Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA),
one of the largest global providers of platforms for Business
Process Automation (“BPA”), announced today its financial results
for the second quarter ended June 30, 2018.
“I am pleased to report second quarter revenue
grew 17.3% and EBITDA grew 23.8% on a pro forma basis. We saw
growth across customers and geographies, and increasing demand for
our services. With approximately 200 customers generating annual
revenue over $1 million, backed by strong quarterly results and a
large contracted backlog, we are reaffirming our outlook for the
full-year 2018,” said Ronald Cogburn, Chief Executive Officer of
Exela.
Financial information contained in this press
release, unless otherwise stated, is presented pro forma for the
business combination of Quinpario Acquisition Corp. 2, SourceHOV
Holdings, Inc. (“SourceHOV”) and Novitex Holdings, Inc.
(“Novitex”), which closed on July 12, 2017 (the “Business
Combination”). The primary pro forma adjustment is to include the
results of Novitex for the period January 1, 2017 to June 30, 2017.
For more information, please refer to the reconciliation of
reported to pro forma financial results contained in the Schedules
to this press release.
Second Quarter Ended June 30, 2018
Financial Highlights(Note: all Q2 2017 numbers, unless
otherwise stated, are presented on a pro forma basis.)
- Revenue: Revenue of $410.4 million, an
increase of 17.3% from $350.0 million in the second quarter of
2017, and an increase of 4.4% from $393.2 million in the first
quarter of 2018. Please refer to the pro forma revenue
reconciliation contained in this press release for the second
quarter of 2017. Information and Transaction Processing Solutions
(“ITPS”) revenue was $330.1 million, an increase of 22.1%
year-over-year, driven primarily by increased volumes and expansion
of services within new and existing customers. The acquisition of
Asterion International in April 2018 added 7.7% of the growth in
ITPS revenue. Healthcare Solutions (“HS”) revenue declined 3.0% to
$56.3 million due to lower volumes received from a single customer
due to that customer’s loss of a contract; expect to see
year-over-year revenue growth within Healthcare Solutions. Legal
and Loss Prevention Services (“LLPS”) revenue was $23.9 million, an
increase of 10.9%. Results in LLPS are event driven and in-line
with expectations. The sale of a small non-core subsidiary during
the quarter reduced LLPS growth by 2.5%.
- An increase from 6 to 8 customers generating over $25 million
in annual revenue.
- Broad revenue base with top 150 customers comprising 66% of
revenue.
- Added 8 contracts generating over $1 million Annual Contract
Value (“ACV”).
- Net Loss: Net Loss for the second quarter
of 2018 totaled $25.2 million, an improvement of $2.7 million when
compared to a pro forma net loss of $27.9 million in the second
quarter of 2017. The improvement in second quarter 2018 net loss
was driven by $6.2 million higher operating income along with
higher sundry and other income and lower interest expense offset by
higher income tax expense of $3.5 million.
- Adjusted EBITDA: Adjusted
EBITDA was $70.1 million, an increase of 9.0% when compared to pro
forma Adjusted EBITDA of $64.3 million in the second quarter of
2017. The increase in second quarter 2018 Adjusted EBITDA was
primarily driven by revenue growth and the impact of the Company’s
cost savings initiatives, partially offset by investments in the
Company’s revenue growth initiatives, and higher public company
costs.
- Adjusted EBITDA Margin: Adjusted EBITDA margin
was 17.1%, representing a decline of 130 basis points when compared
to an Adjusted EBITDA margin of 18.4% in the second quarter of
2017. The decline in Adjusted EBITDA margin was primarily driven by
investments in the Company’s revenue growth initiatives, and higher
public company costs, offset by revenue growth and the impact of
the Company’s cost savings initiatives.
- Capital Expenditures: Capital Expenditures
were 1.9% of Q2 2018 revenue compared to 3.5% in Q2 2017.
- Common Stock: As of June 30, 2018, total
shares outstanding were 158,151,562 which includes
5,586,344 shares for outstanding preferred shares on an as
converted basis.
- Share buyback: During Q2 2018, the Company
purchased 768,693 number of shares. The cumulative shares
repurchased under the Company’s share buyback program totaled
1,043,497 in the aggregate since the inception of the program.
Balance
Sheet and Liquidity
- At June 30, 2018, Exela’s total liquidity was $139.7 million,
measured as $60.3(1) million of cash excluding restricted cash, and
an undrawn revolving credit facility of $100 million with $20.6
million reserved for letters of credit. Total net debt was
$1.343 billion.
(1) – Cash, restricted cash and
cash equivalents total of $86.9 million less $26.6 million of
restricted cash that is subject to legal restrictions as of June
30, 2018.
Reaffirms 2018 and long-term
guidance2018 guidance
- Revenue range $1.55 billion to $1.58 billion, year-over-year
growth of 6.5% to 8.5% on a pro forma basis.
- Adjusted EBITDA range $295 million to $310 million,
year-over-year growth of 20% to 26% on a pro forma basis.
- Further Adjusted EBITDA in the range of $330 million to $355
million.
- Guidance includes delivering $40 million to $45 million in
savings during 2018 with remainder to be achieved beyond 2018.
Long-term guidance
- Revenue growth in the range of 3% to 4%
- Adjusted EBITDA margin guidance in the range of 22% to 23%
- Free Cash Flow Margin of 19% to 20%
Guidance is based on constant-currency.
Note on Outlook: The company
has not forecasted net income/(loss) on a forward-looking basis due
to the high variability and difficulty in predicting certain items
that affect GAAP net income/(loss). Adjusted EBITDA should not be
used to predict net income/(loss) as the difference between the two
measures is variable.
Further Adjusted EBITDA gives effect to
historical acquisitions and other cost saving initiatives as if
they had been included in the financial information from the
beginning of each period presented.
Free Cash Flow Margin is defined as Adjusted
EBITDA, less capex (assumed at 3% of revenue), divided by
revenue.
The above guidance is based on second quarter
2018 results.
Please refer to attached schedules for
reconciliations. Numbers may not total due to rounding.
Earnings Conference Call and Audio Webcast
Exela will host a conference call to discuss its
second quarter 2018 financial results today at 5:00 p.m. EDT.
To access this call, dial 800-860-2442 or +412-858-4600
(international). A replay of this conference call will be
available through August 16, 2018 at 877-344-7529 or +412-317-0088
(international). The replay passcode is 10121267. 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. Exela has also posted additional historical
financial information regarding SourceHOV and on a combined basis
to its investor relations website,
(http://investors.exelatech.com).
About Exela Exela
Technologies, Inc. (“Exela”) is a global business process
automation ("BPA") leader combining industry-specific and
industry-agnostic enterprise software and solutions with decades of
experience. Our BPA suite of solutions are deployed in banking,
healthcare, insurance and other industries to support mission
critical environments. Exela is a leader in work flow automation,
attended and un-attended cognitive automation, digital mail rooms,
print communications, and payment processing with deployments
across the globe.
Exela partners with customers to improve user experience and
quality through operational efficiency. Exela serves over 3,700
customers across more than 50 countries, through a secure,
cloud-enabled global delivery model. We are 22,000 employees strong
across the Americas, Europe and Asia. Our customer list includes
60% of the Fortune® 100, along with many of the world’s largest
retail chains, banks, law firms, healthcare insurance payers and
providers and telecom companies. 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 EBITDA, Adjusted
EBITDA, Further Adjusted EBITDA, and Free Cash Flow Margin, 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 EBITDA, Adjusted EBITDA, Further
Adjusted EBITDA, and Free Cash Flow Margin 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 Business Combination and other such capital
markets based activities. Adjusted EBITDA and Further Adjusted
EBITDA also seek to remove the effects of integration and
related costs to achieve the savings, any expected reduction in
operating expenses due to the Business Combination, asset base
(such as depreciation and amortization) and other similar
non-routine items outside the control of our management
team. Backlog is a measure of the estimated total dollar value
of services expected to be delivered by Exela to its customers
under existing contractual terms. Backlog is considered a
non-GAAP financial measure as defined by SEC Regulation G.
Estimates of future financial results are inherently unreliable.
Our methodology for determining backlog may not be comparable to
the methodologies used by others. 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 to this release. Optimization and restructuring
expenses and merger adjustments are primarily related to the
implementation of strategic actions and initiatives related to the
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.
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, the
estimated or anticipated future results and benefits of the
business combination of Quinpario Acquisition Corp. 2, SourceHOV
Holdings, Inc., (“SourceHOV”) and Novitex Holdings, Inc.
(“Novitex”), which formed Exela Technologies, Inc. (“Exela”), and
closed on July 12, 2017 (including the related transactions, the
“Business Combination”), future opportunities for the combined
company, and other statements that are not historical facts such as
our estimated backlog. 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 regarding Exela’s business, and actual results may
differ materially. These risks and uncertainties include, but are
not limited to, changes in the business environment in which Exela
operates and general financial, economic, regulatory and political
conditions affecting the industries in which Exela operates;
changes in taxes, governmental laws and regulations; competitive
product and pricing activity; failure to realize the anticipated
benefits of the Business Combination, including as a result of a
delay or difficulty in integrating the businesses of SourceHOV and
Novitex or the inability to realize the expected amount and timing
of cost savings and operating synergies of the Business
Combination; and those factors discussed under the heading “Risk
Factors” in Exela’s Annual Report on Form-10-K filed with the
Securities and Exchange Commission (“SEC”) on March 16, 2018. 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
TechnologiesCondensed Consolidated Balance
Sheetsas of June 30, 2018 and December 31,
2017(in thousands of United States dollars unless
otherwise noted)
|
|
June 30, |
|
|
December 31, |
|
|
2018 |
|
|
2017 |
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
55,783 |
|
$ |
39,000 |
Restricted cash |
|
31,088 |
|
|
42,489 |
Accounts receivable,
net of allowance for doubtful accounts of $4,488 and $3,725,
respectively |
|
26,2260 |
|
|
229,704 |
Inventories, net |
|
15,088 |
|
|
11,922 |
Prepaid expenses and
other current assets |
|
24,108 |
|
|
24,596 |
Total current
assets |
|
388,326 |
|
|
347,711 |
Property, plant and
equipment, net |
|
135,585 |
|
|
132,908 |
Goodwill |
|
748,708 |
|
|
747,325 |
Intangible assets,
net |
|
419,725 |
|
|
464,984 |
Deferred income tax
assets |
|
15,280 |
|
|
9,019 |
Other noncurrent
assets |
|
21,276 |
|
|
12,891 |
Total assets |
$ |
1,728,901 |
|
$ |
1,714,838 |
Liabilities and
Stockholders’ Deficit |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable |
$ |
86,304 |
|
$ |
81,263 |
Related party
payables |
|
11,987 |
|
|
14,445 |
Income tax payable |
|
5,385 |
|
|
3,612 |
Accrued
liabilities |
|
40,737 |
|
|
49,383 |
Accrued compensation
and benefits |
|
50,905 |
|
|
46,925 |
Accrued interest |
|
48,885 |
|
|
55,102 |
Customer deposits |
|
36,997 |
|
|
31,656 |
Deferred revenue |
|
20,654 |
|
|
12,709 |
Obligation for claim
payment |
|
94,233 |
|
|
42,489 |
Current portion of
capital lease obligations |
|
16,568 |
|
|
15,611 |
Current portion of
long-term debt |
|
16,299 |
|
|
20,565 |
Total current
liabilities |
|
428,954 |
|
|
373,760 |
Long-term debt, net of
current maturities |
|
1,281,697 |
|
|
1,276,094 |
Capital lease
obligations, net of current maturities |
|
25,193 |
|
|
25,958 |
Pension liability |
|
30,471 |
|
|
25,496 |
Deferred income tax
liabilities |
|
5,016 |
|
|
5,362 |
Long-term income tax
liability |
|
3,470 |
|
|
3,470 |
Other long-term
liabilities |
|
16,208 |
|
|
14,704 |
Total
liabilities |
$ |
1,791,009 |
|
$ |
1,724,844 |
Commitments and
Contingencies (Note 9) |
|
|
|
|
|
Stockholders'
deficit |
|
|
|
|
|
Common stock, par value
of $0.0001 per share; 1,600,000,000 sharesauthorized; 152,565,218
shares issued and 151,747,225 outstanding atJune 30, 2018 and
150,578,451 shares issued and 150,529,151outstanding at December
31, 2017 |
$ |
15 |
|
$ |
15 |
Preferred stock, par
value of $0.0001 per share; 20,000,000 shares authorized; 4,569,233
shares issued and outstanding at June 30, 2018 and6,194,233 shares
issued and outstanding at December 31, 2017 |
|
1 |
|
|
1 |
Additional paid in
capital |
|
482,018 |
|
|
482,018 |
Less:common stock held
in treasury, at cost; 817,993 shares at June 30,2018 and 49,300
shares at December 31, 2017 |
|
(3,728) |
|
|
(249) |
Equity based
compensation |
|
36,980 |
|
|
34,085 |
Accumulated
deficit |
|
(565,222) |
|
|
(514,628) |
Accumulated
other comprehensive loss: |
|
|
|
|
|
Foreign currency
translation adjustment |
|
(1,341) |
|
|
(194) |
Unrealized pension
actuarial losses, net of tax |
|
(10,831) |
|
|
(11,054) |
Total accumulated other
comprehensive loss |
|
(12,172) |
|
|
(11,248) |
Total
stockholders' deficit |
|
(62,108) |
|
|
(10,006) |
Total
liabilities and stockholders' deficit |
$ |
1,728,901 |
|
$ |
1,714,838 |
Exela
TechnologiesCondensed Consolidated Statements of
Operations for the Three and Six Months ended June 30, 2018 and
2017 (Loss) (Unaudited)(in thousands of United States
dollars except share and per share amounts unless otherwise
noted)
|
|
Three Months ended June 30, |
|
Six Months ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
Revenue |
|
$ |
410,382 |
|
$ |
209,382 |
|
$ |
803,549 |
|
$ |
427,642 |
Cost of revenue
(exclusive of depreciation and amortization) |
|
|
313,954 |
|
|
140,418 |
|
|
607,746 |
|
|
284,126 |
Selling, general and
administrative expenses |
|
|
46,723 |
|
|
34,998 |
|
|
92,318 |
|
|
70,578 |
Depreciation and
amortization |
|
|
36,368 |
|
|
21,406 |
|
|
74,386 |
|
|
42,727 |
Related party
expense |
|
|
1,402 |
|
|
2,456 |
|
|
2,508 |
|
|
4,841 |
Operating
income |
|
|
11,935 |
|
|
10,104 |
|
|
26,591 |
|
|
25,370 |
Other expense
(income), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
38,527 |
|
|
27,869 |
|
|
76,544 |
|
|
54,088 |
Sundry expense
(income), net |
|
|
(2,325) |
|
|
(327) |
|
|
(2,389) |
|
|
2,397 |
Other income, net |
|
|
(704) |
|
|
- |
|
|
(4,032) |
|
|
- |
Net loss before
income taxes |
|
|
(23,563) |
|
|
(17,438) |
|
|
(43,532) |
|
|
(31,115) |
Income tax expense |
|
|
(1,619) |
|
|
(2,074) |
|
|
(5,644) |
|
|
(4,078) |
Net
loss |
|
|
(25,182) |
|
|
(19,512) |
|
|
(49,176) |
|
|
(35,193) |
Cumulative dividends
for Series A Preferred Stock |
|
|
(914) |
|
|
- |
|
|
(1,828) |
|
|
- |
Net loss
attributable to common stockholders |
|
$ |
(26,096) |
|
$ |
(19,512) |
|
$ |
(51,004) |
|
$ |
(35,193) |
Net loss per share -
basic and diluted |
|
|
(0.17) |
|
|
(0.28) |
|
|
(0.34) |
|
|
(0.50) |
Exela
TechnologiesCondensed Consolidated Statements of
Cash Flows for the Six Months ended June 30, 2018
and 2017 (Unaudited)(in thousands of United States dollars
unless otherwise noted)
|
|
Six Months ended June 30, |
|
|
|
2018 |
|
|
2017 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(49,176) |
|
$ |
(35,193) |
Adjustments to
reconcile net loss |
|
|
|
|
|
|
Depreciation and amortization |
|
|
74,386 |
|
|
42,727 |
Debt
discount and debt issuance cost amortization |
|
|
5,272 |
|
|
7,027 |
Provision
for doubtful accounts |
|
|
1,857 |
|
|
192 |
Deferred
income tax benefit |
|
|
705 |
|
|
617 |
Share-based compensation expense |
|
|
2,895 |
|
|
2,217 |
Foreign
currency remeasurement |
|
|
(1,156) |
|
|
972 |
Loss on
sale of assets |
|
|
1,340 |
|
|
26 |
Fair
value adjustment for interest rate swap |
|
|
(4,675) |
|
|
- |
Change in
operating assets and liabilities, net of effect from
acquisitions |
|
|
|
|
|
|
Accounts
receivable |
|
|
(19,813) |
|
|
(49) |
Prepaid
expenses and other assets |
|
|
(1,603) |
|
|
(1,794) |
Accounts
payable and accrued liabilities |
|
|
40,677 |
|
|
24,543 |
Related
party payables |
|
|
(2,458) |
|
|
(8,025) |
Net cash provided by operating activities |
|
|
48,251 |
|
|
33,260 |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Purchases of property,
plant and equipment |
|
|
(10,244) |
|
|
(3,409) |
Additions to internally
developed software |
|
|
(2,115) |
|
|
(4,731) |
Costs to obtain and
fulfill a contract |
|
|
(3,695) |
|
|
(6,038) |
Cash paid in
acquisition net of cash - Asterion |
|
|
(4,145) |
|
|
- |
Proceeds on sale of
assets |
|
|
(1,014) |
|
|
4,392 |
Net cash used in investing activities |
|
|
(19,185) |
|
|
(9,786) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Change in bank
overdraft |
|
|
- |
|
|
(210) |
Common share
repurchases |
|
|
(3,479) |
|
|
|
Proceeds from financing
obligations |
|
|
2,152 |
|
|
3,008 |
Contribution from
shareholders |
|
|
- |
|
|
20,546 |
Cash paid for equity
issue costs |
|
|
(7,500) |
|
|
- |
Borrowings from
revolver and swing-line loan |
|
|
30,000 |
|
|
72,600 |
Repayments from
revolver and swing line loan |
|
|
(30,000) |
|
|
(72,500) |
Principal payments on
long-term obligations |
|
|
(14,447) |
|
|
(28,153) |
Net cash used in financing activities |
|
|
(23,274) |
|
|
(4,709) |
Effect of exchange
rates on cash |
|
|
(410) |
|
|
240 |
Net increase in cash and cash equivalents |
|
|
5,382 |
|
|
19,005 |
Cash, restricted cash,
and cash equivalents |
|
|
|
|
|
|
Beginning of
period |
|
|
81,489 |
|
|
34,253 |
End of period |
|
$ |
86,871 |
|
$ |
53,258 |
|
|
|
|
|
|
|
Supplemental cash flow data: |
|
|
|
|
|
|
Income tax payments,
net of refunds received |
|
$ |
3,864 |
|
$ |
2,032 |
Interest paid |
|
|
76,353 |
|
|
32,566 |
Noncash
investing and financing activities: |
|
|
|
|
|
|
Assets acquired through
capital lease arrangements |
|
|
7,787 |
|
|
187 |
Leasehold improvements
funded by lessor |
|
|
1,540 |
|
|
- |
Accrued capital
expenditures |
|
|
1,144 |
|
|
1,026 |
Exela
TechnologiesSchedule 1: Pro Forma Second Quarter
2017 vs. Second Quarter 2018 Financial
Performance
($
in millions) |
|
Q2 2018 |
|
Pro forma Q2 2017 |
|
% Change |
Revenue |
|
|
|
|
|
|
Information and
Transaction Processing Solutions |
|
$330.1 |
|
$270.3 |
|
22.1% |
Healthcare
Solutions |
|
56.3 |
|
58.1 |
|
-3.0% |
Legal and Loss
Prevention Services |
|
23.9 |
|
21.6 |
|
10.9% |
Total
Revenue |
|
410.4 |
|
350.0 |
|
17.3% |
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization) |
|
314.0 |
|
257.0 |
|
22.1 |
Selling, general and
administrative expenses (Including related party) |
|
48.1 |
|
51.8 |
|
-7.1 |
Depreciation and
amortization |
|
36.4 |
|
31.1 |
|
16.8 |
Operating
income (loss) |
|
11.9 |
|
10.0 |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
38.5 |
|
40.0 |
|
|
Sundry expense (income)
& Other income, net |
|
(3.0) |
|
(0.3) |
|
|
Net loss before
income taxes |
|
(23.6) |
|
(29.7) |
|
|
Income tax expense /
(benefit) |
|
1.6 |
|
(1.9) |
|
|
Net
loss |
|
(25.2) |
|
(27.9) |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
36.4 |
|
31.1 |
|
|
Interest expense,
net |
|
38.5 |
|
40.0 |
|
|
Income tax expense /
(benefit) |
|
1.6 |
|
(1.9) |
|
|
EBITDA |
|
51.3 |
|
41.5 |
|
|
Transaction related
costs |
|
0.8 |
|
7.3 |
|
|
Optimization and
restructuring expenses |
|
13.0 |
|
10.2 |
|
|
Non-cash charges /
(gains) |
|
4.9 |
|
5.4 |
|
|
Adjusted
EBITDA |
|
$70.1 |
|
$64.3 |
|
9.0% |
Adjusted EBITDA
Margin |
|
17.1% |
|
18.4% |
|
|
Exela Technologies Schedule
2: Pro Forma YTD 2017 vs. YTD 2018 Financial
Performance
($
in millions) |
|
YTD 2018 |
|
Pro forma YTD 2017 |
|
% Change |
Revenue |
|
|
|
|
|
|
Information and
Transaction Processing Solutions |
|
$642.1 |
|
$549.7 |
|
16.8% |
Healthcare
Solutions |
|
114.9 |
|
117.1 |
|
-1.9% |
Legal and Loss
Prevention Services |
|
46.5 |
|
45.0 |
|
3.5% |
Total
Revenue |
|
803.5 |
|
711.8 |
|
12.9% |
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization) |
|
607.7 |
|
518.9 |
|
17.1% |
Selling, general and
administrative expenses (Including related party) |
|
94.8 |
|
106.1 |
|
10.6% |
Depreciation and
amortization |
|
74.4 |
|
62.2 |
|
19.7% |
Operating
income (loss) |
|
26.6 |
|
24.7 |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
76.5 |
|
78.4 |
|
|
Sundry expense (income)
& Other income, net |
|
(6.4) |
|
2.4 |
|
|
Net loss before
income taxes |
|
(43.5) |
|
(56.1) |
|
|
Income tax expense /
(benefit) |
|
5.6 |
|
(2.9) |
|
|
Net
loss |
|
(49.2) |
|
(53.2) |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
74.4 |
|
62.2 |
|
|
Interest expense,
net |
|
76.5 |
|
78.4 |
|
|
Income tax expense /
(benefit) |
|
5.6 |
|
(2.9) |
|
|
EBITDA |
|
107.4 |
|
84.4 |
|
|
Transaction related
costs |
|
1.9 |
|
17.3 |
|
|
Optimization and
restructuring expenses |
|
27.5 |
|
16.0 |
|
|
Non-cash charges /
(gains) |
|
2.9 |
|
9.3 |
|
|
Adjusted
EBITDA |
|
$139.7 |
|
$127.0 |
|
10% |
Adjusted EBITDA
Margin |
|
17.4% |
|
17.8% |
|
|
Exela TechnologiesSchedule
3: Adjusted EBITDA Reconciliation – Pro Forma Second Quarter
2017
($ in millions) |
|
Q2 2017(1) |
|
|
As Reported |
|
Novitex |
|
Pro Forma |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
($19.5) |
|
($8.4) |
|
($27.9) |
Taxes |
|
2.1 |
|
(3.9) |
|
(1.9) |
Interest expense |
|
27.9 |
|
12.2 |
|
40.0 |
Depreciation and
amortization |
|
21.4 |
|
9.7 |
|
31.1 |
EBITDA |
|
$31.8 |
|
$9.6 |
|
$41.5 |
Optimization and
restructuring expenses |
|
7.5 |
|
2.7 |
|
10.2 |
Transaction related
costs |
|
4.2 |
|
3.1 |
|
7.3 |
Non-cash charges |
|
2.0 |
|
- |
|
2.0 |
New contract setup |
|
- |
|
0.9 |
|
0.9 |
Oversight and
management Fees |
|
2.1 |
|
0.4 |
|
2.5 |
Adjusted
EBITDA |
|
$47.6 |
|
$16.7 |
|
$64.3 |
|
|
|
|
|
|
|
(1)
Net loss for the period is presented on the basis of the previous
debt structure of the respective standalone companies that became
Exela as a result of the Business Combination. As of July 12th,
2017 those debt structures were replaced with new debt consisting
of $350 million Term Loan and $1.0 Billion Senior Secured
Notes. |
Exela
TechnologiesSchedule 4: Adjusted EBITDA
Reconciliation – First Quarter 2018 vs. Second Quarter
2018
|
|
As Reported |
($ in
millions) |
|
Q2 2018 |
|
Q1 2018 |
|
|
|
|
|
Net
loss |
|
($25.2) |
|
($24.0) |
Taxes |
|
1.6 |
|
4.0 |
Interest expense |
|
38.5 |
|
38.0 |
Depreciation and
amortization |
|
36.4 |
|
38.0 |
EBITDA |
|
$51.3 |
|
$56.1 |
Optimization and
restructuring expenses |
|
13.0 |
|
14.5 |
Transaction related
costs |
|
0.8 |
|
1.1 |
Non-cash charges |
|
5.6 |
|
1.3 |
(Gain) / loss on
derivative instruments |
|
(0.7) |
|
(3.3) |
Adjusted
EBITDA |
|
$70.1 |
|
$69.6 |
Exela TechnologiesSchedule 5:
SG&A (Including Related Party) – Pro Forma Second Quarter 2017,
First Quarter 2018 and Second Quarter 2018
|
|
As Reported |
|
Q2 2017 |
($ in
millions) |
|
Q2 2018 |
|
Q1 2018 |
|
Pro Forma |
|
As Reported |
|
Novitex |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
46.7 |
|
45.6 |
|
49.4 |
|
35.0 |
|
14.4 |
Related
party expense |
|
1.4 |
|
1.1 |
|
2.4 |
|
2.4 |
|
0.0 |
Total |
|
$48.1 |
|
$46.7 |
|
$51.8 |
|
$37.4 |
|
$14.4 |
Exela TechnologiesSchedule
6: Pro forma Revenue and Capital Expenditures Reconciliation
TTM’18, FY2017 and FY2016
|
($ in millions) |
|
|
|
|
|
As Reported(1) |
Novitex |
Pro Forma |
|
|
|
|
|
|
Revenue - FY 2018 TTM
Q2 |
$1,528.2 |
$19.8 |
$1,548.0 |
|
Revenue - FY 2017 |
$1,152.3 |
$304.0 |
$1,456.3 |
|
Revenue - FY 2016 |
$789.9 |
$543.2 |
$1,333.1 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures -
FY 2017 |
$33.3 |
$9.1 |
$42.4 |
|
Capital expenditures -
FY 2016 |
$35.6 |
$15.9 |
$51.5 |
|
|
|
|
|
(1)
Financial results for FY 2016 do not include contribution for the
first nine months from the acquisition of TransCentra which closed
on September 25, 2016. |
Exela
TechnologiesSchedule 7: Q2 2017 Revenue and
Expense Reconciliation
|
|
|
|
|
|
|
|
|
Q2 2017(1) |
($ in millions) |
|
As Reported |
|
Novitex |
|
Pro Forma |
|
|
|
|
|
|
|
Revenue |
|
$209.4 |
|
$140.6 |
|
$350.0 |
Cost of revenue
(exclusive of depreciation and amortization) |
|
140.4 |
|
116.6 |
|
257.0 |
Selling, general and
administrative expenses (Including related party) |
|
37.5 |
|
14.4 |
|
51.8 |
Depreciation and
amortization |
|
21.4 |
|
9.7 |
|
31.1 |
Operating
income (loss) |
|
10.1 |
|
(0.1) |
|
10.0 |
|
|
|
|
|
|
|
Interest expense,
net |
|
27.9 |
|
12.2 |
|
40.0 |
Sundry expense (income)
& other income, net |
|
(0.3) |
|
- |
|
(.3) |
Net loss before
income taxes |
|
(17.4) |
|
(12.3) |
|
(29.7) |
Income tax (benefit)
expense |
|
2.1 |
|
(3.9) |
|
(1.9) |
Net
loss |
|
($19.5 |
|
($8.4) |
|
($27.9) |
|
|
|
|
|
|
|
(1) Net loss for the period is presented on the
basis of the previous debt structure of the respective standalone
companies that became Exela as a result of the Business
Combination. As of July 12th, 2017 those debt structures were
replaced with new debt consisting of $350 million Term Loan and
$1.0 Billion Senior Secured Notes. |
Contact: Jim MathiasE: ir@exelatech.comW:
investors.exelatech.comT: +1 972-821-5808
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