketing expenses of $1.3 million; and
Previous wording
•increase of $3.2 million in total revenues; plus
Current wording
•an increase of $0.9 million in total revenues; and
Previous wording
Income tax expense increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to increased earnings in the variable interest entities partially offset by a change in the valuation allowance assessment as of December 31, 2023 at the Joint Corp.
Current wording
Income tax expense increased during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to increase in estimated state income taxes.
Previous wording
The table below reconciles net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023.
Current wording
The table below reconciles net income (loss) to Adjusted EBITDA for the three months ended March 31, 2025, and 2024.
Previous wording
Adjusted EBITDA consists of net income (loss) before interest, income taxes, depreciation and amortization, acquisition related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs, litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business) and other income related to the ERC. There were no costs related to restatement filings or bargain purchase gain for the three and nine months ended September 30, 2024 and 2023. We have provided Adjusted EBITDA because it is a non-GAAP measure of financial performance commonly used for comparing companies in our industry. You should not consider Adjusted EBITDA as a substitute for operating profit as an indicator of our operating performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies.
Current wording
Adjusted EBITDA from continuing operations consists of net loss from continuing operations before interest, income taxes, depreciation and amortization, acquisition related expenses (which includes contract termination costs associated with reacquired regional developer rights), stock-based compensation expense, bargain purchase gain, (gain) loss on disposition or impairment, costs related to restatement filings, restructuring costs, and litigation expenses (consisting of legal and related fees for specific proceedings that arise outside of the ordinary course of our business). We have provided Adjusted EBITDA, a non-GAAP measure of financial performance, because it is commonly used for comparing companies in our industry. You should not consider Adjusted EBITDA as a substitute for operating profit as an indicator of our operating performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies.
Previous wording
We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other outpatient medical clinics, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating Adjusted EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate Adjusted EBITDA in the same manner.
Current wording
We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other outpatient medical clinics, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating Adjusted EBITDA in the future we may incur unadjusted expenses similar to those currently excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate Adjusted EBITDA in the same manner.
Previous wording
As of September 30, 2024, we had unrestricted cash and short-term bank deposits of $20.7 million and $20 million of available capacity under the Line of Credit. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations, our anticipated cash flows from investments as we execute our re-franchising strategy and amounts available under our Line of Credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.
Current wording
As of March 31, 2025, we had unrestricted cash and short-term bank deposits of $21.9 million. We used $3.7 million of cash flow from operating activities from both continuing and discontinued operations in the first quarter of 2025. While unfavorable global economic or political conditions create potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our line of credit will be sufficient to fund our anticipated operating and investment needs for at least the next 12 months.
Previous wording
While the interruptions, delays and/or cost increases resulting from, political instability and geopolitical tensions, economic weakness, inflationary pressures, increase in interest rates and other factors have created uncertainty as to general economic conditions for 2024 and beyond, as of the date of this Quarterly Report on Form 10-Q, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2024, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change. Our long-term capital requirements could be dependent on our ability to access additional funds through the debt and/or equity markets. If the equity or debt markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. There can be no assurance that we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.
Current wording
While the interruptions, delays and/or cost increases resulting from political instability and geopolitical tensions, adverse weather conditions, economic weakness, inflationary pressures, increase in interest rates and other factors have created uncertainty as to general economic conditions for the remainder of 2025, as of the date of this Quarterly Report on Form 10-Q, we believe that we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2025, we expect to use or redeploy our cash resources to support our business within the context of prevailing market conditions, which, given the ongoing uncertainties described above, could rapidly and materially deteriorate or otherwise change. Our long-term capital requirements, primarily for acquisitions and other corporate initiatives, could be dependent on our ability to access additional funds through the debt and/or equity markets. If the equity and credit markets deteriorate, including as a result of economic weakness, political unrest or war, or any other reason, it may make any necessary equity or debt financing more difficult to obtain in a timely manner and on favorable terms, if at all, and if obtained, it may be more costly or more dilutive. From time to time, we consider and evaluate transactions related to our portfolio and capital structure, including debt financings, equity issuances, purchases and sales of assets, and other transactions. Given the ongoing uncertainties described above, the levels of our cash flows from operations for the remainder of 2025 may be impacted. There can be no assurance that we will be able to generate sufficient cash flows or obtain the capital necessary to meet our short and long-term capital requirements.
Previous wording
Net cash used in investing activities was $0.5 million and $4.9 million for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, this included proceeds from sales of clinics of $0.4 million, and purchases of property and equipment of $0.9 million. For the nine months ended September 30, 2023, this included acquisitions of $1.1 million, and the purchases of property and equipment of $3.8 million.
Current wording
Net cash used in investing activities was $0.3 million and $0.3 million for the three months ended March 31, 2025, and 2024, respectively. For the three months ended March 31, 2025, this included purchases of property and equipment of $0.3 million and proceeds from sales of clinics of $40,100. For the three months ended March 31, 2024, this included purchases of property and equipment of $0.4 million and proceeds from sales of clinics of $50,100.
Previous wording
Net cash used in financing activities for the nine months ended September 30, 2024 was $2.0 million, compared to $0.2 million in net cash provided by financing activities for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, this included paying down the outstanding balance on its Debt under the Credit Agreement of $2.0 million.
Current wording
Net cash provided by financing activities for the three months ended March 31, 2025, was $0.9 million, compared to $2.0 million in net cash used in financing activities for the three months ended March 31, 2024. For the three months ended March 31, 2025, net cash provided by financing activities included cash receipts from stock option exercises of $0.9 million. For the three months ended March 31, 2024, net cash used in financing activities included the pay down of the outstanding balance on our Debt under the Credit Agreement in the amount of $2.0 million.
Previous wording
During the nine months ended September 30, 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Current wording
During the three months ended March 31, 2025, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our goal will be to generate significant processes that will provide us with value creating capital allocation opportunities. These opportunities could include, but are not limited to, reinvestment in the brand and related marketing, continued investment in our IT platforms, the repurchase of regional development ("RD") territories, certain merger or acquisition opportunities and/or a stock repurchase program.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Components of revenues were as follows:
Previous report — wording carried elsewhere
Total revenues increased by $3.1 million, primarily due to the continued expansion and revenue growth of our franchise base.
Previous report — wording carried elsewhere
•Royalty fees and advertising fund revenue increased due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics. As of September 30, 2024 and 2023, there were 838 and 778 franchised clinics in operation, respectively.
Previous report — wording carried elsewhere
•Software fees revenue increased due to an increase in our franchised clinic base and the related revenue recognition over the term of the franchise agreement as described in Note 1, Nature of Operations and Summary of Significant Accounting Policies—Revenue Recognition, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Previous report — wording carried elsewhere
•Other revenues primarily consist of merchant income associated with credit card transactions.
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, as compared with the three months ended September 30, 2023, the total cost of revenues increased primarily due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics in regional developer regions. For the nine months ended September 30, 2024, as compared with the nine months ended September 30, 2023, the total cost of revenues increased primarily due to an increase in the number of franchised clinics in operation during the current period, along with continued sales growth in existing franchised clinics in regional developer regions.
Previous report — wording carried elsewhere
Other income (expenses), net increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to decreased interest expense due to the pay down of the outstanding balance on our Debt under the Credit Agreement in 2024.