Exela Technologies, Inc. [XELAP] Filings

10-Q 1 xela-20240930x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36788

EXELA TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	47-1347291
(State of or other Jurisdiction Incorporation or Organization)	(I.R.S. Employer Identification No.)

2701 E. Grauwyler Rd. Irving, TX	75061
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including Area Code: (844) 935-2832

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, Par Value $0.0001 per share	XELA	OTC Pink
6.00% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.0001 per share Tandem Preferred Stock, par value of $0.0001 per share	XELAP	OTC Pink

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2024, the registrant had 6,365,363 shares of Common Stock outstanding.

Table of Contents

Exela Technologies, Inc.

Form 10-Q

For the quarterly period ended September 30, 2024

TABLE OF CONTENTS


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	1

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	2

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	3

Condensed Consolidated Statements of Stockholders’ Deficit for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (Unaudited)	6

Notes to the Condensed Consolidated Financial Statements (Unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3. Quantitative and Qualitative Disclosures about Market Risk	57

Item 4. Controls and Procedures	57

PART II — OTHER INFORMATION

Item 1. Legal Proceedings	59

Item 1A. Risk Factors	59

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities	60

Item 3. Defaults Upon Senior Securities	60

Item 4. Mine Safety Disclosures	61

Item 5. Other Information	61

Item 6. Exhibits	62

Signatures	63

Table of Contents

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of September 30, 2024 and December 31, 2023

(in thousands of United States dollars except share and per share amounts)


	September 30,		December 31,
	2024		2023
	(Unaudited)		(Audited)
Assets
Current assets
Cash and cash equivalents	$	11,278	$	23,341
Restricted cash		34,146		43,812
Accounts receivable, net of allowance for credit losses of $3,549 and $6,628, respectively		48,579		76,893
Related party receivables and prepaid expenses		160		296
Inventories, net		13,360		11,502
Prepaid expenses and other current assets		27,365		25,364
Assets of disposal group held for sale		4,197		—
Total current assets		139,085		181,208
Property, plant and equipment, net of accumulated depreciation of $218,877 and $213,142, respectively		59,274		58,366
Operating lease right-of-use assets, net		35,822		33,874
Goodwill		170,195		170,452
Intangible assets, net		141,296		164,920
Deferred income tax assets		3,229		3,043
Other noncurrent assets		18,065		24,474
Total assets	$	566,966	$	636,337

Liabilities and Stockholders' Deficit
Liabilities
Current liabilities
Current portion of long-term debt	$	51,184	$	30,029
Accounts payable		61,430		61,109
Related party payables		5,162		1,938
Income tax payable		6,368		2,080
Accrued liabilities		58,496		63,699
Accrued compensation and benefits		77,903		65,012
Accrued interest		31,692		52,389
Customer deposits		19,063		23,838
Deferred revenue		14,838		12,099
Obligation for claim payment		52,707		66,988
Current portion of finance lease liabilities		6,247		4,856
Current portion of operating lease liabilities		12,226		10,845
Liabilities of disposal group held for sale		4,529		—
Total current liabilities		401,845		394,882
Long-term debt, net of current maturities		1,028,072		1,030,580
Finance lease liabilities, net of current portion		8,252		5,953
Pension liabilities, net		12,494		13,192
Deferred income tax liabilities		12,584		11,692
Long-term income tax liabilities		8,205		6,359
Operating lease liabilities, net of current portion		26,129		26,703
Other long-term liabilities		5,567		5,811
Total liabilities		1,503,148		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 September 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 September 30, 2024 and December 31, 2023
Series A Preferred Stock, 2,778,111 shares issued and outstanding at September 30, 2024 and December 31, 2023		1		1
Series B Preferred Stock, 3,029,900 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—
Additional paid in capital		1,238,304		1,236,171
Accumulated deficit		(2,158,692)		(2,084,114)
Accumulated other comprehensive loss:
Foreign currency translation adjustment		(10,719)		(7,648)
Unrealized pension actuarial gains (losses), net of tax		416		(174)
Total accumulated other comprehensive loss		(10,303)		(7,822)
Total stockholders’ deficit attributable to Exela Technologies, Inc.		(930,429)		(855,503)
Noncontrolling interest in XBP Europe		(5,753)		(3,332)
Total stockholders’ deficit		(936,182)		(858,835)
Total liabilities and stockholders’ deficit	$	566,966	$	636,337

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

Table of Contents

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the three and nine months ended September 30, 2024 and 2023

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	269,168	$	253,125	$	773,632	$	799,683
Cost of revenue (exclusive of depreciation and amortization)		214,907		198,450		604,859		626,976
Selling, general and administrative expenses (exclusive of depreciation and amortization)		35,088		35,367		117,720		111,774
Depreciation and amortization		13,039		14,398		41,529		45,848
Impairment of goodwill		343		—		343		—
Related party expense		2,598		2,845		8,271		8,696
Operating profit		3,193		2,065		910		6,389
Other expense (income), net:
Interest expense, net		23,446		24,708		67,663		113,980
Debt modification and extinguishment costs (gain), net		256		(571)		256		(16,129)
Sundry expense, net		106		298		1,783		2,546
Other income, net		(440)		(1,069)		(1,314)		(1,583)
Loss before income taxes		(20,175)		(21,301)		(67,478)		(92,425)
Income tax expense		(4,762)		(1,807)		(9,937)		(7,005)
Net loss		(24,937)		(23,108)		(77,415)		(99,430)
Net loss attributable to noncontrolling interest in XBP Europe, net of taxes		(915)		—		(2,837)		—
Net loss attributable to Exela Technologies, Inc.	$	(24,022)	$	(23,108)	$	(74,578)	$	(99,430)
Cumulative dividends for Series A Preferred Stock		(1,105)		(1,002)		(3,225)		(2,923)
Cumulative dividends for Series B Preferred Stock		(1,261)		(1,188)		(3,727)		(3,512)
Net loss attributable to common stockholders	$	(26,388)	$	(25,298)	$	(81,530)	$	(105,865)
Loss per share:
Basic and diluted	$	(4.15)	$	(3.97)	$	(12.81)	$	(18.08)

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

Table of Contents

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

For the three and nine months ended September 30, 2024 and 2023

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net loss	$	(24,937)	$	(23,108)	$	(77,415)	$	(99,430)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(3,607)		(3,165)		(3,124)		(3,369)
Unrealized pension actuarial gains (losses), net of tax		278		147		814		(58)
Total other comprehensive loss, net of tax		(3,329)		(3,018)		(2,310)		(3,427)
Comprehensive loss		(28,266)		(26,126)		(79,725)		(102,857)
Comprehensive loss attributable to noncontrolling interest in XBP Europe, net of tax		(1,008)		—		(2,666)		—
Comprehensive loss attributable to Exela Technologies, Inc., net of tax	$	(27,258)	$	(26,126)	$	(77,059)	$	(102,857)

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

Table of Contents

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit

For the three and nine months ended September 30, 2024 and 2023

(in thousands of United States dollars except share and per share amounts)

(Unaudited)


															Accumulated Other Comprehensive Loss
																	Unrealized
															Foreign		Pension
															Currency		Actuarial				Total
	Common Stock			Series A Preferred Stock			Series B Preferred Stock			Treasury Stock			Additional		Translation		Losses,		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Paid in Capital		Adjustment		net of tax		Deficit		Deficit
Balances at January 1, 2023	1,393,276	$	162	2,778,111	$	1	3,029,900	$	—	612	$	(10,949)	$	1,159,577	$	(4,788)	$	(3,583)	$	(1,948,009)	$	(807,589)
Net loss	—		—	—		—	—		—	—		—		—		—		—		(45,436)		(45,436)
Equity-based compensation expense	—		—	—		—	—		—	—		—		111		—		—		—		111
Foreign currency translation adjustment	—		—	—		—	—		—	—		—		—		(2,105)		—		—		(2,105)
Net realized pension actuarial losses, net of tax	—		—	—		—	—		—	—		—		—		—		(89)		—		(89)
Issuance of Common Stock from at the market offerings, net of offering costs	4,977,744		99	—		—	—		—	—		—		66,929		—		—		—		67,028
Balances at March 31, 2023	6,371,020	$	261	2,778,111	$	1	3,029,900	$	—	612	$	(10,949)	$	1,226,617	$	(6,893)	$	(3,672)	$	(1,993,445)	$	(788,080)
Net loss	—		—	—		—	—		—	—		—		—		—		—		(30,886)		(30,886)
Equity-based compensation expense	—		—	—		—	—		—	—		—		203		—		—		—		203
Foreign currency translation adjustment	—		—	—		—	—		—	—		—		—		1,901		—		—		1,901
Net realized pension actuarial loss, net of tax	—		—	—		—	—		—	—		—		—		—		(116)		—		(116)
Payment for fractional shares on reverse stock split in May 2023	(5,667)		—	—		—	—		—	—		—		(31)		—		—		—		(31)
Balances at June 30, 2023	6,365,353	$	261	2,778,111	$	1	3,029,900	$	—	612	$	(10,949)	$	1,226,789	$	(4,992)	$	(3,788)	$	(2,024,331)	$	(817,009)
Net loss	—		—	—		—	—		—	—		—		—		—		—		(23,108)		(23,108)
Equity-based compensation	—		—	—		—	—		—	—		—		252		—		—		—		252
Foreign currency translation adjustment	—		—	—		—	—		—	—		—		—		(3,165)		—		—		(3,165)
Net realized pension actuarial gains, net of tax	—		—	—		—	—		—	—		—		—		—		147		—		147
Treasury stock retired										(612)		10,949								(10,949)		—
Balances at September 30, 2023	6,365,353	$	261	2,778,111	$	1	3,029,900	$	—	—	$	—	$	1,227,041	$	(8,157)	$	(3,641)	$	(2,058,388)	$	(842,883)

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

Table of Contents

Exela Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit

For the three and nine months ended September 30, 2024 and 2023

(in thousands of United States dollars except share and per share amounts)

(Unaudited)

Accumulated Other
Comprehensive Loss

Unrealized

Foreign

Pension

Currency

Actuarial

Non-

Total

Common Stock

Exela Technologies, Inc. [XELAP] Filings
Exela Technologies, Inc. [XELA] Filings
10-Q	[2024-11-14]
10-Q	[2024-08-14]
10-Q	[2024-05-15]
10-K	[2024-04-03]
10-Q	[2024-01-05]
10-Q	[2023-11-30]
10-Q	[2023-05-10]
10-K	[2023-04-03]
10-Q	[2022-11-14]
10-Q	[2022-08-12]
10-Q	[2022-05-10]
10-K	[2022-03-16]
10-Q	[2021-11-08]
10-Q	[2021-08-16]
10-Q	[2021-05-06]
10-K	[2021-03-22]
10-Q	[2020-11-09]
10-Q	[2020-08-10]
10-Q	[2020-06-29]
10-K	[2020-06-09]
10-Q	[2019-11-12]
10-Q	[2019-08-08]
10-Q	[2019-05-10]
10-K	[2019-03-20]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-03-16]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-03-06]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
10-Q	[2016-05-16]
10-K	[2016-03-28]
10-Q	[2015-11-16]
10-Q	[2015-08-10]
10-Q	[2015-05-14]
10-K	[2015-04-13]
S-1	[2014-09-26]

Exela Technologies, Inc. [XELAP] Filings

Exela Technologies, Inc. [XELA] Filings