Agiliti Announces Financial Results for Second Quarter 2023 and Revises 2023 Outlook

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

<sup>_____________________________

1</sup> 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230808433915/en/