IPO Report: Joint Corp (JYNT)

Francis Gaskins |

The Joint Corp. (JYNT) is a rapidly growing franchisor of chiropractic clinics that operates on a non-insurance, cash-based model. It is based in Scottsdale, AZ.

Ten other companies are scheduled to IPO for the week of Nov. 3, 2014.  The full IPO calendar is available at IPOpremium.

SEC Documents

Manager, Joint-managers: Roth Capital Partners, Feltl and Company
Co-manager: Sanders Morris Harris

JYNT scheduled a $30 million IPO with a market capitalization of $92 million at a price range midpoint of $10 for Friday November 7, 2014 on Nasdaq.

The Joint IPO Summary

JYNT is a rapidly growing franchisor of chiropractic clinics that operates on a non-insurance, cash-based model. JYNT seeks to be the leading provider of chiropractic care in the markets JYNT serves.

JYNT Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annuallizing June 6 mos

       

Joint Corp. (JYNT)

$92

14.4

-176.9

3.6

3.6

33%

             

Conclusion

Neutral

Top line rev +15%

Franchise rev -28%

14 times rev

-8% loss

Business

JYNT is a rapidly growing franchisor of chiropractic clinics that operates on a non-insurance, cash-based model.

JYNT seeks to be the leading provider of chiropractic care in the markets JYNT serves and to become the most recognized brand in its industry through the rapid and focused expansion of chiropractic clinics in key markets throughout North America and abroad. JYNT’s mission is to improve quality of life through routine chiropractic care.

JYNT strives to accomplish this by making quality care readily available and affordable. JYNT has created a growing network of modern, consumer-friendly chiropractic clinics operated by franchisees that employ only licensed chiropractors.

JYNT has priced its services below most competitors’ pricing for similar services and below most insurance co-payment levels (i.e., below the patient co-payment required for an insurance-covered service).

Since acquiring the predecessor to its company in March, 2010, JYNT has grown its enterprise from eight to 215 franchised clinics in operation as of June 30, 2014, with another 250 franchises granted through its network of regional developers and independent franchise operators.

In the six months ended June 30, 2014, JYNT’s franchised clinics registered 948,304 patient visits and generated system-wide revenues of $19,773,084, which refers to the aggregate revenues of its franchisees.

JYNT receives a royalty of 7.0% of gross revenues from franchised clinics and 4.0% of gross revenues from clinics franchised through regional developers.

JYNT also collects a national marketing fee of 1.0% of gross revenues of all franchised clinics. JYNT receives a franchise of $29,000 for franchises JYNT sells directly and a franchise fee of $14,500 for franchises sold through regional developers.

Competition

JYNT’s competitors include the approximately 36,000 independent chiropractic offices currently open throughout the United States as well as certain multi-unit operators.

JYNT may also face competition from traditional medical practices, outpatient clinics, massage therapists and sellers of devices intended for home use to address back and joint discomfort.

JYNT’s two largest multi-unit competitors are HealthSource Chiropractic, an insurance-based practice management company which currently operates 442 units and ChiroOne, which currently operates 42 units, both on a franchised basis.

5% Shareholders Pre-IPO

John Leonesio 16.0%

Ronald Record 5.6%

Craig P. Colmar 10.7%

Steven P. Colmar 12.3%

Richard Rees    10.6%  

Dr. Fred Gerretzen         32.8%

Barbara Holland            5.6%

Don A Sanders5.2%

Don Sanders 2003 Children’s Trust         5.2%

Todd Welker   7.8%

Dividends

No dividends are planned.

Use of Proceeds

JYNT expects to receive $27 million for its IPO and use it for the following:

to provide resources to develop new company-owned clinics; to acquire selected existing franchisees; to repurchase selected regional developer licenses; for general corporate purposes, including additional working capital, capital expenditures and marketing; to facilitate future access to the public capital markets; and to provide JYNT with flexibility in the future to acquire additional businesses, either with the net proceeds from this offering or through the publicly traded common stock JYNT creates through this offering.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JYNT The Joint Corp. 2.13 -0.03 -1.39 34,169

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