Joint : Q2 20 Investor Presentation

Investor Presentation | August 2020

© 2020 The Joint Corp. All Rights Reserved.	1

Safe Harbor Statement

Certain statements contained in this presentation are "forward-looking statements." We have tried to identify these forward-looking statements by using words such as "may," "might," " will," "expect," "anticipate,'' "'believe," "could," " intend," "plan," "estimate," "should," "if," "project," and similar expressions. All statements other than statements of historical facts contained in this presentation, including statements regarding our growth strategies, our vision, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth and potential are forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. However, these forward- looking statements are subject to risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from our expectations and projections. Some of these risks, uncertainties and other factors are set forth in this presentation and in other documents that we file with the United States Securities and Exchange Commission (the "SEC"), including those described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC March 6, 2020, as revised or updated for any material changes described in any subsequently-filed Quarterly Reports on Form 10-Q, including the one we anticipate filing with the SEC on August 7, 2020. These risk factors 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. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. Projections and other forward-looking statements included in this presentation have been prepared based on assumptions, which we believe to be reasonable, but not in accordance with U.S. Generally Accepted Accounting Principals ("GAAP") or any guidelines of the SEC. Actual results may vary, perhaps materially. You are strongly cautioned not to place undue reliance on such projections and other forward-looking statements. All subsequent written and oral forward-looking statements attributable us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any such forward-looking statements, whether made in this presentation or elsewhere, should be considered in the context of the various disclosures made by us.

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, Massachusetts, 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.

© 2020 The Joint Corp. All Rights Reserved.	2

OUR MODEL

Bringing quality, convenient, affordable chiropractic care to retail

© 2020 The Joint Corp. All Rights Reserved.	3

OUR CLINICS

Employing a proven membership-based,walk-in,no-insurance model in an open bay setting

© 2020 The Joint Corp. All Rights Reserved.	4

OUR PATIENTS

Serving patients seeking pain relief and ongoing health and wellness

© 2020 The Joint Corp. All Rights Reserved.	5

The State of the Union Remains Strong

80% of system-wide gross sales from monthly memberships in 2019

2.4M	7.7M
unique patients	patient visits
treated through	in 2019
Dec. 31, 2019

998K unique patients	Up from 6.0M in 2018
treated in 2018

1 New patient survey completed February 2019.

585K

new patients

in 2019

Up from 435K in 2018

26%

of patients were new to

chiropractic1 in 2019

Approx. 152,000 patients had never been to a chiropractor before

33%

annual

system-wide gross

sales increase 2018 vs 2019

Up from 30% increase

2017 vs 2018

© 2020 The Joint Corp. All Rights Reserved.	6

Chiropractic Care Is an Essential Healthcare Service

Increased frequency of messaging through video and blogs, emails and texts, clinic signage and PR

•

•

•

Critical point of differentiation versus other retailer service concepts

Service call for our doctors and staff: Now more than ever, we must be open to treat our patients

Reassuring patients: Our clinics are open and taking the necessary safety precautions

© 2020 The Joint Corp. All Rights Reserved.	7

Upside for Future Growth

$15B growing chiropractic market1

50%	30%	16%
of Americans don't know	understand chiropractic	saw a chiropractor
what the word	but are scared	in the last 12 months
"chiropractic" means
Gallup-Palmer College of	Nucleus Marketing Lab 2018	Gallup-Palmer College of
Chiropractic Report 2017		Chiropractic Report 2018

1 For the period ended Dec. 31, 2019 | 2 IBIS World Chiropractors Market Research Report; February 2019 * and 5-year CAGR

© 2020 The Joint Corp. All Rights Reserved.	8

Market Opportunity: 1800+ Potential Clinics

Targeting 1,000 clinics opened by the end of 2023

Best

Good

Fair

Poor

The Joint Patient Base

With usable addresses in last 21 months

• All 50 States, DC, and Puerto Rico
• All Canadian Provinces and Territories
• 24 Countries on 6 Continents

1800+ Similar Points of Distribution

• Analyze demographics and psychographics
• Model attributes
• Roll across country

© 2020 The Joint Corp. All Rights Reserved.	9

The Joint: The Industry Leader with Momentum Building

Companies	Clinics	Clinics	Change in	States	Franchise	Owned/	Insurance	Private
	at 6/30/20	at 12/31/17	Clinics			Managed		Pay
The Joint Corp.	539	399	140	33	✔️	✔️		✔️
HealthSource Chiropractic	172	295	(123)	34	✔️		✔️
ChiroOne	59	41	18	3		✔️	✔️
100% Chiropractic	38	*	*	9	✔️		✔️	✔️
AlignLife Chiropractic	29	23	6	10	✔️	✔️	✔️
Aligned Modern Health	18	*	*	1		✔️	✔️
Chiropractic Company	17	*	*	1		✔️	✔️
20 Dollar Chiropractic	20	*	*	1	✔️			✔️
Chiropractic Partners	11	*	*	1		✔️	✔️	✔️
ChiroWay	9	8	1	2	✔️			✔️
Simply Chiropractic	2	7	(5)	2	✔️			✔️
Express Chiropractic	5	0	5	1	✔️			✔️
NuSpine	3	3	0	2	✔️			✔️
Independent Offices	40,000	39,000	1,000	50		✔️	Varies	Varies

1 Kentley Insights, The Office of Chiropractors Market Research Report, 2019 and 2017, respectively. * Historical information unknown.

© 2020 The Joint Corp. All Rights Reserved.	10

Driving Growth with Resilient Business Model

Live a Better You

BUILD	INCREASE	ATTRACT	OPEN
BRAND	AWARENESS	NEW PATIENTS	NEW CLINICS

© 2019 The Joint Corp. All Rights Reserved.	11

Continued Clinic Growth

Targeting 1,000 Clinics Opened by the end of 2023

Opened greenfields in February, June and July, bringing the corporate portfolio count to 63 as of August 6, 2020

TOTAL CLINICS OPEN

539

Franchise		Company Owned/Managed							513	62
							60
									442
							370	399	48
								47
						312	61
					246	47
					4					453	477
								352	394
							309
						265
					242
				175
	26	82
12
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	30-Jun-20

© 2020 The Joint Corp. All Rights Reserved.	12

Advancing Robust National Footprint

539 33

clinics states

As of June 30, 2020

© 2020 The Joint Corp. All Rights Reserved.	13

RD Model Proven To Accelerate Scale

1,000 Units

Sold 1 RD territory and 35 Franchise Licenses in H1 2020

% of Sales by Regional Developers

Gross Cumulative Franchise Licenses Sold1

Tipping Point For National Recognition and Economies of Scale

• Regional Developer (RD) model continues
	to demonstrate exponential growth
•	Robust pipeline of 200+ licenses & LOIs
•	Continued focus on franchise sales, with

89% 89%

49%

841 876

80%715

616

eye on accelerating unit openings

Dec. 31,	Dec. 31,	Dec. 31,	June 30,	Dec. 31,	Dec. 31,	Dec. 31,	June 30,
2017	2018	2019	2020	2017	2018	2019	2020

• 79% of franchise clinics supported by RDs
• RDs cover 57% of Metropolitan Statistical Areas (MSAs) in the US

1 Of the 876 franchise licenses sold as of June 30, 2020, 209 are in active development, 539 are currently operating and the balance represents terminated/closed licenses.

© 2020 The Joint Corp. All Rights Reserved.	14

Continued Improvement to Clinic Economics

More recent cohorts continue to far surpass historical sales growth

Approximate Investment of $276k

• $180K initial build-out cost
• Franchisee pays 7% royalty on gross sales
• Franchisee pays $599/month in software fees
• Assumes breakeven at $25K monthly gross sales1
• Franchisee pays $39.9K per license, prior to year 1 sales
• Improving estimated cash-on-cash return from 5+ years to approximately 3.5 years

System-wide Sales & Potential Company-owned/Managed Contribution1

(5 yr. avg., $ in 000s)									$472
							$448
									$437
				$367	$390
				$321
$236
$179
							$130
				$	75				$121	$142
							$92
$(60)				$	37
				Historical System Avg. Gross Sales (Jan-13 - Jun-20)		Historical System Avg. Gross Sales (Jan-17 - Jun-20)
$(109)
			Operating Margin (Jan-13 - Jun-20)			Operating Margin (Jan-17 - Jun-20)
Yr. 1		Yr. 2	Yr. 3		Yr. 4	Yr. 5

1 Breakeven varies on a clinic by clinic basis based on actual gross sales and operating expenses. This represents operating margin excluding income taxes and depreciation.

© 2020 The Joint Corp. All Rights Reserved.	15

System-wide and Comp Sales

2%	(6)%	(10)%
Increase in	Decrease in	Decrease in
system-wide sales	comp sales1 for all clinics	comp sales1 for all clinics
Q2 2020 over Q2 2019	>13 months in operation	>48 months in operation
	Q2 2020 over Q2 2019	Q2 2020 over Q2 2019

1Comparable sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinics that have permanently closed, but include clinics that are temporarily closed due to COVID-19. | 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix.

© 2020 The Joint Corp. All Rights Reserved.	16

Two Major Promotions: Record-Breaking Impact

Direct Marketing	National Campaign

By end of the promotion,

average members per clinic surpassed our all-timerecord.

© 2020 The Joint Corp. All Rights Reserved.	17

Resilient Business Model Drives Long-term Growth

The Joint Corp. 9-yr. CAGR 77%1 vs. Industry CAGR 1.2%2*

People will continue to seek more noninvasive,

System-wide Gross Sales

($ in M)

$220.3

holistic ways in which to manage their pain.

We will be ready to treat them.

	$165.1
77% CAGR1	$126.9

(2010 - 2019)	$114.1
	$98.6

$70.1

$46.2

$22.3

$8.1

2012

2013

2014

2015

2016

2017

2018

2019

30-Jun-20

1 For the period ended Dec. 31, 2019 | 2 IBIS World Chiropractors Market Research Report; February 2019 * and 5-year CAGR

© 2020 The Joint Corp. All Rights Reserved.	18

Appendix

© 2020 The Joint Corp. All Rights Reserved.	19

Q2 2020 Financial Results

$ in M1	Q2 2020	Q2 2019	Differences
Revenue	$12.6	$11.2	$1.4			13%
• Corporate clinics	6.9	5.8	1.1			19%
• Franchise fees	5.7	5.4	0.3			6%
Cost of revenue	1.4	1.3	0.1			5%
Sales and marketing	1.8	1.8	0.0			1%
Depreciation	0.7	0.4	0.3			71%
G&A	8.5	7.2	1.3			18%
Net Income / (Loss)	0.1	0.5	(0.4)			(75)%
Adj. EBITDA2	1.1	1.1	0.0			5%

$14.6M unrestricted cash at June 30, 2020, compared to $10.7M at March 31, 2020.

1. Due to rounding, numbers may not add up precisely to the totals.
2. Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix.

© 2020 The Joint Corp. All Rights Reserved.	20

Year-to-Date June 30, 2020 Financial Results

$ in M1	H1 2020	H1 2019		Differences
Revenue	$26.2	$21.8	$4.4	20%
• Corporate clinics	14.1	11.4	2.7	24%
• Franchise fees	12.1	10.4	1.7	16%
Cost of revenue	2.8	2.5	0.3	14%
Sales and marketing	3.8	3.3	0.5	17%
Depreciation and amortization	1.3	0.8	0.5	75%
G&A	17.2	13.9	3.3	24%
Net Income / (Loss)	0.9	1.4	(0.5)	(34)%
Adj. EBITDA2	2.8	2.6	0.2	5%

1. Due to rounding, numbers may not add up precisely to the totals.
2. Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix.

© 2020 The Joint Corp. All Rights Reserved.	21

Experienced Board Offers Leadership

Matthew E. Rubel	James H. Amos, Jr.	Ronald V. DaVella, CPA	Suzanne M. Decker	Peter D. Holt	Abe Hong	Glenn J. Krevlin
Lead Director, 2017	Director, 2015	Director, 2014	Director, 2017	Director, 2016	Director, 2018	Director, 2019
• Lead Director, Executive Chair	• Advisory Board Chair, APFI	• COO & CFO Aura Ventures	• Chief HR Officer,	• Pres. & CEO,	• EVP & CIO,	• Founder, Managing
KidKraft, Inc.	P&G Franchising Initiatives	• Alkaline Water Co.	Aspen Dental Mgmt	The Joint Corp.	Technologent	Partner, & PM, Glenhill
• Chair, Mid Ocean Ptrs. PE	• Mail Boxes Etc.	• NanoFlex Power Corp.	• Davis Vision Companies	• Tasti D-Lite	• Discount Tire Company	Capital Advisors
Consumer Group	(now The UPS Store)	• Amazing Lash Studio		• Great Hill Partners	• Red Rock Resorts	• Design within Reach
• Ind. Dir., Hudson's Bay Co. &	• Intl. Franchise Assn. (IFA)	CFO & franchisee		• Mail Boxes, Etc.	• Starbucks Corp.	• Centric Brands
Treehouse Foods
• Marine Corps Captain,	• Deloitte & Touche		(now The UPS Store)		• Restoration Hardware
• Varsity Brands, Collective	National Veterans' Admin.,			• Director Intl. Franchise		• Cumberland Associates
Brands, Cole Haan	Marine Military Academy,
		Assn. (IFA)		• The Goldman Sachs Group
	Marine Corps Heritage Fdn.
• Roark Capital & TPG Capital
		• Chair, International Affairs
	• Meineke Car Care Centers
• Pres. Appointee, House			Network (IAN)
Advisory Council on Trade	• Zig Ziglar Corp
Policy Negotiation	• WSI of Canada
BS, Ohio University	AB, University of	BS, Queens College	BS, Russell Sage College	BA, Univ. of Washington	BE, U.S. Military Academy at	BA, Wesleyan University
MBA, University of Miami	Missouri-Columbia	MBA, Pace University	MA, University of London	West Point	MBA, New York University

© 2020 The Joint Corp. All Rights Reserved.	22

Strong Leadership Team in Place

Peter D. Holt

Jake Singleton

Jorge Armenteros

Jason Greenwood

Amy Karroum

Eric Simon

Manjula Sriram

Dr. Steve Knauf

President & CEO

CFO

VP, Operations

VP, Marketing

VP, Human Resources

VP, Franchise Sales

VP, Technology

Exe. Dir. of Chiropractic

& Compliance

•

Tasti D-Lite

•

EY

•

McDonald's

•

Peter Piper Pizza

•

Thermo Fluids

•

Aamco

•

Vail/Versay

•

Arizona State Board

•

Planet Smoothie

•

American Institute

•

Dunkin' Donuts

•

Robeks Juice

•

Taylor Morrison

•

Mail Boxes Etc.

•

Early Warning

of Chiropractic

•

Mail Boxes Etc.

of CPAs

•

Baskin Robbins

•

Young & Rubicam

•

Foundation for

•

UPS Store

•

Walgreens

•

Northwestern

•

The UPS Store

•

Pollo Campero

Group

Senior Living

•

Extreme Pita

•

United Airlines

Health Sciences

•

I Can't Believe

•

Pulte Homes

•

US Foods

University

It's Yogurt

•

International

Chiropractors Assn.

•

American

Chiropractic Assn.

MBA, Keller Graduate

DC, Northwestern Health

MA, Univ. of London

MA, Univ. of Arizona

MBA, Wayne State Univ.

MBA, Univ. of Michigan

BA, Univ. of

Sciences Univ.

School of Management

BA, Univ. of Washington

BS, Univ. of Arizona

BBA, Eastern Michigan Univ.

BA, Michigan State Univ.

Rhode Island

BS, Northwestern Health

BS, Univ. of Wisconsin

Sciences Univ.

© 2020 The Joint Corp. All Rights Reserved.	23

Revolutionizing Access to Chiropractic Care

	Features	Industry Problems	The Joint's Solutions
	Affordability (per appointment)	$77 Average1	$29 Average
	Convenient Locations	Medical Centers / Offices	Retail Locations
	Multiple Locations	Limited Locations	539 Clinics
	Walk-in / No Appointment	Appointments Required	No Appointments
	Insurance / Caps / Co-pays	Yes	Private Pay
	Inviting Consumer-centric Design	Clinical	Approachable, Consumer Friendly
	Service Hours	Limited / Inconsistent	Open 6-7 Days + Nights & Weekends2
	Average Patient Visits per Clinic	600 per Month3	1,350+ per Month4

1 Chiropractic Economics, October 2018 | 2 Hours vary by clinic | 3 Chiropractic Economics, May 2018 | 4 Number includes multiple visits per patient

© 2020 The Joint Corp. All Rights Reserved.	24

Updated Patient Demographics

	Median Age	37 Years
	Generation Mix
	Gen Z	11%
	Millennial	44%
	Gen X	30%
	Baby Boomer	15%
	Gender
	Female	49%

1 Patients who visited The Joint Chiropractic in 2019

© 2020 The Joint Corp. All Rights Reserved.	25

Transformative Opportunity for Chiropractors

		Industry	The Joint
	Starting Salary	$30K - $40K1	$65K - $85K plus bonus potential2
		•	Appointments required	•	No appointments
	Accessibility	•	Medical centers & offices	•	Clustered, high-visibility retail locations
		•	Traditional office hours	•	Open evenings + weekends3
		•		•	Proprietary CRM and
		Challenges of managing		POS software
	Practice		a business without support	• Ongoing training and coaching
	• Difficulty attracting new patients	• Ability to perfect technique
	& Insurance
	•	Insurance hassles	•	Less administration
		•	Slow payment cycle	•	Higher patient focus
				•	Better cash flow

1 Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition

2 Based on Joint Corp. Company-owned/managed actual salaries | 3 Hours vary by clinic

© 2020 The Joint Corp. All Rights Reserved.	26

Non-GAAP Measure Definition

This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they provide a more transparent view of the Company's underlying operating performance and operating trends than GAAP measures alone. Reconciliations of net loss to EBITDA and Adjusted EBITDA are presented where applicable. The Company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses. The Company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase net gain, gain/(loss) on disposition or impairment, and stock-based compensation expenses.

EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operations, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are frequently used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with the Company's financial statements filed with the SEC.

© 2020 The Joint Corp. All Rights Reserved.	27

Q2 2020 Segment Results

2020

Q2

© 2020 The Joint Corp. All Rights Reserved.	28

YTD June 30, 2020 Segment Results

2020 H1

© 2020 The Joint Corp. All Rights Reserved.	29

GAAP - Non-GAAP Reconciliation

© 2020 The Joint Corp. All Rights Reserved.	30

The Joint Corp. Contact Information

Peter D. Holt, President and CEO

[e-mail]

The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | [phone]

Jake Singleton, CFO

[e-mail]

The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | [phone]

Kirsten Chapman, LHA Investor Relations

[e-mail]

LHA Investor Relations | One Market Street, Spear Tower, Suite 3600, San Francisco, CA 94105 | [phone]

https://www.facebook.com/thejointchiro

@thejointchiro

https://twitter.com/thejointchiro

@thejointchiro

https://www.youtube.com/thejointcorp

@thejointcorp

© 2020 The Joint Corp. All Rights Reserved.	31