Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 29, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40361 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 11095 Viking Drive, | ||
Entity Tax Identification Number | 83-1608463 | ||
Entity Address, City or Town | Eden Prairie | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55344 | ||
City Area Code | 952 | ||
Local Phone Number | 893-3200 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 | ||
Trading Symbol | AGTI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 582,763,154 | ||
Entity Common Stock, Shares Outstanding | 135,652,249 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023. | ||
Entity Registrant Name | AGILITI, INC. \DE, | ||
Entity Central Index Key | 0001749704 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Minneapolis, Minnesota |
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 20,037 | $ 5,577 |
Accounts receivable, less allowance for credit losses of $6,236 as of December 31, 2023 and $4,182 as of December 31, 2022 | 215,684 | 207,753 |
Inventories | 74,484 | 70,132 |
Prepaid expenses | 20,231 | 23,458 |
Other current assets | 7,307 | 9,393 |
Total current assets | 337,743 | 316,313 |
Property and equipment, net | 292,684 | 273,958 |
Goodwill | 1,239,432 | 1,239,106 |
Operating lease right-of-use assets | 78,157 | 79,975 |
Other intangibles, net | 430,002 | 512,020 |
Other | 20,926 | 22,735 |
Total assets | 2,398,944 | 2,444,107 |
Current liabilities: | ||
Current portion of long-term debt | 18,468 | 17,752 |
Current portion of operating lease liability | 25,603 | 23,607 |
Current portion of obligation under tax receivable agreement | 12,796 | 34,694 |
Accounts payable | 58,518 | 59,163 |
Accrued compensation | 28,866 | 25,928 |
Accrued interest | 21,451 | 5,039 |
Other current liabilities | 30,906 | 31,198 |
Total current liabilities | 196,608 | 197,381 |
Long-term debt, less current portion | 1,061,062 | 1,077,293 |
Obligation under tax receivable agreement, pension and other long-term liabilities | 10,467 | 9,161 |
Operating lease liability, less current portion | 63,765 | 67,332 |
Deferred income taxes, net | 126,219 | 146,615 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 135,368,025 and 133,608,495 shares issued; 135,352,336 and 133,608,495 outstanding as of December 31, 2023 and December 31, 2022, respectively | 14 | 13 |
Treasury stock, at cost; 54,256 and — shares as of December 31, 2023 and December 31, 2022, respectively | (419) | 0 |
Additional paid-in capital | 972,156 | 953,046 |
Accumulated deficit | (33,699) | (14,274) |
Accumulated other comprehensive income | 2,505 | 7,343 |
Total Agiliti, Inc. and Subsidiaries equity | 940,557 | 946,128 |
Noncontrolling interest | 266 | 197 |
Total equity | 940,823 | 946,325 |
Total liabilities and equity | $ 2,398,944 | $ 2,444,107 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 6,236 | $ 4,182 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 135,368,025 | 133,608,495 |
Common stock, shares outstanding (in shares) | 135,352,336 | 133,608,495 |
Treasury stock (in shares) | 54,256 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenue | $ 1,174,604 | $ 1,121,292 | $ 1,038,690 |
Cost of revenue | 770,501 | 690,318 | 614,073 |
Gross margin | 404,103 | 430,974 | 424,617 |
Selling, general and administrative expense | 339,312 | 338,988 | 320,387 |
Operating income | 64,791 | 91,986 | 104,230 |
Loss on extinguishment / modification of debt | 4,527 | 1,418 | 10,116 |
Interest expense | 84,115 | 49,439 | 53,514 |
Tax indemnification expense | 0 | 11,918 | 0 |
Income (loss) before income taxes and noncontrolling interest | (23,851) | 29,211 | 40,600 |
Income tax (benefit) expense | (4,732) | (1,232) | 16,433 |
Consolidated net income (loss) | (19,119) | 30,443 | 24,167 |
Net income attributable to noncontrolling interest | 306 | 231 | 161 |
Net income (loss) attributable to Agiliti, Inc. and Subsidiaries | $ (19,425) | $ 30,212 | $ 24,006 |
Basic income (loss) per share (in usd per share) | $ (0.14) | $ 0.23 | $ 0.20 |
Diluted income (loss) per share (in usd per share) | $ (0.14) | $ 0.22 | $ 0.19 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 134,647,238 | 132,602,747 | 120,877,480 |
Diluted (in shares) | 134,647,238 | 138,381,295 | 128,497,220 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Consolidated net income (loss) | $ (19,119) | $ 30,443 | $ 24,167 |
Other comprehensive income (loss): | |||
Gain on minimum pension liability, net of tax (expense) of $(191), $(181), and $(747) | 567 | 522 | 2,195 |
Gain (loss) on cash flow hedge, net of tax benefit (expense) of $1,880, $(1,835), and $(1,015) | (5,405) | 5,284 | 2,961 |
Total other comprehensive income (loss) | (4,838) | 5,806 | 5,156 |
Comprehensive income (loss) | (23,957) | 36,249 | 29,323 |
Comprehensive income attributable to noncontrolling interest | 306 | 231 | 161 |
Comprehensive income (loss) attributable to Agiliti, Inc. and Subsidiaries | $ (24,263) | $ 36,018 | $ 29,162 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Gain (loss) on minimum pension liability, tax (expense) benefit | $ (191) | $ (181) | $ (747) |
Income tax benefit related to cash flow hedge | $ 1,880 | $ (1,835) | $ (1,015) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Total Agiliti, Inc. and Subsidiaries | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Beginning balance at Dec. 31, 2020 | $ 441,945 | $ 441,801 | $ 10 | $ 0 | $ 513,902 | $ (68,492) | $ (3,619) | $ 144 |
Increase (Decrease) in Equity | ||||||||
Net income | 24,167 | 24,006 | 24,006 | 161 | ||||
Other comprehensive income (loss) | 5,156 | 5,156 | 5,156 | |||||
Proceeds from issuance of common stock | 414,115 | 414,115 | 3 | 414,112 | ||||
Stock issue costs | (4,379) | (4,379) | (4,379) | |||||
Share-based compensation expense | 13,818 | 13,818 | 13,818 | |||||
Stock options exercised | 1,409 | 1,409 | 1,409 | |||||
Dividend forfeited, net of payable | 26 | 26 | 26 | |||||
Cash distributions to noncontrolling interests | (185) | (185) | ||||||
Ending balance at Dec. 31, 2021 | 896,072 | 895,952 | 13 | 0 | 938,888 | (44,486) | 1,537 | 120 |
Increase (Decrease) in Equity | ||||||||
Net income | 30,443 | 30,212 | 30,212 | 231 | ||||
Other comprehensive income (loss) | 5,806 | 5,806 | 5,806 | |||||
Proceeds from issuance of common stock | 3,809 | 3,809 | 3,809 | |||||
Acquisition consideration paid in equity | 2,928 | 2,928 | 2,928 | |||||
Share-based compensation expense | 18,845 | 18,845 | 18,845 | |||||
Shares forfeited for taxes | (14,547) | (14,547) | (14,547) | |||||
Stock options exercised | 3,101 | 3,101 | 3,101 | |||||
Dividend forfeited, net of payable | 22 | 22 | 22 | |||||
Cash distributions to noncontrolling interests | (154) | (154) | ||||||
Ending balance at Dec. 31, 2022 | 946,325 | 946,128 | 13 | 0 | 953,046 | (14,274) | 7,343 | 197 |
Increase (Decrease) in Equity | ||||||||
Net income | (19,119) | (19,425) | (19,425) | 306 | ||||
Other comprehensive income (loss) | (4,838) | (4,838) | (4,838) | |||||
Purchases of treasury stock | (3,761) | (3,761) | (3,761) | |||||
Reissuance of treasury stock | 0 | 3,342 | (3,342) | |||||
Proceeds from issuance of common stock | 3,140 | 3,140 | 3,140 | |||||
Acquisition consideration paid in equity | 2,753 | 2,753 | 2,753 | |||||
Share-based compensation expense | 19,804 | 19,804 | 1 | 19,803 | ||||
Shares forfeited for taxes | (6,301) | (6,301) | (6,301) | |||||
Stock options exercised | 3,057 | 3,057 | 3,057 | |||||
Cash distributions to noncontrolling interests | (237) | (237) | ||||||
Ending balance at Dec. 31, 2023 | $ 940,823 | $ 940,557 | $ 14 | $ (419) | $ 972,156 | $ (33,699) | $ 2,505 | $ 266 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Consolidated net income (loss) | $ (19,119) | $ 30,443 | $ 24,167 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 80,249 | 84,331 | 103,805 |
Amortization | 93,683 | 95,452 | 88,240 |
Remeasurement of tax receivable agreement | 1,042 | (2,124) | 4,542 |
Loss on extinguishment / modification of debt | 4,527 | 1,418 | 7,716 |
Provision for credit losses | 2,305 | 3,903 | 2,023 |
Provision for inventory obsolescence | 1,725 | 1,034 | 2,424 |
Non-cash share-based compensation expense | 20,186 | 18,775 | 13,960 |
Gain on sales and disposals of equipment | (1,331) | (1,101) | (3,735) |
Deferred income taxes | (17,321) | 1,292 | 12,004 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (9,330) | (3,976) | (8,915) |
Inventories | (5,547) | (12,188) | 3,052 |
Other operating assets | (1,532) | (10,144) | (9,044) |
Accounts payable | 1,077 | 15,753 | 718 |
Accrued and other operating liabilities | 19,202 | (23,092) | (30,640) |
Net cash provided by operating activities | 169,816 | 199,776 | 210,317 |
Cash flows from investing activities: | |||
Medical equipment purchases | (52,118) | (55,864) | (37,377) |
Property and office equipment purchases | (34,230) | (31,600) | (29,121) |
Proceeds from disposition of property and equipment | 3,895 | 2,963 | 9,242 |
Acquisitions, net of cash acquired | (1,350) | (62,339) | (676,878) |
Intangible asset purchases | (89) | (20) | 0 |
Net cash used in investing activities | (83,892) | (146,860) | (734,134) |
Cash flows from financing activities: | |||
Proceeds under debt arrangements | 1,302,937 | 60,000 | 381,927 |
Payments under debt arrangements | (1,321,737) | (160,023) | (364,119) |
Payments of principal under finance lease liability | (9,502) | (8,812) | (9,097) |
Payments of deferred financing costs | (9,579) | 0 | (229) |
Payments under tax receivable agreement | (24,822) | 0 | (15,577) |
Distributions to noncontrolling interests | (237) | (154) | (185) |
Proceeds from exercise of stock options | 3,057 | 3,101 | 1,409 |
Dividend and equity distribution payment | (321) | (908) | (928) |
Proceeds from issuance of common stock | 0 | 0 | 402,815 |
Purchases of treasury stock | (3,761) | 0 | 0 |
Stock issuance costs | 0 | 0 | (4,379) |
Shares forfeited for taxes | (6,301) | (14,547) | 0 |
Acquisition holdback and contingent consideration | (1,198) | (321) | 0 |
Net cash (used in) provided by financing activities | (71,464) | (121,664) | 391,637 |
Net change in cash and cash equivalents | 14,460 | (68,748) | (132,180) |
Cash and cash equivalents at the beginning of period | 5,577 | 74,325 | 206,505 |
Cash and cash equivalents at the end of period | 20,037 | 5,577 | 74,325 |
Supplemental cash flow information: | |||
Interest paid | 60,984 | 42,773 | 52,341 |
Income taxes paid | $ 11,816 | $ 14,843 | $ 3,214 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Description of Business Agiliti, Inc. and its consolidated subsidiaries (Federal Street Acquisition Corp (“FSAC”), Agiliti Holdco, Inc. and Agiliti Health, Inc. and subsidiaries (the “Company” or “Agiliti”)) is a nationwide provider of healthcare technology management and service solutions to the United States healthcare industry. Agiliti, Inc. owns 100% of FSAC. FSAC owns 100% of Agiliti Holdco, Inc. Agiliti Holdco, Inc. owns 100% of Agiliti Health, Inc. Agiliti Health, Inc. owns 100% of Agiliti Surgical, Inc., Agiliti Imaging, Inc., Agiliti Surgical Equipment Repair, Inc. and Sizewise Rentals, LLC. Agiliti Health, Inc. and subsidiaries are the only entities with operations. All other entities have no material assets, liabilities, cash flows or operations other than their investment and ownership of Agiliti Health, Inc. and subsidiaries. Initial Public Offering On April 22, 2021, the Company's registration statement on Form S-1 (File No. 333-253947) related to the initial public offering (“IPO”) was declared effective by the SEC, and the Company's common stock began trading on the New York Stock Exchange (“NYSE”) on April 23, 2021. The IPO closed on April 27, 2021. Agiliti's service solutions consist of Equipment Solutions, Clinical Engineering Services and Onsite Managed Services. On-Site Managed Services: Onsite Managed Services are comprehensive programs that assume full responsibility for the management, reprocessing, and logistics of medical equipment at individual facilities and integrated delivery networks ("IDNs"), with the added benefit of enhancing equipment utilization and freeing more clinician time for patient care. This solution monitors and adjusts equipment quantities and availability to address fluctuations in patient census and acuity. The Company's more than 1,300 onsite employees work 24/7 in customer facilities, augmenting clinical support by integrating proven equipment management processes, utilizing proprietary management software and conducting daily rounds and unit-based training to ensure equipment is being used and managed properly, overall helping to optimize day-to-day operations and care outcomes. The Company assumes full responsibility for ensuring equipment is available when and where it is needed, removing equipment when no longer in use, and decontaminating, testing and servicing equipment as needed between each patient use . Clinical Engineering Services: Clinical Engineering Services provides maintenance, repair and remediation solutions for all types of medical equipment, including general biomedical equipment, diagnostic imaging equipment and surgical equipment through supplemental and outsourced offerings. The Company's supplemental offering helps customers manage their equipment repair and maintenance backlog, assist with remediation and regulatory reporting and temporarily fill open biotechnical positions. With outsourced offerings, the Company assumes full management, staffing and clinical engineering service responsibilities for individual or system-wide customer sites. The outsourced model deploys a dedicated, on-site team to coordinate the management of customer-owned equipment utilizing the Company's proprietary information systems, third party vendors of services and parts, and a broad range of professional services for capital equipment planning and regulatory compliance. The Company employs more than 800 technical resources from over 150 local market service centers and Centers of Excellence who can flex in and out of customer facilities on an as-needed basis, ensuring customers pay only for time spent directly servicing their equipment by an appropriately qualified technician. The Company uses flex staffing for the supplemental clinical engineering solution and to augment support when additional technicians are needed to supplement the outsourced services during peak workload. The Company contracts its Clinical Engineering Services with acute care and alternate site facilities across the U.S., as well as with the federal government and any medical device manufacturers that require a broad logistical footprint to support their large-scale service needs. Equipment Solutions: Equipment Solutions primarily provides supplemental, peak need and per-case rental of general biomedical, specialty, and surgical equipment to acute care hospitals and alternate site providers in the U.S., including some of the nation’s premier healthcare institutions and integrated delivery networks. The Company contracts for Equipment Solutions services directly with customers or through contractual arrangements with hospital systems and alternate site providers. The Company consistently achieves high customer satisfaction ratings, as evidenced by Agiliti's net promoter score ("NPS") of 40 for the year ended December 31, 2023. For these customer, the Company delivers patient-ready equipment within contracted equipment delivery times and provide technical support and educational in-servicing for equipment as-needed in clinical departments, including the emergency room, operating room, intensive care, rehabilitation and general patient care areas. The Company is committed to providing the highest quality of equipment to customers, and the Company does so through the use of a comprehensive quality management system ("QMS"), which is based on the quality standards recognized worldwide for medical devices: 21 Code of Federal Regulations ("CFR") 820 and Interational Organization for Standardization ("ISO") 13485:2016. This commitment ensures that customers have access to patient-ready equipment with the confidence of knowing it has been prepared and maintained to the highest industry standard for optimal patient safety and outcomes . Principles of Consolidation |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Cash and Cash Equivalents The Company considers money market accounts and other highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Book overdrafts, if any, are included in accounts payable in the consolidated balance sheets and in operating activities in the consolidated statements of cash flows. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount. Concentrations of credit risk with respect to trade accounts receivable are limited due to the number of customers and their geographical distribution. The Company performs initial and ongoing credit evaluations of its customers and maintains allowances for potential credit losses. The allowance for credit losses is based on historical loss experience and estimated exposure on specific trade receivables . Inventories Inventories consist of supplies and equipment held for resale and are valued at the lower of cost and net realizable value. Cost is determined by the average cost method, which approximates the first-in, first-out (“FIFO”) method. Property and Equipment The Company separates its property and equipment into two categories - medical equipment and property and office equipment. Depreciation of medical equipment is provided on the straight-line method over the equipment’s estimated useful life generally five . During fiscal year ended December 31, 2022, the Company performed a review of the estimated useful lives associated with certain medical equipment and determined that these assets had actual lives that were longer than previously estimated. As a result, effective July 1, 2022, the Company increased the expected useful lives of such medical equipment from four five Property and office equipment includes leasehold improvements, vehicles, computer software and hardware, and office equipment. Depreciation of property and office equipment is provided on the straight-line method over the lesser of the remaining useful life or lease term for leasehold improvements and three . The Company periodically reviews its property and equipment for impairment and assesses whenever significant events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. A recoverability test is performed by comparing the anticipated future undiscounted cash flows to the carrying amount of the assets. If impairment is identified, an impairment loss is recognized for the excess of the carrying amount of an asset over the anticipated future discounted cash flows expected to result from the use of the asset and its eventual disposition. For other property and equipment, primarily movable medical equipment, the Company continuously monitors specific makes/models for events such as product recalls or obsolescence. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the asset’s carrying amount over its fair value . Recoverability and Valuation of Goodwill Goodwill represents the excess of the cost of acquired businesses over the fair value of identifiable tangible net assets and identifiable intangible assets purchased. Management reviews goodwill for impairment annually at the reporting unit level and upon the occurrence of certain events that might indicate the asset may be impaired. The Company operates under one reporting unit and does not aggregate any components into the one reporting unit. A qualitative review is conducted to determine whether it is more likely than not that the fair value is less than its carrying amount. If it is determined that it is more likely than not that the carrying amount is greater than the fair value of the asset, a quantitative impairment test is performed. To perform the quantitative impairment test, management compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. If the carrying amount of the reporting unit, including goodwill, exceeds its fair value, a goodwill impairment loss is recognized in an amount equal to that excess. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, terminal value, discount rates, relevant comparable public company earnings multiples, and relevant transaction multiples. The Company estimates the fair value of the reporting unit using an income approach that utilizes a discounted cash flow model and a market approach that utilizes the guideline public company method. Each of the valuation methods were weighted by accounting for the relative merits of each method and considered, among other things, the reliability of the valuation methods and the inputs used in the methods. Management’s future financial projections used in the discounted cash flow model included organic net sales growth and net sales growth through new customer and product channels as well as continued operating efficiencies in future periods. The Company elected to perform a quantitative goodwill impairment test as of December 31, 2023. The fair value was approximately 7% greater than its carrying amount, thus no impairment was recognized. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions could have a material effect on the estimated fair value of our reporting unit and could result in a goodwill impairment charge in a future period. No goodwill impairments have been recognized in 2023, 2022, or 2021. Leases At inception, the Company determines whether an arrangement is a lease and the appropriate lease classification. Operating leases with terms greater than twelve months are included as operating lease right-of-use (“ROU”) assets, and lease liabilities within current portion of operating lease liability and operating lease liability less current portion on the consolidated balance sheets. Finance leases with terms greater than twelve months are included as finance ROU assets within property and office equipment, and finance lease liabilities within current portion of long-term debt and long-term debt, less current portion on the consolidated balance sheets. Leases with terms of less than twelve months, referred to as short-term leases, do not create a ROU asset or lease liability on the balance sheet . ROU assets represent the right to use an underlying asset for the lease term. Lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease, based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Finance leases are recognized on the date the asset is placed into service at the cost of capital. For both operating and finance leases, the initial ROU asset equals the lease liability, plus initial direct costs and favorable lease commitments, less lease incentives received. The Company's lease agreements may include options to extend or terminate the lease, which are included in the lease term at the commencement date when it is reasonably certain that the Company will exercise that option. In general, the Company does not consider optional periods included in the lease agreements as reasonably certain of exercise at inception. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Variable lease payments (for example, common area maintenance and real estate tax charges) are recorded separately from the determination of the ROU asset and lease liability. Other Intangible Assets Other intangible assets primarily include customer relationships, non-compete agreements, trade names, developed technology, and patents. Other intangible assets are amortized over their estimated economic lives of two . Deferred Financing Costs and Debt Discount Unamortized financing costs and discounts associated with issuing debt are presented in the consolidated balance sheet as a direct deduction from the carrying amount of the debt and are deferred and amortized to interest expense over the related terms using the effective interest rate method . Acquisitions The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations . This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting . Assigning estimated fair values to the net assets acquired requires the use of significant estimates, judgments, inputs, and assumptions regarding the fair value of the assets acquired and liabilities assumed as of the acquisition date. The Company may refine the estimated fair values of assets acquired and liabilities assumed over a period not to exceed one year from the date of acquisition by taking into consideration new information about facts and circumstances that existed as of the acquisition date. Purchase price allocation revisions that occur outside of the measurement period, if applicable, are recorded within cost of revenue or selling, general and administrative expense within the consolidated statements of operations depending on the nature of the adjustment. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expect to receive in exchange for those products or services. Many of the Company’s customers have multiple contracts and have revenue reported in multiple service lines. The Company’s contracts may include a base level of services provided for a stated period of time, optional services provided upon request, or products. Each of these products and services are generally capable of being distinct and are accounted for as separate performance obligations. The price for each performance obligation is stated in the customer contract and is based upon a price that would be charged to a customer if the product or service were sold on a standalone basis (the list price). Any discount from the list price provided to a customer for a product or service is allocated among the performance obligations based upon their individual standalone selling prices. Service revenue is typically recognized over time as the services are provided. When services are provided for a stated period of time, revenue is generally recognized ratably over the period services are provided. In certain circumstance, optional services may be provided on a time and materials basis. In these circumstances, revenue is recognized in an amount that corresponds to the actual time and expense incurred. Product revenue is recognized when the Company transfers control of a good, which occurs at a point in time. Revenue is recognized net of allowances for estimated rebates and group purchasing organization ("GPO") fees, which are established at the time of sale. Adjustments are made to these allowances at each reporting period. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The Company incurs incremental costs related to obtaining new contracts, primarily for commissions and implementation. Management expects those costs attributable to new revenue production are recoverable and therefore the Company capitalizes them as contract costs in accordance with ASC 340, Other Assets and Deferred Costs, and is amortizing them over the anticipated period of the new revenue production which the Company estimates to be a period of five years. The Company does not have any material contract liabilities. Derivative Financial Instruments The Company has an interest rate swap agreement which it uses as a derivative financial instrument to manage its interest rate exposure. The Company does not use financial instruments for trading or other speculative purposes. ASC 815, Derivatives and Hedging, establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The standard requires that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. If hedge accounting criteria are met, the changes in a derivative’s fair value (for a cash flow hedge) are deferred in stockholders’ equity as a component of accumulated other comprehensive loss. These deferred gains and losses are recognized as income in the period in which hedged cash flows occur. The ineffective portions of hedge returns are recognized as earnings. Income Taxes The Company accounts for deferred income taxes utilizing ASC 740, Income Taxes. ASC 740 requires the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statement and the tax bases of assets and liabilities, as measured at current enacted tax rates. The Company has assessed the need for a valuation allowance by considering whether it is more likely than not that some portion or all of the Company's deferred tax assets will not be realized. The Company continues to evaluate its ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding its forecasted taxable income, the reversal of existing deferred tax liabilities, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. In future reporting periods, the Company will continue to assess the likelihood that deferred tax assets will be realizable . I nterest and penalties associated with uncertain income tax positions is classified as income tax expense. Fair Value of Financial Instruments The financial instruments of the Company include cash and cash equivalents, accounts receivable, interest rate swap, deferred compensation, accounts payable, accrued liabilities, contingent compensation, contingent consideration, debt obligations, and obligation under the Tax Receivable Agreement ("TRA"). Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market as of the measurement date. ASC 820, Fair Value Measurements , provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to and is composed of the following levels: Level 1 — Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. Level 2 — Inputs include directly or indirectly observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that are considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves that are observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities or related observable inputs that can be corroborated at the measurement date. Measurements of non-exchange traded derivative contract assets and liabilities are primarily based on valuation models, discounted cash flow models or other valuation techniques that are believed to be used by market participants. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. The Company considers that the carrying amount of financial instruments, including accounts receivable, accounts payable and accrued liabilities approximates fair value due to their short maturities. The deferred compensation assets are held in mutual funds. The fair value of the deferred compensation assets and liabilities is based on the quoted market prices for the mutual funds and thus represents a Level 1 fair value measurement. The fair value of the Company's outstanding First Lien Term Loan (each as defined in Note 7, Long-Term Debt), based on the quoted market price for the same or similar issues of debt, represents a Level 2 fair value measurement. The fair value of the Company’s revolving line of credit facilities and long-term debt are based on current lending rates for similar borrowings, assuming the debt is outstanding through maturity, and considering the collateral. The carrying amounts of variable interest rate long-term debt and revolving line of credit facilities approximate their fair values because the variable interest rates of these instruments are generally reset monthly. The fair value of the Company's non-variable interest rate debt is estimated by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy. The fair value of the Company’s derivative instruments designated as hedge instruments, which are considered Level 2 inputs under the fair value hierarchy, are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. The fair value of the Company’s contingent consideration obligation is determined utilizing a series of call options with strike prices at revenue thresholds defined in the acquisition purchase agreement. The fair value of the Company’s contingent compensation obligation is determined using projected financial information. The TRA obligation is valued using a discounted cash flow analysis given that the fair value of the liability is expected to approximate the maximum obligation under the TRA. The assumptions used in pr eparing the discounted cash flow analyses include estimates of interest rates and the timing and amount of incremental cash flows. These fair value measurements are based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. Share-Based Compensation Share-based compensation expense related to stock options is measured by the fair value of the stock options on the date of grant. The Company determines the fair value of options using the Black-Scholes option pricing model incorporating certain assumptions, including the risk-free interest rate, expected volatility, dividend yield and expected option life. Share-based compensation expense related to restricted stock units is recorded based on the market value of the Company's common stock on the date of grant. The fair value of the Company's performance restricted stock unit awards is initially measured using a Monte-Carlo simulation model in order to incorporate a total shareholder return multiplier. Subsequent measurement is based on expected level of achievement of a 3-year cumulative adjusted EBITDA target. The Company has an employee stock purchase plan (“ESPP”) under which shares of the Company’s common stock are available for purchase by eligible participants. The plan allows participants to purchase the Company's common stock at 85% of its fair market value at the end of the six-month offering period ending on April 30 and October 31 each year. The fair value of purchases is estimated based on actual employee contributions during the offering period. The expense related to all awards is recognized evenly over the requisite service period within the same statement of operations line item in which cash compensation is recorded for each participant. Treasury Stock The Company records treasury stock at the cost to acquire common stock on the open market. Share reissuances for vested restricted stock units and exercised stock options are made on FIFO basis. Treasury stock is presented as a separate line item on the Company's balance sheet. Comprehensive Incom e (Loss) Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes minimum pension liability adjustments and unrealized fair value adjustments to the cash flow hedge. These amounts are presented in the consolidated statements of comprehensive income (loss) net of reclassification adjustments to earnings, if any . Earnings (Loss) Per Share Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the effect of all potentially dilutive common stock equivalents by application of the treasury stock method, which considers the effect on a per share basis of restricted stock units, performance restricted stock units, and stock options as if they had been converted to common stock at the beginning of the periods presented, or issuance date, if later. Potential shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS and presented separately. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Examples include, but are not limited to, estimates for fair value measurements in business combinations including recoverability and valuation of long-lived assets, goodwill and definite-lived intangibles, and interest rate swaps. Actual results could differ from those estimates. Recent Accounting Pronouncements Standards Adopted In October 2021, the FASB issued Accounting Standards Update No. 2021-08 Business Combinations (ASC 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 improves the accounting for acquired revenue contracts with customers in a business combination. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted. The Company adopted this standard as of January 1, 2023. The adoption of this standard did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU No. 2022-06 Reference Rate Reform (ASC 848): Deferral of the Sunset Date of ASC 848 ("ASU 2022-06"), which delayed the adoption of reference rate reform from December 31, 2022, to December 31, 2024. The Company adopted these standards on May 1, 2023. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 7, Long-Term Debt for details surrounding the adoption of ASU 2020-04 and ASU 2022-06. Standards Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The ASU requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (ASC 740 ): Improvements to Income Tax Disclosures ("ASU 2023-09). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition In the following table, revenue is disaggregated by service solution: Year Ended December 31, (in thousands) 2023 2022 2021 Disaggregated Revenue Equipment Solutions $ 459,797 $ 438,682 $ 352,094 Clinical Engineering 459,013 420,685 384,147 Onsite Managed Services 255,794 261,925 302,449 Total revenue $ 1,174,604 $ 1,121,292 $ 1,038,690 The Company capitalizes contract costs incurred in obtaining new contracts. The contract asset included in other long-term assets in the consolidated balance sheets as of December 31, 2023 and December 31, 2022 was $14.8 million and $17.3 million, respectively. Capitalized costs are amortized over the expected life of the related contracts, which is estimated to be five years. Amortization is computed on a straight-line basis, which coincides with the predominant expected life of the underlying contracts. Amortization costs are reflected in cost of revenue and selling, general and administrative expenses. The amount of amortization included in cost of revenue was $1.4 million, $1.1 million and $0.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. The amount of amortization included in selling, general and administrative expense was $4.9 million, $4.2 million and $3.1 million for the years ended December 31, 2023, 2022, and 2021 , respectively. There was no impairment loss in relation to the costs capitalized during the years ended December 31, 2023, 2022, and 2021 . |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions The Company completed a small acquisition of certain assets of an equipment manufacturer during the year ended December 31, 2023 . On December 15, 2022, the Company completed the acquisition of certain assets of a surgical laser equipment solutions provider for total consideration of approximately $51.2 million funded by cash on hand and a draw on the line of credit. On December 1, 2022, the Company completed the acquisition of certain assets of a surgical equipment and repair services provider for total consideration of $9.7 million funded by cash on hand and common stock issuance. During the year ended December 31, 2023, the Company made a payment of $0.4 million to settle a revenue-based contingent consideration agreement made in connection with this acquisition. During fiscal years ended December 31, 2022 and 2021, the Company completed the acquisition of several small surgical equipment repair companies, which included contingent compensation arrangements. As a result, the Company made earn-out payments of $2.8 million and $0.9 million during the years ended December 31, 2023 and 2022, respectively. All fiscal year 2022 acquisitions qualify as business combinations under ASC 805 and are accounted for using the acquisition method. The results of operations of acquisitions are included in the accompanying consolidated financial statements from the acquisition date. Unaudited pro forma financial information has not been disclosed for the fiscal year 2022 acquisitions as they are not considered material to the Company's consolidated results of operations. Purchase accounting was finalized for the fiscal year 2022 acquisitions as of March 31, 2023. The following summarizes the preliminary fair value of assets acquired and liabilities assumed within the consolidated balance sheet for the fiscal year 2022 transactions: (in thousands) Accounts receivable $ 372 Prepaid expenses 80 Inventories 3,503 Property and equipment 9,001 Goodwill 26,312 Operating lease right-of-use assets 215 Other non-current assets 6 Other intangibles 24,980 Accrued expenses (455) Operating lease liability (209) Total purchase price $ 63,805 Prior to the finalization of purchase accounting, 2023 adjustments affecting the fair values of assets acquired and liabilities assumed decreased inventories by $0.2 million and increased accrued expenses and goodwill by $0.1 million and $0.3 million, respectively. The Company incurred legal and other related costs in connection with the 2022 acquisitions, which were expensed as incurred in the amount of $0.4 million and $1.0 million for the years ended December 31, 2023 and 2022 , respectively. Transaction costs are included within selling, general, and administrative costs within the consolidated statements of operations. On October 1, 2021, the Company completed a stock purchase agreement to purchase all of the outstanding capital stock of Sizewise Rentals, LLC (“Sizewise”), a privately held manufacturer and distributor of specialty patient handling equipment, for a total consideration of approximately $234.8 million (“Sizewise Acquisition”). The results of Sizewise’s operations have been included in the consolidated financial statements since October 1, 2021. The following summarizes the final fair values of assets acquired and liabilities assumed at the date of the Sizewise Acquisition within the consolidated balance sheet: (in thousands) Cash $ 9,977 Accounts receivable 31,005 Inventories 27,911 Other current assets 2,968 Property and equipment 59,042 Goodwill 87,867 Operating lease right-of-use assets 16,754 Other intangibles 67,700 Other long-term assets 10,368 Accounts payable (3,362) Accrued compensation (12,576) Other accrued expenses (4,525) Operating lease liability (16,953) Other long-term liabilities (9,924) Deferred income taxes (31,470) Total purchase price $ 234,782 The acquired other intangibles, all of which are finite-life, are comprised of trade name, developed technology, and customer relationships, and have a weighted average useful life of approximately 14.4 years. The total amount of goodwill that is deductible for tax purposes is $1.4 million. The Sizewise Acquisition was funded from additional borrowing under the first lien term loan and cash. There were no transaction costs incurred in connection with the Sizewise Acquisition for the year ended December 31, 2023. Transaction costs of $0.4 million and $3.2 million for legal and other related costs incurred in connection with the acquisition of Sizewise were expensed as incurred for the years ended December 31, 2022 and 2021, respectively. On March 19, 2021, The Company completed a stock purchase agreement to purchase all of the outstanding capital stock of Northfield Medical, Inc. (“Northfield”), a company specializing in the service and repair of medical equipment and instruments for a total consideration of approximately $472.3 million (“Northfield Acquisition”). The consideration consisted of $461.0 million of cash paid and $11.3 million in issuance of 752,328 shares of common stock. The results of Northfield’s operations have been included in the consolidated financial statements since March 19, 2021. During the year ended December 31, 2022, adjustments affecting the fair values of assets acquired and liabilities assumed decreased accounts receivable $0.2 million, increased goodwill $1.3 million, increased accounts payable $0.1 million, and increased deferred income taxes $1.0 million. All adjustments net to zero. The following summarizes the final fair values of assets acquired and liabilities assumed at the date of the Northfield Acquisition within the consolidated balance sheet: (in thousands) Cash $ 10,767 Accounts receivable 16,786 Inventories 5,810 Other current assets 502 Property and equipment 11,713 Goodwill 306,678 Operating lease right-of-use assets 4,815 Other intangibles 183,700 Accounts payable (7,412) Accrued compensation (7,948) Other accrued expenses (9,620) Finance lease liability (2,340) Operating lease liability (5,025) Other long-term liabilities (837) Deferred income taxes (35,324) Total purchase price $ 472,265 The other intangibles represent acquired finite-life customer relationships, which is amortized over 15 years using the sum of the years’ digits method. The total amount of goodwill that is deductible for tax purposes is $68.2 million. The Northfield Acquisition was funded with additional borrowings under the First Lien Term Loan, Revolving Credit Facility, and cash. There were no transaction costs incurred in connection with the Northfield Acquisition for the year ended December 31, 2023. Transaction costs for legal and other related costs incurred in connection with the acquisition of Northfield were expensed as incurred in the amount of $0.1 million and $4.2 million for the years ended December 31, 2022 and 2021, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis are summarized in the following tables by type of inputs applicable to the fair value measurements: Fair Value at December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 3,390 $ — $ — $ 3,390 Interest rate swap — 3,140 — 3,140 Liabilities: Obligation under tax receivable agreement $ — $ — $ 15,549 $ 15,549 Interest rate swap — 1,212 — 1,212 Deferred compensation liabilities 3,390 — — 3,390 Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 2,681 $ — $ — $ 2,681 Interest rate swap — 9,212 — 9,212 Liabilities: Contingent compensation $ — $ — $ 1,898 $ 1,898 Contingent consideration — — 248 248 Obligation under tax receivable agreement — — 38,714 38,714 Deferred compensation liabilities 2,674 — — 2,674 The deferred compensation assets are held in mutual funds. The fair value of the deferred compensation assets and liabilities is based on the quoted market prices for the mutual funds and thus represents a Level 1 fair value measurement. On April 17, 2023, the Company entered into an interest rate swap agreement, effective July 2023, to manage interest rate exposure. In May 2020, the Company entered into an interest rate swap agreement which expired in June 2023. For additional information on the interest swap agreements, see Note 7, Long-Term Debt. The carrying amount of the interest rate swap contracts is at fair value, which is determined based on current and forward interest rates as of the balance sheet date and is classified within Level 2. During fiscal years ended December 31, 2022 and 2021, the Company completed the acquisition of several small surgical equipment repair companies, which included contingent compensation arrangements. As a result, the Company made earn-out payments of $2.8 million and $0.9 million during the years ended December 31, 2023 and 2022, respectively. The Company also completed the acquisition of another small surgical repair company during the year ended December 31, 2022, which included a revenue-based contingent consideration agreement. An earn-out payment of $0.4 million was made during the year ended December 31, 2023. There were no earn-out payments made during year ended December 31, 2022 in connection with this acquisition. Finally, in January 2022, a $0.5 million earn-out payment was made to the previous owners of a surgical laser equipment solutions company, from which the Company acquired assets on December 11, 2020, based on achievement of certain revenue results. On January 4, 2019, the Company entered into a tax receivable agreement (“TRA”) with its former owners. Historically, the fair value of the liability was estimated using a Monte Carlo simulation model, peer company cost of capital, discount rates and projected financial information. As realization of the tax benefits associated with the federal, state, and local net operating losses has become more certain, the reliance on the Monte Carlo model has decreased in favor of a discounted cash flow analysis given that the fair value of the liability is expected to approximate the maximum obligation under the TRA. The assumptions used in pr eparing the discounted cash flow analyses include estimates of interest rates and the timing and amount of incremental cash flows. Given that the information utilized in determining the obligation was not observable in the market, the measurement of the liability represents a Level 3 fair value measurement. The value of the obligation may decrease in-line with decreases in the Company's estimated taxable income. The Company made a remeasurement adjustment to increase the liability by $1.0 million during the year ended December 31, 2023 and a remeasurement adjustment to decrease the liability by $2.1 million during the year ended December 31, 2022. The Company made $24.8 million in payments under the TRA during the year ended December 31, 2023 and no payments for the year ended December 31, 2022. A reconciliation of the beginning and ending balance for the Level 3 measurement are as follows: (in thousands) Balance as of December 31, 2021 $ 41,130 Additions 3,255 Payments (1,428) Remeasurement adjustment (1) (2,097) Balance as of December 31, 2022 $ 40,860 Additions 1,597 Payments (27,950) Remeasurement adjustment (1) 1,042 Balance as of December 31, 2023 $ 15,549 (1) Remeasurement adjustments are recognized within selling, general and administrative expense in the consolidated statements of operations. Fair Value of Other Financial Instruments The fair value of the Company's outstanding First Lien Term Loan (as defined in Note 7, Long-Term Debt) is based on the quoted market price for the same or similar issuances of debt, which represents a Level 2 fair value measurement. The fair value is approximately: December 31, 2023 December 31, 2022 (in thousands) Carrying Fair Carrying Fair First Lien Term Loan (1) $ 1,056,253 $ 1,070,973 $ 1,043,915 $ 1,030,072 (1) The carrying amount of the First Lien Term Loan is net of unamortized deferred financing costs of $7.3 million and $8.0 million and unamortized debt discount of $8.8 million and $2.6 million as of December 31, 2023 and 2022, respectively . |
Selected Financial Statement In
Selected Financial Statement Information | 12 Months Ended |
Dec. 31, 2023 | |
Selected Financial Statement Information [Abstract] | |
Selected Financial Statement Information | Selected Financial Statement Information Inventories The Company's inventories consist of the following: (in thousands) December 31, December 31, Raw materials $ 13,376 $ 14,575 Work-in-process 400 692 Finished goods 60,708 54,865 Total inventories $ 74,484 $ 70,132 Property and Equipment The Company's property and equipment consists of the following: (in thousands) December 31, December 31, Medical equipment $ 450,564 $ 405,149 Less: Accumulated depreciation (285,139) (250,620) Medical equipment, net 165,425 154,529 Leasehold improvements 59,422 52,046 Property and office equipment 200,560 165,737 259,982 217,783 Less: Accumulated depreciation (132,723) (98,354) Property and office equipment, net 127,259 119,429 Total property and equipment, net $ 292,684 $ 273,958 Depreciation expense recognized during the years ended December 31, 2023, 2022, and 2021 was $80.2 million, $84.3 million, and $103.8 million, respectively. There were no impairment charges on property and equipment during 2023, 2022, and 2021. Goodwill and Other Intangible Assets Goodwill during the year ended December 31, 2023 was recognized due to purchase price adjustments for acquisitions completed during 2022. There were no impairment losses recorded on goodwill through December 31, 2023 . The Company's goodwill consists of the following: (in thousands) Balance at December 31, 2022 $ 1,239,106 Acquisitions 326 Balance at December 31, 2023 $ 1,239,432 Management elected to perform a quantitative goodwill impairment test as of December 31, 2023. The fair value was approximately 7% greater than its carrying amount, thus no impairment was recognized. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions could have a material effect on the estimated fair value of our reporting unit and could result in a goodwill impairment charge in a future period. The Company's other intangible assets consist of the following: December 31, 2023 (in thousands) Cost Accumulated Net Finite-life intangibles Customer relationships $ 780,806 $ (353,190) $ 427,616 Non-compete agreements 1,225 (341) 884 Trade names 7,806 (6,603) 1,203 Patents 310 (11) 299 Total intangible assets $ 790,147 $ (360,145) $ 430,002 December 31, 2022 (in thousands) Cost Accumulated Net Finite-life intangibles Customer relationships $ 780,806 $ (275,522) $ 505,284 Non-compete agreements 6,225 (5,096) 1,129 Trade names 7,826 (3,311) 4,515 Developed technology 2,300 (1,208) 1,093 Total intangible assets $ 797,157 $ (285,137) $ 512,020 Total amortization expense related to intangible assets was approximately $82.3 million, $86.1 million, and $80.3 million for the years ended December 31, 2023, 2022, and 2021, respectively. There were no impairment charges during 2023, 2022, and 2021 with respect to other intangible assets. As of December 31, 2023, future estimated amortization expense related to intangible assets is estimated as follows: (in thousands) 2024 $ 71,619 2025 65,056 2026 58,480 2027 51,915 2028 45,159 Thereafter 137,773 $ 430,002 Future amortization expense is an estimate. Actual amounts may change due to additional intangible asset acquisitions, impairment, accelerated amortization or other events. Supplementary Cash Flow Information Supplementary cash flow information is as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Non-cash activities: Property and equipment purchases included in accounts payable (at end of period) $ 1,610 $ 2,241 $ 7,633 Finance lease asset and liability additions 13,190 7,117 8,783 Operating lease right-of-use asset and operating lease liability additions 20,633 22,501 27,660 Issuance of common stock related to acquisition — 2,000 11,300 Dividend and equity distribution (forfeited) payable — (23) (26) Software service contract additions — — 94 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: (in thousands) December 31, December 31, First Lien Term Loan $ 1,072,313 $ 1,054,549 Revolving Credit Facility — 28,500 Finance lease liability 27,374 23,892 1,099,687 1,106,941 Less: Unamortized deferred financing costs and debt discount (20,157) (11,896) 1,079,530 1,095,045 Less: Current portion of long-term debt (18,468) (17,752) Total long-term debt $ 1,061,062 $ 1,077,293 First Lien Credit Facilities On January 4, 2019, in connection with and substantially concurrent with the closing of the business combination, Agiliti Health, Inc. entered into a credit agreement (the “First Lien Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, collateral agent, and letter of credit issuer, Agiliti Holdco, Inc., certain subsidiaries of Agiliti Health, Inc. acting as guarantors, and the lenders from time-to-time party thereto. The First Lien Credit Agreement originally provided for a seven-year senior secured delayed draw term loan facility in an aggregate principal amount of $660.0 million (the “First Lien Term Loan”) and a five-year senior secured revolving credit facility in an aggregate principal amount of $150.0 million (the “Revolving Credit Facility”). The First Lien Term Loan amortized in equal quarterly installments, in an aggregate annual amount equal to 1.00% of the original principal amount of such term loan, with the balance due and payable at maturity unless prepaid prior thereto. Between February 2020 and December 2022, the Company increased the First Lien Term Loan facility by $625.0 million and the Revolving Credit Facility by $100.0 million via five amendments, resulting in $1.285 billion of borrowings under the First Lien Term Loan and access to $250.0 million via the Revolving Credit Facility as of December 31, 2022. During the year ended December 31, 2022, the Company prepaid $69.1 million resulting in a loss on extinguishment / modification of $1.4 million for the year ended December 31, 2022, which consisted entirely of the write-off of unamortized debt discount. During the year ended December 31, 2021, in connection with amendments discussed above, the Company incurred a loss on extinguishment / modification of debt of $0.3 million related to the write-off of unamortized deferred financing costs. The First Lien Credit Facilities contain a number of negative covenants that, among other things, restrict, subject to certain exceptions, the ability of Agiliti Health, Inc. and the guarantors thereunder to incur additional indebtedness and guarantee indebtedness; create or incur liens; engage in mergers or consolidations; sell, transfer or otherwise dispose of assets; pay dividends and distributions or repurchase capital stock; prepay, redeem or repurchase certain indebtedness; make investments, loans and advances; enter into agreements which limit the ability of Agiliti Health, Inc. and the guarantors thereunder to incur liens on assets; and enter into amendments to certain junior lien and subordinated indebtedness in a manner materially adverse to the lenders. Solely with respect to the Revolving Credit Facility, the Company is required to maintain a leverage ratio not to exceed 7:1 when the aggregate principal amount of outstanding Revolving Loans and drawn Letters of Credit, on the last day of the most recent fiscal quarter, exceeds 35% of the total revolving credit commitments. Revolving Credit Facility Amendment On April 6, 2023, the Company entered into Amendment No. 6 (“Amendment No. 6”) to the First Lien Credit Agreement, with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders. Amendment No. 6, among other things, provided for (i) a refinancing of the existing Revolving Credit Facility through a replacement of the existing $250.0 million Revolving Credit Facility with a $300.0 million revolving credit facility; (ii) extends the maturity of the Revolving Credit Facility to April 6, 2028; and (iii) updates the benchmark interest rate provisions to replace the LIBOR with a term rate based on the Secured Overnight Financing Rate (“Term SOFR”), for revolving loans extended in dollars, a term rate based on the Euro InterBank Offered Rate (“Adjusted EURIBOR”), for revolving loans extended in euros, and a daily rate (“Daily Simple RFR”) based on the Sterling Overnight Index Average (“SONIA”), for revolving loans extended in sterling, as the reference rates for purposes of calculating interest under the Revolving Credit Facility. Following Amendment No. 6, the interest rate margin for borrowings under the Revolving Credit Facility are set at Adjusted EURIBOR, Daily Simple RFR or Term SOFR plus 2.75%, with step downs to (A) Adjusted EURIBOR, Daily Simple RFR or Term SOFR plus 2.50% if the first lien leverage ratio (as calculated under the First Lien Credit Agreement) is less than or equal to 3.75:1.00 and (B) Adjusted EURIBOR, Daily Simple RFR or Term SOFR plus 2.25% if the first lien leverage ratio is less than or equal to 3.25:1.00. Consistent with the prior agreement, the commitment fee on the average daily undrawn portion of the New Revolving Credit Facility is 0.3750% per annum if the first lien leverage ratio is greater than 3.25:1.00 and 0.250% if the first lien leverage ratio is less than or equal to 3.25:1.00 During the year ended December 31, 2023 , in connection with the Company's entry into Amendment No. 6, $3.7 million in lender and third-party fees were capitalized. A&R First Lien Term Loan Agreement On May 1, 2023, the Company entered into an amended and restated credit agreement, dated as of May 1, 2023 (the “A&R First Lien Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders from time-to-time party thereto, which amends and restates the First Lien Credit Agreement. The A&R First Lien Credit Agreement among other things (i) provides for a refinancing of the existing term loan credit facility with a $1.075 billion term loan credit facility (the “Term Loan Credit Facility”); (ii) extends the maturity of the Term Loan Credit Facility to May 1, 2030; and (iii) updates the benchmark interest rate provisions to replace LIBOR with a term rate based on the Term SOFR, for term loans extended in dollars. Following the A&R First Lien Credit Agreement, the interest rate margin for the term loan borrowings under the Term Loan Credit Facility will be set at Term SOFR plus 3.00%. The Term Loan Credit Facility amortizes in equal quarterly installments, commencing on December 31, 2023, in an aggregate annual amount equal to 0.25% of the original principal amount of such term loan, with the balance due and payable at maturity unless prepaid prior thereto. Except as described above, the A&R First Lien Credit Agreement does not give effect to other material changes to the terms of the First Lien Credit Agreement, including with respect to the representations and warranties, events of default and affirmative and negative covenants. During the year ended December 31, 2023, in connection with the Company's entry into the A&R First Lien Credit Agreement, lender and third-party fees of $3.1 million and $2.8 million were capitalized and expensed, respectively. Unamortized costs written off due to loss on extinguishment / modification of debt totaled $1.7 million for the year ended December 31, 2023. The Company was in compliance with all financial debt covenants for all periods presented. Second Lien Term Loan The Second Lien Term Loan provided for an eight-year term loan facility in an aggregate principal amount of $240.0 million (the “Second Lien Term Loan”). During the year ended December 31, 2021, the Company used the proceeds from the IPO to repay the full principal amount of the Second Lien Term Loan, $80.0 million of the First Lien Term Loan, and $10.0 million of the Revolving Credit Facility. In connection with the repayment of the Second Lien Term Loan, the Company incurred a loss on extinguishment / modification of debt of $9.8 million which consisted of the write-off of unamortized deferred financing costs and debt discount of $7.4 million and an additional 1% redemption price or $2.4 million. Interest Rate Swap In May 2020, the Company entered into an interest rate swap agreement for a total notional amount of $500.0 million. Until its expiration in June 2023, the agreement converted $350.0 million and $150.0 million of the First Lien Term Loan to fixed interest rates of 0.3396% and 0.3290%, respectively, plus the Applicable Margin. On April 17, 2023, the Company entered into a new two-year interest rate swap agreement with an effective date of July 1, 2023. As a result, the Company expects the effective interest rate on $500.0 million of the Term Loan Credit Facility to be 4.0685%, plus the Applicable Margin, through July 2025. Both interest rate swap agreements qualify for cash flow hedge accounting under ASC 815. At inception and on an on-going basis, the Company must perform an effectiveness test. The fair value of the interest rate swap agreement as of December 31, 2023 was $1.9 million, of which $3.1 million is included in other current assets offset by $1.2 million included in obligation under tax receivable agreement, pension and other long-term liabilities on the consolidated balance sheet. The change in fair value was recorded as a component of accumulated other comprehensive loss on the consolidated balance sheet, net of tax, since the instrument was determined to be an effective hedge as of December 31, 2023. The Company has not recorded any amounts due to ineffectiveness for any periods presented. Maturities of Long-Term Debt As of December 31, 2023, maturities of long-term debt and capital lease obligations are contractually as follows: (in thousands) 2024 $ 18,468 2025 16,261 2026 14,696 2027 13,582 2028 12,788 Thereafter 1,023,892 Total 1,099,687 Unamortized deferred financing costs (11,371) Unamortized debt discount (8,786) $ 1,079,530 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities under operating lease agreements, which include both monthly and longer-term arrangements. The Company's finance leases consist primarily of leased vehicles. Lease assets and liabilities consist of the following: (in thousands) December 31, December 31, Lease Assets Classification Operating lease assets Operating lease right-of-use assets $ 78,157 $ 79,975 Finance lease assets Property and equipment (1) 27,554 23,231 Total leased assets $ 105,711 $ 103,206 Lease Liabilities Current: Operating Current portion of operating lease liability $ 25,603 $ 23,607 Finance Current portion of long-term debt 7,718 8,354 Noncurrent: Operating Operating lease liability, less current portion 63,765 67,332 Finance Long-term debt, less current portion 19,656 15,538 Total lease liabilities $ 116,742 $ 114,831 (1) Finance lease assets are recorded net of accumulated depreciation of $39.4 million and $29.6 million as of December 31, 2023 and 2022, respectively . Total lease cost consists of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Lease Cost Finance lease cost: Amortization of right-of-use assets $ 10,034 $ 8,659 $ 8,657 Interest on lease liabilities 998 648 738 Operating lease cost 30,218 29,044 19,547 Short-term lease cost 982 878 791 Variable lease cost 7,028 6,293 5,641 Total lease cost $ 49,260 $ 45,522 $ 35,374 The maturities of lease liabilities as of December 31, 2023 are as follows: (in thousands) Operating Finance Total 2024 $ 28,000 $ 8,447 $ 36,447 2025 23,746 6,035 29,781 2026 18,551 4,372 22,923 2027 7,985 3,140 11,125 2028 5,074 2,260 7,334 Thereafter 13,094 5,515 18,609 Total lease payments $ 96,450 $ 29,769 $ 126,219 Less: Interest 7,082 2,395 9,477 Present value of lease liabilities $ 89,368 $ 27,374 $ 116,742 The lease term and discount rates are as follows: December 31, Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 4.6 Finance leases 2.1 Weighted-average discount rate Operating leases 3.2 % Finance leases 2.7 % Other information related to cash paid related to lease liabilities and lease assets obtained is as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 998 $ 648 $ 738 Operating cash flows for operating leases 27,549 25,878 19,569 Financing cash flows for finance leases 9,502 8,812 9,097 Lease asset obtained in exchange for new finance lease liabilities 13,190 7,117 8,783 Lease asset obtained in exchange for new operating lease liabilities 20,633 22,501 27,660 |
Leases | Leases The Company leases facilities under operating lease agreements, which include both monthly and longer-term arrangements. The Company's finance leases consist primarily of leased vehicles. Lease assets and liabilities consist of the following: (in thousands) December 31, December 31, Lease Assets Classification Operating lease assets Operating lease right-of-use assets $ 78,157 $ 79,975 Finance lease assets Property and equipment (1) 27,554 23,231 Total leased assets $ 105,711 $ 103,206 Lease Liabilities Current: Operating Current portion of operating lease liability $ 25,603 $ 23,607 Finance Current portion of long-term debt 7,718 8,354 Noncurrent: Operating Operating lease liability, less current portion 63,765 67,332 Finance Long-term debt, less current portion 19,656 15,538 Total lease liabilities $ 116,742 $ 114,831 (1) Finance lease assets are recorded net of accumulated depreciation of $39.4 million and $29.6 million as of December 31, 2023 and 2022, respectively . Total lease cost consists of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Lease Cost Finance lease cost: Amortization of right-of-use assets $ 10,034 $ 8,659 $ 8,657 Interest on lease liabilities 998 648 738 Operating lease cost 30,218 29,044 19,547 Short-term lease cost 982 878 791 Variable lease cost 7,028 6,293 5,641 Total lease cost $ 49,260 $ 45,522 $ 35,374 The maturities of lease liabilities as of December 31, 2023 are as follows: (in thousands) Operating Finance Total 2024 $ 28,000 $ 8,447 $ 36,447 2025 23,746 6,035 29,781 2026 18,551 4,372 22,923 2027 7,985 3,140 11,125 2028 5,074 2,260 7,334 Thereafter 13,094 5,515 18,609 Total lease payments $ 96,450 $ 29,769 $ 126,219 Less: Interest 7,082 2,395 9,477 Present value of lease liabilities $ 89,368 $ 27,374 $ 116,742 The lease term and discount rates are as follows: December 31, Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 4.6 Finance leases 2.1 Weighted-average discount rate Operating leases 3.2 % Finance leases 2.7 % Other information related to cash paid related to lease liabilities and lease assets obtained is as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 998 $ 648 $ 738 Operating cash flows for operating leases 27,549 25,878 19,569 Financing cash flows for finance leases 9,502 8,812 9,097 Lease asset obtained in exchange for new finance lease liabilities 13,190 7,117 8,783 Lease asset obtained in exchange for new operating lease liabilities 20,633 22,501 27,660 |
Shareholder's Equity
Shareholder's Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Shareholder's Equity | Shareholder’s Equity Treasury Stock On August 21, 2023, the Company announced that its board of directors approved a share repurchase program, pursuant to which, the Company is authorized to repurchase up to $50.0 million of shares of the Company’s common stock (exclusive of any fees, commissions or other expenses related to such repurchases), over a period of 12 months. During the year ended December 31, 2023, the Company repurchased 406,096 shares of its common stock for a total of $3.8 million. Dividends In November 2019, the Company declared a $2.23 dividend per share that was paid to holders of common stock and is paid upon vesting to holders of restricted stock units and performance restricted stock units. Dividends paid during the years ended December 31, 2023 and 2022 totaled $0.3 million and $0.9 million, respectively. Accumulated Other Comprehensive Income (Loss) The components of Accumulated Other Comprehensive Income (Loss) are as follows: (in thousands) December 31, December 31, Unrealized gain on minimum pension liability adjustment, net of tax $ 1,069 $ 502 Unrealized gain on cash flow hedge, net of tax 1,436 6,841 $ 2,505 $ 7,343 Changes in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2023 are as follows: (in thousands) Minimum pension liability - balance as of December 31, 2022 $ 502 Net actuarial gain 909 Amortization of net actuarial gain (151) Income tax (expense) related to pension (191) Net current year other comprehensive income 567 Minimum pension liability - balance as of December 31, 2023 $ 1,069 Cash flow hedge - balance as of December 31, 2022 $ 6,841 Changes in the effective portion of the fair value of cash flow hedge (7,285) Income tax benefit related to cash flow hedge 1,880 Net current year other comprehensive (loss) (5,405) Cash flow hedge - balance as of December 31, 2023 $ 1,436 Net current year other comprehensive (loss) $ (4,838) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation On January 4, 2019, the 2018 Omnibus Incentive Plan (“2018 Plan”) became effective. The 2018 Plan provides for issuance of 24.6 million nonqualified stock options, restricted stock units and performance restricted stock units to any of its executives, other key employees and certain non-employee directors. Approximately 3.0 million shares of the 2007 Stock Option Plan with an exercise price of $2.13 per share and expiration date of November 4, 2024 were rolled into the 2018 Plan on January 4, 2019. In connection with the Company's IPO in 2021, the Company granted certain employees, including named executive officers, restricted stock units, performance restricted stock units, and stock options under the 2018 Plan with respect to approximately 1.6 million shares of the Company’s common stock. The Company adopted an Employee Stock Purchase Plan (“ESPP”) in 2021 and a total of 2.6 million shares of the Company's common stock are reserved for issuance thereunder. Employees are permitted to purchase the Company’s common stock at 85% of market value at the end of the six-month offering period ending on April 30 and October 31 each year. 398,895 shares were issued under the ESPP during the year ended December 31, 2023. The Company recognized $0.6 million share-based compensation expense for the discount received by participating employees for the year ended December 31, 2023. In connection with the dividend payment in November 2019, the exercise price of stock options granted under the 2018 Plan was adjusted from $8.50 to $6.27 per share. This modification did not result in additional share-based compensation expense. Stock Options A summary of activity for the stock options under the 2018 Plan is detailed below : (in thousands, except exercise price and years) Number of Weighted Aggregate Weighted Outstanding as of December 31, 2020 6,690 $ 4.25 $ 81,235 6.5 Granted 710 14.09 Exercised (651) 2.22 11,939 Forfeited or expired — — Outstanding as of December 31, 2021 6,749 $ 6.08 $ 114,095 6.1 Granted 555 18.45 Exercised (820) 3.67 12,332 Forfeited or expired (85) 14.30 Outstanding as of December 31, 2022 6,399 $ 7.36 $ 58,449 5.7 Granted 676 14.54 Exercised (835) 3.93 6,778 Forfeited or expired (1,145) 11.38 Outstanding as of December 31, 2023 5,095 $ 7.97 $ 9,797 4.9 Exercisable as of December 31, 2023 4,547 $ 7.11 $ 9,764 4.5 Stock options allow for the purchase of shares of common stock of the Company at prices equal to the stock’s fair market value at the date of grant. Options granted have a ten-year contractual term and vest over one The exercise price of the stock option award is equal to the market value of Company’s common stock on the grant date as determined reasonably and in good faith by the Company’s Board of Directors and Compensation Committee. The intrinsic value of a stock award is the amount by which the market value of the underlying stock exceeds the exercise price of the award. The Company determines the fair value of options using the Black-Scholes option pricing model. The estimated fair value of options is recognized as expense on a straight-line basis over the options’ vesting periods. The assumptions in the table below were used to determine the Black-Scholes fair value of stock options granted: Year Ended December 31, 2023 2022 2021 Risk-free interest rate 3.91 % 1.76 % 0.94 % Expected volatility 39.71 % 33.36 % 34.05 % Dividend yield N/A N/A N/A Expected option life (years) 6.00 6.00 5.92 Black-Scholes Value of options $ 6.64 $ 6.53 $ 4.83 Expected volatility is based on an independent valuation of the stock of companies within the Company's peer group. Given the lack of a true comparable company, the peer group consists of selected public healthcare companies representing the Company's suppliers, customers and competitors within certain product lines. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date based on the expected option life. The expected option life is estimated utilizing the simplified method due to the Company's lack of historical exercise data. Future expense related to stock options that the Company expects to recognize as expense over a weighted average period of 2.0 years, totals approximately $2.2 million. The expense could be accelerated upon the sale of the Company. Restricted Stock Units and Performance Restricted Stock Units A summary of activity for restricted stock units and performance restricted stock units is detailed below: (in thousands, except grant date fair values) Number of Weighted Nonvested as of December 31, 2020 1,944 $ 8.37 Granted 1,180 14.69 Vested (817) 8.58 Forfeited (135) 11.55 Nonvested as of December 31, 2021 2,172 $ 11.26 Granted 1,620 18.40 Vested (1,021) 10.03 Forfeited (398) 15.58 Nonvested as of December 31, 2022 2,373 $ 15.55 Granted 2,636 11.38 Vested (1,289) 13.64 Forfeited (505) 16.90 Nonvested as of December 31, 2023 3,215 $ 12.68 The restricted stock units vest over one The fair value of the market-based performance restricted stock units is estimated at the grant date using a Monte-Carlo simulation model which included the following assumptions: Year Ended December 31, 2023 Risk-free interest rate 4.19 % Dividend yield N/A Expected volatility 51.19 % Expected term (years) 2.57 The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date based on the expected option life. Expected volatility is based on the historical volatility of the Company's stock over the expected term. The expected term is the time between the award grant date and performance period end date. The following table summarizes stock-based compensation expense for the 2018 Plan and ESPP: December 31, (in thousands) 2023 2022 2021 Cost of sales $ 2,962 $ 2,335 $ — Selling, general, and administrative expense 17,224 16,440 13,960 Total stock-based compensation expense $ 20,186 $ 18,775 $ 13,960 The Company's actual tax benefits realized from tax deductions related to the vesting of awards for years ended December 31, 2023, 2022, and 2021 was $4.9, $6.0, and $3.6 million, respectively. Remaining authorized options, restricted stock units and performance restricted stock units available for future issuance under the 2018 Plan was 14.1 million shares as of December 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company, in the ordinary course of business, is subject to liability claims related to employees and the equipment that it rents and services. Asserted claims are subject to many uncertainties and the outcome of individual matters is not predictable. For certain claims where the loss is probable, a provision is recorded based on the Company’s best estimate. While the ultimate resolution of these actions may have an impact on the Company’s financial results for a particular reporting period, management believes that any such resolution would not have a material adverse effect on the financial position, results of operations or cash flows of the Company and the chance of a negative outcome on outstanding litigation is considered remote. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Agreement On January 4, 2019, the Company entered into an advisory services agreement (the “Advisory Services Agreement”) with Agiliti Holdco, Inc., Agiliti Health, Inc. and THL Managers VIII, LLC (the “Advisor”). Pursuant to the Advisory Services Agreement, the Advisor provided management, consulting, and other advisory services to the Company. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans ASC 715, Compensation — Retirement Benefits, requires employers to recognize the under-funded or over-funded status of a defined benefit post retirement plan as an asset or liability in its consolidated balance sheets and to recognize changes in the funded status in the year in which the changes occur through accumulated other comprehensive income. Additionally, ASC 715 requires employers to measure the funded status of a plan as of the date of its year-end balance sheet date. Pension plan benefits are to be paid to eligible employees after retirement based primarily on years of credited service and participants’ compensation. The Company uses a December 31 measurement date. Effective December 31, 2002, the Company froze the benefits under the pension plan. The change in benefit obligation, pension plan assets and funded status as of and for the years ended December 31, 2023 and 2022 are as follows: Change in Benefit Obligation (in thousands) 2023 2022 Benefit obligations at beginning of year $ 24,129 $ 31,150 Interest cost 1,181 847 Actuarial (gain) loss 591 (6,451) Benefits paid (1,532) (1,417) Benefit obligations at end of year $ 24,369 $ 24,129 Change in Plan Assets (in thousands) 2023 2022 Fair value of plan assets at beginning of year $ 21,016 $ 26,393 Actual return on plan assets 2,933 (4,610) Employer contributions 180 650 Benefits paid (1,532) (1,417) Fair value of plan assets at end of year $ 22,597 $ 21,016 Funded Status (in thousands) 2023 2022 Funded status $ (1,772) $ (3,113) Unrecognized net actuarial (gain) / accumulated other comprehensive (gain) (1,432) (675) Net amount recognized $ (3,204) $ (3,788) A summary of the Company's pension plan projected benefit obligation, accumulated obligation and fair value of pension plan assets are as follows: (in thousands) 2023 2022 Projected benefit obligation $ 24,369 $ 24,129 Accumulated benefit obligation (“ABO”) 24,369 24,129 Fair value of plan assets 22,597 21,016 ABO less fair value of plan assets $ 1,772 $ 3,113 Amounts recognized in the consolidated balance sheets are as follows: (in thousands) 2023 2022 Current liabilities $ — $ 650 Noncurrent liabilities 1,772 2,463 Total amount recognized $ 1,772 $ 3,113 Net Periodic Benefit Cost The components of net periodic benefit cost are as follows: (in thousands) Year Ended December 31, 2023 2022 2021 Interest cost $ 1,181 $ 847 $ 785 Expected return on plan assets (1,434) (1,139) (1,107) Recognized net actuarial (gain) loss (151) — 293 Net periodic benefit cost $ (404) $ (292) $ (29) Change in Accumulated Other Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2023 2022 2021 Beginning of year $ 502 $ (20) $ (2,215) Net actuarial gain 909 703 2,649 Amortization of net actuarial (gain) loss (151) — 293 Income tax expense related to pension (191) (181) (747) End of year $ 1,069 $ 502 $ (20) Pension Plan Assets The Company's target pension plan asset allocation and actual pension plan allocation of assets as of December 31, are as follows: Asset Category Target 2023 2022 Equity securities 46 % 43 % 69 % Debt securities and cash 54 57 31 100 % 100 % 100 % The pension plan assets are invested with the objective of maximizing long-term returns while minimizing material losses in order to meet future benefit obligations when they come due. The Company utilizes an investment approach with a mix of equity and debt securities used to maximize the long-term return on assets. Risk tolerance is established through consideration of pension plan liabilities, funded status and corporate financial condition. The investment portfolio consists of a diversified blend of mutual funds and fixed-income investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual asset and liability reviews. Fair Value Measurement The following tables present the Company's plan assets, using the fair value hierarchy as disclosed in Note 5, Fair Value Measurements. Assets at Fair Value as of December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 127 $ — $ — $ 127 Registered investment companies: Total international stock index fund 5,184 — — 5,184 Total stock market index fund 4,609 — — 4,609 Total return fund 12,677 — — 12,677 Total assets at fair value $ 22,597 $ — $ — $ 22,597 Assets at Fair Value as of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 121 $ — $ — $ 121 Registered investment companies: Total international stock index fund 7,163 — — 7,163 Total stock market index fund 7,346 — — 7,346 Total return fund 6,386 — — 6,386 Total assets at fair value $ 21,016 $ — $ — $ 21,016 Investments in equity and debt securities are valued at the net asset value of units held at the end of the period based upon the value of the underlying investments as determined by quoted market prices. These investments are classified as Level 1. Contributions The Company contributed $0.2 million, $0.7 million and $0.7 million to the pension plan during the years ended December 31, 2023, 2022, and 2021, respectively. The Company does not expect to make contributions during in 2024 . Estimated Future Benefit Payments The following benefit payments are expected to be paid: (in thousands) 2024 $ 1,633 2025 1,672 2026 1,720 2027 1,810 2028 1,812 2029 - 2033 8,822 Pension Plan Assumptions The following weighted-average assumptions were used as of each of the years ended December 31, as follows: 2023 2022 2021 Weighted-average actuarial assumptions used to determine benefit obligations: Discount rate 4.82 % 5.01 % 2.77 % Expected return on assets 5.93 % 4.90 % 5.05 % Weighted-average actuarial assumptions used to determine net periodic benefit cost: Discount rate 5.01 % 2.77 % 2.43 % Expected return on assets 6.13 % 5.05 % 5.05 % Rate of compensation increase N/A N/A N/A These assumptions are reviewed on an annual basis. The discount rate reflects the current rate at which the pension obligation could be effectively settled at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flow sufficient in timing and amount to settle projected future benefits. In determining the expected return on asset assumption, the Company evaluates the long-term returns earned by the pension plan, the mix of investments that comprise pension plan assets and forecasts of future long-term investment returns. Other Employee Benefits The Company also sponsors a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”) and covers substantially all of the Company’s employees. Employees may contribute annually up to 80% of their base compensation on a pre-tax basis (subject to Internal Revenue Service limitation). The company matching contribution is 50% of the first 6% of base compensation that an employee contributes. The Company made matching contributions to the plan of approximately $7.5 million, $6.0 million and $5.6 million for the years ended December 31, 2023 and 2022, and 2021, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income tax expense (benefit) consists of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Federal current $ 8,873 $ (6,555) $ 223 State current 3,716 3,697 4,206 Total current 12,589 (2,858) 4,429 Federal deferred (11,918) 1,730 11,823 State deferred (5,403) (104) 181 Total deferred (17,321) 1,626 12,004 $ (4,732) $ (1,232) $ 16,433 Reconciliations between the Company’s effective income tax rate and the U.S. statutory rate are as follows: Year Ended December 31, 2023 2022 2021 Statutory U.S. Federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of U.S. Federal income tax 3.4 10.9 4.8 Permanent items (0.4) (0.8) 0.1 Meals and entertainment (2.7) 0.3 0.4 Deferred rate change 8.9 2.1 1.8 Share-based compensation 6.2 (30.0) (5.2) Executive compensation disallowed (15.8) 23.5 11.1 TRA fair value adjustment (1.1) (1.9) 2.9 Release of Sizewise reserve — (30.4) — Transaction costs — — 2.3 Tax credits 2.7 (0.6) — Valuation allowance (2.4) — — Other (0.2) 1.6 1.4 Effective income tax rate 19.6 % (4.3) % 40.6 % The Company's effective tax rate for the year ended December 31, 2023 was primarily impacted by executive compensation disallowed under Internal Revenue Code Section 162(m), share-based compensation, and deferred rate changes. Th e Company's effective tax rate for the year ended December 31, 2022 was primarily impacted by share-based compensation, executive compensation disallowed under Internal Revenue Code Section 162(m), and the release of uncertain tax positions and permanent items related to the Sizewise Acquisition as described below. The Company's effective tax rate for the year ended December 31, 2021 was primarily impacted by share-based compensation, executive compensation disallowed under Internal Revenue Code Section 162(m), a tax rate change, transaction costs and the Company's tax receivable agreement. Pursuant to the receipt of a Private Letter Ruling from the IRS during the fiscal year ended December 31, 2022, the Company released a reserve assumed from the Sizewise Acquisition completed in 2021. The exposure was covered by an indemnification agreement with the seller. The release of the reserve and associated interest and penalties accrual resulted in a $11.9 million tax benefit and indemnification expense for the same amount, which is included in ‘Tax indemnification expense’ on the consolidated statements of operations. The release of the reserve is treated as a significant, unusual item under the provisions of ASC 740 and the $11.9 million tax benefit recognized resulted in a significant variation in the customary relationship between income tax expense (benefit) and pre-tax income (loss) for fiscal year ended December 31, 2022, as seen within the table above. On August 9, 2022, the Creating Helpful Incentives to Produce Semiconductors ("CHIPS") Act was signed into law creating a new advanced manufacturing investment credit under new Internal Revenue Code section 48D. On August 16, 2022, the Inflation Reduction Act was signed into law. The two primary tax implications for corporations are a 15% alternative minimum tax (“AMT”) that applies to corporations with at least $1.0 billion of pretax income and a 1% surtax on share buybacks, which takes effect in 2023. The Company does not deem the CHIPS Act or the Inflation Reduction Act to have a material impact on its financial statements for the years ended December 31, 2023 and 2022. On December 15, 2022, the European Union (“EU”) member states formally adopted the EU’s Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15% minimum effective tax rate for multinational enterprises, in every jurisdiction in which they operate. While the Company does not anticipate that this will have a material impact on the tax provision or effective tax rate, management continues to monitor evolving tax legislation in the jurisdictions in which the Company operates. The components of the Company’s overall deferred tax assets and liabilities are as follows: (in thousands) December 31, December 31, Deferred tax assets: Accounts receivable $ 1,582 $ 1,079 Accrued compensation and pension 8,529 9,901 Inventories 2,888 1,468 Other assets 4,151 3,847 Operating lease liability 22,730 23,407 Section 163(j) capitalized interest 16,979 4,975 Section 174 capitalized R&D costs 6,591 2,901 Net operating loss carryforwards 2,138 17,146 Total gross deferred tax assets 65,588 64,724 Valuation allowance (577) — Total deferred tax assets 65,011 64,724 Deferred tax liabilities: Deferred contract costs (3,102) (3,850) Unrealized (gain) on pension (364) (174) Unrealized (gain) on cash flow hedge (489) (2,370) Accelerated depreciation and amortization (163,988) (180,934) Prepaid assets (3,429) (3,537) Operating lease right-of-use assets (19,858) (20,474) Total deferred tax liabilities (191,230) (211,339) Total net deferred tax liabilities (126,219) (146,615) As of December 31, 2023, the Company has fully utilized its federal net operating loss carryforwards. In assessing the need for a valuation allowance, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates its ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding its forecasted taxable income, the reversal of existing deferred tax liabilities, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The Company has been generating taxable income in recent years on a consolidated basis and is projecting taxable income in future years due to continued growth on a consolidated basis. However, based upon the analysis performed on the various operating entities, it was determined that it was more-likely-than not that the Company will not be able to benefit from a portion of the separate state net operating losses. As such, the Company has recorded a valuation allowance on these deferred tax assets as of December 31, 2023. The Company did not record a valuation allowance for the years ended December 31, 2022 and 2021. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company files income tax returns in the U.S. federal jurisdiction and numerous state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal or state and local income tax examinations by tax authorities for taxable years before 2020. A reconciliation of the beginning and ending amount of unrecognized tax benefit for the years ended December 31, 2023, 2022 and 2021 is as follows: (in thousands) Unrecognized tax benefits balance at December 31, 2020 $ 1,340 Gross decreases for tax positions in 2021 8,771 Unrecognized tax benefits balance at December 31, 2021 10,111 Gross increase for rate change in 2022 (8,753) Unrecognized tax benefits balance at December 31, 2022 1,358 Gross decrease for tax positions in 2023 (18) Unrecognized tax benefits balance at December 31, 2023 $ 1,340 The Company has $1.3 million of unrecognized tax benefits as of December 31, 2023 that, if recognized, would impact the effective tax rate. The Company did not accrue for any interest or penalties related to unrecognized tax benefits as of December 31, 2023 and 2022 as compared to an accrual of $3.2 million for the year ended December 31, 2021. The Company does not anticipate significant changes to our unrecognized tax benefits within the next twelve months. |
Concentration
Concentration | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration | Concentration On December 14, 2022, the Company received a modification to the Company’s current U.S. Department of Health and Human Services (“HHS”) and the Assistant Secretary for Preparedness and Response (“ASPR”) agreement that expired on February 27, 2023 incorporating Federal Acquisition Regulation (“FAR”) 52.217-8, which allows the government to extend the term of this current agreement by up to six months. Additionally, on December 14, 2022, the Company entered into a new HHS / ASPR agreement (the "Agreement") for preventive maintenance services (“PMS”), management and storage for ventilator and powered air purifying respirator (“PAPR”) systems. The Agreement’s performance period commenced on August 28, 2023 and is anticipated to have a period of performance of four years and six months, consisting of a base period of twelve months, three one-year option periods and an additional six-month option period. Approximately 10.4% and 10.5% of total Company revenue was attributable to various contracts with the HHS / ASPR for the years ending December 31, 2023 and 2022, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following is a reconciliation of the basic and diluted number of shares used in computing earnings (loss) per share: Year Ended December 31, 2023 2022 2021 Basic weighted average shares outstanding 134,647,238 132,602,747 120,877,480 Net effect of dilutive stock awards based upon the treasury stock method — 5,778,548 7,619,740 Dilutive weighted average shares outstanding 134,647,238 138,381,295 128,497,220 Basic earnings (loss) per share $ (0.14) $ 0.23 $ 0.20 Diluted earnings (loss) per share $ (0.14) $ 0.22 $ 0.19 Anti-dilutive share-based awards excluded from the calculation of dilutive earnings per share 8,557,396 9,203 — For the year ended December 31, 2023, dilutive weighted-average shares outstanding is equal to basic weighted-average shares outstanding due to the Company’s net loss position as the inclusion of such stock awards within dilutive weighted-average shares outstanding would be antidilutive. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Merger Agreement On February 26, 2024, the Company, entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) by and among the Company, Apex Intermediate Holdco, Inc., a Delaware corporation (“ Parent ”), and Apex Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“ Merger Sub ”), pursuant to which, subject to the satisfaction or waiver of certain conditions and on the terms set forth therein, Merger Sub will merge (the “ Merger ”) with and into the Company, with the Company continuing as the surviving corporation (the “ Surviving Corporation ”). Parent and Merger Sub are affiliates of THL Agiliti LLC, an affiliate of Thomas H. Lee Partners, L.P. (“ THL ”) and the holder of a majority of the outstanding capital stock of the Company (the “ Significant Company Stockholder ”). Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement. Merger Consideration Pursuant to the Merger Agreement, at the effective time of the Merger (the “ Effective Time ”), each share of common stock, $0.0001 par value per share, of the Company (the “ Shares ” and each a “ Share ”) issued and outstanding immediately prior to the Effective Time (other than (i) Shares owned directly or indirectly by the Significant Company Stockholder, Parent or Merger Sub or any of their respective Subsidiaries (each such Share referred to in clause (i), a “ Significant Company Stockholder Share ” and, collectively, the “ Significant Company Stockholder Shares ”), (ii) the Rollover Shares (defined below) and (iii) Shares owned by the Company as treasury stock (each such Share referred to in clause (iii), an “ Excluded Share ” and, collectively, the “ Excluded Shares ”) and (iv) Shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights in accordance with Section 262 of the DGCL (“ Dissenting Stockholders ”)), shall be converted into the right to receive $10.00 per Share in cash, without interest thereon (the “ Merger Consideration ”). Refer to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024 for additional information regarding the Merger. Accounts Receivable Securitization On February 14, 2024, Agiliti Receivables LLC, a special purpose entity (the “SPV”) that is an indirect subsidiary of the Company, entered into an accounts receivable securitization facility (the “AR Facility”) of up to $150 million with MUFG Bank, Ltd., as administrative agent pursuant to a receivables financing agreement, dated as of February 14, 2024 (the “RFA”), among the SPV, Agiliti Health, Inc., as servicer, the administrative agent and the group and agents and lenders party thereto. In connection with the AR Facility, certain subsidiaries of Agiliti, as originators (the “Originators”), sold and will continue to sell all of their accounts receivable and certain related assets (collectively, the “Receivables”) to the SPV. The amount available for borrowings at any one time under the RFA is limited to a borrowing base amount calculated based on the outstanding balance of eligible Receivables, subject to certain reserves, concentration limits, and other limitations. Borrowings under the RFA bear interest at rates specified in the RFA in addition to a drawn fee and a fee on the undrawn committed amount of the RFA. Interest and fees payable by the SPV under the RFA are due monthly. The RFA is scheduled to terminate on February 12, 2027, unless extended in accordance with its terms or earlier terminated. As of the date hereof, no amounts have been drawn on the AR facility. The SPV pledged its ownership interest in the Receivables as collateral security for all amounts outstanding under the RFA, and Agiliti Health, Inc. will perform administrative and collection services relating to the Receivables on behalf of the SPV for a fee. Agiliti Health, Inc. guaranteed the respective performance obligations of the Originators under the RFA pursuant to a performance guaranty dated as of the Closing Date. However, neither Agiliti Health, Inc. nor any of its affiliates guarantees the SPV’s borrowings under the RFA or the collectability of the Receivables. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) Attributable to Parent | $ (19,425) | $ 30,212 | $ 24,006 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Thomas J. Leonard [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On December 11, 2023, Thomas J. Leonard, a member of our Board of Directors and our Chief Executive Officer, adopted a pre-arranged trading plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 trading plan”). Mr. Leonard’s Rule 10b5-1 trading plan authorizes the potential sale of up to 496,041 shares of common stock issuable upon the exercise of outstanding stock options and expires no later than November 1, 2024. | |
Name | Thomas J. Leonard | |
Title | member of our Board of Directors and our Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 11, 2023 | |
Arrangement Duration | 326 days | |
Aggregate Available | 496,041 | 496,041 |
Lee M. Neumann [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On December 11, 2023, Lee M. Neumann, Executive Vice President and General Counsel, adopted a Rule 10b5-1 trading plan authorizing the potential sale of up to 14,055 shares of common stock. Ms. Neumann’s Rule 10b5-1 trading plan expires no later than November 29, 2024. | |
Name | Lee M. Neumann | |
Title | Executive Vice President and General Counsel | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 11, 2023 | |
Arrangement Duration | 354 days | |
Aggregate Available | 14,055 | 14,055 |
Scott A. Christensen [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On December 12, 2023, Scott A. Christensen, Senior Vice President, Controller and Chief Accounting Officer, adopted a Rule 10b5-1 trading plan authorizing the potential sale of up to 13,934 shares of common stock issuable upon the exercise of outstanding stock options. Mr. Christensen’s Rule 10b5-1 trading plan expires no later than November 29, 2024. | |
Name | Scott A. Christensen | |
Title | Senior Vice President, Controller and Chief Accounting Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 12, 2023 | |
Arrangement Duration | 353 days | |
Aggregate Available | 13,934 | 13,934 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers money market accounts and other highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Book overdrafts, if any, are included in accounts payable in the consolidated balance sheets and in operating activities in the consolidated statements of cash flows. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount. Concentrations of credit risk with respect to trade accounts receivable are limited due to the number of customers and their geographical distribution. The Company performs initial and ongoing credit evaluations of its customers and maintains allowances for potential credit losses. The allowance for credit losses is based on historical loss experience and estimated exposure on specific trade receivables . |
Inventories | Inventories Inventories consist of supplies and equipment held for resale and are valued at the lower of cost and net realizable value. Cost is determined by the average cost method, which approximates the first-in, first-out (“FIFO”) method. |
Property and Equipment | Property and Equipment The Company separates its property and equipment into two categories - medical equipment and property and office equipment. Depreciation of medical equipment is provided on the straight-line method over the equipment’s estimated useful life generally five . During fiscal year ended December 31, 2022, the Company performed a review of the estimated useful lives associated with certain medical equipment and determined that these assets had actual lives that were longer than previously estimated. As a result, effective July 1, 2022, the Company increased the expected useful lives of such medical equipment from four five Property and office equipment includes leasehold improvements, vehicles, computer software and hardware, and office equipment. Depreciation of property and office equipment is provided on the straight-line method over the lesser of the remaining useful life or lease term for leasehold improvements and three . The Company periodically reviews its property and equipment for impairment and assesses whenever significant events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. A recoverability test is performed by comparing the anticipated future undiscounted cash flows to the carrying amount of the assets. If impairment is identified, an impairment loss is recognized for the excess of the carrying amount of an asset over the anticipated future discounted cash flows expected to result from the use of the asset and its eventual disposition. For other property and equipment, primarily movable medical equipment, the Company continuously monitors specific makes/models for events such as product recalls or obsolescence. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the asset’s carrying amount over its fair value . |
Recoverability and Valuation of Goodwill | Recoverability and Valuation of Goodwill Goodwill represents the excess of the cost of acquired businesses over the fair value of identifiable tangible net assets and identifiable intangible assets purchased. Management reviews goodwill for impairment annually at the reporting unit level and upon the occurrence of certain events that might indicate the asset may be impaired. The Company operates under one reporting unit and does not aggregate any components into the one reporting unit. A qualitative review is conducted to determine whether it is more likely than not that the fair value is less than its carrying amount. If it is determined that it is more likely than not that the carrying amount is greater than the fair value of the asset, a quantitative impairment test is performed. To perform the quantitative impairment test, management compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired. If the carrying amount of the reporting unit, including goodwill, exceeds its fair value, a goodwill impairment loss is recognized in an amount equal to that excess. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, terminal value, discount rates, relevant comparable public company earnings multiples, and relevant transaction multiples. The Company estimates the fair value of the reporting unit using an income approach that utilizes a discounted cash flow model and a market approach that utilizes the guideline public company method. Each of the valuation methods were weighted by accounting for the relative merits of each method and considered, among other things, the reliability of the valuation methods and the inputs used in the methods. Management’s future financial projections used in the discounted cash flow model included organic net sales growth and net sales growth through new customer and product channels as well as continued operating efficiencies in future periods. The Company elected to perform a quantitative goodwill impairment test as of December 31, 2023. The fair value was approximately 7% greater than its carrying amount, thus no impairment was recognized. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions could have a material effect on the estimated fair value of our reporting unit and could result in a goodwill impairment charge in a future period. No goodwill impairments have been recognized in 2023, 2022, or 2021. |
Leases | Leases At inception, the Company determines whether an arrangement is a lease and the appropriate lease classification. Operating leases with terms greater than twelve months are included as operating lease right-of-use (“ROU”) assets, and lease liabilities within current portion of operating lease liability and operating lease liability less current portion on the consolidated balance sheets. Finance leases with terms greater than twelve months are included as finance ROU assets within property and office equipment, and finance lease liabilities within current portion of long-term debt and long-term debt, less current portion on the consolidated balance sheets. Leases with terms of less than twelve months, referred to as short-term leases, do not create a ROU asset or lease liability on the balance sheet . ROU assets represent the right to use an underlying asset for the lease term. Lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease, based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Finance leases are recognized on the date the asset is placed into service at the cost of capital. For both operating and finance leases, the initial ROU asset equals the lease liability, plus initial direct costs and favorable lease commitments, less lease incentives received. The Company's lease agreements may include options to extend or terminate the lease, which are included in the lease term at the commencement date when it is reasonably certain that the Company will exercise that option. In general, the Company does not consider optional periods included in the lease agreements as reasonably certain of exercise at inception. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Variable lease payments (for example, common area maintenance and real estate tax charges) are recorded separately from the determination of the ROU asset and lease liability. |
Other Intangible Assets | Other Intangible Assets Other intangible assets primarily include customer relationships, non-compete agreements, trade names, developed technology, and patents. Other intangible assets are amortized over their estimated economic lives of two . |
Deferred Financing Costs and Debt Discount | Deferred Financing Costs and Debt Discount Unamortized financing costs and discounts associated with issuing debt are presented in the consolidated balance sheet as a direct deduction from the carrying amount of the debt and are deferred and amortized to interest expense over the related terms using the effective interest rate method |
Acquisitions | Acquisitions The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations . This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting . Assigning estimated fair values to the net assets acquired requires the use of significant estimates, judgments, inputs, and assumptions regarding the fair value of the assets acquired and liabilities assumed as of the acquisition date. The Company may refine the estimated fair values of assets acquired and liabilities assumed over a period not to exceed one year from the date of acquisition by taking into consideration new information about facts and circumstances that existed as of the acquisition date. Purchase price allocation revisions that occur outside of the measurement period, if applicable, are recorded within cost of revenue or selling, general and administrative expense within the consolidated statements of operations depending on the nature of the adjustment. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expect to receive in exchange for those products or services. Many of the Company’s customers have multiple contracts and have revenue reported in multiple service lines. The Company’s contracts may include a base level of services provided for a stated period of time, optional services provided upon request, or products. Each of these products and services are generally capable of being distinct and are accounted for as separate performance obligations. The price for each performance obligation is stated in the customer contract and is based upon a price that would be charged to a customer if the product or service were sold on a standalone basis (the list price). Any discount from the list price provided to a customer for a product or service is allocated among the performance obligations based upon their individual standalone selling prices. Service revenue is typically recognized over time as the services are provided. When services are provided for a stated period of time, revenue is generally recognized ratably over the period services are provided. In certain circumstance, optional services may be provided on a time and materials basis. In these circumstances, revenue is recognized in an amount that corresponds to the actual time and expense incurred. Product revenue is recognized when the Company transfers control of a good, which occurs at a point in time. Revenue is recognized net of allowances for estimated rebates and group purchasing organization ("GPO") fees, which are established at the time of sale. Adjustments are made to these allowances at each reporting period. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The Company incurs incremental costs related to obtaining new contracts, primarily for commissions and implementation. Management expects those costs attributable to new revenue production are recoverable and therefore the Company capitalizes them as contract costs in accordance with ASC 340, Other Assets and Deferred Costs, and is amortizing them over the anticipated period of the new revenue production which the Company estimates to be a period of five years. The Company does not have any material contract liabilities. |
Derivative Financial Instruments | Derivative Financial Instruments The Company has an interest rate swap agreement which it uses as a derivative financial instrument to manage its interest rate exposure. The Company does not use financial instruments for trading or other speculative purposes. ASC 815, Derivatives and Hedging, establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The standard requires that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. If hedge accounting criteria are met, the changes in a derivative’s fair value (for a cash flow hedge) are deferred in stockholders’ equity as a component of accumulated other comprehensive loss. These deferred gains and losses are recognized as income in the period in which hedged cash flows occur. The ineffective portions of hedge returns are recognized as earnings. |
Income Taxes | Income Taxes The Company accounts for deferred income taxes utilizing ASC 740, Income Taxes. ASC 740 requires the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statement and the tax bases of assets and liabilities, as measured at current enacted tax rates. The Company has assessed the need for a valuation allowance by considering whether it is more likely than not that some portion or all of the Company's deferred tax assets will not be realized. The Company continues to evaluate its ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding its forecasted taxable income, the reversal of existing deferred tax liabilities, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. In future reporting periods, the Company will continue to assess the likelihood that deferred tax assets will be realizable . I nterest and penalties associated with uncertain income tax positions is classified as income tax expense. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The financial instruments of the Company include cash and cash equivalents, accounts receivable, interest rate swap, deferred compensation, accounts payable, accrued liabilities, contingent compensation, contingent consideration, debt obligations, and obligation under the Tax Receivable Agreement ("TRA"). Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market as of the measurement date. ASC 820, Fair Value Measurements , provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to and is composed of the following levels: Level 1 — Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. Level 2 — Inputs include directly or indirectly observable inputs other than Level 1 inputs such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that are considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves that are observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities or related observable inputs that can be corroborated at the measurement date. Measurements of non-exchange traded derivative contract assets and liabilities are primarily based on valuation models, discounted cash flow models or other valuation techniques that are believed to be used by market participants. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. The Company considers that the carrying amount of financial instruments, including accounts receivable, accounts payable and accrued liabilities approximates fair value due to their short maturities. The deferred compensation assets are held in mutual funds. The fair value of the deferred compensation assets and liabilities is based on the quoted market prices for the mutual funds and thus represents a Level 1 fair value measurement. The fair value of the Company's outstanding First Lien Term Loan (each as defined in Note 7, Long-Term Debt), based on the quoted market price for the same or similar issues of debt, represents a Level 2 fair value measurement. The fair value of the Company’s revolving line of credit facilities and long-term debt are based on current lending rates for similar borrowings, assuming the debt is outstanding through maturity, and considering the collateral. The carrying amounts of variable interest rate long-term debt and revolving line of credit facilities approximate their fair values because the variable interest rates of these instruments are generally reset monthly. The fair value of the Company's non-variable interest rate debt is estimated by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy. The fair value of the Company’s derivative instruments designated as hedge instruments, which are considered Level 2 inputs under the fair value hierarchy, are determined using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. The fair value of the Company’s contingent consideration obligation is determined utilizing a series of call options with strike prices at revenue thresholds defined in the acquisition purchase agreement. The fair value of the Company’s contingent compensation obligation is determined using projected financial information. The TRA obligation is valued using a discounted cash flow analysis given that the fair value of the liability is expected to approximate the maximum obligation under the TRA. The assumptions used in pr |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense related to stock options is measured by the fair value of the stock options on the date of grant. The Company determines the fair value of options using the Black-Scholes option pricing model incorporating certain assumptions, including the risk-free interest rate, expected volatility, dividend yield and expected option life. Share-based compensation expense related to restricted stock units is recorded based on the market value of the Company's common stock on the date of grant. The fair value of the Company's performance restricted stock unit awards is initially measured using a Monte-Carlo simulation model in order to incorporate a total shareholder return multiplier. Subsequent measurement is based on expected level of achievement of a 3-year cumulative adjusted EBITDA target. The Company has an employee stock purchase plan (“ESPP”) under which shares of the Company’s common stock are available for purchase by eligible participants. The plan allows participants to purchase the Company's common stock at 85% of its fair market value at the end of the six-month offering period ending on April 30 and October 31 each year. The fair value of purchases is estimated based on actual employee contributions during the offering period. The expense related to all awards is recognized evenly over the requisite service period within the same statement of operations line item in which cash compensation is recorded for each participant. |
Treasury Stock | Treasury Stock The Company records treasury stock at the cost to acquire common stock on the open market. Share reissuances for vested restricted stock units and exercised stock options are made on FIFO basis. Treasury stock is presented as a separate line item on the Company's balance sheet. |
Comprehensive Income (Loss) | Comprehensive Incom e (Loss) Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes minimum pension liability adjustments and unrealized fair value adjustments to the cash flow hedge. These amounts are presented in the consolidated statements of comprehensive income (loss) net of reclassification adjustments to earnings, if any . |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS includes the effect of all potentially dilutive common stock equivalents by application of the treasury stock method, which considers the effect on a per share basis of restricted stock units, performance restricted stock units, and stock options as if they had been converted to common stock at the beginning of the periods presented, or issuance date, if later. Potential shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS and presented separately. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Examples include, but are not limited to, estimates for fair value measurements in business combinations including recoverability and valuation of long-lived assets, goodwill and definite-lived intangibles, and interest rate swaps. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Adopted In October 2021, the FASB issued Accounting Standards Update No. 2021-08 Business Combinations (ASC 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 improves the accounting for acquired revenue contracts with customers in a business combination. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted. The Company adopted this standard as of January 1, 2023. The adoption of this standard did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU No. 2022-06 Reference Rate Reform (ASC 848): Deferral of the Sunset Date of ASC 848 ("ASU 2022-06"), which delayed the adoption of reference rate reform from December 31, 2022, to December 31, 2024. The Company adopted these standards on May 1, 2023. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 7, Long-Term Debt for details surrounding the adoption of ASU 2020-04 and ASU 2022-06. Standards Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The ASU requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (ASC 740 ): Improvements to Income Tax Disclosures ("ASU 2023-09). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated | In the following table, revenue is disaggregated by service solution: Year Ended December 31, (in thousands) 2023 2022 2021 Disaggregated Revenue Equipment Solutions $ 459,797 $ 438,682 $ 352,094 Clinical Engineering 459,013 420,685 384,147 Onsite Managed Services 255,794 261,925 302,449 Total revenue $ 1,174,604 $ 1,121,292 $ 1,038,690 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Fair Value of Assets Acquired and Liabilities Assumed | The following summarizes the preliminary fair value of assets acquired and liabilities assumed within the consolidated balance sheet for the fiscal year 2022 transactions: (in thousands) Accounts receivable $ 372 Prepaid expenses 80 Inventories 3,503 Property and equipment 9,001 Goodwill 26,312 Operating lease right-of-use assets 215 Other non-current assets 6 Other intangibles 24,980 Accrued expenses (455) Operating lease liability (209) Total purchase price $ 63,805 The following summarizes the final fair values of assets acquired and liabilities assumed at the date of the Sizewise Acquisition within the consolidated balance sheet: (in thousands) Cash $ 9,977 Accounts receivable 31,005 Inventories 27,911 Other current assets 2,968 Property and equipment 59,042 Goodwill 87,867 Operating lease right-of-use assets 16,754 Other intangibles 67,700 Other long-term assets 10,368 Accounts payable (3,362) Accrued compensation (12,576) Other accrued expenses (4,525) Operating lease liability (16,953) Other long-term liabilities (9,924) Deferred income taxes (31,470) Total purchase price $ 234,782 The following summarizes the final fair values of assets acquired and liabilities assumed at the date of the Northfield Acquisition within the consolidated balance sheet: (in thousands) Cash $ 10,767 Accounts receivable 16,786 Inventories 5,810 Other current assets 502 Property and equipment 11,713 Goodwill 306,678 Operating lease right-of-use assets 4,815 Other intangibles 183,700 Accounts payable (7,412) Accrued compensation (7,948) Other accrued expenses (9,620) Finance lease liability (2,340) Operating lease liability (5,025) Other long-term liabilities (837) Deferred income taxes (35,324) Total purchase price $ 472,265 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized in the following tables by type of inputs applicable to the fair value measurements: Fair Value at December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 3,390 $ — $ — $ 3,390 Interest rate swap — 3,140 — 3,140 Liabilities: Obligation under tax receivable agreement $ — $ — $ 15,549 $ 15,549 Interest rate swap — 1,212 — 1,212 Deferred compensation liabilities 3,390 — — 3,390 Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Deferred compensation assets $ 2,681 $ — $ — $ 2,681 Interest rate swap — 9,212 — 9,212 Liabilities: Contingent compensation $ — $ — $ 1,898 $ 1,898 Contingent consideration — — 248 248 Obligation under tax receivable agreement — — 38,714 38,714 Deferred compensation liabilities 2,674 — — 2,674 |
Schedule of Reconciliation of Level 3 Measurement | A reconciliation of the beginning and ending balance for the Level 3 measurement are as follows: (in thousands) Balance as of December 31, 2021 $ 41,130 Additions 3,255 Payments (1,428) Remeasurement adjustment (1) (2,097) Balance as of December 31, 2022 $ 40,860 Additions 1,597 Payments (27,950) Remeasurement adjustment (1) 1,042 Balance as of December 31, 2023 $ 15,549 (1) Remeasurement adjustments are recognized within selling, general and administrative expense in the consolidated statements of operations. |
Schedule of Carrying Value and Fair Value of Long Term Debt | The fair value of the Company's outstanding First Lien Term Loan (as defined in Note 7, Long-Term Debt) is based on the quoted market price for the same or similar issuances of debt, which represents a Level 2 fair value measurement. The fair value is approximately: December 31, 2023 December 31, 2022 (in thousands) Carrying Fair Carrying Fair First Lien Term Loan (1) $ 1,056,253 $ 1,070,973 $ 1,043,915 $ 1,030,072 (1) The carrying amount of the First Lien Term Loan is net of unamortized deferred financing costs of $7.3 million and $8.0 million and unamortized debt discount of $8.8 million and $2.6 million as of December 31, 2023 and 2022, respectively . |
Selected Financial Statement _2
Selected Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Selected Financial Statement Information [Abstract] | |
Schedule of Inventories | The Company's inventories consist of the following: (in thousands) December 31, December 31, Raw materials $ 13,376 $ 14,575 Work-in-process 400 692 Finished goods 60,708 54,865 Total inventories $ 74,484 $ 70,132 |
Schedule of Property and Equipment | The Company's property and equipment consists of the following: (in thousands) December 31, December 31, Medical equipment $ 450,564 $ 405,149 Less: Accumulated depreciation (285,139) (250,620) Medical equipment, net 165,425 154,529 Leasehold improvements 59,422 52,046 Property and office equipment 200,560 165,737 259,982 217,783 Less: Accumulated depreciation (132,723) (98,354) Property and office equipment, net 127,259 119,429 Total property and equipment, net $ 292,684 $ 273,958 |
Schedule of Goodwill | The Company's goodwill consists of the following: (in thousands) Balance at December 31, 2022 $ 1,239,106 Acquisitions 326 Balance at December 31, 2023 $ 1,239,432 |
Schedule of Other Intangible Assets | The Company's other intangible assets consist of the following: December 31, 2023 (in thousands) Cost Accumulated Net Finite-life intangibles Customer relationships $ 780,806 $ (353,190) $ 427,616 Non-compete agreements 1,225 (341) 884 Trade names 7,806 (6,603) 1,203 Patents 310 (11) 299 Total intangible assets $ 790,147 $ (360,145) $ 430,002 December 31, 2022 (in thousands) Cost Accumulated Net Finite-life intangibles Customer relationships $ 780,806 $ (275,522) $ 505,284 Non-compete agreements 6,225 (5,096) 1,129 Trade names 7,826 (3,311) 4,515 Developed technology 2,300 (1,208) 1,093 Total intangible assets $ 797,157 $ (285,137) $ 512,020 |
Schedule of Estimated Future Amortization Expense for Identifiable Intangible Assets | As of December 31, 2023, future estimated amortization expense related to intangible assets is estimated as follows: (in thousands) 2024 $ 71,619 2025 65,056 2026 58,480 2027 51,915 2028 45,159 Thereafter 137,773 $ 430,002 |
Schedule of Supplementary Cash Flow Information | Supplementary cash flow information is as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Non-cash activities: Property and equipment purchases included in accounts payable (at end of period) $ 1,610 $ 2,241 $ 7,633 Finance lease asset and liability additions 13,190 7,117 8,783 Operating lease right-of-use asset and operating lease liability additions 20,633 22,501 27,660 Issuance of common stock related to acquisition — 2,000 11,300 Dividend and equity distribution (forfeited) payable — (23) (26) Software service contract additions — — 94 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following: (in thousands) December 31, December 31, First Lien Term Loan $ 1,072,313 $ 1,054,549 Revolving Credit Facility — 28,500 Finance lease liability 27,374 23,892 1,099,687 1,106,941 Less: Unamortized deferred financing costs and debt discount (20,157) (11,896) 1,079,530 1,095,045 Less: Current portion of long-term debt (18,468) (17,752) Total long-term debt $ 1,061,062 $ 1,077,293 |
Schedule of Maturities of Long-term Debt | As of December 31, 2023, maturities of long-term debt and capital lease obligations are contractually as follows: (in thousands) 2024 $ 18,468 2025 16,261 2026 14,696 2027 13,582 2028 12,788 Thereafter 1,023,892 Total 1,099,687 Unamortized deferred financing costs (11,371) Unamortized debt discount (8,786) $ 1,079,530 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Lease Assets and Liabilities | Lease assets and liabilities consist of the following: (in thousands) December 31, December 31, Lease Assets Classification Operating lease assets Operating lease right-of-use assets $ 78,157 $ 79,975 Finance lease assets Property and equipment (1) 27,554 23,231 Total leased assets $ 105,711 $ 103,206 Lease Liabilities Current: Operating Current portion of operating lease liability $ 25,603 $ 23,607 Finance Current portion of long-term debt 7,718 8,354 Noncurrent: Operating Operating lease liability, less current portion 63,765 67,332 Finance Long-term debt, less current portion 19,656 15,538 Total lease liabilities $ 116,742 $ 114,831 (1) Finance lease assets are recorded net of accumulated depreciation of $39.4 million and $29.6 million as of December 31, 2023 and 2022, respectively . |
Summary of Lease Cost | Total lease cost consists of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Lease Cost Finance lease cost: Amortization of right-of-use assets $ 10,034 $ 8,659 $ 8,657 Interest on lease liabilities 998 648 738 Operating lease cost 30,218 29,044 19,547 Short-term lease cost 982 878 791 Variable lease cost 7,028 6,293 5,641 Total lease cost $ 49,260 $ 45,522 $ 35,374 |
Summary of Maturity of Lease Liabilities | The maturities of lease liabilities as of December 31, 2023 are as follows: (in thousands) Operating Finance Total 2024 $ 28,000 $ 8,447 $ 36,447 2025 23,746 6,035 29,781 2026 18,551 4,372 22,923 2027 7,985 3,140 11,125 2028 5,074 2,260 7,334 Thereafter 13,094 5,515 18,609 Total lease payments $ 96,450 $ 29,769 $ 126,219 Less: Interest 7,082 2,395 9,477 Present value of lease liabilities $ 89,368 $ 27,374 $ 116,742 |
Summary of Lease Term and Discount Rate | The lease term and discount rates are as follows: December 31, Lease Term and Discount Rate Weighted-average remaining lease term (years) Operating leases 4.6 Finance leases 2.1 Weighted-average discount rate Operating leases 3.2 % Finance leases 2.7 % |
Summary of Cash Paid Related to Lease Liabilities and Lease Assets Obtained | Other information related to cash paid related to lease liabilities and lease assets obtained is as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $ 998 $ 648 $ 738 Operating cash flows for operating leases 27,549 25,878 19,569 Financing cash flows for finance leases 9,502 8,812 9,097 Lease asset obtained in exchange for new finance lease liabilities 13,190 7,117 8,783 Lease asset obtained in exchange for new operating lease liabilities 20,633 22,501 27,660 |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of Accumulated Other Comprehensive Income (Loss) are as follows: (in thousands) December 31, December 31, Unrealized gain on minimum pension liability adjustment, net of tax $ 1,069 $ 502 Unrealized gain on cash flow hedge, net of tax 1,436 6,841 $ 2,505 $ 7,343 Changes in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2023 are as follows: (in thousands) Minimum pension liability - balance as of December 31, 2022 $ 502 Net actuarial gain 909 Amortization of net actuarial gain (151) Income tax (expense) related to pension (191) Net current year other comprehensive income 567 Minimum pension liability - balance as of December 31, 2023 $ 1,069 Cash flow hedge - balance as of December 31, 2022 $ 6,841 Changes in the effective portion of the fair value of cash flow hedge (7,285) Income tax benefit related to cash flow hedge 1,880 Net current year other comprehensive (loss) (5,405) Cash flow hedge - balance as of December 31, 2023 $ 1,436 Net current year other comprehensive (loss) $ (4,838) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity for Stock Options Under the 2018 Plan | A summary of activity for the stock options under the 2018 Plan is detailed below : (in thousands, except exercise price and years) Number of Weighted Aggregate Weighted Outstanding as of December 31, 2020 6,690 $ 4.25 $ 81,235 6.5 Granted 710 14.09 Exercised (651) 2.22 11,939 Forfeited or expired — — Outstanding as of December 31, 2021 6,749 $ 6.08 $ 114,095 6.1 Granted 555 18.45 Exercised (820) 3.67 12,332 Forfeited or expired (85) 14.30 Outstanding as of December 31, 2022 6,399 $ 7.36 $ 58,449 5.7 Granted 676 14.54 Exercised (835) 3.93 6,778 Forfeited or expired (1,145) 11.38 Outstanding as of December 31, 2023 5,095 $ 7.97 $ 9,797 4.9 Exercisable as of December 31, 2023 4,547 $ 7.11 $ 9,764 4.5 |
Summary of Assumptions used in Determining the Fair Value of Awards | The assumptions in the table below were used to determine the Black-Scholes fair value of stock options granted: Year Ended December 31, 2023 2022 2021 Risk-free interest rate 3.91 % 1.76 % 0.94 % Expected volatility 39.71 % 33.36 % 34.05 % Dividend yield N/A N/A N/A Expected option life (years) 6.00 6.00 5.92 Black-Scholes Value of options $ 6.64 $ 6.53 $ 4.83 The fair value of the market-based performance restricted stock units is estimated at the grant date using a Monte-Carlo simulation model which included the following assumptions: Year Ended December 31, 2023 Risk-free interest rate 4.19 % Dividend yield N/A Expected volatility 51.19 % Expected term (years) 2.57 |
Summary of Activity for Restricted Stock Units and Performance Restricted Stock Units | A summary of activity for restricted stock units and performance restricted stock units is detailed below: (in thousands, except grant date fair values) Number of Weighted Nonvested as of December 31, 2020 1,944 $ 8.37 Granted 1,180 14.69 Vested (817) 8.58 Forfeited (135) 11.55 Nonvested as of December 31, 2021 2,172 $ 11.26 Granted 1,620 18.40 Vested (1,021) 10.03 Forfeited (398) 15.58 Nonvested as of December 31, 2022 2,373 $ 15.55 Granted 2,636 11.38 Vested (1,289) 13.64 Forfeited (505) 16.90 Nonvested as of December 31, 2023 3,215 $ 12.68 |
Summary of stock-based compensation expense | The following table summarizes stock-based compensation expense for the 2018 Plan and ESPP: December 31, (in thousands) 2023 2022 2021 Cost of sales $ 2,962 $ 2,335 $ — Selling, general, and administrative expense 17,224 16,440 13,960 Total stock-based compensation expense $ 20,186 $ 18,775 $ 13,960 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Change in Benefit Obligation | Change in Benefit Obligation (in thousands) 2023 2022 Benefit obligations at beginning of year $ 24,129 $ 31,150 Interest cost 1,181 847 Actuarial (gain) loss 591 (6,451) Benefits paid (1,532) (1,417) Benefit obligations at end of year $ 24,369 $ 24,129 |
Schedule of Change in Plan Assets | Change in Plan Assets (in thousands) 2023 2022 Fair value of plan assets at beginning of year $ 21,016 $ 26,393 Actual return on plan assets 2,933 (4,610) Employer contributions 180 650 Benefits paid (1,532) (1,417) Fair value of plan assets at end of year $ 22,597 $ 21,016 |
Schedule of Funded Status | Funded Status (in thousands) 2023 2022 Funded status $ (1,772) $ (3,113) Unrecognized net actuarial (gain) / accumulated other comprehensive (gain) (1,432) (675) Net amount recognized $ (3,204) $ (3,788) |
Summary of Pension Plan | A summary of the Company's pension plan projected benefit obligation, accumulated obligation and fair value of pension plan assets are as follows: (in thousands) 2023 2022 Projected benefit obligation $ 24,369 $ 24,129 Accumulated benefit obligation (“ABO”) 24,369 24,129 Fair value of plan assets 22,597 21,016 ABO less fair value of plan assets $ 1,772 $ 3,113 |
Schedule of Amounts Recognized in Consolidated Balance Sheets | Amounts recognized in the consolidated balance sheets are as follows: (in thousands) 2023 2022 Current liabilities $ — $ 650 Noncurrent liabilities 1,772 2,463 Total amount recognized $ 1,772 $ 3,113 |
Schedule of Net Periodic Pension Cost | The components of net periodic benefit cost are as follows: (in thousands) Year Ended December 31, 2023 2022 2021 Interest cost $ 1,181 $ 847 $ 785 Expected return on plan assets (1,434) (1,139) (1,107) Recognized net actuarial (gain) loss (151) — 293 Net periodic benefit cost $ (404) $ (292) $ (29) |
Schedule of Change in Accumulated Other Comprehensive Income (Loss) | Change in Accumulated Other Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2023 2022 2021 Beginning of year $ 502 $ (20) $ (2,215) Net actuarial gain 909 703 2,649 Amortization of net actuarial (gain) loss (151) — 293 Income tax expense related to pension (191) (181) (747) End of year $ 1,069 $ 502 $ (20) |
Schedule of Pension Plan Assets | The Company's target pension plan asset allocation and actual pension plan allocation of assets as of December 31, are as follows: Asset Category Target 2023 2022 Equity securities 46 % 43 % 69 % Debt securities and cash 54 57 31 100 % 100 % 100 % |
Schdule of Plan Assets using the Fair Value Measurement | The following tables present the Company's plan assets, using the fair value hierarchy as disclosed in Note 5, Fair Value Measurements. Assets at Fair Value as of December 31, 2023 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 127 $ — $ — $ 127 Registered investment companies: Total international stock index fund 5,184 — — 5,184 Total stock market index fund 4,609 — — 4,609 Total return fund 12,677 — — 12,677 Total assets at fair value $ 22,597 $ — $ — $ 22,597 Assets at Fair Value as of December 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 121 $ — $ — $ 121 Registered investment companies: Total international stock index fund 7,163 — — 7,163 Total stock market index fund 7,346 — — 7,346 Total return fund 6,386 — — 6,386 Total assets at fair value $ 21,016 $ — $ — $ 21,016 |
Schedule of Estimated Future Benefit Payments | The following benefit payments are expected to be paid: (in thousands) 2024 $ 1,633 2025 1,672 2026 1,720 2027 1,810 2028 1,812 2029 - 2033 8,822 |
Schedule of Pension Plan Assumptions | The following weighted-average assumptions were used as of each of the years ended December 31, as follows: 2023 2022 2021 Weighted-average actuarial assumptions used to determine benefit obligations: Discount rate 4.82 % 5.01 % 2.77 % Expected return on assets 5.93 % 4.90 % 5.05 % Weighted-average actuarial assumptions used to determine net periodic benefit cost: Discount rate 5.01 % 2.77 % 2.43 % Expected return on assets 6.13 % 5.05 % 5.05 % Rate of compensation increase N/A N/A N/A |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Tax Expense (Benefit) | The provision for income tax expense (benefit) consists of the following: Year Ended December 31, (in thousands) 2023 2022 2021 Federal current $ 8,873 $ (6,555) $ 223 State current 3,716 3,697 4,206 Total current 12,589 (2,858) 4,429 Federal deferred (11,918) 1,730 11,823 State deferred (5,403) (104) 181 Total deferred (17,321) 1,626 12,004 $ (4,732) $ (1,232) $ 16,433 |
Schedule of Effective Income Tax Rate and the U.S. Statutory Rate | Reconciliations between the Company’s effective income tax rate and the U.S. statutory rate are as follows: Year Ended December 31, 2023 2022 2021 Statutory U.S. Federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of U.S. Federal income tax 3.4 10.9 4.8 Permanent items (0.4) (0.8) 0.1 Meals and entertainment (2.7) 0.3 0.4 Deferred rate change 8.9 2.1 1.8 Share-based compensation 6.2 (30.0) (5.2) Executive compensation disallowed (15.8) 23.5 11.1 TRA fair value adjustment (1.1) (1.9) 2.9 Release of Sizewise reserve — (30.4) — Transaction costs — — 2.3 Tax credits 2.7 (0.6) — Valuation allowance (2.4) — — Other (0.2) 1.6 1.4 Effective income tax rate 19.6 % (4.3) % 40.6 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s overall deferred tax assets and liabilities are as follows: (in thousands) December 31, December 31, Deferred tax assets: Accounts receivable $ 1,582 $ 1,079 Accrued compensation and pension 8,529 9,901 Inventories 2,888 1,468 Other assets 4,151 3,847 Operating lease liability 22,730 23,407 Section 163(j) capitalized interest 16,979 4,975 Section 174 capitalized R&D costs 6,591 2,901 Net operating loss carryforwards 2,138 17,146 Total gross deferred tax assets 65,588 64,724 Valuation allowance (577) — Total deferred tax assets 65,011 64,724 Deferred tax liabilities: Deferred contract costs (3,102) (3,850) Unrealized (gain) on pension (364) (174) Unrealized (gain) on cash flow hedge (489) (2,370) Accelerated depreciation and amortization (163,988) (180,934) Prepaid assets (3,429) (3,537) Operating lease right-of-use assets (19,858) (20,474) Total deferred tax liabilities (191,230) (211,339) Total net deferred tax liabilities (126,219) (146,615) |
Schedule of Unrecognized Tax Benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit for the years ended December 31, 2023, 2022 and 2021 is as follows: (in thousands) Unrecognized tax benefits balance at December 31, 2020 $ 1,340 Gross decreases for tax positions in 2021 8,771 Unrecognized tax benefits balance at December 31, 2021 10,111 Gross increase for rate change in 2022 (8,753) Unrecognized tax benefits balance at December 31, 2022 1,358 Gross decrease for tax positions in 2023 (18) Unrecognized tax benefits balance at December 31, 2023 $ 1,340 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Number of Shares Used in Computing Earnings (Loss) Per Share | The following is a reconciliation of the basic and diluted number of shares used in computing earnings (loss) per share: Year Ended December 31, 2023 2022 2021 Basic weighted average shares outstanding 134,647,238 132,602,747 120,877,480 Net effect of dilutive stock awards based upon the treasury stock method — 5,778,548 7,619,740 Dilutive weighted average shares outstanding 134,647,238 138,381,295 128,497,220 Basic earnings (loss) per share $ (0.14) $ 0.23 $ 0.20 Diluted earnings (loss) per share $ (0.14) $ 0.22 $ 0.19 Anti-dilutive share-based awards excluded from the calculation of dilutive earnings per share 8,557,396 9,203 — |
Basis of Presentation (Details)
Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2023 employee resource center | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Number of onsite employees | employee | 1,300 |
Number of technical resources | resource | 800 |
Number of local market service centers | center | 150 |
Agiliti, Inc. | Federal Street Acquisition Corp | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 100% |
Federal Street Acquisition Corp | Agiliti Holdco Inc | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 100% |
Agiliti Holdco Inc | Agiliti Health Inc | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 100% |
Agiliti Health Inc | Agiliti Surgical Inc., Agiliti Imaging, Inc. Northfield Medical, Inc. and Sizewise Rentals, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 100% |
Significant Accounting Polici_3
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2023 | Jul. 01, 2022 | Jun. 30, 2022 | |
Medical Equipment | ||||
Medical Equipment and Property and Office Equipment | ||||
Depreciation expense, decrease | $ 6.8 | |||
Net income, increase | $ 4.6 | |||
Increase in earnings per share, basic and diluted (in usd per share) | $ 0.03 | |||
Medical Equipment | Minimum | ||||
Medical Equipment and Property and Office Equipment | ||||
Estimated useful life | 5 years | 5 years | 4 years | |
Medical Equipment | Maximum | ||||
Medical Equipment and Property and Office Equipment | ||||
Estimated useful life | 10 years | 10 years | 7 years | |
Office Equipment | Minimum | ||||
Medical Equipment and Property and Office Equipment | ||||
Estimated useful life | 3 years | |||
Office Equipment | Maximum | ||||
Medical Equipment and Property and Office Equipment | ||||
Estimated useful life | 10 years |
Significant Accounting Polici_4
Significant Accounting Policies - Recoverability and Valuation of Goodwill and Other Intangible Assets (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) reporting_unit | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Other Intangible Assets | |||
Number of reporting units | reporting_unit | 1 | ||
Fair value in excess of carrying amount (as a percent) | 7% | ||
Impairment, goodwill | $ | $ 0 | $ 0 | $ 0 |
Other Intangible Assets | Minimum | |||
Other Intangible Assets | |||
Estimated economic lives | 2 years | ||
Other Intangible Assets | Maximum | |||
Other Intangible Assets | |||
Estimated economic lives | 15 years |
Significant Accounting Polici_5
Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended | |
Apr. 27, 2021 | Dec. 31, 2023 | |
Employee Stock Purchase Plan ("ESPP") | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percentage of shares to be purchased at market value | 85% | 85% |
Offering period | 6 months | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue production period | 5 years |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue Disaggregated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues by service solution | |||
Total revenue | $ 1,174,604 | $ 1,121,292 | $ 1,038,690 |
Equipment Solutions | |||
Revenues by service solution | |||
Total revenue | 459,797 | 438,682 | 352,094 |
Clinical Engineering | |||
Revenues by service solution | |||
Total revenue | 459,013 | 420,685 | 384,147 |
Onsite Managed Services | |||
Revenues by service solution | |||
Total revenue | $ 255,794 | $ 261,925 | $ 302,449 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues by service solution | |||
Contract asset | $ 14,800,000 | $ 17,300,000 | |
Capitalized costs amortization period | 5 years | 5 years | |
Impairment loss | $ 0 | $ 0 | $ 0 |
Cost of Sales | |||
Revenues by service solution | |||
Cost amortization | 1,400,000 | 1,100,000 | 700,000 |
Selling, General and Administrative Expenses | |||
Revenues by service solution | |||
Cost amortization | $ 4,900,000 | $ 4,200,000 | $ 3,100,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 15, 2022 | Dec. 01, 2022 | Oct. 01, 2021 | Mar. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Surgical Laser Equipment Solutions Provider | |||||||
Acquisitions | |||||||
Asset acquisition, total consideration | $ 51,200,000 | ||||||
Surgical Equipment Repair and Maintenance Service Provider | |||||||
Acquisitions | |||||||
Asset acquisition, total consideration | $ 9,700,000 | ||||||
Asset acquisition, contingent consideration | $ 400,000 | $ 0 | |||||
2022 Acquisitions | |||||||
Acquisitions | |||||||
Earn-out payment | 2,800,000 | 900,000 | |||||
Decrease to inventory | 200,000 | ||||||
Increase to accounts payable | 100,000 | ||||||
Increases in goodwill | 300,000 | ||||||
Legal and other related costs | 400,000 | 1,000,000 | |||||
Sizewise Acquisition | |||||||
Acquisitions | |||||||
Business combination, total consideration | $ 234,800,000 | ||||||
Estimated economic lives | 14 years 4 months 24 days | ||||||
Goodwill deductible for tax purpose | $ 1,400,000 | ||||||
Transaction costs expensed | 0 | 400,000 | $ 3,200,000 | ||||
Northfield Acquisition | |||||||
Acquisitions | |||||||
Increase to accounts payable | 100,000 | ||||||
Increase to goodwill | 1,300,000 | ||||||
Business combination, total consideration | $ 472,300,000 | ||||||
Estimated economic lives | 15 years | ||||||
Goodwill deductible for tax purpose | $ 68,200,000 | ||||||
Transaction costs expensed | $ 0 | 100,000 | $ 4,200,000 | ||||
Cash paid | 461,000,000 | ||||||
Business combination, consideration through equity, value | $ 11,300,000 | ||||||
Business combination, consideration through equity, number of shares issued (in shares) | 752,328 | ||||||
Decrease to accounts receivable | 200,000 | ||||||
Increase deferred income taxes | $ 1,000,000 |
Acquisitions - Preliminary Fair
Acquisitions - Preliminary Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Acquisitions | ||
Goodwill | $ 1,239,432 | $ 1,239,106 |
Operating lease liability | $ (89,368) | |
2022 Acquisitions | ||
Acquisitions | ||
Accounts receivable | 372 | |
Prepaid expenses | 80 | |
Inventories | 3,503 | |
Property and equipment | 9,001 | |
Goodwill | 26,312 | |
Operating lease right-of-use assets | 215 | |
Other non-current assets | 6 | |
Other intangibles | 24,980 | |
Accrued expenses | (455) | |
Operating lease liability | (209) | |
Total purchase price | $ 63,805 |
Acquisitions - Sizewise Rentals
Acquisitions - Sizewise Rentals (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Oct. 01, 2021 |
Acquisitions | |||
Goodwill | $ 1,239,432 | $ 1,239,106 | |
Operating lease liability | $ (89,368) | ||
Sizewise Acquisition | |||
Acquisitions | |||
Cash | $ 9,977 | ||
Accounts receivable | 31,005 | ||
Inventories | 27,911 | ||
Other current assets | 2,968 | ||
Property and equipment | 59,042 | ||
Goodwill | 87,867 | ||
Operating lease right-of-use assets | 16,754 | ||
Other intangibles | 67,700 | ||
Other long-term assets | 10,368 | ||
Accounts payable | (3,362) | ||
Accrued compensation | (12,576) | ||
Other accrued expenses | (4,525) | ||
Operating lease liability | (16,953) | ||
Other long-term liabilities | (9,924) | ||
Deferred income taxes | (31,470) | ||
Total purchase price | $ 234,782 |
Acquisitions - Northfield Medic
Acquisitions - Northfield Medical (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 19, 2021 |
Acquisitions | |||
Goodwill | $ 1,239,432 | $ 1,239,106 | |
Operating lease liability | $ (89,368) | ||
Northfield Acquisition | |||
Acquisitions | |||
Cash | $ 10,767 | ||
Accounts receivable | 16,786 | ||
Inventories | 5,810 | ||
Other current assets | 502 | ||
Property and equipment | 11,713 | ||
Goodwill | 306,678 | ||
Operating lease right-of-use assets | 4,815 | ||
Other intangibles | 183,700 | ||
Accounts payable | (7,412) | ||
Accrued compensation | (7,948) | ||
Other accrued expenses | (9,620) | ||
Finance lease liability | (2,340) | ||
Operating lease liability | (5,025) | ||
Other long-term liabilities | (837) | ||
Deferred income taxes | (35,324) | ||
Total purchase price | $ 472,265 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Deferred compensation assets | $ 3,390 | $ 2,681 |
Interest rate swap | 3,140 | 9,212 |
Liabilities: | ||
Contingent compensation | 1,898 | |
Contingent consideration | 248 | |
Obligation under tax receivable agreement | 15,549 | 38,714 |
Interest rate swap | 1,212 | |
Deferred compensation liabilities | 3,390 | 2,674 |
Level 1 | ||
Assets: | ||
Deferred compensation assets | 3,390 | 2,681 |
Interest rate swap | 0 | 0 |
Liabilities: | ||
Contingent compensation | 0 | |
Contingent consideration | 0 | |
Obligation under tax receivable agreement | 0 | 0 |
Interest rate swap | 0 | |
Deferred compensation liabilities | 3,390 | 2,674 |
Level 2 | ||
Assets: | ||
Deferred compensation assets | 0 | 0 |
Interest rate swap | 3,140 | 9,212 |
Liabilities: | ||
Contingent compensation | 0 | |
Contingent consideration | 0 | |
Obligation under tax receivable agreement | 0 | 0 |
Interest rate swap | 1,212 | |
Deferred compensation liabilities | 0 | 0 |
Level 3 | ||
Assets: | ||
Deferred compensation assets | 0 | 0 |
Interest rate swap | 0 | 0 |
Liabilities: | ||
Contingent compensation | 1,898 | |
Contingent consideration | 248 | |
Obligation under tax receivable agreement | 15,549 | 38,714 |
Interest rate swap | 0 | |
Deferred compensation liabilities | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Surgical Equipment Repair and Maintenance Service Provider | |||
Fair value measurements | |||
Asset acquisition, contingent consideration | $ 400,000 | $ 0 | |
Level 3 | Fair Value, Recurring | |||
Fair value measurements | |||
Increase (decrease) in TRA liabliity | 1,000,000 | (2,100,000) | |
Payments under tax receivable agreement | 24,800,000 | 0 | |
2022 Acquisitions | |||
Fair value measurements | |||
Earn-out payment | $ 2,800,000 | $ 900,000 | |
Surgical Laser Equipment Solutions Provider | |||
Fair value measurements | |||
Earn-out payment | $ 500,000 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Reconciliation of Level 3 Measurement (Details) - Level 3 - Fair Value, Recurring - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning of the year | $ 40,860 | $ 41,130 |
Additions | 1,597 | 3,255 |
Payments | (27,950) | (1,428) |
Remeasurement adjustment | 1,042 | (2,097) |
Balance at the end of the year | $ 15,549 | $ 40,860 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Carrying Value and Fair Value of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair value measurements | ||
Carrying Value | $ 1,079,530 | $ 1,095,045 |
Unamortized deferred financing costs | 11,371 | |
Unamortized debt discount | 8,786 | |
First Lien Term Loans | ||
Fair value measurements | ||
Carrying Value | 1,056,253 | 1,043,915 |
Fair Value | 1,070,973 | 1,030,072 |
Unamortized deferred financing costs | 7,300 | 8,000 |
Unamortized debt discount | $ 8,800 | $ 2,600 |
Selected Financial Statement _3
Selected Financial Statement Information - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Selected Financial Statement Information [Abstract] | ||
Raw materials | $ 13,376 | $ 14,575 |
Work-in-process | 400 | 692 |
Finished goods | 60,708 | 54,865 |
Total inventories | $ 74,484 | $ 70,132 |
Selected Financial Statement _4
Selected Financial Statement Information - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment | |||
Medical equipment | $ 450,564,000 | $ 405,149,000 | |
Less: Accumulated depreciation | (285,139,000) | (250,620,000) | |
Medical equipment, net | 165,425,000 | 154,529,000 | |
Property and office equipment | 259,982,000 | 217,783,000 | |
Less: Accumulated depreciation | (132,723,000) | (98,354,000) | |
Property and office equipment, net | 127,259,000 | 119,429,000 | |
Total property and equipment, net | 292,684,000 | 273,958,000 | |
Depreciation | 80,249,000 | 84,331,000 | $ 103,805,000 |
Intangible asset impairment charge | 0 | 0 | $ 0 |
Leasehold improvements | |||
Property and Equipment | |||
Property and office equipment | 59,422,000 | 52,046,000 | |
Property and office equipment | |||
Property and Equipment | |||
Property and office equipment | $ 200,560,000 | $ 165,737,000 |
Selected Financial Statement _5
Selected Financial Statement Information - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Other Intangible Assets | |||
Impairment, goodwill | $ 0 | $ 0 | $ 0 |
Fair value in excess of carrying amount (as a percent) | 7% | ||
Total amortization expense | $ 82,300,000 | 86,100,000 | 80,300,000 |
Intangible asset impairment charge | 0 | 0 | $ 0 |
Goodwill | |||
Balance at the beginning of the period | 1,239,106,000 | ||
Acquisitions | 326,000 | ||
Balance at the end of the period | 1,239,432,000 | 1,239,106,000 | |
Finite-life intangibles | |||
Accumulated Amortization | (360,145,000) | (285,137,000) | |
Net | 430,002,000 | ||
Cost, intangible assets excluding goodwill, total | 790,147,000 | 797,157,000 | |
Net, intangible assets excluding goodwill, total | 430,002,000 | 512,020,000 | |
Customer relationships | |||
Finite-life intangibles | |||
Cost | 780,806,000 | 780,806,000 | |
Accumulated Amortization | (353,190,000) | (275,522,000) | |
Net | 427,616,000 | 505,284,000 | |
Non-compete agreements | |||
Finite-life intangibles | |||
Cost | 1,225,000 | 6,225,000 | |
Accumulated Amortization | (341,000) | (5,096,000) | |
Net | 884,000 | 1,129,000 | |
Trade names | |||
Finite-life intangibles | |||
Cost | 7,806,000 | 7,826,000 | |
Accumulated Amortization | (6,603,000) | (3,311,000) | |
Net | 1,203,000 | 4,515,000 | |
Developed technology | |||
Finite-life intangibles | |||
Cost | 2,300,000 | ||
Accumulated Amortization | (1,208,000) | ||
Net | $ 1,093,000 | ||
Patents | |||
Finite-life intangibles | |||
Cost | 310,000 | ||
Accumulated Amortization | (11,000) | ||
Net | $ 299,000 |
Selected Financial Statement _6
Selected Financial Statement Information - Schedule of Estimated Future Amortization Expense for Identifiable Intangible Assets (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Future estimation amortization expense | |
2024 | $ 71,619 |
2025 | 65,056 |
2026 | 58,480 |
2027 | 51,915 |
2028 | 45,159 |
Thereafter | 137,773 |
Net | $ 430,002 |
Selected Financial Statement _7
Selected Financial Statement Information - Schedule of Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Selected Financial Statement Information [Abstract] | |||
Property and equipment purchases included in accounts payable (at end of period) | $ 1,610 | $ 2,241 | $ 7,633 |
Finance lease asset and liability additions | 13,190 | 7,117 | 8,783 |
Operating lease right-of-use asset and operating lease liability additions | 20,633 | 22,501 | 27,660 |
Issuance of common stock related to acquisition | 0 | 2,000 | 11,300 |
Dividend and equity distribution (forfeited) payable | 0 | (23) | (26) |
Software service contract additions | $ 0 | $ 0 | $ 94 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Long-Term Debt | ||
Total | $ 1,099,687 | $ 1,106,941 |
Less: Unamortized deferred financing costs and debt discount | (20,157) | (11,896) |
Long-term debt | 1,079,530 | 1,095,045 |
Less: Current portion of long-term debt | (18,468) | (17,752) |
Total long-term debt | 1,061,062 | 1,077,293 |
First Lien Term Loan | ||
Long-Term Debt | ||
Total | 1,072,313 | 1,054,549 |
Revolving Credit Facility | ||
Long-Term Debt | ||
Total | 0 | 28,500 |
Finance lease liability | ||
Long-Term Debt | ||
Total | $ 27,374 | $ 23,892 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 12 Months Ended | 35 Months Ended | ||||||||||
May 01, 2023 USD ($) | Apr. 17, 2023 USD ($) | Apr. 06, 2023 USD ($) | Apr. 27, 2021 USD ($) | Nov. 15, 2019 USD ($) | Jan. 04, 2019 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Apr. 05, 2023 USD ($) | May 31, 2020 USD ($) | |
Long-Term Debt | ||||||||||||
Proceeds under debt arrangements | $ 1,302,937,000 | $ 60,000,000 | $ 381,927,000 | |||||||||
Loss on extinguishment of debt | (4,527,000) | (1,418,000) | (7,716,000) | |||||||||
Interest Rate Swap | ||||||||||||
Long-Term Debt | ||||||||||||
Term of contract | 2 years | |||||||||||
Notional amount | $ 500,000,000 | |||||||||||
Derivative, interest rate | 4.0685% | |||||||||||
Derivative, fair value | 1,900,000 | |||||||||||
Interest Rate Swap | Other Current Assets | ||||||||||||
Long-Term Debt | ||||||||||||
Derivative, fair value | 3,100,000 | |||||||||||
Interest Rate Swap | Other Noncurrent Liabilities | ||||||||||||
Long-Term Debt | ||||||||||||
Derivative, fair value | (1,200,000) | |||||||||||
Interest Rate Swap | ||||||||||||
Long-Term Debt | ||||||||||||
Aggregate outstanding principal amount | $ 500,000,000 | |||||||||||
Secured Debt | A&R First Lien Term Loan | Line of Credit | ||||||||||||
Long-Term Debt | ||||||||||||
Loss on extinguishment of debt | (1,700,000) | |||||||||||
Capitalized lender and third-party fees | 3,100,000 | |||||||||||
Deferred finance costs expensed | 2,800,000 | |||||||||||
First Lien Term Loan | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument, term | 7 years | |||||||||||
Aggregate outstanding principal amount | $ 660,000,000 | |||||||||||
Loan Installments Payment | 1% | |||||||||||
Increase in principal amount | $ 625,000,000 | |||||||||||
Proceeds under debt arrangements | 1,285,000,000 | |||||||||||
Loss on extinguishment of debt | 1,400,000 | 300,000 | ||||||||||
First Lien Term Loan | Debt One | Interest Rate Swap | ||||||||||||
Long-Term Debt | ||||||||||||
Aggregate outstanding principal amount | $ 350,000,000 | |||||||||||
Interest rate at period end | 0.3396% | |||||||||||
First Lien Term Loan | Debt Two | Interest Rate Swap | ||||||||||||
Long-Term Debt | ||||||||||||
Aggregate outstanding principal amount | $ 150,000,000 | |||||||||||
Interest rate at period end | 0.329% | |||||||||||
Revolving Credit Facility | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument, term | 5 years | |||||||||||
Aggregate outstanding principal amount | $ 150,000,000 | |||||||||||
Increase in principal amount | $ 100,000,000 | |||||||||||
Leverage ratio | 7 | |||||||||||
Repayment of debt | $ 10,000,000 | |||||||||||
First Lien Term Loan - October 2020 Amendment | ||||||||||||
Long-Term Debt | ||||||||||||
Payments under debt arrangements | $ 69,100,000 | |||||||||||
Line of Credit | Revolving Credit Facility | ||||||||||||
Long-Term Debt | ||||||||||||
Percent of total revolving credit commitments | 35% | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Pre Amendment | ||||||||||||
Long-Term Debt | ||||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | ||||||||||||
Long-Term Debt | ||||||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||||
Capitalized lender and third-party fees | $ 3,700,000 | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | Step Down, Term One | ||||||||||||
Long-Term Debt | ||||||||||||
First lien leverage ratio, maximum | 3.75 | |||||||||||
Commitment fee (as a percent) | 0.375% | |||||||||||
Commitment fee ratio | 3.25 | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | Step Down, Term Two | ||||||||||||
Long-Term Debt | ||||||||||||
First lien leverage ratio, maximum | 3.25 | |||||||||||
Commitment fee (as a percent) | 0.25% | |||||||||||
Commitment fee ratio | 3.25 | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | Secured Overnight Financing Rate (SOFR) | ||||||||||||
Long-Term Debt | ||||||||||||
Margin over base rate (as a percent) | 2.75% | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | Secured Overnight Financing Rate (SOFR) | Step Down, Term One | ||||||||||||
Long-Term Debt | ||||||||||||
Margin over base rate (as a percent) | 2.50% | |||||||||||
Line of Credit | Revolving Credit Facility | JP Morgan Chase Bank Credit Facility - Amendment No. 6 | Secured Overnight Financing Rate (SOFR) | Step Down, Term Two | ||||||||||||
Long-Term Debt | ||||||||||||
Margin over base rate (as a percent) | 2.25% | |||||||||||
Line of Credit | Secured Debt | A&R First Lien Term Loan | ||||||||||||
Long-Term Debt | ||||||||||||
Aggregate outstanding principal amount | $ 1,075,000,000 | |||||||||||
Amortization of principal, annual amount | 0.25% | |||||||||||
Line of Credit | Secured Debt | A&R First Lien Term Loan | Secured Overnight Financing Rate (SOFR) | ||||||||||||
Long-Term Debt | ||||||||||||
Margin over base rate (as a percent) | 3% | |||||||||||
Second Lien Term Loan | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument, term | 8 years | |||||||||||
Aggregate outstanding principal amount | $ 240,000,000 | |||||||||||
Loss on extinguishment of debt | 9,800,000 | |||||||||||
Repayment of debt | $ 80,000,000 | |||||||||||
Write off of unamortized deferred financing cost | $ 7,400,000 | |||||||||||
Additional redemption price percentage | 0.01 | |||||||||||
Debt redemption price discount | $ 2,400,000 |
Long-Term Debt - Schedule of Ma
Long-Term Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2024 | $ 18,468 | |
2025 | 16,261 | |
2026 | 14,696 | |
2027 | 13,582 | |
2028 | 12,788 | |
Thereafter | 1,023,892 | |
Total | 1,099,687 | $ 1,106,941 |
Unamortized deferred financing costs | (11,371) | |
Unamortized debt discount | (8,786) | |
Long-term debt, gross | $ 1,079,530 |
Leases - Summary of Lease Asset
Leases - Summary of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lease Assets | ||
Operating lease assets | $ 78,157 | $ 79,975 |
Finance lease assets | $ 27,554 | $ 23,231 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 105,711 | $ 103,206 |
Current: | ||
Operating | 25,603 | 23,607 |
Finance | $ 7,718 | $ 8,354 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Noncurrent: | ||
Operating | $ 63,765 | $ 67,332 |
Finance | $ 19,656 | $ 15,538 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Total long-term debt | Total long-term debt |
Total lease liabilities | $ 116,742 | $ 114,831 |
Finance lease assets, accumulated depreciation | $ 39,400 | $ 29,600 |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Amortization of right-of-use assets | $ 10,034 | $ 8,659 | $ 8,657 |
Interest on lease liabilities | 998 | 648 | 738 |
Operating lease cost | 30,218 | 29,044 | 19,547 |
Short-term lease cost | 982 | 878 | 791 |
Variable lease cost | 7,028 | 6,293 | 5,641 |
Total lease cost | $ 49,260 | $ 45,522 | $ 35,374 |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 28,000 | |
2025 | 23,746 | |
2026 | 18,551 | |
2027 | 7,985 | |
2028 | 5,074 | |
Thereafter | 13,094 | |
Total lease payments | 96,450 | |
Less: Interest | 7,082 | |
Present value of lease liabilities | 89,368 | |
Finance Leases | ||
2024 | 8,447 | |
2025 | 6,035 | |
2026 | 4,372 | |
2027 | 3,140 | |
2028 | 2,260 | |
Thereafter | 5,515 | |
Total lease payments | 29,769 | |
Less: Interest | 2,395 | |
Present value of lease liabilities | 27,374 | |
Total | ||
2024 | 36,447 | |
2025 | 29,781 | |
2026 | 22,923 | |
2027 | 11,125 | |
2028 | 7,334 | |
Thereafter | 18,609 | |
Total lease payments | 126,219 | |
Less: Interest | 9,477 | |
Total lease liabilities | $ 116,742 | $ 114,831 |
Leases - Summary of Lease Term
Leases - Summary of Lease Term and Discount Rate (Details) | Dec. 31, 2023 |
Weighted-average remaining lease term (years) | |
Operating leases | 4 years 7 months 6 days |
Finance leases | 2 years 1 month 6 days |
Weighted-average discount rate | |
Operating leases | 3.20% |
Finance leases | 2.70% |
Leases - Summary of Cash Paid R
Leases - Summary of Cash Paid Related to Lease Liabilities and Lease Assets Obtained (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating cash flows for finance leases | $ 998 | $ 648 | $ 738 |
Operating cash flows for operating leases | 27,549 | 25,878 | 19,569 |
Financing cash flows for finance leases | 9,502 | 8,812 | 9,097 |
Lease asset obtained in exchange for new finance lease liabilities | 13,190 | 7,117 | 8,783 |
Lease asset obtained in exchange for new operating lease liabilities | $ 20,633 | $ 22,501 | $ 27,660 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Aug. 21, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2019 | |
Equity [Abstract] | |||||
Common stock repurchases | $ 50,000 | ||||
Common stock repurchase, period in force | 12 months | ||||
Shares repurchased (in shares) | 406,096 | ||||
Purchases of treasury stock | $ 3,761 | ||||
Dividend declared per share (in usd per share) | $ 2.23 | ||||
Dividends paid | $ 321 | $ 908 | $ 928 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||
Unrealized gain on minimum pension liability adjustment, net of tax | $ (1,069) | $ (502) | |
Unrealized gain on cash flow hedge, net of tax | 1,436 | 6,841 | |
Accumulated other comprehensive income | 2,505 | 7,343 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Minimum pension liability - beginning balance | 502 | ||
Net actuarial gain | 909 | ||
Amortization of net actuarial gain | (151) | ||
Income tax (expense) related to pension | (191) | (181) | $ (747) |
Net current year other comprehensive income | 567 | ||
Minimum pension liability - ending balance | 1,069 | 502 | |
Cash flow hedge - Beginning balance | 6,841 | ||
Changes in the effective portion of the fair value of cash flow hedge | (7,285) | ||
Income tax benefit related to cash flow hedge | 1,880 | (1,835) | (1,015) |
Net current year other comprehensive (loss) | (5,405) | 5,284 | 2,961 |
Cash flow hedge - Ending balance | 1,436 | 6,841 | |
Total other comprehensive income (loss) | $ (4,838) | $ 5,806 | $ 5,156 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 27, 2021 | Jan. 04, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation | |||||
Number of stock, granted (in shares) | 1,600,000 | ||||
Non-cash share-based compensation expense | $ 20,186 | $ 18,775 | $ 13,960 | ||
Non-cash share-based compensation, weighted average period | 2 years | ||||
Weighted-average cost expected to be recognized | $ 2,200 | ||||
Income tax expense (benefit) | $ 4,732 | 1,232 | (16,433) | ||
Restricted Stock and Performance Restricted Stock Units | |||||
Stock-based compensation | |||||
Non-cash share-based compensation, weighted average period | 1 year 7 months 6 days | ||||
Weighted-average cost expected to be recognized | $ 20,500 | ||||
Income tax expense (benefit) | $ 4,900 | $ 6,000 | $ 3,600 | ||
2018 Omnibus Incentive Plan | |||||
Stock-based compensation | |||||
Shares authorized under the plan (in shares) | 24,600,000 | ||||
2018 Omnibus Incentive Plan | Performance Restricted Stock Units (PSUs) | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, vested term | 3 years | ||||
2018 Omnibus Incentive Plan | Restricted Stock and Performance Restricted Stock Units | |||||
Stock-based compensation | |||||
Number of units available for future issuance (in shares) | 14,100,000 | ||||
2018 Omnibus Incentive Plan | Minimum | |||||
Stock-based compensation | |||||
Options exercise price (in usd per share) | $ 8.50 | ||||
2018 Omnibus Incentive Plan | Minimum | Share-based Payment Arrangement, Option | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, vested term | 1 year | ||||
2018 Omnibus Incentive Plan | Minimum | Restricted Stock Units (RSUs) | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, vested term | 1 year | ||||
2018 Omnibus Incentive Plan | Maximum | |||||
Stock-based compensation | |||||
Options exercise price (in usd per share) | $ 6.27 | ||||
2018 Omnibus Incentive Plan | Maximum | Share-based Payment Arrangement, Option | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, vested term | 4 years | ||||
2018 Omnibus Incentive Plan | Maximum | Restricted Stock Units (RSUs) | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, vested term | 4 years | ||||
2007 Stock Option Plan | |||||
Stock-based compensation | |||||
Shares authorized under the plan (in shares) | 3,000,000 | ||||
Options exercise price (in usd per share) | $ 2.13 | ||||
Employee Stock Purchase Plan ("ESPP") | |||||
Stock-based compensation | |||||
Common shares reserved for future issuance (in shares) | 2,600,000 | ||||
Percentage of shares to be purchased at market value | 85% | 85% | |||
Offering period | 6 months | 6 months | |||
Shares issued under ESPP (in shares) | 398,895 | ||||
Non-cash share-based compensation expense | $ 600 | ||||
2018 Omnibus Incentive Plan | |||||
Stock-based compensation | |||||
Share-based compensation arrangement by share-based payment award, options, granted contractual term | 10 years |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Activity for Stock Options Under the 2018 Plan (Details) - Parent Company - Share-based Payment Arrangement, Option - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options | ||||
Outstanding at the beginning of the period (in shares) | 6,399 | 6,749 | 6,690 | |
Granted (in shares) | 676 | 555 | 710 | |
Exercised (in shares) | (835) | (820) | (651) | |
Forfeited or expired (in shares) | (1,145) | (85) | 0 | |
Outstanding at the end of the period (in shares) | 5,095 | 6,399 | 6,749 | 6,690 |
Exercisable at the end of the period (in shares) | 4,547 | |||
Weighted average exercise price | ||||
Outstanding at the beginning of the period (in usd per share) | $ 7.36 | $ 6.08 | $ 4.25 | |
Granted (in usd per share) | 14.54 | 18.45 | 14.09 | |
Exercised (in usd per share) | 3.93 | 3.67 | 2.22 | |
Forfeited or expired (in usd per share) | 11.38 | 14.30 | 0 | |
Outstanding at the end of the period (in usd per share) | 7.97 | $ 7.36 | $ 6.08 | $ 4.25 |
Exercisable at the end of the period (in usd per share) | $ 7.11 | |||
Aggregate intrinsic value | ||||
Outstanding | $ 9,797 | $ 58,449 | $ 114,095 | $ 81,235 |
Exercised | 6,778 | $ 12,332 | $ 11,939 | |
Exercisable | $ 9,764 | |||
Weighted average remaining contractual term (years) | ||||
Outstanding | 4 years 10 months 24 days | 5 years 8 months 12 days | 6 years 1 month 6 days | 6 years 6 months |
Exercisable | 4 years 6 months |
Share-Based Compensation - Blac
Share-Based Compensation - Black-Scholes Assumptions (Details) - Parent Company - Share-based Payment Arrangement, Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation | |||
Risk-free interest rate | 3.91% | 1.76% | 0.94% |
Expected volatility | 39.71% | 33.36% | 34.05% |
Expected option life (years) | 6 years | 6 years | 5 years 11 months 1 day |
Black-Scholes Value of options (in dollars per share) | $ 6.64 | $ 6.53 | $ 4.83 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Activity for Restricted Stock Units and Performance Restricted Stock Units (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of units | |||
Nonvested -Beginning (in shares) | 2,373 | 2,172 | 1,944 |
Granted (in shares) | 2,636 | 1,620 | 1,180 |
Vested (in shares) | (1,289) | (1,021) | (817) |
Forfeited (in shares) | (505) | (398) | (135) |
Nonvested - Ending (in shares) | 3,215 | 2,373 | 2,172 |
Weighted average grant date fair value | |||
Nonvested - Beginning (in usd per share) | $ 15.55 | $ 11.26 | $ 8.37 |
Granted (in usd per share) | 11.38 | 18.40 | 14.69 |
Vested (in usd per share) | 13.64 | 10.03 | 8.58 |
Forfeited (in usd per share) | 16.90 | 15.58 | 11.55 |
Nonvested - Ending (in usd per share) | $ 12.68 | $ 15.55 | $ 11.26 |
Share-Based Compensation - Mont
Share-Based Compensation - Monte Carlo Simulation Assumptions (Details) - Parent Company - Performance Restricted Stock Units (PSUs) | 12 Months Ended |
Dec. 31, 2023 | |
Stock-based compensation | |
Risk-free interest rate | 4.19% |
Expected volatility | 51.19% |
Expected option life (years) | 2 years 6 months 25 days |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of Stock-Based Compensation Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation | |||
Non-cash share-based compensation expense | $ 20,186 | $ 18,775 | $ 13,960 |
Cost of Sales | |||
Stock-based compensation | |||
Non-cash share-based compensation expense | 2,962 | 2,335 | 0 |
Selling, General and Administrative Expenses | |||
Stock-based compensation | |||
Non-cash share-based compensation expense | $ 17,224 | $ 16,440 | $ 13,960 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction | ||
Buyout fee | $ 7 | |
Professional Service Fee | ||
Related Party Transaction | ||
Amount incurred | $ 0.6 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Change in Benefit Obligation (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Plan Assets | |||
Benefit obligations at beginning of year | $ 24,129 | $ 31,150 | |
Interest cost | 1,181 | 847 | $ 785 |
Actuarial (gain) loss | 591 | (6,451) | |
Benefits paid | (1,532) | (1,417) | |
Benefit obligations at end of year | $ 24,369 | $ 24,129 | $ 31,150 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Change in Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | $ 21,016 | ||
Fair value of plan assets at end of year | 22,597 | $ 21,016 | |
Pension Plan | |||
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | 21,016 | 26,393 | |
Actual return on plan assets | 2,933 | (4,610) | |
Employer contributions | 180 | 650 | $ 700 |
Benefits paid | (1,532) | (1,417) | |
Fair value of plan assets at end of year | $ 22,597 | $ 21,016 | $ 26,393 |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Funded Status (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Benefit Plans | ||
Funded status | $ (1,772) | $ (3,113) |
Unrecognized net actuarial (gain) / accumulated other comprehensive (gain) | (1,432) | (675) |
Net amount recognized | $ (3,204) | $ (3,788) |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Pension Plan (Details) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Employee Benefit Plans | ||
Projected benefit obligation | $ 24,369 | $ 24,129 |
Accumulated benefit obligation (“ABO”) | 24,369 | 24,129 |
Fair value of plan assets | 22,597 | 21,016 |
ABO less fair value of plan assets | $ 1,772 | $ 3,113 |
Employee Benefit Plans - Sche_4
Employee Benefit Plans - Schedule of Amounts Recognized in Consolidated Balance Sheets (Details) - Pension Plan - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Employee Benefit Plans | ||
Current liabilities | $ 0 | $ 650 |
Noncurrent liabilities | 1,772 | 2,463 |
Total amount recognized | $ 1,772 | $ 3,113 |
Employee Benefit Plans - Sche_5
Employee Benefit Plans - Schedule of Net Periodic Pension Cost (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefit Plans | |||
Interest cost | $ 1,181 | $ 847 | $ 785 |
Expected return on plan assets | (1,434) | (1,139) | (1,107) |
Recognized net actuarial (gain) loss | (151) | 0 | 293 |
Net periodic benefit cost | $ (404) | $ (292) | $ (29) |
Employee Benefit Plans - Sche_6
Employee Benefit Plans - Schedule of Change in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Accumulated Other Comprehensive Loss | |||
Net actuarial gain | $ 909 | ||
Income tax expense related to pension | (191) | $ (181) | $ (747) |
Pension Plan | |||
Change in Accumulated Other Comprehensive Loss | |||
Beginning of year | 502 | (20) | (2,215) |
Net actuarial gain | 909 | 703 | 2,649 |
Amortization of net actuarial (gain) loss | (151) | 0 | 293 |
Income tax expense related to pension | (191) | (181) | (747) |
End of year | $ 1,069 | $ 502 | $ (20) |
Employee Benefit Plans - Sche_7
Employee Benefit Plans - Schedule of Pension Plan Assets (Details) - Pension Plan | Dec. 31, 2023 | Dec. 31, 2022 |
Employee Benefit Plans | ||
Target Allocation (as a percent) | 100% | |
Actual Allocation (as a percent) | 100% | 100% |
Equity securities | ||
Employee Benefit Plans | ||
Target Allocation (as a percent) | 46% | |
Actual Allocation (as a percent) | 43% | 69% |
Debt securities and cash | ||
Employee Benefit Plans | ||
Target Allocation (as a percent) | 54% | |
Actual Allocation (as a percent) | 57% | 31% |
Employee Benefit Plans - Schdul
Employee Benefit Plans - Schdule of Plan Assets using the Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Employee Benefit Plans | ||
Fair value of plan assets | $ 22,597 | $ 21,016 |
Level 1 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 22,597 | 21,016 |
Level 2 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Level 3 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Cash and cash equivalents | ||
Employee Benefit Plans | ||
Fair value of plan assets | 127 | 121 |
Cash and cash equivalents | Level 1 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 127 | 121 |
Cash and cash equivalents | Level 2 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Cash and cash equivalents | Level 3 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total international stock index fund | ||
Employee Benefit Plans | ||
Fair value of plan assets | 5,184 | 7,163 |
Total international stock index fund | Level 1 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 5,184 | 7,163 |
Total international stock index fund | Level 2 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total international stock index fund | Level 3 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total stock market index fund | ||
Employee Benefit Plans | ||
Fair value of plan assets | 4,609 | 7,346 |
Total stock market index fund | Level 1 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 4,609 | 7,346 |
Total stock market index fund | Level 2 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total stock market index fund | Level 3 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total return fund | ||
Employee Benefit Plans | ||
Fair value of plan assets | 12,677 | 6,386 |
Total return fund | Level 1 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 12,677 | 6,386 |
Total return fund | Level 2 | ||
Employee Benefit Plans | ||
Fair value of plan assets | 0 | 0 |
Total return fund | Level 3 | ||
Employee Benefit Plans | ||
Fair value of plan assets | $ 0 | $ 0 |
Employee Benefit Plans - Contri
Employee Benefit Plans - Contributions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefit Plans | |||
Expected contribution in 2024 | $ 0 | ||
Pension Plan | |||
Employee Benefit Plans | |||
Employer contributions | $ 180,000 | $ 650,000 | $ 700,000 |
Employee Benefit Plans - Sche_8
Employee Benefit Plans - Schedule of Estimated Future Benefit Payments (Details) - Pension Plan $ in Thousands | Dec. 31, 2023 USD ($) |
Employee Benefit Plans | |
2024 | $ 1,633 |
2025 | 1,672 |
2026 | 1,720 |
2027 | 1,810 |
2028 | 1,812 |
2029 - 2033 | $ 8,822 |
Employee Benefit Plans - Sche_9
Employee Benefit Plans - Schedule of Pension Plan Assumptions (Details) - Pension Plan | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-average actuarial assumptions used to determine benefit obligations: | |||
Discount rate | 4.82% | 5.01% | 2.77% |
Expected return on assets | 5.93% | 4.90% | 5.05% |
Weighted-average actuarial assumptions used to determine net periodic benefit cost: | |||
Discount rate | 5.01% | 2.77% | 2.43% |
Expected return on assets | 6.13% | 5.05% | 5.05% |
Employee Benefit Plans - Other
Employee Benefit Plans - Other Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Maximum employee contribution as percentage of base compensation | 80% | ||
Maximum employer matching contribution as percentage of the first 6% of base compensation that an employee contributes | 50% | ||
Percentage of base compensation matched by employer | 6% | ||
Matching contributions by employer | $ 7.5 | $ 6 | $ 5.6 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal current | $ 8,873 | $ (6,555) | $ 223 |
State current | 3,716 | 3,697 | 4,206 |
Total current | 12,589 | (2,858) | 4,429 |
Federal deferred | (11,918) | 1,730 | 11,823 |
State deferred | (5,403) | (104) | 181 |
Total deferred | (17,321) | 1,626 | 12,004 |
Income tax expense (benefit) | $ (4,732) | $ (1,232) | $ 16,433 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate and the U.S. Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. Federal income tax rate | 21% | 21% | 21% |
State income taxes, net of U.S. Federal income tax | 3.40% | 10.90% | 4.80% |
Permanent items | (0.40%) | (0.80%) | 0.10% |
Meals and entertainment | (2.70%) | 0.30% | 0.40% |
Deferred rate change | 8.90% | 2.10% | 1.80% |
Share-based compensation | 6.20% | (30.00%) | (5.20%) |
Executive compensation disallowed | (15.80%) | 23.50% | 11.10% |
TRA fair value adjustment | (1.10%) | (1.90%) | 2.90% |
Release of Sizewise reserve | 0% | (30.40%) | 0% |
Transaction costs | 0% | 0% | 2.30% |
Tax credits | 2.70% | (0.60%) | 0% |
Other | (0.20%) | 1.60% | 1.40% |
Valuation allowance | (2.40%) | 0% | 0% |
Effective income tax rate | 19.60% | (4.30%) | 40.60% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Tax indemnification expense | $ 0 | $ 11,918,000 | $ 0 |
Unrecognized tax benefits, if recognized would decrease the effective tax rate | 1,300,000 | ||
Unrecognized tax benefits, accrued penalties and interest | 0 | 0 | 3,200,000 |
Valuation allowance | $ 577,000 | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | |||
Accounts receivable | $ 1,582 | $ 1,079 | |
Accrued compensation and pension | 8,529 | 9,901 | |
Inventories | 2,888 | 1,468 | |
Other assets | 4,151 | 3,847 | |
Operating lease liability | 22,730 | 23,407 | |
Section 163(j) capitalized interest | 16,979 | 4,975 | |
Section 174 capitalized R&D costs | 6,591 | 2,901 | |
Net operating loss carryforwards | 2,138 | 17,146 | |
Total gross deferred tax assets | 65,588 | 64,724 | |
Valuation allowance | (577) | 0 | $ 0 |
Total deferred tax assets | 65,011 | 64,724 | |
Deferred tax liabilities: | |||
Deferred contract costs | (3,102) | (3,850) | |
Unrealized (gain) on pension | (364) | (174) | |
Unrealized (gain) on cash flow hedge | (489) | (2,370) | |
Accelerated depreciation and amortization | (163,988) | (180,934) | |
Prepaid assets | (3,429) | (3,537) | |
Operating lease right-of-use assets | (19,858) | (20,474) | |
Total deferred tax liabilities | (191,230) | (211,339) | |
Total net deferred tax liabilities | $ (126,219) | $ (146,615) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of beginning and ending amount of unrecognized tax benefit | |||
Balance at the beginning of the period | $ 1,358 | $ 10,111 | $ 1,340 |
Gross decreases for tax positions | (18) | (8,771) | |
Gross increase for tax positions | 8,753 | ||
Balance at the end of the period | $ 1,340 | $ 1,358 | $ 10,111 |
Concentration (Details)
Concentration (Details) - option_period | 12 Months Ended | ||
Aug. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Concentration | |||
PMS performance period | 4 years 6 months | ||
PMS base period | 12 months | ||
PMS number of option periods | 3 | ||
PMS option period | 1 year | ||
PMS additional option period | 6 months | ||
US Department Of Health and Human Services | Sales | Geographic Concentration Risk | |||
Concentration | |||
Concentration risk (as a percent) | 10.40% | 10.50% |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Basic weighted average shares outstanding (in shares) | 134,647,238 | 132,602,747 | 120,877,480 |
Net effect of dilutive stock awards based upon the treasury stock method (in shares) | 0 | 5,778,548 | 7,619,740 |
Dilutive weighted average shares outstanding (in shares) | 134,647,238 | 138,381,295 | 128,497,220 |
Basic earnings (loss) per share (in usd per share) | $ (0.14) | $ 0.23 | $ 0.20 |
Diluted earnings (loss) per share (in usd per share) | $ (0.14) | $ 0.22 | $ 0.19 |
Anti-dilutive share-based awards excluded from the calculation of dilutive earnings per share (in shares) | 8,557,396 | 9,203 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 26, 2024 | Feb. 14, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Subsequent event | ||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | ||
Subsequent Event | AR Facility | MUFG Bank | ||||
Subsequent event | ||||
Aggregate outstanding principal amount | $ 150,000,000 | |||
Subsequent Event | Merger Agreement | ||||
Subsequent event | ||||
Common stock, par value (in usd per share) | $ 0.0001 | |||
Subsequent Event | Merger Agreement | Apex | ||||
Subsequent event | ||||
Share price (in usd per share) | $ 10 |