Agility Health, Inc.
TSX VENTURE : AHI

Agility Health, Inc.

May 30, 2017 16:30 ET

Agility Health Reports First Quarter 2017 Financial Results

GRAND RAPIDS, MICHIGAN--(Marketwired - May 30, 2017) - Agility Health, Inc. (TSX VENTURE:AHI) ("Agility Health" or the "Company"), today reports its financial results for the three-month period ended March 31, 2017. All amounts are expressed in U.S. dollars unless indicated otherwise.

During the first quarter of 2017 the Company experienced revenue growth of 11.5% relative to first quarter 2016. The growth was the result of its normal operations and the acquisition of Medic Holdings Corp. ("Medic") in March 2017.

Financial and Operating Highlights for the First Quarter
(All comparative figures are for the corresponding period of the prior year)

  • Revenues increase by $1.8 million to $17.3 million.
  • Gross margin from operations for the first quarter was 22%, compared to 21% from a year ago.
  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations declined from $1.1 million to $.6 million, primarily driven by a 47% increase General & Administrative costs resulting in large part from one-time legal and financial advisory fees incurred in connection with the acquisition of Medic.
  • Net and total loss for the first quarter ending March 31, 2017 increased to $1.1 million or $(0.01) per share, compared with a loss of $0.4 million or $(0.01) per share in the prior year, again driven in large measure by non-recurring expenses associated with the Medic acquisition.

"The acquisition of Medic was a significant transaction during the 1st quarter of 2017. Although expenses were incurred to close the acquisition, it lays the ground work for Agility to both expand its geographic footprint and grow its service line offerings," stated Pierre G. Gagnon, Agility Health's interim Chief Executive Officer. "We continue to work with our advisors to aggressively pursue strategies that will reduce the Company's cost of capital and debt. We also continue to work with our financial partners while pursuing those strategies."

Selected Financial Information
Condensed Interim Consolidated Statements of Financial Position

(Unaudited) (Audited)
March 31, December 31,
2017 2016
ASSETS
Current assets
Cash $ 370,462 $ 621,240
Restricted cash 1,070,692 736,360
Accounts and other receivables 8,172,842 6,712,871
Inventory 1,814,238 -
Prepaid expenses and other current assets 907,854 1,047,670
Total current assets 12,336,088 9,118,141
Non-current assets
Investments 86,025 86,025
Property and equipment 1,673,984 984,859
Intangible assets 13,778,198 11,081,330
Goodwill 5,388,444 2,169,095
Total non-current assets 20,926,651 14,321,309
Total assets $ 33,262,739 $ 23,439,450
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $ 9,659,121 $ 10,291,572
Lines of credit 7,204,877 4,187,931
Convertible debenture payable 1,176,230 -
Class B and C Unit Liability 20,100,000 20,100,000
Class B and C Unit Embedded Derivative Liability 400,000 400,000
Current portion of long-term debt 819,822 -
Current portion of other long-term liabilities 651,188 445,488
Total current liabilities 40,011,238 35,424,991
Non-current liabilities
Convertible debentures payable 545,870 1,076,974
Deferred income taxes 298,000 266,000
Long-term debt 4,063,918 -
Other non-current liabilities 1,189,839 1,015,873
Total non-current liabilities 6,097,627 2,358,847
Total liabilities 46,108,865 37,783,838
Equity (deficit)
Share capital 12,047,461 9,537,239
Contributed surplus 1,070,196 368,991
Retained deficit (28,076,814 ) (26,522,676 )
(14,959,157 ) (16,616,446 )
Non-controlling interest 2,113,031 2,272,058
Total equity (deficit) (12,846,126 ) (14,344,388 )
Total liabilities and equity (deficit) $ 33,262,739 $ 23,439,450

Selected Financial Information
Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income

(Unaudited) (Unaudited)
March 31, March 31,
2017 2016
Revenue $ 17,309,981 $ 15,521,949
Cost of revenues
Salaries and benefits 11,032,122 9,984,495
Contract labor 219,127 304,232
Facility 1,063,471 1,019,446
Supplies 462,887 205,778
Depreciation and amortization 143,540 166,492
Provision for bad debts 166,864 255,201
Other 298,455 325,696
Total cost of revenues 13,386,466 12,261,340
Gross margin 3,923,515 3,260,609
Selling, general and administrative expenses 3,847,543 2,612,036
Other income (expense)
Interest expense (1,257,243 ) (1,094,690 )
Interest income - 12,612
Gain on disposal of equipment 13,175 -
Foreign currency gain 2,064 120
Fair value adjustment on warrants and obligations 7,541 (1,090 )
(1,234,463 ) (1,083,048 )
Loss from continuing operations before income taxes (1,158,491 ) (434,475 )
Provision for income taxes 32,000 -
Total comprehensive loss from continuing operations (1,190,491 ) (434,475 )
Discontinued Operations
Loss from discontinued operations, net of tax - (20,949 )
Net and total comprehensive loss $ (1,190,491 ) $ (455,424 )
Loss and total comprehensive loss attributable to:
Shareholders $ (1,554,138 ) $ (662,364 )
Non-controlling interest 363,647 206,940
Earnings per share $ (1,190,491 ) $ (455,424 )

About Agility Health

Through its U.S. subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions. In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. As of January 1, 2017, Agility Health operates 84 outpatient or onsite rehabilitation locations in 14 states. Agility Health's contract therapy services business provides rehabilitative services to 36 hospitals and inpatient rehabilitation units and 37 nursing homes, long-term care facilities and other service locations in 11 states.

In Canada, Medic Holdings Corp., Agility's primary Canadian subsidiary, operates twelve (12) foot care clinics and manufactures orthotics and prosthetics.

For more information, please visit www.agilityhealth.com.

Non-IFRS Financial Measures

Agility Health's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company also uses certain non-IFRS measures, such as EBITDA, to measure its financial performance. EBITDA is defined by the Company as the addition of net loss, depreciation and amortization and financial expenses. The Company uses EBITDA for the purpose of evaluating its historical and prospective financial and operational performance. Management believes that EBITDA is a useful measure for evaluating the performance of the Company. EBITDA is not a performance measure recognized under IFRS, therefore it does not have any standardized meaning prescribed by IFRS and may not be comparable to similarly titled financial metrics reported by other companies.

Forward-Looking Information

This press release contains forward-looking statements regarding Agility Health and its business. Such statements are based on the current expectations and views of future events of Agility Health's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release, including the anticipated future growth of Agility Health, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumption and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Agility Health undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future events, or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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