Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA),
a location-agnostic global business process automation (“BPA”)
leader across numerous industries, announced today that it has
filed its Quarterly Report on Form 10-Q for the three months ended
March 31, 2020.
“We are pleased to report our first quarter 2020
results, which include revenue above the high-end of our previously
announced range. While we expect that the COVID-19 pandemic will
impact our 2020 performance, Exela is well positioned to navigate
this uncertain environment and emerge a stronger company than
before. We have a resilient business model supported by the
mission-critical solutions we provide our customers, and our
near-shore and off-shore global delivery platform which maintained
over 96% of Service Level Agreements to our customers even during
COVID-19. As virtually every company in the world is being forced
to re-examine their business models and cost structures, Exela is
uniquely positioned to help customers address these new challenges
through our BPA solutions. These solutions deliver increased
operational efficiency and cost reduction through digital
transformation and automation. Looking ahead, we remain focused on
our initiatives to grow our core lines of business, improve our
profit margin and cash flow performance, and increase our liquidity
position,” said Ronald Cogburn, Chief Executive Officer of
Exela.
First Quarter 2020 Financial
Highlights
- Revenue: Revenue was
$365.5 million, a decline of 9.6% from $404.4 million in the first
quarter of 2019. Revenue for the Information and Transaction
Processing Solutions segment was $284.1 million, a decline of 12.6%
year-over-year attributable primarily to exiting contracts and
statements of work in late 2019 from certain customers with revenue
that we believe was unpredictable, non-recurring and were not a
strategic fit to Company’s long-term success or unlikely to achieve
the Company’s long-term target margins. Healthcare Solutions
revenue was $64.0 million, an increase of 4.4% year-over-year,
driven by increased volumes with existing customers. Legal and Loss
Prevention Services revenue was $17.3 million, a decline of
approximately $0.5 million, or 2.8% from the first quarter of
2019.Revenue excluding the previously announced low margin contract
exit (“LMCE”) and pass through revenues from postage and postage
handling with either zero or nominal margins (“pass through
revenue”) (4) was $295.7 million in the first
quarter of 2020, representing a decrease of 9.6% from $327.1
million in the first quarter of 2019. 83% of first quarter 2020
revenue was earned in the Americas, 15% was in EMEA and 2% was in
rest of world.
- Operating income /
(loss): Operating loss for the first quarter of 2020 was
$2.2 million, compared with operating income of $16.5 million in
the first quarter of 2019. The year-over-year decrease in operating
income was primarily attributable to lower revenue and gross profit
compared with the first quarter of 2019.
- Net Loss: Net Loss
for the first quarter of 2020 was $12.7 million, compared with a
net loss of $32.2 million in the first quarter of 2019. The
year-over-year improvement in net loss was primarily due to a $35.0
million non-cash, one-time gain recognized in the first quarter of
2020 related to the sale of the Company’s Tax Benefit Group (“TBG”)
business.
- Adjusted
EBITDA: Adjusted EBITDA for the first quarter of
2020 was $44.4 million, compared to $76.4 million in the first
quarter of 2019. Adjusted EBITDA margin for the first quarter of
2020 was 12.1% compared to Adjusted EBITDA margin of 18.9% in the
first quarter of 2019. The decrease in first quarter 2020 Adjusted
EBITDA was mainly driven by lower revenue and gross profit compared
with the first quarter of 2019, partially offset by continued
realization of savings flow-through.Adjusted EBITDA margin, based
on revenue excluding LMCE and pass through revenue, was 15.0% in
the first quarter of 2020, compared with 23.3% in the first quarter
of 2019.
- Capital Expenditures:
Capital expenditures for the first quarter of 2020 were 1.3% of
revenue compared to 1.8% of revenue in the first quarter of
2019.
- Common Stock: As of
June 26, 2020, there were 147,511,430 total shares of common stock
outstanding and an additional 3,923,385 shares of common stock
reserved for issuance for our outstanding preferred shares on an
as-converted basis.
- Total employees as of March 31, 2020
were 22,058 as compared to 22,766 as of December 31, 2019.
Balance Sheet: At March 31,
2020, Exela’s total net debt was $1.518 billion.
Debt Reduction and Liquidity
Improvement
On November 12, 2019, Exela announced that its
Board of Directors adopted a debt reduction and liquidity
improvement initiative (“Initiative”), with the goal of increasing
the Company’s liquidity to approximately $125.0 to $150.0 million,
and repaying debt with a target debt reduction of approximately
$150.0 to $200.0 million. In accordance with this Initiative, Exela
announced two transactions in the first quarter of 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 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. The Company
believes it is on schedule for additional divestitures with
expected proceeds in the range of $110.0 million to $160.0 million
in the aggregate.
Second Quarter and Full Year 2020
Outlook
- For the second quarter of 2020, Exela
currently expects revenue to be in the range of $300.0 million to
$305.0 million. The Company's second quarter revenue outlook
includes approximately $35.0 million to $40.0 million in negative
impact from lower volumes primarily from certain Healthcare and
Banking, Financial Services and Insurance clients as a result of
the COVID-19 pandemic.
- The depth and duration of the economic
impact from COVID-19 on Exela and its customers’ businesses remains
unknown. Given the uncertainties surrounding COVID-19 and its
impacts on visibility, Exela has delayed providing financial
guidance for full year 2020. However, we do expect the gross profit
margins to increase post COVID-19 downdraft as volumes
normalize.
(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
first quarter 2020 financial results at 5 p.m. ET on June 30,
2020. To access this call, dial 833-255-2831 or +
412-902-6724 (international). A replay of this conference
call will be available through July 7, 2020 at 877-344-7529 or +
412-317-0088 (international). The replay passcode is
10145235. 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 22,000 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 March 31, 2020 and December
31, 2019(in thousands of United States dollars except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
|
(Unaudited) |
|
(Audited) |
Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
113,013 |
|
|
$ |
6,198 |
|
Restricted
cash |
|
|
9,563 |
|
|
|
7,901 |
|
Accounts
receivable, net of allowance for doubtful accounts of $5,508 and
$4,975, respectively |
|
|
242,757 |
|
|
|
261,400 |
|
Related
party receivables |
|
|
866 |
|
|
|
716 |
|
Inventories,
net |
|
|
17,353 |
|
|
|
19,047 |
|
Prepaid
expenses and other current assets |
|
|
30,271 |
|
|
|
23,663 |
|
Total current assets |
|
|
413,823 |
|
|
|
318,925 |
|
Property,
plant and equipment, net of accumulated depreciation of $180,378
and $176,995, respectively |
|
|
107,586 |
|
|
|
113,637 |
|
Operating
lease right-of-use assets, net |
|
|
85,983 |
|
|
|
93,627 |
|
Goodwill |
|
|
358,880 |
|
|
|
359,771 |
|
Intangible
assets, net |
|
|
329,837 |
|
|
|
342,443 |
|
Deferred
income tax assets |
|
|
11,661 |
|
|
|
12,032 |
|
Other
noncurrent assets |
|
|
20,293 |
|
|
|
17,889 |
|
Total assets |
|
$ |
1,328,063 |
|
|
$ |
1,258,324 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
(Deficit) |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts
payables |
|
$ |
74,093 |
|
|
$ |
86,167 |
|
Related
party payables |
|
|
1,323 |
|
|
|
1,740 |
|
Income tax
payable |
|
|
2,532 |
|
|
|
352 |
|
Accrued
liabilities |
|
|
116,557 |
|
|
|
121,553 |
|
Accrued
compensation and benefits |
|
|
54,034 |
|
|
|
48,574 |
|
Accrued
interest |
|
|
23,786 |
|
|
|
48,769 |
|
Customer
deposits |
|
|
25,605 |
|
|
|
27,765 |
|
Deferred
revenue |
|
|
18,455 |
|
|
|
16,282 |
|
Obligation
for claim payment |
|
|
40,225 |
|
|
|
39,156 |
|
Current
portion of finance lease liabilities |
|
|
13,214 |
|
|
|
13,788 |
|
Current
portion of operating lease liabilities |
|
|
24,177 |
|
|
|
25,345 |
|
Current
portion of long-term debts |
|
|
36,691 |
|
|
|
36,490 |
|
Total current liabilities |
|
|
430,692 |
|
|
|
465,981 |
|
Long-term
debt, net of current maturities |
|
|
1,520,619 |
|
|
|
1,398,385 |
|
Finance
lease liabilities, net of current portion |
|
|
16,954 |
|
|
|
20,272 |
|
Pension
liabilities |
|
|
28,600 |
|
|
|
25,681 |
|
Deferred
income tax liabilities |
|
|
7,473 |
|
|
|
7,996 |
|
Long-term
income tax liabilities |
|
|
2,795 |
|
|
|
2,806 |
|
Operating
lease liabilities, net of current portion |
|
|
66,848 |
|
|
|
73,282 |
|
Other
long-term liabilities |
|
|
7,508 |
|
|
|
6,962 |
|
Total liabilities |
|
|
2,081,489 |
|
|
|
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 147,508,669 shares
outstanding at March 31, 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 March 31,
2020 and 4,294,233 shares issued and outstanding at December 31,
2019 |
|
|
1 |
|
|
|
1 |
|
Additional
paid in capital |
|
|
445,452 |
|
|
|
445,452 |
|
Less: Common
Stock held in treasury, at cost; 7,357,881 shares at March 31, 2020
and 2,787,147 shares at December 31, 2019 |
|
|
(10,949 |
) |
|
|
(10,949 |
) |
Equity-based
compensation |
|
|
50,197 |
|
|
|
49,336 |
|
Accumulated
deficit |
|
|
(1,224,178 |
) |
|
(1,211,508 |
) |
Accumulated
other comprehensive loss: |
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
|
(6,409 |
) |
|
|
(7,329 |
) |
Unrealized
pension actuarial losses, net of tax |
|
|
(7,555 |
) |
|
|
(8,059 |
) |
Total
accumulated other comprehensive loss |
|
|
(13,964 |
) |
|
|
(15,388 |
) |
Total stockholders’ deficit |
|
|
(753,426 |
) |
|
|
(743,041 |
) |
Total liabilities and stockholders’ deficit |
|
$ |
1,328,063 |
|
|
$ |
1,258,324 |
|
|
|
|
|
|
|
|
|
Exela
Technologies, Inc. and SubsidiariesConsolidated
Statements of Operations for the three months ended March 31, 2020
and 2019(in thousands of United States dollars except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2019 |
|
|
2020 |
|
(Restated) |
Revenue |
|
$ |
365,451 |
|
|
$ |
404,357 |
|
Cost of
revenue (exclusive of depreciation and amortization) |
|
|
292,539 |
|
|
|
310,601 |
|
Selling,
general and administrative expenses (exclusive of depreciation and
amortization) |
|
|
50,374 |
|
|
|
49,677 |
|
Related
party expense |
|
|
1,551 |
|
|
|
998 |
|
Operating income (loss) |
|
|
(2,198 |
) |
|
|
16,457 |
|
Other expense (income), net: |
|
|
|
|
|
|
Sundry expense, net |
|
|
1,082 |
|
|
|
2,715 |
|
Other expense (income), net |
|
|
(34,657 |
) |
|
|
1,493 |
|
Net
loss before income taxes |
|
|
(10,211 |
) |
|
|
(27,452 |
) |
Income tax expense |
|
|
(2,459 |
) |
|
|
(4,720 |
) |
Net
loss |
|
$ |
(12,670 |
) |
|
$ |
(32,172 |
) |
Cumulative dividends for Series A Preferred Stock |
|
|
1,440 |
|
|
|
(914 |
) |
Net
loss attributable to common stockholders |
|
$ |
(11,230 |
) |
|
$ |
(33,086 |
) |
Loss
per share: |
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
Exela
Technologies, Inc. and SubsidiariesConsolidated
Statements of Cash Flows For the three months
ended March 31, 2020 and 2019(in thousands of United
States dollars unless otherwise stated) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2019 |
|
|
2020 |
|
(Restated) |
Cash
flows from operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(12,670 |
) |
|
$ |
(32,172 |
) |
Adjustments
to reconcile net loss |
|
|
|
|
|
|
Depreciation and amortization |
|
|
23,185 |
|
|
|
26,624 |
|
Original issue discount and debt issuance cost amortization |
|
|
3,193 |
|
|
|
2,852 |
|
Provision for doubtful accounts |
|
|
74 |
|
|
|
800 |
|
Deferred income tax provision |
|
|
(401 |
) |
|
|
1,076 |
|
Share-based compensation expense |
|
|
861 |
|
|
|
2,798 |
|
Foreign currency remeasurement |
|
|
(936 |
) |
|
|
35 |
|
Loss (gain) on sale of assets |
|
|
(35,246 |
) |
|
|
54 |
|
Fair value adjustment for interest rate swap |
|
|
845 |
|
|
|
1,677 |
|
Change in operating assets and liabilities, net effect from
acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
13,476 |
|
|
|
(8,742 |
) |
Prepaid expenses and other assets |
|
|
(5,678 |
) |
|
|
(632 |
) |
Accounts payable and accrued liabilities |
|
|
(21,420 |
) |
|
|
(33,033 |
) |
Related party balances |
|
|
(568 |
) |
|
|
(1,551 |
) |
Additions to outsource contract costs |
|
|
(88 |
) |
|
|
(2,434 |
) |
Net cash used in operating activities |
|
|
(35,373 |
) |
|
|
(42,648 |
) |
|
|
|
|
|
|
|
Cash
flows from investing activities |
|
|
|
|
|
|
Purchases of property, plant, and equipment |
|
|
(3,591 |
) |
|
|
(5,572 |
) |
Additions to internally developed software |
|
|
(1,153 |
) |
|
|
(1,879 |
) |
Cash paid in acquisition, net of cash received |
|
|
(3,500 |
) |
|
|
— |
|
Proceeds from sale of assets |
|
|
38,222 |
|
|
|
7 |
|
Net cash provided by (used in) investing
activities |
|
|
29,978 |
|
|
|
(7,444 |
) |
|
|
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
|
|
|
Repurchases of Common Stock |
|
|
— |
|
|
|
(2,872 |
) |
Borrowings from other loans |
|
|
11,241 |
|
|
|
6,904 |
|
Borrowings under factoring arrangement and A/R Facility |
|
|
131,591 |
|
|
|
14,678 |
|
Principal repayment on borrowings under factoring arrangement and
A/R Facility |
|
|
(23,042 |
) |
|
|
(13,560 |
) |
Lease terminations |
|
|
(14 |
) |
|
|
(45 |
) |
Cash paid for debt issuance costs |
|
|
(2,908 |
) |
|
|
— |
|
Borrowings from senior secured revolving facility |
|
|
29,750 |
|
|
|
51,000 |
|
Repayments on senior secured revolving facility |
|
|
(14,000 |
) |
|
|
(21,000 |
) |
Principal payments on finance lease obligations |
|
|
(3,187 |
) |
|
|
(5,077 |
) |
Principal repayments on senior secured term loans and other
loans |
|
|
(15,343 |
) |
|
|
(10,498 |
) |
Net cash provided by financing activities |
|
|
114,088 |
|
|
|
19,530 |
|
Effect of exchange rates on cash |
|
|
(216 |
) |
|
|
(32 |
) |
Net increase (decrease) in cash and cash
equivalents |
|
|
108,477 |
|
|
|
(30,594 |
) |
Cash, restricted cash, and cash equivalents |
|
|
|
|
|
|
Beginning of period |
|
|
14,099 |
|
|
|
43,854 |
|
End of period |
|
$ |
122,576 |
|
|
$ |
13,260 |
|
|
|
|
|
|
|
|
Supplemental cash flow data: |
|
|
|
|
|
|
Income tax payments, net of refunds received |
|
$ |
623 |
|
|
$ |
1,356 |
|
Interest paid |
|
|
61,852 |
|
|
|
60,573 |
|
Noncash investing and financing activities: |
|
|
|
|
|
|
Assets acquired through right-of-use arrangements |
|
|
270 |
|
|
|
4,097 |
|
Accrued capital expenditures |
|
|
1,565 |
|
|
|
809 |
|
|
|
|
|
|
|
|
|
Exela
TechnologiesSchedule 1: First Quarter 2020 vs.
First Quarter 2019 Financial Performance |
|
|
|
|
$ in millions |
Q1'20 |
Q1'19 |
Change ($) |
|
|
|
|
|
Information and Transaction Processing Solutions |
284.1 |
|
325.2 |
|
(41.1 |
) |
Healthcare Solutions |
64.0 |
|
61.3 |
|
2.7 |
|
Legal and Loss Prevention Services |
17.3 |
|
17.8 |
|
(0.5 |
) |
Total Revenue |
365.5 |
|
404.4 |
|
(38.9 |
) |
% change |
-10 |
% |
3 |
% |
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization) |
292.5 |
|
310.6 |
|
(18.1 |
) |
Gross profit |
72.9 |
|
93.8 |
|
(20.8 |
) |
% change |
-22 |
% |
-5 |
% |
|
as a % of revenue |
20 |
% |
23 |
% |
|
|
|
|
|
|
SG&A |
50.4 |
|
49.7 |
|
0.7 |
|
Depreciation and amortization |
23.2 |
|
26.6 |
|
(3.4 |
) |
Impairment of goodwill and other intangible assets |
- |
|
- |
|
- |
|
Related party expense |
1.6 |
|
1.0 |
|
0.6 |
|
Operating (loss) income |
(2.2 |
) |
16.5 |
|
(18.7 |
) |
as a % of revenue |
-1 |
% |
4 |
% |
|
|
|
|
|
|
Interest expense, net |
41.6 |
|
39.7 |
|
1.9 |
|
Loss on extinguishment of debt |
- |
|
- |
|
- |
|
Sundry expense (income) & Other income, net |
(33.6 |
) |
4.2 |
|
(37.8 |
) |
Net loss before income taxes |
(10.2 |
) |
(27.5 |
) |
17.2 |
|
Income tax expense (benefit) |
2.5 |
|
4.7 |
|
(2.3 |
) |
Net income (loss) |
(12.7 |
) |
(32.2 |
) |
19.5 |
|
as a % of revenue |
-3 |
% |
-8 |
% |
|
|
|
|
|
|
Depreciation and amortization |
23.2 |
|
26.6 |
|
(3.4 |
) |
Interest expense, net |
41.6 |
|
39.7 |
|
1.9 |
|
Income tax expense (benefit) |
2.5 |
|
4.7 |
|
(2.3 |
) |
EBITDA |
54.6 |
|
38.9 |
|
15.7 |
|
as a % of revenue |
15 |
% |
10 |
% |
|
|
|
|
|
|
EBITDA Adjustments |
|
|
|
1 |
Gain / loss on derivative instruments |
0.8 |
|
1.7 |
|
(0.8 |
) |
2 |
Non-Cash and Other Charges |
(28.5 |
) |
11.1 |
|
(39.7 |
) |
3 |
Transaction and integration costs |
4.4 |
|
1.0 |
|
3.4 |
|
4 |
Optimization and restructuring expenses |
13.1 |
|
23.7 |
|
(10.5 |
) |
Adjusted EBITDA |
44.4 |
|
76.4 |
|
(32.0 |
) |
% change |
-42 |
% |
10 |
% |
|
as a % of revenue |
12 |
% |
19 |
% |
-7 |
% |
|
|
|
|
|
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 |
|
|
|
|
|
Three months ended |
($ in millions) |
|
31-Mar-20 |
|
31-Mar-19 |
Revenues, as reported (GAAP) |
|
$365.5 |
|
|
$404.4 |
|
Foreign
currency exchange impact (1) |
|
1.8 |
|
|
|
Revenues, at constant currency (Non-GAAP) |
|
$367.2 |
|
|
$404.4 |
|
|
|
|
|
|
(1) Constant currency excludes the impact of foreign currency
fluctuations and is computed by applying the average exchange rates
for the three months ended March 31, 2019, to the revenues during
the corresponding period in 2020. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA |
|
|
|
|
|
|
Three months ended |
($ in
millions) |
|
31-Mar-20 |
|
31-Mar-19 |
Net loss (GAAP) |
|
($12.7 |
) |
|
($32.2 |
) |
Interest
expense |
|
41.6 |
|
|
39.7 |
|
Taxes |
|
2.5 |
|
|
4.7 |
|
Depreciation
and amortization |
|
23.2 |
|
|
26.6 |
|
EBITDA (Non-GAAP) |
|
$54.6 |
|
|
$38.9 |
|
Transaction
and integration costs |
|
4.4 |
|
|
1.0 |
|
Optimization
and restructuring expenses |
|
13.1 |
|
|
23.7 |
|
Gain / loss
on derivative instruments |
|
0.8 |
|
|
1.7 |
|
Other
Charges |
|
(28.5 |
) |
|
11.1 |
|
Adjusted EBITDA (Non-GAAP) |
|
$44.4 |
|
|
$76.4 |
|
Foreign
currency exchange impact (1) |
|
0.1 |
|
|
|
Adjusted EBITDA, at constant currency
(Non-GAAP) |
|
$44.5 |
|
|
$76.4 |
|
|
|
|
|
|
(1) Constant currency excludes the impact of foreign currency
fluctuations and is computed by applying the average exchange rates
for the three months ended March 31, 2019, to the adjusted EBITDA
during the corresponding period in 2020. |
|
|
|
|
|
|
|
|
|
|
Schedule 3:
Non-GAAP Revenue reconciliation & Adjusted EBITDA margin on
Revenue net of pass through & LMCE |
|
|
|
|
|
Non-GAAP revenue reconciliation & Adjusted EBITDA
margin on revenue net of pass through & LMCE |
|
|
|
|
|
|
|
Three months ended |
($ in
millions) |
|
31-Mar-20 |
|
31-Mar-19 |
Revenues, as reported (GAAP) |
|
$365.5 |
|
|
$404.4 |
|
(-) Postage
& postage handling |
|
69.7 |
|
|
75.5 |
|
Revenue - Net of pass through (Non-GAAP) |
|
$295.7 |
|
|
$328.9 |
|
(-)
LMCE |
|
- |
|
|
1.8 |
|
Revenue - Net of pass through & LMCE
(Non-GAAP) |
|
$295.7 |
|
|
$327.1 |
|
Revenue
growth % |
|
(9.6 |
%) |
|
|
|
|
|
|
|
Adjusted EBITDA (Non-GAAP) |
|
$44.4 |
|
|
$76.4 |
|
|
|
|
|
|
Adjusted EBITDA margin |
|
15.0 |
% |
|
23.3 |
% |
|
|
|
|
|
Media Contact: Kevin McLaughlinE:
kevin.mclaughlin@icrinc.com T: 646-277-1234
Investor Contact: William MainaE:
IR@exelatech.com T: 646-277-1236
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