# JOINT Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [JOINT Corp](/companies/jynt.md) (CIK 1612630)
- Form: 10-Q
- Filed: 2025-05-09
- Accepted by EDGAR: May 8, 2025, 22:52 ET
- Period: 2025-03-31
- Accession: 0001628280-25-023983
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1612630/000162828025023983/jynt-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1612630/000162828025023983/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $13.1m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $3.0m | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $10.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$678.5k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $13.4k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $801.4k | us-gaap:ProfitLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.05 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.05 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 15,263,152 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$3.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $331.5k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $8.4k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $21.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $67.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $77.2m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $42.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $57.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $19.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 23,767 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited 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.*

### Overview

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.

*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.

*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.

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.

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.

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.

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.

### Recent Events

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.

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.

In addition, the increase in interest rates and the expectation that interest rates will continue to remain elevated may adversely affect patients’ financial conditions, resulting in reduced spending on our services. While the impact of these factors continues to remain uncertain, we will continue to evaluate the extent to which these factors will impact our business, financial condition, or results of operations. These and other uncertainties with respect to these recent events could result in changes to our current expectations.

### Other Significant Events and/or Recent Developments

For the three months ended March 31, 2025, compared to the prior year period:

- Comp sales of clinics that have been open for at least 13 full months increased 3.1%;
- Comp sales for mature clinics open 48 months or more decreased 1.7%; and
- System-wide sales for all clinics open for any amount of time grew 5.0% to $132.6 million.

### Factors Affecting Our Performance

Our operating results may fluctuate significantly as a result of a variety of factors, including the timing of new clinic sales, openings, closures, markets in which they are contained and related expenses, general economic conditions, cost inflation, labor shortages, consumer confidence in the economy, consumer preferences, competitive factors, and disease epidemics and other health-related concerns.

### Critical Accounting Estimates

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.

### Results of Operations

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.

### Total Revenues

Components of revenues were as follows:

| Revenues: | Three Months Ended March 31, 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Royalty fees | $8,070,985 | $7,587,547 | 483,438 | 6.4% |
| Franchise fees | 828,519 | 655,874 | 172,645 | 26.3% |
| Advertising fund revenue | 2,307,502 | 2,166,472 | 141,030 | 6.5% |
| IT related income and software fees | 1,461,967 | 1,386,776 | 75,191 | 5.4% |
| Other revenues | 408,617 | 388,047 | 20,570 | 5.3% |
| Total revenues | $13,077,590 | $12,184,716 | $892,874 | 7.3% |

Total revenues increased by $0.9 million, primarily due to the continued expansion and revenue growth of our franchise base and included:

- 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.
- 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 above.
- Other revenues primarily consisted of merchant income associated with credit card transactions.

### Cost of Revenues

| Cost of Revenues | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $2,972,126 | $2,704,512 | $267,614 | 9.9% |

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.

### Selling and Marketing Expenses

| Selling and Marketing Expenses | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $3,505,150 | $2,237,583 | $1,267,567 | 56.6% |

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.

### Depreciation and Amortization Expenses

| Depreciation and Amortization Expenses | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $361,930 | $329,634 | $32,296 | 9.8% |

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.

### General and Administrative Expenses

| General and Administrative Expenses | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $6,914,945 | $7,339,308 | $(424,363) | (5.8)% |

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.

### Loss from Operations

| Loss from Operations | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $(678,534) | $(426,596) | $(251,938) | 59.1% |

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:

- an increase in selling and marketing expenses of $1.3 million; and
- an increase of $0.3 million in our total cost of revenues; partially offset by
- an increase of $0.9 million in total revenues; and
- a decrease of $0.4 million in general and administrative expenses.

### Other Income (Expense), Net

| Other Income (Expense), Net | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $185,917 | $36,259 | $149,658 | (412.7)% |

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.

### Income Tax Expense

| Income Tax Expense | 2025 | 2024 | Change from Prior Year | Percent Change from Prior Year |
| --- | ---: | ---: | ---: | ---: |
| Three Months Ended March 31, | $13,404 | $8,582 | $4,822 | 56.2% |

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.

### Recent Accounting Pronouncements

See Note 1, *Nature of Operations and Summary of Significant Accounting Policies,* to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for information regarding recently issued accounting pronouncements that may impact our financial statements.

### Non-GAAP Financial Measures

The table below reconciles net income (loss) to Adjusted EBITDA for the three months ended March 31, 2025, and 2024.

| Non-GAAP Financial Data: | Three Months Ended March 31, 2025 from Continuing Operations | from Discontinued Operations | Net Operations | 2024 from Continuing Operations | from Discontinued Operations | Net Operations |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| (Loss) Income | $(506,021) | $1,307,451 | $801,430 | $(398,919) | $1,345,898 | $946,979 |
| Net interest | (185,917) | 239 | (185,678) | (36,259) | 628 | (35,631) |
| Depreciation and amortization expense | 361,930 | 26,385 | 388,315 | 329,634 | 1,074,272 | 1,403,906 |
| Income tax expense | 13,404 | 103,412 | 116,816 | 8,582 | 170,345 | 178,927 |
| EBITDA | (316,604) | 1,437,487 | 1,120,883 | (96,962) | 2,591,143 | 2,494,181 |
| Stock compensation expense | 293,941 | — | 293,941 | 493,395 | — | 493,395 |
| Net loss on disposition or impairment | 1,973 | 1,299,724 | 1,301,697 | 275 | 361,828 | 362,103 |
| Restructuring Costs | 67,084 | 71,384 | 138,468 | 28,000 | 129,036 | 157,036 |
| Adjusted EBITDA | $46,394 | $2,808,595 | $2,854,989 | $424,708 | $3,082,007 | $3,506,715 |

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.

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.

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:

- Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
- 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;
- 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
- 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.

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.

### Liquidity and Capital Resources

### Sources of Liquidity

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.

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.

### Analysis of Cash Flows

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.

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.

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.

### Off-Balance Sheet Arrangements

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.

## Market risk

As filed, 289 characters.

As of March 31, 2025, there have been no material changes to the quantitative and qualitative disclosures about market risk appearing in Part II, Item 7(a), “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2024.

## Controls and procedures

As filed, 1,839 characters.

### Evaluation of Disclosure Controls and Procedures

Our management evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were designed to provide reasonable assurance of achieving such objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our management concluded that as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 232 characters.

We documented our risk factors in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our risk factors since the filing of that Annual Report on Form 10-K.

Filed May 9, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-023983. Last ingested by Listed: Oct 24, 2026, 15:14 ET. No prices; not investment advice.