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 quarter ended March 31, 2022, and reaffirmed its financial outlook for 2022.
First Quarter 2022 Highlights
- Revenue growth of 25 percent to $294 million
- Net income of $19.9 million, up $10.3 million from the prior year period; diluted income per share of $0.14, up $0.05 per share from the prior year period
- Adjusted EBITDA1 growth of 3 percent to $89 million, and Adjusted Earnings Per Share1 of $0.29, a three percent decrease over the prior year period
- Total debt of $1,121 million; Net debt1 of $1,069 million; and, Net Leverage ratio1 of 3.2x
“We are pleased with our Q1 performance, with results that reflect the importance of our value proposition and the durability of our business model,” said Tom Leonard, Chief Executive Officer. “Our customers are emerging from the pandemic with a new set of economic challenges, and we are proud to bring solutions that address many of the financial, clinical and operational constraints facing our healthcare system today. That critical work continues to drive the momentum in our business and gives us confidence in our outlook for the year.”
First Quarter 2022 Financial Results
Total revenue for the three months ended March 31, 2022, was $294.4 million, representing a 25.2 percent increase from total revenue of $235.2 million for the same period of 2021.
Net income for the three months ended March 31, 2022, was $19.9 million, a 108.2 percent increase from net income of $9.6 million for the same period of 2021.
Adjusted EBITDA1 for the three months ended March 31, 2022, was $89.2 million, a 3.4 percent increase from Adjusted EBITDA1 of $86.2 million for the same period of 2021.
2022 Financial Outlook
The company reaffirmed its guidance for 2022 as follows:
- Revenue of $1,160 - $1,190 million
- Adjusted EBITDA of $305-315 million2
- Adjusted earnings per share of $0.89 – 0.94 per share2
- Capex investment expected in the range of $80 to $90 million
__________________________ |
1 Non-GAAP Measures. See further discussion below. |
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. |
Conference Call Information
Agiliti will hold a conference call to discuss its first quarter 2022 results on Tuesday, May 10, at 5 p.m. Eastern Time (4 p.m. Central Time).
The conference call can be accessed live over the phone by dialing 1-877-407-0792 or for international callers, 1-201-689-8263. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 13728694. The replay will be available until May 17, 2022.
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 9,000 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.
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: 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 including our agreement with HHS/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 annual report on Form 10-K.
| Agiliti, Inc. and Subsidiaries | ||||||
| Condensed Consolidated Statements of Operations | ||||||
| (in thousands, except share and per share information) | ||||||
| (unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
2022 |
2021 |
|||||
| Revenue | $ | 294,444 |
$ | 235,245 |
||
| Cost of revenue | 170,817 |
133,922 |
||||
| Gross margin | 123,627 |
101,323 |
||||
| Selling, general and administrative | 86,138 |
69,224 |
||||
| Operating income | 37,489 |
32,099 |
||||
| Interest expense | 10,664 |
18,021 |
||||
| Income before income taxes and noncontrolling interest | 26,825 |
14,078 |
||||
| Income tax expense | 6,905 |
4,495 |
||||
| Consolidated net income | 19,920 |
9,583 |
||||
| Net income attributable to noncontrolling interest | 28 |
30 |
||||
| Net income attributable to Agiliti, Inc. and Subsidiaries | $ | 19,892 |
$ | 9,553 |
||
|
|
|||||
| Basic income per share | $ | 0.15 |
$ | 0.10 |
||
| Diluted income per share | $ | 0.14 |
$ | 0.09 |
||
|
|
|||||
| Weighted-average common shares outstanding: |
|
|
||||
| Basic | 131,148,108 |
99,103,933 |
||||
| Diluted | 139,426,334 |
106,090,703 |
||||
| Agiliti, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
March 31, |
December 31, |
|||||||
2022 |
2021 |
|||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 52,103 |
$ | 74,325 |
||||
| Accounts receivable, less allowance for credit losses of $3,006 at March 31, 2022 and $2,902 at December 31, 2021 | 213,547 |
209,308 |
||||||
| Inventories | 55,954 |
55,307 |
||||||
| Prepaid expenses | 14,614 |
18,549 |
||||||
| Other current assets | 6,453 |
395 |
||||||
| Total current assets | 342,671 |
357,884 |
||||||
| Property and equipment, net | 256,667 |
258,370 |
||||||
| Goodwill | 1,213,121 |
1,213,121 |
||||||
| Operating lease right-of-use assets | 85,960 |
80,676 |
||||||
| Other intangibles, net | 551,996 |
573,159 |
||||||
| Other | 36,846 |
32,537 |
||||||
| Total assets | $ | 2,487,261 |
$ | 2,515,747 |
||||
| Liabilities and Equity |
|
|
||||||
| Current Liabilities: |
|
|
||||||
| Current portion of long-term debt | $ | 17,693 |
$ | 17,534 |
||||
| Current portion of operating lease liability | 22,883 |
22,826 |
||||||
| Current portion of obligation under tax receivable agreement | 29,397 |
29,187 |
||||||
| Accounts payable | 57,454 |
53,851 |
||||||
| Accrued compensation | 36,396 |
47,951 |
||||||
| Accrued interest | 3,269 |
3,473 |
||||||
| Deferred revenue | 6,918 |
5,808 |
||||||
| Other accrued expenses | 29,539 |
27,900 |
||||||
| Total current liabilities | 203,549 |
208,530 |
||||||
| Long-term debt, less current portion | 1,103,785 |
1,174,968 |
||||||
| Obligation under tax receivable agreement, pension and other long-term liabilities | 31,196 |
29,629 |
||||||
| Operating lease liability, less current portion | 73,142 |
63,241 |
||||||
| Deferred income taxes, net | 149,571 |
143,307 |
||||||
| Commitments and contingencies |
|
|
||||||
| Equity: |
|
|
||||||
| Common stock, $0.0001 par value; 350,000,000 shares authorized; 131,476,924 and 130,950,061 shares issued and outstanding at March 31, 2022 and December 31, 2021 | 13 |
13 |
||||||
| Additional paid-in capital | 943,517 |
938,888 |
||||||
| Accumulated deficit | (24,594 |
) | (44,486 |
) |
||||
| Accumulated other comprehensive income | 6,966 |
1,537 |
||||||
| Total Agiliti, Inc. and Subsidiaries equity | 925,902 |
895,952 |
||||||
| Noncontrolling interest | 116 |
120 |
||||||
| Total equity | 926,018 |
896,072 |
||||||
| Total liabilities and equity | 2,487,261 |
$ | 2,515,747 |
|||||
| Agiliti, Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2022 |
2021 |
|||||||
| Cash flows from operating activities: | ||||||||
| Consolidated net income | $ | 19,920 |
$ | 9,583 |
||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|||||||
| Depreciation | 22,498 |
26,217 |
||||||
| Amortization | 23,358 |
18,399 |
||||||
| Remeasurement of tax receivable agreement | — |
4,148 |
||||||
| Provision for credit (gains) losses | (27 |
) | 18 |
|||||
| Provision for inventory obsolescence | 325 |
1,532 |
|
|||||
| Non-cash share-based compensation expense | 4,637 |
2,412 |
||||||
| Gain on sales and disposals of equipment | (593 |
) | (647 |
) | ||||
| Deferred income taxes | 4,398 |
3,932 |
||||||
| Changes in operating assets and liabilities: |
|
|
||||||
| Accounts receivable | (6,212 |
) | 2,898 |
|||||
| Inventories | (972 |
) | 3,641 |
|||||
| Other operating assets | 1,132 |
226 |
||||||
| Accounts payable | 5,351 |
1,361 |
||||||
| Other operating liabilities | (6,691 |
) | (10,811 |
) | ||||
| Net cash provided by operating activities | 67,124 |
62,909 |
||||||
| Cash flows from investing activities: |
|
|
||||||
| Medical equipment purchases | (10,005 |
) | (4,415 |
) | ||||
| Property and office equipment purchases | (5,215 |
) | (3,915 |
) | ||||
| Proceeds from disposition of property and equipment | 644 |
1,003 |
||||||
| Acquisitions, net of cash acquired | — |
(450,198 |
) | |||||
| Net cash used in investing activities | (14,576 |
) | (457,525 |
) | ||||
| Cash flows from financing activities: |
|
|
||||||
| Proceeds under revolver | — |
10,000 |
||||||
| Proceeds under term loan | — |
198,052 |
||||||
| Payments under term loan | (71,474 |
) | (2,840 |
) | ||||
| Payments of principal under finance lease liability | (2,223 |
) | (2,051 |
) | ||||
| Payments under tax receivable agreement | — |
(748 |
) | |||||
| Distributions to noncontrolling interests | (32 |
) | (50 |
) | ||||
| Proceeds from exercise of stock options | 978 |
— |
||||||
| Dividend and equity distribution payment | (906 |
) | (924 |
) | ||||
| Shares forfeited for taxes | (792 |
) | — |
|||||
| Payments of contingent consideration | (321 |
) |
|
|||||
| Net cash provided by (used in) financing activities | (74,770 |
) | 201,439 |
|||||
| Net change in cash and cash equivalents | (22,222 |
) | (193,177 |
) | ||||
| Cash and cash equivalents at the beginning of period | 74,325 |
206,505 |
||||||
| Cash and cash equivalents at the end of period | $ | 52,103 |
$ | 13,328 |
||||
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 | ||||||
| (in thousands) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
2022 |
2021 |
|||||
| Net income attributable to Agiliti, Inc. and Subsidiaries | $ | 19,892 |
$ | 9,553 |
||
| Interest expense | 10,664 |
18,021 |
||||
| Income tax expense | 6,905 |
4,495 |
||||
| Depreciation and amortization | 44,831 |
43,563 |
||||
| EBITDA | 82,292 |
75,632 |
||||
| Non-cash share-based compensation expense | 4,637 |
2,412 |
||||
| Management and other expenses | — |
563 |
||||
| Transaction costs (1) | 2,226 |
3,451 |
||||
| Tax receivable agreement remeasurement | — |
4,148 |
||||
| Adjusted EBITDA | $ | 89,155 |
$ | 86,206 |
||
__________________________ |
(1) Transaction costs represent costs associated with potential and completed mergers and acquisitions and are primarily related to the Northfield and Sizewise acquisitions. |
| Agiliti, Inc. and Subsidiaries | ||||||||
| Non-GAAP Financial Measure: Adjusted Net Income and Adjusted EPS | ||||||||
| (in thousands, except share and per share information) | ||||||||
| Three months ended | ||||||||
| March 31, | ||||||||
2022 |
2021 |
|||||||
| Net income attributable to Agiliti, Inc. | $ |
19,892 |
|
$ |
9,553 |
|
||
| and Subsidiaries | ||||||||
| Amortization |
|
22,333 |
|
|
17,348 |
|
||
| Non-cash share-based compensation expense |
|
4,637 |
|
|
2,412 |
|
||
| Management and other expenses |
|
- |
|
|
563 |
|
||
| Transaction costs (1) |
|
2,226 |
|
|
3,451 |
|
||
| Tax receivable agreement remeasurement(2) |
|
- |
|
|
4,148 |
|
||
| Income tax benefit associated with pre-tax adjustments (3) |
|
(7,969 |
) |
|
(5,463 |
) |
||
| Adjusted Net Income | $ |
41,119 |
|
$ |
32,012 |
|
||
| Weighted average shares outstanding - diluted |
|
139,426 |
|
|
106,091 |
|
||
| Adjusted EPS | $ |
0.29 |
|
$ |
0.30 |
|
||
| __________________________ | ||
(1) Transaction costs represent costs associated with potential and completed mergers and acquisitions and are primarily related to the Northfield and Sizewise acquisitions. |
||
(2) Tax receivable agreement remeasurement represents the change in the fair value of the tax receivable agreement. |
||
(3) Income tax benefit associated with pre-tax adjustments represents the tax benefit or provision associated with the reconciling items between net income (loss) and Adjusted Net Income and includes both the current and deferred income tax impact of the adjustments. To determine the aggregate tax effect of the reconciling items, we utilized statutory income tax rates ranging from 0% to 26%, depending upon the applicable jurisdictions of each adjustment. |
| Agiliti, Inc. and Subsidiaries | ||||
| Non-GAAP Financial Measure: Net Debt and Net Leverage Ratio | ||||
| (in millions) | ||||
| March 31, | ||||
2022 |
||||
| Term Loan B (due 2026) | $ |
1,111.6 |
|
|
| Consolidated Capital Leases |
|
26.0 |
|
|
| Less: Deferred Financing Fees |
|
(16.2 |
) |
|
| Debt | $ |
1,121.5 |
|
|
| Less: Cash |
|
(52.1 |
) |
|
| Net Debt | $ |
1,069.4 |
|
|
| LTM Adjusted EBITDA | $ |
333.6 |
|
|
| Net Leverage | 3.2x | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220510005575/en/
Contacts
Kate Kaiser
Corporate Communication and Investor Relations
kate.kaiser@agilitihealth.com
