Agiliti(AGTI) - 2023 Q4 - Annual Results

Agiliti Financial Results for Fourth Quarter and Full-Year 2023 Financial Highlights Agiliti's full-year 2023 revenue increased 5% to $1.17 billion, but net income shifted to a $19.4 million loss, and Adjusted EBITDA declined 10% Fourth Quarter 2023 Highlights Q4 2023 vs Q4 2022 Performance | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue (in millions) | $292.0 | $281.7 | +3.7% | | Net Income (Loss) (in millions) | ($5.7) | $3.4 | -267.6% | | Diluted EPS (Loss) | ($0.04) | $0.02 | -300.0% | | Adjusted EBITDA (in millions) | $67.3 | $71.4 | -5.7% | | Adjusted EPS | $0.13 | $0.18 | -27.8% | Full-Year 2023 Highlights Full-Year 2023 vs Full-Year 2022 Performance | Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue (in billions) | $1.17 | $1.12 | +4.8% | | Net Income (Loss) (in millions) | ($19.4) | $30.2 | -164.2% | | Diluted EPS (Loss) | ($0.14) | $0.22 | -163.6% | | Adjusted EBITDA (in millions) | $266.9 | $296.6 | -10.0% | | Adjusted EPS | $0.55 | $0.85 | -35.3% | Year-End 2023 Debt Position | Metric | Amount | | :--- | :--- | | Total Debt (in billions) | $1.08 | | Net Debt (in billions) | $1.06 | | Net Leverage Ratio | 3.97x | Corporate Developments: Acquisition by THL Partners Agiliti announced a definitive merger agreement on February 26, 2024, to be acquired by its majority shareholder, THL Partners, for an enterprise value of approximately $2.5 billion, taking the company private - THL will acquire all outstanding shares of Agiliti common stock not already owned by THL and certain management for $10.00 per share in cash[6] - The transaction implies an enterprise value of approximately $2.5 billion[6] - The transaction has been approved by the majority shareholder, THL Agiliti LLC, and requires no other shareholder approval; upon completion, Agiliti will no longer be traded on the New York Stock Exchange[7] - Due to the pending transaction, Agiliti will not hold a conference call to discuss these financial results[7] Consolidated Financial Statements This section presents Agiliti's detailed, audited Consolidated Statements of Operations, Balance Sheets, and Statements of Cash Flows, providing a comprehensive view of the company's financial performance and position Consolidated Statements of Operations Statement of Operations Highlights | Metric | Full-Year 2023 | Full-Year 2022 | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue (in thousands) | $1,174,604 | $1,121,292 | $291,986 | $281,679 | | Gross Margin (in thousands) | $404,103 | $430,974 | $98,556 | $107,579 | | Operating Income (in thousands) | $64,791 | $91,986 | $16,617 | $22,894 | | Interest Expense (in thousands) | $84,115 | $49,439 | $23,461 | $14,983 | | Net Income (Loss) Attributable to Agiliti (in thousands) | ($19,425) | $30,212 | ($5,711) | $3,371 | Consolidated Balance Sheets Balance Sheet Highlights | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents (in thousands) | $20,037 | $5,577 | | Total current assets (in thousands) | $337,743 | $316,313 | | Goodwill (in thousands) | $1,239,432 | $1,239,106 | | Total Assets (in thousands) | $2,398,944 | $2,444,107 | | Long-term debt, less current portion (in thousands) | $1,061,062 | $1,077,293 | | Total Liabilities (in thousands) | $1,458,121 | $1,497,782 | | Total Equity (in thousands) | $940,823 | $946,325 | Consolidated Statements of Cash Flows Statement of Cash Flows Highlights | Metric | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities (in thousands) | $169,816 | $199,776 | | Net cash used in investing activities (in thousands) | ($83,892) | ($146,860) | | Net cash used in financing activities (in thousands) | ($71,464) | ($121,664) | | Net change in cash and cash equivalents (in thousands) | $14,460 | ($68,748) | | Cash and cash equivalents at end of period (in thousands) | $20,037 | $5,577 | Non-GAAP Financial Measures This section reconciles GAAP to non-GAAP financial measures like Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS, used for internal performance evaluation and external analysis, with adjustments for non-recurring costs - The company uses non-GAAP measures like EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Net Debt, and Net Leverage Ratio for internal operational performance assessment and to aid external analysis[17] Reconciliation to Adjusted EBITDA Adjusted EBITDA Reconciliation | Metric | Full-Year 2023 | Full-Year 2022 | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Agiliti (in thousands) | ($19,425) | $30,212 | ($5,711) | $3,371 | | Interest, Taxes, D&A (in thousands) | $248,224 | $223,971 | $64,800 | $61,476 | | EBITDA (in thousands) | $228,799 | $254,183 | $59,089 | $64,847 | | Other Adjustments* (in thousands) | $38,064 | $42,382 | $8,246 | $6,556 | | Adjusted EBITDA (in thousands) | $266,863 | $296,565 | $67,335 | $71,403 | - Other Adjustments include non-cash share-based compensation, transaction costs, management expenses (including severance), and loss on extinguishment of debt[18] Reconciliation to Adjusted Net Income and Adjusted EPS Adjusted Net Income Reconciliation | Metric | Full-Year 2023 | Full-Year 2022 | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Agiliti (in thousands) | ($19,425) | $30,212 | ($5,711) | $3,371 | | Pre-tax Adjustments (in thousands) | $126,657 | $133,804 | $29,991 | $29,786 | | Income tax benefit associated with adjustments (in thousands) | ($30,655) | ($46,538) | ($6,950) | ($8,630) | | Adjusted Net Income (in thousands) | $76,577 | $117,488 | $17,330 | $24,520 | Adjusted EPS | Metric | Full-Year 2023 | Full-Year 2022 | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EPS | $0.55 | $0.85 | $0.13 | $0.18 | Net Debt and Net Leverage Ratio Net Debt Calculation as of Dec 31, 2023 | Component | Amount (in thousands) | | :--- | :--- | | Total Debt | $1,079,530 | | Less: Cash | ($20,037) | | Net Debt (in thousands) | $1,059,493 | Net Leverage Ratio as of Dec 31, 2023 | Component | Amount (in thousands) | | :--- | :--- | | LTM Adjusted EBITDA | $266,863 | | Net Leverage Ratio | 3.97x |