Agility Health Inc.
TSX VENTURE : AHI

Agility Health Inc.

November 29, 2016 16:42 ET

Agility Health Reports Third Quarter 2016 Financial Results

GRAND RAPIDS, MICHIGAN--(Marketwired - Nov. 29, 2016) - Agility Health, Inc. (TSX VENTURE:AHI) ("Agility Health" or the "Company"), today reports its financial results for the three and nine-month period ended September 30, 2016. All amounts are expressed in U.S. dollars (and intermittently, for convenience, in Canadian dollars at an exchange rate of 1.34 USD/CAD).

Financial and Operating Highlights for the Third Quarter and Year-to-Date

(All comparative figures are for the corresponding period of the prior year)

  • Revenue from continuing operations for the third quarter was $16.0 million (CAD $21.4 million);
  • Revenue for the first three quarters of 2016 grew to $47.8 million (CAD$64.1 million) from $47.0 million (CAD$63.0 million) for the comparable period in 2015;
  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations for the third quarter was $0.6 million (CAD$.8 million) or 4% of revenues;
  • Gross margin from operations for the third quarter was 20%;
  • Gross margin from operations for the three quarters ending September 30, 2016 was 21%. This anticipated 2%-point decline was due in part to the various startup/greenfield opportunities that were initiated in 2015; and
  • Net and total loss for the three quarters ending September 30, 2016 increased to $(1.7) million or $(0.03) per share compared with a loss of $(1.1) million or $(0.02) per share in the prior year.

"This quarter we completed an operational and administrative expense review," stated Steve Davidson, Agility Health's CEO. "When fully implemented, the Company anticipates annualized cost reductions in excess of $1.0 million. Our greenfield developments are progressing nicely. Historically, our start-ups take 9-12 months to break even and, as such, our recent greenfield developments remain a drag on year-to-date financial performance. Overall, we are making progress on many fronts, including pursuing potential transactions to effect a redemption of units held by Alaris USA, Inc. in Agility Health, LLC, the Company's primary operating subsidiary."

Selected Financial Information

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
September 30, 2016 and December 31, 2015
(Expressed in US Dollars)
(Unaudited) (Audited)
September 30, December 31,
2016 2015
ASSETS
Current assets
Cash $ 948,442 $ 1,306,593
Accounts and other receivables 7,860,683 7,206,485
Income taxes receivable - 115,808
Prepaid expenses and other current assets 1,015,733 1,004,376
Total current assets 9,824,858 9,663,262
Investments 86,025 86,025
Property and equipment 967,316 1,187,773
Intangible assets 11,647,186 12,160,263
Goodwill 2,354,422 2,531,390
Total assets $ 24,879,807 $ 25,598,713
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $ 9,982,937 $ 8,267,626
Line of credit 4,733,603 4,582,875
Current portion of long-term debt - 222,222
Current portion of other long-term liabilities 445,444 630,794
Total current liabilities 15,161,984 13,703,517
Convertible debentures payable 1,053,101 1,004,628
Other long-term liabilities 21,681,500 21,832,854
Total liabilities 37,896,585 36,540,999
Equity (deficit)
Share capital 9,395,485 9,020,480
Contributed surplus 363,764 355,267
Retained deficit (24,975,725 ) (22,430,873 )
(15,216,476 ) (13,055,126 )
Non-controlling interest 2,199,698 2,112,840
Total equity (deficit) (13,016,778 ) (10,942,286 )
Total liabilities and equity (deficit) $ 24,879,807 $ 25,598,713
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE LOSS
Three months ended September 30, 2016 and 2015
(Expressed in US Dollars)
(Unaudited) (Unaudited)
2016 2015
Revenue $ 15,959,224 $ 15,515,195
Cost of revenues
Salaries and benefits 10,725,001 9,834,394
Contract labor 185,038 271,960
Facility 1,067,080 964,283
Supplies 192,149 218,518
Depreciation and amortization 156,052 173,805
Provision for bad debts 123,448 107,669
Other 353,140 333,933
Total cost of revenues 12,801,908 11,904,562
Gross margin 3,157,316 3,610,633
Selling, general and administrative 3,029,808 3,060,205
Other income (expense)
Interest expense (923,104 ) (1,174,089 )
Interest income 298 -
Foreign currency translation gain (loss) (23 ) (1,092 )
Fair value adjustment on warrants and obligations 5,093 430,202
(917,736 ) (744,979 )
Loss from continuing operations before income taxes (790,228 ) (194,551 )
Provision for income taxes
Current - -
Deferred - -
- -
Net and total comprehensive loss from continuing operations (790,228 ) (194,551 )
Discontinued Operations
Net and total comprehensive loss from discontinued operations (78,600 ) (18,052 )
Net and total comprehensive loss $ (868,828 ) $ (212,603 )
Net and total comprehensive income (loss) attributable to:
Shareholders $ (1,147,083 ) $ (485,239 )
Non-controlling interest 278,255 272,636
$ (868,828 ) $ (212,603 )
Earnings per share
Basic, loss per share (0.01 ) (0.01 )
Diluted, loss per share (0.01 ) (0.01 )
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE LOSS
Nine months ended September 30, 2016 and 2015
(Expressed in US Dollars)
(Unaudited) (Unaudited)
2016 2015
Revenue $ 47,760,101 $ 47,067,546
Cost of revenues
Salaries and benefits 31,298,592 29,999,402
Contract labor 689,816 822,618
Facility 3,133,469 2,910,126
Supplies 608,522 602,266
Depreciation and amortization 489,038 526,074
Provision for bad debts 521,970 360,340
Other 1,048,655 957,980
Total cost of revenues 37,790,062 36,178,806
Gross margin 9,970,039 10,888,740
Selling, general and administrative 8,826,692 8,749,526
Other income (expense)
Interest expense (3,068,170 ) (3,612,872 )
Interest income 14,191 14
Foreign currency translation gain (loss) 94 (96 )
Fair value adjustment on warrants and obligations 332,975 565,294
(2,720,910 ) (3,047,660 )
Loss from continuing operations before income taxes (1,577,563 ) (908,446 )
Provision for income taxes
Current - -
Deferred - -
- -
Net and total comprehensive loss from continuing operations (1,577,563 ) (908,446 )
Discontinued Operations
Net and total comprehensive loss from discontinued operations (110,431 ) (162,260 )
Net and total comprehensive loss $ (1,687,994 ) $ (1,070,706 )
Net and total comprehensive income (loss) attributable to:
Shareholders $ (2,544,852 ) $ (1,974,287 )
Non-controlling interest 856,858 903,581
$ (1,687,994 ) $ (1,070,706 )
Earnings per share
Basic, loss per share (0.03 ) (0.02 )
Diluted, loss per share (0.03 ) (0.02 )

Gemino Healthcare Finance, LLC

At September 30, 2016, the Company was not in compliance with the fixed charge coverage ratio covenant in the Gemino Credit Agreement ("Credit Agreement"), which constitutes an event of default thereunder. Nevertheless, Gemino has agreed to extend the maturity date of the line of credit to January 31, 2017, although such extension does not constitute a waiver by Gemino of the event of default or its rights and remedies.

About Agility Health

Through its 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 September 30, 2016, Agility Health operates 88 outpatient or onsite rehabilitation locations in 16 states.

Agility Health's contract therapy services business provides rehabilitative services to 39 hospitals and inpatient rehabilitation units, 27 nursing homes, long-term care facilities and other service locations in 8 states. For more information, please visit investors.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 "anticipate", "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.

Contact Information

  • Agility Health Inc.
    Steven N. Davidson
    Chairman and Chief Executive Officer
    (616) 356-5000

    Agility Health Inc.
    Ray Matthews
    Ray Matthews and Associates
    (604) 818-7778
    ray@raymatthews.ca