EX-99.1 2 a18-13320_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

 

Contact: Jim Mathias

E: ir@exelatech.com

W: investors.exelatech.com

T: +1 972-821-5808

 

Exela Technologies, Inc. Reports First Quarter 2018 Results; Pro forma Revenue growth of 8.7%; Net Loss of $24 million; Pro forma Adjusted EBITDA Growth of 10.9%; Increases 2018 Revenue and Adjusted EBITDA Guidance

 

First Quarter 2018 Highlights:

 

·                  Revenue of $393.2 million, representing pro forma year-over-year growth of 8.7%

·                  Net loss of $24.0 million, a year-over-year improvement from a pro forma net loss of $25.4 million

·                  Adjusted EBITDA of $69.6 million, representing pro forma year-over-year growth of 10.9%

·                  Adjusted EBITDA margin of 17.7%, representing pro forma year-over year improvement of 40 basis points

·                  Achieved $14.8 million of savings during the first quarter of 2018 and reiterate anticipated savings of $40 million to $45 million during 2018

·                  Operating Income of $14.7 million, flat on a year-over-year basis

·                  EBITDA of $56.1 million, an increase of 30% year-over-year

·                  Previously announced share buyback program remains in effect and as of the date of this release, total shares purchased equal 186,205

·                  Increases 2018 revenue and adjusted EBITDA guidance

 

Irving, TX— May 10, 2018 — 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 first quarter ended March 31, 2018.

 

“We are beginning to see the benefits provided through the successful execution of our strategy. I am pleased to report our first quarter results, highlighted by pro forma revenue growth of 8.7% and pro forma adjusted EBITDA growth of 10.9%. Based on our strong first quarter results, we are increasing our outlook for both revenue and adjusted EBITDA,” said Ronald Cogburn, Chief Executive Officer.

 

Cogburn continued, “The mission to extend Exela’s global leadership position in business process automation continues. We have significant white space opportunity to harvest, and we are expanding our customer engagements. For example, we are opening Exela innovation centers in key Exela markets. At these centers, we showcase our full suite of solutions and collaborate with our customers to solve problems and launch new services.  Early signs are positive, with over 24 pilot programs at work to share the breadth and depth of Exela solutions with our customers. We continue to invest in people and technology to further build upon increased customer awareness.”

 

Financial information contained in this press release 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 primary pro forma adjustment is to include the results of Novitex for the period January 1, 2017 to July 12, 2017. For more information, please refer to the reconciliation of reported to pro forma financial results contained in the Schedules of this release.

 

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First Quarter Ended March 31, 2018 Financial Highlights

(Note: all Q1 2017 numbers, unless otherwise stated, are presented on a pro forma basis.)

 

·                  Revenue: Revenue of $393.1 million, an increase of 8.7% from $361.9 million in the first quarter of 2017, and an increase of 1.8% from $386.3 million in the fourth quarter of 2017. Please refer to the pro forma revenue reconciliation contained in this press release for the first quarter of 2017. ITPS revenue was $311.9 million, an increase of 11.6% year-over-year, driven primarily by increased volumes and expansion of services within existing customers. HS revenue was in-line with expectations at $58.6 million, a slight decrease of 0.8%. LLPS revenue was in-line with expectations at $22.6 million, a decline of 3.4%.

 

·                  6 customers over $25 million in annual revenue and approximately 200 customers with more than $1 million annual revenue.

 

·                  Revenue per full-time employee increased sequentially to $69 thousand from $66 thousand.

 

·                  Total contract value won as of March 31, 2018, on a trailing-twelve-month basis, totaled $1.525 billion

 

·                  Renewal rate on strategic accounts greater than 95%.

 

·                  Net Loss for the first quarter of 2018 totaled $24.0 million, an improvement when compared to a pro forma net loss of $25.4 million in the first quarter of 2017.

 

·                  Adjusted EBITDA: Adjusted EBITDA was $69.6 million, an increase of 10.9% when compared to pro forma Adjusted EBITDA of $62.7 million in the first quarter of 2017. The increase in first quarter 2018 Adjusted EBITDA was primarily driven by revenue growth and the impact of the Company’s cost savings initiatives, partially offset by ramp-up costs associated with new ITPS client contracts, investments in the Company’s revenue growth initiatives, and higher public company costs.

 

·                  Adjusted EBITDA Margin: Adjusted EBITDA margin was 17.7%, representing an improvement of 40 basis points when compared to an Adjusted EBITDA margin of 17.3% in the first quarter of 2017. The improvement in Adjusted EBITDA margin was primarily driven by revenue growth and the impact of the Company’s cost savings initiatives, partially offset by ramp-up costs associated with new ITPS client contracts, investments in the Company’s revenue growth initiatives, and higher public company costs.

 

·                  Capital Expenditures: 2.2% of Q1 2018 revenue compared to 3.1% in Q1 2017.

 

·                  Share buyback: As of the date of this release, total shares repurchased under the Company’s share buyback program totaled 186,205. Company anticipates continuing to be opportunistic in purchasing of shares under the current buyback program; particularly given the Company’s view that shares are undervalued at current levels.

 

Balance Sheet and Liquidity

 

·                  Balance Sheet and Liquidity: At March 31, 2018, Exela’s total liquidity was $117 million, measured as $26.9 million of cash and cash equivalents, $10.4 million of restricted cash with no legal restriction, and $79.4 million of available revolving credit facility ($100 million of revolving credit facility less $20.6 million of letters of credit).  Total net debt was $1.368 billion (measured as total consolidated

 

2



 

debt of $1.406 billion less cash balances not legally restricted of $37.3 million). During the first quarter, the Company made a cumulative $26.5 million investment in initiatives intended to drive growth including: business optimization expenses and working capital growth. Investments in the aforementioned growth initiatives resulted in a sequential decline in liquidity.

 

Outlook

2018

 

·                  Company increases 2018 guidance for revenue and adjusted EBITDA.

·                  Revenue range increased to $1.55 billion to $1.58 billion from $1.51 billion to $1.54 billion previously. Increased range drives pro forma growth of 6.5% to 8.5%, up from pro forma growth of 4% to 6% previously.

·                  Adjusted EBITDA range increased to $295 million to $310 million from $290 million to $310 million previously. Increased range drives pro forma year-over-year growth of 20% to 26%; and expansion of adjusted EBITDA margins in the range of 220 basis points to 320 basis points.

·                  Further Adjusted EBITDA guidance — in the range of $330 million to $355 million or a margin of 21% to 22%.

·                  Guidance includes delivering $40 million to $45 million in savings during 2018 with remaining to be achieved beyond 2018.

 

Long-term

 

·                  Revenue growth in the range of 3% to 4%

·                  Adjusted EBITDA margin guidance in the range of 22% to 23%

·                  Adjusted Free Cash Flow conversion in the range of 87% to 89%

 

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) including, income tax expense, stock-based compensation expense. Adjusted EBITDA should not be used to predict net income/(loss) as the difference between the two measures is variable.

 

The above outlook is based on first quarter 2018 results. Reconciliations are available in the attached tables.

 

Earnings Conference Call and Audio Webcast

 

Exela will host a conference call to discuss its first quarter 2018 financial results today at 5:00 p.m. EDT.  To access this call, dial 800-860-2442 or +412-858-4600.  A replay of this conference call will be available through May 17, 2018 at 877-344-7529 or +412-317-0088 (international).  The replay passcode is 10119270.  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 Holdings, Inc. and Novitex Holdings, Inc. on a combined basis to its investor relations website, (http://investors.exelatech.com).

 

About Exela

 

Embracing complexity. Delivering simplicity.SM Exela is a global business process automation leader combining industry-specific and industry-agnostic enterprise software and solutions with decades of experience. Our BPA suite of solutions are deployed across banking, healthcare, insurance and other industries to support mission-critical environments. Exela is a leader in workflow automation, attended and unattended cognitive automation, digital mailrooms, print communications, and payment processing with deployments across the globe.

 

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Exela partners with customers to improve user experience and quality through operational efficiency. Exela serves over 3,500 customers across more than 50 countries, through a secure, cloud-enabled global delivery model. We are 22,000 employees strong at nearly 1,100 onsite customer facilities and more than 150 delivery centers located throughout 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

 

About Non-GAAP Financial Measures: This earnings release presents certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Further Adjusted EBITDA, Further Adjusted Free Cash Flow, each of which is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe 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. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Our board of directors and management use EBITDA, Adjusted EBITDA, Further Adjusted EBITDA, and Further Adjusted Free Cash Flow to assess our financial performance, because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our 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.  The Company 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 the Company’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 our non-GAAP measures. For reconciliation of the comparable GAAP measures to these non-GAAP financial measures, see the schedules to this release. Optimization & restructuring expenses and merger adjustments are primarily related to the implementation of strategic actions and initiatives related to the business combination completed on July 12, 2017. 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 recently consummated transaction between Exela Technologies, Inc., SourceHOV Holdings, Inc., and  Novitex Holdings, Inc. (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 based on the current expectations of Exela management and are not predictions of actual performance. These statements are

 

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subject to a number of risks and uncertainties regarding Exela’s businesses, 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 10K dated March 16, 2018 filed with the Securities and Exchange Commission (“SEC”). 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 presentation.

 

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Exela Technologies

Condensed Consolidated Balance Sheet (Unaudited)

 

 

 

March 31,

 

December 31,

 

 

 

2018

 

2017

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

26,882

 

$

39,000

 

Restricted cash

 

12,549

 

42,489

 

Accounts receivable, net of allowance for doubtful accounts of $4,077 and $3,725, respectively

 

238,680

 

229,704

 

Inventories, net

 

13,519

 

11,922

 

Prepaid expenses and other current assets

 

27,456

 

24,596

 

Current deferred tax asset

 

64

 

 

Total current assets

 

319,150

 

347,711

 

Property, plant and equipment, net

 

132,870

 

132,908

 

Goodwill

 

747,325

 

747,325

 

Intangible assets, net

 

438,929

 

464,984

 

Deferred income tax assets

 

9,171

 

9,019

 

Other noncurrent assets

 

18,490

 

12,891

 

Total assets

 

$

1,665,935

 

$

1,714,838

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

Liabilities

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Accounts payable

 

$

77,194

 

$

81,263

 

Related party payables

 

14,172

 

14,445

 

Income tax payable

 

6,967

 

3,612

 

Accrued liabilities

 

31,805

 

49,383

 

Accrued compensation and benefits

 

49,738

 

46,925

 

Accrued Interest

 

23,795

 

55,102

 

Customer deposits

 

36,542

 

31,656

 

Deferred revenue

 

15,933

 

12,709

 

Obligation for claim payment

 

56,554

 

42,489

 

Current portion of capital lease obligations

 

14,785

 

15,611

 

Current portion of long-term debt

 

21,170

 

20,565

 

Total current liabilities

 

348,655

 

373,760

 

Long-term debt, net of current maturities

 

1,277,029

 

1,276,094

 

Capital lease obligations, net of current maturities

 

26,474

 

25,958

 

Pension liability

 

26,081

 

25,496

 

Deferred income tax liabilities

 

5,478

 

5,362

 

Long-term income tax liability

 

3,470

 

3,470

 

Other long-term liabilities

 

13,879

 

14,704

 

Total liabilities

 

1,701,066

 

1,724,844

 

Commitements and Contingencies (Note 9)

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 152,565,218 shares issued and 152,515,918 outstanding at March 31, 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 shares; 20,000,000 shares authorized; 4,569,233 shares issued and outstanding at March 31, 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; 49,300 shares at March 31, 2018 and 49,300 shares at December 31, 2017

 

(249

)

(249

)

Equity based compensation

 

35,044

 

34,085

 

Accumulated deficit

 

(540,041

)

(514,628

)

Accumulated other comprehensive loss:

 

 

 

 

 

Foreign currency translation adjustment

 

(462

)

(194

)

Unrealized pension actuarial losses, net of tax

 

(11,457

)

(11,054

)

Total accumulated other comprehensive loss

 

(11,919

)

(11,248

)

Total stockholders’ deficit

 

(35,131

)

(10,006

)

Total liabilities and stockholders’ deficit

 

$

1,665,935

 

$

1,714,838

 

 

6



 

Exela Technologies

Condensed Consolidated Statements of Income (Loss) (Unaudited)

 

 

 

Three Months ended March 31,

 

 

 

2018

 

2017

 

Revenue

 

$

393,167

 

$

218,260

 

Cost of revenue (exclusive of depreciation and amortization)

 

293,792

 

143,708

 

Selling, general and administrative expenses

 

45,595

 

35,581

 

Depreciation and amortization

 

38,019

 

21,320

 

Related party expense

 

1,105

 

2,385

 

Operating income (loss)

 

14,656

 

15,266

 

Other expense (income), net:

 

 

 

 

 

Interest expense, net

 

38,017

 

26,219

 

Sundry expense (income), net

 

(64

)

2,724

 

Other income, net

 

(3,328

)

 

Net loss before income taxes

 

(19,969

)

(13,677

)

Income tax (expense) benefit

 

(4,025

)

(2,004

)

Net loss

 

(23,994

)

(15,681

)

Cumulative dividends for Series A Preferred Stock

 

(914

)

 

Net loss attributable to common stockholders

 

$

(24,908

)

$

(15,681

)

Net loss per share - basic and diluted

 

(1.64

)

(2.45

)

 

7



 

Exela Technologies

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

 

Three Months ended March 31,

 

 

 

2018

 

2017

 

Cash flows from operating activities

 

 

 

 

 

Net loss

 

$

(23,994

)

$

(15,681

)

Adjustments to reconcile net loss

 

 

 

 

 

Depreciation and amortization

 

38,019

 

21,320

 

Original issue discount and debt issuance cost amortization

 

2,595

 

3,474

 

Provision (recovery) for doubtful accounts

 

481

 

79

 

Deferred income tax benefit

 

835

 

627

 

Share-based compensation expense

 

959

 

310

 

Foreign currency remeasurement

 

(323

)

687

 

Gain on sale of Meridian

 

 

(251

)

Loss on sale of property, plant and equipment

 

253

 

272

 

Fair value adjustment for interest rate swap

 

(3,328

)

 

Change in operating assets and liabilities, net of effect from acquisitions

 

 

 

 

 

Accounts receivable

 

(10,876

)

(1,086

)

Prepaid expenses and other assets

 

(5,567

)

(3,720

)

Accounts payable and accrued liabilities

 

(18,864

)

1,928

 

Related party payables

 

(273

)

(3,690

)

Net cash provided by (used in) operating activities

 

(20,083

)

4,269

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Purchases of property, plant and equipment

 

(5,957

)

(2,045

)

Additions to internally developed software

 

(1,092

)

(2,528

)

Additions to outsourcing contract costs

 

(1,596

)

(3,989

)

Proceeds from sale of Meridian

 

 

4,381

 

Proceeds from sale of property, plant, and equipment

 

2

 

 

Net cash used in investing activities

 

(8,643

)

(4,181

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Change in bank overdraft

 

 

(210

)

Proceeds from financing obligations

 

1,863

 

3,008

 

Contribution from shareholders

 

 

20,538

 

Cash paid for equity issue costs

 

(7,500

)

 

Borrowings from revolver and swing-line loan

 

25,000

 

38,500

 

Repayments from revolver and swing line loan

 

(25,000

)

(38,500

)

Principal payments on long-term obligations

 

(7,750

)

(15,786

)

Net cash provided by (used in) financing activities

 

(13,387

)

7,550

 

Effect of exchange rates on cash

 

55

 

(44

)

Net increase (decrease) in cash and cash equivalents

 

(42,058

)

7,594

 

Cash and cash equivalents

 

 

 

 

 

Beginning of period

 

81,489

 

34,253

 

End of period

 

$

39,431

 

$

41,847

 

 

 

 

 

 

 

Supplemental cash flow data:

 

 

 

 

 

Income tax payments, net of refunds received

 

$

1,053

 

$

(12

)

Interest paid

 

66,192

 

30,844

 

Noncash investing and financing activities:

 

 

 

 

 

Assets acquired through capital lease arrangements

 

4,432

 

68

 

Accrued capital expenditures

 

1,101

 

98

 

 

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Exela Technologies

Schedule 1: Pro Forma First Quarter 2017 vs. First Quarter 2018 Financial Performance

 

($ in millions)

 

Q1 2018

 

Pro forma
Q1 2017

 

% Change

 

Revenue

 

 

 

 

 

 

 

Information and Transaction Processing Solutions

 

$

311.9

 

$

279.4

 

11.6

%

Healthcare Solutions

 

58.6

 

59.1

 

-0.8

%

Legal and Loss Prevention Services

 

22.6

 

23.4

 

-3.4

%

Total Revenue

 

$

393.2

 

$

361.9

 

8.7

%

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization)

 

293.8

 

261.9

 

 

 

Selling, general and administrative expenses (Including related party)

 

46.7

 

54.3

 

 

 

Depreciation and amortization

 

38.0

 

31.0

 

 

 

Impairment of goodwill and other intangible assets

 

0.0

 

0.0

 

 

 

Operating income (loss)

 

14.7

 

14.7

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

38.0

 

38.3

 

 

 

Loss / (Gain) on extinguishment of debt

 

0.0

 

0.0

 

 

 

Sundry expense (income) & Other income, net

 

(3.4

)

2.7

 

 

 

Net loss before income taxes

 

(20.0

)

(26.4

)

 

 

Income tax expense / (benefit)

 

4.0

 

(1.0

)

 

 

Net loss

 

(24.0

)

(25.4

)

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

38.0

 

31.0

 

 

 

Interest expense, net

 

38.0

 

38.3

 

 

 

Income tax expense / (benefit)

 

4.0

 

(1.0

)

 

 

EBITDA

 

56.1

 

43.0

 

 

 

Transaction related costs

 

1.1

 

10.0

 

 

 

Optimization and restructuring expenses

 

14.5

 

5.9

 

 

 

Non-cash charges / (gains), oversight & management fees

 

(2.1

)

3.8

 

 

 

Adjusted EBITDA

 

$

69.6

 

$

62.7

 

10.9

%

 

 

17.7

%

17.3

%

 

 

 

Exela Technologies

Schedule 2: Adjusted EBITDA Reconciliation — Pro Forma First Quarter 2017

 

 

 

Q1 2017(1)

 

($ in millions)

 

As Reported

 

Novitex

 

Pro Forma

 

Net loss

 

$

(15.7

)

$

(9.7

)

$

(25.4

)

Taxes

 

2.0

 

(3.0

)

(1.0

)

Interest expense

 

26.2

 

12.1

 

38.3

 

Depreciation and amortization

 

21.3

 

9.7

 

31.0

 

EBITDA

 

$

33.9

 

$

9.1

 

$

43.0

 

Optimization and restructuring expenses

 

4.3

 

1.5

 

5.9

 

Transaction related costs

 

5.1

 

4.9

 

10.0

 

Non-cash charges

 

0.1

 

 

0.1

 

New contract setup

 

 

1.1

 

1.1

 

Oversight and management Fees

 

2.1

 

0.5

 

2.6

 

Adjusted EBITDA

 

$

45.5

 

$

17.3

 

$

62.7

 

 


(1)         Net loss for the period is presented on the basis of the previous debt structure at the respective standalone companies. As of July 12th, 2017 the existing debt structures at respective Exela entities have been replaced with a new capital structure consisting of $350 million Term Loan and $1.0 Billion Senior Secured Notes.

 

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Exela Technologies

Schedule 3: Adjusted EBITDA Reconciliation — Fourth Quarter 2017 vs. First Quarter 2018

 

 

 

As Reported

 

($ in millions)

 

Q1 2018

 

Q4 2017

 

 

 

 

 

 

 

Net loss

 

$

(24.0

)

$

(58.7

)

Taxes

 

4.0

 

(27.3

)

Interest expense

 

38.0

 

36.7

 

Depreciation and amortization

 

38.0

 

28.1

 

EBITDA

 

$

56.1

 

$

(21.1

)

Impairment of goodwill and other intangible assets

 

 

69.4

 

Optimization and restructuring expenses

 

14.5

 

11.0

 

Transaction related costs

 

1.1

 

2.4

 

Non-cash charges

 

1.3

 

2.3

 

(Gain) / loss on derivative instruments

 

(3.3

)

(1.3

)

Adjusted EBITDA

 

$

69.6

 

$

62.7

 

 

Exela Technologies

Schedule 4: SG&A (Including Related Party) — Pro Forma First Quarter 2017, Fourth Quarter 2017 and First Quarter 2018

 

 

 

As Reported

 

Q1 2017

 

($ in millions)

 

Q1 2018

 

Q4 2017

 

Pro Forma

 

As Reported

 

Novitex

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

45.6

 

48.3

 

51.6

 

35.6

 

16.0

 

Related party expense

 

1.1

 

1.7

 

2.7

 

2.4

 

0.3

 

Total

 

$

46.7

 

$

50.0

 

$

54.3

 

$

38.0

 

$

16.3

 

 

10



 

Exela Technologies

Schedule 5: Pro Forma Reconciliation — First Quarter 2017

 

 

 

Q1 2017(1)

 

($ in millions)

 

As Reported

 

Novitex

 

Pro Forma

 

Revenue

 

$

218.3

 

$

143.6

 

$

361.9

 

Cost of revenue (exclusive of depreciation and amortization)

 

143.7

 

118.2

 

261.9

 

Selling, general and administrative expenses (Including related party)

 

38.0

 

16.3

 

54.3

 

Depreciation and amortization

 

21.3

 

9.7

 

31.0

 

Operating income (loss)

 

15.3

 

(0.6

)

14.7

 

 

 

 

 

 

 

 

 

Interest expense, net

 

26.2

 

12.1

 

38.3

 

Sundry expense (income) & other income, net

 

2.7

 

 

2.7

 

Net loss before income taxes

 

(13.7

)

(12.7

)

(26.4

)

Income tax (benefit) expense

 

2.0

 

(3.0

)

(1.0

)

Net loss

 

$

(15.7

)

$

(9.7

)

$

(25.4

)

 


(1)         Net loss for the period is presented on the basis of the previous debt structure at the respective standalone companies. As of July 12th, 2017 the existing debt structures at respective Exela entities have been replaced with a new capital structure consisting of $350 million Term Loan and $1.0 Billion Senior Secured Notes.

 

Exela Technologies

Schedule 6: Pro forma capital expenditures — First Quarter 2017

 

 

 

Q1 2017

 

($ in millions)

 

Acquirer

 

Novitex

 

Pro Forma

 

 

 

 

 

 

 

 

 

Capital expenditures

 

8.6

 

2.5

 

11.1

 

 

Exela Technologies

Schedule 7: Further Adjusted EBITDA Calculation Pro Forma 2017

 

 

 

Pro Forma

 

($ in millions)

 

FY 2017

 

Net Loss

 

$

(242.4

)

Taxes

 

(67.2

)

Interest expense

 

153.4

 

Depreciation and amortization

 

119.5

 

Impairment of goodwill and other intangible assets

 

69.4

 

(Gain) / loss on extinguishment of debt

 

53.0

 

Optimization and restructuring expenses

 

47.9

 

Transaction related costs

 

99.0

 

Non-cash charges

 

6.7

 

New contract setup

 

2.0

 

Oversight and management Fees

 

5.1

 

(Gain) / loss on derivative instruments

 

(1.3

)

Gain / (loss) on currency exchange

 

2.4

 

Combined merger adjustments

 

99.2

 

Further Adjusted EBITDA

 

$

346.8

 

 

11