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.
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