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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 14, 2023

 

 

 

EXELA TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36788   47-1347291
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
 

(I.R.S. Employer
Identification No.)

 

2701 East Grauwyler Road

Irving, Texas

  75061
(Address of principal executive offices)   (Zip Code)

 

(844) 935-2832
(Registrant's telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share XELA The Nasdaq Stock Market LLC
6.00% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.0001 per share XELAP The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

¨ Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

Item 2.02 Results of Operation and Financial Condition.

 

On August 14, 2023, Exela Technologies, Inc. (the “Company”) issued a press release announcing its preliminary financial results for the quarter ended June 30, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

 

The information in this Current Report on Form 8-K furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section, and they shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The Company is making reference to non-GAAP financial information in the press release. A reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

On August 11, 2023, the Company received a notice of non-compliance from Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (the “Form 10-Q”), the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed companies to timely file all periodic financial reports with the U.S. Securities and Exchange Commission (the “SEC”). Under Nasdaq’s listing rules, the Company has 60 calendar days to submit a plan to regain compliance. If the plan is accepted by Nasdaq, the Company can be granted up to 180 calendar days from the Form 10-Q due date, or until or until February 5, 2024, to regain compliance.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number   Exhibit Description
     
99.1*   Press Release dated August 14, 2023
     
104   The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

 

* Furnished herewith

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 14, 2023

 

  EXELA TECHNOLOGIES, INC.
   
  By: /s/ Erik Mengwall
    Name: Erik Mengwall
    Title: Secretary

 

 

 

Exhibit 99.1

 

Exela Technologies, Inc. Reports
Preliminary
Second Quarter 2023 Results

 

Preliminary Second Quarter Highlights

 

Revenue of $272.9 million, up 2.3% year-over-year (up 2.5% on a constant currency basis)
Net loss of $30.9 million
Gross profit(1) of $60.9 million, up 23.0% or $11.4 million year-over-year, with a corresponding margin of 22.3% and up 3.8% year-over-year and up 1.4% sequentially
Adjusted EBITDA of $40.9 million, up 12.1% year-over-year, with a corresponding margin of 15.0% and up 17.8% sequentially
$106.2 million in new TCV(2) wins and renewal of $32.8M TCV reflect strength of award-winning best-in-class solutions and services
Long-term Liability(3) reduced to $792 million from $1.608 billion
Value enhancing initiatives include Completion of Debt Recapitalization and XBP Europe progress

 

Conference call scheduled for August 14, 2023 at 8:30 AM ET

 

Irving, TX – August 14, 2023 – Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA, XELAP), a global business process automation leader, announced today its financial results for the second quarter ended June 30, 2023.

 

“Our improving metrics in the second quarter are a result of many factors but certain ones stand above all - focus on cost management, debt reduction and the value proposition of our services and solutions enhanced by evolving AI,” said Par Chadha, Executive Chairman of Exela.

 

Second Quarter Highlights

 

Revenue: Revenue for Q2 2023 was $272.9 million, up 2.3% compared to $266.8 million in Q2 2022.
Revenue for the Information and Transaction Processing Solutions segment was $185.0 million, a decrease of 2.6% year-over-year, primarily due to lower volumes, customers rebalancing portfolios and attrition.
Healthcare Solutions revenue was $63.6 million, an increase of 12.8% year-over-year, led by higher volumes from our new and existing customers.
Legal and Loss Prevention Services revenue was $24.3 million, an increase of 19.5% year-over-year due to higher demand for services.

 

Operating income/(loss): Operating income for Q2 2023 was $11.2 million, compared with operating loss of $20.9 million in Q2 2022. The $32.1 million year over year improvement was primarily driven by higher revenue, lower cost of revenue, lower Selling, General and Administrative Expenses including a gain from sale of an asset.

 

Net Loss: Net loss for Q2 2023 was $30.9 million, compared with a net loss of $79.2 million in Q2 2022.

 

 

 

EBITDA(4): EBITDA for Q2 2023 was $31.6 million compared to a loss of $17.6 million in Q2 2022. EBITDA margin for Q2 2023 was 11.6% compared to (6.6)% in Q2 2022.
Adjusted EBITDA(5): Adjusted EBITDA for Q2 2023 was $40.9 million, an increase of 12.1% compared to $36.5 million in Q2 2022. Adjusted EBITDA margin for Q2 2023 was 15.0%, an increase of 130 basis points from 13.7% in Q2 2022.

 

Capital Expenditures: Capital expenditures for Q2 2023 were 1.4% of revenue compared to 2% of revenue in Q2 2022

 

Nasdaq Non-Compliance Notice

 

On August 11, 2023, Exela received a notice of non-compliance from Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (the “Form 10-Q”), the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed companies to timely file all periodic financial reports with the U.S. Securities and Exchange Commission (the “SEC”). Under Nasdaq’s listing rules, the Company has 60 calendar days to submit a plan to regain compliance. If the plan is accepted by Nasdaq, the Company can be granted up to 180 calendar days from the Form 10-Q due date, or until or until February 5, 2024, to regain compliance. The Company expects to complete its Form 10-Q and intends to file the Form 10-Q as soon as practicable to regain compliance with the Rule within the time period to provide the plan of compliance.

 

Earnings Conference Call and Audio Webcast

 

Exela will host a conference call to discuss its second quarter 2023 financial results at 8:30 AM ET on August 14, 2023. To access this call, dial 833-255-2831 or +1-412-902-6724 (international). The password for the call is “Exela Earnings Call”.

 

Shortly after the conclusion of the call, a replay will be available through May 18, 2023 at 877-344-7529 or +1-412-317-0088 (international). The replay passcode is 20333000. A replay will also be archived on the Exela investor relations website at http://investors.exelatech.com.

 

Exela invites all investors to ask questions that they would like addressed on the conference call. We ask investors to submit questions via email to IR@exelatech.com.

 

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.

 

Below are the notes referenced above:

(1)Gross Profit is defined as revenue less cost of revenue excluding depreciation and amortization
(2)TCV: Total Contract Value, the aggregate $USD value of a contract over its life
(3)Long-term liability: Includes senior secured term loan and revolving facility, senior secured 2023 notes, senior secured 2026 notes, Securitization facility and interest-bearing current liabilities calculated ending July 2023 beginning June 2021
(4)EBITDA is a non-GAAP measure. A reconciliation of EBITDA is attached to this release.
(5)Adjusted EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA is attached to this release.

 

2

 

 

About Exela

 

Exela Technologies is a business process automation (BPA) leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of experience 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. Utilizing foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry, departmental solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and the public sector. Through cloud-enabled platforms, built on a configurable stack of automation modules, and approximately 15,500 employees operating in 21 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.

 

Find out more at www.exelatech.com

To automatically receive Exela financial news by e-mail, please visit the Exela Investor Relations website, http://investors.exelatech.com/, and subscribe to E-mail Alerts.

 

Financial Disclosure Advisory

 

The preliminary unaudited financial results included in this press release are based on information available as of August 14, 2023 and management’s review of operations and financial results for the second quarter of 2023. Actual results may be materially different from these preliminary financial results. They remain subject to change based on the completion of customary review procedures and are forward-looking statements. The Company assumes no obligation to update these statements, except as may be required by law. The actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in the Company's annual and quarterly filings with the SEC. An independent registered public accounting firm has not reviewed or performed any procedures with respect to the preliminary unaudited financial information included in this release. The Company expects to file a quarterly report on Form 10-Q with respect to the period ended June 30, 2023, once an independent registered public accounting firm has reviewed the relevant unaudited financial information.

 

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.

 

3

 

 

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 the network outage described in this press release and those discussed under the heading “Risk Factors” in our Annual Report and in subsequent filings with the U.S. Securities and Exchange Commission (“SEC”). 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.

 

For more Exela news, commentary, and industry perspectives, visit: 

Website: https://investors.exelatech.com/

 

4

 

 

Twitter: @ExelaTech

LinkedIn: /exela-technologies

Facebook: @exelatechnologies

Instagram: @exelatechnologies

 

The information posted on the Company's website and/or via its social media accounts may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its social media accounts in addition to the Company's press releases, SEC filings and public conference calls and webcasts.

 

Investor and/or Media Contacts:

 

Vincent Kondaveeti

E: vincent.kondaveeti@exelatech.com

 

Mary Beth Benjamin

E: IR@exelatech.com

 

Source: Exela Technologies, Inc.

 

5

 

 

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of June 30, 2023 and December 31, 2022

(in thousands of United States dollars except share and per share amounts)

 

   June 30,   December 31, 
   2023   2022 
   (Unaudited and
Not Reviewed)
   (Audited) 
Assets          
Current assets          
Cash and cash equivalents  $10,718   $15,073 
Restricted cash   42,792    29,994 
Accounts receivable, net of allowance for credit losses of $6,927 and $6,402, respectively   106,831    101,616 
Related party receivables and prepaid expenses   463    759 
Inventories, net   11,055    16,848 
Prepaid expenses and other current assets   21,463    26,206 
Total current assets   193,322    190,496 
Property, plant and equipment, net of accumulated depreciation of $214,611 and $207,520, respectively   62,972    71,694 
Operating lease right-of-use assets, net   37,400    40,734 
Goodwill   170,391    186,802 
Intangible assets, net   182,350    200,982 
Deferred income tax assets   1,584    1,483 
Other noncurrent assets   26,785    29,721 
Total assets  $674,804   $721,912 
           
Liabilities and Stockholders' Equity (Deficit)          
Liabilities          
Current liabilities          
Accounts payable  $64,105   $79,249 
Related party payables   1,773    2,473 
Income tax payable   (539)   2,045 
Accrued liabilities   69,324    61,340 
Accrued compensation and benefits   50,691    54,143 
Accrued interest   60,103    60,901 
Customer deposits   15,906    16,955 
Deferred revenue   12,039    16,405 
Obligation for claim payment   62,294    44,380 
Current portion of finance lease liabilities   5,469    5,485 
Current portion of operating lease liabilities   11,079    11,867 
Current portion of long-term debts   106,372    154,802 
Total current liabilities   458,616    510,045 
Long-term debt, net of current maturities   958,005    942,035 
Finance lease liabilities, net of current portion   7,745    9,448 
Pension liabilities, net   17,732    16,917 
Deferred income tax liabilities   11,968    11,180 
Long-term income tax liabilities   3,801    2,742 
Operating lease liabilities, net of current portion   27,991    31,030 
Other long-term liabilities   5,955    6,104 
Total liabilities   1,491,813    1,529,501 
Commitments and Contingencies (Note 8)          
           
Stockholders' equity (deficit)          
Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 6,365,965 shares issued and 6,365,353 shares outstanding at June 30, 2023 and 1,393,889 shares issued and 1,393,276 shares outstanding at December 31, 2022   261    162 
Preferred stock, $0.0001 par value per share, 20,000,000 shares authorized at June 30, 2023 and December 31, 2022, respectively          
Series A Preferred Stock, 2,778,111 shares issued and outstanding at June 30, 2023 and December 31, 2022   1    1 
Series B Preferred Stock, 3,029,900 shares issued and outstanding at June 30, 2023 and December 31, 2022        
Additional paid in capital   1,169,517    1,102,619 
Less: Common Stock held in treasury, at cost; 612 shares at June 30, 2023 and December 31, 2022   (10,949)   (10,949)
Equity-based compensation   57,272    56,958 
Accumulated deficit   (2,024,331)   (1,948,009)
Accumulated other comprehensive loss:          
Foreign currency translation adjustment   (4,992)   (4,788)
Unrealized pension actuarial losses, net of tax   (3,788)   (3,583)
Total accumulated other comprehensive loss   (8,780)   (8,371)
Total stockholders’ deficit   (817,009)   (807,589)
Total liabilities and stockholders’ deficit  $674,804   $721,912 

 

6

 

 

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the three and six months ended June 30, 2023 and 2022

(in thousands of United States dollars except share and per share amounts)

(Unaudited)

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2023 (Not
Reviewed)
   2022   2023 (Not
Reviewed)
   2022 
Revenue  $272,938   $266,770   $546,558   $546,168 
Cost of revenue (exclusive of depreciation and amortization)   212,059    217,277    428,526    440,781 
Selling, general and administrative expenses (exclusive of depreciation and amortization)   32,026    50,195    76,407    93,235 
Depreciation and amortization   14,890    17,993    31,450    36,205 
Related party expense   2,739    2,186    5,851    4,173 
Operating profit (loss)   11,224    (20,881)   4,324    (28,226)
Other expense (income), net:                    
Interest expense, net   45,092    42,271    89,272    82,031 
Debt modification and extinguishment costs (gain), net   (6,785)   8,117    (15,558)   9,001 
Sundry expense (income), net   1,500    (741)   2,248    (434)
Other expense (income), net   (232)   7,375    (514)   13,534 
Net loss before income taxes   (28,351)   (77,903)   (71,124)   (132,358)
Income tax expense   (2,535)   (1,296)   (5,198)   (3,797)
Net loss  $(30,886)  $(79,199)  $(76,322)  $(136,155)
Cumulative dividends for Series A Preferred Stock   (967)   (876)   (1,921)   (1,740)
Cumulative dividends for Series B Preferred Stock   (1,171)   (1,317)   (2,324)   (1,392)
Net loss attributable to common stockholders  $(33,024)  $(81,392)  $(80,567)  $(139,287)
Loss per share:                    
Basic and diluted  $(5.19)  $(643.71)  $(14.40)  $(1,310.32)

 

7

 

 

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2023 and 2022

(in thousands of United States dollars except share and per share amounts)

(Unaudited)

         
   Six Months Ended June 30, 
   2023 (Not
Reviewed)
   2022 
Cash flows from operating activities          
Net loss  $(76,322)  $(136,155)
Adjustments to reconcile net loss          
Depreciation and amortization   31,450    36,205 
Original issue discount and debt issuance cost amortization   16,064    5,804 
Debt modification and extinguishment costs (gain), net   (16,964)   3,533 
Credit loss expense   2,865    285 
Deferred income tax provision   776    1,383 
Share-based compensation expense   313    836 
Unrealized foreign currency losses (gain)   521    (989)
Loss (Gain) on sale of assets   (5,831)   508 
Change in operating assets and liabilities, net of effect from acquisitions          
Accounts receivable   (7,703)   80,674 
Prepaid expenses and other assets   6,495    (10,870)
Accounts payable and accrued liabilities   (639)   45,148 
Related party payables   (403)   (23)
Additions to outsource contract costs   (298)   (199)
Net cash provided by (used in) operating activities   (49,676)   26,140 
           
Cash flows from investing activities          
Purchase of property, plant and equipment   (3,357)   (10,689)
Additions to patents       (15)
Additions to internally developed software   (1,976)   (1,736)
Proceeds from sale of assets   29,811    194 
Net cash provided by (used in) investing activities   24,478    (12,246)
           
Cash flows from financing activities          
Proceeds from issuance of Common Stock from at the market offerings   69,260    177,388 
Dividend paid on Series B Preferred Stock       (1,396)
Payment for fractional shares on reverse stock split   (28)    
Cash paid for equity issuance costs from at the market offerings   (2,232)   (6,493)
Borrowings under factoring arrangement and Securitization Facility   62,858    69,143 
Principal repayment on borrowings under factoring arrangement and Securitization Facility   (63,577)   (160,684)
Cash paid for withholding taxes on vested RSUs       (195)
Lease terminations       (15)
Cash paid for debt issuance costs   (6,398)   (7,125)
Principal payments on finance lease obligations   (2,150)   (2,884)
Borrowings from senior secured revolving facility and BRCC revolver   9,600    12,500 
Repayments on senior secured revolving facility       (49,477)
Proceeds from issuance of 2026 Notes       56,583 
Borrowings from other loans   24,289    5,491 
Cash paid for debt repurchases   (11,858)    
Proceeds from Second Lien Note   31,500     
Repayment of BRCC term loan   (44,775)   (46,202)
Principal repayments on senior secured term loans and other loans   (32,991)   (15,007)
Net cash provided by financing activities   33,498    31,627 
Effect of exchange rates on cash   143    (404)
Net increase in cash and cash equivalents   8,443    45,117 
Cash, restricted cash, and cash equivalents          
Beginning of period   45,067    48,060 
End of period  $53,510   $93,177 
Supplemental cash flow data:          
Income tax payments, net of refunds received  $2,898   $4,453 
Interest paid   72,608    19,103 
Noncash investing and financing activities:          
Assets acquired through right-of-use arrangements   405    231 
Accrued capital expenditures   2,167    1,400 

 

8

 

 

Exela Technologies

Schedule 1: Second Quarter 2023 vs. Second Quarter 2022

Financial Performance

 

$ in million  Q2-2023   Q2-2022   Increase
(Decrease)
YoY ($ mn)
   Increase
(Decrease)
YoY (%)
   YTD'23   YTD'22   Increase
(Decrease)
YoY ($ mn)
   Increase
(Decrease)
YoY (%)
 
Information and Transaction Processing Solutions  $185.0   $190.0   $(5.0)   (2.6)%   378.7    395.0    (16.3)   (4.1)%
Healthcare Solutions   63.6    56.4    7.2    12.8%   126.6    113.0    13.6    12.0%
Legal and Loss Prevention Services   24.3    20.4    3.9    19.5%   41.2    38.2    3.0    7.9%
Total Revenue  $272.9   $266.8   $6.2    2.3%   546.6    546.2    0.4    0.1%
Gross profit   60.9    49.5    11.4    23.0%   118.0    105.4    12.6    12.0%
Gross profit margin   22.3%   18.6%   3.8%   380bps   21.6%   19.3%   2.3%   230bps
SG&A   32.0    50.2    (18.2)   (36.2)%   76.4    93.2    (16.8)   (18.0)%
Operating (loss) income   11.2    (20.9)   32.1    (153.8)%   4.3    (28.2)   32.6    (115.3)%
Operating margin   4.1%   (7.8)%   11.9%   1190bps   0.8%   (5.2)%   6.0%   600bps
Net income (loss)   (30.9)   (79.2)   48.3    (61.0)%   (76.3)   (136.2)   59.8    (43.9)%
Net income margin   (11.3)%   (29.7)%   18.4%   1840bps    (14.0)%   (24.9)%   11.0%   1100bps
EBITDA   31.6    (17.6)   49.3    (279.3)%   49.6    (14.1)   63.7    (451.2)%
EBITDA Margin   11.6%   (6.6)%   18.2%   1820bps    9.1%   (2.6)%   11.7%   1170bps
Adjusted EBITDA  $40.9   $36.5   $4.4    12.1%   75.6    72.6    3.0    4.1%
Adjusted EBITDA margin   15.0%   13.7%   1.3%   130bps    13.8%   13.3%   0.5%   50bps 

 

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Exela Technologies

Schedule 2: Reconciliation of Adjusted EBITDA and constant currency revenues

  

Non-GAAP constant currency revenue reconciliation                    

 

   Three months ended   Six months ended 
($ in millions)  30-Jun-23   30-Jun-22   31-Mar-23   30-Jun-23   30-Jun-22 
Revenues, as reported (GAAP)  $272.9   $266.8   $273.6   $546.6   $546.2 
Foreign currency exchange impact (1)   0.4         3.2    0.4      
Revenues, at constant currency (Non-GAAP)  $273.3   $266.8   $276.8   $547.0   $546.2 

 

(1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the three months and six months ended June 30, 2022, to the revenues during the corresponding period in 2023.

 

Reconciliation of Adjusted EBITDA

 

   Three months ended   Six months ended 
($ in millions)  30-Jun-23   30-Jun-22   31-Mar-23   30-Jun-23   30-Jun-22 
Net loss (GAAP)  $(30.9)  $(79.2)  $(45.4)  $(76.3)  $(136.2)
Interest expense   45.1    42.3    44.2    89.3    82.0 
Taxes   2.5    1.3    2.7    5.2    3.8 
Depreciation and amortization   14.9    18.0    16.6    31.4    36.2 
EBITDA (Non-GAAP)  $31.6   $(17.6)  $18.0   $49.6   $(14.1)
Transaction and integration costs   2.9    8.6    5.2    8.1    12.3 
Gain / loss on derivative instruments   (0.0)   -    (0.1)   (0.1)   (0.0)
Other Charges / (gains)   0.3    38.9    5.5    5.7    61.0 
Sub-Total (Adj. EBITDA before O&R)  $34.8   $29.9   $28.5   $63.3   $59.2 
Optimization and restructuring expenses   6.1    6.6    6.2    12.3    13.4 
Adjusted EBITDA (Non-GAAP)  $40.9   $36.5   $34.7   $75.6   $72.6 

 

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