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Agiliti , Inc. Announces 2005 First Quarter Results

Posted: May 10, 2005

Dateline City:
EDINA, Minn.

EDINA, Minn.–(BUSINESS WIRE)–May 10, 2005–Agiliti , Inc., the leader in medical equipment lifecycle services, today announced financial results for the first quarter 2005, ended March 31, 2005.

Total revenues were $55.3 million for the first quarter of 2005, representing a $6.3 million or 13% increase from total revenues of $49.0 million for the same period of 2004.

Gross margin for the first quarter of 2005 totaled $23.7 million, representing a $1.6 million or 7% increase from total gross margin of $22.1 million for the same period of 2004.

Net income for the quarter was $1.0 million, compared to net income of $1.4 million for the same quarter last year.

EBITDA before management/board fees and SOX compliance costs was $20.0 million, representing a $1.4 million or 7% increase from $18.6 million for the same period of 2004.

“We realized three consecutive months of record revenues in the first quarter,” said Gary Blackford, President and CEO. “This is primarily the result of our commitment to and focus on the transition of Agiliti from an equipment rental company to an equipment life cycle services company. Our first quarter results reflect our progress in executing on our stated strategies. Looking forward, we remain cautious about the hospital marketplace, but given our execution to date, we are optimistic about the prospects for the rest of the year.”

Agiliti will hold its quarterly conference call to discuss 2005 first quarter results on Wednesday, May 11, 2005, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time).

To participate, call (800) 670-3537 and indicate you would like to join in the Agiliti First Quarter Results call with Gary Blackford as the leader, or enter conference ID # 21245517. A taped replay of this call will be available from 12:00 p.m. Eastern Time on May 11 through 12:00 a.m. on May 18 by calling 800-633-8284; enter reservation # 21245517.

This call is being webcast by CCBN and can be accessed at the Agiliti , Inc. web site at www.agilitihealth.com. Click on “Financials” and then on “Webcasts.” The webcast is being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (www.streetevents.com).

Agiliti will also use a slide presentation to facilitate the conference call discussion. A copy of the presentation may be obtained via the company’s website in the “Financials” section.

About Agiliti , Inc.

Based in Edina, Minnesota, Agiliti , Inc. is a leading medical equipment lifecycle services company. Agiliti offers comprehensive solutions that maximize utilization, increase productivity and support optimal patient care resulting in capital and operational efficiencies. Agiliti currently operates through more than 75 offices, serving customers in all 50 states and the District of Columbia.

EBITDA Reconciliation. EBITDA (before management/board fees, financing and reorganization costs, and costs related to Sarbanes Oxley compliance) and EBITDA are not intended to represent an alternative to operating income or cash flows from operating, financing or investing activities (as determined in accordance with generally accepted accounting principles (GAAP)) as a measure of performance, and is not representative of funds available for discretionary use due to the Company’s financing obligations. EBITDA, as defined by the Company, may not be calculated consistently among other companies applying similar reporting measures. EBITDA is included because it is a widely accepted financial indicator used by certain investors and financial analysts to assess and compare companies and is an integral part of the Company’s debt covenant calculations, and EBITDA before management and board fees is included because the company’s financial guidance and certain compensation plans are based upon this measure. Management believes that EBITDA provides an important perspective on the Company’s ability to service its long-term obligations, the Company’s ability to fund continuing growth, and the Company’s ability to continue as a going concern. A reconciliation of operating cash flows to EBITDA (before management/board fees, financing and reorganization costs, and costs related to Sarbanes Oxley compliance) and EBITDA is included on the attached Statements of Cash Flows.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Agiliti , Inc. believes statements in this presentation looking forward in time 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: UHS’ history of net losses and substantial interest expense; UHS’ need for substantial cash to operate and expand its business as planned; UHS’ substantial outstanding debt and debt service obligations; restrictions imposed by the terms of UHS’ debt; a decrease in the number of patients our customers are serving; UHS’ ability to effect change in the manner in which healthcare providers traditionally procure medical equipment; the absence of long-term commitments with customers; UHS’ 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; difficulties or delays in our continued expansion into certain of our businesses/geographic markets and developments of new businesses/geographic markets; and additional credit risks in increasing business with home care providers and nursing homes. These and other risk factors are detailed in UHS’ Annual Report on Form 10K for the year ended December 31, 2004, filed with the Securities and Exchange Commission.

                    Agiliti , Inc.                          Statements of Income                         (dollars in thousands)                              (unaudited)                                            Three Months Ended March 31,                                          -----------------------------                                               2005           2004                                          -------------- --------------                                                   (unaudited)   Medical equipment outsourcing                $43,181        $39,888   Technical and professional services            7,493          4,722   Medical equipment sales & remarketing          4,597          4,387                                          -------------- --------------   Total revenues                                55,271         48,997    Cost of medical equipment outsourcing         13,237         11,645   Cost of technical and professional    services                                      5,445          3,215   Cost of medical equipment sales &    remarketing                                   3,636          3,352   Movable medical equipment depreciation         9,273          8,638                                          -------------- --------------   Total costs of medical equipment    outsourcing, service and sales               31,591         26,850                                          -------------- --------------   Gross margin                                  23,680         22,147   Selling, general and administrative           14,855         13,092                                          -------------- --------------   Operating income                               8,825          9,055   Interest expense                               7,647          7,449                                          -------------- --------------   Loss before income taxes                       1,178          1,606   Provision for income taxes                       207            248                                          -------------- --------------   Net Income                                      $971         $1,358                                          ============== ============== Additional information   EBITDA                                       $19,496        $18,416   EBITDA as a percentage of total    revenues                                       35.3%          37.6%   Movable medical equipment (approximate    number of units at end of period)           151,000        147,000   Offices (at end of period)                        76             71   Number of hospital outsourcing    customers (at end of period)                  3,200          3,000   Number of total outsourcing customers    (at end of period)                            6,350          6,050   Movable medical equipment depreciation    expense                                       9,273          8,638   Non-movable medical equipment    depreciation expense                           $953           $677                     UNIVERSAL HOSPITAL SERVICES, INC.                             BALANCE SHEETS     (dollars in thousands except share and per share information)                              (unaudited)                                  ASSETS                                              March 31,     December 31,                                               2005           2004                                          -------------- --------------                                                   (unaudited) Current assets:    Cash                                          $2,999             $-   Accounts receivable, less allowance    for doubtful accounts of $1,500 at    March 31, 2005 and December 31, 2004         42,667         40,644   Inventories                                    4,756          5,229   Deferred income taxes                          2,412          2,449   Other current assets                             939          3,458                                          -------------- --------------     Total current assets                        53,774         51,780  Property and equipment, net:    Movable medical equipment, net               125,814        125,987   Property and office equipment, net            10,136         10,042                                          -------------- --------------     Total property and equipment, net          135,950        136,029  Intangible assets:    Goodwill                                      37,062         37,062   Other, primarily deferred financing    costs, net                                   10,041         10,471   Other intangibles, net                        10,620         11,065                                          -------------- --------------     Total assets                              $247,446       $246,407                                          ============== ==============                 LIABILITIES AND SHAREHOLDERS' DEFICIENCY  Current liabilities:    Current portion of long-term debt               $253           $328   Accounts payable                              12,857         13,406   Accrued compensation                           7,253          9,276   Accrued interest                              11,102          4,615   Other accrued expenses                         2,843          2,594   Book overdrafts                                    -          4,691                                          -------------- --------------     Total current liabilities                   34,308         34,910  Long-term debt, less current portion           297,480        296,974 Deferred compensation and pension                3,694          3,644 Deferred income taxes                            4,039          3,937  Shareholders' deficiency:    Common stock, $0.01 par value;    500,000,000 shares authorized,    123,436,024.21 and 123,430,612.96    shares issued and outstanding at    March 31, 2005 and December 31, 2004,    respectively                                  1,234          1,234   Additional paid-in capital                       766            760   Deferred compensation                            (56)           (62)   Accumulated deficit                          (91,039)       (92,010)   Accumulated other comprehensive loss          (2,980)        (2,980)                                          -------------- --------------     Total shareholders' deficiency             (92,075)       (93,058)                                          -------------- --------------     Total liabilities and shareholders'      deficiency                               $247,446       $246,407                                          ============== ==============                     Agiliti , Inc.                        Statements of Cash Flows                         (dollars in thousands)                              (unaudited)                                            Three Months Ended March 31,                                          -----------------------------                                               2005           2004 Cash flows from operating activities:             (unaudited)   Net Income                                      $971         $1,358   Adjustments to reconcile net loss to    net cash provided by operating    activities:     Depreciation                                10,226          9,315     Amortization of intangibles                    445             46     Provision for inventory obsolescence           162             64     Provision for doubtful accounts                295            363     Non-cash stock-based compensation      expense                                         6              -     (Gain) loss on sales/disposal of      equipment                                    (348)            63     Deferred income taxes                          139              0     Changes in operating assets and      liabilities, net of impact of      acquisition:       Accounts receivable                       (2,317)        (4,275)       Inventories and other operating        assets                                    2,993           (136)       Accounts payable and accrued        expenses                                  4,762         11,191                                          -------------- --------------     Net cash provided by operating      activities                                 17,334         17,989                                          -------------- --------------  Cash flows from investing activities:   Movable medical equipment purchases           (9,547)       (18,619)   Property and office equipment    purchases                                    (1,055)        (1,328)   Proceeds from disposition of movable    medical equipment                               525            784   Acquisitions                                       -         (3,297)   Other                                              -           (362)                                          -------------- --------------     Net cash used in investing      activities                                (10,077)       (22,822)                                          -------------- --------------  Cash flows from financing activities:   Proceeds under revolving credit    facility agreements                          25,131         24,325   Payments under revolving credit    facility agreements                         (24,699)       (15,901)   Payment of deferred financing cost                (4)             -   Proceeds from issuance of common    stock, net of issuance costs                      5              -   Other                                              -            (44)   Change in book overdraft                      (4,691)        (3,547)                                          -------------- --------------     Net cash (used in) provided by      financing activities                       (4,258)         4,833                                          -------------- --------------  Net change in cash and cash equivalents         $2,999           $---                                          ============== ==============  Cash and cash equivalents at the  beginning of period                                $-             $- Cash and cash equivalents at the end of  period                                         $2,999             $-  Supplemental cash flow information:     Interest paid                                 $727           $426                                          ============== ==============     Income taxes paid                             $305         $2,265                                          ============== ==============     Movable medical equipment purchases      in accounts payable                        $3,529             $6                                          ============== ==============  Additional information      Net cash provided by operating      activities                                $17,334        $17,989     Changes in operating assets and      liabilities                                (5,438)        (6,780)     Other non-cash expenses                       (255)          (490)     Current income taxes                           207            248     Interest expense                             7,647          7,449                                          -------------- --------------      EBITDA                                     $19,495        $18,416                                          ============== ==============                                                              Percent                                                           Increase                           Percent of Total Revenues      (Decrease)                          Three Months Ended March 31,     Qtr 1 2005                              2005           2004       Over Qtr 1 2004                         -----------------------------  ---------------  Medical equipment  outsourcing                     78.1%          81.4%             8.3% Technical and  professional services           13.6            9.6             58.7 Medical equipment sales  & remarketing                    8.3            9.0              4.8                         -------------- --------------  --------------- Total revenues                  100.0          100.0             12.8  Cost of medical  equipment outsourcing           23.9           23.8             13.7 Cost of technical and  professional services            9.9            6.6             69.3 Cost of medical  equipment sales &  remarketing                      6.6            6.8              8.5 Movable medical  equipment depreciation          16.8           17.6              7.3                         -------------- -------------- Total costs of medical  equipment outsourcing,  service and sales               57.2           54.8             17.7                         -------------- --------------  --------------- Gross margin                     42.8           45.2              6.9 Selling, general and  administrative                  26.9           26.7             13.5                         -------------- --------------  --------------- Operating  income                16.0           18.5             (2.5) Interest expense                 13.8           15.2              2.7                         -------------- --------------  --------------- Loss income before  income taxes                     2.1            3.3            (26.6) Provision (benefit) for  income taxes                     0.1            0.5            (16.5)                         -------------- --------------  --------------- Net loss                          1.8%           2.8%           -28.5%                         ============== ==============  =============== 
Language:
English
Contact:
Agiliti , Inc., Edina
Bethany A. Ring, 952-893-3288