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Exela Technologies Holdings, Inc. Reports Full Year 2023 Results

Globe Newswire 4-Apr-2024 8:00 AM

  • 2023 revenue of $1,064.1 million, down 1.2% year-over-year
  • Gross margin of 21.7% in 2023 vs 18.5% in 2022
  • Operating profit of $8.1 million, up $236.8 million due to increased gross margin, lower SG&A and no impairments in 2023 versus 2022
  • Net loss of $124.4 million ($125.1 attributable to Exela Technologies Inc), an improvement of $291.4 million year-over-year
  • Certain of the Company's subsidiaries issued approximately $764.8 million of aggregate principal amount of new notes in exchange for $956.0 million of aggregate principal amount of existing 2026 notes in 2023

IRVING, Texas, April 04, 2024 (GLOBE NEWSWIRE) -- Exela Technologies, Inc. ("Exela" or the "Company") (NASDAQ: XELA, XELAP), a global business process automation ("BPA") leader, announced today its financial results for the full year ended December 31, 2023.

"2023 was a challenging year with focus on stabilizing revenues and recovering from the effects of our network outage in 2022. We made significant improvement to our balance sheet, eliminating current liabilities, and reducing our overall debt and interest expense under a difficult macro environment and uncertain outlook. We maintained our focus on cost management and leveraging automation, and have 2023 initiatives in process continuing into 2024 to achieve our margin improvement goals. Late in the year, we made investments to position the Company for future growth by entering into cyber security, data modernization, cloud and Infrastructure-as-a-Service, in addition to previously announced investments in FAO and data science. We completed the public listing on Nasdaq of XBP Europe, our European business. We also made significant investments in people. We improved gross margins and operating income, however we did not accomplish all of our goals in 2023 and have room to grow," said Par Chadha, Executive Chairman of Exela Technologies.

Full Year Highlights

  • Revenue: Revenue for 2023 was $1,064.1 million, a decline of 1.2% compared to $1,077.2 million in 2022
    • Revenue for the Information and Transaction Processing Solutions segment was $732.3 million, a decline of 4.3% year-over-year
    • Healthcare Solutions generated $251.4 million, a 5.0% increase year-over-year
    • Legal and Loss Prevention Services generated $80.4 million in revenue, a 10.6% increase year-over-year
  • Operating profit: Operating profit in 2023 was $8.0 million, up $236.8 million compared with an operating loss of $228.8 million in 2022. Higher gross margin from technology advancements, lower SG&A with reductions in professional services and facility expenses, and a lack of goodwill impairment contributed to the profit improvement on a year-over-year basis.    
  • Net Loss: Net loss for 2023 was $124.4 million ($125.1 attributable to Exela Technologies Inc), an improvement of $291.4 million compared with a net loss of $415.6 million in 2022. The year over year decrease was materially driven by improvements in operating profit, lower interest expense and a gain on debt modification and extinguishment costs relative 2022.
  • Adjusted EBITDA(1): Adjusted EBITDA for 2023 was $60.0 million compared to $56.8 million in 2022. Adjusted EBITDA margin for 2023 was 5.6%, an increase of 30 basis points from 2022.
  • Capital Expenditures: Capital expenditures for 2023 were 1.1% of revenue compared to 2% of revenue in 2022 as we continue to migrate from capital intensive infrastructure to cloud computing, by making investments in our platforms and operations.

Below is the note referenced above:
(1) Adjusted EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA is attached to this release.

About Exela
Exela Technologies is a business process automation (BPA) leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of experience operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100. Utilizing foundational technologies spanning information management, workflow automation, and integrated communications, Exela's software and services include multi-industry, departmental solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and the public sector. Through cloud-enabled platforms, built on a configurable stack of automation modules, and approximately 14,100 employees operating in 20 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.

To automatically receive Exela financial news by e-mail, please visit the Exela Investor Relations website,, and subscribe to E-mail Alerts. 

Forward-Looking Statements
Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "may", "should", "would", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "seem", "seek", "continue", "future", "will", "expect", "outlook" or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, estimated or anticipated future results and benefits, future opportunities for Exela, and other statements that are not historical facts. These statements are based on the current expectations of Exela management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties, including without limitation the network outage described in this press release and those discussed under the heading "Risk Factors" in our Annual Report and in subsequent filings with the U.S. 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 press release.

For more Exela news, commentary, and industry perspectives, visit:
X: @ExelaTech
LinkedIn: /exela-technologies
Facebook: @exelatechnologies
Instagram: @exelatechnologies
The information posted on the Company's website and/or via its social media accounts may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its social media accounts in addition to the Company's press releases, SEC filings and public conference calls and webcasts.

Investor and/or Media Contacts:
Vincent Kondaveeti


Exela Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2023 and 2022
(in thousands of United States dollars except share and per share amounts)
 December 31, 
Current assets     
Cash and cash equivalents$23,341  $15,073 
Restricted cash 43,812   29,994 
Accounts receivable, net of allowance for credit losses of $6,628 and $6,402, respectively 76,893   101,616 
Related party receivables and prepaid expenses 296   759 
Inventories, net 11,502   16,848 
Prepaid expenses and other current assets 25,364   26,206 
Total current assets  181,208    190,496 
Property, plant and equipment, net of accumulated depreciation of $213,142 and $207,520, respectively 58,366   71,694 
Operating lease right-of-use assets, net 33,874   40,734 
Goodwill 170,452   186,802 
Intangible assets, net 164,920   200,982 
Deferred income tax assets 3,043   1,483 
Other noncurrent assets 24,474   29,721 
Total assets$ 636,337  $ 721,912 
Liabilities and Stockholders' Deficit     
Current liabilities     
Current portion of long-term debt$30,029  $154,802 
Accounts payable 61,109   79,249 
Related party payables 1,938   2,473 
Income tax payable 2,080   2,045 
Accrued liabilities 63,699   61,340 
Accrued compensation and benefits 65,012   54,143 
Accrued interest 52,389   60,901 
Customer deposits 23,838   16,955 
Deferred revenue 12,099   16,405 
Obligation for claim payment 66,988   44,380 
Current portion of finance lease liabilities 4,856   5,485 
Current portion of operating lease liabilities 10,845   11,867 
Total current liabilities  394,882    510,045 
Long-term debt, net of current maturities 1,030,580   942,035 
Finance lease liabilities, net of current portion 5,953   9,448 
Pension liabilities, net 13,192   16,917 
Deferred income tax liabilities 11,692   11,180 
Long-term income tax liabilities 6,359   2,742 
Operating lease liabilities, net of current portion 26,703   31,030 
Other long-term liabilities 5,811   6,104 
Total liabilities  1,495,172    1,529,501 
Commitments and Contingencies (Note 14)     
Stockholders' deficit     
Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 6,365,353 shares issued and outstanding at December 31, 2023 and 1,393,889 shares issued and 1,393,276 shares outstanding at December 31, 2022 261   162 
Preferred stock, $0.0001 par value per share, 20,000,000 shares authorized at December 31, 2023 and December 31, 2022, respectively     
Series A Preferred Stock, 2,778,111 shares issued and outstanding at December 31, 2023 and December 31, 2022 1   1 
Series B Preferred Stock, 3,029,900 shares issued and outstanding at December 31, 2023 and 0 shares issued and outstanding at December 31, 2022     
Additional paid in capital 1,179,098   1,102,619 
Less: Common Stock held in treasury, at cost; 0 shares at December 31, 2023 and 612 shares at December 31, 2022    (10,949)
Equity-based compensation 57,073   56,958 
Accumulated deficit (2,084,114)  (1,948,009)
Accumulated other comprehensive loss:     
Foreign currency translation adjustment (7,648)  (4,788)
Unrealized pension actuarial losses, net of tax (174)  (3,583)
Total accumulated other comprehensive loss (7,822)  (8,371)
Total stockholders' deficit attributable to Exela Technologies, Inc.  (855,503)   (807,589)
Noncontrolling interest in XBP Europe (3,332)   
Total stockholders' deficit  (858,835)   (807,589)
Total liabilities and stockholders' deficit$ 636,337  $ 721,912 

The accompanying notes are an integral part of these consolidated financial statements.

Exela Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2023 and 2022
(in thousands of United States dollars except share and per share amounts)
 Years ended December 31, 
Revenue$1,064,124  $1,077,157 
Cost of revenue (exclusive of depreciation and amortization) 833,422   877,474 
Selling, general and administrative expenses (exclusive of depreciation and amortization) 150,672   176,524 
Depreciation and amortization 60,535   71,831 
Impairment of goodwill and other intangible assets    171,182 
Related party expense 11,444   8,923 
Operating profit (loss)  8,051    (228,777)
Other expense (income), net:     
Interest expense, net 139,656   164,870 
Debt modification and extinguishment costs (gain), net (16,129)  4,522 
Sundry expense (income), net 973   (957)
Other expense (income), net (884)  14,170 
Loss before income taxes  (115,565)   (411,382)
Income tax expense (8,868)  (4,199)
Net loss  (124,433)   (415,581)
Net profit (loss) attributable to noncontrolling interest in XBP Europe, net of taxes 723    
Net loss attributable to Exela Technologies, Inc.$ (125,156) $ (415,581)
Cumulative dividends for Series A Preferred Stock (3,961)  (3,588)
Cumulative dividends for Series B Preferred Stock (4,718)  (3,665)
Net loss attributable to common stockholders$ (133,835) $ (422,834)
Loss per share:     
Basic and diluted$(22.37) $(1,372.98)

The accompanying notes are an integral part of these consolidated financial statements.

Exela Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2023 and 2022
(in thousands of United States dollars unless otherwise stated)
 Years ended December 31, 
 2023 2022
Cash flows from operating activities     
Net loss$(124,433) $(415,581)
Adjustments to reconcile net loss     
Depreciation and amortization 60,535   71,831 
Original issue discount, debt premium and debt issuance cost amortization 5,411   15,261 
Interest paid on BR Exar AR Facility (10,754)   
Debt modification and extinguishment gain, net (17,534)  (1,803)
Impairment of goodwill and other intangible assets    171,182 
Impairment of operating lease right-of-use assets 1,942    
Credit loss expense 4,486   1,573 
Deferred income tax provision (1,048)  147 
Share-based compensation expense 115   970 
Unrealized foreign currency gain (70)  (1,288)
(Gain) loss on sale of assets (7,044)  707 
Fair value adjustment for private warrants liability of XBP Europe 597    
Change in operating assets and liabilities     
Accounts receivable 22,729   77,650 
Prepaid expenses and other current assets 5,523   (7,813)
Accounts payable and accrued liabilities 63,711   (520)
Related party payables (71)  945 
Additions to outsource contract costs (539)  (423)
Net cash provided by (used in) operating activities  3,556    (87,162)
Cash flows from investing activities     
Purchase of property, plant and equipment (8,075)  (18,299)
Additions to patents    (15)
Additions to internally developed software (3,818)  (3,650)
Proceeds from sale of assets 29,811   194 
Net cash provided by (used in) investing activities  17,918    (21,770)
Cash flows from financing activities     
Proceeds from issuance of Common Stock from private placement    55 
Proceeds from issuance of Common Stock from at the market offerings 69,260   276,337 
Cash received in exchange for the issuance of noncontrolling interest shares in XBP Europe 5,205    
Cash paid for equity issuance costs from at the market offerings (2,232)  (9,482)
Dividend paid on Series B Preferred Stock    (2,532)
Payment for fractional shares on reverse stock split (31)   
Repurchases of Common Stock for retirement    (487)
Borrowings under factoring arrangement and Securitization Facility 88,396   123,353 
Principal repayment on borrowings under factoring arrangement and Securitization Facility (92,536)  (216,812)
Cash paid for withholding taxes on vested RSUs    (135)
Lease terminations    3 
Cash paid for debt issuance costs (8,496)  (7,125)
Principal payments on finance lease obligations (4,570)  (5,523)
Borrowings from senior secured revolving facility and BRCC revolver 9,600   20,000 
Repayments on senior secured revolving facility    (49,477)
Proceeds from issuance of July 2026 Notes    70,269 
Borrowings from other loans 8,709   10,095 
Cash paid for debt repurchases (11,858)  (4,712)
Proceeds from Senior secured term loan 40,000    
Proceeds from Second Lien Note 31,500    
Borrowing under BR Exar AR Facility 42,539    
Repayments under BR Exar AR Facility (42,546)   
Repayment of BRCC term loan (48,529)  (66,471)
Principal repayments on senior secured term loans and other loans (83,787)  (30,717)
Net cash provided by financing activities  624    106,639 
Effect of exchange rates on cash, restricted cash and cash equivalents (12)  (700)
Net increase (decrease) in cash, restricted cash and cash equivalents   22,086    (2,993)
Cash, restricted cash, and cash equivalents     
Beginning of period 45,067   48,060 
End of period$67,153  $45,067 
Supplemental cash flow data:     
Income tax payments, net of refunds received$5,494  $5,790 
Interest paid 111,835   98,602 
Noncash investing and financing activities:     
Assets acquired through right-of-use arrangements$405  $4,790 
Issuance of April 2026 Notes in exchange of July 2026 Notes 764,800    
Issuance of April 2026 Notes in exchange of 2023 term loan 2,963    
Accrued PIK interest paid through issuance of PIK Notes 44,146    
Common Stock exchanged for Series B Preferred Stock    6 
Accrued liability for true-up obligation settled through the issuance of July 2026 Notes    10,351 
Accrued capital expenditures 2,261   1,851 

The accompanying notes are an integral part of these consolidated financial statements.

Exela Technologies, Inc. and Subsidiaries
Schedule 1: Reconciliation of Adjusted EBITDA and constant currency revenues
 Year Ended December 31, 
Net Loss$(124,433) $(415,581)
Taxes 8,868   4,199 
Interest expense 139,656   164,870 
Depreciation and amortization 60,535   71,831 
EBITDA 84,626   (174,681)
Transaction and integration costs (1) 6,172   18,586 
Non-cash equity compensation (2) 115   985 
Other charges including non-cash (3) (12,991)  35,932 
Loss/(gain) on sale of assets (4) 1,105   1,357 
Loss/(gain) on business disposals (5) (7,223)   
Debt modification and extinguishment costs (gain), net (16,129)  4,522 
Loss/(gain) on derivative instruments    (1,091)
Exit costs related to China operations 1,850    
XBP Europe related de-SPAC costs 2,478    
Impairment of goodwill, other intangible assets    171,182 
Adjusted EBITDA$60,003  $56,792 

(1) Represents non-recurring legal, consulting and other fees and expenses incurred in connection with acquisitions, dispositions, debt-exchanges and other extraordinary transactions and events during the applicable period.
(2) Represents the non-cash charges related to restricted stock units and options.
(3) Represents fair value adjustments to our true-up guarantee obligation under the Revolver Exchange (as defined below), network outage related costs and related insurance recoveries, legal settlement costs for class action.
(4) Represents a loss/(gain) recognized on the disposal of property, plant, and equipment and other assets.
(5) Represents a loss/(gain) recognized on the sale of high-speed scanner business in the second quarter of 2023.

Source: Exela Technologies, Inc. 

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