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Agility Health Reports 2014 Financial Results

GRAND RAPIDS, MICHIGAN -- (Marketwired) -- 05/01/15 -- Agility Health, Inc. ("Agility Health or the "Company") (TSX VENTURE:AHI) today reports its financial results for the fourth quarter and year ended December 31, 2014. All amounts are expressed in U.S. dollars unless indicated otherwise.

During 2014, the Company focused its efforts on operational performance improvement, strengthening of the management team, administrative cost realignment, the discontinuation of certain operations and internal software development.

Financial and Operating Highlights for 2014

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


--  Revenue from continuing operations for 2014 grew to $62.1 million from
    $60.5 million; 
--  Adjusted EBITDA from continuing operations for 2014 was $2.7 million
    compared with $2.9 million in 2013; 
--  Gross margin from operations for the year grew to 22% from 18%; 
--  Net and total loss declined to $6.5 million or ($0.09) per share in 2014
    compared with $8.8 million or ($0.14) per share in 2013. 

"Agility Health's financial results for 2014 showed improvement throughout the year, as we reset the Company with the objective of returning to consistent growth and profitability," stated Steve Davidson, Agility Health's Chairman and CEO. "The overall market for physiotherapy services is growing and we remain extremely well positioned to benefit from that opportunity. We are focused on lines of business which offer higher gross margins, evidenced by our year over year increase from 18% to 22%. We expect these higher margin levels combined with continued cost management to result in significant improvements in EBITDA during 2015.

In addition, we look forward to reporting updates on several "greenfield" clinic expansions and timely acquisitions as the year unfolds to complement organic growth initiatives. "

Financial and Operating Highlights for the Fourth Quarter, 2014


--  Revenue from continuing operations for the period increased to $15.4
    million from $15.1 million; 
--  Adjusted EBITDA for the period increased to $0.6 million from $0.5
    million; 
--  Gross margin from operations for the quarter grew to 22% from 18%. 

Selected Financial Information


                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION               
                         December 31, 2014 and 2013                         
                          (Expressed in US Dollars)                         
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                 December 31,   December 31,
                                                         2014           2013
ASSETS                                                                      
Current assets                                                              
  Cash                                          $   1,301,084  $   2,062,859
  Accounts and other receivables                    7,668,353      7,083,792
  Income taxes receivable                             115,808        115,808
  Prepaid expenses and other current assets         1,173,300      1,049,081
                                                -------------  -------------
    Total current assets                           10,258,545     10,311,540
                                                                            
Investments                                            86,025         86,025
Property and equipment                              1,307,508      1,756,403
Intangible assets                                  13,024,986     13,572,091
Goodwill                                            2,682,730      3,107,465
                                                -------------  -------------
                                                                            
  Total assets                                  $  27,359,794  $  28,833,524
                                                -------------  -------------
                                                -------------  -------------
                                                                            
LIABILITIES AND EQUITY (DEFICIT)                                            
Current liabilities                                                         
  Accounts payable and accrued liabilities      $   8,122,871  $   7,379,942
  Line of credit                                    5,060,085      4,116,644
  Current portion of long-term debt                   555,555        888,889
  Current portion of other long-term                                        
   liabilities                                      1,413,432        624,824
                                                -------------  -------------
    Total current liabilities                      15,151,943     13,010,299
                                                                            
Convertible debentures payable                      1,114,763              -
Other long-term liabilities                        22,214,537     22,440,559
                                                -------------  -------------
  Total liabilities                                38,481,243     35,450,858
                                                                            
Equity (deficit)                                                            
  Share capital                                     6,280,665      3,454,309
  Contributed surplus                                 299,036        301,692
  Retained deficit                               (19,382,756)   (12,088,285)
                                                -------------  -------------
                                                 (12,803,055)    (8,332,284)
  Non-controlling interest                          1,681,606      1,714,950
                                                -------------  -------------
    Total equity (deficit)                       (11,121,449)    (6,617,334)
                                                -------------  -------------
                                                                            
      Total liabilities and equity (deficit)    $  27,359,794  $  28,833,524
                                                -------------  -------------
                                                -------------  -------------
                                                                            
                                                                            
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS               
                   Years ended December 31, 2014 and 2013                   
                          (Expressed in US Dollars)                         
                                                                            
----------------------------------------------------------------------------
                                                                            
                                                         2014           2013
                                                                            
Revenue                                         $  62,104,509  $  60,527,877
                                                                            
Cost of revenues                                                            
  Salaries and benefits                            40,837,396     41,302,131
  Contract labor                                      802,113      1,067,679
  Facility                                          3,424,663      3,457,499
  Supplies                                            891,292        798,147
  Depreciation and amortization                       726,829        768,401
  Provision for bad debts                             464,763      1,077,803
  Other                                             1,424,005      1,339,330
                                                -------------  -------------
    Total cost of revenues                         48,571,061     49,810,990
                                                -------------  -------------
                                                                            
Gross margin                                       13,533,448     10,716,887
                                                                            
Selling, general and administrative                14,313,511     11,688,051
Public listing expense                                      -        883,561
Other income (expense)                                                      
  Interest expense                                (4,684,482)    (3,615,767)
  Interest income                                         157            510
  Loss on disposal of equipment                      (38,568)        (6,841)
  Foreign currency translation expense                 31,644        (1,633)
  Fair value adjustment on warrants and                                     
   obligations                                        284,882      (476,723)
                                                -------------  -------------
                                                  (4,406,367)    (4,100,454)
                                                -------------  -------------
                                                                            
Loss from continuing operations before income                               
 taxes                                            (5,186,430)    (5,955,179)
                                                                            
Provision for income taxes                                                  
  Current                                              71,729         68,000
  Deferred                                                  -              -
                                                -------------  -------------
                                                       71,729         68,000
                                                -------------  -------------
Net and total comprehensive loss from                                       
 continuing operations                            (5,258,159)    (6,023,179)
                                                -------------  -------------
                                                                            
Discontinued Operations                                                     
Net and total comprehensive loss from                                       
 discontinued operations                          (1,257,477)    (2,782,732)
                                                -------------  -------------
                                                                            
Net and total comprehensive loss                $ (6,515,636)  $ (8,805,911)
                                                -------------  -------------
                                                -------------  -------------
                                                                            
Net and total comprehensive income (loss)                                   
 attributable to:                                                           
  Shareholders                                  $ (7,337,303)  $ (8,609,549)
  Non-controlling interest                            821,667      (196,362)
                                                -------------  -------------
                                                                            
                                                $ (6,515,636)  $ (8,805,911)
                                                -------------  -------------
                                                -------------  -------------
Earnings per share                                                          
  Basic, loss per share                         $      (0.09)  $      (0.14)
  Diluted, loss per share                       $      (0.09)  $      (0.14)

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 December 31, 2014, Agility Health operates 74 outpatient or onsite rehabilitation locations in 17 states. Agility Health's contract therapy services business provides rehabilitative services to 42 hospitals and inpatient rehabilitation units, 35 nursing homes, long-term care facilities and other service locations in 9 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 and Adjusted EBITDA to measure its financial performance. EBITDA is defined by the Company as the addition of net loss, depreciation and amortization and financial expenses. Adjusted EBITDA is defined as EBITDA before acquisition expenses, certain legal expenses and provision adjustments, public listing expense, public transaction expenses, contingent consideration expenses, fair value adjustments on warrants and obligations, share-based compensation expense, contract termination fees (non-recurring revenue) and any restructuring expenses. The Company uses Adjusted EBITDA for the purpose of evaluating the quality of historical and prospective financial and operational performance. Management believes that Adjusted EBITDA is a useful measure for evaluating the performance of the Company and is useful supplemental information to a reader of financial statements. Adjusted EBITDA as well as EBITDA are not recognized measures under IFRS and do not have standardized meanings 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 Regulatory Service Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Steven N. Davidson
Chairman and Chief Executive Officer
(616) 356-5000
steve.davidson@agilityhealth.com

Terry Vanderkruyk
Chief Corporate Development Officer
(604) 961-3844
terry@agilityhealth.com

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