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The Joint (JYNT) Q2 Earnings Miss Estimates, 2023 View Down
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The Joint Corp. (JYNT - Free Report) reported second-quarter 2023 preliminary financial results. In the quarter under review, it witnessed an adjusted loss per share of 1 cent against the Zacks Consensus Estimate of earnings of 3 cents. The bottom line, however, improved from a loss of 6 cents per share a year ago.
Revenues of The Joint amounted to $29.3 million, which increased 17.8% year over year. The top line missed the consensus mark by 1.8%.
The weaker-than-expected quarterly results were primarily due to higher expenses and lower franchise fees, partially offset by continued organic growth and an increased number of clinics.
Revenues from company-owned or managed clinics increased 22.8% year over year to $17.8 million. Royalty fees garnered $7.2 million in the second quarter, up 11.9% from a year ago. Advertising fund revenues rose 11.8% from a year ago to more than $2 million. Software fees jumped 12.3% year over year to $1.2 million. However, franchise fees declined 2.3% from a year ago to $0.67 million.
Total cost of revenues rose 15% year over year to $2.6 million in the second quarter. General and administrative expenses jumped 7.2% from a year ago to $19.9 million. As such, total SG&A costs jumped 12.9% to $26.9 million.
The Joint reported a net loss of $0.2 million in the quarter under review, which improved from $0.9 million a year ago.
System-wide sales jumped 13% in the quarter to $120.1 million. During this period, it sold 21 franchise licenses and increased the total clinic count to 890, which was below the Zacks Consensus Estimate of 897. The number of franchised clinics grew to 756, which was lower than the consensus mark of 765. However, company-owned or managed clinics were at 134, beating the consensus estimate of 132. Quarter to date, the total number of clinics rose to 911.
Financial Update (as of Jun 30, 2023)
JYNT exited the second quarter with cash and cash equivalents of $13.6 million, which climbed from $9.7 million at 2022-end. Total assets of $99.3 million increased from $93.5 at 2022-end.
Debt under the credit agreement remained flat at $2 million from 2022-end.
Total equity of $35.6 million grew from $32.6 million at 2022-end.
In the first half of 2023, the operating cash flow of $7.5 million improved from an outflow of $1.2 million a year ago.
2023 Guidance
The company expects 2023 revenues to be within $115-118 million, up from $101.9 million in the previous year. However, the latest guidance is lower than the previous view of $123-$128 million.
JYNT expects adjusted EBITDA for the year to be in the range of $11-12.5 million, down from the previous guidance of $12.5-$14 million. It reported adjusted EBITDA of $11.5 million a year ago.
It expects to open 100-120 franchised clinics in 2023 compared with 121 opened last year. Further, it is likely to open 8-12 company-owned or managed greenfield units, down from 16 openings last year.
The Zacks Consensus Estimate for Select Medical’s 2023 earnings indicates a 56.9% year-over-year increase to $1.93 per share. It has witnessed one upward estimate revision over the past month against no movement in the opposite direction. The consensus mark for SEM’s 2023 revenues indicates 4.2% growth from a year ago.
The Zacks Consensus Estimate for HCA Healthcare’s 2023 bottom line suggests a 9.2% increase from the prior-year levels. HCA has witnessed one upward estimate revision in the past month against none in the opposite direction. It beat earnings estimates in three of the last four quarters and missed once, with the average surprise being 5.4%.
The Zacks Consensus Estimate for Atai Life Sciences’ current-year earnings implies a 16.3% improvement from the year-ago reported figure. It has witnessed two upward estimate revisions over the past month against no movement in the opposite direction. ATAI beat earnings estimates in two of the last four quarters, met once and missed on the other occasion.
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The Joint (JYNT) Q2 Earnings Miss Estimates, 2023 View Down
The Joint Corp. (JYNT - Free Report) reported second-quarter 2023 preliminary financial results. In the quarter under review, it witnessed an adjusted loss per share of 1 cent against the Zacks Consensus Estimate of earnings of 3 cents. The bottom line, however, improved from a loss of 6 cents per share a year ago.
Revenues of The Joint amounted to $29.3 million, which increased 17.8% year over year. The top line missed the consensus mark by 1.8%.
The weaker-than-expected quarterly results were primarily due to higher expenses and lower franchise fees, partially offset by continued organic growth and an increased number of clinics.
The Joint Corp. Price, Consensus and EPS Surprise
The Joint Corp. price-consensus-eps-surprise-chart | The Joint Corp. Quote
Behind the Headlines
Revenues from company-owned or managed clinics increased 22.8% year over year to $17.8 million. Royalty fees garnered $7.2 million in the second quarter, up 11.9% from a year ago. Advertising fund revenues rose 11.8% from a year ago to more than $2 million. Software fees jumped 12.3% year over year to $1.2 million. However, franchise fees declined 2.3% from a year ago to $0.67 million.
Total cost of revenues rose 15% year over year to $2.6 million in the second quarter. General and administrative expenses jumped 7.2% from a year ago to $19.9 million. As such, total SG&A costs jumped 12.9% to $26.9 million.
The Joint reported a net loss of $0.2 million in the quarter under review, which improved from $0.9 million a year ago.
System-wide sales jumped 13% in the quarter to $120.1 million. During this period, it sold 21 franchise licenses and increased the total clinic count to 890, which was below the Zacks Consensus Estimate of 897. The number of franchised clinics grew to 756, which was lower than the consensus mark of 765. However, company-owned or managed clinics were at 134, beating the consensus estimate of 132. Quarter to date, the total number of clinics rose to 911.
Financial Update (as of Jun 30, 2023)
JYNT exited the second quarter with cash and cash equivalents of $13.6 million, which climbed from $9.7 million at 2022-end. Total assets of $99.3 million increased from $93.5 at 2022-end.
Debt under the credit agreement remained flat at $2 million from 2022-end.
Total equity of $35.6 million grew from $32.6 million at 2022-end.
In the first half of 2023, the operating cash flow of $7.5 million improved from an outflow of $1.2 million a year ago.
2023 Guidance
The company expects 2023 revenues to be within $115-118 million, up from $101.9 million in the previous year. However, the latest guidance is lower than the previous view of $123-$128 million.
JYNT expects adjusted EBITDA for the year to be in the range of $11-12.5 million, down from the previous guidance of $12.5-$14 million. It reported adjusted EBITDA of $11.5 million a year ago.
It expects to open 100-120 franchised clinics in 2023 compared with 121 opened last year. Further, it is likely to open 8-12 company-owned or managed greenfield units, down from 16 openings last year.
Zacks Rank & Stocks to Consider
The Joint currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Medical space are Select Medical Holdings Corporation (SEM - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Atai Life Sciences N.V. (ATAI - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Select Medical’s 2023 earnings indicates a 56.9% year-over-year increase to $1.93 per share. It has witnessed one upward estimate revision over the past month against no movement in the opposite direction. The consensus mark for SEM’s 2023 revenues indicates 4.2% growth from a year ago.
The Zacks Consensus Estimate for HCA Healthcare’s 2023 bottom line suggests a 9.2% increase from the prior-year levels. HCA has witnessed one upward estimate revision in the past month against none in the opposite direction. It beat earnings estimates in three of the last four quarters and missed once, with the average surprise being 5.4%.
The Zacks Consensus Estimate for Atai Life Sciences’ current-year earnings implies a 16.3% improvement from the year-ago reported figure. It has witnessed two upward estimate revisions over the past month against no movement in the opposite direction. ATAI beat earnings estimates in two of the last four quarters, met once and missed on the other occasion.