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 second quarter ended June 30, 2023, and revised its financial outlook for 2023.
Second Quarter 2023 Highlights
- Revenue growth of 6.2% to $291 million
- Net loss of $4 million, compared to net income of $5 million in the prior year period; loss per share of $0.03, compared to income per share of $0.04 per share in the prior year period
- Adjusted EBITDA1 of $66 million, compared to $70 million in the prior year period; Adjusted Earnings Per Share1 of $0.14, compared to $0.19 in the prior year period
“In the second quarter we delivered solid topline performance supported by continued demand for our differentiated suite of essential services,” said Tom Boehning, Chief Executive Officer. “Our customers continue to rely on us to help them address the many challenges they’re facing, as we ultimately deliver improved clinical efficiencies, cost savings and enhanced patient outcomes. While we are maintaining our revenue guidance for the year, we are lowering our adjusted EBITDA and adjusted EPS guidance to reflect the near-term impact of the contraction of our peak need rental (PNR) business and the onboarding of larger contracts. However, we expect our mix of business to help support a more visible and predictable financial outlook moving forward, consistent with our long history as a company.”
Second Quarter 2023 Financial Results
Total revenue for the three months ended June 30, 2023 was $291.1 million, representing a 6.2 percent increase from $274.0 million for the same period of 2022. Total revenue for the six months ended June 30, 2023, was $591.0 million, representing a 4.0 percent increase from $568.4 million for the same period of 2022.
Net loss for the three months ended June 30, 2023 was $4.0 million, compared to net income of $5.0 million for the same period of 2022. Net loss for the six months ended June 30, 2023, was $1.0 million compared to net income of $24.9 million for the same period of 2022.
Adjusted EBITDA1 for the three months ended June 30, 2023 was $65.5 million, a 5.8 percent decline from $69.6 million for the same period of 2022. Adjusted EBITDA1 for the six months ended June 30, 2023, was $137.5 million, a 13.4 percent decline from $158.7 million for the same period of 2022.
Revised 2023 Financial Outlook
The company revised its guidance for 2023 as follows:
- Revenue of $1.16 - $1.19 billion (consistent with prior guidance)
- Adjusted EBITDA of $260 - $270 million2
- Adjusted earnings per share of $0.54 – $0.59 per share2
- Capex investment expected at $80 million
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1 Non-GAAP Measures. See further discussion on page 6
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 second quarter 2023 results on Tuesday, August 8, 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. The passcode for the live call and the replay is 13739397. 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 Access ID for the replay call is 13739397. The replay will be available until August 22, 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.
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.
Agiliti, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except share and per share information) (unaudited) | |||||||||||||||
Three Months Ended
| Six Months Ended
| ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenue | $ | 291,081 | $ | 273,984 | $ | 590,985 | $ | 568,428 | |||||||
Cost of revenue | 191,677 | 175,819 | 382,207 | 346,636 | |||||||||||
Gross margin | 99,404 | 98,165 | 208,778 | 221,792 | |||||||||||
Selling, general and administrative expense | 81,230 | 82,121 | 170,067 | 168,259 | |||||||||||
Operating income | 18,174 | 16,044 | 38,711 | 53,533 | |||||||||||
Loss on extinguishment / modification of debt | 4,445 | 1,418 | 4,445 | 1,418 | |||||||||||
Interest expense | 20,549 | 11,261 | 36,380 | 21,925 | |||||||||||
Income (loss) before income taxes and noncontrolling interest | (6,820 | ) | 3,365 | (2,114 | ) | 30,190 | |||||||||
Income tax (benefit) expense | (2,892 | ) | (1,698 | ) | (1,236 | ) | 5,207 | ||||||||
Consolidated net income (loss) | (3,928 | ) | 5,063 | (878 | ) | 24,983 | |||||||||
Net income attributable to noncontrolling interest | 98 | 65 | 135 | 93 | |||||||||||
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries | $ | (4,026 | ) | $ | 4,998 | $ | (1,013 | ) | $ | 24,890 | |||||
Basic income (loss) per share | $ | (0.03 | ) | $ | 0.04 | $ | (0.01 | ) | $ | 0.19 | |||||
Diluted income (loss) per share | $ | (0.03 | ) | $ | 0.04 | $ | (0.01 | ) | $ | 0.18 | |||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 134,661,933 | 132,556,645 | 134,258,271 | 131,856,267 | |||||||||||
Diluted | 139,744,988 | 138,697,206 | 139,373,990 | 137,932,546 | |||||||||||
Agiliti, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share information) (unaudited) | ||||||||
June 30, 2023 | December 31,
| |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,213 | $ | 5,577 | ||||
Accounts receivable, less allowance for credit losses of $4,304 as of June 30,
| 220,269 | 207,753 | ||||||
Inventories | 79,154 | 70,132 | ||||||
Prepaid expenses | 15,420 | 23,458 | ||||||
Other current assets | 4,760 | 9,393 | ||||||
Total current assets | 328,816 | 316,313 | ||||||
Property and equipment, net | 284,132 | 273,958 | ||||||
Goodwill | 1,239,432 | 1,239,106 | ||||||
Operating lease right-of-use assets | 80,717 | 79,975 | ||||||
Other intangibles, net | 470,420 | 512,020 | ||||||
Other | 23,991 | 22,735 | ||||||
Total assets | $ | 2,427,508 | $ | 2,444,107 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 16,376 | $ | 17,752 | ||||
Current portion of operating lease liability | 25,397 | 23,607 | ||||||
Current portion of obligation under tax receivable agreement | 10,052 | 34,694 | ||||||
Accounts payable | 70,328 | 59,163 | ||||||
Accrued compensation | 20,620 | 25,928 | ||||||
Accrued interest | 7,814 | 5,039 | ||||||
Other current liabilities | 30,105 | 31,198 | ||||||
Total current liabilities | 180,692 | 197,381 | ||||||
Long-term debt, less current portion | 1,081,246 | 1,077,293 | ||||||
Obligation under tax receivable agreement, pension and other long-term liabilities | 10,135 | 9,161 | ||||||
Operating lease liability, less current portion | 67,046 | 67,332 | ||||||
Deferred income taxes, net | 133,976 | 146,615 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 134,987,003
| 13 | 13 | ||||||
Additional paid-in capital | 963,965 | 953,046 | ||||||
Accumulated deficit | (15,287 | ) | (14,274 | ) | ||||
Accumulated other comprehensive income | 5,497 | 7,343 | ||||||
Total Agiliti, Inc. and Subsidiaries equity | 954,188 | 946,128 | ||||||
Noncontrolling interest | 225 | 197 | ||||||
Total equity | 954,413 | 946,325 | ||||||
Total liabilities and equity | $ | 2,427,508 | $ | 2,444,107 | ||||
Agiliti, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (unaudited) | ||||||||
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
