Agiliti, Inc.

third quarter 2022 earnings conference call today's call is being recorded and we have allocated one hour for prepared remarks and q a at this time i'd like to turn the conference over to kate tizer senior vice president of corporate communication and investor relations at agility thank you you may begin thank you operator and hello everyone thank you for joining us on today's call as we provided an overview of agility's results for the quarter ending september 30th 2022.

Before we begin, I'll remind you that during today's call, we'll be making statements that are forward-looking and consequently are subject to risks and uncertainties. Certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward-looking statements. Specific risk factors are detailed in our press release and our most recent SEC filings, which can be found in the investor section of our corporate website at agilityhealth.com. We'll also be referring to certain measures that are not calculated and presented in accordance with generally accepted accounting principles on this call. You can find a reconciliation of those measures to the most directly comparable gap measures and a description of why we use these measures in our press release. To download a copy of the presentation that we'll use to facilitate today's discussion, please visit our website at agilityhealth.com. Select the Investors section at the top of the screen, and then Events and Presentations. Finally, select a presentation titled Agility Q3 2022 Earnings Slides. With that, I'll turn the call over to our CEO, Tom Leonard.

Good afternoon. Thank you for joining us to review our third quarter performance for 2022. Joining me today is our president, Tom Benning, and our CFO, Jim Pekarek. Tomorrow is Veterans Day. I'd like to begin today's call by thanking all of our Agility team members, and especially our veterans, for their service to our company, our customers, and our country. Agility is an active supporter of the Defense Department's Skill Bridge program, providing training, internships, and long-term employment to military members transitioning to civilian life. Nearly 8% of our current workforce, myself included, count ourselves as veterans. Thank you all for your service. Turning now to our business. our financial results met our expectations for the quarter, with reported revenue up 3% to $271 million. Excluding the COVID benefit we saw in Q3 2021, our third quarter revenue was up between 6% and 7% year over year. Adjusted EBITDA was $66.5 million, as our results developed in line with the financial drivers we described in Q2. Agility-based business remains strong and durable. Over the next two quarters, the impacts of COVID-19 and the delay associated with the HHS contract should be behind us. Thereafter, our results will more clearly reflect our underlying organic growth momentum. Today, we'll spend a few moments on the trends within the business, and then Jim will walk through our financial performance and expectations for the balance of the year. On August 5th, Agility submitted its formal RFP response for the Department of Health and Human Services' new multi-year agreement for the management of the federal emergency stockpile of medical equipment. On November 8th, Agility was notified that a Government Accountability Office protest had been filed by another bidder, challenging the government's determination of their bid as technically unacceptable. We anticipate a short delay while the government works through its formal protest process. Agility remains confident in our performance, our competitive position, and in the ultimate expected award of a new long-term contract. In the meantime, we continue to operate under our existing one-year extension agreement with HHS that was awarded in February of this year. The general terms of which already reflect the normalized post-COVID management duties for the medical device stockpile. As we described on our last call and beginning in Q2 this year, the utilization for our peak need rental devices trended to a new lower level, settling somewhat below pre-pandemic utilization levels. As of Q3, peak need rental volumes appear to have stabilized much as we had anticipated. We expect to see a normal seasonal uptick in utilization in the back half of Q4. and continuing into Q1 of 2023, with the actual impact driven by the severity and length of the COVID, RSV, and flu season. COVID-related impacts and the HHS agreement have been the primary transient drivers of variability in our report results during our first 18 months as a public company. Throughout this same period, we've shared that our base underlying business has continued to show positive momentum, noting exceptionally strong new business performance from our selling teams. The result has been a solid backlog of sizable new contracts for agility, on top of the normal high volume pace of smaller new business orders. In just the last few quarters, we've signed more seven and eight figure annual value contracts than ever before in our company's 80-plus year history. In the transition from supporting our customers' COVID-driven needs to executing on larger, longer-term strategic contracts, we expect to see some near-term lumpiness in our financial results over the next few quarters related to this growth trend. A reminder that COVID-driven customer needs generally resulted in short-term, immediate impact, high margin revenue. The three to five-year contracts we're now implementing will once again provide a highly visible and predictable financial outlook, more typical of our long history as a company. For the balance of the year, we're revising our financial guidance to reflect a more conservative near-term outlook on this continued transition within our business. I'll now turn the call to Tom Benning to add his perspective.