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Agility Health Reports Third Quarter 2018 Financial Results

HAMILTON, Ontario, Nov. 30, 2018 (GLOBE NEWSWIRE) -- Agility Health, Inc. (TSXV: AHI) (“Agility Health” or “Corporation”), a leading provider of orthotics, prosthetics and foot care services, today reported its financial results for the third quarter ended September 30, 2018.  All amounts are expressed in U.S. dollars unless indicated otherwise.

The complete financial results for Agility Health are available at Highlights include:

Financial and Operating Highlights for Third Quarter 2018

  • Revenues from continuing operations decreased 23.6% to $1,863,037 million for third quarter 2018 versus revenues from continuing operations of $2,437,833 for third quarter 2017
  • Gross margins from continuing operations for third quarter 2018 were 35.6%, compared to gross margins of 42.1% from continuing operations for the comparable period last year
  • Net loss from continuing operations, net of tax, was $956,169 for the third quarter 2018 versus a loss from continuing operations, net of tax and discontinued operations, of $1,167,838 for the third quarter 2017
  • The Corporation had $583,620 of cash, including restricted escrow cash, and a working capital deficit of $5.8 million at the end of September 2018

“The decline in third quarter revenues is partially offset by a small increase in the Company’s nine-month results,” said Wayne Cockburn, Interim CEO of Agility. “We remain active in seeking additional financing to reduce corporate debt and move the business towards profitability.”

Loan from Ken Scholten

The Corporation previously entered into a secured promissory note in the amount of USD$156,000 in favour of Kenneth Scholten, a director of the Corporation (the “Promissory Note”).  The Promissory Note matures on September 1, 2019, with an interest rate of 5.2% and is secured against the Corporation’s funds currently held in escrow by U.S. Bank National Association (the “Escrow Agent”) pursuant to an escrow agreement entered into on February 28, 2018, among Alliance Physical Therapy Management, LLC, Agility Health Holdings, Inc., Alaris USA Inc., and the Escrow Agent.

Selected Financial Information

September 30, 2018 and December 31, 2017
(Expressed in US Dollars)
 September 30, 2018
 December 31, 2017
Cash$263,786   $821,703 
Restricted cash 319,834    - 
Accounts and other receivables 539,774    7,585,640 
Inventory 919,621    1,508,520 
Prepaid expenses and other current assets 263,900    1,190,248 
Total Current Assets 2,306,915    11,106,111 
Non-current assets     
Investments -   86,025 
Deferred income taxes 614,000    614,000 
Property and equipment 1,139,388    1,749,436 
Intangible assets 1,305,536    11,385,910 
Goodwill 2,000,390    4,206,098 
Total non-current assets 5,059,314    18,041,469 
Total assets$7,366,229   $29,147,580 
Liabilities and Equity (Deficit)     
Current liabilities     
Accounts payable and accrued liabilities$2,686,942   $11,343,887 
Lines of credit 1,545,000    5,411,406 
Note payable -   1,000,000 
Convertible debentures payable -   1,250,000 
Class B and C Unit Liability -   20,100,000 
Class B and C Unit Embedded Derivative Liability -   2,131,410 
Current portion of long-term debt 3,849,095    4,692,117 
Current portion of other long-term liabilities 37,419    1,465,324 
Total current liabilities 8,118,456    47,394,144 
Long-term liabilities     
Convertible debentures payable -   768,702 
Long-term debt -   2,499,278 
Other non-current liabilities 21,510    987,520 
Total non-current liabilities 21,510    4,255,500 
Total liabilities 8,139,966    51,649,644 
Equity (deficit)     
Share capital 12,504,980    12,483,989 
Contributed surplus 1,566,597    1,304,901 
Retained deficit (14,757,331)  (37,659,710)
Translation reserve (87,983)  (223,158)
  (773,737)  (24,093,978)
Non-controlling interest    1,591,914 
Total equity (deficit) (773,737)  (22,502,064)
Total liabilities and equity (deficit)$7,366,229   $29,147,580 

Selected Financial Information

Three and Nine Months Ended September 30, 2018 and 2017
(Expressed in US Dollars)
 Three months ended, Nine months ended,
 September 30 September 30
  2018   2017   2018   2017 
Net revenue$1,863,037   $2,437,833  $5,962,096   $5,797,258 
Cost of revenues           
Materials 856,815    776,708   2,117,630    1,883,156 
Salaries and benefits 226,757    423,538   1,005,248    929,084 
Contract labor -   -   -   - 
Facility 51,016    23,591   158,321    137,829 
Supplies 4,072    29,556   31,323    47,275 
Depreciation and amortization 58,363    137,859   212,577    255,913 
Provision for bad debts 3,296    3,610   11,214    5,205 
Other -   15,631   -   15,631 
Total cost of revenues 1,200,319    1,410,493   3,536,313    3,274,093 
Gross Margin 662,718    1,027,340   2,425,783    2,523,165 
Selling, general and administrative expenses 1,605,363    2,058,624   4,951,527    5,379,670 
Other income (expense)           
Interest expense (80,060)  (92,960)  (225,004)  (161,642)
Interest income -   -   -   120 
Gain on Sale of United States based assets
(Note 6)
 -   -   28,623,599    - 
Gain/(Loss) on sale of asset 39,975    (9,264)  39,975    (9,264)
Foreign currency adjustment 26,561    (2,330)  20,826    (17,544)
Fair value adjustment on warrants and obligations -   -   -   22,823 
  (13,524)  (104,554)  28,459,396    (165,507)
Income (Loss) from continuing operations before income taxes (956,169)  (1,135,838)  25,933,652    (3,022,012)
Provision for income taxes -   32,000   -   96,000 
Income (Loss) from continuing operations (956,169)  (1,167,838)  25,933,652    (3,118,012)
Loss from discontinued operations, net of tax -   (2,046,113)  (2,942,086)  (3,497,226)
Net Income (Loss) (956,169)  (3,213,951)  22,991,566    (6,615,238)
Other comprehensive loss, net of tax           
Foreign currency translation adjustment (45,864)  -   135,175    (264,981)
Comprehensive Income (Loss)$(1,002,033) $(3,213,951) $23,126,741   $(6,880,219)
Net Income (loss) attributable to:           
Shareholders$(956,169) $(1,703,771) $22,902,379   $(5,729,804)
Non-controlling interest -   (1,510,180)  89,187    (885,434)
 $(956,169) $(3,213,951) $22,991,566   $(6,615,238)
Comprehensive income (loss) attributable to:           
Shareholders$(1,002,033) $(1,703,771) $23,037,554   $(5,994,785)
Non-controlling interest -   (1,510,180)  89,187    (885,434)
 $(1,002,033) $(3,213,951) $23,126,741   $(6,880,219)
Earnings per share            
Basic, loss per share$(0.01) $(0.01) $0.16   $(0.04)
Diluted, loss per share$(0.01) $(0.01) $0.16   $(0.04)

About Agility Health

Through its Canadian subsidiary and principal operating entity, Medic Holdings Corp., Agility Health operates foot care clinics in Ontario and Quebec and manufactures orthotics and prosthetics.

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

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

This release includes 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 assumptions 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 revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

For further information please contact:

Wayne Cockburn
Interim Chief Executive Officer
(905) 505-0770


Friday, November 30, 2018 - 08:40