AGTI - Earnings call transcript Q4 2021

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Operator

Good afternoon and welcome to Agiliti's Fourth Quarter and Full Year 2021 Earnings Conference Call. Today's call is being recorded and we have allocated 1 hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Kate Kaiser, Senior Vice President of Corporate Communications and Investor Relations at Agiliti. Thank you.

You may begin.

Kate Kaiser

everyone. hello, and Shamali Thanks, Thank you provide quarter call we on December joining overview of us an the XXXX. today's Agiliti's XX, as for results ending for

in Specific we'll Investors you detailed Before actual I'll subject and results at most could from us to call. this risk our Certain materially accepted forward-looking that are calculated in referring be release factors uncertainties. our be presented are not our are be making those and website and recent to generally the may during press and we differ consequently accounting can to statements remind in forward-looking which principles expressed found corporate cause that today's with certain factors begin, risks agilitihealth.com. also during the SEC section filings are that We'll and in statements. measures call, the in affect future of accordance

most of the measures You GAAP of website in reconciliation these we'll our a the can release. a and find our use select today's measures agilitihealth.com then copy Investors a to the press these facilitate and presentation please To discussion, directly of we use that at the and Events at visit download comparable description why of section the to screen measures top Presentations.

I'll With Finally, over select CEO, presentation titled Earnings Leonard. Full turn the that, call Year Agiliti Slides. QX and our Tom XXXX to

Tom Leonard

full for good on of taking reflect review join you XXXX time quarter the afternoon. results year. performance as and fourth our Thank for our Thanks, the Kate we the us from to and

Commercial Boehning, Jim Pekarek who is our leads our and me CFO, President, today Tom Operations. our Joining

for through perspective previously our details and our insights Jim of and factors our XXXX a the crossed results walk that $X call. year begin we'll our direction. revenue milestone. current few on finished our the and initial outlook XXXX the in the performance XXXX, the ahead for the throughout offer increased provide our for in will annual into guidance results billion trends year drove performance Our later Today, overall Agiliti share on expectations ahead. I'll and a business and with guidance our

in both commercial quarter First, we goals and reflected the to the on results for deliver full our as our year. continue

Sizewise With Within rapid spread Delta the rental rise and on our variants increased financial our COVID-XX demand year, in in Equipment our Omicron we also the we the fleet the of Solutions, recognized impacted recent Solutions contribution acquisition. which customer results. device Equipment medical favorably late saw from

across recap our from Revenue HHS engineering the now filed Agiliti driven XXXX business his like We customer work and Boehning announcing rest government's the to the on-site our the direction held our of with see and With offer X-year new X, overall the contracts emergency important focus continue year-over-year. in remarks. medical Tom quarter brief prepared services managed details well. strategy federal our On ongoing performance agreement to deploying the to March as on stockpile. of steady provide additional squarely Clinical strategic X-K a our work, will I'd managing, a beyond, national supporting largely solid continue performance new and an in by was stockpile. on device company. maintaining and

repair than and service needed, and we level, We organizations the with other patient clinical and infrastructure. manage, same we delivery part availability customers capabilities, ensuring manage established and their patient-ready of at we whenever for serve. device the more patient's needs, to provider care customers. hospitals, health of and centers, key rights Starting and devices have equipment drive as expertise our wherever as teams local behalf to improve care our the logistics systems mobilize bedside. customers Agiliti in medical the outcomes national our medical our neighborhoods down efficiently health With and of maintain quite helping The literally including paired work a medical device live help technology-enabled on local are medical cost XXX a

device solutions as new and availability repair at At inside we Agiliti's well improving We them. targeted XX% that beds have at more advantage we device unique staff serve integrated a delivered delivers operations and national in country. previously infrastructure shared our Agiliti puts radius XXX-mile advantage a opportunities and cost in provides a identify us level, how the as access us This all of how structural customers logistics in of and readiness than a medical meaningful scale.

each many uniquely systems floods We response short coast-to-coast or needed. support over deployment other device national behalf on long Agiliti peak rapid systems of natural surge emergency man-made fires, and footprint supported and during Our teams and we've last care on wherever season. mobilizing equipment, provides provided the health largest years, nation's and patient during sophisticated X emergent operations government supporting needs and teams. by of medical the been systems health maintenance across enables of our regional to serve history, management, Throughout and our response medical to city, and flu disasters And state federal notice and need. device for capacity the us most times meet country has the supplemental to required health to the

an recalls. Our part choice of Agiliti even agencies of tuck-in successful growth, as own has repair history organic work a medical medical established has top become challenges, an the consistent the Agiliti large-scale of serving demonstrated this device record their solve of has of by extension important capabilities M&A. field these impacted response of our COVID-XX. been device for many on government to partner national nationwide throughout behalf including manufacturers, On period of medical

to staying volume to that to what approach. completed national close to approach profitable existing build while share stated illustrate additional overlap clearly we X meaning infrastructure, look grow do and XXXX, acquisitions our on this Our to In evaluating market our our size to we we and capabilities continuing opportunities drive through is service extend, best.

associated Instruments, the was surgical instrument Sizewise Medical, up and and is Across repair a our standard that bed of service addition the repair in we're of the specialty nationwide complete XXXX therapeutic and acquisition opportunities largest maintenance services with in patients First our our provider protocols the are on these bedrest. a require higher to acquisition medical recently, care, service to mobility support Agiliti. woefully X, at national patient they and them excited specialized March. second handling patient we we of illustrates synergies, this medical remain future need, Northfield and about population the Sizewise of the for equipment Mobile despite for nationwide the capabilities underserved. we third for It and overlap risk on prolonged footprint. and closed which continuum equipment, Obesity combine and manufacturer independent providers services challenge. Sizewise transaction clinicians model. More distributor and the clearly direct care Building acquired of the opens October equipment And closed expand significantly surgical a and frames, that and near-term beyond complications extend last that

complete and our pursue compelling competitiveness. Sizewise volume resilience our can extend provide around infrastructure, them. flexibility to extraordinary customers with we foundation which opportunities known. our is a see the make of and we've M&A the into More opportunity drive solutions continue business deliver on Agility build seek value profitable targeted for Agiliti regarding for new and an targets operations we final and support point and the to to We'll that that built active broadly, through strategy is predictability our financial I'll national operational maintains a forward, model. local clinical pipeline our the enhance A today that Looking

long our has highs and operations, starting now in lows our proud the back We're results model in and of performed of phase business our to demand. the our described the as as delivery and as and our pandemic connection well parts before meaning well customer, of customers' medical of this to customers' teams has the we previously us serves internal business, support COVID and the regardless normal observe resilience affecting of individual hospital's a is Financially, our which our reflected in medical of always roles throughout operations. of a financial this I've the our system. support every situations and look business a you as or of for cycle as device can set evidenced our As health model system or trends care in challenges durable our the the procedural Agiliti of essential across that the between part an work. facing performance, balance of nature of our transition Agiliti you life some are macro natural solution or been the our stable our important performance specific of national health nature whole hedge, sides

forward, business we're and ahead enthusiastic the of us. Looking even momentum strong our more about opportunities

Let now the turn our his Boehning call to for perspective Tom on performance. me

Tom Boehning

color begin additional then Thanks, reflections our Tom. with I'll on a recent macro on their trends our and and on share commercial some few business. performance impact

to demand of and COVID-XX equipment by Omicron both Delta rental customer heightened the variants the continue virus. during we see First, our the fourth driven for quarter,

of persistence levels offset an device country of engaging to share, equipment as medical had our device now their XXXX. which We while their QX continued responsive our the a approach to demand. supported access see some to customers, return enjoy likewise its of teams service the to normalization we case of remain navigated of on More the capabilities needs. impact We're the surgical strategic network on volumes needs we increasingly customers national longer-term from impact Today, short-term pandemic. favorably as to COVID-XX fearless and customer non-COVID broadly, across mind of that a end the effects initiatives. variants with logistics we will normal Our they our ongoing utilization the of the and expect seeing ensured return normal

agreement that award ventilator federal fully for interruption services device the and to of future this services contract of maintenance X-month and XX This XX competitive new Human while comprised into the of it's up HHS risk Secretary is this term response a government On of COVID-XX to base March a U.S. prior ongoing details of Services, Assistant for medical minimizing to Department It's agreement for course, response. award. for support of the process to any a In of intends XXXX, sufficient provide contract to time X, publicly months. multiyear compete for intended and critical Agiliti preparedness an run emergency and equipment. year, summary, Agiliti several to of provides the consolidates topic agreements option contract and February Health released the term for Agiliti, stockpile in initial entered the award. term. comprehensive nation's X-year new our On this management X-month medical Agiliti of agreement new management. Turning with our

publicly information shared perform moment work to in nondisclosure remarks. on their under what of discloses details federal inflation we calls, and to and wage this regarding that can touch today the operate on HHS previous at we've labor supply limited subjects the provided a I of our chain direction. availability, we government prepared take The As and general we we strict risk. agreement today the with discuss could what is the contract

We discussion important our happening inputs we industries. broader monitor across continue to closely all followed and these business to the

not As macro these quarter, a seeing from issues. are we impact shared we last significant

Are the top up mind, availability, we the With and engaged this somewhat land to across we joined X we that process. labor in complicates in funnel recruitment land view finally, our candidates they've pressure Regarding attracting in we're fewer in time broad ability the successfully we're the candidates Agiliti? fill funnel? high-quality seeing slightly. tend can local the at We've once seen attracting and to currently increased good markets of And categories. subject we've has we've certain what them ticked context candidates once the to Are once also our process? candidates of top today them retain positions able is right engaged wage that to we our the talent to

positions positions open within our As of the XX% today, company. a result, seeing total approaching we're

these single historic on roles in based While impact excess additional to hover time. high open growth over high the customer levels date, positions we've through or our been meaningful digits rate, not able without manage in normally turnover to

trying closely we and risk monitor of our work to can employee to teams continue while continue the burnout. ensure important We customers our to minimize our

more We the picture, Bigger doing our members Our personal mission-driven well-being. last extended the have new overall offer credit itself teams members work. patients and opportunity company employee rates the targeted on that a career the Further, difference ensure supports benefits financial and system. over prioritizes introduction believe to we to cash incentive in retention Overall, culture of a we in this plan. rewarding care lives a our steady of the nation's labor Agiliti in We the that the of competitively our relatively stock-based that an positioned opportunity and purchase prides build when team recently, ensure a generally success had held makes through programs our difficult work to the and Agiliti including of stock COVID, we needs employee health years. environment. our X throughout share to remains team

risks, outlook fixed generally Agiliti is supply operates our under In similar. longer-term pricing. relatively terms of somewhat agreements supply chain with

for capabilities those and processes parts customers. devices supply ensures critical for chain we that our for the we own and for manage service fleet purchasing acquisition repair centralized management that Our of efficient management devices Further, with support and on through of our the of I'll the manufacturing our acquisitions. safety an disruptions. are Sizewise, recent stock addition potential to our business of conclude we update the acquisition adequate integration through recent with short-term maintaining

facilities, team. project underway X and vehicle to leadership have team is operations now field financial serve we go our turn selling taking highest with beginning common supported functions we differentiated our infrastructure. platform our market combine well integrated a corporate to our well directly commercial merge next our Northfield personnel, that We're performance. customers. customers and and operating and integration priority. years. to financial is operating that, equipment single service a repair operations aligned let our completed just We've our to fleet, integration Sizewise. and we over by First, steps which inventory technology the solution the now The equipment to as a systems offering of to Medical. Today, collaborating a also our to team as combined integration our the surgical me with We're expanded span our our newly will in as we're With review things roughly bring Jim of

Jim Pekarek

overview our financial on Thank with of an and comments full end QX then our you, Tom. I'll and XXXX with start guidance. financials XXXX year some

demand. million total revenue year the estimate $X Adjusted points totaled $XX a estimated $XX of in Adjusted revenue million as XX% approximately margins million, Sizewise an EBITDA margins QX, in For to an well includes of revenue XX% prior increase over impacted totaled representing the from for of XX% EBITDA the in prior the Northfield $XX COVID-driven million year. year. XXX the fourth that acquisition We were million, quarter, and adjusted $X increase contribution by million $XXX company the contributed prior EBITDA down which basis the acquisition were year. from over Adjusted Sizewise Medical. EBITDA versus as last quarter

generally enjoys You margin that Agiliti will a recall strong very profile.

start So the all with margins. adjusted we companies have EBITDA acquired pre-synergy lower

year. direct of April performance, average This result of an adjusted shares with an associated XXXX last of offset strong share performance business XX a QX earnings or was partially operating diluted per growth overall by drove weighted $X.XX, our strong of increase outstanding $X.XX million Our up over IPO. XX% fully share our a

basis the points representing EBITDA full year, XX% over for rental record medical overall from revenue growth XX% last up device of billion, increase $X.XX new Adjusted impacted also HHS and For drivers. XX% the year. COVID-driven performed most utilization medical representing were fleet year. a device Organic year. prior notably by under contract. company Margins XXXX, a significant million, Adjusted customers from margins were utilization volume over from favorably totaled growth, EBITDA XXX and total the totaled our services our prior were $XXX increase

revenue growth million, earnings nearly service Equipment $X.XX an per adjusted quarter solutions the and drove equipment year-over-year. revenue. services slight We and performance closer double up Taking Solutions year's XX% a operating $X.XX, our last of in share engineering revenue results. look strong clinical managed both delivered lines. at $XXX a Our fourth across across on-site decline and up totaled strong

contributed in QX. acquisition in X million Sizewise $XX of October approximately revenue Our

between And In the impact experienced million. addition, $XX million from of we also million quantify, while estimate levels. to period, in COVID approximately $XX million versus pre-COVID a impact and COVID prior favorable of demand continued had a QX. year we $XX net In to favorable difficult $XX

was Engineering. driver representing the under significant revenue Clinical A QX quarter. agreement. growth to year-over-year of of revenue Moving performance million, performed for was higher-than-anticipated $XX work XX% this HHS our from

solution In during addition, the we Clinical from reported Engineering our contribution the Northfield Medical within quarter. revenue

million, totaled representing decline services on-site of Finally, managed X% year-over-year revenue $XX for a quarter. the our

Agiliti's on and line benefited. As have we nearly service customers has Solutions near-term COVID X for to the have years, focused Equipment previously related challenges been directly described,

emerge period, with more engaged again once are longer-term, customers we on we strategic As our this from COVID-dominated initiatives.

We $XX in year-over-year. on-site P&L. Continuing for through an Gross XX% increase an funnel. QX margin million totaled managed are already opportunities $XXX new the sales seeing million, down our moving of or increase

basis margin was than gross utilization was levels of and better than growth solutions. our This rate of general driven margin record Our fleet the device our prior by rate in across year. improvement more volume XX%, points XXX medical by

a percentage increase our or the over due lines XX of prior $XX on basis favorable an increase The operations by expenses points revenue from for $XX SG&A is increased volume costs acquisitions, year. to leverage of as of XXXX all a million, common approximately XX%. net As primarily SG&A our infrastructure, has margins. QX business achieved of a SG&A costs synergies. million impact totaled

$X.XX on $XX billion QX cash sheet. which sheet. We debt hand balance of less $X.XX in closed on the with balance billion to of our million includes Moving net debt,

paydown a lower and part interest debt of flow reduction by and from Strong flow our operating costs the to prior adjusted year $XXX IPO. resulting generation was in the for operations over cash X.Xx as lien reported the results leverage at our the of second from Our of resulted versus our strong driven year the end cash facility ratio EBITDA quarter. of growth million,

in X, strong call, results. in using reminder leverage with QX A acquisition would we leverage result our a range we significant by revolving liquidity a and longer October as earnings actual includes as XXXX, $XXX in cash fund to increase hand. that with successfully of an well mid-Xx of XXXX. we raised we term maintain the terms of acquisition, facility as closing is credit loan estimated with opportunistic turn approximately M&A. the pricing generation half consistent As stated as million our the million cash sheet consistent term, Sizewise available had ratio debt. million on our we term our to Agiliti maintains in our the the $XXX our most with the $XXX anticipate cost-efficient Sizewise low and add-on of our with loan that over This to flow expect which position December balance On portion

XXXX, spend on towards a minute near-term investment. turn As incremental we I'll planned capital

our or level This X support drivers the than XXXX. and in We range are percentage X to of CapEx There the million points to increased for as maintenance infrastructure is business. normal the of our X% requirements as well X% full operations of to in to IT of year guiding several investment annual higher are $XX approximately revenue. $XX our growth and million spend

had unable experienced targeted This and/or no on is XXXX the supply year manufacturers targeted First, ship device delay. and impact simply we invest as equipment to some quality-related at operations chain last maintenance challenges our spend our level a It of CapEx timing for level. holds. below we finished our fleet were

our capabilities focused scale upgrading ongoing investment modestly accelerate our business. expanding support customer we These are systems and rapidly improving increasing the of to investments IT are the internal on of Next, our build-out infrastructure. to experience

expand to modernize we are several Finally, growth making investments infrastructure to Sizewise, with of the with focused align our acquisition near-term projections. our manufacturing and

outlook. Turning financial now the rest to of our XXXX

the to assumptions. basis. As XX% revenue approximately billion of the share year. quantitative currently a just CapEx with line range $X.XX I'll representing for We to the investment in prior million, million expect year X% EBITDA $XXX $XXX stated, a to adjusted reflects anticipate guidance reminder, XXXX to provide key of our to top of to metrics to a $XX We deliver performance expected compared decline we billion, $XX million. the $X.XX range growth in of in million summary X% cash our our range a as And on net of full XX%. guidance and significant start

share the metrics year are guidance our approach IPO X-year anniversary our of we earnings per to as and adjusted structure capital Finally, adding our stabilized. full we has

share calls, $XX $X.XX $XX per our earnings earnings throughout of and adjusted in From comp much high-margin in of expect financial perspective million in as COVID-driven share. have XXXX, per we qualitative we each $X.XX of from XXXX, million a shared tailwinds the our to range the For results XXXX. will against to revenue

year, of XXXX some return early year. of equipment saw levels the to balance for we utilization assumes While QX COVID-driven this demand a the in pre-COVID our plan

or HHS stockpile Additionally consolidates and the its activities reflects device maintenance described associated standup contract several as agreements and prior Tom management initial of scope the new ongoing narrowed earlier, without our the and its deployment. with incremental

our historical guidance made HHS the our impact long-term new range, impact of of consistent implies growth XXXX, While services. our Net impact will financial Consistent in continue majority for expected remain of Agiliti is and services the contracts ordinary course managed important and That pre-COVID the play where mid- attention rate. for the and acquisitions their high implicit our for solutions role. approximate engineering our million million within solutions reduction growth the is organic be of to an the COVID on-site XXXX. revenue the throughout rescoped signing financial will within strategic in $XX turn both contract in in as business, adjusting on-site confidential, $XX accounted our managed back with single-digit in the and customers revenue expect of initiatives to with that difference clinical to though details year an to in the implementing the see we guidance contract annualized

new guidance for in which to implied normalization XX%. rental impact will our utilization full are to device be levels, drivers range XXXX adjusted can include of to margins the calculated be pre-COVID from expected of that the of the our Primary margins XX% year balance year contract the EBITDA the turn with Finally, to back margins both on our impact lower call Northfield and the to Medical which and provide operator instructions Agiliti's historical our compared HHS acquisitions of now to for assumptions internal the average. pre-synergy over of in EBITDA our Sizewise, I'll Q&A. our start when

Operator

Instructions] comes [Operator the of BMO Borsch first Capital question line Matthew Our from with Markets.

Matthew Borsch

Maybe talk remember availability bit more the experience in you labor wage change what your and just about with Yes. a said little third inflation. I quarter. I mean, the on

it where You impact saying no know there be about might was and anything there accelerated. the or but you anything coming it bid say weren't about like that? away modest what was regional you from really Is can variation

Tom Boehning

a material impact our modifications had get as to in markets the Matthew, double-digit now was we we the in having remarks ramping -- shared business. certain are be get prepared talked the said We're particular and, our about speaking, our Boehning. the in company. you of right we roles. to vacancy sure We've markets. course, as it's generally about it incentive the what that attractive -- of to on high But certainly It's we up -- low people we our usually it's order make Thank rate hitting recruiting make for structures run sure to able range question. we in and our in rates the make in those it's the in remarks, Tom terms right not last we people single-digit efforts to quarter, in some to in

Matthew Borsch

is Are just trying getting -- to you of running just it just right in trends it out months gotten last the figure you've of X has the XXXX, where I'm worse, for going seen then trend better, terms how over what recently? is the now.

Tom Boehning

Yes, a good question. it's

But slower trying steady. place. as again, So little I growth, retention remain vacancies the models we stated, is past. would rates, it's have right relatively in encouraging has And our we're retention steady with to fill that say has we to positions we been it the fill. remained than in the been But the relatively have that which a

Our what the are what team members that with feel they do. aligned desires in and structures incentive are. fulfilled their

of in retaining a has it's it markets, doing we're than difficult more recruiting well terms little but So in been. certainly certain

Operator

next Kevin question comes of Fischbeck Bank America. line And with the our from of

Kevin Fischbeck

comment I everything the the given But to appreciate what's above much and by revenue think -- if kind COVID can the as -- everything. additional hard breaking about sense tell maybe is growth you organic of it out How segment range deals far what's single-digit underpinning to a kind to as be demand to volumes? give little makes it be is might maybe you kind there you the going that about pent-up mid- color in because core growing that? what normal and are as below to of growing assuming high assumptions. of anywhere return Or a

Jim Pekarek

And break back sharing was that $XX things I us I out pre-COVID expect had perspective, just to within revenue a a level to going couple from a million. the don't quickly. the to for the overall $XX get prepared in remarks, was that of shared shared recall COVID Yes. Kevin. but that we're impact We details that very what we do XXXX million Thanks, First, here

point that you're So a XXXX as Equipment would be XXXX good reference Solutions. thinking to within

I is the for quarter. for one an QX The about was Sizewise the for is estimate revenue million out the other acquisition important thing the in called which $XX

mind. that couple in will keep are XXXX pieces So impact those also a of to solutions so in equipment

million will engineering pointed Kevin keep of on and between is we we HHS, primarily and I million within lower on-site. but contract that is clinical it on-site there $XX both impact that and will revenue impact piece out other in just The estimate primarily renewed, mind, to that that and $XX impact site. the It

solution. a bit that within as color about each you gives little hopefully So think more you XXXX

Kevin Fischbeck

we there impact if guys of those be because impact still is serve guess, that and this discussing, were you potentially Or things resolved things an shift future sounds it And have to think that fully it delays I CapEx an that. that to expect like some year-end? are Okay. Are And and ability as your now? you the like about clients. resolved was of in having delays, would by equipment

Tom Leonard

this So is Tom.

Jim Pekarek

can hit one. that you maybe Leonard,

Tom Leonard

Yes.

No. are are manufacturers chains are of Medical impact both there supply and availability some that fully resolved? So recalls they equipment. device impact still seeing to still the

business, of maintain as CapEx fleet equipment terms we refreshing continuously though, to our would a maintenance our risk. think the we're this impact and its that at We level own. I where about fleet. In our

equipment to year means no when of we're it just impact fleet may make customers appropriately. delay meet to our can we our the our our age but of over course age that of we average and requirements up ability the refreshing the simply ensure So a to slightly the

Operator

line next Our Pinal question Jefferies. of from comes the with Frank

Frank Pinal

I quarter the for on guess X me. Congrats here.

a of for that clarity's what On that maybe months, million, contract, $XX way is contract sake? of if all option the clarity the just lower -- is second is they're that a you in at And million assumption could there. period the that Is XX it X-month there sort X-month revenues little it the that wondering provide unpack quarter, lower on $XX months midpoint. there there goes some X or end that, a to options just sort could

Tom Leonard

Tom. is Sure. This

Let you. take that me for

contract if a from what be a if X-year by initial the will years X-year contract. look at rent you has into contract happened So take ends extension way, X.X

very device to that has and for half actually years for a been long stockpile dozen what's the been give here. this team stockpile so has some color that been I and medical time. gone. We've of There it managing device part or a me Let medical

the a that and share now feel Delta with services awarded give new significantly to vital period with strategy direct I'm a X-month to consists in risk What a without X-year to would Omicron then run months outlined a first to contract COVID, seen do was full extensions process procurement that that use it of the competitive last that so they X-month and has hope certain and As a on world award and option we're the a that time you've there'll of what's a think over X process background, it -- and base to the wane provide was providing. they awarded extensions, to X-month a the Agiliti cases us contracts COVID paths run X-month they to and part was to without was regard in new it period. and can has the these of the process directly risk to expanded they over them received to directly series there and those the COVID stabilized we government award us. to X-year described Effectively, ability when I COVID run going that initial that be a time services pandemic,

that as ahead Sort option that between X and they'll of that a X with first structured we competitive and go initial term the X-month this end of expect would sometime term option generally process. an and months the run months

our previously of management. we've stockpile management As stated our we've parts consolidated continuously, the consolidated unrelated under We've predecessor the X of stockpiles years. all other under additionally this over last

award. is on continue We government contract this. in to good feel a longer-term our to position run very able whenever be position a the to new finally about

Frank Pinal

steps longer-term just or sort given portion 'XX, a Great. I there, taking that sort And variable is of guess, contribution time to down wins et over into view cetera? there it this assume, of 'XX, then prudent the

Tom Leonard

I'm sorry.

to be million in Imagine needed It about was support way made us It a management was award, and million provide is generally course the manufacturers spoken $XX as all a of these substantial this the we've of taking in pointing there then year. protection ready storage contract. the occur first activities, expanded $XX devices what number year So of in the we reflects devices activities ensuring maintenance, the ongoing this greatly reflects new structured over got when that that uncertain been the what the whatever to variety to stockpile. we managed, increase stockpile. on might deployment by stand-up and to a to these of wide are being have and

maintenance was current deployments. -- it back future a management without very larger to assumptions was of so And the a goes contract. stockpile contract The and it

normalized just we've the see the future not reduced million to deployment, renewals, reflecting level, revenue stockpile, to the to guided management X-year in again, that million normalized level we'd here really it's revenue of is expect the $XX not So the $XX of of this that standout.

Operator

Citi. line And of Cassorla question Jason our comes from with next the

Jason Cassorla

to quickly Great. commentary. wanted the just to back turn supply labor I

You ability digits currently new isn't in for which current really could to a difference, impacts high you your if haven't impacting this significant revenue noticed to that opposed near go on expand single go-to-market term? versus XX% the as noted while open dynamic positions yet. the And opportunities historically. you maybe to around just contracts labor strategy service you supply the is guess forward considerations said impact I

Just there be color great. would any

Tom Boehning

Tom It's Jason. Thanks, Boehning again.

be ability think don't see speaks retain But it meet the that created right have nice without strength I of acquisitions We some have to we an have model also trends macro positions. at some our to us our proactive have in accelerated So of sure these really obviously the that having to to making retain demands able level. we growth. been we synergies to the recruit fill done talent. And now and the allowed inhibiting and customer

to grown we've in of manage we've these have, impacted we that the customers, of through been and our had that and and that able both year-over-year existing talent XX% pressure and the filling the well. really headcount balance the the fact because So hasn't acquisitions the we talent that part positions resources

ourselves. our our ability customers meet and on now, again, to right growth So impact for we that to set our targets the delivery no

Jason Cassorla

services. for a I it. called And to -- want out COVID Got just focus on-site an managed follow-up. as then maybe Great. short-term impact as you

specifically; the your could you're this just here. deeper around that out there segment first is this on for dynamic. you're argument that amid delve and the think hoping seeing comments be opportunity I But the funnel sales how I calling you time develop off to

Tom Boehning

you, Thank Yes. Jason.

side the during their were they So for is both labor markets. to Equipment equipment critical as for trying obviously on of periods our clinical was our and patients various customers engineering, augmentation highest in of demand the which resource in the that Solutions meet the needs

it course, was dramatic. Of

their conversations transactional demand across enterprise. the try the managing so across strategic in really their near-term around, IDN manage needs facilities or and equipment, their coming to because on to either their outweighed basis postponed their their the instance, And were equipment across for

And strategic. that's hospitalizations So it begin was we're strategic. customers we're seeing which much amount now tactical that we're reengaging of the to our more on why drop, And seeing than these the fact for seeing on-site conversations deployed of equipment some the the a are time drop. onsite hospitalizations the as of mentioned we side. growth been to some the and return on that's beginning that distributed because earlier, of more And

has relevant because So of their strategic equipment that COVID more starting last of their it the demands. to become conversations pivot more to across years X.X been management around full over than enterprise the year, is

Tom Leonard

In help customers our of or to as cycle consistent of individual solutions. of we're balance the side example a their I'd the to when case, on not of a the teams the way, the devices balance this medical the were to course the looking kitchen. house. COVID, the equipment hand redesigning bucket hose our the on necessary procedural servicing across same it color them life fire is is the somebody and for full But fire, of the help, land hence specifically wasn't across were the guide if additional looking both during an house customers meet is to houses it clear needs. when going some somebody of I'll said liken for to In water, the the matter on-site always with both Just that on is what's we no our you for you with point it indicated as you, share not revenue, to what of year remind we've pointed well needs the our demand, year. I'd is out only had portion we where business What in devices comes when

once back Now fires that we on-site as increase again remodel programs. to shifting shift This again, what do with initiatives them home, how do the focus do I I how of thinking longer-term out, my the their the a they're value on back once our in kitchen. our about to conversations

Operator

question comes next of line KeyBanc. Matt from with the Our Mishan

Matt Mishan

nice a very quarter. -- on a Congratulations nice on

that's mean Just volumes? to in better procedural your the be that that. little to hospital I now how fire business wanted tied it I area bit to a just out, if like starts going quick one. as recovery the of back coming of you understand the What that the leveraged a percentage faster. now is is to seems are

Tom Leonard

field provides have surgical repair as the lasers procedural both the in the well that instruments Equipment leveraged as somewhat Solutions, are and mobile business. as to side places. technicians X as well We had Within surgical we we business support that a North business acquired cases

are always as we about net a we've COVID When we've to impact. described spoken So procedure impact, leveraged past volumes. well it the in

on business surgical some of excess those that reduction the impact medical volumes side, So demand, of types the the net in the described. parts equipments case I've of just of

minor but these business. expect laser for reverse pickup events things our things surgical like instrument and things of some would like to a and we beds corresponding our business So repair surgical lower and equipment utilization pumps,

Matt Mishan

on when hospitals. about like you time during for just the very But then difficult you of Okay. you them revenue made made, acquisitions. Excellent. you And think great synergies, acquisitions made a really the couple a

share, mean, your you and deploying wallet of with since that increase kind is a those there could they conversations start do those where share had As in grow of comfortable and those? look point now at I 'XX we're customers to you you've market feel

Tom Leonard

increase an of to So across case repair. The have mobile this to the the through those future. medical side they've And the expect about we've We're position excited in excess just instruments, competitive volumes. and in acquisitions balance do of in instrument be number yes. return, in the organizations service like well as And period clearly case to And surgical X to speak driver acquisition, been as do and medical that side. case the -- we again, and important shared what We procedure. growth been benefits business volumes us sign by acquisition field we somewhat on for repair looks sign new both surgical a continued continue beneficiary in Sizewise impacted the you as the business. COVID number demand, throughout expect very beneficiary of surgical X, volumes described, the combined some X a and as instrument both to surgical we we a reduction independent our North be the that, to

Operator

comes And with Goldman our Sachs. question from Amit Hazan next

Unidentified Analyst

This could. is if Phil [ph] Amit. A of on I clarifications, for couple

when is contracts to of kind go-forward phenomenon a occurred reduced course if forward I be $XX full this appreciate reduction the that you to prior that's $XX few contract. just headwind or or over wondering months the were forward? million the million on new one, this that in the scope last rolled not of HHS will scope expected moving comment whether the if the characterize first on I'm on the renewal The being can

Tom Leonard

our further an reduction that expectation direct of were consistently revenue extension extensions contract out we've announced see further that the where causes now it this -- to supported pandemic is And deploy much expect prior just The contracts we as don't expect and response. well. been is scope need deploy million is comes on $XX awarded. as we've that up the guiding of that And agreement stood XXXX. existing terms the be we what $XX X-year equipment what original to the we longer-term would this reduction have of reduced this were impacts scope Again, new million in to as to

revenue that's in result new $XX about and out in us for announced. reduction scope come $XX was the effectively for contract items just that to line million those and million a So but

Unidentified Analyst

to XQ, then quarter? And of during XQ XX the persisting XQ XX expected impact the to reasonable from XXXX the but correct? point for in to Omicron, and Okay. clear. experienced getting I a XX on the normal Is and impact some heard I That's very it's course environment the about impact, for occurring comment -- obviously, to guidance also secondarily, fair level solutions of starting within think XX COVID the 'XX the the XX primarily in back equipment year-over-year saw to quarter. within the XX on

Jim Pekarek

Yes, Amit, think about it way. wouldn't I that

be is As what the for going not but to of we've the in balance shared saw early we quarter in script, plan it my the material. that assumed first I it's

back the middle be we'll QX. to So a pre-COVID candidly in starting of level

Tom Leonard

would expect would you the as range quarter. be much impact that in suggested see than what So expect a to higher We QX. in would nonmaterial we

Operator

reached closing Tom session. for the now CEO, remarks. We the Leonard, over call to question-and-answer of I'll turn end have the back

Tom Leonard

what everyone, and a again, joining to continued support our progress health we care look forward We're to system. our our With for our nation's enter excited absolutely the and about they're you conclude and doing you call today. with we get XXXX to I'll Thank privilege as today's it's thank to great sharing share teams momentum that, our say you. call. of work we'll

Operator

lines conference concludes participation. And at may time. your today's you disconnect this you you And call. this for Thank

Agiliti (AGTI) 9 Mar 222021 Q4 Earnings call transcript