The Joint (US:JYNT) ZACKSยท2024-11-14 19:56Core Insights - The Joint Corp. (JYNT) experienced a 2.7% decline in share price following the release of its third-quarter 2024 results, primarily due to high general and administrative expenses and impairment-related charges, although this was mitigated by increased system-wide sales driven by improved royalty fees, advertising fund revenues, and software fees [1][4]. Financial Performance - Adjusted earnings per share for JYNT were reported at 4 cents, aligning with the Zacks Consensus Estimate, and showing improvement from an adjusted loss of 5 cents per share in the previous year [2]. - Total revenues increased by 2% year over year to $30.2 million, surpassing the consensus estimate by 5.5% [2]. - Revenue from company-owned or managed clinics decreased by 1.9% year over year to $17.5 million, while royalty fees rose by 10.2% to $7.9 million [3]. - Advertising fund revenues increased by 9.6% year over year to $2.2 million, and software fees improved by 10% to $1.4 million [3]. - Franchise fees fell by 7.5% year over year to $0.7 million [3]. Cost Structure - Total cost of revenues rose by 8.4% year over year to $2.8 million, attributed to higher regional developer royalties and commissions [4]. - General and administrative expenses increased by 2.7% year over year to $20.8 million, while total selling, general, and administrative costs decreased by 0.4% year over year to $26.8 million [4]. Net Loss and Cash Flow - The company reported a net loss of $3.2 million, which is wider than the net loss of $0.7 million in the same quarter last year, primarily due to losses from disposition or impairment [4]. - For the first nine months of 2024, JYNT generated net cash from operations of $5.3 million, a decline of 53.2% from the prior-year period [7]. Sales and Clinic Count - System-wide sales increased by 8% year over year to $129.3 million [5]. - As of September 30, 2024, the total clinic count was 963, which was below the Zacks Consensus Estimate of 975, with franchised clinics totaling 838, also lower than the consensus mark of 864 [5]. Financial Position - JYNT ended the third quarter with cash and cash equivalents of $20.7 million, reflecting a 14.2% increase from the end of 2023 [6]. - Total assets decreased by 8.7% from the end of 2023 to $79.6 million, while total equity declined by 17.3% to $20.5 million [6]. Guidance - The company revised its guidance for system-wide sales to a range of $525-$535 million, down from the previous estimate of $530-$545 million, and expects to open 55-60 franchised clinics, reduced from the earlier forecast of 60-75 [8].