Second Quarter Highlights Revenue of $245.7 million, down 10.0% year-over-year Gross margin of 23.5%, up 120 bps year-over-year Interest expense of $23.1 million, down 48.7% year-over-year SG&A of $41.8 million, up 30.5% year-over-year Operating loss of $2.4 million, vs $11.2 million operating profit, year-over-year Net loss of $26.9 million ($25.7 million attributable to Exela Technologies, Inc.), an improvement of $4.0 million year-over-year Adjusted EBITDA of $13.7 million, down 39.0% year-over-year IRVING, Texas, Aug. 15, 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 quarter ended June 30, 2024. "Our increased operating leverage and continued focus on cost management and rationalization of our real estate footprint are reflected in the solid expansion of our gross margin. We continue to add new logos and remain cautiously optimistic as we head into the second half of the year," noted Par Chadha, Executive Chairman. Revenue: Revenue for 2Q 2024 was $245.7 million, a decline of 10.0% compared to $272.9 million in 2Q 2023 (or a decline of 9.3% when excluding the sale of the high-speed scanner business in June 2023). Revenue for the Information and Transaction Processing Solutions segment was $156.8 million, a decline of 15.2% year-over-year (or a decline of 14.0% on a pro forma basis when adjusted for the sale of the high-speed scanner business that occurred in June 2023). Healthcare Solutions generated $62.9 million in revenue, a 1.1% decline year-over-year. Legal & Loss Prevention Services generated $25.9 million in revenue, a 6.3% increase year-over-year. Gross margin of 23.5%, up 1.2% year-over-year due to lower costs. Interest Expense of $23.1M, down 48.7% year-over-year due to the Company's debt modification in July 2023. SG&A of $41.8M, up 30.5% year-over-year due to profit on the sale of our high-speed scanner business of $6.6M recognized in 2Q 2023. Other SG&A expenses were higher by $9.0 million, due to $10.1 in Q2FY24 write-downs, predominantly driven by a partner contract amendment, which provides for higher pricing and service expansion but resulted in a non-cash write down of the original contract's straight-line revenue recognition and related contract assets. The SG&A increase was further offset by lower legal and professional fees and employee related costs. Operating Loss: Operating loss of $2.4 million, versus an Operating profit of $11.2 million in 2Q 2023, primarily driven by lower revenue and higher SG&A, partially offset by higher gross profits. Net Loss: Net loss of $26.9 million ($25.7 million attributable to Exela Technologies, Inc.), an improvement of $4.0 million year-over-year, primarily driven by lower interest expense following debt modification in July 2023, partially offset by higher SG&A. Adjusted EBITDA(1): Adjusted EBITDA was $13.7 million compared to $22.5 million in 2Q 2023, a decline of 39.0% year-over-year, while up 6.7% sequentially. Adjusted EBITDA margin was 5.6%, a decrease of 260 basis points from 2Q 2023. 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 ExelaExela Technologies is a business process outsourcing and automation leader, leveraging a global footprint and proprietary technology to help turn the complex into the simple through user friendly software platforms and solutions that enable our customers' digital transformation. With decades of experience operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers worldwide, including many of the world's largest enterprises and 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 13,100 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 email, please visit the Exela Investor Relations website at http://investors.exelatech.com/ and subscribe to E-mail Alerts.     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"). 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 constant currency, 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 capital markets-based activities). Adjusted EBITDA also seeks to remove the effects of integration and related costs to achieve the savings, asset base (such as depreciation and amortization) and other similar non-routine items outside the control of our management team.  All of these costs are variable and dependent upon the nature of the actions being implemented and can vary significantly. 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. The constant currency presentation excludes the impact of fluctuations in foreign currency exchange rates. We calculate constant currency revenue and Adjusted EBITDA on a constant currency basis by converting our current-period local currency financial results using the exchange rates from the corresponding prior-period and compare these adjusted amounts to our corresponding prior period reported results. 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 attached to this release. 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:Website: https://investors.exelatech.com/X: @ExelaTechLinkedIn: exela-technologiesFacebook: @exelatechnologiesInstagram: @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:     Exela Technologies, Inc. and SubsidiariesCondensed Consolidated Balance SheetsAs of June 30, 2024 and December 31, 2023(in thousands of United States dollars except share and per share amounts)           June 30,    December 31,        2024     2023         (Unaudited)   (Audited)   Assets                Current assets               Cash and cash equivalents   $ 30,327     $ 23,341     Restricted cash     20,933       43,812     Accounts receivable, net of allowance for credit losses of $6,813 and $6,628, respectively     61,501       76,893     Related party receivables and prepaid expenses     449       296     Inventories, net     13,251       11,502     Prepaid expenses and other current assets     30,140       25,364     Total current assets     156,601       181,208     Property, plant and equipment, net of accumulated depreciation of $216,695 and $213,142, respectively     58,448       58,366     Operating lease right-of-use assets, net     31,421       33,874     Goodwill     170,354       170,452     Intangible assets, net     148,364       164,920     Deferred income tax assets     2,990       3,043     Other noncurrent assets     19,775       24,474     Total assets   $ 587,953     $ 636,337                     Liabilities and Stockholders' Deficit               Liabilities               Current liabilities               Current portion of long-term debt   $ 53,723     $ 30,029     Accounts payable     68,628       61,109     Related party payables     3,047       1,938     Income tax payable     4,211       2,080     Accrued liabilities     57,611       63,699     Accrued compensation and benefits     71,192       65,012     Accrued interest     55,776       52,389     Customer deposits     27,898       23,838     Deferred revenue     14,018       12,099     Obligation for claim payment     38,913       66,988     Current portion of finance lease liabilities     6,422       4,856     Current portion of operating lease liabilities     9,590       10,845     Total current liabilities     411,029       394,882     Long-term debt, net of current maturities     1,015,252       1,030,580     Finance lease liabilities, net of current portion     8,203       5,953     Pension liabilities, net     12,879       13,192     Deferred income tax liabilities     12,516       11,692     Long-term income tax liabilities     6,511       6,359     Operating lease liabilities, net of current portion     24,676       26,703     Other long-term liabilities     5,621       5,811     Total liabilities     1,496,687       1,495,172     Commitments and Contingencies (Note 8)               Stockholders' deficit               Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 6,365,363 shares issued and outstanding at June 30, 2024 and 6,365,355 shares issued and outstanding at December 31, 2023     261       261     Preferred stock, $0.0001 par value per share, 20,000,000 shares authorized at June 30, 2024 and December 31, 2023               Series A Preferred Stock, 2,778,111 shares issued and outstanding at June 30, 2024 and December 31, 2023     1       1     Series B Preferred Stock, 3,029,900 shares issued and outstanding at June 30, 2024 and December 31, 2023     —       —     Additional paid in capital     1,237,687       1,236,171     Accumulated deficit     (2,134,670 )     (2,084,114 )   Accumulated other comprehensive loss:               Foreign currency translation adjustment     (7,282 )     (7,648 )   Unrealized pension actuarial gains (losses), net of tax     215