SOURCE: Agility Health, Inc.

Agility Health, Inc

September 24, 2014 05:30 ET

Agility Health Provides Corporate Update: Successful Year Yields Positive Outlook for Continued Growth

GRAND RAPIDS, MI--(Marketwired - September 24, 2014) - Agility Health (TSX VENTURE: AHI), a premier physical therapy and rehabilitation services providers in the U.S., today provided an operational update, summarizing the company's business and strategic growth over the past 12 months.

Agility Health continues to expand its footprint as one of the premier physical therapy and rehabilitation services providers in the United States; growing aggressively through acquisition; disciplined, organic growth and with potential to generate recurring revenue from proprietary software sales. Corporate clients now include Ford Motor Company, Medtronic, Amway, Amica Insurance, Continental Tire, Alcoa, UTC Power, and the Women's Tennis Association among others.

2014 -- KEY BUSINESS STRATEGIES IN BUILDING A FOUNDATION FOR A ROBUST GROWTH COMPANY -- 

After generating $63 million in revenue in fiscal 2013, key growth initiatives are underway with a goal of continuing to consolidate the fragmented physical therapy market and improving operational efficiencies to increase margins in 2014 and beyond. 

  • Acquisition Strategy: Since acquiring Agility Health through a leveraged management buyout in 2003, we have successfully completed 9 acquisitions and grown the business from approximately $20 million to over $63 million (FY 2013). The physical therapy market is highly fragmented with the largest companies in the United States controlling less than 5 percent of the total market. We have established a positive reputation in the marketplace and have developed a significant acquisition pipeline which we intend to pursue to continue to build upon our 160+ service sites across the country that serve more than one million patient visits annually.
  • Business Mix: We are focused on higher margin business lines moving forward with an emphasis on outpatient clinics and hospital collaborations.
  • Operational Focus: Stronger financial controls, improved gross margins across all business lines and cost saving programs have been implemented.

    Improved Gross Margins across all core business lines -- Year-over-Year:
  • +13.6 % Senior Care/Long Term Care
  • +23.0 % Outpatient Clinics
  • +16.5 % Hospital Outsourcing 
  • Reduced Investment: Upfront investments in infrastructure and going-public costs are now behind us. 
  • Key hires: Internal legal counsel, IT manager and a key COO hire in Gene Miyamoto who brings to Agility extensive executive health system experience with a successful track record of managing large scale consolidation. 

NEW PRODUCT LINE -- SOFTWARE (High Margin / High Global Demand)
Through feedback from our partners, Agility has further identified a strategic opportunity and has made a significant investment in developing a proprietary software package tailored to the needs of our industry -- case management, scheduling, work queues, reporting, patient records, paperless documentation, compliance, billing, payment, etc.

Focus:

  • Our software, AgileRPM, has been implemented in 38 clinics and we plan to be operational in all of our facilities by the end of 2014; investing over $3 million in its development.
  • AgileRPM provides recurring revenue through a "Software as a Service" or SaaS model in which outpatient clinic and hospital partners subscribe to our service for a monthly fee.
  • Implementing our system results in an increase in revenue per therapist due to reductions in time spent on administrative duties. This time savings can equate to a therapists seeing an extra patient per day while insuring billing compliance.
  • Proprietary data of clinical cases are being used to develop case-based optimized treatments to enhance outcomes and minimize costs for patients and insurance payers.
  • We believe AgileRPM has the potential to be a significant revenue pillar for the company, and we are looking to aggressively expand our footprint into multiple jurisdictions and outpatient clinics / hospital venues throughout North America.

Financial

Since completing its go-public transaction through a reverse takeover transaction with Thornapple Capital, Inc. in October of 2013, Agility has worked diligently to increase its retail and institutional audience, has successfully strengthened its treasury position and implemented a company-matching employee stock purchase plan.

Highlights

  • In March of 2014 we completed a non-brokered private placement financing for $3.43M CDN @ $.60/Share
  • In September of 2014 we issued an unsecured convertible debenture to the Bloom Burton Healthcare Structured Lending Fund LP in the principal amount of up to $1.25-million (U.S.). ‎The goal of this facility is to achieve financial flexibility for strategic growth.
  • In January of 2014 we implemented an employee Stock Purchase Plan for all full and part-time Agility Health employees.
  • Total revenues for Q2, 2014 (ended June 30th) were $16.24 million compared to $16.74 million in Q2, 2013. We entered 2014 with a goal of focusing more on the higher margin segments of our business and were pleased to see revenue from the outpatient segment of the company increase from $6.78 million in Q2, 2013 to $9.29 million in Q2, 2014. The net effect is that our cost of revenue decreased to $12.46 million in Q2, 2014 compared to $14.06 million in Q2, 2013.

Business Development: Progress

Agility targeted and closed significant acquisitions over the last year which has increased our national presence and added to our growing top line revenue across our service spectrum:

  • Acquired Excel Sports and Physical Therapy in November 13, 2013 for $3.6M
  • Acquired Work-Fit in October 25, 2013 for $6.3M
  • Started 3 new outpatient clinics:
    • Border Therapy Service, Advent Rehabilitation, Chandler, Arizona (reopened)
  • In discussions with 3 health systems to joint-venture rehabilitation services
  • Ford Motor has granted us 2 new in-plant opportunities -- Fortune 500 client since 1998 and renewed for 2 more years
  • New contract with Medtronic in Boston for onsite Physical Therapy
  • 3 new / expanded hospital contracts; Sayor, OK, Mason City, IA and Oswego, KS
  • Biocorrect:
     a. 2 new Pro-Fit (pre-fabricated orthotics) Distributors; North Coast Medical, Inc.
  • GNR Systems, Inc. 
     b. New Medicare credentials to bill patients insurance.
  • Strong pipeline for numerous small clinic acquisition opportunities

Summary:

With this level of strategic focus, we diversified our growth across multiple product and service spectrums, while continuing to build our credibility and reputation as one of the premier physical therapy and rehabilitation service providers in the United States: 

  • Key initiatives are underway with a philosophical transition towards more disciplined growth by continuing to identify strategic acquisition targets and placing an increased emphasis on operational efficiencies to increase margins in 2014 and beyond.
  • Agility has further identified a strategic opportunity and has made a significant investment in developing a proprietary software package -- AgileRPM -- tailored to the needs of our industry -- case management, scheduling, work queues, reporting, patient records, paperless documentation, compliance, billing, payment, etc.

In addition to the operational progress achieved in 2014, we are looking to expand awareness and presence in capital market jurisdictions in the United States and Europe, and continue to build shareholder value as the company achieves its milestones and increases profitability.

Thank you for your continued support -- we are very excited about the year ahead.

Steve Davidson, CEO

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