The Joint Corp. Acquires Northern California Regional Developer Territory

Rhea-AI Summary

The Joint Corp. (NASDAQ: JYNT) announced the acquisition of regional developer rights for Northern California for $2.4 million, effective April 1, 2022. This acquisition allows oversight of 56 franchised clinics, including 20 operational and 36 in development, plus the opportunity for 19 more clinics. CEO Peter D. Holt stated this move aims to enhance growth and margin contribution in California, signaling strategic expansion potential in the chiropractic care market.

Positive

• Acquisition of regional developer rights for Northern California for $2.4 million.
• Potential for a total of 75 clinics in the region, enhancing market presence.
• Support for 56 franchised clinics, with 20 currently operational and 36 actively developing.

Negative

• Risks associated with the ongoing impact of COVID-19 on operations.
• Challenges in staffing qualified chiropractors due to a nationwide labor shortage.

Expected to increase margin contribution and support corporate clinic growth opportunity

SCOTTSDALE, Ariz., April 06, 2022 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ: JYNT), the nation's largest provider of chiropractic care through The Joint Chiropractic^® network, acquired the regional developer rights for the Northern California territory for $2.4 million on April 1, 2022.

The demographic modeling for the Northern California region indicates the potential for a total of 75 clinics. This includes The Joint’s April 1^st acquisition of the right to oversee 56 franchised clinics – 20 of which are currently operating and will continue to be franchised and 36 of which the licenses have been sold and are in active development. It also includes another 19 sites for future corporate or franchised clinic development.

“The acquisition of the regional developer rights for the Northern California territory is an important development for our growth in California,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “Within every franchise concept that utilizes a regional developer program to accelerate its growth, regional developer territory ownership will shift from time to time based on a variety of reasons – both financial and personal. At The Joint, we stand ready to evaluate such opportunities to execute the best course of action for our patients, franchisees, and shareholders. We acquired the regional developer territory rights in Northern California to increase our margin contribution within the franchise segment and will now directly support the existing and future franchised units that will remain in the territory. This acquisition also provides the opportunity to accelerate our growth of greenfield clinics within the territory.”

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, our inability to identify and recruit enough qualified chiropractors and other personnel to staff our clinics, due in part to the nationwide labor shortage, 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, 2021, as updated or revised for any material changes described in any subsequently-filed Quarterly Reports on Form 10-Q or other SEC 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. revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, it is the nation's largest operator, manager and franchisor of chiropractic clinics through The Joint Chiropractic network. The company is making quality care convenient and affordable, while eliminating the need for insurance, for millions of patients seeking pain relief and ongoing wellness. With more than 700 locations nationwide and nearly 11 million patient visits annually, The Joint Chiropractic is a key leader in the chiropractic industry. Ranked number one on Forbes' 2022 America's Best Small Companies list, number three on Fortune's 100 Fastest-Growing Companies list and consistently named to Franchise Times "Top 400+ Franchises" and Entrepreneur's "Franchise 500^®" lists, The Joint Chiropractic is an innovative force, where healthcare meets retail. For more information, visit www.thejoint.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, 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

FAQ

What are the details of JYNT's acquisition in Northern California?

The Joint Corp. acquired regional developer rights for Northern California for $2.4 million, overseeing 56 franchised clinics and enabling the development of additional locations.

How many clinics can JYNT potentially operate in Northern California?

There is a potential for a total of 75 clinics in the Northern California region, including existing and future locations.

What is the strategic significance of JYNT's acquisition?

This acquisition is expected to increase margin contributions and support corporate clinic growth, enhancing The Joint's presence in California.

What challenges does JYNT face following the acquisition?

The company may face challenges around the ongoing impact of COVID-19 and difficulties in staffing due to a nationwide labor shortage.