GRAND RAPIDS, MICHIGAN–(Marketwired – May 1, 2017) – Agility Health, Inc. (TSX VENTURE:AHI) (“Agility Health” or the “Company”) today reported its financial results for the fourth quarter and year ended December 31, 2016. All amounts are expressed in U.S. dollars unless indicated otherwise.
During 2016, the Company saw improvements in several revenue-enhancing initiatives, including 33% year-over-year revenue growth in the industrial rehabilitation services segment, as well as completing the acquisition of Medic Holdings Corp.
Financial and Operating Highlights for 2016
(All comparative figures are for the corresponding period of the prior year)
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”) from continuing operations declined to $4.1 million from $5.1 million in 2015;
- Gross margin from operations declined to 20.2% from 22.0% in 2015; and
- Net and total loss increased to $2.9 million or $(0.04) per share in 2016 compared to $1.9 million or $(0.03) per share in 2015.
“Agility Health’s financial results for 2016 reflect a continuation of operational changes designed to move the Company toward greater growth and profitability,” stated Pierre Gagnon, Agility Health’s Chairman and Interim CEO. “For 2017, we expect to continue to develop our greenfield clinic opportunities, to pursue collaborative growth opportunities through our recent acquisition of Medic Holdings, and to pursue additional strategic acquisition opportunities, dependent on available sources of capital. Our most important initiative for 2017 however is working with our financial advisors in the active pursuit of strategies to reduce the cost of capital through debt and/or equity financings. We believe a strengthened balance sheet will greatly assist us in carrying out our growth plans.”
Financial and Operating Highlights for the Fourth Quarter, 2016
(All comparative figures are for the corresponding period of the prior year)
- EBITDA from continuing operations declined to $596,344 compared to $719,790 in 2015; and
- Revenue from continuing operations for the period increased to $15.8 million from $15.3 million in 2015.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31, 2016 and 2015
(Expressed in US Dollars)
| December 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 621,240 | $ | 650,409 | ||||
| Restricted cash (Note 3) | 736,360 | 656,184 | ||||||
| Accounts and other receivables (Note 5) | 6,712,871 | 7,206,485 | ||||||
| Income taxes receivable | – | 115,808 | ||||||
| Prepaid expenses and other current assets | 1,047,670 | 1,004,376 | ||||||
| Total current assets | 9,118,141 | 9,633,262 | ||||||
| Investments (Note 8) | 86,025 | 86,025 | ||||||
| Property and equipment (Note 9) | 984,859 | 1,187,773 | ||||||
| Intangible assets (Note 10) | 11,081,330 | 12,160,263 | ||||||
| Goodwill (Note 11) | 2,169,095 | 2,531,390 | ||||||
| Total assets | $ | 23,439,450 | $ | 25,598,713 | ||||
| LIABILITIES AND EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 14) | $ | 10,291,572 | $ | 8,267,626 | ||||
| Line of credit (Note 15) | 4,187,931 | 4,582,875 | ||||||
| Class B and C Unit Liability (Note 20) | 20,100,000 | – | ||||||
| Class B and C Unit Embedded Derivative Liability (Note 20) | 400,000 | – | ||||||
| Current portion of long-term debt (Note 15) | – | 222,222 | ||||||
| Current portion of other long-term liabilities (Note 17) | 445,488 | 630,794 | ||||||
| Total current liabilities | 35,424,991 | 13,703,517 | ||||||
| Convertible debentures payable (Note 16) | 1,076,974 | 1,004,628 | ||||||
| Deferred income taxes (Note 7) | 266,000 | – | ||||||
| Other long-term liabilities (Note 17) | 1,015,873 | 21,832,854 | ||||||
| Total liabilities | 37,783,838 | 36,540,999 | ||||||
| Equity (deficit) | ||||||||
| Share capital (Note 18) | 9,537,239 | 9,020,480 | ||||||
| Contributed surplus | 368,991 | 355,267 | ||||||
| Retained deficit | (26,522,676 | ) | (22,430,873 | ) | ||||
| (16,616,446 | ) | (13,055,126 | ) | |||||
| Non-controlling interest | 2,272,058 | 2,112,840 | ||||||
| Total deficit | (14,344,388 | ) | (10,942,286 | ) | ||||
| Total liabilities and deficit | $ | 23,439,450 | $ | 25,598,713 | ||||
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
Years ended December 31, 2016 and 2015
(Expressed in US Dollars)
| 2016 | 2015 | |||||||||
| Revenue | $ | 63,612,979 | $ | 62,328,991 | ||||||
| Cost of revenues | ||||||||||
| Salaries and benefits | 42,130,105 | 40,093,117 | ||||||||
| Contract labor | 808,430 | 1,018,142 | ||||||||
| Facility | 4,196,175 | 3,895,123 | ||||||||
| Supplies | 794,851 | 802,671 | ||||||||
| Depreciation and amortization | 630,495 | 692,741 | ||||||||
| Provision for bad debts | 812,284 | 770,408 | ||||||||
| Other | 1,400,764 | 1,333,490 | ||||||||
| Total cost of revenues (Note 19) | 50,773,104 | 48,605,692 | ||||||||
| Gross margin | 12,839,875 | 13,723,299 | ||||||||
| Selling, general and administrative (Note 19) | 11,546,524 | 11,682,170 | ||||||||
| Other income (expense) | ||||||||||
| Interest expense | (4,168,257 | ) | -4,808,120 | |||||||
| Interest income | 14,192 | 50 | ||||||||
| Gain on disposal of equipment | 2,500 | 4,630 | ||||||||
| Foreign currency translation income (expense) | 68 | -186 | ||||||||
| Fair value adjustment on warrants and obligations (Note 6) | 365,923 | 991,969 | ||||||||
| -3,785,574 | -3,811,657 | |||||||||
| Loss from continuing operations before income taxes | -2,492,223 | -1,770,528 | ||||||||
| Provision for income taxes (Note 7) | ||||||||||
| Current | 75,684 | 66,202 | ||||||||
| Deferred | 266,000 | – | ||||||||
| 341,684 | 66,202 | |||||||||
| Total comprehensive loss from continuing operations | -2,833,907 | -1,836,730 | ||||||||
| Discontinued Operations (Note 23) | ||||||||||
| Loss from discontinued operations, net of tax | -100,678 | -99,153 | ||||||||
| Net and total comprehensive loss | $ | (2,934,585 | ) | $ | (1,935,883 | ) | ||||
| Loss and total comprehensive loss attributable to: | ||||||||||
| Shareholders | $ | (4,091,803 | ) | $ | (3,048,117 | ) | ||||
| Non-controlling interest | 1,157,218 | 1,112,234 | ||||||||
| $ | (2,934,585 | ) | $ | (1,935,883 | ) | |||||
| Earnings per share (Note 29) | ||||||||||
| Basic, loss per share | -0.04 | -0.03 | ||||||||
| Diluted, loss per share | -0.04 | -0.03 | ||||||||
Shares for Services Issuance
In accordance with the financial advisory agreement between the Company and Maxim Group LLC (“Maxim”) announced on January 31, 2017, Agility Health issued a total of 541,666 voting common shares of the Company to an affiliate of Maxim today in consideration for CDN$65,000 of services rendered by Maxim to the Company during the period from April 1, 2017 to April 30, 2017. The shares were issued at CDN$0.12 per share, the closing price of the voting common shares of the Company on the TSX Venture Exchange on April 28, 2017, and are subject to a four-month hold period expiring September 2, 2017.
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, financial expenses and income taxes. 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.
Vice President, Corporate Development
(905) 505-0770
Wayne@medicholdings.com
Ray Matthews
Ray Matthews and Associates
(604) 818-7778
ray@raymatthews.ca