[PART I](index=5&type=section&id=PART%20I) [Item 1: Business](index=5&type=section&id=Item%201%3A%20Business) Agiliti provides medical equipment management and service solutions to the U.S. healthcare industry, driven by market trends and a strategy of expansion and M&A - Agiliti provides essential medical equipment management solutions to the U.S. healthcare industry, enhancing safety and efficiency while reducing costs and waste[12](index=12&type=chunk)[13](index=13&type=chunk) - The company serves over **9,000 customers** including hospitals and government agencies via a nationwide network of over **150 service centers** and **seven Centers of Excellence**[15](index=15&type=chunk) Revenue Breakdown by Service Line (FY 2021 & 2020) | Service Line | FY 2021 Revenue ($M) | % of Total | FY 2020 Revenue ($M) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Clinical Engineering Services | $384.1M | 37% | $256.9M | 33% | | Equipment Solutions | $352.1M | 34% | $296.3M | 38% | | On-Site Managed Services | $302.4M | 29% | $220.2M | 29% | - Agiliti's growth strategy involves expanding existing customer share, securing new outsourcing contracts, and pursuing accretive M&A, having integrated **nine acquisitions** from 2015-2021[54](index=54&type=chunk)[57](index=57&type=chunk) - In 2021, Agiliti completed two major acquisitions: Northfield Medical for **$475.0 million** and Sizewise Rentals for **$230 million**[58](index=58&type=chunk)[59](index=59&type=chunk) [Item 1A: Risk Factors](index=22&type=section&id=Item%201A%3A%20Risk%20Factors) Agiliti faces material risks from COVID-19, key customer contract reliance, substantial debt, and controlling stockholder influence - A significant risk is the potential inability to maintain contracts, especially with key customers like the U.S. Department of Health and Human Services (HHS), which accounted for approximately **17% of total revenue** in 2021[117](index=117&type=chunk)[166](index=166&type=chunk)[489](index=489&type=chunk) - The company has substantial indebtedness of approximately **$1.2 billion** under its First Lien Term Loan Facility as of December 31, 2021, requiring significant cash flow for debt service[181](index=181&type=chunk) - The COVID-19 pandemic poses ongoing risks, including potential supply chain disruptions, inflation, a tightening labor market, and demand uncertainty[108](index=108&type=chunk)[109](index=109&type=chunk) - As a controlled company, principal stockholder THL exerts significant influence over corporate decisions, potentially leading to conflicts of interest with other shareholders[186](index=186&type=chunk)[190](index=190&type=chunk) - The company faces risks integrating recent acquisitions like Northfield Medical and Sizewise, potentially hindering the realization of anticipated benefits or synergies[140](index=140&type=chunk)[141](index=141&type=chunk) [Item 2: Properties](index=43&type=section&id=Item%202%3A%20Properties) Agiliti operates from leased facilities, including its Minneapolis headquarters, with a nationwide network of service centers and manufacturing facilities - The company's corporate headquarters is a **55,197 square foot** leased facility in Minneapolis, Minnesota[211](index=211&type=chunk)[591](index=591&type=chunk) - Agiliti's nationwide network comprises approximately **150 leased service centers**, **seven Centers of Excellence**, and **four manufacturing facilities**[211](index=211&type=chunk) [Item 3: Legal Proceedings](index=43&type=section&id=Item%203%3A%20Legal%20Proceedings) Agiliti is subject to ordinary course liability claims, with management assessing current litigation as not materially adverse - Agiliti is subject to ordinary course liability claims related to employees and equipment, with management deeming the likelihood of a materially adverse outcome from outstanding litigation as remote[212](index=212&type=chunk)[706](index=706&type=chunk) [PART II](index=44&type=section&id=PART%20II) [Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205%3A%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Agiliti's common stock began trading on the NYSE under "AGTI" on April 23, 2021, with no plans for future dividend payments - The company's common stock has been listed on the NYSE under the symbol **"AGTI"** since its IPO on **April 23, 2021**[214](index=214&type=chunk) - Agiliti has not historically paid dividends and does not intend to pay any in the future, with any future determination at the Board of Directors' discretion[215](index=215&type=chunk) [Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2021, Agiliti reported **$1.04 billion** revenue, a **34.3%** increase, with **$24.2 million** net income and **$330.7 million** Adjusted EBITDA Consolidated Statement of Operations (2021 vs. 2020) | Metric (in thousands) | 2021 (Successor, $ thousands) | 2020 (Successor, $ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$1,038,690** | **$773,312** | **$265,378** | **34.3%** | | Gross margin | $424,617 | $286,347 | $138,270 | 48.3% | | Operating income | $104,230 | $36,058 | $68,172 | 189.1% | | Interest expense | $53,514 | $61,530 | ($8,016) | (13.0%) | | **Consolidated net income (loss)** | **$24,167** | **($22,238)** | **$56,521** | **N/M** | Revenue by Service Solution (2021 vs. 2020) | Service Line (in thousands) | 2021 (Successor, $ thousands) | 2020 (Successor, $ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Equipment Solutions | $352,094 | $296,267 | $55,827 | 18.8% | | Clinical Engineering | $384,147 | $256,874 | $127,273 | 49.5% | | Onsite Managed Services | $302,449 | $220,171 | $82,278 | 37.4% | Adjusted EBITDA Reconciliation (2021 vs. 2020) | Metric (in thousands) | 2021 (Successor, $ thousands) | 2020 (Successor, $ thousands) | | :--- | :--- | :--- | | Net income (loss) | $24,006 | ($22,478) | | Interest expense | $53,514 | $61,530 | | Income tax expense (benefit) | $16,433 | ($3,234) | | Depreciation and amortization | $187,963 | $169,241 | | **EBITDA** | **$281,916** | **$205,059** | | Non-cash & Non-recurring items | $48,766 | $29,142 | | **Adjusted EBITDA** | **$330,682** | **$234,201** | - Net cash provided by operating activities increased to **$210.3 million** in 2021 from **$137.9 million** in 2020, while net cash used in investing activities significantly increased to **$734.1 million** due to acquisitions[262](index=262&type=chunk)[263](index=263&type=chunk) [Item 7A: Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%207A%3A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Agiliti is exposed to market risks from interest rate fluctuations, fuel costs, and pension plan asset valuation - The company has significant interest rate risk exposure, with **$683.1 million** of its **$1.21 billion** total debt bearing variable rates, where a **1.0%** change would alter annual interest expense by approximately **$6.8 million**[288](index=288&type=chunk) - Agiliti is exposed to fuel cost volatility for its vehicle fleet, where a **10%** change in gasoline prices would impact annual fuel costs by approximately **$0.6 million**[289](index=289&type=chunk) [Item 8: Consolidated Financial Statements and Supplementary Data](index=58&type=section&id=Item%208%3A%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Agiliti's audited consolidated financial statements and unaudited supplementary quarterly financial data for 2021 and 2020 Selected Quarterly Financial Data for 2021 (Unaudited, in thousands) | Quarter Ended | Total Revenue ($ thousands) | Gross Margin ($ thousands) | Consolidated Net Income (Loss) ($ thousands) | | :--- | :--- | :--- | :--- | | March 31 | $235,245 | $101,323 | $9,583 | | June 30 | $250,543 | $99,108 | ($5,171) | | September 30 | $262,424 | $103,434 | $9,728 | | December 31 | $290,478 | $120,752 | $10,027 | [Item 9A: Controls and Procedures](index=58&type=section&id=Item%209A%3A%20Controls%20and%20Procedures) Management concluded Agiliti's disclosure controls and procedures were effective as of December 31, 2021, leveraging the SEC transition period for internal control reporting - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[296](index=296&type=chunk) - The company is utilizing the transition period for newly public companies, thus not including a management report or auditor attestation on internal control over financial reporting in this 10-K[297](index=297&type=chunk) [PART III](index=59&type=section&id=PART%20III) [Item 10: Directors, Executive Officers and Corporate Governance](index=59&type=section&id=Item%2010%3A%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the forthcoming Definitive Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming Definitive Proxy Statement[298](index=298&type=chunk) [Item 11: Executive Compensation](index=59&type=section&id=Item%2011%3A%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's Definitive Proxy Statement - Information regarding executive compensation is incorporated by reference from the forthcoming Definitive Proxy Statement[299](index=299&type=chunk) [Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=59&type=section&id=Item%2012%3A%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the company's Definitive Proxy Statement - Information regarding security ownership is incorporated by reference from the forthcoming Definitive Proxy Statement[299](index=299&type=chunk) [Item 13: Certain Relationships and Related Transactions, and Director Independence](index=59&type=section&id=Item%2013%3A%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's Definitive Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the forthcoming Definitive Proxy Statement[300](index=300&type=chunk) [Item 14: Principal Accounting Fees and Services](index=59&type=section&id=Item%2014%3A%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the company's Definitive Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the forthcoming Definitive Proxy Statement[300](index=300&type=chunk) [PART IV](index=60&type=section&id=PART%20IV) [Item 15: Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015%3A%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, financial statement schedules, and exhibits filed as part of the Annual Report on Form 10-K - This item lists all documents filed as part of the Form 10-K, including financial statements and exhibits such as credit agreements and material contracts[302](index=302&type=chunk)[305](index=305&type=chunk) [Consolidated Financial Statements](index=68&type=section&id=Consolidated%20Financial%20Statements) [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed financial statement information, including accounting policies, business acquisitions, debt structure, and revenue concentration - The company completed the acquisition of Sizewise for approximately **$234.8 million** on October 1, 2021, and Northfield for approximately **$472.3 million** on March 19, 2021[379](index=379&type=chunk)[382](index=382&type=chunk) - Following its IPO in April 2021, the company used proceeds to repay its **$240 million** Second Lien Term Loan, resulting in a loss on extinguishment of debt of **$9.8 million**[416](index=416&type=chunk) - A significant revenue concentration exists, with approximately **17%** of total revenue for 2021 related to contracts with the U.S. Department of Health and Human Services (HHS) and its ASPR office[489](index=489&type=chunk) - Subsequent to year-end, on February 28, 2022, the company entered into a new **12-month** sole source agreement with HHS/ASPR for ventilator and PAPR systems management[493](index=493&type=chunk) Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $74,325 | $206,505 | | Total current assets | $357,884 | $402,367 | | Goodwill | $1,213,121 | $817,113 | | **Total assets** | **$2,515,747** | **$1,903,356** | | **Liabilities & Equity** | | | | Total current liabilities | $208,530 | $159,531 | | Long-term debt, less current portion | $1,174,968 | $1,145,055 | | **Total liabilities** | **$1,619,675** | **$1,461,411** | | **Total equity** | **$896,072** | **$441,945** |

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The unaudited Q1 2021 financial statements reflect significant revenue growth, a shift to net income, asset and liability increases from the Northfield acquisition, and improved operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show total assets increased to **$2.20 billion** driven by the Northfield acquisition, with total liabilities rising to **$1.73 billion** due to increased long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $13,328 | $206,505 | | Goodwill | $1,122,530 | $817,113 | | Total assets | $2,195,836 | $1,903,356 | | **Liabilities & Equity** | | | | Long-term debt, less current portion | $1,350,035 | $1,145,055 | | Total liabilities | $1,729,783 | $1,461,411 | | Total equity | $466,053 | $441,945 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2021 revenue increased **31.2%** to **$235.2 million**, with gross margin improving to **43.1%** and a shift from net loss to **$9.6 million** net income Q1 2021 vs Q1 2020 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Revenue | $235,245 | $179,240 | | Gross Margin | $101,323 | $57,807 | | Operating Income | $32,099 | $1,241 | | Consolidated Net Income (Loss) | $9,583 | $(12,548) | | Diluted Income (Loss) Per Share | $0.09 | $(0.13) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow more than doubled to **$62.9 million**, while investing activities saw a **$457.5 million** outflow primarily for acquisitions, funded by **$201.4 million** in financing Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,909 | $27,679 | | Net cash used in investing activities | $(457,525) | $(101,139) | | Net cash provided by financing activities | $201,439 | $134,483 | | Net change in cash and cash equivalents | $(193,177) | $61,023 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the **$475 million** Northfield Medical acquisition, the post-quarter IPO raising **$397.4 million** for debt repayment, and a significant **20%** revenue contract with HHS - On March 19, 2021, the company acquired Northfield Medical, Inc. for a total consideration of approximately **$475 million**, consisting of **$461.0 million** in cash and **$11.3 million** in common stock, funded by additional borrowings[31](index=31&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk) - Subsequent to the quarter end, on April 27, 2021, the company closed its IPO, raising net proceeds of approximately **$397.4 million**, used to repay **$240.0 million** of the Second Lien Term Loan, **$80.0 million** of the First Lien Term Loan, and **$10.0 million** of the Revolving Loan[91](index=91&type=chunk)[93](index=93&type=chunk) - For the three months ended March 31, 2021, approximately **20%** of total revenue was derived from contracts with the U.S. Department of Health and Human Services[88](index=88&type=chunk) - Total long-term debt increased to **$1.37 billion** as of March 31, 2021, from **$1.16 billion** at year-end 2020, primarily to finance the Northfield acquisition[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 2021 performance to **31.2%** revenue growth across all service lines, gross margin expansion to **43.1%**, and **77.0%** Adjusted EBITDA growth to **$86.2 million** Revenue by Service Solution (in thousands) | Service Solution | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Equipment Solutions | $82,471 | $68,405 | 20.6% | | Clinical Engineering | $75,106 | $66,014 | 13.8% | | Onsite Managed Services | $77,668 | $44,821 | 73.3% | | **Total Revenue** | **$235,245** | **$179,240** | **31.2%** | - The positive impact from COVID-19 within the Equipment Solutions segment was estimated to be in the **$10 million to $12 million** range for Q1 2021[112](index=112&type=chunk) - Gross margin increased to **43.1%** of revenue in Q1 2021 from **32.3%** in Q1 2020, primarily due to favorable leverage from volume growth, allowing the company to better utilize its fixed cost infrastructure[114](index=114&type=chunk)[115](index=115&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net income (loss) attributable to Agiliti | $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 | $2,412 | $2,383 | | Management and other expenses | $563 | $4,111 | | Transaction costs | $3,451 | $889 | | Tax receivable agreement remeasurement | $4,148 | — | | **Adjusted EBITDA** | **$86,206** | **$48,716** | [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates, fuel costs, and pension valuation, with a **1.0 percentage point** interest rate change impacting annual expense by **$8.7 million** - The company's primary market risks are related to interest rates, fuel costs, and pension valuation[138](index=138&type=chunk) - As of March 31, 2021, the company had **$869.4 million** in variable rate debt, where a **1.0 percentage point** change in interest rates would result in an annual interest expense fluctuation of approximately **$8.7 million**[139](index=139&type=chunk) - A hypothetical **10%** increase in gasoline prices would increase annual fuel costs by approximately **$0.3 million**, based on Q1 2021 usage levels[140](index=140&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (March 31, 2021)[143](index=143&type=chunk) - No changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[145](index=145&type=chunk) [PART II - OTHER INFORMATION](index=29&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company faces ordinary course liability claims, but management believes their resolution will not materially adversely affect financial position or operations - The company is subject to liability claims related to employees and equipment in the ordinary course of business, but management does not expect these to have a material adverse effect[146](index=146&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Key risks include potential non-renewal of the significant HHS contract, impairment charges for goodwill, and challenges associated with substantial indebtedness - A key risk is the potential non-renewal of a one-year agreement with HHS, which accounted for approximately **20%** of total revenue for the three months ended March 31, 2021, and is set to expire on July 21, 2021[152](index=152&type=chunk)[153](index=153&type=chunk) - The company faces risk of impairment charges for goodwill or other long-lived assets, as testing for impairment requires estimates about future performance that are subject to significant assumptions[154](index=154&type=chunk) - As of March 31, 2021, the company had substantial indebtedness, with approximately **$1.12 billion** under its First Lien Term Loan and **$240.0 million** under its Second Lien Term Loan, which could make it difficult to satisfy debt obligations and limit financial flexibility[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered equity for the Northfield acquisition and RSU settlement, then completed an IPO raising **$397.4 million** primarily for debt repayment - In connection with the Northfield Acquisition on March 19, 2021, the company issued **752,328 shares** of common stock to the Northfield management team[158](index=158&type=chunk) - On April 27, 2021, the company completed its IPO, receiving net proceeds of **$397.4 million** after underwriting discounts and expenses[160](index=160&type=chunk) - Approximately **$330.0 million** of the IPO proceeds were used to repay debt: **$240.0 million** for the Second Lien Term Loan, **$80.0 million** for the First Lien Term Loan, and **$10.0 million** for the Revolving Loan[162](index=162&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including certifications from the Principal Executive Officer and Principal Financial Officer - This section provides a list of all exhibits filed with the quarterly report, including certifications from the Principal Executive Officer and Principal Financial Officer[165](index=165&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) ☒ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to . Commission File Number: 132-02824 AGILITI, INC. (Exact name of registrant as specified in its charter) Delaware 82-1608463 (State or other jurisdiction of (I ...