EX-99.1 2 agti-202337x8kex991.htm EX-99.1 Document

Exhibit 99.1
AGILITI ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND FULL-YEAR 2022
AND PROVIDES 2023 OUTLOOK
Eden Prairie, Minn. — (BUSINESS WIRE) — March 7, 2023 – Agiliti Inc. (NYSE: AGTI) (“Agiliti”), a nationwide provider of healthcare technology management and service solutions to the United States healthcare industry, today announced its financial results for the fourth quarter and year ended December 31, 2022, and provided its financial outlook for 2023.
Fourth Quarter 2022 Highlights
•Revenue of $282 million, a decrease of 3 percent from the prior year’s Covid-impacted results
•Net income of $3.4 million, down $6.6 million from the prior year period; diluted income per share of $0.02, down $0.05 per share from the prior year period
•Adjusted EBITDA1 of $71 million, compared to $85 million in the prior year period; Adjusted Earnings Per Share1 of $0.18, down $0.07 compared to the prior year period

Full-Year 2022 Highlights
•Revenue growth of 8 percent to $1.12 billion
•Net income of $30.2 million, up $6.2 million from the prior year period; diluted income per share of $0.22, up $0.03 per share from the prior year period
•Adjusted EBITDA1 of $297 million, compared to $331 million in the prior year period; Adjusted Earnings Per Share1 of $0.85, down $0.14 compared to the prior year period
•Total debt of $1.10 billion; Net debt1 of $1.09 billion; and, Net Leverage ratio1 of 3.7x

“Agiliti achieved a number of important business milestones over the course of 2022, including successfully navigating our critical role during the Covid pandemic; securing a long-term renewal of our federal government medical device stockpile management contract; and, signing a record volume of new customer agreements,” said Tom Leonard, CEO of Agiliti. “We enter 2023 with confidence in our near-term financial outlook and excited about our longer-term potential. As I conclude my time as CEO of Agiliti, I could not be more proud of our team and of the company’s important mission in healthcare. I look forward to supporting Agiliti’s continued progress under Tom Boehning’s leadership.”

“In 2022, our performance demonstrated the strength and durability of our model—withstanding the transient impacts of pandemic recovery as we supported our customers through this challenging period for their own business,” said Tom Boehning, President of Agiliti. “As we turn the corner to 2023, our teams are squarely focused on sustaining our new business momentum and executing on our proven strategy to meet the steady demand from our customers. As the company’s next CEO, I am excited to continue working alongside our teams to deliver on our growth potential.
Fourth Quarter and Year-to-Date 2022 Financial Results
Total revenue for the three months ended December 31, 2022 was $281.7 million, representing a 3.0 percent decrease from total revenue of $290.5 million for the same period of 2021. Total revenue for the year ended December 31, 2022 was $1.12 billion, representing a 8.0 percent increase from total revenue of $1.04 billion for the same period of 2021.
Net income for the three months ended December 31, 2022 was $3.4 million, compared to $10 million for the same period of 2021. Net income for the year ended December 31, 2022 was $30.2 million, a $6.2 million increase from net income of $24.0 million for the same period of 2021.
Adjusted EBITDA1 for the three months ended December 31, 2022 was $71.4 million, a 15.9 percent decrease from Adjusted EBITDA1 of $84.9 million for the same period of 2021. Adjusted EBITDA1 for the year ended December 31, 2022 was $296.6 million, a 10.3 percent decrease from Adjusted EBITDA1 of $330.7 million for the same period of 2021.

2023 Financial Guidance
•Revenue of $1.16 - $1.19 billion
1 Non-GAAP Measures. See further discussion on page 6


•Adjusted EBITDA of $295 - 305 million2
•Adjusted earnings per share of $0.65 – $0.70 per share2
•Capex investment expected in the range of $85 to $95 million
Conference Call Information
Agiliti will hold a conference call to discuss its fourth quarter and full year 2022 results on Tuesday, March 7, at 5 p.m. Eastern Time (4 p.m. Central Time).
The conference call can be accessed live over the phone by dialing 1-844-512-2921 or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 13735716. A replay will be available two hours after the call and can be accessed by dialing 1-877-407-0792, or for international callers, 1-201-689-8263. The Access ID for the replay call is 13735716. The replay will be available until March 13, 2023.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by visiting the Agiliti Investor Relations site at https://investors.agilitihealth.com. The online replay will be available for a limited time shortly following the call.
About Agiliti
Agiliti is an essential service provider to the U.S. healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system. Agiliti serves more than 10,000 national, regional and local acute care and alternate site providers across the U.S. For more than eight decades, Agiliti has delivered medical equipment management and service solutions that help healthcare providers reduce costs, increase operating efficiencies and support optimal patient outcomes.
CONTACT:
Kate Kaiser
Corporate Communication and Investor Relations
kate.kaiser@agilitihealth.com
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release are forward-looking in time, including financial outlook and other preliminary results, and involve risks and uncertainties. The following factors, among others, could adversely affect our business, operations and financial condition causing our actual results to differ materially from those expressed in any forward-looking statements: negative reaction of our investors, our suppliers, our customers or our employees to our leadership succession; market volatility of our common stock as a result of our leadership succession; the risk that the leadership succession may not provide the results that the company expects; our history of net losses and substantial interest expense; our need for substantial cash to operate and expand our business as planned; our substantial outstanding debt and debt service obligations; restrictions imposed by the terms of our debt; a decrease in the number of patients our customers are serving; our ability to effect change in the manner in which health care providers traditionally procure medical equipment; the absence of long-term commitments with customers; our potential inability to maintain the agreement with the U.S. Department of Health and Human Services’ (“HHS”) and Office of Assistant Secretary of Preparedness and Response (“ASPR”) (the “Agreement”) or comply with its terms and risks relating to extension, renewal or termination of the Agreement or any of our existing contacts with HHS and ASPR; our ability to renew contracts with group purchasing organizations and integrated delivery networks; changes in reimbursement rates and policies by third-party payors; the impact of health care reform initiatives; the impact of significant regulation of the health care industry and the need to comply with those regulations; the effect of prolonged negative changes in domestic and global economic conditions; difficulties or delays in our continued expansion into certain of our businesses/geographic markets and developments of new businesses/geographic markets; additional credit risks in increasing business with home care providers and nursing homes, impacts of equipment product recalls or obsolescence; increases in vendor costs that cannot be passed through to our customers; and other Risk Factors as detailed in our most recent annual report on Form 10-K.
2 With regard to the non-GAAP Adjusted EBITDA guidance and adjusted earnings per share guidance provided above, a reconciliation to GAAP net income has not been provided as the quantification of certain items included in the calculation of GAAP net income cannot be calculated or predicted at this time without unreasonable efforts. For example, the non-GAAP adjustment for stock-based compensation expense requires additional inputs such as number of shares granted and market price that are not currently ascertainable, and the non-GAAP adjustment for certain reserves and expenses depends on the timing and magnitude of these expenses and cannot be accurately forecasted. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on its future GAAP financial results. See further discussion below regarding historical Adjusted EBITDA and historical adjusted earnings per share.


Agiliti, Inc. and Subsidiaries
Consolidated Statements of Operations

Three Months Ended
December 31		Year Ended
December 31
(in thousands, except share and per share information)2022202120222021
Revenue$281,679 $290,478 $1,121,292 $1,038,690 
Cost of revenue174,100 169,727 690,318 614,073 
Gross margin107,579 120,751 430,974 424,617 
Selling, general and administrative expense84,685 95,053 338,988 320,387 
Operating income22,894 25,698 91,986 104,230 
Loss on extinguishment of debt— — 1,418 10,116 
Interest expense14,983 13,070 49,439 53,514 
Tax indemnification expense— — 11,918 — 
Income before income taxes and noncontrolling interest7,911 12,628 29,211 40,600 
Income tax expense (benefit)4,440 2,601 (1,232)16,433 
Consolidated net income3,471 10,027 30,443 24,167 
Net income attributable to noncontrolling interest100 44 231 161 
Net income attributable to Agiliti, Inc. and Subsidiaries $3,371 9,983 $30,212 $24,006 
Basic income per share$0.03 $0.08 $0.23 $0.20 
Diluted income per share$0.02 $0.07 $0.22 $0.19 
Weighted-average common shares outstanding:
Basic133,461,895 130,666,105 132,602,747 120,877,480 
Diluted139,001,770 138,525,173 138,381,295 128,497,220 


Agiliti, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share information)
December 31, 2022December 31,
2021
Assets
Current assets:
Cash and cash equivalents$5,577$74,325 
Accounts receivable, less allowance for credit losses of $4,182 as of December 31, 2022 and $2,902 at December 31, 2021207,753209,308 
Inventories70,13255,307 
Prepaid expenses23,45818,549 
Other current assets9,393395 
Total current assets316,313 357,884 
Property and equipment, net273,958258,370 
Goodwill1,239,1061,213,121 
Operating lease right-of-use assets79,97580,676 
Other intangibles, net512,020573,159 
Other22,73532,537 
Total assets$2,444,107$2,515,747 
Liabilities and Equity
Current liabilities:
Current portion of long-term debt$17,752$17,534 
Current portion of operating lease liability23,60722,826 
Current portion of obligation under tax receivable agreement34,69429,187 
Accounts payable59,16353,851 
Accrued compensation25,92847,951 
Accrued interest5,0393,473 
Other current liabilities31,19833,708 
Total current liabilities197,381 208,530 
Long-term debt, less current portion1,077,2931,174,968 
Obligation under tax receivable agreement, pension and other long-term liabilities9,16129,629 
Operating lease liability, less current portion67,33263,241 
Deferred income taxes, net146,615143,307 
Commitments and contingencies
Equity:
Common stock, $0.0001 par value; 500,000,000 shares authorized; 133,608,495 and 130,950,061 shares issued and outstanding as of December 31, 2022 and December 31, 2021
1313 
Additional paid-in capital953,046938,888 
Accumulated deficit(14,274)(44,486)
Accumulated other comprehensive income7,3431,537 
Total Agiliti, Inc. and Subsidiaries equity946,128895,952 
Noncontrolling interest197120 
Total equity946,325896,072 
Total liabilities and equity$2,444,107$2,515,747 


Agiliti, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Year Ended December 31,
(in thousands)20222021
Cash flows from operating activities:
Consolidated net income$30,443$24,167
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation84,331103,805
Amortization 95,45288,240
Remeasurement of tax receivable agreement(2,124)4,542
Loss on extinguishment of debt1,4187,716
Provision for credit losses3,9032,023
Provision for inventory obsolescence1,0342,424
Non-cash share-based compensation expense18,77513,960
Gain on sales and disposals of equipment(1,101)(3,735)
Deferred income taxes1,29212,004
Changes in operating assets and liabilities:
Accounts receivable(3,976)(8,915)
Inventories(12,188)3,052
Other operating assets(10,144)(9,044)
Accounts payable15,753718
Accrued and other operating liabilities(23,092)(30,640)
Net cash provided by operating activities199,776210,317
Cash flows from investing activities:
Medical equipment purchases(55,864)(37,377)
Property and office equipment purchases(31,600)(29,121)
Proceeds from disposition of property and equipment2,9639,242
Acquisitions, net of cash acquired(62,339)(676,878)
Intangible asset purchases(20)— 
Net cash used in investing activities(146,860)(734,134)
Cash flows from financing activities:
Proceeds under debt arrangements60,000381,927
Payments under debt arrangements(160,023)(364,119)
Payments of principal under finance lease liability(8,812)(9,097)
Payments of deferred financing costs— (229)
Payments under tax receivable agreement— (15,577)
Distributions to noncontrolling interests(154)(185)
Proceeds from exercise of stock options3,1011,409
Dividend and equity distribution payment(908)(928)
Proceeds from issuance of common stock—402,815
Stock issuance costs— (4,379)
Shares forfeited for taxes(14,547)—
Payments of contingent consideration(321)—
Net cash (used in) provided by financing activities(121,664)391,637
Net change in cash and cash equivalents(68,748)(132,180)
Cash and cash equivalents at the beginning of period74,325206,505
Cash and cash equivalents at the end of period$5,577$74,325


Use of non-GAAP information
This press release contains non-GAAP measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Net Debt and Net Leverage Ratio. We use these internally as measures of operational performance, or liquidity, as applicable, and disclose them externally to assist analysts, investors and lenders in their comparisons of operational performance, valuation and debt capacity across companies with differing capital, tax and legal structures. We believe the investment community frequently uses these measures in the evaluation of similarly situated companies. Adjusted EBITDA is also used by the Company as a factor to determine the total amount of incentive compensation to be awarded to executive officers and other employees. EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Net Debt and Net Leverage Ratio, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (“GAAP”) and should not be considered as alternatives to, or more meaningful than, net income as measures of operating performance or to cash flows from operating, investing or financing activities or to total debt as measures of liquidity or debt capacity. Since EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Net Debt and Net Leverage Ratio are not measures determined in accordance with GAAP and are thus susceptible to varying interpretations and calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies. EBITDA, Adjusted EBITDA, and Adjusted Net Income do not represent amounts of funds that are available for management’s discretionary use. EBITDA and Adjusted EBITDA presented may not be the same as EBITDA and Adjusted EBITDA calculations as defined in the First Lien Credit Facilities. EBITDA is defined as earnings attributable to Agiliti, Inc.before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding non-cash share-based compensation expense, management fees and other non-recurring gains, expenses, or losses, transaction costs, remeasurement of the tax receivable agreement and loss on extinguishment of debt. LTM Adjusted EBITDA represents the last twelve months (“LTM”) of Adjusted EBITDA.
Agiliti, Inc. and Subsidiaries
Non-GAAP Financial Measure: Adjusted EBITDA
Three Months Ended
December 31		Year Ended
December 31
(in thousands)2022202120222021
Net income attributable to Agiliti, Inc. and Subsidiaries$3,371 $9,983 $30,212 $24,006 
Interest expense14,983 13,070 49,439 53,514 
Income tax expense ( benefit) (1)4,440 2,601 (1,232)16,433 
Depreciation and amortization42,05349,287 175,764 187,963 
EBITDA64,847 74,941 254,183 281,916 
Non-cash share-based compensation expense3,710 3,833 18,775 13,960 
Tax indemnification expense— — 11,918 — 
Management and other expenses (2)451 286 2,411 7,926 
Transaction costs (3)4,519 5,797 9,984 12,222 
Tax receivable agreement remeasurement(2,124)— (2,124)4,542 
Loss on extinguishment of debt (4)— — 1,418 10,116 
Adjusted EBITDA$71,403 $84,857 $296,565 $330,682 
_____________________________
(1)Income tax expense (benefit) includes the $11.9 million tax benefit due to the release of the reserve and associated interest and penalties related to the Sizewise Acquisition offset in tax indemnification expense.
(2)Management and other expenses represent (a) management fees and buyout termination fee under the Advisory Services Agreement, which was terminated in connection with the initial public offering and (b) employee related non-recurring expenses.
(3)Transaction costs represent costs associated with potential and completed mergers and acquisitions and are primarily related to the Northfield and Sizewise Acquisitions.
(4)Loss on extinguishment of debt for 2022 consists of the write-off of the unamortized debt discount related to the partial prepayment of the First Lien Term Loan. Loss on extinguishment of debt for 2021 consists of the write-off of the unamortized deferred financing costs and debt discount and an additional 1% redemption price related to the repayment of our Second Lien Term Loan and the write-off of the unamortized deferred financing cost related to the amendment of our Revolving Credit Facility.


Agiliti, Inc. and Subsidiaries
Non-GAAP Financial Measure: Adjusted Net Income and Adjusted EPS
Three Months Ended
December 31,		Year Ended
December 31,
(in thousands, except share and per share information, unaudited)2022202120222021
Net income attributable to Agiliti, Inc. and Subsidiaries $3,371 $9,983 $30,212 $24,006 
Amortization23,223 23,731 91,432 84,158 
Non-cash share-based compensation expense3,710 3,833 18,775 13,960 
Tax indemnification expense— — 11,918 — 
Management and other expenses (1)451 286 2,411 7,926 
Transaction costs (2)4,519 5,797 9,984 12,222 
Tax receivable agreement remeasurement(2,124)— (2,124)4,542 
Loss on extinguishment of debt (3)— — 1,418 10,116 
Income tax benefit associated with pre-tax adjustments (4)(8,630)(9,462)(46,538)(29,920)
Adjusted net income$24,520 $34,168 $117,488 $127,010 
Weighted average shares outstanding - diluted139,002 138,525 138,381 128,497 
Adjusted EPS$0.18 $0.25 $0.85 $0.99 
_____________________________
(1)Management and other expenses represent (a) management fees and buyout termination fee under the Advisory Services Agreement, which was terminated in connection with the initial public offering and (b) employee related non-recurring expenses.
(2)Transaction costs represent costs associated with potential and completed mergers and acquisitions and are primarily related to the Northfield and Sizewise Acquisitions.
(3)Loss on extinguishment of debt for 2022 consists of the write-off of the unamortized debt discount related to the partial prepayment of the First Lien Term Loan. Loss on extinguishment of debt for 2021 consists of the write-off of the unamortized deferred financing costs and debt discount and an additional 1% redemption price related to the repayment of our Second Lien Term Loan and the write-off of the unamortized deferred financing cost related to the amendment of our Revolving Credit Facility.
(4)Income tax (benefit) expense includes the $11.9 million tax benefit due to the release of the reserve and associated interest and penalties related to the Sizewise Acquisition offset in tax indemnification expense.


Agiliti, Inc. and Subsidiaries
Non-GAAP Financial Measure: Net Debt and Net Leverage Ratio
(in millions, unaudited)December 31, 2022
First Lien Term Loan, due 2026$1,054.5 
Revolving Loan, due 202628.5 
Finance lease liability23.9 
Less: Unamortized Deferred Financing Costs and Debt Discount(11.9)
Total Debt$1,095.0 
Less: Cash(5.6)
Net Debt$1,089.4 
LTM Adjusted EBITDA$296.6 
Net Leverage3.7 x