Business Combination and Bankruptcy - XBP Global completed its business combination with Exela Technologies BPA, LLC on July 29, 2025, acquiring it for $1.00 amid its voluntary bankruptcy proceedings [278]. - The company emerged from Chapter 11 bankruptcy on July 29, 2025, implementing fresh-start accounting, which resulted in a new entity for financial reporting purposes [283]. - As part of the restructuring, XBP Global increased its authorized shares to 400 million common shares and issued 81,799,821 shares to holders of Allowed Notes Claims, resulting in a total of 117,515,972 shares outstanding [284]. - The equity valuation of BPA was assessed at $407 million, leading to an overall implied equity valuation of the combined company at $585.7 million [285]. Revenue and Segments - XBP Global's revenue primarily comes from transaction processing, including payment processing and data capture, with a focus on the Americas, Europe, and increasing presence in Asia [275]. - The Applied Workflow Automation segment generated $189.4 million in revenue, a decline of $30.9 million, or 14.0%, primarily due to lower postage revenue and project completions [303]. - The Technology segment's revenue increased by $6.6 million, or 50.3%, to $19.7 million, largely due to the inclusion of a newly acquired entity [304]. - Revenue from the Applied Workflow Automation segment decreased by $85.4 million, or 13.7%, primarily due to lower postage revenue and client contract ends [323]. - Revenue from the Technology segment increased by $5.4 million, or 13.4%, to $45.9 million, largely due to the inclusion of a newly acquired entity [324]. Financial Performance - For the three months ended September 30, 2025, total revenue decreased by $24.3 million, or 10.4%, to $209.08 million from $233.4 million for the same period in 2024 [302]. - Net revenue for the nine months ended September 30, 2025, decreased by $79.9 million, or 12.0%, to $584.1 million from $664.0 million for the same period in 2024 [322]. - The company reported a net loss of $(305,838) for the three months ended September 30, 2025, compared to a net profit of $1,480,093 for the same period in 2024 [343]. - For the nine months ended September 30, 2025, the net loss was $1.1 billion [396]. - EBITDA for the three months ended September 30, 2025, was $(283,616), compared to $1,521,187 for the same period in 2024, indicating a substantial decline in operational performance [342]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $49,505, compared to $38,765 for the same period in 2024, showing an increase of approximately 28% [345]. Expenses and Costs - Cost of revenue decreased by $26.2 million, or 13.9%, compared to the prior year, with the Applied Workflow Automation segment's cost decreasing by $29.4 million, or 15.9% [305][307]. - Selling, general and administrative expenses increased by $2.1 million, or 7.9%, to $28.9 million, with SG&A expenses as a percentage of revenue rising to 13.8% [309]. - Total depreciation and amortization expenses were $12.3 million for the three months ended September 30, 2025, compared to $12.1 million for the same period in 2024 [310]. - Selling, general and administrative expenses decreased by $22.5 million, or 23.8%, to $71.9 million for the nine months ended September 30, 2025 [329]. Cash Flow and Liquidity - Cash, restricted cash, and cash equivalents totaled $64.2 million as of September 30, 2025, slightly up from $64.1 million at the end of 2024 [347]. - The company expects liquidity to be constrained until pre-petition liabilities are fully settled following its emergence from Chapter 11 [350]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $13.9 million, a significant increase compared to a net cash used of $159.9 million in the same period of 2024, reflecting a change of $173.8 million [354]. - Cash flows from operating activities resulted in a net cash used of $(146,076) million for the nine months ended September 30, 2025 [397]. - Cash flows from financing activities resulted in a net cash provided of $155,242 million for the nine months ended September 30, 2025 [397]. Debt and Financing - The company entered into exit financing arrangements, including the issuance of $183.0 million in July 2030 Notes and a $150 million revolving credit facility [288]. - The total outstanding borrowings under the Super Senior Term Loan as of September 30, 2025, were $46 million, with a maturity date set for July 28, 2028 [368]. - The Company issued approximately $183 million in aggregate principal amount of the July 2030 Notes, which bear a fixed interest rate of 12% per annum, payable quarterly starting January 15, 2026 [362]. - The Company recorded a $61.1 million reduction in the cost of revenue and a $22.5 million decrease in selling, general, and administrative expenses, contributing to improved cash flow [356][357]. Assets and Liabilities - Total assets as of September 30, 2025, amounted to $947.9 million, with total liabilities of $817.4 million [393]. - The current portion of long-term debt was $34.9 million, contributing to total current liabilities of $330.4 million [393]. - The company’s total stockholder's equity was reported at $130.5 million as of September 30, 2025 [393]. Tax and Goodwill - Goodwill impairment for the three months ended September 30, 2025, was $295.8 million, with $215.8 million attributed to the Applied Workflow Automation segment and $80.0 million to the Technology segment [311][331]. - Income tax expense for the nine months ended September 30, 2025, was $39.2 million, up from $9.4 million for the same period in 2024, reflecting a significant increase due to goodwill impairment and reorganization items [338]. - The estimated annual effective tax rate for the three months ended September 30, 2025, was 3.0%, significantly lower than the expected U.S. statutory tax rate of 21.0% [318]. Strategic Outlook - The company anticipates future growth opportunities driven by its proprietary platforms and automation solutions, which are designed to enhance operational efficiency for clients [276]. - The company may explore strategic transactions, including joint ventures and acquisitions, which may require additional funding [398]. - The company adopted fresh-start accounting in 2025, significantly impacting its accounting estimates and fair value measurements [402].
CF ACQUISITION(CFFE) - 2025 Q3 - Quarterly Report