Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA),
a location-agnostic global business process automation (“BPA”)
leader, announced today its preliminary financial results for the
fourth quarter and year ended December 31, 2020.
“We are pleased to have exceeded our revenue
expectations for the fourth quarter and full year 2020. While 2020
was a challenging year for everyone due to the Covid-19 pandemic,
Exela continued to penetrate our significant market opportunity
with our technology-led automation solutions, such as those
provided by our Digital Asset Group. This reflects both continued
solid demand for our process automation solutions, and the ability
of our global team to adapt to these unprecedented times while
continuing to execute our multi-year strategy. Looking to 2021, we
believe Exela has the right strategy to capitalize on profitable
growth and further value creation,” said Ronald Cogburn, Chief
Executive Officer of Exela.
Full-Year 2020 Financial
Highlights
- Revenue: Revenue
was $1,292.6 million in 2020, a decline of 17.3% from $1,562.3
million in 2019 primarily due to pruning of transition revenue(5),
lower volumes as a result of COVID-19 and strategic asset sales.
Revenue for the Information and Transaction Processing Solutions
segment was $1,005.0 million, representing a decline of 18.6%
year-over-year. Healthcare Solutions revenue was $219.0
million, a decline of 14.7% year-over-year driven by reduced
volumes primarily as a result of COVID-19. Legal and Loss
Prevention Services revenue was $68.4 million, representing a
decline of 4.1% from 2019. Results in Legal and Loss Prevention
Services are primarily event driven with timing of revenue
sometimes unpredictable. Revenue excluding pass through revenues
from postage and postage handling with either zero or nominal
margins (“pass through revenue”) and the previously announced low
margin client exit (“LMCE”) (6) was $1,062.5 million, representing
a decrease of 17.3% from $1,284.9 million in 2019. In the public
sector, we are seeing temporary softness due to budget process
refinements as the new administration implements policies and
priorities.
- Operating income /
(loss): Operating loss in 2020 was $16.4 million, compared
with a loss of $321.2 million in 2019. The year-over-year
improvement in operating loss was primarily attributable to there
being no goodwill or other intangible asset impairment costs in
2020, compared with $349.6 million in 2019.
- Net Loss: Net Loss
for 2020 was $178.5 million, compared with a net loss of $509.1
million in 2019. The year over year improvement in net loss
primarily reflects the aforementioned improvement in operating
loss, no goodwill or other intangible asset impairment costs and
$45 million gains related to asset sales, partially offset by
higher interest expense.
- Adjusted
EBITDA: Adjusted EBITDA in 2020 was $173.4
million, compared with Adjusted EBITDA of $254.8 million in 2019.
Adjusted EBITDA margin for 2020 was 13.4% compared with Adjusted
EBITDA margin of 16.3% in 2019. The decrease in 2020 Adjusted
EBITDA was primarily driven by lower gross profit(7) partially
offset by operating leverage and planned reduction in O&R
costs. Adjusted EBITDA margin, based on revenue excluding pass
through revenue and the LMCE, was 16.3% in 2020, compared with
19.8% in 2019.
- Capital
Expenditures: Capital expenditures for 2020 were 1.2% of
revenue compared to 1.3% of revenue in 2019.
- Common
Stock: As of December 31, 2020, there were 49,242,225
total shares of common stock outstanding and an additional
1,404,621 shares of common stock reserved for issuance for our
outstanding preferred shares on an as-converted basis (in each case
adjusting for the January 2021 1:3 reverse split).
- Total employees as of December 31,
2020 were 19,000 as compared to 21,000 as of September 30,
2020.
- Customer retention rate in 2020 of
81%.
- Added $182 million of ACV including
14 new logos each with TCV of over $1 million in 2020.
- Digital Assets Group sales were 8%
of the total revenue in 2020, up from 7% in the nine months ended
September 30, 2020.
- $174 million of cost savings in
progress; incremental cash realization of $38 million expected in
2021 due to recently completed actions.
- Completed non-core asset
divestitures of $50 million in 2020; an additional $100-$150M of
asset sales in progress.
Fourth Quarter 2020 Financial
Highlights
- Revenue: Revenue
for the fourth quarter of 2020 was $314.1 million, a decline of
20.2% from $393.6 million in the fourth quarter of 2019 primarily
due to pruning of transition revenue(5), reduced customer volumes
as a result of COVID-19 and strategic asset sales. Revenue for the
Information and Transaction Processing Solutions segment was $243.5
million, a decline of 20.6% year-over-year. Healthcare Solutions
revenue was $51.6 million, a decrease of 26.0% year-over-year,
driven by reduced volumes primarily as a result of COVID-19. Legal
and Loss Prevention Services revenue was $18.9 million, an increase
of 10.7% year-over-year. Revenue excluding pass through revenue(6)
was $260 million in the fourth quarter of 2020, representing a
decrease of 19.6% from $323.5 million in the fourth quarter of
2019. Revenue excluding pass through revenue(6) increased 2.2%
sequentially from $254.4 million in the third quarter of
2020.
- Operating income /
(loss): Operating loss for the fourth quarter of 2020 was
$(13.9) million, compared with operating loss of $(249.5) million
in the fourth quarter of 2019. The year-over-year improvement in
operating loss was primarily attributable to there being no
goodwill or other intangible asset impairment costs in 2020,
compared with $252.4 million in Q4 2019.
- Net Loss: Net Loss
for the fourth quarter of 2020 was $88.9 million, compared with a
net loss of $304.1 million in the fourth quarter of 2019 primarily
due to the difference in goodwill or other intangible asset
impairment costs as described above.
- Adjusted
EBITDA: Adjusted EBITDA for the fourth quarter of
2020 was $37.2 million, a decrease of 29.9% from $53.0 million in
the fourth quarter of 2019. Adjusted EBITDA margin for the fourth
quarter of 2020 was 11.8%, compared with 13.5% in fourth quarter of
2019. The year over year decline in Adjusted EBITDA primarily
reflects lower gross profits(7) partially offset by operating
leverage and planned reduction in O&R costs. Adjusted EBITDA
margin, based on revenue excluding pass through revenue, was 14.3%
in the fourth quarter of 2020, compared with 16.4% in the fourth
quarter of 2019.
- Capital
Expenditures: Capital expenditures for the fourth quarter
of 2020 were 2.0% of revenue compared to 1.2% of revenue in the
fourth quarter of 2019.
Balance Sheet and Liquidity: At
December 31, 2020, Exela’s total liquidity was $108 million.
Exela’s total net debt at December 31, 2020 was $1.4 billion (as
determined in accordance with the Company's credit agreement).
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 connection with this Initiative,
Exela made two additional announcements in the fourth quarter of
2020.
- On December 17, 2020, Exela
announced that it entered into a 5-year, $145 million term loan
facility with Angelo Gordon. The facility provides for an initial
funding of approximately $92 million and subject to certain
conditions a further funding of approximately $53 million. A
portion of the proceeds from the initial funding were used to
retire all debt outstanding under Exela’s accounts receivables
securitization facility of approximately $83 million.
- On December 30, 2020, Exela
announced that it had retained UBS Investment Bank as an additional
financial advisor to assist the Company and management in pursuing
alternatives to strengthen its balance sheet and enhance
shareholder value.
- 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.
2021 Guidance
- Revenue range: $1.25 billion to $1.39 billion
- Gross margin range: 23% to 25%
- Adjusted EBITDA margin range: 16% to 17%
- Capital expenditures: ~1% of revenue
Note: Guidance is based on
constant-currency.Below are the notes referenced above.
(1) Gross proceeds of $26.8 million from the
Equity offering are before any fees and expenses. Please refer to
the equity capital raise related press release dated March 15th
2021 for more details.(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. A reconciliation of Adjusted EBITDA
(2021 Guidance) is not available on forward-looking basis without
unreasonable efforts due to the impact and timing on future
operating results arising from items excludes from the measures.(4)
Liquidity is defined per the third amendment of
the Company’s credit agreement effective May 15, 2020 and
includes $18.5 million as addbacks for fees paid for advisory and
professional services paid until December 31, 2020. At December 31,
2020, total cash and cash equivalents was $68.2 million (including
restricted cash not subject to legal restriction). The Company had
$26 million under its global credit facilities. Additionally, the
Company has $53 million capacity under the Loan and Security
Agreement dated December 10, 2020 that remains undrawn in
accordance with its terms.(5) Transition revenue includes the exit
of contracts and statements of work from certain customers 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.(6) 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.(7) Gross Profit is defined as Revenue
less cost of revenue excluding depreciation and amortization.
Earnings Conference Call and Audio
Webcast
Exela will host a conference call to discuss its
fourth quarter and year end 2020 financial results at 11:00 a.m. ET
on March 16, 2021. To access this call, dial 833-255-2831 or
+1-412-902-6724 (international). A replay of this conference
call will be available through March 23, 2021 at 877-344-7529 or
+1-412-317-0088 (international). The replay passcode is
10152973.
Exela invites all investors to ask questions
that they would like addressed on the conference call. We ask
individual investors to submit your 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.
Final ResultsThe estimated financial results
described above are preliminary, unaudited and represent the most
recent current information available to Exela management. Exela’s
actual results may differ from these estimated financial results,
including due to the completion of its financial closing
procedures, final adjustments that may arise between the date of
this press release and the time that financial results for the
fourth quarter of 2020 are finalized, and such differences may be
material.
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. 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.
Investor and/or Media
Contacts:Vincent KondaveetiE:
vincent.kondaveeti@exelatech.comT: 929-620-1849
Mary Beth BenjaminE: IR@exelatech.comT:
646-277-1216
Source: Exela Technologies, Inc.
Exela Technologies, Inc. and Subsidiaries |
Consolidated Balance Sheets (UNAUDITED) |
For the years ended December 31, 2020 and
2019 |
(in thousands of United States dollars except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
68,221 |
|
|
$ |
6,198 |
|
Restricted cash |
|
|
2,088 |
|
|
|
7,901 |
|
Accounts receivable, net of
allowance for doubtful accounts of $5,647 and $4,975,
respectively |
|
|
206,868 |
|
|
|
261,400 |
|
Related party receivables |
|
|
711 |
|
|
|
716 |
|
Inventories, net |
|
|
14,314 |
|
|
|
19,047 |
|
Prepaid expenses and other
current assets |
|
|
31,091 |
|
|
|
23,663 |
|
Total current
assets |
|
|
323,293 |
|
|
|
318,925 |
|
Property, plant and equipment,
net of accumulated depreciation of $193,760 and $176,995,
respectively |
|
|
87,851 |
|
|
|
113,637 |
|
Operating lease right-of-use
assets, net |
|
|
68,861 |
|
|
|
93,627 |
|
Goodwill |
|
|
359,781 |
|
|
|
359,771 |
|
Intangible assets, net |
|
|
292,664 |
|
|
|
342,443 |
|
Deferred income tax
assets |
|
|
6,606 |
|
|
|
12,032 |
|
Other noncurrent assets |
|
|
18,723 |
|
|
|
17,889 |
|
Total
assets |
|
$ |
1,157,779 |
|
|
$ |
1,258,324 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity (Deficit) |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
76,027 |
|
|
$ |
86,167 |
|
Related party payables |
|
|
97 |
|
|
|
1,740 |
|
Income tax payable |
|
|
2,466 |
|
|
|
352 |
|
Accrued liabilities |
|
|
126,399 |
|
|
|
121,553 |
|
Accrued compensation and
benefits |
|
|
63,467 |
|
|
|
48,574 |
|
Accrued interest |
|
|
48,769 |
|
|
|
48,769 |
|
Customer deposits |
|
|
21,277 |
|
|
|
27,765 |
|
Deferred revenue |
|
|
16,377 |
|
|
|
16,282 |
|
Obligation for claim
payment |
|
|
29,328 |
|
|
|
39,156 |
|
Current portion of finance
lease liabilities |
|
|
12,231 |
|
|
|
13,788 |
|
Current portion of operating
lease liabilities |
|
|
18,349 |
|
|
|
25,345 |
|
Current portion of long-term
debts |
|
|
39,952 |
|
|
|
36,490 |
|
Total current
liabilities |
|
|
454,739 |
|
|
|
465,981 |
|
Long-term debt, net of current
maturities |
|
|
1,498,004 |
|
|
|
1,398,385 |
|
Finance lease liabilities, net
of current portion |
|
|
13,287 |
|
|
|
20,272 |
|
Pension liabilities, net |
|
|
35,515 |
|
|
|
25,681 |
|
Deferred income tax
liabilities |
|
|
9,569 |
|
|
|
7,996 |
|
Long-term income tax
liabilities |
|
|
2,759 |
|
|
|
2,806 |
|
Operating lease liabilities,
net of current portion |
|
|
56,814 |
|
|
|
73,282 |
|
Other long-term
liabilities |
|
|
13,624 |
|
|
|
6,962 |
|
Total
liabilities |
|
|
2,084,311 |
|
|
|
2,001,365 |
|
Commitments and Contingencies
(Note 14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit) |
|
|
|
|
|
|
|
|
Common stock, par value of
$0.0001 per share; 1,600,000,000 shares authorized; 51,693,931
shares issued and 49,242,225 shares outstanding at December 31,
2020 and 51,212,945 shares issued and 50,283,896 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 December 31, 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; 2,451,706 shares at December 31, 2020 and
929,049 shares at December 31, 2019 |
|
|
(10,949 |
) |
|
|
(10,949 |
) |
Equity-based compensation |
|
|
52,183 |
|
|
|
49,336 |
|
Accumulated deficit |
|
|
(1,390,038 |
) |
|
|
(1,211,508 |
) |
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
|
(7,419 |
) |
|
|
(7,329 |
) |
Unrealized pension actuarial
losses, net of tax |
|
|
(17,064 |
) |
|
|
(8,059 |
) |
Total accumulated other
comprehensive loss |
|
|
(24,483 |
) |
|
|
(15,388 |
) |
Total stockholders'
deficit |
|
|
(926,532 |
) |
|
|
(743,041 |
) |
Total liabilities and
stockholders' deficit |
|
$ |
1,157,779 |
|
|
$ |
1,258,324 |
|
|
|
|
|
|
|
|
|
|
|
Exela Technologies, Inc. and Subsidiaries |
Consolidated Statements of Operations for the years ended
December 31, 2020, 2019 and 2018 |
(UNAUDITED) |
(in thousands of United States dollars except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
2020 |
|
|
2019 |
|
|
2018 |
|
Revenue |
$ |
1,292,562 |
|
|
$ |
1,562,337 |
|
|
$ |
1,586,222 |
|
Cost of revenue (exclusive of
depreciation and amortization) |
|
1,023,544 |
|
|
|
1,224,735 |
|
|
|
1,213,403 |
|
Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
186,104 |
|
|
|
198,864 |
|
|
|
184,908 |
|
Depreciation and
amortization |
|
93,953 |
|
|
|
100,903 |
|
|
|
138,077 |
|
Impairment of goodwill and
other intangible assets |
|
- |
|
|
|
349,557 |
|
|
|
48,127 |
|
Related party expense |
|
5,381 |
|
|
|
9,501 |
|
|
|
12,403 |
|
Operating
loss |
|
(16,420 |
) |
|
|
(321,223 |
) |
|
|
(10,696 |
) |
Other expense
(income), net: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
173,878 |
|
|
|
163,449 |
|
|
|
155,991 |
|
Debt modification and
extinguishment costs |
|
9,589 |
|
|
|
1,404 |
|
|
|
1,067 |
|
Sundry expense (income),
net |
|
(153 |
) |
|
|
969 |
|
|
|
(3,271 |
) |
Other expense (income),
net |
|
(34,788 |
) |
|
|
14,429 |
|
|
|
(3,030 |
) |
Net loss before income
taxes |
|
(164,946 |
) |
|
|
(501,474 |
) |
|
|
(161,453 |
) |
Income tax expense |
|
(13,584 |
) |
|
|
(7,642 |
) |
|
|
(8,353 |
) |
Net loss |
$ |
(178,530 |
) |
|
$ |
(509,116 |
) |
|
$ |
(169,806 |
) |
Dividend equivalent on Series
A Preferred Stock related to beneficial conversion feature |
|
- |
|
|
|
- |
|
|
|
- |
|
Cumulative dividends for
Series A Preferred Stock |
|
(1,309 |
) |
|
|
(3,309 |
) |
|
|
(3,655 |
) |
Net loss attributable
to common stockholders |
$ |
(179,839 |
) |
|
$ |
(512,425 |
) |
|
$ |
(173,461 |
) |
Loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(3.66 |
) |
|
$ |
(10.55 |
) |
|
$ |
(3.52 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Exela Technologies, Inc. and Subsidiaries |
Consolidated Statements of Cash
Flows (UNAUDITED) |
For the years ended December 31, 2020, 2019 and
2018 |
(in thousands of United States dollars unless otherwise
stated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(178,530 |
) |
|
$ |
(509,116 |
) |
|
$ |
(169,806 |
) |
Adjustments to reconcile net
loss |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
93,953 |
|
|
|
100,903 |
|
|
|
138,077 |
|
Original issue discount and
debt issuance cost amortization |
|
|
15,117 |
|
|
|
11,777 |
|
|
|
10,913 |
|
Debt modification and
extinguishment costs |
|
|
8,296 |
|
|
|
1,049 |
|
|
|
103 |
|
Impairment of goodwill and
other intangible assets |
|
|
- |
|
|
|
349,557 |
|
|
|
48,127 |
|
Provision for doubtful
accounts |
|
|
422 |
|
|
|
4,304 |
|
|
|
2,767 |
|
Deferred income tax
provision |
|
|
7,940 |
|
|
|
1,093 |
|
|
|
3,220 |
|
Share-based compensation
expense |
|
|
2,846 |
|
|
|
7,827 |
|
|
|
7,647 |
|
Unrealized foreign currency
losses |
|
|
(415 |
) |
|
|
(511 |
) |
|
|
(1,180 |
) |
Loss (gain) on sale of
assets |
|
|
(44,013 |
) |
|
|
556 |
|
|
|
2,687 |
|
Fair value adjustment for
interest rate swap |
|
|
(375 |
) |
|
|
4,337 |
|
|
|
(2,540 |
) |
Change in operating assets and
liabilities, net of effect from acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
54,980 |
|
|
|
4,410 |
|
|
|
(19,319 |
) |
Prepaid expenses and other assets |
|
|
(1,289 |
) |
|
|
(4,825 |
) |
|
|
(2,820 |
) |
Accounts payable and accrued liabilities |
|
|
12,157 |
|
|
|
(19,588 |
) |
|
|
8,815 |
|
Related party payables |
|
|
(352 |
) |
|
|
(14,339 |
) |
|
|
918 |
|
Additions to outsource contract costs |
|
|
(518 |
) |
|
|
(1,285 |
) |
|
|
(4,009 |
) |
Net cash provided by (used in) operating
activities |
|
|
(29,781 |
) |
|
|
(63,851 |
) |
|
|
23,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant
and equipment |
|
|
(11,663 |
) |
|
|
(14,360 |
) |
|
|
(20,072 |
) |
Additions to internally
developed software |
|
|
(3,825 |
) |
|
|
(6,182 |
) |
|
|
(7,438 |
) |
Cash paid for acquisition, net
of cash received |
|
|
(12,500 |
) |
|
|
(5,000 |
) |
|
|
(34,810 |
) |
Cash paid for earnouts |
|
|
(700 |
) |
|
|
- |
|
|
|
- |
|
Proceeds from sale of
assets |
|
|
50,126 |
|
|
|
360 |
|
|
|
3,568 |
|
Net cash provided by (used in) investing
activities |
|
|
21,438 |
|
|
|
(25,182 |
) |
|
|
(58,752 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Repurchases of Common
Stock |
|
|
- |
|
|
|
(3,480 |
) |
|
|
(7,221 |
) |
Cash paid for equity issuance
costs |
|
|
- |
|
|
|
- |
|
|
|
(7,500 |
) |
Borrowings under factoring
arrangement and Securitization Facilities |
|
|
297,673 |
|
|
|
68,283 |
|
|
|
- |
|
Principal repayment on
borrowings under factoring arrangement and Securitization
Facilities |
|
|
(203,841 |
) |
|
|
(64,976 |
) |
|
|
- |
|
Cash paid for withholding
taxes on vested RSUs |
|
|
(7 |
) |
|
|
(223 |
) |
|
|
- |
|
Lease terminations |
|
|
(337 |
) |
|
|
(318 |
) |
|
|
(592 |
) |
Cash paid for debt issuance
costs |
|
|
(16,205 |
) |
|
|
(7 |
) |
|
|
(130 |
) |
Principal payments on finance
lease obligations |
|
|
(12,758 |
) |
|
|
(20,465 |
) |
|
|
(16,068 |
) |
Borrowings from senior secured
revolving facility |
|
|
29,750 |
|
|
|
206,500 |
|
|
|
30,000 |
|
Repayments on senior secured
revolving facility |
|
|
(14,200 |
) |
|
|
(141,500 |
) |
|
|
(30,000 |
) |
Proceeds from senior secured
term loans |
|
|
- |
|
|
|
29,850 |
|
|
|
30,000 |
|
Borrowings from other
loans |
|
|
29,260 |
|
|
|
39,153 |
|
|
|
11,557 |
|
Principal repayments on senior
secured term loans and other loans |
|
|
(45,973 |
) |
|
|
(53,678 |
) |
|
|
(12,651 |
) |
Net cash provided by (used in) financing
activities |
|
|
63,362 |
|
|
|
59,139 |
|
|
|
(2,605 |
) |
Effect of exchange rates on
cash |
|
|
1,191 |
|
|
|
139 |
|
|
|
122 |
|
Net decrease in cash and cash
equivalents |
|
|
56,210 |
|
|
|
(29,755 |
) |
|
|
(37,635 |
) |
Cash, restricted cash, and
cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
14,099 |
|
|
|
43,854 |
|
|
|
81,489 |
|
End of period |
|
$ |
70,309 |
|
|
$ |
14,099 |
|
|
$ |
43,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
data: |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax payments, net of
refunds received |
|
$ |
2,695 |
|
|
$ |
7,882 |
|
|
$ |
7,827 |
|
Interest paid |
|
|
152,678 |
|
|
|
144,456 |
|
|
|
146,076 |
|
Noncash investing and
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Assets acquired through
right-of-use arrangements |
|
|
4,372 |
|
|
|
10,732 |
|
|
|
14,920 |
|
Leasehold improvements funded
by lessor |
|
|
- |
|
|
|
- |
|
|
|
1,565 |
|
Settlement gain on related
party payable to Ex-Sigma 2 |
|
|
1,287 |
|
|
|
- |
|
|
|
- |
|
Accrued capital
expenditures |
|
|
2,124 |
|
|
|
1,402 |
|
|
|
2,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exela Technologies |
Schedule 1: Fourth Quarter Full Year 2020 vs. Fourth
Quarter Full Year 2019 Financial Performance |
(UNAUDITED) |
|
$ in millions |
Q4'20 |
|
Q4'19 |
|
|
Change ($) |
|
|
FY'20 |
|
FY'19 |
|
|
Change ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information and
Transaction Processing Solutions |
243.5 |
|
306.7 |
|
|
(63.2 |
) |
|
1,005.0 |
|
1,234.3 |
|
|
(229.3 |
) |
Healthcare
Solutions |
51.6 |
|
69.8 |
|
|
(18.2 |
) |
|
219.0 |
|
256.6 |
|
|
(37.6 |
) |
Legal and Loss
Prevention Services |
18.9 |
|
17.1 |
|
|
1.8 |
|
|
68.4 |
|
71.3 |
|
|
(2.9 |
) |
Total Revenue |
314.1 |
|
393.6 |
|
|
(79.5 |
) |
|
1,292.6 |
|
1,562.3 |
|
|
(269.8 |
) |
% change |
-20 |
% |
-2 |
% |
|
|
|
|
-17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization) |
255.0 |
|
314.9 |
|
|
(59.9 |
) |
|
1,023.5 |
|
1,224.7 |
|
|
(201.2 |
) |
Gross profit |
59.1 |
|
78.7 |
|
|
(19.6 |
) |
|
269.0 |
|
337.6 |
|
|
(68.6 |
) |
as a % of
revenue |
19 |
% |
20 |
% |
|
-1.2 |
% |
|
21 |
% |
22 |
% |
|
-0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A |
45.9 |
|
49.7 |
|
|
(3.8 |
) |
|
186.1 |
|
198.9 |
|
|
(12.8 |
) |
Depreciation and
amortization |
25.8 |
|
24.4 |
|
|
1.4 |
|
|
94.0 |
|
100.9 |
|
|
(7.0 |
) |
Impairment of
goodwill and other intangible assets |
- |
|
252.4 |
|
|
(252.4 |
) |
|
- |
|
349.6 |
|
|
(349.6 |
) |
Related party
expense |
1.3 |
|
1.7 |
|
|
(0.4 |
) |
|
5.4 |
|
9.5 |
|
|
(4.1 |
) |
Operating (loss) income |
(13.9 |
) |
(249.5 |
) |
|
235.6 |
|
|
(16.4 |
) |
(321.2 |
) |
|
304.8 |
|
as a % of
revenue |
-4 |
% |
-63 |
% |
|
59.0 |
% |
|
-1 |
% |
-21 |
% |
|
19.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
44.2 |
|
43.2 |
|
|
1.0 |
|
|
173.9 |
|
163.4 |
|
|
10.4 |
|
Loss on
extinguishment of debt |
9.6 |
|
- |
|
|
9.6 |
|
|
9.6 |
|
1.4 |
|
|
8.2 |
|
Sundry expense
(income) & Other income, net |
11.0 |
|
9.4 |
|
|
1.6 |
|
|
(34.9 |
) |
15.4 |
|
|
(50.3 |
) |
Net loss before income taxes |
(78.7 |
) |
(302.1 |
) |
|
223.4 |
|
|
(164.9 |
) |
(501.5 |
) |
|
336.5 |
|
Income tax expense
(benefit) |
10.1 |
|
2.0 |
|
|
8.2 |
|
|
13.6 |
|
7.6 |
|
|
5.9 |
|
Net income (loss) |
(88.9 |
) |
(304.1 |
) |
|
215.2 |
|
|
(178.5 |
) |
(509.1 |
) |
|
330.6 |
|
as a % of
revenue |
-28 |
% |
-77 |
% |
|
49.0 |
% |
|
-14 |
% |
-33 |
% |
|
18.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
25.8 |
|
24.4 |
|
|
1.4 |
|
|
94.0 |
|
100.9 |
|
|
(7.0 |
) |
Interest expense,
net |
44.2 |
|
43.2 |
|
|
1.0 |
|
|
173.9 |
|
163.4 |
|
|
10.4 |
|
Income tax expense
(benefit) |
10.1 |
|
2.0 |
|
|
8.2 |
|
|
13.6 |
|
7.6 |
|
|
5.9 |
|
EBITDA |
(8.6 |
) |
(234.5 |
) |
|
225.9 |
|
|
102.9 |
|
(237.1 |
) |
|
340.0 |
|
as a % of
revenue |
-3 |
% |
-60 |
% |
|
56.8 |
% |
|
8 |
% |
-15 |
% |
|
23.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Gain / loss on derivative
instruments |
0.7 |
|
(0.6 |
) |
|
1.3 |
|
|
0.2 |
|
4.3 |
|
|
(4.1 |
) |
2 |
Non-Cash and Other
Charges |
30.7 |
|
271.9 |
|
|
(241.2 |
) |
|
8.0 |
|
407.9 |
|
|
(399.9 |
) |
3 |
Transaction and integration
costs |
4.9 |
|
1.5 |
|
|
3.4 |
|
|
16.6 |
|
5.7 |
|
|
10.9 |
|
|
Sub-Total (Adj. EBITDA
before O&R) |
27.7 |
|
38.3 |
|
|
(10.6 |
) |
|
127.8 |
|
180.9 |
|
|
(53.1 |
) |
4 |
Optimization and restructuring expenses |
9.5 |
|
14.7 |
|
|
(5.2 |
) |
|
45.6 |
|
73.9 |
|
|
(28.3 |
) |
Adjusted EBITDA |
37.2 |
|
53.0 |
|
|
(15.9 |
) |
|
173.4 |
|
254.8 |
|
|
(81.4 |
) |
as a % of
revenue |
11.8 |
% |
13.5 |
% |
|
-1.6 |
% |
|
13.4 |
% |
16.3 |
% |
|
-2.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Twelve months ended |
|
($ in
millions) |
|
31-Dec-20 |
|
|
31-Dec-19 |
|
|
31-Dec-20 |
|
|
31-Dec-19 |
|
Revenues, as reported (GAAP) |
|
$ |
314.1 |
|
|
$ |
393.6 |
|
|
$ |
1,292.6 |
|
|
$ |
1,562.3 |
|
Foreign currency exchange
impact (1) |
|
(4.2 |
) |
|
|
|
|
(3.4 |
) |
|
|
|
Revenues, at constant
currency (Non-GAAP) |
|
$ |
310.0 |
|
|
$ |
393.6 |
|
|
$ |
1,289.2 |
|
|
$ |
1,562.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2019, to the revenues
during the corresponding period in 2020. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
($ in
millions) |
|
31-Dec-20 |
|
|
31-Dec-19 |
|
|
31-Dec-20 |
|
|
31-Dec-19 |
|
Net loss
(GAAP) |
|
($88.9 |
) |
|
($304.1 |
) |
|
($178.5 |
) |
|
($509.1 |
) |
Interest expense |
|
44.2 |
|
|
43.2 |
|
|
173.9 |
|
|
163.4 |
|
Taxes |
|
10.1 |
|
|
2.0 |
|
|
13.6 |
|
|
7.6 |
|
Depreciation and
amortization |
|
25.8 |
|
|
24.4 |
|
|
94.0 |
|
|
100.9 |
|
EBITDA
(Non-GAAP) |
|
($8.6 |
) |
|
($234.5 |
) |
|
$ |
102.9 |
|
|
($237.1 |
) |
Transaction and integration
costs |
|
4.9 |
|
|
1.5 |
|
|
16.6 |
|
|
5.7 |
|
Optimization and restructuring
expenses |
|
9.5 |
|
|
14.7 |
|
|
45.6 |
|
|
73.9 |
|
Gain / loss on derivative
instruments |
|
0.7 |
|
|
(0.6 |
) |
|
0.2 |
|
|
4.3 |
|
Other Charges |
|
30.7 |
|
|
271.9 |
|
|
8.0 |
|
|
407.9 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
37.2 |
|
|
$ |
53.0 |
|
|
$ |
173.4 |
|
|
$ |
254.8 |
|
Foreign currency exchange
impact (1) |
|
0.0 |
|
|
|
|
|
1.1 |
|
|
- |
|
Adjusted EBITDA, at
constant currency (Non-GAAP) |
|
$ |
37.2 |
|
|
$ |
53.0 |
|
|
$ |
174.4 |
|
|
$ |
254.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 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 |
|
|
Twelve months ended |
|
($ in
millions) |
|
31-Dec-20 |
|
|
31-Dec-19 |
|
|
31-Dec-20 |
|
|
31-Dec-19 |
|
Revenues, as reported
(GAAP) |
|
$ |
314.1 |
|
|
$ |
393.6 |
|
|
$ |
1,292.6 |
|
|
$ |
1,562.3 |
|
(-) Postage & postage
handling |
|
54.1 |
|
|
70.1 |
|
|
230.0 |
|
|
275.3 |
|
Revenue - Net of pass
through (Non-GAAP) |
|
$ |
260.0 |
|
|
$ |
323.5 |
|
|
$ |
1,062.5 |
|
|
$ |
1,287.0 |
|
(-) LMCE |
|
- |
|
|
- |
|
|
- |
|
|
2.1 |
|
Revenue - Net of pass
through & LMCE (Non-GAAP) |
|
$ |
260.0 |
|
|
$ |
323.5 |
|
|
$ |
1,062.5 |
|
|
$ |
1,284.9 |
|
Revenue growth % |
|
(19.6 |
%) |
|
|
|
|
(17.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
37.2 |
|
|
$ |
53.0 |
|
|
$ |
173.4 |
|
|
$ |
254.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin |
|
14.3 |
% |
|
16.4 |
% |
|
16.3 |
% |
|
19.8 |
% |
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