Subject: EARNINGS
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 www.sedar.com. 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
| AGILITY HEALTH, INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION September 30, 2018 and December 31, 2017 (Expressed in US Dollars) (Unaudited) | |||||||
| September 30, 2018 (Unaudited) | December 31, 2017 (Audited) | ||||||
| Assets | |||||||
| Current | |||||||
| 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
| AGILITY HEALTH, INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE LOSS Three and Nine Months Ended September 30, 2018 and 2017 (Expressed in US Dollars) (Unaudited) | |||||||||||||||
| 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
[email protected]
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