UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| 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. |
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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/
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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 | % | 380 | bps | 21.6 | % | 19.3 | % | 2.3 | % | 230 | bps | ||||||||||||||||
| 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 | % | 1190 | bps | 0.8 | % | (5.2 | )% | 6.0 | % | 600 | bps | ||||||||||||||||
| 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 | % | 1840 | bps | (14.0 | )% | (24.9 | )% | 11.0 | % | 1100 | bps | ||||||||||||||||
| 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 | % | 1820 | bps | 9.1 | % | (2.6 | )% | 11.7 | % | 1170 | bps | ||||||||||||||||
| 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 | % | 130 | bps | 13.8 | % | 13.3 | % | 0.5 | % | 50 | bps | ||||||||||||||||
9
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 | ||||||||||
10