AGILITI, INC. DE0001749704false00017497042024-03-052024-03-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 5, 2024
AGILITI, INC.
(Exact name of Registrant as specified in its charter)
Delaware001-4036183-1608463
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
11095 Viking Drive, Suite 300
Eden Prairie, MN 55344
(Address of principal executive offices, including zip code)
(952) 893-3200
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001AGTIThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02. Results of Operations and Financial Condition.
On March 5, 2024, Agiliti, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2023. A copy of the press release attached hereto as Exhibit 99.1, and is incorporated herein by reference.
The information in this Current Report, including the exhibit attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such disclosure in this Form 8-K in such a filing.
Item 9.01. Financial Statements and Exhibits.
Exhibit
Number
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 5, 2024
AGILITI, INC.
By:/s/ James B. Pekarek
Name:James B. Pekarek
Title:Executive Vice President and Chief Financial Officer


Exhibit 99.1
AGILITI ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER AND FULL-YEAR 2023
Eden Prairie, Minn. — (BUSINESS WIRE) — March 5, 2024 – Agiliti Inc. (NYSE: AGTI) (“Agiliti”), a nationwide provider of healthcare technology management and service solutions to the healthcare industry, today announced its financial results for the fourth quarter and year ended December 31, 2023.
Fourth Quarter 2023 Highlights
•Revenue growth of 4% to $292 million
•Net loss of $5.7 million, compared to net income of $3.4 million in the prior year period; diluted loss per share of $0.04, compared to diluted earnings per share of $0.02 in the prior year period
•Adjusted EBITDA1 of $67.3 million, compared to $71.4 million in the prior year period; Adjusted Earnings Per Share1 of $0.13, compared to $0.18 in the prior year period
Full-Year 2023 Highlights
•Revenue growth of 5% to $1.17 billion
•Net loss of $19.4 million, compared to net income of $30.2 million in the prior year period; diluted loss per share of $0.14, compared to diluted earnings per share of $0.22 in the prior year period
•Adjusted EBITDA of $266.9 million, compared to $296.6 million in the prior year period; Adjusted Earnings Per Share1 of $0.55, compared to $0.85 in the prior year period
•Total debt of $1.08 billion; Net debt1 of $1.06 billion; and, Net leverage ratio1 of 3.97x
Fourth Quarter and Year-to-Date 2023 Financial Results
Total revenue for the three months ended December 31, 2023 was $292.0 million, representing a 3.7 percent increase from total revenue of $281.7 million for the same period of 2022. Total revenue for the year ended December 31, 2023 was $1.17 billion, representing a 4.8 percent increase from total revenue of $1.12 billion for the same period of 2022.
Net loss for the three months ended December 31, 2023 was $5.7 million, compared to net income of $3.4 million for the same period of 2022. Net loss for the year ended December 31, 2023 was $19.4 million compared to net income of $30.2 million for the same period of 2022.
Adjusted EBITDA1 for the three months ended December 31, 2023 was $67.3 million, a 5.7 percent decrease from Adjusted EBITDA1 of $71.4 million for the same period of 2022. Adjusted EBITDA1 for the year ended December 31, 2023 was $266.9 million, a 10.0 percent decrease from Adjusted EBITDA1 of $296.6 million for the same period of 2022.
Agiliti to be Taken Private by THL Partners
On Monday, February 26, 2024, the company announced it has entered into a definitive merger agreement pursuant to which an affiliate of private equity firm Thomas H. Lee Partners, L.P. (“THL”), the company’s majority shareholder, will acquire all outstanding shares of Agiliti common stock not currently owned by THL and its affiliates and certain management shareholders for $10.00 per share in cash, implying an enterprise value of approximately $2.5 billion.
The transaction is expected to close in the first half of 2024, subject to customary closing conditions. The transaction has been approved by THL Agiliti LLC in its capacity as the majority shareholder of Agiliti and no other shareholder approval is required. Upon completion of the transaction, Agiliti will become a private company and will no longer be publicly listed or traded on the New York Stock Exchange. In light of this agreement, Agiliti will no longer hold a conference call to discuss financial results for the fourth quarter and full year 2023. Further detail on the transaction agreement can be found in the company’s press release at investors.agilitihealth.com.
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
1 Non-GAAP Measures. See further discussion on page 6


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 presentation and the related conference call are looking forward 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 forwardlooking statements: negative reaction of our investors, our suppliers, our customers or our employees to our leadership transition; market volatility of our common stock as a result of our leadership transition; the risk that the leadership transition may not provide the results that the company expects; imbalances in our selling mix; effects from political and policy changes that could limit our growth opportunities; our ability to maintain existing contracts or contract terms with, or enter into new contracts with customers; cancellations by or disputes with customers; our ability to maintain our reputation, including by protecting intellectual property; effects of a global economic downturn on our customers and suppliers; competitive practices by our competitors that could cause us to lose market share, reduce our prices or increase our expenditures; the bundling of products and services by our competitors, some of which we do not offer; consolidation in the healthcare industry; adverse developments with supplier relationships; our potential inability to attract and retain key personnel; our potential inability to make attractive acquisitions or successfully integrate acquire businesses; 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; 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; impairment charges for goodwill or other long-lived assets; an increase in expenses related to our pension plan; potential claims related to the medical equipment that we outsource and service; incurrence of costs that we cannot pass through to our customers; a failure of our management information systems; limitations inherent in all internal controls systems over financial reporting; our failure to keep up with technological changes; our failure to coordinate the management of our equipment; challenges to our tax positions or changes in taxation laws; litigation that may be costly to defend; federal privacy laws that may subject us to more stringent penalties; our contracts with the federal government that subject us to additional oversight; effects of high interest rates; potential recall or obsolescence of our large fleet of medical equipment; risks associated with transaction with THL generally, such as the inability to obtain, or delays in obtaining, any required regulatory approvals or other consents; the failure to consummate or delay in consummating the merger for other reasons; the risk that a condition to closing of the merger may not be satisfied; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that may be instituted following announcement of the merger; failure to retain key management and employees of Agiliti; unfavorable reaction to the merger by customers, competitors, suppliers and employees and other Risk Factors as detailed in our most recent annual report on Form 10-K.


Agiliti, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except share and per share information)

Three Months Ended
December 31,		Year Ended
December 31,
2023202220232022
Revenue$291,986 $281,679 $1,174,604 $1,121,292 
Cost of revenue193,430 174,100 770,501 690,318 
Gross margin98,556 107,579 404,103 430,974 
Selling, general and administrative expense81,939 84,685 339,312 338,988 
Operating income16,617 22,894 64,791 91,986 
Loss on extinguishment / modification of debt— — 4,527 1,418 
Interest expense23,461 14,983 84,115 49,439 
Tax indemnification expense— — — 11,918 
Income (loss) before income taxes and noncontrolling interest(6,844)7,911 (23,851)29,211 
Income tax (benefit) expense (1,225)4,440 (4,732)(1,232)
Consolidated net income (loss) (5,619)3,471 (19,119)30,443 
Net income attributable to noncontrolling interest92 100 306 231 
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries $(5,711)$3,371 $(19,425)$30,212 
Basic income (loss) per share$(0.04)$0.03 $(0.14)$0.23 
Diluted income (loss) per share$(0.04)$0.02 $(0.14)$0.22 
Weighted-average common shares outstanding:
Basic135,090,561 133,461,895 134,647,238 132,602,747 
Diluted135,090,561 139,001,770 134,647,238 138,381,295 


Agiliti, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share information)

December 31,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$20,037 $5,577 
Accounts receivable, less allowance for credit losses of $6,236 as of December 31, 2023 and $4,182 as of December 31, 2022
215,684 207,753 
Inventories74,484 70,132 
Prepaid expenses20,231 23,458 
Other current assets7,307 9,393 
Total current assets337,743 316,313 
Property and equipment, net292,684 273,958 
Goodwill1,239,432 1,239,106 
Operating lease right-of-use assets78,157 79,975 
Other intangibles, net430,002 512,020 
Other20,926 22,735 
Total assets$2,398,944 $2,444,107 
Liabilities and Equity
Current liabilities:
Current portion of long-term debt$18,468 $17,752 
Current portion of operating lease liability25,603 23,607 
Current portion of obligation under tax receivable agreement12,796 34,694 
Accounts payable58,518 59,163 
Accrued compensation28,866 25,928 
Accrued interest21,451 5,039 
Other current liabilities30,906 31,198 
Total current liabilities196,608 197,381 
Long-term debt, less current portion1,061,062 1,077,293 
Obligation under tax receivable agreement, pension and other long-term liabilities10,467 9,161 
Operating lease liability, less current portion63,765 67,332 
Deferred income taxes, net126,219 146,615 
Commitments and contingencies
Equity:
Common stock, $0.0001 par value; 500,000,000 shares authorized; 135,368,025 and 133,608,495 shares issued; 135,352,336 and 133,608,495 outstanding as of December 31, 2023 and December 31, 2022, respectively
14 13 
Treasury stock, at cost; 54,256 and — shares as of December 31, 2023 and December 31, 2022, respectively
(419)— 
Additional paid-in capital972,156 953,046 
Accumulated deficit(33,699)(14,274)
Accumulated other comprehensive income2,505 7,343 
Total Agiliti, Inc. and Subsidiaries equity940,557 946,128 
Noncontrolling interest266 197 
Total equity940,823 946,325 
Total liabilities and equity$2,398,944 $2,444,107 


Agiliti, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)

Year Ended December 31,
20232022
Cash flows from operating activities:
Consolidated net income (loss)$(19,119)$30,443 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation80,249 84,331 
Amortization 93,683 95,452 
Remeasurement of tax receivable agreement1,042 (2,124)
Loss on extinguishment / modification of debt4,527 1,418 
Provision for credit losses2,305 3,903 
Provision for inventory obsolescence1,725 1,034 
Non-cash share-based compensation expense20,186 18,775 
Gain on sales and disposals of equipment(1,331)(1,101)
Deferred income taxes(17,321)1,292 
Changes in operating assets and liabilities:
Accounts receivable0(9,330)(3,976)
Inventories(5,547)(12,188)
Other operating assets(1,532)(10,144)
Accounts payable1,077 15,753 
Accrued and other operating liabilities19,202 (23,092)
Net cash provided by operating activities169,816 199,776 
Cash flows from investing activities:
Medical equipment purchases(52,118)(55,864)
Property and office equipment purchases(34,230)(31,600)
Proceeds from disposition of property and equipment3,895 2,963 
Acquisitions, net of cash acquired(1,350)(62,339)
Intangible asset purchases(89)(20)
Net cash used in investing activities(83,892)(146,860)
Cash flows from financing activities:
Proceeds under debt arrangements1,302,937 60,000 
Payments under debt arrangements(1,321,737)(160,023)
Payments of principal under finance lease liability(9,502)(8,812)
Payments of deferred financing costs(9,579)— 
Payments under tax receivable agreement(24,822)— 
Distributions to noncontrolling interests(237)(154)
Proceeds from exercise of stock options3,057 3,101 
Dividend and equity distribution payment(321)(908)
Purchases of treasury stock(3,761)— 
Shares forfeited for taxes(6,301)(14,547)
Acquisition holdback and contingent consideration(1,198)(321)
Net cash used in financing activities(71,464)(121,664)
Net change in cash and cash equivalents14,460 (68,748)
Cash and cash equivalents at the beginning of period5,577 74,325 
Cash and cash equivalents at the end of period$20,037 $5,577 


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
(unaudited)
Three Months Ended
December 31,		Year Ended
December 31,
(in thousands)2023202220232022
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries $(5,711)$3,371 $(19,425)$30,212 
Interest expense23,461 14,983 84,115 49,439 
Income tax (benefit) (1)(1,225)4,440 (4,732)(1,232)
Depreciation and amortization42,564 42,053 168,841 175,764 
EBITDA59,089 64,847 228,799 254,183 
Non-cash share-based compensation expense4,325 3,710 20,186 18,775 
Tax indemnification expense— — — 11,918 
Management and other expenses (2)1,811 451 9,409 2,411 
Transaction costs (3)1,068 4,519 2,900 9,984 
Tax receivable agreement remeasurement1,042 (2,124)1,042 (2,124)
Loss on extinguishment / modification of debt (4)— — 4,527 1,418 
Adjusted EBITDA$67,335 $71,403 $266,863 $296,565 
_____________________________
(1)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.
(2)Management and other expenses represent non-recurring expenses, including a severance charge related to the Chief Executive Officer transition and charges related to a reduction in workforce.
(3)Transaction costs represent costs associated with potential and completed mergers and acquisitions.
(4)Loss on extinguishment / modification of debt for 2023 consists of the write-off of the unamortized costs and new costs incurred in relation to the amendment of the First Lien Term Loan and Revolving Credit Facility. Loss on extinguishment / modification 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.


Agiliti, Inc. and Subsidiaries
Non-GAAP Financial Measure: Adjusted Net Income and Adjusted EPS
(unaudited)
Three Months Ended
December 31,		Year Ended
December 31,
(in thousands, except share and per share information)2023202220232022
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries $(5,711)$3,371 $(19,425)$30,212 
Amortization21,745 23,223 88,593 91,432 
Non-cash share-based compensation expense4,325 3,710 20,186 18,775 
Tax indemnification expense (1)
— — — 11,918 
Management and other expenses (2)
1,811 451 9,409 2,411 
Transaction costs (3)
1,068 4,519 2,900 9,984 
Tax receivable agreement remeasurement1,042 (2,124)1,042 (2,124)
Loss on extinguishment / modification of debt (4)
— — 4,527 1,418 
Income tax benefit associated with pre-tax adjustments (5)
(6,950)(8,630)(30,655)(46,538)
Adjusted net income$17,330 $24,520 $76,577 $117,488 
Weighted average shares outstanding - diluted136,382,223 139,001,770 138,057,476 138,381,295 
Adjusted EPS$0.13 $0.18 $0.55 $0.85 
_____________________________
(1)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.
(2)Management and other expenses represent non-recurring expenses, including a severance charge related to the Chief Executive Officer transition and charges related to a reduction in workforce.
(3)Transaction costs represent costs associated with potential and completed mergers and acquisitions.
(4)Loss on extinguishment / modification of debt for 2023 consists of the write-off of the unamortized costs and new costs incurred in relation to the amendment of the First Lien Term Loan and Revolving Credit Facility. Loss on extinguishment / modification 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.
(5)Income tax benefit associated with pre-tax adjustments represents the tax benefit associated with the reconciling items between net income 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
(unaudited)
(in thousands)December 31, 2023
First Lien Term Loan, due 2030$1,072,313 
Revolving Credit Facility, due 2028— 
Finance Lease Liability27,374 
Less: Unamortized Deferred Financing Costs and Debt Discount(20,157)
Total Debt1,079,530 
Less: Cash(20,037)
Net Debt$1,059,493 
LTM Adjusted EBITDA$266,863 
Net Leverage3.97 x

v3.24.0.1
Cover
Mar. 05, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Mar. 05, 2024
Entity Registrant Name AGILITI, INC. DE
Entity Incorporation, State or Country Code DE
Entity File Number 001-40361
Entity Tax Identification Number 83-1608463
Entity Address, Address Line One 11095 Viking Drive
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Eden Prairie
Entity Address, State or Province MN
Entity Address, Postal Zip Code 55344
City Area Code 952
Local Phone Number 893-3200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.0001
Trading Symbol AGTI
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001749704
Amendment Flag false
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