Financial Performance - For the year ended December 31, 2024, the company reported a net loss of $12.366 million, compared to a net loss of $11.047 million in 2023, representing an increase in loss of approximately 11.97%[426]. - Revenue for the year ended December 31, 2024, was $142.408 million, down from $154.943 million in 2023, indicating a decrease of about 8.06%[426]. - The company reported an operating profit of $3.472 million for 2024, compared to $1.117 million in 2023, reflecting an increase of approximately 211.5%[426]. - The company’s accumulated deficit increased from $11.339 million in 2023 to $23.705 million in 2024, representing a growth of approximately 109.5%[425]. - The net loss for the year ended December 31, 2024, was $12,366,000, compared to a net loss of $11,047,000 for 2023, representing an increase in loss of approximately 11.9%[433]. - The Company recorded a net revenue of $8.064 million from discontinued operations for the year ended December 31, 2024, down from $11.393 million in 2023, representing a decrease of approximately 29.5%[449]. - The net loss from discontinued operations, after income taxes, was $5.833 million for 2024, compared to a loss of $5.479 million in 2023, reflecting an increase in loss of approximately 6.4%[449]. Assets and Liabilities - The company's total current assets decreased from $49.867 million in 2023 to $41.338 million in 2024, a decline of approximately 17.3%[425]. - Total liabilities decreased from $115.307 million in 2023 to $109.391 million in 2024, a reduction of about 5.3%[425]. - The company’s cash and cash equivalents increased from $6.537 million in 2023 to $12.099 million in 2024, an increase of approximately 85.5%[425]. - Accounts receivable, net decreased to $19.8 million as of December 31, 2024, down from $30.2 million in 2023[491]. - Total current liabilities held for sale were $2.443 million as of December 31, 2024, compared to $3.818 million in 2023, showing a decrease of approximately 36%[450][451]. - Total accrued liabilities decreased from $23,850 thousand in 2023 to $17,993 thousand in 2024, representing a reduction of about 24.6%[545]. Cash Flow and Financing - Cash used in operating activities for 2024 was $5,227,000, a significant increase from $1,535,000 in 2023[433]. - The Company incurred interest expense of $0.6 million related to the Secured Borrowing Facility in 2023, which was eliminated in 2024[547]. - The outstanding balances payable under the Secured Borrowing Facility decreased from $0.1 million in 2023 to $0 in 2024[547]. - The Company repaid a total of $1.9 million under the Term Loan A Facility, $0.4 million under the Term Loan B Facility, and $6.4 million under the Revolving Credit Facility during the year ended December 31, 2024[551]. - The maturity of the Revolving Credit Facility was further extended to August 31, 2025 on May 10, 2024[551]. Operational Challenges - The company is uncertain about achieving continued and sustained profitability[17]. - The company may need to raise debt or equity financing, which could be on unfavorable terms[18]. - The company's revenues are highly dependent on the banking and finance industries, and any decrease in demand could reduce revenues[24]. - The company faces significant competition, including from clients who may choose to perform business processes in-house[22]. - The company relies on ETI, which is a highly leveraged company facing substantial doubt about its ability to continue as a going concern[18]. - The company may not be able to offset increased costs with increased fees under its contracts[22]. - The company is subject to regular client and third-party security reviews, and failure to pass these may adversely impact operations[27]. - The invasion of Ukraine by Russia and the resulting sanctions have caused significant economic disruption[31]. Shareholder Information - The company does not expect to declare any dividends in the foreseeable future[34]. - The company reported a total of 30,166,102 shares of common stock outstanding following the business combination[444]. - The weighted average common shares outstanding increased from 22,535,920 in 2023 to 30,166,102 in 2024[515]. - Basic and diluted loss per share for continuing operations improved from $(0.25) in 2023 to $(0.22) in 2024[515]. Expenses and Costs - The company incurs significant increased expenses and administrative burdens as a result of being a public company[35]. - The Company recognized stock-based compensation expense of $1,611,000 in 2024, compared to no such expense in 2023[433]. - Research and development expenses were $0.6 million for the year ended December 31, 2024, down from $0.9 million in 2023[502]. - Advertising expenses increased to $0.2 million in 2024 from $0.1 million in 2023[500]. - Restructuring charges for the years ended December 31, 2024 and 2023 were $1.1 million and $4.3 million, respectively[504]. Currency and Translation Adjustments - Foreign currency translation adjustments resulted in a gain of $1.890 million in 2024, compared to a loss of $2.995 million in 2023[429]. - Foreign exchange losses were $2.5 million in 2024, compared to $0.6 million in 2023[512]. - The company’s foreign currency translation adjustment resulted in a loss of $1,416,000 for the year ended December 31, 2023[431]. Goodwill and Impairment - The Company recorded an impairment charge of $0.1 million related to goodwill for the year ended December 31, 2024[449]. - The impairment of goodwill recorded in 2024 was due to the classification of certain operations as held for sale, indicating a significant strategic shift[449]. - The Company recorded a goodwill impairment of $0.1 million in discontinued operations for the year ended December 31, 2024[473].

Core Viewpoint - XBP Europe Holdings, Inc. has entered into a non-binding letter of intent to acquire Exela Technologies BPA, LLC, which will significantly increase XBP Europe's revenue and enhance its market position in business process automation solutions [1][2]. Company Overview - XBP Europe is a pan-European integrator focused on bills, payments, and related solutions, serving over 2,000 clients across various industries including banking, healthcare, and public sector [3]. - The company aims to facilitate digital transformation and optimize clients' billing and payment processes through proprietary software and cloud-based solutions [3]. - XBP Europe operates in 15 countries with a workforce of approximately 1,500 employees [3]. Exela Technologies BPA Overview - BPA is a leading provider of business process automation solutions, serving over 1,550 customers globally [4]. - The company utilizes proprietary technology to enhance quality, productivity, and user experience across various sectors including finance, healthcare, and legal management [4]. - BPA employs around 11,000 individuals and operates in 5 countries, providing integrated technology and operations as a digital journey partner [4]. Transaction Details - The acquisition, if completed, will increase XBP Europe's revenue from $145 million to over $1 billion on a pro forma basis for the twelve months ending September 30, 2024 [1]. - The transaction is contingent upon BPA completing a corporate reorganization to achieve a sustainable capital structure [1]. - Both parties are committed to negotiating definitive agreements and completing due diligence, although there is no guarantee that the transaction will be finalized [2].

Core Insights - XBP Europe Holdings, Inc. has been selected as a supplier for the AGIRC-ARRCO framework, which is valued at over €25 million for all suppliers, to provide data processing and payment services [1][2][3] Group 1: Company Overview - XBP Europe is a pan-European integrator focused on bills, payments, and related solutions, aiming to facilitate digital transformation for over 2,000 clients across various sectors including banking, healthcare, and public services [5] - The company operates in 15 countries with a workforce of approximately 1,500 individuals, leveraging a cloud-based structure to deploy its solutions across Europe, the Middle East, and Africa [5] Group 2: AGIRC-ARRCO Framework - AGIRC-ARRCO manages a compulsory supplementary pension scheme for private-sector employees in France, collecting contributions from 27 million employees and 1.8 million companies, and disbursing €90 billion annually [2] - XBP Europe will collaborate with three other suppliers to support pension applications and administrative services related to pension contributions, utilizing its advanced IDP/TTY, workflow solutions, and Digital Mailroom platforms [3][4] Group 3: Strategic Importance - The partnership with AGIRC-ARRCO enhances XBP Europe's reputation as a trusted partner in digital transformations, emphasizing its expertise in data digitization and workflow automation to ensure operational efficiency and accuracy [4]

Core Insights - XBP Europe Holdings, Inc. has been registered with the European Payments Council as a vendor of Verification of Payee (VOP) services, positioning the company to assist organizations in the Eurozone with compliance to new instant payment regulations [1][2] - The VOP regulations, effective by October 5, 2025, aim to reduce annual losses in the payments industry, which amount to approximately $120 billion due to erroneous payments and fraud [2] - XBP Europe's cloud-based VOP solution is distinguished in the market, utilizing deterministic AI technologies to enhance accuracy in verifying payee accounts, thereby minimizing false positives and negatives [3][4] Company Overview - XBP Europe has nearly 30 years of experience in account name verification and was an early adopter of the UK's equivalent service, Confirmation of Payee (CoP), supporting over 400 banks [4][5] - The company operates across 15 countries with a workforce of approximately 1,500 individuals, providing services to over 2,000 clients in various sectors including banking, healthcare, and utilities [7] - XBP Europe aims to facilitate digital transformation and improve market liquidity by expediting payments, while also promoting sustainable business practices [7]

Core Insights - XBP Europe Holdings, Inc. has been registered with the European Payments Council as a vendor of Verification of Payee (VOP) services, positioning the company to assist organizations in the Eurozone with compliance to new instant payment regulations [1][2] Group 1: Company Overview - XBP Europe is a pan-European integrator of bills, payments, and related solutions, serving over 2,000 clients across various sectors including banking, healthcare, and utilities [7] - The company has a physical presence in 15 countries with 32 locations and employs approximately 1,500 individuals [7] Group 2: VOP Services - The VOP regulations require payment service providers in the Eurozone to comply by October 5, 2025, aiming to reduce annual losses of around $120 billion from erroneous payments and fraud [2] - XBP Europe's cloud-based VOP solution is distinguished in the market, utilizing deterministic AI technologies to enhance accuracy in verifying payee accounts, thereby minimizing false positives and negatives [3][4] Group 3: Market Position and Experience - XBP Europe has nearly 30 years of experience in account name verification and was among the first to implement the UK's equivalent service, Confirmation of Payee (CoP) [4][5] - The company supports over 400 banks for account name verification and is positioned to enable Eurozone banks to deploy VOP services rapidly [5] Group 4: Future Innovations - The company is focused on further innovations beyond VOP, including broader data sharing initiatives to further mitigate errors and payment fraud [6]

Company Overview - XBP Europe Holdings, Inc. is a pan-European integrator of bills, payments, and related solutions, aiming to enable digital transformation for over 2,000 clients across various sectors including banking, healthcare, insurance, utilities, and the public sector [6] - The company operates in 15 countries with 32 locations and employs approximately 1,500 individuals, providing business process management solutions through proprietary software [6] Conference Details - XBP Europe has been invited to present at the Emerging Growth Conference on January 15, 2025, at 10:15 AM Eastern time for a duration of 30 minutes [1][3] - The conference will allow existing shareholders and the investment community to interact with the company's CEO, Andrej Jonovic, who will present prepared remarks and answer questions [2][5] Conference Significance - The Emerging Growth Conference serves as a platform for public companies to present new products, services, and major announcements to the investment community efficiently [4] - The audience for the conference includes potentially tens of thousands of individual and institutional investors, as well as investment advisors and analysts [5]

Core Viewpoint - XBP Europe Holdings, Inc. has achieved NF461 certification for electronic document management in France, enhancing its position in the European market and demonstrating its commitment to efficient document management solutions [1][3]. Group 1: Certification and Standards - The NF461 standard establishes strict guidelines for the lifecycle of documents, ensuring quality and security in creation, storage, use, and disposal [2]. - Compliance with NF461 allows companies to meet both French and international standards, as it aligns with ISO 14641-1 [2]. Group 2: Company Solutions and Offerings - XBP Europe's electronic archiving solution is part of its Enterprise Information Management suite, aimed at optimizing document management and supporting digital transformation for various organizations [3]. - The EFA-SAE electronic archiving system enables organizations to store diverse data types and documents, regardless of their format, and integrates with business platforms to streamline information flows [4]. Group 3: Company Overview - XBP Europe serves over 2,000 clients across multiple sectors, including banking, healthcare, and public services, focusing on optimizing bills and payments through digital solutions [6]. - The company operates in 15 countries with a workforce of approximately 1,500 individuals, emphasizing its role in advancing digital transformation and sustainable business practices [6].

Revenue Performance - Revenue for Q3 2024 was $35.4 million, a decrease of 5.6% year-over-year but an increase of 5.5% sequentially[1]. - The Bills & Payments segment generated revenue of $24.6 million, a decline of 3.1% year-over-year, while the Technology segment revenue was $10.8 million, down 10.8% year-over-year[4]. - Total revenue for the three months ended September 30, 2024, was $35,330,000, a decrease of 5.9% from $37,429,000 in the same period of 2023[17]. - Revenues for the three months ended September 30, 2024, were reported at $35,400,000, down from $37,496,000 in 2023, reflecting a constant currency revenue of $34,712,000[19]. - The company experienced a foreign currency exchange impact of $(688,000) on revenues for the three months ended September 30, 2024[19]. Profitability Metrics - Gross margin improved to 32.6%, reflecting an increase of 800 basis points year-over-year and 1,300 basis points sequentially[1]. - Operating profit reached $2.5 million, up from $0.3 million in Q3 2023, driven by higher gross margins and SG&A improvements[5]. - Adjusted EBITDA from continuing operations was $4.8 million, a 116% increase compared to $2.2 million in Q3 2023, with an adjusted EBITDA margin of 13.7%[6]. - Operating profit for the three months ended September 30, 2024, was $2,509,000, significantly up from $348,000 in the same period of 2023[17]. - Adjusted EBITDA from continuing operations for the three months ended September 30, 2024, was $4,846,000, compared to $2,244,000 in 2023[20]. Net Loss and Financial Position - The company reported a net loss of $2.8 million, a slight improvement from a net loss of $2.9 million in Q3 2023[5]. - Net loss for the three months ended September 30, 2024, was $2,769,000, compared to a net loss of $2,887,000 in the same period of 2023[17]. - The company reported a net loss from continuing operations of $1,226,000 for the three months ended September 30, 2024, compared to a loss of $1,219,000 in the same period of 2023[17]. - Net loss for the nine months ended September 30, 2024, was $9,700,000, compared to a net loss of $5,951,000 for the same period in 2023[18]. Cash Flow and Liquidity - The company has adequate liquidity with cash and cash equivalents totaling $7.8 million as of September 30, 2024[7]. - Cash and cash equivalents increased to $7,770,000 as of September 30, 2024, from $6,537,000 as of December 31, 2023[16]. - Cash and equivalents at the end of the period increased to $7,960,000 from $2,819,000 in the previous year[18]. - The company reported a net cash used in operating activities of $11,154,000 for the nine months ended September 30, 2024, compared to a net cash provided of $1,743,000 in 2023[18]. - The company incurred $1,441,000 in net cash used in investing activities for the nine months ended September 30, 2024, compared to $2,254,000 in 2023[18]. Investments and Future Outlook - Capital expenditures were 2.0% of revenue, up from 0.7% in Q3 2023, indicating increased investments for growth[6]. - Plans to divest the on-demand printing operation were announced, which had generated approximately $6.8 million in revenue year-to-date[8]. - The company is optimistic about future growth opportunities, particularly due to being selected for the UK government's G-cloud 14 framework[2]. Balance Sheet Highlights - Total current assets decreased to $47,511,000 as of September 30, 2024, from $49,867,000 as of December 31, 2023[16]. - Total liabilities increased to $120,408,000 as of September 30, 2024, compared to $115,307,000 as of December 31, 2023[16]. - Accounts receivable decreased to $24,576,000 as of September 30, 2024, from $30,238,000 as of December 31, 2023[16]. - Selling, general and administrative expenses for the three months ended September 30, 2024, were $6,818,000, slightly down from $6,846,000 in the same period of 2023[17]. Debt and Interest Expenses - Borrowings under the 2024 Term Loan A Facility amounted to $3,830,000, and under the 2024 Term Loan B Facility, $11,413,000[18]. - The company reported interest expense of $1,843,000 for the three months ended September 30, 2024, compared to $1,251,000 in 2023[20]. - The impairment of goodwill was recorded at $87,000 for the nine months ended September 30, 2024[18].

Financial Performance - The Company reported a net loss from continuing operations of $1,226,000 for the three months ended September 30, 2024, compared to a net loss of $1,219,000 for the same period in 2023[186]. - Adjusted EBITDA from continuing operations was $4,846,000 for the three months ended September 30, 2024, compared to $2,244,000 for the same period in 2023, reflecting a significant increase[186]. - For the three months ended September 30, 2024, the company's net revenue decreased by $2.1 million, or 5.6%, to $35.4 million from $37.5 million for the same period in 2023[200]. - The Bills & Payments segment generated $24.6 million in revenue, a decline of $0.8 million or 3.1%, primarily due to lower postage revenue and client contract ends[201]. - The Technology segment's revenue decreased by $1.3 million or 10.8%, to $10.8 million, largely due to lower license sales[202]. - For the nine months ended September 30, 2024, the company's net revenue decreased by $9.4 million, or 8.1%, to $107.0 million compared to $116.4 million for the same period in 2023[219]. - The Bills & Payments segment generated $75.9 million in revenue, a decline of $7.0 million, or 8.4%, primarily due to project completions and lower volumes[220]. - The Technology segment's revenue decreased by $2.4 million, or 7.2%, to $31.1 million, attributed to lower software license sales[222]. Costs and Expenses - Total cost of revenue decreased by $4.4 million, or 15.6%, compared to the same period in 2023, with a total cost of revenue of $23.8 million[203]. - Cost of revenue for the Bills & Payments segment decreased by $3.2 million, or 14.2%, due to completed projects and optimization efforts[204]. - Selling, general and administrative expenses slightly decreased by $28 thousand, or 0.4%, to $6.8 million[207]. - Selling, General and Administrative (SG&A) expenses decreased by $1.6 million, or 7.8%, to $19.8 million, driven by cost optimization initiatives[227]. - Interest expense increased to $1.8 million for the three months ended September 30, 2024, compared to $1.2 million for the same period in 2023[212]. - Interest expense increased to $4.7 million for the nine months ended September 30, 2024, compared to $3.6 million in the prior year, due to higher borrowing costs[230]. Foreign Exchange and Tax - The Company has experienced foreign exchange losses of $668,000 for the three months ended September 30, 2024[186]. - Foreign exchange losses were $0.7 million for the three months ended September 30, 2024, compared to gains of $0.5 million for the same period in 2023[214]. - The company reported an income tax expense of $1.7 million for the three months ended September 30, 2024, compared to $1.0 million for the same period in 2023[217]. Workforce and Operations - As of September 30, 2024, the Company had approximately 1,500 employees, with 147 being part-time, across 16 countries[173]. - A restructuring plan was approved in Q4 2023 to realign the Company's business and strategic priorities, involving workforce rightsizing[276]. Business Segments - The Company has two reportable segments: Bills & Payments and Technology, focusing on optimizing bill processing and software solutions respectively[177]. - Revenue from the Bills & Payments segment includes both project-based and recurring digital transformation revenue[178]. Debt and Financing - As of September 30, 2024, total debt increased by $14.8 million primarily due to borrowings under the 2024 Senior Credit Facilities[237]. - The Company incurred $1.6 million in debt issuance costs related to the 2024 Facilities Agreement[265]. - The 2024 Facilities Agreement requires maintenance of a consolidated total leverage ratio of not greater than 2.50 to 1.00, with stepdowns starting January 1, 2025[266]. - The Company had fully repaid the outstanding balance under the 2022 Committed Facility Agreement as of September 30, 2024[261]. - The Company incurred a loss on the sale of accounts receivables totaling approximately $0.3 million and $0.7 million for the three and nine months ended September 30, 2024, respectively[250]. Strategic Initiatives - The Company may explore strategic transactions, including joint ventures and acquisitions, which may require additional funds[278]. - There have been no material changes to the Company's market risk during the nine months ended September 30, 2024[282].

Third Quarter Highlights Revenue of $35.4 million, decrease of 5.6% year-over-year and increase of 5.5% sequentiallyGross margin increased to 32.6%, a 800 bps increase year-over-year and 1,300 bps increase sequentiallyOperating profit of $2.5 million, an increase of $2.2 million year-over-year and $3.8 million sequentiallyNet loss of $2.8 million includes $0.7 million of FX losses, a decrease of $0.1 million year-over-year and $2.0 million sequentiallyAdjusted EBITDA from continuing operations of $4.8 milli ...