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
ImprovementOn 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
WebcastExela 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/exelatechFollow
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
SubsidiariesConsolidated 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
SubsidiariesConsolidated 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
SubsidiariesConsolidated 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
TechnologiesSchedule 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
TechnologiesSchedule 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 McLaughlinE: kevin.mclaughlin@icrinc.comT:
646-277-1234
Investor Contact: William MainaE:
IR@exelatech.com T: 646-277-1236
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