NASDAQ: XELA

News Release Details

 

Exela Technologies, Inc. Reports Third Quarter 2020 Results

November 9, 2020

Third Quarter Revenue of $305.3M meets prior guidance on a GAAP basis 
Continued Expansion in Gross Profit and Adj. EBITDA Margins 
Conference Call Scheduled for Nov 10, 2020 at 11:00 AM ET 

Third Quarter 2020 Highlights:

  • Revenue of $305.3 million, a decline of 18.3% on a reported basis and 18.9%(1) on a constant currency basis from Q3 2019
  • Gross profit margin of 23.3%, an increase of approximately 190 basis points from Q2 2020 and 240 basis points from Q3 2019
  • Operating income of $4.8 million, compared with operating loss of $(93.9) million in Q3 2019
  • EBITDA(2) of $37.7 million, compared with EBITDA loss of $(69.4) million in Q3 2019
  • Adjusted EBITDA(3) of $48.7 million on a reported basis; $48.8 million on a constant currency basis; Adjusted EBITDA margin of 16.0%, an increase of 200 basis points from Q2 2020 and consistent with Q3 2019. 

IRVING, Texas, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA), a location-agnostic global business process automation (“BPA”) leader across numerous industries, announced today its financial results for the third quarter ended September 30, 2020.

“The COVID-19 pandemic has impacted everyone to some degree, including Exela and our customers.  While some uncertainty related to the pandemic still remains, we continue to execute well against our plan for value creation in this current environment.  Our sequential margin expansion, improving cash flow and rising liquidity in the third quarter is further evidence of our progress,” said Ronald Cogburn, Chief Executive Officer of Exela.

Third Quarter 2020 Financial Highlights

  • Revenue: Revenue for the third quarter of 2020 was $305.3 million, a decline of 18.3% from $373.5 million in the third quarter of 2019.
    • Revenue for the Information and Transaction Processing Solutions segment was $234.4 million, a decline of 19.9% year-over-year, primarily due to reduced customer volumes as a result of COVID-19, as well as the exit of contracts and statements of work from certain customers with revenue that the Company believes are unpredictable, non-recurring, and were not a strategic fit to its long-term success or unlikely to achieve long-term target margins (“transition revenue”).
    • Healthcare Solutions revenue was $54.2 million, a decrease of 12.8% year-over-year, driven by reduced volumes as a result of COVID-19. Healthcare solutions revenue increased 10.2% from $49.2 million in the second quarter of 2020, driven by increased volumes.
    • Legal and Loss Prevention Services revenue was $16.7 million, a decline of 11.2% year-over-year primarily due to a decline in legal claims administration services.
    • Revenue excluding pass through revenues from postage and postage handling with either zero or nominal margins (“pass through revenue”) (4) was $254.4 million in the third quarter of 2020, representing a decrease of 17.9% from $309.9 million in the third quarter of 2019. Revenue excluding pass through revenue increased 0.8% sequentially from $252.5 million in the second quarter of 2020.
    • 82% of third quarter 2020 revenue was earned in the Americas, 17% in EMEA and 2% in rest of world.
       
  • Operating income / (loss): Operating income for the third quarter of 2020 was $4.8 million, compared with operating loss of $93.9 million in the third quarter of 2019. The year-over-year increase in operating income was attributable to gross margin improvements of 237 basis points driven by realigning capacity and costs to reflect changes in customer volumes, lower SG&A expense due to cost containment and lower depreciation and amortization expense in the third quarter of 2020. Additionally, there was no impairment of goodwill and other intangible asset costs in the third quarter of 2020 compared with $97.2 million in the third quarter of 2019.  
     
  • Net Loss: Net Loss for the third quarter of 2020 was $28.3 million, compared with a net loss of $131.3 million in the third quarter of 2019.
     
  • Adjusted EBITDA: Adjusted EBITDA for the third quarter of 2020 was $48.7 million, a decrease of 19.6% from $60.5 million in the third quarter of 2019, and an increase of 13.0% from $43.1 million in the second quarter of 2020. Adjusted EBITDA margin for the third quarter of 2020 was 16.0%, consistent with 16.2% in third quarter of 2019 and up 200 basis points from 14.0% in second quarter of 2020. The sequential improvement in third quarter 2020 Adjusted EBITDA margin reflects flow through of the Company’s ongoing cost containment initiatives.

    Adjusted EBITDA margin was 19.1%, based on revenue excluding pass through revenue, in the third quarter of 2020, an increase from 17.1% compared to second quarter of 2020 on flat revenue. Adjusted EBITDA margin was at 19.5% for the third quarter of 2019.
  • Capital Expenditures: Capital expenditures for the third quarter of 2020 were 0.6% of revenue compared to 0.7% of revenue in the third quarter of 2019.
     
  • Common Stock: As of September 30, 2020, there were 147,511,430 total shares of common stock outstanding and an additional 4,109,949 shares of common stock reserved for issuance for our outstanding preferred shares on an as-converted basis.
     
  • Total employees as of September 30, 2020 were 21,000 as compared to 21,073 as of June 30, 2020.

Balance Sheet: At September 30, 2020, Exela’s total net debt was $1.477 billion.

Debt Reduction and Liquidity Improvement
On November 12, 2019, Exela announced that its Board of Directors adopted a debt reduction and liquidity improvement initiative (“Initiative”), with the goal of increasing the Company’s liquidity to approximately $125.0 to $150.0 million, and repaying debt with a target debt reduction of approximately $150.0 to $200.0 million. In accordance with this Initiative, Exela has announced three transactions year-to-date 2020. 

  • On January 15, 2020, Exela announced that the Company entered into a 5-year, $160.0 million accounts receivable securitization facility to improve liquidity.  The facility is for an initial five-year term, may be extended in accordance with its terms, and is incremental to Exela’s existing $100.0 million revolving facility maturing in July 2022
     
  • On March 17, 2020, Exela announced the sale of its Tax Benefit Group (“TBG”) business for $40.0 million, or approximately 1.93x 2019 revenue. Net of closing costs and adjustments, this transaction resulted in proceeds of $38.2 million. For full year 2019, TBG generated total revenue of $20.7 million.
     
  • On July 23, 2020, Exela announced the sale of its physical records storage and logistics business for $12.3 million. The assets involved in the business generated approximately $1.0 million of EBITDA in 2019.
     
  • The Company believes it is on schedule for additional divestitures with expected proceeds in the range of $100.0 million to $150.0 million in the aggregate.

Fourth Quarter and Full Year 2020 Revenue Outlook

  • For the fourth quarter of 2020, Exela currently expects revenue to be in the range of $300 million to $310 million.
     
  • For full year 2020, Exela currently expects revenue to be in the range of $1.28 billion to $1.29 billion.

(1) – Constant currency is a non-GAAP measure. A reconciliation of constant currency is attached to this release.
(2) – EBITDA is a non-GAAP measure. A reconciliation of EBITDA is attached to this release.
(3) – Adjusted EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA is attached to this release.
(4) – Pass through revenue is defined as postage and postage handling revenue with either zero or nominal margins.  LMCE is defined as revenue from the low margin contract exit announced in the third quarter of 2018. A reconciliation of revenue net of pass through revenue and LMCE is attached to this release.  

Earnings Conference Call and Audio Webcast
Exela will host a conference call to discuss its third quarter 2020 financial results at 11:00 a.m. ET on November 10, 2020.  To access this call, dial 833-255-2831 or +1-412-902-6724 (international).  A replay of this conference call will be available through November 17, 2020 at 877-344-7529 or +1-412-317-0088 (international).  The replay passcode is 10149156.  A live webcast of this conference call will be available on the “Investors” page of the Company’s website (www.exelatech.com). A supplemental slide presentation that accompanies this call and webcast can be found on the investor relations website (http://investors.exelatech.com/) and will remain available after the call. 

About Exela 
Exela Technologies, Inc. is a business process automation leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of expertise operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100.  With foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry department solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and public sectors. Through cloud-enabled platforms, built on a configurable stack of automation modules, and over 21,000 employees operating in 23 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.  

Find out more at www.exelatech.com

Follow Exela on Twitter: https://twitter.com/exelatech
Follow Exela on LinkedIn: https://www.linkedin.com/company/11174620/

About Non-GAAP Financial Measures: This press release includes constant currency, EBITDA and Adjusted EBITDA, each of which is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Exela believes that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance, results of operations and liquidity and allows investors to better understand the trends in our business and to better understand and compare our results. Exela’s board of directors and management use constant currency, EBITDA and Adjusted EBITDA to assess Exela’s financial performance, because it allows them to compare Exela’s operating performance on a consistent basis across periods by removing the effects of Exela’s capital structure (such as varying levels of debt and interest expense, as well as transaction costs resulting from the combination of Quinpario Acquisition Corp. 2, SourceHOV Holdings, Inc. and Novitex Holdings, Inc. on July 12, 2017 (the “Novitex Business Combination”) and capital markets-based activities). Adjusted EBITDA also seeks to remove the effects of integration and related costs to achieve the savings, any expected reduction in operating expenses due to the Novitex Business Combination, asset base (such as depreciation and amortization) and other similar non-routine items outside the control of our management team.  Optimization and restructuring expenses and merger adjustments are primarily related to the implementation of strategic actions and initiatives related to the Novitex Business Combination. All of these costs are variable and dependent upon the nature of the actions being implemented and can vary significantly driven by business needs. Accordingly, due to that significant variability, we exclude these charges since we do not believe they truly reflect our past, current or future operating performance. The constant currency presentation excludes the impact of fluctuations in foreign currency exchange rates. We calculate constant currency revenue and Adjusted EBITDA on a constant currency basis by converting our current-period local currency financial results using the exchange rates from the corresponding prior-period and compare these adjusted amounts to our corresponding prior period reported results. Exela does not consider these non-GAAP measures in isolation or as an alternative to liquidity or financial measures determined in accordance with GAAP. A limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Exela’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures and therefore the basis of presentation for these measures may not be comparable to similarly-titled measures used by other companies. These non-GAAP financial measures are not required to be uniformly applied, are not audited and should not be considered in isolation or as substitutes for results prepared in accordance with GAAP. Net loss is the GAAP measure most directly comparable to the non-GAAP measures presented here. For reconciliation of the comparable GAAP measures to these non-GAAP financial measures, see the schedules attached to this release.

Restatement:
As described in additional detail in the Explanatory Note to the Company’s Annual Report on Form 10-K filed with the SEC on June 9, 2020 (the “Annual Report”), the Company restated its audited consolidated financial statements in the for the years ended December 31, 2018 and 2017 and its unaudited quarterly results for the first three fiscal quarters in the fiscal year ended December 31, 2019 and each fiscal quarter in the fiscal year ended December 31, 2018 in the Annual Report.  Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended.  See Note 20, Unaudited Quarterly Financial Data, of the Notes to the consolidated financial statements in the Annual Report for the impact of these adjustments on each of the quarterly periods in fiscal 2018 and for the first three quarters of fiscal 2019.  All amounts in this release affected by the restatement adjustments reflect such amounts as restated.

Forward-Looking Statements: Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, estimated or anticipated future results and benefits, future opportunities for Exela, and other statements that are not historical facts. These statements are based on the current expectations of Exela management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties, including without limitation those discussed under the heading “Risk Factors” in the Annual Report. In addition, forward-looking statements provide Exela’s expectations, plans or forecasts of future events and views as of the date of this communication. Exela anticipates that subsequent events and developments will cause Exela’s assessments to change. These forward-looking statements should not be relied upon as representing Exela’s assessments as of any date subsequent to the date of this press release.

Exela Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2020 and December 31, 2019
(in thousands of United States dollars except share and per share amounts)

           
  September 30   December 31
  2020
  2019
  (Unaudited)   (Audited)
Assets            
Current assets          
Cash and cash equivalents $ 37,176     $ 6,198  
Restricted cash   6,032       7,901  
Accounts receivable, net of allowance for doubtful accounts of $5,444 and $4,975, respectively   214,949       261,400  
Related party receivables   786       716  
Inventories, net   17,428       19,047  
Prepaid expenses and other current assets   33,359       23,663  
Total current assets    309,730        318,925  
Property, plant and equipment, net of accumulated depreciation of $181,310 and $176,995, respectively   91,846       113,637  
Operating lease right-of-use assets, net   67,522       93,627  
Goodwill   359,270       359,771  
Intangible assets, net   304,958       342,443  
Deferred income tax assets   12,192       12,032  
Other noncurrent assets   24,907       17,889  
Total assets $  1,170,425     $  1,258,324  
           
Liabilities and Stockholders' Equity (Deficit)          
Liabilities          
Current liabilities          
Accounts payable $ 61,788     $ 86,167  
Related party payables   162       1,740  
Income tax payable   1,695       352  
Accrued liabilities   109,336       121,553  
Accrued compensation and benefits   53,904       48,574  
Accrued interest   23,274       48,769  
Customer deposits   15,605       27,765  
Deferred revenue   18,071       16,282  
Obligation for claim payment   36,284       39,156  
Current portion of finance lease liabilities   12,599       13,788  
Current portion of operating lease liabilities   20,049       25,345  
Current portion of long-term debts   38,042       36,490  
Total current liabilities    390,809        465,981  
Long-term debt, net of current maturities   1,491,969       1,398,385  
Finance lease liabilities, net of current portion   13,448       20,272  
Pension liabilities   24,885       25,681  
Deferred income tax liabilities   7,682       7,996  
Long-term income tax liabilities   2,808       2,806  
Operating lease liabilities, net of current portion   50,085       73,282  
Other long-term liabilities   16,202       6,962  
Total liabilities    1,997,888        2,001,365  
Commitments and Contingencies (Note 8)          
           
Stockholders' equity (deficit)          
Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 154,866,550 shares issued and 147,511,430 shares outstanding at September 30, 2020 and 153,638,836 shares issued and 150,851,689 shares outstanding at December 31, 2019   15       15  
Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; 3,290,050 shares issued and outstanding at September 30, 2020 and 4,294,233 shares issued and outstanding at December 31, 2019   1       1  
Additional paid in capital   446,739       445,452  
Less: Common Stock held in treasury, at cost; 7,355,120 shares at September 30, 2020 and 2,787,147 shares at December 31, 2019   (10,949 )     (10,949 )
Equity-based compensation   51,816       49,336  
Accumulated deficit   (1,301,187 )     (1,211,508 )
Accumulated other comprehensive loss:          
Foreign currency translation adjustment   (6,044 )     (7,329 )
Unrealized pension actuarial losses, net of tax   (7,854 )     (8,059 )
Total accumulated other comprehensive loss   (13,898 )     (15,388 )
Total stockholders’ deficit    (827,463 )      (743,041 )
Total liabilities and stockholders’ deficit $  1,170,425     $  1,258,324  
           

Exela Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019
(in thousands of United States dollars except share and per share amounts)

                       
  Three Months Ended September 30   Nine Months Ended September 30
      2019
      2019
  2020
  (Restated)   2020
  (Restated)
Revenue $ 305,280     $ 373,545     $ 978,453     $ 1,168,751  
Cost of revenue (exclusive of depreciation and amortization)   234,222       295,445       768,548       909,877  
Selling, general and administrative expenses (exclusive of depreciation and amortization)   42,837       48,347       140,224       149,186  
Depreciation and amortization   22,095       25,079       68,127       76,482  
Impairment of goodwill and other intangible assets         97,158             97,158  
Related party expense   1,360       1,430       4,058       7,759  
Operating income (loss)   4,766       (93,914 )     (2,504 )     (71,711 )
Other expense (income), net:                      
Interest expense, net   43,612       40,573       129,639       120,235  
Debt modification and extinguishment costs                     1,404  
Sundry expense (income), net   (434 )     165       (251 )     1,569  
Other expense (income), net   (10,414 )     406       (45,655 )     4,424  
Net loss before income taxes   (27,998 )     (135,058 )     (86,237 )     (199,343 )
Income tax benefit (expense)   (320 )     3,769       (3,440 )     (5,689 )
Net loss $ (28,318 )   $ (131,289 )   $ (89,677 )   $ (205,032 )
Cumulative dividends for Series A Preferred Stock   (976 )     (884 )     (394 )     (2,712 )
Net loss attributable to common stockholders $ (29,294 )   $ (132,173 )   $ (90,071 )   $ (207,744 )
Loss per share:                      
Basic and diluted $ (0.20 )   $ (0.91 )   $ (0.61 )   $ (1.43 )

Exela Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2020 and 2019
(in thousands of United States dollars unless otherwise stated)

           
  Nine Months Ended September 30
      2019
  2020
  (Restated)
Cash flows from operating activities          
Net loss $ (89,677 )   $ (205,032 )
Adjustments to reconcile net loss          
Depreciation and amortization   68,127       76,482  
Original issue discount and debt issuance cost amortization   10,979       8,730  
Impairment of goodwill and other intangible assets         97,158  
Debt modification and extinguishment costs         1,049  
Provision for doubtful accounts   415       4,402  
Deferred income tax provision   (417 )     1,632  
Share-based compensation expense   2,480       6,903  
Foreign currency remeasurement   (499 )     (173 )
Loss (gain) on sale of assets   (44,868 )     123  
Fair value adjustment for interest rate swap   23       4,965  
Change in operating assets and liabilities, net effect from acquisitions:          
Accounts receivable   44,197       3,501  
Prepaid expenses and other assets   (8,012 )     2,377  
Accounts payable and accrued liabilities   (48,257 )     (41,146 )
Related party balances   (362 )     (5,198 )
Additions to outsource contract costs   (289 )     (3,130 )
Net cash used in operating activities    (66,160 )      (47,357 )
           
Cash flows from investing activities          
Purchases of property, plant, and equipment   (6,893 )     (10,797 )
Additions to internally developed software   (2,988 )     (5,074 )
Cash paid in acquisition, net of cash received   (12,500 )     (5,000 )
Proceeds from sale of assets   50,126       360  
Net cash provided by (used in) investing activities    27,745        (20,511 )
           
Cash flows from financing activities          
Repurchases of Common Stock         (3,480 )
Borrowings from other loans   28,626       21,530  
Borrowings under factoring arrangement and A/R Facility   166,786       48,748  
Principal repayment on borrowings under factoring arrangement and A/R Facility   (84,121 )     (49,243 )
Cash paid for withholding taxes on vested RSUs         (223 )
Proceeds from senior secured term loans         29,850  
Lease terminations   (331 )     (314 )
Cash paid for debt issuance costs   (12,708 )     (7 )
Borrowings from senior secured revolving facility   29,750       130,500  
Repayments on senior secured revolving facility   (14,200 )     (91,500 )
Principal payments on finance lease obligations   (9,614 )     (13,598 )
Principal repayments on senior secured term loans and other loans   (37,283 )     (32,996 )
Net cash provided by financing activities    66,905        39,267  
Effect of exchange rates on cash   619       (29 )
Net increase (decrease) in cash and cash equivalents     29,109        (28,630 )
Cash, restricted cash, and cash equivalents          
Beginning of period   14,099       43,854  
End of period $ 43,208     $ 15,224  
           
Supplemental cash flow data:          
Income tax payments, net of refunds received $ 2,767     $ 6,981  
Interest paid   140,751       131,744  
Noncash investing and financing activities:          
Assets acquired through right-of-use arrangements   2,472       9,352  
Settlement gain on related party payable to Ex-Sigma 2   1,287        
Accrued capital expenditures   1,699       2,388  
           

Exela Technologies
Schedule 1: Third Quarter and YTD 2020 vs. Third Quarter and YTD 2019 Financial Performance



                     
$ in millions Q3'20 Q3'19   Change ($)   YTD'20 YTD'19   Change ($)
                     
Information and Transaction Processing Solutions 234.4 292.6   (58.2)   761.5 927.6   (166.1)
Healthcare Solutions 54.2 62.1   (7.9)   167.4 186.8   (19.4)
Legal and Loss Prevention Services 16.7 18.8   (2.1)   49.5 54.2   (4.7)
Total Revenue  305.3 373.5   (68.3)   978.5 1,168.8   (190.3)
% change -18%         -16%      
                     
Cost of revenue (exclusive of depreciation and amortization) 234.2 295.4   (61.2)   768.5 909.9   (141.3)
Gross profit  71.1 78.1   (7.0)   209.9 258.9   (49.0)
as a % of revenue 23% 21%   2%   21% 22%   -0.7%
                     
SG&A 42.8 48.3   (5.5)   140.2 149.2   (9.0)
Depreciation and amortization 22.1 25.1   (3.0)   68.1 76.5   (8.4)
Impairment of goodwill and other intangible assets - 97.2   (97.2)   - 97.2   (97.2)
Related party expense 1.4 1.4   (0.1)   4.1 7.8   (3.7)
Operating (loss) income  4.8 (93.9)   98.7   (2.5) (71.7)   69.2
as a % of revenue 2% -25%   27%   0% -6%   5.9%
                     
Interest expense, net 43.6 40.6   3.0   129.6 120.2   9.4
Sundry expense (income) & Other income, net (10.8) 0.6   (11.4)   (45.9) 6.0   (51.9)
Net loss before income taxes  (28.0) (135.1)   107.1   (86.2) (199.3)   113.1
Income tax expense (benefit) 0.3 (3.8)   4.1   3.4 5.7   (2.2)
Net income (loss)  (28.3) (131.3)   103.0   (89.7) (205.0)   115.4
as a % of revenue -9% -35%   26%   -9% -18%   8.4%
                     
Depreciation and amortization 22.1 25.1   (3.0)   68.1 76.5   (8.4)
Interest expense, net 43.6 40.6   3.0   129.6 120.2   9.4
Income tax expense (benefit) 0.3 (3.8)   4.1   3.4 5.7   (2.2)
EBITDA  37.7 (69.4)   107.1   111.5 (2.6)   114.2
as a % of revenue 12% -19%   31%   11% 0%   11.6%
                     
EBITDA Adjustments                   
 1 Gain / loss on derivative instruments (0.9) 0.6   (1.5)   (0.5) 5.0   (5.5)
 2 Non-Cash and Other Charges (1.9) 111.4   (113.3)   (22.7) 136.0   (158.7)
 3 Transaction and integration costs 2.6 1.2   1.4   11.7 4.2   7.5
  Sub-Total (Adj. EBITDA before O&R)  37.4 43.7   (6.3)   100.1 142.6   (42.5)
 4 Optimization and restructuring expenses 11.3 16.8   (5.6)   36.1 59.2   (23.1)
Adjusted EBITDA  48.7 60.5    (11.9)   136.2 201.8   (65.6)
as a % of revenue 16.0% 16.2%   -0.3%   13.9% 17.3%   -3.3%
                     

Exela Technologies
Schedule 2: Reconciliation of Adjusted EBITDA and constant currency revenues

                 
Reconciliation of Non-GAAP Financial Measures to GAAP Measures            
                 
                 
Non-GAAP constant currency revenue reconciliation                
($ in millions)   Three months ended   Nine months ended
  30-Sep-20   30-Sep-19   30-Sep-20   30-Sep-19
Revenues, as reported (GAAP)   $305.3   $373.5   $978.5   $1,168.8
Foreign currency exchange impact (1)   (2.4)       0.8    
Revenues, at constant currency (Non-GAAP)   $302.9   $373.5   $979.2   $1,168.8
                 
(1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the three months and nine months ended September 30, 2019, to the revenues during the corresponding period in 2020.
                 
                 
                 
Reconciliation of Adjusted EBITDA                
($ in millions)   Three months ended   Nine months ended
  30-Sep-20   30-Sep-19   30-Sep-20   30-Sep-19
Net loss (GAAP)   ($28.3)   ($131.3)   ($89.7)   ($205.0)
Interest expense   43.6   40.6   129.6   120.2
Taxes   0.3   (3.8)   3.4   5.7
Depreciation and amortization   22.1   25.1   68.1   76.5
EBITDA (Non-GAAP)   $37.7   ($69.4)   $111.5   ($2.6)
Transaction and integration costs   2.6   1.2   11.7   4.2
Optimization and restructuring expenses   11.3   16.8   36.1   59.2
Gain / loss on derivative instruments   (0.9)   0.6   (0.5)   5.0
Other Charges   (1.9)   111.4   (22.7)   136.0
Adjusted EBITDA (Non-GAAP)   $48.7   $60.5   $136.2   $201.8
Foreign currency exchange impact (1)   0.1       1.1   -
Adjusted EBITDA, at constant currency (Non-GAAP)   $48.8   $60.5   $137.3   $201.8
                 
(1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the three months and nine months ended September 30, 2019, to the adjusted EBITDA during the corresponding period in 2020.
 

Schedule 3: Non-GAAP Revenue reconciliation & Adjusted EBITDA margin on Revenue net of pass through & LMCE

                 
Non-GAAP revenue reconciliation & Adjusted EBITDA margin on revenue net of pass through & LMCE    
                 
($ in millions)   Three months ended   Nine months ended
  30-Sep-20   30-Sep-19   30-Sep-20   30-Sep-19
Revenues, as reported (GAAP)   $305.4   $373.5   $978.5   $1,168.8
(-) Postage & postage handling   51.0   63.6   176.0   205.3
Revenue - Net of pass through (Non-GAAP)   $254.4   $309.9   $802.6   $963.5
(-) LMCE   -   -   -   2.1
Revenue - Net of pass through & LMCE (Non-GAAP)   $254.4   $309.9   $802.6   $961.4
Revenue growth %   (17.9%)       (16.5%)    
                 
Adjusted EBITDA (Non-GAAP)   $48.7   $60.5   $136.2   $201.8
                 
Adjusted EBITDA margin    19.1%   19.5%   17.0%   21.0%
                 

Media Contact: Kevin McLaughlin
E: kevin.mclaughlin@icrinc.com
T: 646-277-1234

Investor Contact: William Maina
E: IR@exelatech.com 
T: 646-277-1236


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Source: Exela Technologies, Inc.

 
 
 
 
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