Agiliti Announces Financial Results for Fourth Quarter and Full-Year 2021 and Provides 2022 Outlook
Agiliti Inc. (NYSE: AGTI) reported a 36% revenue growth in Q4 2021, reaching $290 million, with net income of $10 million. Full-year revenue increased by 34% to $1.04 billion, driven by a strong performance in healthcare technology services. Adjusted EBITDA for Q4 grew 18% to $85 million, with a full-year total of $331 million, a 41% increase. The company expects 2022 revenue between $1.16 - $1.19 billion and adjusted EBITDA of $305-315 million. A new one-year agreement with the U.S. HHS for ventilator maintenance was also established, consolidating existing contracts.
- Q4 2021 revenue up 36% to $290 million.
- Full-year 2021 revenue increased 34% to $1.04 billion.
- Net income for Q4 turned positive at $10 million, up $10.5 million year-over-year.
- Adjusted EBITDA grew 18% in Q4 to $85 million.
- 2022 revenue outlook of $1.16 - $1.19 billion.
- Total debt stands at $1,193 million, raising concerns over leverage.
Fourth Quarter 2021 Highlights
-
Revenue growth of 36 percent to
$290 million -
Net income of
$10.0 million $10.5 million $0.07 $0.07 -
Adjusted EBITDA1 growth of 18 percent to
$85 million $0.25 -
Entered into a new one-year agreement with the
U.S. Department of Health and Human Services’ Assistant Secretary for Preparedness and Response for the comprehensive maintenance and management services of medical ventilator equipment -
Closed acquisition of Sizewise on
October 1 and realized$10 million
Full-Year 2021 Highlights
-
Revenue growth of 34 percent year-over-year to
$1,039 million -
Net income of
$24.0 million $46.5 million $0.19 $0.42 -
Adjusted EBITDA1 growth of 41 percent year-over-year to
$331 million $0.99 $0.48 -
Total debt of
$1,193 million $1,118 million -
Successfully completed IPO in
April 2021 to raise proceeds of approximately$390 million -
Completed acquisitions of
Northfield Medical and Sizewise
“Our results in 2021 reflect the extraordinary efforts of our teams to meet the needs of health systems across the country as we helped ensure the readiness and availability of critical medical devices, including supporting frontline response to the Covid-19 pandemic,” said
Fourth Quarter and Year-to-Date 2021 Financial Results
Total revenue for the three months ended
Net income for the three months ended
Adjusted EBITDA1 for the three months ended
2022 Financial Outlook
-
Revenue of
$1,160 $1,190 million -
Adjusted EBITDA2 of
$305 -315 million -
Adjusted earnings per share2 of
$0.89 -
Capex investment expected in the range of
$80 $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. |
Subsequent Event
On
On
Conference Call Information
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 13726349. The replay will be available until
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
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.
| Condensed Consolidated Statements of Operations | ||||||||||||||
| (in thousands, except share and per share information) | ||||||||||||||
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
||||||||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
| Revenue | $ | 290,478 |
$ | 214,190 |
|
$ | 1,038,690 |
$ | 773,312 |
|
||||
| Cost of revenue | 169,727 |
127,726 |
|
614,073 |
486,965 |
|
||||||||
| Gross margin | 120,751 |
86,464 |
|
424,617 |
286,347 |
|
||||||||
| Selling, general and administrative | 95,053 |
69,450 |
|
320,387 |
250,289 |
|
||||||||
| Operating income | 25,698 |
17,014 |
|
104,230 |
36,058 |
|
||||||||
| Loss on extinguishment of debt | — |
— |
|
10,116 |
— |
|
||||||||
| Interest expense | 13,070 |
14,998 |
|
53,514 |
61,530 |
|
||||||||
| Income (loss) before income taxes and noncontrolling interest | 12,628 |
2,016 |
|
40,600 |
(25,472 |
) |
||||||||
| Income tax expense (benefit) | 2,601 |
2,444 |
|
16,433 |
(3,234 |
) |
||||||||
| Consolidated net income (loss) | 10,027 |
(428 |
) |
24,167 |
(22,238 |
) |
||||||||
| Net income attributable to noncontrolling interest | 44 |
42 |
|
161 |
240 |
|
||||||||
| Net income (loss) attributable to |
$ | 9,983 |
$ | (470 |
) |
$ | 24,006 |
$ | (22,478 |
) |
||||
| Basic income (loss) per share | $ | 0.08 |
$ | (0.00 |
) |
$ | 0.20 |
$ | (0.23 |
) |
||||
| Diluted income (loss) per share | $ | 0.07 |
$ | (0.00 |
) |
$ | 0.19 |
$ | (0.23 |
) |
||||
| Weighted-average common shares outstanding: | ||||||||||||||
| Basic | 130,666,105 |
98,983,296 |
|
120,877,480 |
98,976,226 |
|
||||||||
| Diluted | 138,525,173 |
98,983,296 |
|
128,497,220 |
98,976,226 |
|
||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands, except share and per share information) | ||||||||
|
|
|||||||
2021 |
2020 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 74,325 |
|
$ | 206,505 |
|
||
| Accounts receivable, less allowance for credit losses of |
209,308 |
|
154,625 |
|
||||
| Inventories | 55,307 |
|
27,062 |
|
||||
| Prepaid expenses | 18,549 |
|
13,549 |
|
||||
| Other current assets | 395 |
|
626 |
|
||||
| Total current assets | 357,884 |
|
402,367 |
|
||||
| Property and equipment: | ||||||||
| Medical equipment | 359,284 |
|
285,723 |
|
||||
| Property and office equipment | 174,669 |
|
112,646 |
|
||||
| Accumulated depreciation | (275,583 |
) |
(183,953 |
) |
||||
| Total property and equipment, net | 258,370 |
|
214,416 |
|
||||
| Other long-term assets: | ||||||||
1,213,121 |
|
817,113 |
|
|||||
| Operating lease right-of-use assets | 80,676 |
|
51,214 |
|
||||
| Other intangibles, net | 573,159 |
|
402,095 |
|
||||
| Other | 32,537 |
|
16,151 |
|
||||
| Total assets | $ | 2,515,747 |
|
$ | 1,903,356 |
|
||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 17,534 |
|
$ | 16,044 |
|
||
| Current portion of operating lease liability | 22,826 |
|
14,155 |
|
||||
| Current portion of obligation under tax receivable agreement | 29,187 |
|
15,572 |
|
||||
| Accounts payable | 53,851 |
|
37,215 |
|
||||
| Accrued compensation | 47,951 |
|
38,671 |
|
||||
| Accrued interest | 3,473 |
|
6,347 |
|
||||
| Deferred revenue | 5,808 |
|
8,800 |
|
||||
| Other accrued expenses | 27,900 |
|
22,727 |
|
||||
| Total current liabilities | 208,530 |
|
159,531 |
|
||||
| Long-term debt, less current portion | 1,174,968 |
|
1,145,055 |
|
||||
| Obligation under tax receivable agreement, pension and other long-term liabilities | 29,629 |
|
53,794 |
|
||||
| Operating lease liability, less current portion | 63,241 |
|
40,283 |
|
||||
| Deferred income taxes, net | 143,307 |
|
62,748 |
|
||||
| Commitments and contingencies (Note 11) | ||||||||
| Equity | ||||||||
| Common stock, |
13 |
|
10 |
|
||||
| Additional paid-in capital | 938,888 |
|
513,902 |
|
||||
| Accumulated deficit | (44,486 |
) |
(68,492 |
) |
||||
| Accumulated other comprehensive loss | 1,537 |
|
(3,619 |
) |
||||
895,952 |
|
441,801 |
|
|||||
| Noncontrolling interest | 120 |
|
144 |
|
||||
| Total equity | 896,072 |
|
441,945 |
|
||||
| Total liabilities and equity | $ | 2,515,747 |
|
$ | 1,903,356 |
|
||
| Condensed Consolidated Statements of Cash Flows | |||||||||
| (in thousands, except share and per share information) | |||||||||
Year Ended |
|||||||||
|
|||||||||
2021 |
2020 |
||||||||
| Cash flows from operating activities: | |||||||||
| Consolidated net income (loss) | $ | 24,167 |
|
$ | (22,238 |
) |
|||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
| Depreciation | 103,805 |
|
99,638 |
|
|||||
| Amortization | 88,240 |
|
73,456 |
|
|||||
| Remeasurement of tax receivable agreement and contingent consideration | 4,542 |
|
12,931 |
|
|||||
| Loss on extinguishment of debt | 7,716 |
|
— |
|
|||||
| Provision for credit losses | 2,023 |
|
1,959 |
|
|||||
| Provision for inventory obsolescence | 2,424 |
|
722 |
|
|||||
| Non-cash share-based compensation expense | 13,960 |
|
10,334 |
|
|||||
| Gain on sales and disposals of equipment | (3,735 |
) |
(1,191 |
) |
|||||
| Deferred income taxes | 12,004 |
|
(4,944 |
) |
|||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (8,915 |
) |
(39,763 |
) |
|||||
| Inventories | 3,052 |
|
(9,712 |
) |
|||||
| Other operating assets | (9,044 |
) |
(13,597 |
) |
|||||
| Accounts payable | 718 |
|
552 |
|
|||||
| Other operating liabilities | (30,640 |
) |
29,780 |
|
|||||
| Net cash provided by operating activities | 210,317 |
|
137,927 |
|
|||||
| Cash flows from investing activities: | |||||||||
| Medical equipment purchases | (37,377 |
) |
(31,668 |
) |
|||||
| Property and office equipment purchases | (29,121 |
) |
(27,597 |
) |
|||||
| Proceeds from disposition of property and equipment | 9,242 |
|
3,486 |
|
|||||
| Acquisitions, net of cash acquired | (676,878 |
) |
(95,953 |
) |
|||||
| Net cash used in investing activities | (734,134 |
) |
(151,732 |
) |
|||||
| Cash flows from financing activities: | |||||||||
| Proceeds under revolver | 35,000 |
|
199,500 |
|
|||||
| Payments under revolver | (35,000 |
) |
(233,000 |
) |
|||||
| Proceeds under term loan | 346,927 |
|
273,344 |
|
|||||
| Payments under term loan | (329,119 |
) |
(7,860 |
) |
|||||
| Payments of principal under finance lease liability | (9,097 |
) |
(8,024 |
) |
|||||
| Payments of deferred financing costs | (229 |
) |
(199 |
) |
|||||
| Payments under tax receivable agreement | (15,577 |
) |
— |
|
|||||
| Distributions to noncontrolling interests | (185 |
) |
(397 |
) |
|||||
| Proceeds from exercise of stock options | 1,409 |
|
— |
|
|||||
| Dividend and equity distribution payment | (928 |
) |
(1,138 |
) |
|||||
| Proceeds from issuance of common stock | 402,815 |
|
— |
|
|||||
| Stock issuance costs | (4,379 |
) |
— |
|
|||||
| Shares forfeited for taxes | — |
|
(145 |
) |
|||||
| Change in book overdrafts | — |
|
(1,771 |
) |
|||||
| Net cash provided by financing activities | 391,637 |
|
220,310 |
|
|||||
| Net change in cash and cash equivalents | (132,180 |
) |
206,505 |
|
|||||
| Cash and cash equivalents at the beginning of period | 206,505 |
|
— |
|
|||||
| Cash and cash equivalents at the end of period | $ | 74,325 |
|
$ | 206,505 |
|
|||
| Supplemental cash flow information: | |||||||||
| Interest paid | $ | 52,341 |
|
$ | 55,161 |
|
|||
| Income taxes paid | 3,214 |
|
1,260 |
|
|||||
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
| Non-GAAP Financial Measure: Adjusted EBITDA | ||||||||||||
Three Months Ended |
Year Ended |
|||||||||||
| (in thousands) | 2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
| Net income (loss) attributable to |
$ | 9,983 |
$ | (470) |
$ | 24,006 |
$ | (22,478) |
||||
| Interest expense | 13,070 |
14,998 |
53,514 |
61,530 |
||||||||
| Income tax expense (benefit) | 2,601 |
2,444 |
16,433 |
(3,234) |
||||||||
| Depreciation and amortization | 49,287 |
44,582 |
187,963 |
169,241 |
||||||||
| EBITDA | 74,941 |
61,554 |
281,916 |
205,059 |
||||||||
| Non-cash share-based compensation expense | 3,833 |
2,677 |
13,960 |
10,334 |
||||||||
| Management and other expenses (1) | 286 |
927 |
7,926 |
671 |
||||||||
| Transaction costs (2) | 5,797 |
2,138 |
12,222 |
3,837 |
||||||||
| Tax receivable agreement remeasurement | — |
4,700 |
4,542 |
14,300 |
||||||||
| Loss on extinguishment of debt (3) | — |
— |
10,116 |
— |
||||||||
| Adjusted EBITDA | $ | 84,857 |
$ | 71,996 |
$ | 330,682 |
$ | 234,201 |
||||
| ____________________ |
(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 for the year ended |
(3) Loss on extinguishment of debt consists of the write-off of the unamortized deferred financing costs and debt discount and an additional |
| Non-GAAP Financial Measure: Adjusted Net Income and Adjusted EPS | ||||||||||||||||
Three months ended |
|
Year ended |
||||||||||||||
|
|
|
||||||||||||||
| (in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
| Net income (loss) attributable to |
$ |
9,983 |
|
$ |
(470 |
) |
$ |
24,006 |
|
$ |
(22,478 |
) |
||||
| and Subsidiaries | ||||||||||||||||
| Amortization |
|
23,731 |
|
|
17,900 |
|
|
84,158 |
|
|
69,602 |
|
||||
| Non-cash share-based compensation expense |
|
3,833 |
|
|
2,677 |
|
|
13,960 |
|
|
10,334 |
|
||||
| Management and other expenses (1) |
|
286 |
|
|
960 |
|
|
7,926 |
|
|
671 |
|
||||
| Transaction costs (2) |
|
5,797 |
|
|
2,103 |
|
|
12,222 |
|
|
3,837 |
|
||||
| Tax receivable agreement remeasurement(3) |
|
- |
|
|
4,700 |
|
|
4,542 |
|
|
14,300 |
|
||||
| Loss on extinguishment of debt (4) |
|
- |
|
|
- |
|
|
10,116 |
|
|
- |
|
||||
| Income tax benefit associated with pre-tax adjustments (5) |
|
(9,462 |
) |
|
(6,258 |
) |
|
(29,920 |
) |
|
(21,785 |
) |
||||
| Adjusted Net Income | $ |
34,168 |
|
$ |
21,612 |
|
$ |
127,010 |
|
$ |
54,481 |
|
||||
| Weighted average shares outstanding - diluted |
|
138,525 |
|
|
106,091 |
|
|
128,497 |
|
|
106,084 |
|
||||
| Adjusted EPS | $ |
0.25 |
|
$ |
0.20 |
|
$ |
0.99 |
|
$ |
0.51 |
|
||||
| ____________________ |
(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 for the year ended |
| Non-GAAP Financial Measure: Net Debt and Net Leverage Ratio | ||||
| (unaudited) | ||||
| (in millions) |
|
2021 |
|
|
| Term Loan B (due 2026) | $ |
1,183.1 |
|
|
| Consolidated Capital Leases |
|
26.6 |
|
|
| Less: Deferred Financing Fees |
|
(17.2 |
) |
|
| Debt | $ |
1,192.5 |
|
|
| Less: Cash |
|
(74.3 |
) |
|
| Net Debt | $ |
1,118.2 |
|
|
| LTM Adjusted EBITDA | $ |
330.7 |
|
|
| Net Leverage | 3.4x | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220308006023/en/
Corporate Communication and Investor Relations
kate.kaiser@agilitihealth.com
Source:
FAQ
What were Agiliti's financial results for Q4 2021?
How did Agiliti perform in full-year 2021?
What is Agiliti's revenue guidance for 2022?
What recent agreements has Agiliti entered regarding ventilator services?
