Revenue of $383.0 million an
increase of 7% over Q3 2017 on a pro forma basis; Net Loss of $28.9
million; EBITDA of $43.7 million; Expect 2018
revenue to be between $1.58 billion to $1.59
billion
Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA),
a leader in location agnostic Business Process Automation (“BPA”),
announced today its financial results for the third quarter ended
September 30, 2018.
Exela reported strong financial growth with
third quarter revenue of $383 million, an increase of 7% on a pro
forma basis, and Adjusted EBITDA of $69 million, an increase of 24%
on a year-over-year pro forma basis for 2017. Exela has invested
approximately $60 million for the nine months ended September 30,
2018, to further accelerate growth and integration, capitalize on
our leading position in the marketplace and strengthen our
differentiated offerings.
“Our transformative business process automation
solutions are resonating well with customers. Exela’s
differentiated location agnostic high automation services,
Enterprise SaaS offerings and our BPA suite, Digital NowSM are
beginning to show results with substantial growth in pipeline.
Recently, a top 10 bank and financial services company that we have
worked with for over a decade expanded their relationship with
Exela, signing a contract estimated to be $100 million of revenue
over the next three years.” said Ronald Cogburn, Chief Executive
Officer of Exela.
James Reynolds, Chief Financial Officer of
Exela, said “We expect our full year 2018 revenue to be between
$1.58 billion to $1.59 billion with growth of 8.5 to 9%
year-over-year. The increasing market receptiveness to Digital
NowSM has exceeded our expectations, and therefore we have
accelerated our investments for future profitable growth. This key
strategic initiative, when coupled with lower project revenue in
our LLPS segment and the exit from a low margin contract, will have
some short-term impact on our Adjusted EBITDA.. Accordingly, we are
now forecasting Adjusted EBITDA for the year to be between $280
million to $290 million, representing year-over-year growth of 14
to 18%”.
Financial information contained in this press
release, unless otherwise stated, is presented pro forma for the
business combination of Quinpario Acquisition Corp. 2 (now Exela),
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.
Third Quarter Ended September 30, 2018
Financial Highlights(Note: all third quarter 2017 numbers,
unless otherwise stated, are presented on a pro forma basis.)
- Revenue: Revenue of $383.0 million, an
increase of 7.0% from $358.2 million in the third quarter of 2017
on a pro forma basis. Please refer to the pro forma revenue
reconciliation contained in this press release for the third
quarter of 2017. Revenue for our Information and Transaction
Processing Solutions (“ITPS”) segment was $307.3 million, an
increase of 9.8% year-over-year, driven primarily by revenue from
the Digital NowSM model, growth investments and acquisitions offset
by a decline in business with lower automation. Healthcare
Solutions (“HS”) revenue was $56.8 million, an increase of 1%
year-over-year due to its ramp up of new business and is poised to
grow in future periods. Legal and Loss Prevention Services (“LLPS”)
revenue was $18.9 million. Results in LLPS are event driven and
were negatively impacted by projects that generated lower revenue.
- Low customer concentration with top 150 customers comprising
68% of revenue.
- 10 customers generating over $25 million in annual revenue, an
increase from 6 customers at the beginning of 2018.
- 249 customers with over $1 million in annual revenue, an
increase from 200 in December 2017.
- 8%(3) increase in revenue per FTE to $72 thousand, from $66
thousand per FTE in December 2017.
- $60 million invested in the business year-to-date to drive
growth and integration.
- Net Loss: Net Loss for the third quarter of
2018 totaled $28.9 million, an improvement of $101.6 million when
compared to a pro forma net loss of $130.5 million in the third
quarter of 2017. The improvement in third quarter 2018 net loss was
driven by $81.9 million higher operating income that was offset by
higher income tax expense of $36.3 million, for a net increase of
$45.6 million. The third quarter of 2017 also included $53 million
in charges for extinguishment of debt.
- Adjusted EBITDA: Adjusted
EBITDA for the third quarter of 2018 was $68.9 million a margin of
18% and increased 23.6% when compared to pro forma Adjusted EBITDA
of $55.5 million and a margin of 16% in the third quarter of 2017.
The increase in third quarter 2018 Adjusted EBITDA was primarily
driven by revenue growth, the Company’s cost savings initiatives,
and partially offset by investments the Company made for growth.
- Capital Expenditures: Capital expenditures for
the third quarter of 2018 was 1.7% of revenue compared to 2.2% on a
year over year basis.
- Common Stock: As of September 30, 2018, total
shares outstanding were 158,278,484 which includes 1,043,497 of
treasury stock and 5,586,344 shares for outstanding preferred
shares on an as-converted basis.
- Share buyback: During the third quarter of
2018, the Company repurchased 225,504 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 September 30, 2018, Exela’s total liquidity was $124
million, measured as $45(4) 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 $1.383 billion.
Updated 2018 guidance
- Revenue range $1.58 billion to $1.59 billion, approximately
8.5% growth y-o-y.
- Adjusted EBITDA range $280 million to $290 million, over 14%
growth y-o-y.
Note: 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.
The above guidance is based on third quarter
2018 results.
Please refer to attached schedules for
reconciliations. Due to rounding, numbers presented throughout
this document may not add up precisely to the totals provided and
percentages may not precisely reflect absolute figures.
(1) – EBITDA is a non-GAAP measure. A
reconciliation of EBITDA is attached to this release.(2) – Adjusted
EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA
is attached to this release. (3) – Presented on a pro forma basis
with acquisitions for the TTM period.(4) – Calculated as cash,
restricted cash and cash equivalents totaling $49.6 million, less
$4.6 million of restricted cash that is subject to legal
restrictions as of September 30, 2018.
Earnings Conference Call and Audio WebcastExela
will host a conference call to discuss its third quarter 2018
financial results today at 5:00 p.m. ET. To access this call,
dial 833-255-2831 or +412-902-6724 (international). A replay
of this conference call will be available through November 15, 2018
at 877-344-7529 or +412-317-0088 (international). The replay
passcode is 10124229. 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 location-agnostic global business process
automation ("BPA") leader combining industry-specific and
multi-industry 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 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 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 Business Combination and other
such 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 Business Combination, asset base (such as depreciation
and amortization) and other similar non-routine items outside the
control of our management team. 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 (now Exela), 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. 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 or
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 as supplemented by the risk
factors contained in our quarterly report on Form 10-Q for the
quarter ended June 30, 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
Sheets as of September 30, 2018 and December 31,
2017(in thousands of United States dollars unless
otherwise noted)
|
|
September 30, |
|
December
31, |
|
2018 |
|
2017 |
|
(Unaudited) |
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
40,692 |
|
|
$ |
39,000 |
|
Restricted cash |
|
|
8,955 |
|
|
|
42,489 |
|
Accounts receivable, net of allowance for doubtful accounts of
$4,427 and $3,725, respectively |
|
253,986 |
|
|
|
229,704 |
|
Inventories, net |
|
|
16,122 |
|
|
|
11,922 |
|
Prepaid expenses and
other current assets |
|
|
26,933 |
|
|
|
24,596 |
|
Total current
assets |
|
|
346,688 |
|
|
|
347,711 |
|
Property, plant and equipment, net |
|
|
131,156 |
|
|
|
132,908 |
|
Goodwill |
|
|
749,762 |
|
|
|
747,325 |
|
Intangible assets, net |
|
|
398,280 |
|
|
|
464,984 |
|
Deferred
income tax assets |
|
|
14,810 |
|
|
|
9,019 |
|
Other
noncurrent assets |
|
|
21,650 |
|
|
|
12,891 |
|
Total assets |
|
$ |
1,662,346 |
|
|
$ |
1,714,838 |
|
Liabilities and
Stockholders’ Deficit |
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
|
$ |
90,673 |
|
|
$ |
81,263 |
|
Related
party payables |
|
|
10,756 |
|
|
|
14,445 |
|
Income tax payable |
|
|
5,422 |
|
|
|
3,612 |
|
Accrued
liabilities |
|
|
41,397 |
|
|
|
49,383 |
|
Accrued compensation
and benefits |
|
|
54,975 |
|
|
|
46,925 |
|
Accrued interest |
|
|
23,845 |
|
|
|
55,102 |
|
Customer deposits |
|
|
39,419 |
|
|
|
31,656 |
|
Deferred
revenue |
|
|
18,084 |
|
|
|
12,709 |
|
Obligation for claim
payment |
|
|
52,889 |
|
|
|
42,489 |
|
Current
portion of capital lease obligations |
|
|
15,926 |
|
|
|
15,611 |
|
Current
portion of long-term debt |
|
|
20,062 |
|
|
|
20,565 |
|
Total current liabilities |
|
|
373,448 |
|
|
|
373,760 |
|
Long-term debt, net of current maturities |
|
|
1,307,884 |
|
|
|
1,276,094 |
|
Capital lease
obligations, net of current maturities |
|
|
22,945 |
|
|
|
25,958 |
|
Pension liability |
|
|
30,376 |
|
|
|
25,496 |
|
Deferred income tax
liabilities |
|
|
2,115 |
|
|
|
5,362 |
|
Long-term income tax
liability |
|
|
3,470 |
|
|
|
3,470 |
|
Other
long-term liabilities |
|
|
15,307 |
|
|
|
14,704 |
|
Total
liabilities |
|
$ |
1,755,545 |
|
|
$ |
1,724,844 |
|
Commitments and
Contingencies (Note 9) |
|
|
|
|
Stockholders'
deficit |
|
|
|
|
Common
stock, par value of $0.0001 per share; 1,600,000,000 shares
authorized; 152,692,140 shares issued and 151,648,643 outstanding
at September 30, 2018 and 150,578,451 shares issued and 150,529,151
outstanding 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 September
30, 2018 and 6,194,233 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; 1,043,497 shares at
September 30, 2018 and 49,300 shares at December 31, 2017 |
|
|
(5,148 |
) |
|
|
(249 |
) |
Equity
based compensation |
|
|
38,601 |
|
|
|
34,085 |
|
Accumulated deficit |
|
|
(594,162 |
) |
|
|
(514,628 |
) |
Accumulated other comprehensive loss: |
|
|
|
|
Foreign currency
translation adjustment |
|
|
(3,833 |
) |
|
|
(194 |
) |
Unrealized pension
actuarial losses, net of tax |
|
|
(10,691 |
) |
|
|
(11,054 |
) |
Total accumulated other
comprehensive loss |
|
|
(14,524 |
) |
|
|
(11,248 |
) |
Total
stockholders' deficit |
|
|
(93,199 |
) |
|
|
(10,006 |
) |
Total liabilities and stockholders' deficit |
|
$ |
1,662,346 |
|
|
$ |
1,714,838 |
|
|
|
|
|
|
|
|
|
|
Exela
TechnologiesCondensed Consolidated Statements of
Operations for the Three and Nine Months ended September 30, 2018
and 2017 (Loss) (Unaudited)(in thousands of United States
dollars except share and per share amounts unless otherwise
noted)
|
|
Three Months ended
September 30, |
|
Nine Months ended
September 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Revenue |
|
$ |
383,030 |
|
|
$ |
338,393 |
|
|
$ |
1,186,579 |
|
|
$ |
766,035 |
|
|
Cost of revenue
(exclusive of depreciation and amortization) |
|
|
295,936 |
|
|
|
255,116 |
|
|
|
903,682 |
|
|
|
539,242 |
|
|
Selling, general and
administrative expenses |
|
|
44,913 |
|
|
|
102,048 |
|
|
|
137,231 |
|
|
|
172,626 |
|
|
Depreciation and
amortization |
|
|
35,041 |
|
|
|
28,052 |
|
|
|
109,428 |
|
|
|
70,779 |
|
|
Related party
expense |
|
|
759 |
|
|
|
26,892 |
|
|
|
3,267 |
|
|
|
31,733 |
|
|
Operating income (loss) |
|
|
6,381 |
|
|
|
(73,715 |
) |
|
|
32,971 |
|
|
|
(48,345 |
) |
|
Other expense
(income), net: |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
38,339 |
|
|
|
37,652 |
|
|
|
114,883 |
|
|
|
91,740 |
|
|
Loss on extinguishment
of debt |
|
|
1,067 |
|
|
|
35,512 |
|
|
|
1,067 |
|
|
|
35,512 |
|
|
Sundry expense
(income), net |
|
|
(2,571 |
) |
|
|
563 |
|
|
|
(4,961 |
) |
|
|
2,960 |
|
|
Other income, net |
|
|
(781 |
) |
|
|
- |
|
|
|
(4,813 |
) |
|
|
- |
|
|
Net loss before income taxes |
|
|
(29,673 |
) |
|
|
(147,442 |
) |
|
|
(73,205 |
) |
|
|
(178,557 |
) |
|
Income tax benefit
(expense) |
|
|
733 |
|
|
|
37,002 |
|
|
|
(4,911 |
) |
|
|
32,924 |
|
|
Net loss |
|
|
(28,940 |
) |
|
|
(110,440 |
) |
|
|
(78,116 |
) |
|
|
(145,633 |
) |
|
Dividend equivalent on Series A Preferred Stock
related to beneficial conversion feature |
|
|
- |
|
|
|
(16,375 |
) |
|
|
- |
|
|
|
(16,375 |
) |
|
Cumulative dividends for Series A Preferred
Stock |
|
|
(914 |
) |
|
|
(1,225 |
) |
|
|
(2,742 |
) |
|
|
(1,225 |
) |
|
Net loss attributable to common stockholders |
|
$ |
(29,854 |
) |
|
$ |
(128,040 |
) |
|
$ |
(80,858 |
) |
|
$ |
(163,233 |
) |
|
Net loss per share -
basic and diluted |
|
$ |
(0.20 |
) |
|
$ |
(2.08 |
) |
|
$ |
(0.53 |
) |
|
$ |
(3.98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exela
TechnologiesCondensed Consolidated Statements of
Cash Flows for the Nine Months ended
September 30, 2018 and 2017 (Unaudited)(in thousands of
United States dollars unless otherwise noted)
|
|
Nine Months ended September 30, |
|
|
|
2018 |
|
|
|
2017 |
|
Cash flows from
operating activities |
|
|
|
|
Net loss |
|
$ |
(78,116 |
) |
|
$ |
(145,633 |
) |
Adjustments to
reconcile net loss |
|
|
|
|
Depreciation and amortization |
|
|
109,428 |
|
|
|
70,779 |
|
Fees paid
in stock |
|
|
- |
|
|
|
23,875 |
|
HGM
Contract Termination Fee paid in stock |
|
|
- |
|
|
|
10,000 |
|
Original
issue discount and debt issuance cost amortization |
|
|
8,062 |
|
|
|
9,684 |
|
Provision
(recovery) for doubtful accounts |
|
|
2,470 |
|
|
|
451 |
|
Deferred
income tax benefit |
|
|
(3,689 |
) |
|
|
(37,186 |
) |
Share-based compensation expense |
|
|
4,516 |
|
|
|
4,446 |
|
Foreign
currency remeasurement |
|
|
(2,040 |
) |
|
|
777 |
|
Gain on
sale of Meridian |
|
|
- |
|
|
|
(588 |
) |
Loss on
sale of assets |
|
|
1,835 |
|
|
|
508 |
|
Fair
value adjustment for interest rate swap |
|
|
(5,456 |
) |
|
|
- |
|
Change in
operating assets and liabilities, net of effect from
acquisitions |
|
|
|
|
Accounts
receivable |
|
|
(6,374 |
) |
|
|
(2,784 |
) |
Prepaid
expenses and other assets |
|
|
(5,770 |
) |
|
|
189 |
|
Accounts
payable and accrued liabilities |
|
|
(23,457 |
) |
|
|
48,745 |
|
Related
party payables |
|
|
(3,689 |
) |
|
|
4,936 |
|
Net cash used in operating activities |
|
|
(2,280 |
) |
|
|
(11,801 |
) |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchases of property,
plant and equipment |
|
|
(14,077 |
) |
|
|
(7,001 |
) |
Additions to internally
developed software |
|
|
(3,080 |
) |
|
|
(6,348 |
) |
Additions to
outsourcing contracts |
|
|
(5,427 |
) |
|
|
(8,574 |
) |
Proceeds from sale of
Meridian |
|
|
- |
|
|
|
4,582 |
|
Cash acquired in
Quinpario reverse merger |
|
|
- |
|
|
|
91 |
|
Cash paid in
acquisition, net of cash received |
|
|
(6,513 |
) |
|
|
(423,428 |
) |
Proceeds on sale of
assets |
|
|
1,095 |
|
|
|
11 |
|
Net cash used in investing activities |
|
|
(28,002 |
) |
|
|
(440,667 |
) |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Change in bank
overdraft |
|
|
- |
|
|
|
(210 |
) |
Loss on extinguishment
of debt |
|
|
1,067 |
|
|
|
35,512 |
|
Proceeds from issuance
of stock |
|
|
- |
|
|
|
231,448 |
|
Repurchases of common
stock |
|
|
(4,899 |
) |
|
|
- |
|
Proceeds from financing
obligations |
|
|
3,068 |
|
|
|
3,040 |
|
Contribution from
shareholders |
|
|
- |
|
|
|
20,548 |
|
Proceeds from credit
facility |
|
|
30,000 |
|
|
|
1,320,500 |
|
Retirement of previous
credit facilities |
|
|
- |
|
|
|
(1,055,736 |
) |
Cash paid for debt
issuance costs and debt discounts |
|
|
(1,094 |
) |
|
|
(39,837 |
) |
Cash paid for equity
issue costs |
|
|
(7,500 |
) |
|
|
(149 |
) |
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 |
|
|
(21,647 |
) |
|
|
(32,647 |
) |
Net cash provided by (used in) financing
activities |
|
|
(1,005 |
) |
|
|
482,569 |
|
Effect of exchange
rates on cash |
|
|
(554 |
) |
|
|
335 |
|
Net increase (decrease) in cash and cash
equivalents |
|
|
(31,842 |
) |
|
|
30,436 |
|
Cash, restricted cash,
and cash equivalents |
|
|
|
|
Beginning of
period |
|
|
81,489 |
|
|
|
34,253 |
|
End of period |
|
$ |
49,647 |
|
|
$ |
64,689 |
|
|
|
|
|
|
Supplemental
cash flow data: |
|
|
|
|
Income tax payments,
net of refunds received |
|
$ |
5,296 |
|
|
$ |
2,673 |
|
Interest paid |
|
|
136,396 |
|
|
|
60,347 |
|
Noncash
investing and financing activities: |
|
|
|
|
Assets acquired through
capital lease arrangements |
|
|
9,318 |
|
|
|
2,080 |
|
Leasehold improvements
funded by lessor |
|
|
1,565 |
|
|
|
74 |
|
Issuance of common
stock as consideration for Novitex |
|
|
- |
|
|
|
244,800 |
|
Accrued capital
expenditures |
|
|
1,994 |
|
|
|
3,512 |
|
Accretion of dividend
equivalents |
|
|
- |
|
|
|
16,375 |
|
Exela
TechnologiesSchedule 1: Pro Forma Third Quarter
2017 vs. Third Quarter 2018 Financial Performance
|
|
|
|
|
|
|
|
|
|
|
$ in millions |
Q3'17 |
Q3'18 |
|
Change ($) |
Information
and Transaction Processing Solutions |
279.8 |
|
307.3 |
|
|
27.5 |
|
Healthcare
Solutions |
56.4 |
|
56.8 |
|
|
0.4 |
|
Legal and
Loss Prevention Services |
22.0 |
|
18.9 |
|
|
(3.1 |
) |
Total
Revenue |
358.2 |
|
383.0 |
|
|
24.9 |
|
% change |
|
7 |
% |
|
|
|
|
|
|
|
|
Cost of
revenue (exclusive of depreciation and amortization) |
271.1 |
|
295.9 |
|
|
24.8 |
|
Gross
profit |
87.1 |
|
87.1 |
|
|
0.0 |
|
% change |
|
0 |
% |
|
|
as
a % of revenue |
24 |
% |
23 |
% |
|
|
|
|
|
|
|
|
SG&A |
106.5 |
|
44.9 |
|
|
(61.6 |
) |
Depreciation and amortization |
29.2 |
|
35.0 |
|
|
5.8 |
|
Impairment
of goodwill and other intangible assets |
- |
|
- |
|
|
- |
|
Related
party expense |
26.9 |
|
0.8 |
|
|
(26.1 |
) |
Operating (loss)
income |
(75.5 |
) |
6.4 |
|
|
81.9 |
|
as
a % of revenue |
-21 |
% |
2 |
% |
|
|
|
|
|
|
|
|
Interest
expense, net |
38.3 |
|
38.3 |
|
|
0.0 |
|
Loss on
extinguishment of debt |
53.0 |
|
1.1 |
|
|
(51.9 |
) |
Sundry
expense (income) & Other income, net |
0.7 |
|
(3.4 |
) |
|
(4.0 |
) |
Net loss before income
taxes |
(167.5 |
) |
(29.7 |
) |
|
137.9 |
|
Income tax
expense (benefit) |
(37.0 |
) |
(0.7 |
) |
|
36.3 |
|
Net income
(loss) |
(130.5 |
) |
(28.9 |
) |
|
101.6 |
|
as
a % of revenue |
-36 |
% |
-8 |
% |
|
|
|
|
|
|
|
|
Depreciation and amortization |
29.2 |
|
35.0 |
|
|
5.8 |
|
Interest
expense, net |
38.3 |
|
38.3 |
|
|
0.0 |
|
Income tax
expense (benefit) |
(37.0 |
) |
(0.7 |
) |
|
36.3 |
|
EBITDA |
(100.0 |
) |
43.7 |
|
|
143.7 |
|
as
a % of revenue |
-28 |
% |
11 |
% |
|
|
|
|
|
|
|
|
EBITDA Adjustments |
|
|
|
|
1 |
Transaction and
integration costs |
79.3 |
|
0.2 |
|
|
(79.1 |
) |
2 |
Optimization and
restructuring expenses |
20.9 |
|
19.4 |
|
|
(1.4 |
) |
3 |
Gain / loss on
derivative instruments |
- |
|
(0.8 |
) |
|
(0.8 |
) |
4 |
Other Charges |
55.3 |
|
6.3 |
|
|
(49.0 |
) |
Adjusted
EBITDA |
55.5 |
|
68.9 |
|
|
13.4 |
|
% change |
|
24 |
% |
|
|
as
a % of revenue |
16 |
% |
18 |
% |
|
|
|
|
|
|
|
|
Exela Technologies
Schedule 2: Pro Forma YTD 2017 vs. YTD 2018 Financial
Performance
Exela Technologies, Inc. |
|
|
|
|
Quarterly Pro-Forma Income Statement |
|
|
|
|
|
|
|
|
|
|
$ in millions |
YTD Q3'17 |
YTD Q3'18 |
|
Change ($) |
Information
and Transaction Processing Solutions |
829.5 |
|
949.3 |
|
|
119.8 |
|
Healthcare
Solutions |
173.5 |
|
171.7 |
|
|
(1.8 |
) |
Legal and
Loss Prevention Services |
66.9 |
|
65.4 |
|
|
(1.5 |
) |
Total Revenue |
1,070.0 |
|
1,186.6 |
|
|
116.6 |
|
%
change |
|
11 |
% |
|
|
|
|
|
|
|
|
Cost of
revenue (exclusive of depreciation and amortization) |
790.0 |
|
903.7 |
|
|
113.7 |
|
Gross profit |
280.0 |
|
282.9 |
|
|
2.9 |
|
%
change |
|
1 |
% |
|
|
as
a % of revenue |
26 |
% |
24 |
% |
|
|
|
|
|
|
|
|
SG&A |
207.4 |
|
137.2 |
|
|
(70.2 |
) |
Depreciation and amortization |
91.4 |
|
109.4 |
|
|
18.0 |
|
Impairment
of goodwill and other intangible assets |
- |
|
- |
|
|
- |
|
Related
party expense |
32.0 |
|
3.3 |
|
|
(28.8 |
) |
Operating (loss) income |
(50.9 |
) |
33.0 |
|
|
83.8 |
|
as
a % of revenue |
-5 |
% |
3 |
% |
|
|
|
|
|
|
|
|
Interest
expense, net |
116.7 |
|
114.9 |
|
|
(1.8 |
) |
Loss on
extinguishment of debt |
53.0 |
|
1.1 |
|
|
(51.9 |
) |
Sundry
expense (income) & Other income, net |
3.1 |
|
(9.8 |
) |
|
(12.9 |
) |
Net loss before income taxes |
(223.6 |
) |
(73.2 |
) |
|
150.4 |
|
Income tax
expense (benefit) |
(39.9 |
) |
4.9 |
|
|
44.8 |
|
Net income (loss) |
(183.8 |
) |
(78.1 |
) |
|
105.7 |
|
as
a % of revenue |
-17 |
% |
-7 |
% |
|
|
|
|
|
|
|
|
Depreciation and amortization |
91.4 |
|
109.4 |
|
|
18.0 |
|
Interest
expense, net |
116.7 |
|
114.9 |
|
|
(1.8 |
) |
Income tax
expense (benefit) |
(39.9 |
) |
4.9 |
|
|
44.8 |
|
EBITDA |
(15.5 |
) |
151.1 |
|
|
166.7 |
|
as
a % of revenue |
-1 |
% |
13 |
% |
|
|
|
|
|
|
|
|
EBITDA Adjustments |
|
|
|
|
1 |
Transaction and
integration costs |
96.6 |
|
2.1 |
|
|
(94.5 |
) |
2 |
Optimization and
restructuring expenses |
36.9 |
|
47.0 |
|
|
10.0 |
|
3 |
Gain / loss on
derivative instruments |
- |
|
(4.8 |
) |
|
(4.8 |
) |
4 |
Other Charges |
64.6 |
|
13.2 |
|
|
(51.4 |
) |
Adjusted EBITDA |
182.5 |
|
208.6 |
|
|
26.0 |
|
%
change |
|
14 |
% |
|
|
as
a % of revenue |
17 |
% |
18 |
% |
|
|
|
|
|
|
|
|
Exela
TechnologiesSchedule 3: Adjusted EBITDA
Reconciliation – Three months ended and Nine
months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
Q3
2017(1) |
|
YTD
2017(1) |
|
As Reported |
|
Novitex |
|
Pro Forma |
|
As Reported |
|
Novitex |
|
Pro Forma |
Net loss |
|
($110.4 |
) |
|
($20.1 |
) |
|
($130.5 |
) |
|
($145.6 |
) |
|
($38.1 |
) |
|
($183.8 |
) |
Taxes |
|
|
(37.0 |
) |
|
|
0.0 |
|
|
|
(37.0 |
) |
|
|
(32.9 |
) |
|
|
(6.9 |
) |
|
|
(39.9 |
) |
Interest expense |
|
|
37.7 |
|
|
|
0.6 |
|
|
|
38.3 |
|
|
|
91.7 |
|
|
|
24.9 |
|
|
|
116.7 |
|
Depreciation and amortization |
|
|
28.1 |
|
|
|
1.2 |
|
|
|
29.2 |
|
|
|
70.8 |
|
|
|
20.6 |
|
|
|
91.4 |
|
EBITDA |
|
($81.7 |
) |
|
($18.2 |
) |
|
($100.0 |
) |
|
($16.0 |
) |
|
$0.5 |
|
|
($15.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction related costs |
|
|
77.3 |
|
|
|
2.0 |
|
|
|
79.3 |
|
|
|
86.6 |
|
|
|
10.0 |
|
|
|
96.6 |
|
Optimization and restructuring expenses |
|
|
19.7 |
|
|
|
1.2 |
|
|
|
20.9 |
|
|
|
31.5 |
|
|
|
5.4 |
|
|
|
36.9 |
|
Other Charges |
|
|
37.8 |
|
|
|
17.5 |
|
|
|
55.3 |
|
|
|
44.1 |
|
|
|
20.5 |
|
|
|
64.6 |
|
Adjusted EBITDA |
|
$53.1 |
|
|
$2.5 |
|
|
$55.5 |
|
|
$146.1 |
|
|
$36.4 |
|
|
$182.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $1.0 billion Senior
Secured Notes.
Exela
TechnologiesSchedule 4: Revenue and Expense
ReconciliationThree months ended and Nine months
ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2017(1) |
|
YTD
2017(1) |
($ in millions) |
|
As Reported |
|
Novitex |
|
Pro Forma |
|
As Reported |
|
Novitex |
|
Pro Forma |
Revenue |
|
$338.4 |
|
|
$19.8 |
|
|
$358.2 |
|
|
$766.0 |
|
|
$304.0 |
|
|
$1,070.0 |
|
Cost of revenue (exclusive of depreciation and amortization) |
|
|
255.1 |
|
|
|
16.0 |
|
|
|
271.1 |
|
|
|
539.2 |
|
|
|
250.8 |
|
|
|
790.0 |
|
Selling, general and administrative expenses (Including related
party) |
|
|
128.9 |
|
|
|
4.4 |
|
|
|
133.4 |
|
|
|
204.4 |
|
|
|
35.1 |
|
|
|
239.4 |
|
Depreciation and amortization |
|
|
28.1 |
|
|
|
1.2 |
|
|
|
29.2 |
|
|
|
70.8 |
|
|
|
20.6 |
|
|
|
91.4 |
|
Operating income (loss) |
|
|
(73.7 |
) |
|
|
(1.8 |
) |
|
|
(75.5 |
) |
|
|
(48.3 |
) |
|
|
(2.5 |
) |
|
|
(50.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
37.7 |
|
|
|
0.6 |
|
|
|
38.3 |
|
|
|
91.7 |
|
|
|
24.9 |
|
|
|
116.7 |
|
Loss / (Gain) on
extinguishment of debt |
|
|
35.5 |
|
|
|
17.5 |
|
|
|
53.0 |
|
|
|
35.5 |
|
|
|
17.5 |
|
|
|
53.0 |
|
Sundry expense &
other income, net |
|
|
0.6 |
|
|
|
0.0 |
|
|
|
0.7 |
|
|
|
3.0 |
|
|
|
0.0 |
|
|
|
3.1 |
|
Net loss before income taxes |
|
|
(147.4 |
) |
|
|
(20.0 |
) |
|
|
(167.5 |
) |
|
|
(178.6 |
) |
|
|
(45.0 |
) |
|
|
(223.6 |
) |
Income tax (benefit)
expense |
|
|
(37.0 |
) |
|
|
0.0 |
|
|
|
(37.0 |
) |
|
|
(32.9 |
) |
|
|
(6.9 |
) |
|
|
(39.9 |
) |
Net loss |
|
($110.4 |
) |
|
($20.0 |
) |
|
($130.5 |
) |
|
($145.6 |
) |
|
($38.0 |
) |
|
($183.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
12, 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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