Agility Health Inc.
TSX VENTURE : AHI

Agility Health Inc.

November 17, 2017 17:00 ET

Agility Health Reports Third Quarter 2017 Financial Results

GRAND RAPIDS, MICHIGAN--(Marketwired - Nov. 17, 2017) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Agility Health, Inc. (TSX VENTURE:AHI) ("Agility Health" or the "Company"), today reports its financial results for the nine-month period ended September 30, 2017. All amounts are expressed in U.S. dollars unless indicated otherwise.

During the third quarter of 2017 the Company experienced revenue growth of 19.4% relative to the third 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 Third Quarter

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

  • Revenues increased by $3.06 million to $18.84 million.
  • Revenue increased by 16.2% to $54.8 million for the three quarters ending September 30, 2017 compared to the same period of 2016.
  • Gross margin from operations for the third quarter was 22.9%, compared to 21.4% from a year ago.
  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations declined from $.7 million to $.5 million from the third quarter of 2017 compared to the third quarter of 2016, primarily driven results of Medic operations which are seasonally slower and less profitably during third quarter and one-time financial advisory fees.
  • Comprehensive loss for the third quarter ending September 30, 2017 increased to $(1.7) million or $(0.01) per share, compared with a loss of $(0.9) million or $(0.01) per share in the prior year, again driven in large measure by Medic's seasonal performance and non-recurring financial expenses.

"We continue to aggressively pursue all strategies to address the Company's capital structure. We also continue to work with our financial partners while pursuing those strategies," stated Pierre G. Gagnon, Agility Health's Interim Chief Executive Officer. "Although significant resources have been devoted to these efforts, we have also been able to continue to pursue our growth strategies in both the U.S. and Canada, including adding new clinics and contracts during the second half of 2017."

Selected Financial Information
AGILITY HEALTH, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
September 30, 2017 and December 31, 2016
(Expressed in US Dollars)
(Unaudited)
September 30, December 31,
2017 2016
ASSETS
Current assets
Cash $ 371,715 $ 621,240
Restricted cash - 736,360
Accounts and other receivables 7,728,071 6,712,871
Inventory 1,738,441 -
Prepaid expenses and other current assets 974,884 1,047,670
Total current assets 10,813,111 9,118,141
Non-current assets
Investments 86,025 86,025
Property and equipment 1,808,263 984,859
Intangible assets 12,977,655 11,081,330
Goodwill 5,388,444 2,169,095
Total non-current assets 20,260,387 14,321,309
Total assets $ 31,073,498 $ 23,439,450
LIABILITIES AND EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $ 10,002,686 $ 10,296,199
Lines of credit 5,187,304 4,187,931
Note payable 1,000,000 -
Convertible debentures payable 1,250,000 -
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 1,232,729 -
Current portion of other long-term liabilities 1,130,968 445,488
Total current liabilities 40,303,687 35,429,618
Non-current liabilities
Convertible debentures payable 694,425 1,072,347
Deferred income taxes 362,000 266,000
Long-term debt 6,660,788 -
Other non-current liabilities 1,009,555 1,015,873
Total non-current liabilities 8,726,768 2,354,220
Total liabilities 49,030,455 37,783,838
Equity (deficit)
Share capital 12,428,623 9,537,239
Contributed surplus 1,306,159 368,991
Retained deficit (33,137,914 ) (26,522,676 )
Other comprehensive loss (264,981 ) -
(19,668,113 ) (16,616,446 )
Non-controlling interest 1,711,156 2,272,058
Total equity (deficit) (17,956,957 ) (14,344,388 )
Total liabilities and equity (deficit) $ 31,073,498 $ 23,439,450

Selected Financial Information
AGILITY HEALTH, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS
Three months Ended September 30, 2017 and 2016
(Expressed in US Dollars)
(Unaudited)
2017 2016
Net revenue $ 18,841,762 $ 15,776,956
Cost of revenues
Materials 776,708 -
Salaries and benefits 11,584,962 10,585,934
Contract labor 134,424 185,038
Facility 1,078,273 1,043,435
Supplies 256,456 186,467
Depreciation and amortization 193,593 148,876
Provision for bad debts 292,928 115,556
Other 326,563 338,000
Total cost of revenues 14,643,907 12,603,306
Gross margin 4,197,855 3,173,650
Selling, general and administrative expenses 4,243,777 2,950,850
Other income (expense)
Interest expense (1,532,496 ) (923,104 )
Interest income 124 298
Loss on disposal of equipment (8,464 ) -
Foreign currency adjustment (2,330 ) (23 )
Fair value adjustment on warrants and obligations - 5,093
(1,543,166 ) (917,736 )
Loss from continuing operations before income taxes (1,589,088 ) (694,936 )
Provision for income taxes 32,000 -
Loss from continuing operations (1,621,088 ) (694,936 )
Loss from discontinued operations, net of tax (16,841 ) (173,892 )
Net loss (1,637,929 ) (868,828 )
Other comprehensive loss, net of tax
Foreign currency adjustment 142,304 -
Comprehensive loss $ (1,780,233 ) $ (868,828 )
Comprehensive loss attributable to:
Shareholders $ (2,040,921 ) $ (1,147,083 )
Non-controlling interest 260,688 278,255
$ (1,780,233 ) $ (868,828 )
Earnings per share
Basic, loss per share $ (0.01 ) $ (0.01 )
Diluted, loss per share $ (0.01 ) $ (0.01 )

Selected Financial Information
AGILITY HEALTH, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS
Nine months Ended September 30, 2017 and 2016
(Expressed in US Dollars)
(Unaudited)
2017 2016
Net revenue $ 54,815,065 $ 47,182,608
Cost of revenues
Materials 1,883,156 -
Salaries and benefits 33,918,914 30,887,905
Contract labor 487,010 689,816
Facility 3,104,558 2,923,597
Supplies 654,572 591,712
Depreciation and amortization 544,652 467,057
Provision for bad debts 725,344 491,167
Other 928,818 1,005,691
Total cost of revenues 42,247,024 37,056,945
Gross margin 12,568,041 10,125,663
Selling, general and administrative expenses 13,606,370 8,730,202
Other income (expense)
Interest expense (4,162,574 ) (3,068,170 )
Interest income 244 14,191
Gain on disposal of equipment 4,711 -
Foreign currency adjustment (17,544 ) 94
Fair value adjustment on warrants and obligations 22,823 332,975
(4,152,340 ) (2,720,910 )
Loss from continuing operations before income taxes (5,190,669 ) (1,325,449 )
Provision for income taxes 96,000 -
Loss from continuing operations (5,286,669 ) (1,325,449 )
Loss from discontinued operations, net of tax (443,135 ) (362,545 )
Net loss (5,729,804 ) (1,687,994 )
Other comprehensive loss, net of tax
Foreign currency adjustment 264,981 -
Comprehensive loss $ (5,994,785 ) $ (1,687,994 )
Comprehensive loss attributable to:
Shareholders $ (6,880,219 ) $ (2,544,852 )
Non-controlling interest 885,434 856,858
$ (5,994,785 ) $ (1,687,994 )
Earnings per share
Basic, loss per share $ (0.05 ) $ (0.03 )
Diluted, loss per share $ (0.05 ) $ (0.03 )

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 October 1, 2017, Agility Health operates 84 outpatient or onsite rehabilitation locations in 16 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 Health'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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