Agiliti, Inc. (AGTI) on Q1 2021 Results - Earnings Call Transcript
Operator: Good afternoon, and welcome to Agiliti's First Quarter 2021 Earnings Conference Call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I would like to turn this conference over to Kate Kaiser, Vice President of Corporate Communication and Investor Relations at Agiliti. Thank you. You may begin.
Kate Kaiser: Thank you, Laura, and good afternoon, everyone. Thank you for joining us on today's call, as we provide an overview of Agiliti's results for the quarter ending March 31, 2021. Before we begin, I'd like to remind you that during today's call, we'll be making statements that are forward-looking, and consequently are subject to risks and uncertainties. Certain factors may affect us in the future, and could cause actual results to differ materially from those expressed in these forward-looking statements. Specific risk factors are detailed in our press release, and our most recent SEC filings, which can be found in the investor section of our corporate website at agilitihealth.com.
Tom Leonard: Thanks, Kate, and good afternoon. Thank you for taking the time to join us as we review our results from the first quarter of 2021. As a newly public company, we're excited to continue sharing the Agiliti story, and the important work that we do is a vital part of our nation's healthcare infrastructure. I'd like to start today, by taking a moment to recognize our extraordinary team. Throughout our more than 80 year history, we've been driven by a belief that every interaction has the power to change a life. That has never been more true than over the past year as COVID-19 affected our communities, our healthcare system, each of us personally. From the very beginning of the pandemic our teams worked side by side with clinicians and hospitals and health systems across the country, ensuring access to the patient ready medical devices, they needed to care for their patients. It's an honor to serve alongside more than 4,400 passionate, dedicated professionals doing work that truly makes a difference. Joining me on today's call is our Chief Financial Officer, Jim Pekarek, our President, Tom Boehning, who leads our commercial operations, and Kate Kaiser, our Head of Corporate Communications and Investor Relations. Following the recent close of our IPO on April 27, I'd like to begin today's call with a brief overview of our business, outlining the fundamentals of what we do and why we believe Agiliti is well-positioned to sustain our consistent above market growth for years to come. To sum up Agiliti in a single phrase, we're the leading experts in the management, maintenance, and mobilization of regulated reusable medical devices.
Tom Boehning: Thanks, Tom, and hello everyone. It's my pleasure to be joining you here today. So as we near the halfway mark on 2021, I can't help but reflect on this time last year, when COVID-19 was first impacting our communities. We've been proud to support our healthcare system through this time of unparalleled crisis. And our highly visible role during this period has increased the awareness of the unique and essential nature of what we do. COVID-19 drove a net financial tailwind for us. In the short term, we saw higher utilization of our service teams, and our rental device fleet. Longer term, we're benefiting from the expansion of medical device stockpile management opportunities at the federal, state and local levels, as well as a heightened awareness amongst our customers of the need to better manage their critical medical device assets. Durability of our business model is clearly visible in our performance during this challenging period. And it's important to highlight, as Agiliti first transitioned to support our customers at the beginning of the pandemic, and now as we move back toward normalized operations, you can observe our connection to every phase of our customers' medical device lifecycle, as well as the balance of our business between the medical and procedural sides of a hospital's operations. Financially, this serves as a natural internal hedge, meaning regardless of the macro trends facing our healthcare system as a whole, or specific situations or challenges affecting an individual customer, some part or parts of our end to end solution are always in demand. Our stable financial performance, evidenced in our pre COVID results, and then again, as we pivoted to meet the extraordinary demands on our health system over the last year, and now as we support our customers' transition back to normal operations, demonstrates the resilience of our business model.
Jim Pekarek: Thanks, Tom. I'll start with an overview of our Q1 2021 financials at a high level, then provide some comments on our new capital structure, and finally share our 2021 financial outlook. For the first quarter, total company revenue totaled $235 million, representing a 31% increase over the prior year. Adjusted EBITDA totaled $86 million, representing a 77% increase over the same period of 2020 and adjusted EBIT margin expansion of 900 basis points. That level of strong operating performance drove an adjusted earnings per share of $0.30 per share up $0.25 from Q1 of 2020. Taking a closer look at our revenue for the first quarter of 2021. Recall that we operate our business from a single shared infrastructure that supports each of our solutions. And accordingly, we report our financial results as one segment. Within that single segment, we report our revenue by solution line for equipment solutions, clinical engineering, and onsite managed services respectively. We delivered strong Q1 performance across all three of our service lines, benefiting in part by the impact of COVID-19 on the demand for our equipment rental services. Equipment solutions revenue totaled $82 million, representing growth at 21% for the quarter. We estimate that the favorable impact from COVID overall was $10 million to $12 million, occurring primarily within equipment solutions and reflecting increased demand for device rental services. Looking ahead, we expect that in Q2 of this year, we will have lapped the initial surge of COVID driven demand that occurred last year. Currently, our rental fleet utilization is trending below this same time last year, and is gradually returning to normalize utilization levels. This trend aligns with our financial plan for 2021, and it's fully considered within the full year guidance we have provided for total company revenue. Moving to clinical engineering, Q1 revenue was $75 million representing year-over-year growth of 14% for the quarter. Note that the recently completed acquisition of Northfield Medical on March 19, is accounted for within clinical engineering orders. Northfield Medical contributed approximately $4 million in revenue for the first quarter. Finally, our onsite managed services revenue totaled $78 million representing year-over-year growth of 73% for the quarter. A significant portion of the growth in Q1 came from our expanded contract with the federal government for medical device stockpile management, which was originally awarded in the third quarter of 2020. Moving to our balance sheet and our new capital structure, we have reduced our leverage by 90 basis points from 4.2 times as of December 31, 2020 to 3.3 times on a pro forma basis as of March '21, after giving effect for the acquisition of Northfield, as well as the use of proceeds from our recently completed IPO. Net proceeds of approximately $390 million from the all primary shares IPO for us to repay outstanding borrowings, primarily our second lien term loan debt, which was our highest cost debt. Estimated annual cash interest savings from our new capital structure will exceed $20 million. Included in the pro forma leverage calculation of 3.3 times is approximately $18 million in adjusted EBITDA that was generated by Northfield Medical in 2020. Looking forward, we expect to maintain our longer term leverage in the low to mid three times range. We also anticipate using our strong balance sheet and cash flow generation to fund opportunistic tuck in M&A, aligned with our strategy to augment our organic growth profile and drive additional profitable volume through our at scale operating infrastructure. Agiliti maintains significant liquidity with more than $324 million available on a pro forma basis as of March 2021. This includes our newly expanded $250 million revolving credit facility, as well as cash on hand. The maturity date on the expanded credit facility was extended to align more closely with our remaining term loan. Since completing the IPO and reducing our outstanding debt, we are pleased to share that the corporate rating was recently increased from B2B plus with a positive outlook from S&P, and from B1 to B2 with a stable outlook from Moody's. Over time, we expect this should further reduce our cost to access the capital markets, as required to augment our growth with targeted M&A. Finally, I'll provide some additional color on our 2021 financial outlook. As a reminder, going forward, we will provide guidance for key performance metrics on a full year basis. I'll start with a quantitative summary and share our significant assumptions. For the full year 2021. We expect total company revenue in the range of $950 million to $975 million representing growth of 23% to 26%. We are targeting adjusted EBITDA in the range of $275 million to $285 million representing growth of approximately 17% to 22%. And we expect to invest net cash CapEx in the range of $65 million to $70 million. The OpEx is a percentage of revenue, a relevant measure of a decreasing capital intensity of our business is expected to be in the range of 6% to 7%. From a qualitative standpoint, our assumptions are as follows. We expect to return to normalize pre pandemic utilization levels for our rental fleet by the end of Q2. Recall, we shared that the net favorable impact of COVID on 2020 revenue was estimated to be between $30 million and $40 million dollars. This impact occurred primarily within equipment solutions, in over the period from Q2 to Q4 of 2020. In Q1 of 2021, we estimated the net favorable COVID impact on revenue is between $10 million and $12 million. Reflecting on the balance of the year, we are planning under the assumption that COVID will continue to abate within the United States. Accordingly, we expect generally lower utilization of our rental device fleet, partially offset by new account growth, as well as favorability in surgical rentals within our equipment solution service line between Q2 of this year and Q1 of next year. We also expect to ramp new contracts for our clinical engineering and onsite managed solutions throughout the year as customers turn their attention back to their longer term goals. These assumptions are embodied within our full year guidance. Our 2021 financial guidance also includes the assumption that we will successfully renew the agreement with the Department of Health and Human Services. As a reminder, we operate under a strict NDA with HHS and are not permitted to disclose details of this or other contracts beyond the publicly available details on the Federal Register. Although final determinations with respect to the renewal and the size of any future contract are not yet determined, we expect the size of the future contract will be appropriate for the anticipated level of services required to manage and maintain the stockpile post pandemic. Finally, our implied EBITDA margins, which can be calculated from our 2021 guidance range from 28% to 30%. This margin range generally reflects a return to our pre-COVID margin profile, compared to our reported Q1 adjusted EBITDA margin of over 36%. Primary drivers that contribute to the return to pre-COVID margins include the assumed normalization of rental device demand by the end of Q2, our internal assumptions on an expected renewal of our stockpile management contract with HHS, and the impact of our recently completed acquisition of Northfield Medical, which has lower initial EBITDA margins, compared to our historical average. Before we open the call to your questions, I want to echo Tom in sharing our gratitude to our team members for continuing to fulfill a critical role in healthcare. I've never been more proud to be part of Team Agiliti. I'll now turn the call over to the operator to provide instructions for our Q&A.
Operator: At this time, we'll be conducting a question-and-answer session. Our first question comes from the line of Matthew Borsch with BMO Capital Markets. You may proceed with your question.
Matthew Borsch: Thank you, and congratulations on the quarter results and on your IPO as well. Let me let me ask if I could about your dialogue at the hospital. I know you referred to this during the call. And notice that clinical engineering came in more ahead, I think than other areas. I don't know if that reflected -- recognizing of course Northfield was in that number. But there is this unfolding faster or slower than you would expect in terms of the conversations you're having with hospitals. Is there anything about the post-pandemic environment or approaching post-pandemic environment that is making them more receptive to the value proposition you're laying out to them?
Tom Leonard: So first, thank you for the question, Matt, and good to connect again. As you pointed out, we did have we probably strength across all three of our service lines in Q1. And as you point out, as well, within clinical engineering, I think the post-pandemic period is playing out pretty much as we anticipated, posted within our guidance has been our expectation that by time we got to Q2, and certainly by the end of Q2, we'd see normalized utilization of our rental device fleet, and the ramping of discussions with our customers on longer term initiatives, including around clinical engineering. So I'd say that's playing out more or less, as we anticipated. I will say there's a small portion of the federal government contract that relates to the supports and maintenance of the devices that we deploy from the stockpile in the field. And those things that are clinical engineering focused, we also account for within clinical engineering. So that is a small part of the performance in Q1 as well.
Matthew Borsch: Can you just -- if I can ask one more question, can you give us -- I guess the trickiest area here is on the federal government contracts. And I heard everything you said. And maybe is that partly why they're not giving guidance on the individual categories? Or is that not something you're going to do going forward?
Jim Pekarek: So kind of go forward basis, we're going to provide guidance on whole company revenue, not guidance by individual solutions.
Matthew Borsch: Okay. Thank you.
Operator: Our next question comes from the line of Matthew Mishan with KeyBanc. You may proceed with your question.
Matthew Mishan : Great. Good afternoon, and thank you for taking the questions. Also, congratulations on the IPO. So Tom, it looks like you guys came in at the high end of where you were expecting your one key ranges. But I think the midpoint of your revenue ranges are down a little bit from where the deal model was. Can you walk through maybe some of the moving pieces about what's changed into 2Q and 3Q, versus what you thought a couple months ago?
Tom Leonard: Yeah, Matt. What I would share is, in general, nothing has changed. We very much what we've shared previously within the model is consistent with what's transpired in the business and what we're reflecting within our guidance more broadly, Matt.
Matthew Mishan : Okay, excellent. And then just your initial thoughts on Northfield and Mobile Instrument Care coming together, how you're thinking about integration of those two businesses and kind of overlapping footprints.
Tom Leonard: So one of the things we particularly like about Northfield, again as background, Northfield brought us capabilities in surgical instrument repair. It was a great complement to a smaller business that we acquired a year before called Mobile Instrument. Northfield being the number two player by size in the surgical repair space, and Mobile Instrument being at the time, the number three player by size in that surgical instrument repair segment. Number one, of course, Storz. So we brought these two businesses together? Most recently, with the close of the Northfield acquisition that closed at the end of March. We really were excited about Northfield's both contract positions with GPOs, the momentum that they have in the marketplace awesome. There are extraordinary references, including with some very significant academic medical centers. And there's actually very little overlap between the two companies Mobile that we acquired again the year before and Northfield, very little overlap in terms of existing customer base, as well as the deals they were in each business's respective funnels. So the work that we have going on today to integrate these two businesses is proceeding actually very smoothly, with so little actual overlap commercially, it's not been disruptive at all, on the back end as we've looked to integrate. And first and foremost, that integration has started with our commercial teams, making sure that we're driving that alignment in the field, eliminating or reducing any chance for conflicts with our customers and our customer communication, particularly with new deals. Then over time, we'll work to integrate the back end. We like to think about our integration, to borrow from the Hippocratic Oath, when we think about integration particularly on the back end, we like to say, first, do no harm. Let's make sure we do it thoughtfully, carefully, and not risk breaking anything. This acquisition, like all that we've done, really focused on accelerating top line growth, and expanding the available market. So that gives us the opportunity to be thoughtful, in how we integrate the back end.
Matthew Mishan : Thank you very much.
Operator: Our next question comes from the line of Amit Hassan with Goldman Sachs. You may proceed with your question.
Unidentified Analyst: Hi, this is Phil on for Amit. Can you guys hear me okay?
Tom Leonard: We got you.
Unidentified Analyst: Awesome. Yeah, maybe I can follow-on to Matt's question on the Northfield side and ask for some maybe some quantitative around that. I'm interested if you can provide sort of any financial synergy targets that you guys have in mind in relation to the integration efforts. And then also what the contribution from Northfield that's contemplated in this year's financial guidance so that we can try to work down towards organic numbers.
Jim Pekarek: Yeah, Phil, where I'll start is, so we don't break out that level of detail. But a couple of reference points for you. We've disclosed that Northfield delivered $111 million of top line revenue in 2020, and approximately $18 million of EBITDA. That's how to think about that portion of the business coming into 2021. Regarding why we don't separate organic versus inorganic, consider that last year, we acquired the number three ISO in mobile instrument and then added Northfield the number two, in the space. So it'd be impractical to parse the two, because we're in the process of integrating both as well as with the overall business more broadly. Obviously, we're going to use that integration to share our one overall infrastructure. So given that we don't guide the sub parts of our individual solution lines, but keep in mind that Northfield is included within the CES portion, the clinical engineering portion of our revenue, in March and then going forward.
Unidentified Analyst: All right, thanks. That's helpful. Maybe another one to help with a little bit of an apples to apples comparison. I heard the commentary around to 2Q unwinding the rental benefit from COVID. It sounds like if we just put some rough numbers on it, that that implies roughly a $15 million to $25 million headwind versus the three quarters of impact from COVID, from 2Q '20 to 4Q '20. Is that just kind of ballpark the right way to be thinking about the net headwind that's coming in 2021, within your financial guidance?
Jim Pekarek: So let me just restate what I shared previously, Phil, which was that, in 2020, we estimated the impact was between $30 million and $40 million of top line revenue from COVID. And that primarily occurred between Q2 and Q4 of 2020. We've shared that in Q1, the impact was $10 million to $12 million. So you're thinking about it in the right range with the framework that I just shared, overall in my script, Phil.
Unidentified Analyst: All right, thanks for the questions. Appreciate it.
Jim Pekarek: Yes, happy to help.
Operator: Our next question comes from a line of Kevin Fischbeck with Bank of America. You may proceed with your question.
Kevin Fischbeck : Great, thanks. I guess you mentioned that things are returning to normal, the hospital clients are in better financial health and better able to kind of focus on doing agreements with you guys. Can you talk a bit about where we are in that process? How should we think about that, is Q2 still a quarter of discussions that we should expect it to be more in the back half of the year? Or is this something that, you should expect to start to see into the numbers and in which parts of the business, I mean, I guess it's going to be clinical engineering on side, but which one, maybe more than the other is more levered to that?
Jim Pekarek: So Kevin, good, good to speak. Again. Thank you for the question. Actually, our expectations of this, again, wrapping down of the COVID impact going into Q2 is fully implicit within our full year guidance, specific to the point of which or how each of the solutions impacted. The primary net tailwind, has been within equipment solutions. And within equipment solutions recently described it as a net tailwind, is that we think about this balance in our business between the medical and the procedural side of a hospital or health system. And so what we saw what produced the net tailwind for us and primarily it's been in equipment solutions is those areas more focused on the medical, like the rental of ventilators and infusion pumps into a degree specialty beds and surfaces. We saw a strong tailwind high demand offset to a degree by decreased demand on our surgical laser portion of our business, which is also falls within our equipment solutions, as we get to this point of the year as Tom Boehning reflected that our customers conversations are changing, are taking longer term views, now again, because they don't have to worry about the challenges right in front of their face. And while they're focusing on improving their financial health, which means returning to a normalized level of procedures, we'll see that both within our Surgical Laser Rental, that that will pick up and our comp very well versus last year when procedures were off. But I naturally did fall off on the medical side and equipment solutions, the pickup on the surgical side, that still produces a net headwind for us for these next four quarters within equipment solutions. What we expect to see as well then within clinical engineering, and within our onsite manager, is the conversations that we've been having with customers, once they've been able to look up from the challenge right in front of them are those conversations are turning into opportunities, which will turn into contracts. And were very comfortable based on the deal flow we're seeing today that in that mix of very strong tailwinds for us in equipment solutions, as well as within chemical engineering, that good line of sight to the full year and to the guidance that we've provided for a full year for your revenue and for your EBITDA.
Kevin Fischbeck : Okay, that's helpful. And I guess in the slide deck, you mentioned that you guys continue to look at, smaller kind of opportunistic M&A to augment the growth, any commentary on the deal environment today, and how you guys think about leverage and your capacity to do a deal, after closing north, so just a couple of months ago.
Tom Leonard: Thank you. So within our capacity, there's no financial capacity and management capacity to successfully, after you've acquired it to successfully integrate it and deliver results for our shareholders. We're deep in the work today on Northfield, and we hope to be in a position if we can find the right opportunities to do more M&A, whether it's in this year or beginning of next year. Our focus, our approach is opportunistic. So we're not chasing deals you don't need to chase deals. We do maintain a healthy funnel interesting opportunities. We're very mindful of valuations. But when we find the right opportunity, if we've got developed valuable management capacity, it is our view that we're going to, over the longer term, maintain our leverage ratio in the low to mid threes. But occasionally tap into that available capacity for M&A, opportunistic M&A, with a goal of after acquiring something through synergies and through growth, and our performance, once you can drag down to that longer term, general goal of low to mid threes on our leverage.
Kevin Fischbeck : All right, great, thanks.
Operator: Our next question comes from a line of Ralph Giacobbe with Citi. You may proceed with your question.
Ralph Giacobbe : Thanks, good afternoon. I guess I was wondering if there was anything to call out on the type of hospitals you see accelerating discussions is it or urbane, is it larger systems versus smaller systems, those that are more challenged financial position versus those more sound footing, just anything qualitatively there, in terms of who's accelerating the discussions at this point.
Tom Leonard: I'll say simply, most, if not all, hospitals, had financial challenges in some form, primarily through the loss of ability to do procedures at the normalized rate. Should -- every customer that we speak to and it's large for profits, whose names you know, a small, similar community hospitals, academic medical centers, really all of them are focused on a return to health. If I were to -- a way to think about it would be when your house is on fire, it's that time to think about upgrading your kitchen, even if you're upgrading your kitchen will make your home more valuable. You house is on fire you want to put the fire out across the market, market by market facility without regard for your public, not for profit, community, large. For the last year, our customers were focused on the challenges at hand. And they tapped into us to help us solve their most urgent challenges getting access to the devices they need to care for their patients. And as each of them are in turn, based on what's going on in their local markets, able to lift their heads up. Now they're ready to think about what should the future look like? And we're having those discussions really across our customer base and our customer base more than 7,000 facilities we serve across the country really are a cross section of healthcare, the healthcare marketplace in the U.S.
Ralph Giacobbe : Okay, and then just, I guess to follow up, lots of headlines around inflation out there. Are you seeing anything at this point, maybe specific to supplies and/or labor to sort of pull out? Thanks.
Tom Leonard: Great question. Thank you. So today, we're not seeing any impact, either with labor market tightness, or in supplies, particularly with regard to Part C , I'm not sure, on the part side, we generally have longer term arrangements with our suppliers. So I think we feel pretty comfortable in our position there. With regard to the labor market, I'd say a couple of things. First, our standard contract does include inflation adjustment provisions. So there is an offset that we generally have. I also say, and this is important that we're obviously not immune from labor shortages, or those related cost pressures. But it's important for our most important roles, it really is, for us, a specialized and narrow healthcare only market where we're effectively competing with hospitals for the same types of talent, for example, biomedical technicians who repair and maintain devices. And we believe I think our history has shown, we simply have more to offer those folks than our customers do. Further to the point, one of the things that we see is when our customers are experiencing these same challenges and risks of whether it's the risk of labor market inflation or just simply an inability to get the talent that they need to do this work. It actually adds to their interest in outsourcing these areas like clinical engineering to companies like Agiliti. So we're not seeing the effect today in our business. I think we're in a good position when it comes to recruiting and retaining the high quality talent in this narrow market. And it generally serves as a tailwind for us when we think about the propensity for a customer to outsource versus doing this work for themselves. Thank you.
Operator: Our next question comes from the line of Anthony Petrone with Jefferies. You may proceed with your question.
Anthony Petrone: Thanks, and congratulations as well on the IPO and the strong quarter. Maybe Tom a more sort of macro question coming out of pandemic, just sort of your views on where hospitals are, you know, their heads are at, as it relates to preparedness out of the pandemic? Or do you think there's a more of an extended tail wind here in the event that they want to be, sort of more prepared, just from a capacity standpoint? And so do you think there's this sort of accelerated discussions on more outsourcing of equipment and potentially bulking up rental, and maybe even on site services? And so how do you think that's trending? And what do you think that does to share of wallet at existing sites going forward? And then I have one quick follow up.
Tom Leonard: Yeah, and I really appreciate that question. It's important for one for us. I think there is a great, longer term, not quantifiable tailwind that we get, based on the pains that our customers experience as they went through the pandemic. In the conversations that we have, this is needed to be ready, this need to never find themselves unable to deliver the kind of care that they expect to as part of their mission to their patients, is something that's driving a lot of soul searching and a lot of activity on their part. An important part of our business, the onsite manager business, where we will maintain managed mobilized hospitals owned equipment, and not just the hospitals that mobilize it across the health system where that equipment is most needed. Then again, augment with our rental. That's was historically for us something that we had to educate our customers on the inefficiencies that they have, the waste that they have, the excess equipment that they have, while they're still renting. What COVID has done and their inability to manage for themselves this environment such that they had access to the equipment that they needed, the visibility to it could mobilize what they had first and then be wise about how they chose to rent. That used to be an education sale for us. Now we're getting pulled into the C suite, help customers understand how do I -- this from happening to me again? How can I be ready, not just to more efficiently manage these assets, but to make sure I never find myself unable to provide the care that my patients expect and demand of us? So I think it's a longer term, very positive tailwind course, is certainly impacting where we're able to engage with our customers and giving us access to the C suite at a level that we've never had before.
Anthony Petrone: That's helpful and a quick follow up maybe from Jim would just be a little bit on margin progression, adjusted EBITDA margins, surprised to the upside in the quarter. There's some volume rolling off of COVID next quarter. So just the spread between the 36% and the guide for the year and just how we should be thinking about the lumpiness or lack thereof of adjusted margins. Thanks again.
Jim Pekarek: Yes, happy to help there. In my prepared remarks, just to restate the elements of why our EBITDA margins in Q1 of 2021 are going to normalize and come back to pre COVID levels, there's really three drivers first being cycling through of COVID. As we've shared previously, the revenue impact from COVID also had a very high flow through rates. While we don't describe what that impact is, it certainly did exist. So that's point number one. Number two is the assumptions that we're making with the renewal of the government contract. And finally, a key piece to keep in mind is the acquisition that Northfield did have lower EBITDA margins, which will take us a bit of time to integrate and execute and get back more in line with the overall trends in terms of our EBITDA margins. That's the way I would think about it.
Anthony Petrone: Helpful. Thanks again.
Jim Pekarek: Yeah, happy to help.
Operator: Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Mr. Tom Leonard for closing remarks.
Tom Leonard: Thank you, operator. And I want to thank everyone for your time for your questions today. I'd like to close by sharing that we like to describe Agiliti as a company on the right side of healthcare. And what that means is that whether we're in times of financial strain, or at times of relative prosperity, this needs on the part of our customers to drive cost savings, operating efficiencies, and patient safety. These needs are fundamentally essential. We have demonstrated we're a critical part of our national health care infrastructure. And I think as the events of 20 now clearly highlight the services that we provide are always necessary and in high demand. Look forward to updating you on our progress and we do want to thank you all for your interest in Agiliti. With that, I'll go ahead and close to these call. Thank you.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your evening.
