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, 2021, and provided a
preliminary outlook for the full year 2021.
Highlights
- Revenue growth of 31 percent to $235 million
- Net income of $9.6 million, up $22.2 million from Q1 2020, and
diluted earnings per share of $0.09, up $0.22 per share from the
prior year period
- Adjusted EBITDA growth of 77 percent to $86 million, and
adjusted diluted earnings per share of $0.30, up $0.25 per share
from the prior year period
- Leverage ratio reduced to 3.3x following the close of its
initial public offering
- Full year 2021 guidance for revenue of $950-$975 million and
Adjusted EBITDA of $275-$285 million
“Our strong first quarter results reflect the continued
execution of our growth strategy and the extraordinary work of our
entire team at Agiliti,” said Tom Leonard, Chief Executive Officer.
“The challenges of the past year helped raise awareness of the
unique and essential nature of what we do, while also demonstrating
the stable and predictable nature of our business model. Agiliti is
a critical part of our national healthcare infrastructure, and as
the events of 2020 highlight, the services we provide are always
necessary and in high demand. This long term consistency gives us
confidence in our 2021 outlook and beyond.”
Total revenue for the three months ended March 31, 2021, was
$235.2 million, representing a 31 percent increase from total
revenue of $179.2 million for the same period of 2020.
Net income for the first quarter was $9.6 million, representing
a $22.2 million increase compared to a net loss of $12.6 million
for the same period of 2020.
Adjusted EBITDA for the three months ended March 31, 2021, was
$86.2 million, a 77 percent increase from Adjusted EBITDA of $48.7
million for the same period of 2020.
Balance Sheet
Following the close of its initial public offering (“IPO”) on
April 27, 2021, the Company used net proceeds from the offering to
repay outstanding borrowings and related fees and expenses under
the Company’s credit facilities. Post IPO proceeds and following
its acquisition of Northfield Medical on March 19, 2021, it’s
pro-forma leverage ratio approximates 3.3x.
Financial Guidance
For the full year 2021, the Company expects revenue to be in the
range of $950 million to $975 million and Adjusted EBITDA to be in
the range of $275 million to $285 million. Additionally, the
Company expects capital expenditures for 2021 to be in the range of
$65 million to $70 million.
With regard to the non-GAAP Adjusted EBITDA 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.
Conference Call Information
Agiliti will hold a conference call to discuss its 2021 first
quarter results on Tuesday, May 18, 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 13719551. The replay will be available until May 25,
2021.
Interested investors and other parties may view a simultaneous
webcast of the conference call by visiting the Agiliti Investor
Relations site at https://investors.agilitihealth.com. The webcast
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 7,000 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: Agiliti Inc., believes statements in this
presentation looking forward in time, including preliminary
results, 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; 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
final prospectus filed with the Securities and Exchange Commission
(“SEC”), on April 26, 2021.
Agiliti, Inc. and Subsidiaries Condensed Consolidated
Statements of Operations (in thousands, except share and per
share information) (unaudited)
Three Months Ended
March 31,
2021
2020
Revenue $
235,245
$
179,240
Cost of revenue
133,922
121,433
Gross margin
101,323
57,807
Selling, general and administrative
69,224
56,566
Operating income
32,099
1,241
Interest expense
18,021
17,817
Income (loss) before income taxes and noncontrolling interest
14,078
(16,576
)
Income tax expense (benefit)
4,495
(4,028
)
Consolidated net income (loss)
9,583
(12,548
)
Net income attributable to noncontrolling interest
30
74
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries $
9,553
$
(12,622
)
Basic income (loss) per share $
0.10
$
(0.13
)
Diluted income (loss) per share $
0.09
$
(0.13
)
Weighted-average common shares outstanding: Basic
99,103,933
98,954,862
Diluted
106,090,703
98,954,862
Agiliti, Inc. and Subsidiaries Condensed Consolidated
Balance Sheets (in thousands, except share and per share
information) (unaudited)
March 31, December
31,
2021
2020
Assets Current assets: Cash and cash equivalents $
13,328
$
206,505
Accounts receivable, less allowance for doubtful accounts of $2,020
at March 31, 2021 and $1,993 at December 31, 2020
168,679
154,625
Inventories
27,699
27,062
Other current assets
13,129
14,175
Total current assets
222,835
402,367
Property and equipment: Medical equipment
295,398
285,723
Property and office equipment
124,054
112,646
Accumulated depreciation
(208,484
)
(183,953
)
Total property and equipment, net
210,968
214,416
Other long-term assets: Goodwill
1,122,530
817,113
Operating lease right-of-use assets
53,447
51,214
Other intangibles, net
569,343
402,095
Other
16,713
16,151
Total assets $
2,195,836
$
1,903,356
Liabilities and Equity Current liabilities: Current portion
of long-term debt $
19,060
$
16,044
Current portion of operating lease liability
14,985
14,155
Current portion of obligation under tax receivable agreement
15,650
15,572
Accounts payable
47,523
37,215
Accrued compensation
38,864
38,671
Accrued interest
3,533
6,347
Deferred revenue
11,356
8,800
Other accrued expenses
29,394
22,727
Total current liabilities
180,365
159,531
Long-term debt, less current portion
1,350,035
1,145,055
Obligation under tax receivable agreement, pension and other
long-term liabilities
56,182
53,794
Operating lease liability, less current portion
41,904
40,283
Deferred income taxes, net
101,297
62,748
Commitments and contingencies (Note 11) Equity Common stock,
$0.0001 par value; 350,000,000 shares authorized; 99,843,335
and98,983,296 shares issued and outstanding at March 31, 2021 and
December 31, 2020
10
10
Additional paid-in capital
527,626
513,902
Accumulated deficit
(58,939
)
(68,492
)
Accumulated other comprehensive loss
(2,768
)
(3,619
)
Total Agiliti, Inc. and Subsidiaries equity
465,929
441,801
Noncontrolling interest
124
144
Total equity
466,053
441,945
Total liabilities and equity $
2,195,836
$
1,903,356
Agiliti, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (in thousands)
(unaudited)
Three Months Ended March 31,
2021
2020
Cash flows from operating activities: Consolidated net income
(loss) $
9,583
$
(12,548
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation
26,217
23,377
Amortization
18,399
17,756
Remeasurement of tax receivable agreement
4,148
—
Provision for doubtful accounts
18
656
Provision for inventory obsolescence
1,532
233
Non-cash share-based compensation expense
2,412
2,383
Gain on sales and disposals of equipment
(647
)
(165
)
Deferred income taxes
3,932
(4,195
)
Changes in operating assets and liabilities: Accounts receivable
2,898
(10,709
)
Inventories
3,641
(1,539
)
Other operating assets
226
565
Accounts payable
1,361
4,378
Other operating liabilities
(10,811
)
7,487
Net cash provided by operating activities
62,909
27,679
Cash flows from investing activities: Medical equipment purchases
(4,415
)
(9,165
)
Property and office equipment purchases
(3,915
)
(3,003
)
Proceeds from disposition of property and equipment
1,003
524
Acquisitions, net of cash acquired
(450,198
)
(89,495
)
Net cash used in investing activities
(457,525
)
(101,139
)
Cash flows from financing activities: Proceeds under new revolver
10,000
178,000
Payments under new revolver
—
(161,500
)
Proceeds under new term loan
198,052
124,844
Payments under new term loan
(2,840
)
(1,650
)
Payments of principal under finance lease liability
(2,051
)
(1,857
)
Payments of deferred financing costs
—
(199
)
Payments under tax receivable agreement
(748
)
—
Distributions to noncontrolling interests
(50
)
(124
)
Dividend and equity distribution payment
(924
)
(1,115
)
Shares forfeited for taxes
—
(145
)
Change in book overdrafts
—
(1,771
)
Net cash provided by financing activities
201,439
134,483
Net change in cash and cash equivalents
(193,177
)
61,023
Cash and cash equivalents at the beginning of period
206,505
—
Cash and cash equivalents at the end of period $
13,328
$
61,023
Supplemental cash flow information: Interest paid $
19,746
$
16,523
Income taxes (refund) paid
(715
)
5
Agiliti, Inc. and Subsidiaries Adjusted EBITDA
(unaudited)
Three Months Ended March 31,
(in thousands)
2021
2020
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries $
9,553
$
(12,622
)
Interest expense
18,021
17,817
Income tax expense (benefit)
4,495
(4,028
)
Depreciation and amortization
43,563
40,166
EBITDA
75,632
41,333
Non-cash share-based compensation expense
2,412
2,383
Management and other expenses (1)
563
4,111
Transaction costs (2)
3,451
889
Tax receivable agreement remeasurement
4,148
—
Adjusted EBITDA $
86,206
$
48,716
_________________________ (1) Management and other expenses
represent (a) the Advisory Services Fees, which were subsequently
terminated in connection with the initial public offering and (b)
employee related non-recurring expenses. (2) Transaction costs
represent costs associated with potential mergers and acquisitions
and are primarily related to the Northfield acquisition.
EBITDA is defined as earnings attributable to Agiliti before
interest expense, income taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA excluding non-cash
shared-based compensation expense, management fees and other
non-recurring gains, expenses or losses, transaction costs and
remeasurement of the tax receivable agreement. In addition to using
EBITDA and Adjusted EBITDA internally as measures of operational
performance, we 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 EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA, 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 as
measures of liquidity. Since EBITDA and Adjusted EBITDA are not
measures determined in accordance with GAAP and are thus
susceptible to varying interpretations and calculations, EBITDA and
Adjusted EBITDA, as presented, may not be comparable to other
similarly titled measures of other companies. EBITDA and Adjusted
EBITDA 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.
Agiliti, Inc. and Subsidiaries Non-GAAP Financial
Measure: Adjusted EPS (unaudited)
Three months
ended March 31, (in thousands)
2021
2020
Net income (loss) attributable to Agiliti, Inc. and
Subsidiaries
$
9,553
$
(12,622
)
Amortization
17,348
16,788
Non-cash share-based compensation expense
2,412
2,383
Management & other expenses (1)
563
4,111
Transaction costs (2)
3,451
889
Tax receivable agreement remeasurement(3)
4,148
-
Income tax benefit associated with pre-tax adjustments (4)
(5,463
)
(6,223
)
Adjusted Net Income
$
32,012
$
5,326
Weighted average shares outstanding - diluted
106,091
103,695
Adjusted EPS
$
0.30
$
0.05
____________________________ (1) Represents management and
advisory fees, which were subsequently terminated in connection
with the initial public offering and employee related non-recurring
expenses. (2) Represents costs associated with potential mergers
and acquisitions and are primarily related to the Northfield
acquisition. (3) Represents the change in the fair value of the tax
receivable agreement. (4) Represents the tax benefit or provision
associated with the reconciling items between net income (loss) and
Adjusted Net Income. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210518006057/en/
Kate Kaiser Corporate Communication and Investor Relations
kate.kaiser@agilitihealth.com
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