Exela Technologies(XELA) - 2022 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's revenue for 2022 was $1.08 billion, representing a 7.7% year-over-year decline, or approximately 4% decline when excluding one-time events and currency impacts [23][11] - Adjusted EBITDA for the year was $139.9 million, down $33.4 million from 2021, with expectations for improvement in 2023 due to cost-saving measures [25][12] - Q4 2022 revenue was $267 million, down 9.3% year-over-year but up 1.1% sequentially [24] Business Line Data and Key Metrics Changes - The Healthcare Solutions segment grew by 10.9% for the year, with Q4 growth of 15.5% year-over-year [13][26] - ITPS segment revenue decreased by 12.9% for the year and 14.7% in Q4, impacted by lower volumes and a network outage [13][28] - Gross margins for the Healthcare Solutions segment improved to 55.1% in Q4, while ITPS gross margins decreased by approximately 35% year-over-year [27][28] Market Data and Key Metrics Changes - The company has a stable revenue base with high recurring revenue and a large pipeline, indicating positive market positioning [23] - The adoption of a work-from-anywhere model has led to operational improvements and a reduction in headcount to 16,000 [7] Company Strategy and Development Direction - The company aims to reduce debt by $250 million to $500 million in 2023, with ongoing discussions with lenders to achieve this goal [16][41] - Investments in growth areas such as data science, technology, and cloud operations are expected to improve EBITDA over time [34] - The strategic focus is on operational improvements and maintaining a sustainable balance sheet [36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged 2022 as a challenging year but emphasized the importance of operational and balance sheet improvements [5][12] - There is optimism for 2023, with expectations for revenue and adjusted EBITDA growth barring unforeseen events [19][36] Other Important Information - The company reduced its debt by $141 million in 2022, with a total of $296 million in debt extinguished or modified [15][35] - A non-cash goodwill impairment charge of $142 million in Q4 significantly impacted net loss for the year [30] Q&A Session Summary Question: Plans for debt reduction - Management discussed pathways to achieve the targeted debt reduction, including support from consenting lenders and potential asset sales [38][41] Question: Operational performance and cost-saving initiatives - Management highlighted improvements in gross margins for the ITPS segment and emphasized the focus on automation and cloud infrastructure for cost savings [44][46]