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Exela Technologies, Inc. Reports Preliminary Second Quarter 2021 Results

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·22 min read
In this article:
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Revenue of $293.0 million, net loss of $19.4 million, and Adjusted EBITDA of $50.9 million
Reiterates 2021 financial guidance
$158 million liquidity ahead of plan
Achieves over $140 million reduction in net debt year-to-date
SMB business showing robust growth globally
Conference call scheduled for August 10, 2021 at 11:00 AM ET

Second Quarter 2021 Highlights:

  • Revenue of $293.0 million, a decline of 2.3% from Q1 2021

  • Healthcare Solutions revenue increased ~10% and Legal and Loss Prevention Services revenue grew ~14% from Q1 2021

  • Gross profit (1) margin of 28.6%, an increase of ~720 basis points from Q2 2020 and ~620 basis points from Q1 2021

  • Operating income of $25.4 million, compared with operating loss of $5.1 million in Q2 2020

  • Net loss of $19.4 million, compared with net loss of $48.7 million in Q2 2020

  • Gross Profit of $83.9 million, an increase of 27% from $65.9 million in Q2 2020

  • EBITDA (2) of $44.9 million, an increase of 133% from $19.3 million in Q2 2020

  • Adjusted EBITDA (3) of $50.9 million, an increase of 18.0% from $43.1 million in Q2 2020

  • Small-and-Medium-Sized Business “SMB” business continues robust growth globally with DMR and DrySign solutions

  • Positive operating leverage driven by from Work-from-Anywhere adoption and automation

  • Strong financial flexibility with $158 million liquidity position enabled by the $224 million(4) in gross proceeds from recent equity offerings yielding over $140 million reduction in net debt(5) year-to-date through August 6, 2021

IRVING, Texas, Aug. 10, 2021 (GLOBE NEWSWIRE) -- Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA), a global business process automation (“BPA”) leader, announced today its financial results for the second quarter ended June 30, 2021.

“We generated strong margin expansion in the second quarter, which reflects our ongoing commitment to focus on our core businesses and drive operational improvement. We are pleased with the rapid growth of our digital solutions for the SMB market where we see significant opportunity for continued expansion. Finally, we are also pleased to report a $158 million liquidity exceeding our liquidity targets announced in November 2019 while reducing our outstanding debt. Based on our second quarter results and the increased stability in our business, we reiterate our prior 2021 guidance,” said Ronald Cogburn, Chief Executive Officer of Exela.

Second Quarter 2021 Financial Highlights

  • Revenue: Revenue for Q2 2021 was $293.0 million, a decline of 4.8% compared to $307.7 million in Q2 2020. Revenue for the Information and Transaction Processing Solutions segment was $217.3 million, a decline of 10.6% year-over-year, primarily due to lower volumes as a result of COVID-19 and transition revenue (6) roll off. Exela believes it is well positioned to see volumes return in the ITPS segment once COVID-19 impacts subside. Healthcare Solutions revenue was $56.2 million, an increase of 14.3% year-over-year, primarily due to increased volumes driven by new statements of work, new customers and backlog from existing customers. Legal and Loss Prevention Services revenue was $19.5 million, an increase of 25.9% year-over-year.

  • Operating income / (loss): Operating income for Q2 2021 was $25.4 million, compared with operating loss of $5.1 million in Q2 2020. The year-over-year improvement in operating income was primarily attributable to higher gross profit, lower SG&A costs, and lower depreciation and amortization expenses.

  • Net Loss: Net loss for Q2 2021 was $19.4 million, compared with a net loss of $48.7 million in Q2 2020, primarily due to increased operating income and lower interest expense.

  • Adjusted EBITDA: Adjusted EBITDA for Q2 2021 was $50.9 million, an increase of 18.0% compared to $43.1 million in Q2 2020. Adjusted EBITDA margin for Q2 2021 was 17.4%, an increase of 336 basis points from 14.0% in Q2 2020 and 189 basis points from 15.5% in Q1 2021.

  • Common Stock: As of June 30, 2021, there were 70,409,282 total shares of common stock outstanding and an additional 1,245,758 shares of common stock reserved for issuance for our outstanding preferred shares on an as-converted basis.

Second Quarter 2021 Business Highlights
Contract and product updates:

  • Completed the commercial launch of DrySign in India on June 1, 2021, allowing businesses to sign documents from any internet connected device

  • Launched Digital Mail Room (“DMR”) on June 30, 2021 in the United Kingdom and launched in France and Germany in August 2020, facilitating continued global expansion

  • Q2 2021 DrySign user growth of 144% and DMR customer growth of 99% from Q1 2021

  • Expanded PCH Global Deployment for one of the world’s largest specialty care services insurance companies, paving the way to connecting claims and correspondence from over 27,000 unique hospital systems and providers across the country

Operating leverage improvement continues:

  • Completed four real estate facility closures in the second quarter, underscoring continued adoption of Exela’s Work-From-Anywhere model

  • Automation led efficiencies reduced employee count to approximately 18,000 as of June 30, 2021 from 18,400 as of March 31, 2021

Capital Expenditures: Capital expenditures for the second quarter of 2021 were 0.7% of revenue compared to 1.1% of revenue in the second quarter of 2020.

Balance Sheet and Liquidity(7): As of June 30, 2021, Exela’s liquidity was $67.9 million. Exela’s net debt at June 30, 2021 was $1,477.2 billion (as determined in accordance with the Company's credit agreement). As of August 6, 2021 the Company’s liquidity was approximately $158 million including $136 million of cash and cash equivalents.

Expanding financial flexibility: Raised a total of $223.9 million in gross proceeds year to date through August 6, 2021 under three equity offerings. (4)

  • As of August 6, 2021, and after giving effect to the shares sold in the equity offerings, there were 144,041,323 shares of common stock outstanding.

  • In accordance with Exela’s plan to use proceeds from its equity offerings to strategically reduce its debt and associated interest expense obligations as well as explore ways to invest in its growth, Exela repurchased an aggregate of $59.1 million of its term loans and senior secured notes for an aggregate purchase price of $35.1 million since June 30, 2021.

Exela plans to continue working on expanding its financial flexibility with the objective to improve consolidated cash flows from all activities.

2021 Guidance

  • Revenue range $1.25 billion to $1.39 billion

  • Gross profit margin of 23% to 25%

  • Adjusted EBITDA margin 16% to 17%

  • Capital expenditures in the range of 1% of revenue

Note: Guidance is based on constant-currency.

Preliminary Results; Notes

The financial results discussed herein are presented on a preliminary basis; final data will be included in Exela’s Quarterly Report on Form 10-Q for the period ended June 30, 2021.

Below are the notes referenced above:

(1) – Gross Profit is defined as Revenue less cost of revenue excluding depreciation and amortization.
(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. A reconciliation of Adjusted EBITDA (2021 Guidance) is not available on forward-looking basis without unreasonable efforts due to the impact and timing on future operating results arising from items excludes from the measures.
(4) – The $224 million gross equity proceeds include $197 million of equity proceeds raised through the at-the-market sale of equity securities in the YTD period. The equity proceeds also include $26.8 million from the private placement offering completed earlier this year in March 2021. Please refer to the equity capital raise related press release dated March 15, 2021 and Form 8-K dated March 19, 2021 for more details.
(5) – Net debt is calculated as the difference between the total debt outstanding (including $1.0 billion of senior secured notes, $355.1 million of term loans under the credit agreement dated July 12, 2017, $83.5 million of revolving credit facility, $21.8 million of capital leases and $32.0 million of other debt) and the sum of $59.1 million debt repurchased (but not retired following the quarter end) and $136.0 million of consolidated cash balances as of August 6, 2021.
(6) – Transition revenue includes the exit of contracts and statements of work from certain customers that the Company believes are unpredictable, non-recurring, and were not a strategic fit to its long-term success or unlikely to achieve long-term target margins.
(7) – Liquidity as defined per the third amendment of the credit agreement effective May 15, 2020.

Earnings Conference Call and Audio Webcast
Exela will host a conference call to discuss its second quarter 2021 financial results at 11:00 a.m. ET on August 10, 2021. To access this call, dial 833-255-2831 or +1-412-902-6724 (international). A replay of this conference call will be available through August 17, 2021 at 877-344-7529 or +1-412-317-0088 (international). The replay passcode is 10159119.

Exela invites all investors to ask questions that they would like addressed on the conference call. We ask individual investors to submit questions via email to IR@exelatech.com.

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.

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. With foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry department solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and public sectors. Through cloud-enabled platforms, built on a configurable stack of automation modules, and over 18,400 employees operating in 23 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.

Find out more at www.exelatech.com

To automatically receive Exela financial news by e-mail, please visit the Exela Investor Relations website, http://investors.exelatech.com/, and subscribe to E-mail Alerts.

For more Exela news, commentary, and industry perspectives, visit:

Website: https://investors.exelatech.com/

Twitter: @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.

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 the combination of Quinpario Acquisition Corp. 2, SourceHOV Holdings, Inc. and Novitex Holdings, Inc. on July 12, 2017 (the “Novitex Business Combination”) and 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 Novitex Business Combination, asset base (such as depreciation and amortization) and other similar non-routine items outside the control of our management team. Optimization and restructuring expenses and merger adjustments are primarily related to the implementation of strategic actions and initiatives related to the Novitex 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. 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 those discussed under the heading “Risk Factors” in the Annual Report. 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.

Rounding : 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.

Investor and/or Media Contacts:
Vincent Kondaveeti
E: vincent.kondaveeti@exelatech.com
T: 929-620-1849

Mary Beth Benjamin
E: IR@exelatech.com
T: 646-277-1216

Source: Exela Technologies, Inc.



Exela Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2021 and December 31, 2020
(in thousands of United States dollars except share and per share amounts)
(UNAUDITED)

June 30,

December 31,

2021

2020

(Unaudited)

(Audited)

Assets

Current assets

Cash and cash equivalents

$

45,866

$

68,221

Restricted cash

1,998

2,088

Accounts receivable, net of allowance for doubtful accounts of $5,885 and $5,647, respectively

201,929

206,868

Related party receivables and prepaid expenses

712

711

Inventories, net

15,130

14,314

Prepaid expenses and other current assets

25,822

31,091

Total current assets

291,457

323,293

Property, plant and equipment, net of accumulated depreciation of $185,684 and $193,760, respectively

76,520

87,851

Operating lease right-of-use assets, net

63,529

68,861

Goodwill

358,561

359,781

Intangible assets, net

268,525

292,664

Deferred income tax assets

6,643

6,606

Other noncurrent assets

25,420

18,723

Total assets

$

1,090,655

$

1,157,779

Liabilities and Stockholders' Equity (Deficit)

Liabilities

Current liabilities

Accounts payable

$

65,801

$

76,027

Related party payables

489

97

Income tax payable

1,654

2,466

Accrued liabilities

111,713

126,399

Accrued compensation and benefits

63,417

63,467

Accrued interest

48,952

48,769

Customer deposits

15,269

21,277

Deferred revenue

20,935

16,377

Obligation for claim payment

25,562

29,328

Current portion of finance lease liabilities

9,960

12,231

Current portion of operating lease liabilities

17,096

18,349

Current portion of long-term debts

34,778

39,952

Total current liabilities

415,626

454,739

Long-term debt, net of current maturities

1,497,063

1,498,004

Finance lease liabilities, net of current portion

11,884

13,287

Pension liabilities, net

34,885

35,515

Deferred income tax liabilities

10,331

9,569

Long-term income tax liabilities

2,283

2,759

Operating lease liabilities, net of current portion

49,391

56,814

Other long-term liabilities

12,458

13,624

Total liabilities

2,033,921

2,084,311

Commitments and Contingencies (Note 8)

Stockholders' equity (deficit)

Common stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 72,860,988 shares issued and 70,409,282 shares outstanding at June 30, 2021 and 51,693,931 shares issued and 49,242,225 shares outstanding at December 31, 2020

17

15

Preferred stock, par value of $0.0001 per share; 20,000,000 shares authorized; 2,778,111 shares issued and outstanding at June 30, 2021 and 3,290,050 shares issued and outstanding at December 31, 2020

1

1

Additional paid in capital

489,176

446,739

Less: Common Stock held in treasury, at cost; 2,451,706 shares at June 30, 2021 and December 31, 2020

(10,949

)

(10,949

)

Equity-based compensation

53,163

52,183

Accumulated deficit

(1,448,605

)

(1,390,038

)

Accumulated other comprehensive loss:

Foreign currency translation adjustment

(8,763

)

(7,419

)

Unrealized pension actuarial losses, net of tax

(17,306

)

(17,064

)

Total accumulated other comprehensive loss

(26,069

)

(24,483

)

Total stockholders’ deficit

(943,266

)

(926,532

)

Total liabilities and stockholders’ deficit

$

1,090,655

$

1,157,779



Exela Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2021 and 2020
(in thousands of United States dollars except share and per share amounts)
(UNAUDITED)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenue

$

293,009

$

307,722

$

593,064

$

673,173

Cost of revenue (exclusive of depreciation and amortization)

209,080

241,788

441,666

534,326

Selling, general and administrative expenses (exclusive of depreciation and amortization)

36,390

47,014

78,275

97,387

Depreciation and amortization

19,420

22,847

39,020

46,032

Related party expense

2,748

1,146

4,455

2,698

Operating profit (loss)

25,371

(5,073

)

29,648

(7,270

)

Other expense (income), net:

Interest expense, net

42,867

44,440

85,999

86,028

Sundry expense (income), net

(787

)

(899

)

(573

)

183

Other expense (income), net

651

(584

)

803

(35,241

)

Net loss before income taxes

(17,360

)

(48,030

)

(56,581

)

(58,240

)

Income tax benefit (expense)

(2,007

)

(661

)

(1,989

)

(3,120

)

Net loss

$

(19,367

)

$

(48,691

)

$

(58,570

)

$

(61,360

)

Cumulative dividends for Series A Preferred Stock

(798

)

(858

)

98

582

Net loss attributable to common stockholders

$

(20,165

)

$

(49,549

)

$

(58,472

)

$

(60,778

)

Loss per share:

Basic and diluted

$

(0.33

)

$

(1.01

)

$

(1.04

)

$

(1.24

)



Exela Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2021 and 2020
(in thousands of United States dollars unless otherwise stated)
(UNAUDITED)

Six Months Ended June 30,

2021

2020

Cash flows from operating activities

Net loss

$

(58,570

)

$

(61,360

)

Adjustments to reconcile net loss

Depreciation and amortization

39,020

46,032

Original issue discount and debt issuance cost amortization

7,829

6,857

Provision for doubtful accounts

1,781

(110

)

Deferred income tax provision

(41

)

(338

)

Share-based compensation expense

980

1,782

Unrealized foreign currency losses

(485

)

(980

)

Gain on sale of assets

(238

)

(34,791

)

Fair value adjustment for interest rate swap

(125

)

440

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

Accounts receivable

2,004

38,260

Prepaid expenses and other assets

(3,447

)

(9,157

)

Accounts payable and accrued liabilities

(34,785

)

(8,812

)

Related party payables

391

(642

)

Additions to outsource contract costs

(304

)

(297

)

Net cash used in operating activities

(45,990

)

(23,116

)

Cash flows from investing activities

Purchase of property, plant and equipment

(3,498

)

(5,766

)

Additions to internally developed software

(820

)

(2,216

)

Cash paid for acquisition, net of cash received

-

(3,500

)

Proceeds from sale of assets

4,252

38,222

Net cash provided by (used in) investing activities

(66

)

26,740

Cash flows from financing activities

Proceeds from issuance of Common Stock from private placement

25,065

-

Proceeds from issuance of Common Stock from at the market offerings

18,118

-

Cash paid for equity issuance costs from at the market offerings

(745

)

-

Borrowings under factoring arrangement and Securitization Facilities

66,098

149,951

Principal repayment on borrowings under factoring arrangement and Securitization Facilities

(68,800

)

(66,114

)

Lease terminations

(119

)

(331

)

Cash paid for debt issuance costs

-

(12,708

)

Principal payments on finance lease obligations

(5,600

)

(6,353

)

Borrowings from senior secured revolving facility

3,000

29,750

Repayments on senior secured revolving facility

(55

)

(14,200

)

Borrowings from other loans

4,776

23,248

Principal repayments on senior secured term loans and other loans

(18,076

)

(29,040

)

Net cash provided by financing activities

23,662

74,203

Effect of exchange rates on cash

(51

)

1

Net decrease in cash and cash equivalents

(22,445

)

77,828

Cash, restricted cash, and cash equivalents

Beginning of period

70,309

14,099

End of period

$

47,864

$

91,927

Supplemental cash flow data:

Income tax payments, net of refunds received

$

1,994

$

1,339

Interest paid

75,136

76,781

Noncash investing and financing activities:

Assets acquired through right-of-use arrangements

2,159

772

Leasehold improvements funded by lessor

125

-

Settlement gain on related party payable to Ex-Sigma 2

-

1,287

Accrued capital expenditures

1,505

1,088



Exela Technologies
Schedule 1: Second Quarter 2021 vs. Second Quarter 2020 and First Half 2021 vs. First Half 2020 Financial Performance
(UNAUDITED)

$ in millions

Q2'21

Q2'20

H1'21

H1'20

Information and Transaction Processing Solutions

217.3

243.0

449.2

527.1

Healthcare Solutions

56.2

49.2

107.3

113.2

Legal and Loss Prevention Services

19.5

15.5

36.6

32.8

Total Revenue

293.0

307.7

593.1

673.2

% change

-5

%

-21

%

-12

%

Cost of revenue (exclusive of depreciation and amortization)

209.1

241.8

441.7

534.3

Gross profit

83.9

65.9

151.4

138.8

as a % of revenue

29

%

21

%

26

%

21

%

SG&A

36.4

47.0

78.3

97.4

Depreciation and amortization

19.4

22.8

39.0

46.0

Related party expense

2.7

1.1

4.5

2.7

Operating (loss) income

25.4

(5.1

)

29.6

(7.3

)

as a % of revenue

9

%

-2

%

5

%

-1

%

Interest expense, net

42.9

44.4

86.0

86.0

Sundry expense (income) & Other income, net

(0.1

)

(1.5

)

0.2

(35.1

)

Net loss before income taxes

(17.4

)

(48.0

)

(56.6

)

(58.2

)

Income tax expense (benefit)

2.0

0.7

2.0

3.1

Net income (loss)

(19.4

)

(48.7

)

(58.6

)

(61.4

)

as a % of revenue

-7

%

-16

%

-10

%

-9

%

Depreciation and amortization

19.4

22.8

39.0

46.0

Interest expense, net

42.9

44.4

86.0

86.0

Income tax expense (benefit)

2.0

0.7

2.0

3.1

EBITDA

44.9

19.3

68.4

73.8

as a % of revenue

15

%

6

%

12

%

11

%

EBITDA Adjustments

1

Gain / loss on derivative instruments

-

(0.4

)

(0.1

)

0.4

2

Non-Cash and Other Charges

(0.3

)

7.8

12.8

(20.8

)

3

Transaction and integration costs

1.4

4.8

6.0

9.2

Sub-Total (Adj. EBITDA before O&R)

46.0

31.4

87.1

62.7

4

Optimization and restructuring expenses

4.9

11.7

10.3

24.9

Adjusted EBITDA

50.9

43.1

97.4

87.5

as a % of revenue

17

%

14

%

16

%

13

%



Exela Technologies
Schedule 2: Reconciliation of Adjusted EBITDA and constant currency revenues

Non-GAAP constant currency revenue reconciliation

Three months ended

Six months ended

($ in millions)

30-Jun-21

30-Jun-20

31-Mar-21

30-Jun-21

30-Jun-20

Revenues, as reported (GAAP)

$293.0

$307.7

$300.1

$593.1

$673.2

Foreign currency exchange impact (1)

(5.5

)

(5.1

)

(10.6

)

Revenues, at constant currency (Non-GAAP)

$287.5

$307.7

$294.9

$582.5

$673.2

(1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the three months and six months ended June 30, 2020, to the revenues during the corresponding period in 2021.

Reconciliation of Adjusted EBITDA

Three months ended

Six months ended

($ in millions)

30-Jun-21

30-Jun-20

31-Mar-21

30-Jun-21

30-Jun-20

Net loss (GAAP)

($19.4

)

($48.7

)

($39.2

)

($58.6

)

($61.4

)

Interest expense

42.9

44.4

43.1

86.0

86.0

Taxes

2.0

0.7

(0.0

)

2.0

3.1

Depreciation and amortization

19.4

22.8

19.6

39.0

46.0

EBITDA (Non-GAAP)

$44.9

$19.3

$23.5

$68.4

$73.8

Transaction and integration costs

1.4

4.8

4.6

6.0

9.2

Gain / loss on derivative instruments

-

(0.4

)

(0.1

)

(0.1

)

0.4

Other Charges

(0.3

)

7.8

13.1

12.8

(20.8

)

Sub-Total (Adj. EBITDA before O&R)

$46.0

$31.4

$41.1

$87.1

$62.7

Optimization and restructuring expenses

4.9

11.7

5.4

10.3

24.9

Adjusted EBITDA (Non-GAAP)

$50.9

$43.1

$46.5

$97.4

$87.5


Schedule 3: Non-GAAP Revenue reconciliation & Adjusted EBITDA margin on Revenue net of pass through

Non-GAAP revenue reconciliation & Adjusted EBITDA margin on revenue net of pass through

Three months ended

Six months ended

($ in millions)

30-Jun-21

30-Jun-20

31-Mar-21

30-Jun-21

30-Jun-20

Revenues, as reported (GAAP)

$293.0

$307.7

$300.1

$593.1

$673.2

(-) Postage & postage handling

52.8

55.2

59.3

112.2

125.0

Revenue - Net of pass through (Non-GAAP)

$240.2

$252.5

$240.7

$480.9

$548.2

Revenue growth %

(4.9

%)

(12.3

%)

Adjusted EBITDA (Non-GAAP)

$50.9

$43.1

$46.5

$97.4

$87.5

Adjusted EBITDA margin

21.2

%

17.1

%

19.3

%

20.2

%

16.0

%