Exela Technologies(US:XELA)2023-04-03 12:27Financial Performance - The company reported revenue of $1.08 billion for the fiscal year ended December 31, 2022, primarily from business and transaction processing services [393]. - Exela Technologies reported a revenue of $1,077,157,000 for the year ended December 31, 2022, a decrease of 7.6% from $1,166,606,000 in 2021 [417]. - The company incurred a net loss of $415,581,000 in 2022, compared to a net loss of $142,390,000 in 2021, representing a significant increase in losses [417]. - The net loss for the year ended December 31, 2022, was $415.581 million, compared to a net loss of $142.390 million in 2021 [432]. - The net loss attributable to common stockholders was $422.8 million in 2022, compared to $144.0 million in 2021 and $179.8 million in 2020 [526]. Assets and Liabilities - Total assets decreased from $1,037,023,000 in 2021 to $721,912,000 in 2022, a decline of approximately 30.3% [414]. - Current liabilities decreased from $591,840,000 in 2021 to $510,045,000 in 2022, a reduction of about 13.8% [414]. - The company’s total liabilities decreased from $1,703,795,000 in 2021 to $1,529,501,000 in 2022, a decrease of approximately 10.2% [414]. - The company had $1,169.1 million of debt outstanding as of December 31, 2022, with a weighted average interest rate of 11.2% [377]. - The total cash and cash equivalents at the end of 2022 were $45.067 million, a decrease from $48.060 million at the end of 2021 [432]. Goodwill and Intangible Assets - Goodwill balance was $186.8 million as of December 31, 2022, with impairment charges totaling $171.2 million recorded for the Information and Transaction Processing (ITPS) reporting unit [396]. - The company recorded an impairment charge of $171.2 million for goodwill in 2022, primarily related to ITPS, due to a decline in market capitalization and future cash flow projections [561]. - The total goodwill balance decreased from $358.3 million at December 31, 2021, to $186.8 million at December 31, 2022, after accounting for impairments [565]. - The company has accumulated impairment relating to ITPS of $487.7 million as of December 31, 2022 [565]. - Intangible assets, net as of December 31, 2022, amounted to $200.982 million, with gross carrying amount of $701.065 million [556]. Cash Flow and Financing Activities - Cash used in operating activities for 2022 was $87.162 million, an improvement from $111.534 million in 2021 [432]. - Cash provided by financing activities in 2022 was $106.639 million, compared to $98.651 million in 2021 [432]. - The company issued common stock from at-the-market offerings, generating $276.337 million in 2022 [432]. - The Company raised proceeds of $347.5 million from the sale of equity and debt during the year ended December 31, 2022 [446]. - The Company executed a $150.0 million financing with PNC Bank, generating annual interest rate savings of approximately $5.0 million [446]. Operational Challenges - The company has a history of net losses and significant cash payments for interest on long-term debt, raising substantial doubt about its ability to continue as a going concern [388]. - The Company continues to face impacts from global supply chain challenges and staff availability at key operating centers [449]. - The company’s internal control over financial reporting was found to be ineffective as of December 31, 2022 [387]. - The Company recorded a liability for settlement funds of $44.4 million and $46.9 million at December 31, 2022, and 2021, respectively [462]. - The Company has not recorded a corresponding receivable for expected insurance recovery related to customer claims from the cyber incident [454]. Revenue Recognition and Deferred Revenue - The Company recognized revenue of $1,077.2 million for the year ended December 31, 2022, a decrease from $1,166.6 million in 2021 [494]. - Deferred revenues increased slightly to $17.6 million as of December 31, 2022, compared to $17.5 million in 2021 [495]. - The Company recognized $16.5 million in revenue during the year ended December 31, 2022, that had been deferred as of December 31, 2021 [496]. Expenses and Cost Management - The company incurred impairment of goodwill and other intangible assets amounting to $171.182 million in 2022 [432]. - Expenses associated with a network security incident totaled $3.7 million, net of insurance recoveries of $6.2 million [452]. - The Company identified estimated cost savings in the range of $65-$75 million for fiscal year 2023 [447]. - The Company’s consolidated rental expense for all operating leases was $48.0 million for the year ended December 31, 2022, down from $51.8 million in 2021 [551]. - Amortization of costs incurred to obtain and fulfill contracts was $1.1 million, $1.5 million, and $2.4 million for the years 2022, 2021, and 2020, respectively [497].