Exela Technologies, Inc. Reports First Quarter 2019 Results; Reaffirms 2019 Outlook
- Revenue of
$403.8 million, representing 2.7% growth over Q1 2018; revenue of $409.8 millionon a constant currency basis(1), representing 4.2% growth over Q1 2018
- Net loss of
- EBITDA(2) of
- Adjusted EBITDA(3) of
$74.1 million, representing 6.5% growth over Q1 2018; Adjusted EBITDA of $74.9 millionon a constant currency basis, representing 7.6% growth over Q1 2018
- Adjusted EBITDA margin of 18.3%, an increase of 60 basis points over Q1 2018
“We are very pleased with the solid first quarter results and about the remainder of 2019. On a constant currency basis, our revenue grew 4% and Adjusted EBITDA grew 8%, year over year, backed by a growing and profitable pipeline, and the continued ramp up of our existing customers. Our Digital NowSM strategy continues to win business by leveraging our best in class technology and support services. Our goal is to continue to accelerate the digital transformation of our customers through expanding engagements across multiple layers and to be a technology and a business process automation partner,” said
“As we continue to grow and service our new and existing customers, we have seen an acceleration in our initial costs associated with these wins. Therefore, we have added to our employee base and have seen an increased use of working capital. We anticipate these trends will reverse in the back-half of the year. Further, we continue to exit lower margin contracts where customers do not have a path towards automation. On a sequential basis, we expect revenue to be flat, but improve materially in the third and fourth quarter, and, accordingly we are reaffirming our 2019 outlook.”
“Our customer awareness is rising and our solutions are well-received. This year,
First Quarter Ended
- Revenue: Revenue of
$403.8 million, an increase of 2.7% from $393.2 millionin the first quarter of 2018. Revenue for our Information and Transaction Processing Solutions (“ITPS”) segment was $324.6 million, an increase of 4.1% year-over-year, driven primarily by growth in top customers, faster ramp up of contracts utilizing our Digital Now model, and the impact of growth investments, offset by a decline in lower automation and project driven business. Healthcare Solutions (“HS”) revenue was $61.3 million, an increase of 4.6% year-over-year and consistent with expectations. Legal and Loss Prevention Services (“LLPS”) revenue was $17.8 million. Results in LLPS are event driven and were negatively impacted by projects that generated lower revenue.
- Net Loss: Net Loss for the first quarter of 2019 was
$29.9 million, compared to a net loss of $24.0 millionin the first quarter of 2018. The net loss was higher primarily due to the negative impact related to an interest rate derivative.
- AdjustedEBITDA: Adjusted EBITDA for the first quarter of 2019 was
$74.1 million, an increase of 6.5% as compared to Adjusted EBITDA of $69.6 millionin the first quarter of 2018. Adjusted EBITDA margin for the first quarter of 2019 was 18.3%, an increase of 60 basis points as compared to an Adjusted EBITDA margin of 17.7% in the first quarter of 2018. The increase in first quarter 2019 Adjusted EBITDA and Adjusted EBITDA margin was primarily driven by revenue growth and by the continued realization of savings flow-through, partially offset by investments the Company made for growth.
- Capital Expenditures: Capital expenditures for the first quarter of 2019 were 3.2% of revenue compared to 2.2% of revenue in the first quarter of 2018.
- Common Stock: As of
March 31, 2019, there were 155,729,299 total shares of common stock outstanding which includes 5,586,344 shares reserved for outstanding preferred shares on an as-converted basis.
- Share buyback: During the first quarter of 2019, the Company did not purchase any shares of common stock. Cumulative shares repurchased under the Company’s share buyback program total 2,549,185 since program inception.
- Launch of Exela Smart OfficeTM –
Internet of Thingsfor the workplace.
- Total employees as of
March 31, 2019rose to 22,976 from 22,047 as of December 31, 2018.
- 83% of first quarter 2019 revenue in the
Americas, 17% in Europe.
Balance Sheet and Liquidity
March 31, 2019, Exela’s total liquidity was $57.9(4) million and total net debt was $1.459 billion.
2019 Guidance as of
- Revenue range of
$1.66 billion to $1.70 billion, growth of approximately 5% - 7% year over year.
- Adjusted EBITDA range of
$305 million to $335 million, growth of approximately 7% - 18% year over year.
- Capital expenditures range as % of revenue of 2% - 2.5%.
- Capital allocation to be prioritized towards debt pre-payment.
- Reduction of net leverage ratio by 5% - 7%.
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.
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) – Constant currency is a non-GAAP measure. A reconciliation of constant currency is attached to this release.
(2) – EBITDA is a non-GAAP measure. A reconciliation of EBITDA is attached to this release.
(3) – Adjusted EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA is attached to this release.
(4) – Total liquidity of
Earnings Conference Call and Audio Webcast
Find out more at www.exelatech.com
About Non-GAAP Financial Measures: This press release includes constant currency, EBITDA and Adjusted EBITDA, each of which is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
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, future opportunities for the combined company, and other statements that are not historical facts. These statements are based on the current expectations of
Exela Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets - As of March 31, 2019 and December 31, 2018
(in thousands of United States dollars except share and per share amounts)