Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-36788 | ||
Entity Registrant Name | Exela Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-1347291 | ||
Entity Address, Address Line One | 2701 E. Grauwyler Rd. | ||
Entity Address, City or Town | Irving | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75061 | ||
City Area Code | 844 | ||
Local Phone Number | 935-2832 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 90,306,352 | ||
Entity Common Stock, Shares Outstanding | 1,274,204,054 | ||
Entity Central Index Key | 0001620179 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Firm ID | 185 | ||
Auditor Location | Detroit, Michigan | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, Par Value $0.0001 per share | ||
Trading Symbol | XELA | ||
Security Exchange Name | NASDAQ | ||
6.00% Series B Cumulative Convertible Perpetual Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 6.00% Series B Cumulative Convertible | ||
Trading Symbol | XELAP | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 15,073 | $ 20,775 |
Restricted cash | 29,994 | 27,285 |
Accounts receivable, net of allowance for doubtful accounts of $6,402 and $6,049, respectively | 101,616 | 184,102 |
Related party receivables and prepaid expenses | 759 | 715 |
Inventories, net | 16,848 | 15,215 |
Prepaid expenses and other current assets | 26,206 | 31,799 |
Total current assets | 190,496 | 279,891 |
Property, plant and equipment, net of accumulated depreciation of $207,520 and $196,683, respectively | 71,694 | 73,449 |
Operating lease right-of-use assets, net | 40,734 | 53,937 |
Goodwill | 186,802 | 358,323 |
Intangible assets, net | 200,982 | 244,539 |
Deferred income tax assets | 1,483 | 2,109 |
Other noncurrent assets | 29,721 | 24,775 |
Total assets | 721,912 | 1,037,023 |
Current liabilities | ||
Accounts payable | 79,249 | 61,744 |
Related party payables | 2,473 | 1,484 |
Income tax payable | 2,045 | 3,551 |
Accrued liabilities | 61,340 | 113,519 |
Accrued compensation and benefits | 54,143 | 60,860 |
Accrued interest | 60,901 | 10,075 |
Customer deposits | 16,955 | 17,707 |
Deferred revenue | 16,405 | 16,617 |
Obligation for claim payment | 44,380 | 46,902 |
Current portion of finance lease liabilities | 5,485 | 6,683 |
Current portion of operating lease liabilities | 11,867 | 15,923 |
Current portion of long-term debts | 154,802 | 236,775 |
Total current liabilities | 510,045 | 591,840 |
Long-term debt, net of current maturities | 942,035 | 1,012,452 |
Finance lease liabilities, net of current portion | 9,448 | 9,156 |
Pension liabilities, net | 16,917 | 28,383 |
Deferred income tax liabilities | 11,180 | 11,594 |
Long-term income tax liabilities | 2,742 | 3,201 |
Operating lease liabilities, net of current portion | 31,030 | 41,170 |
Other long-term liabilities | 6,104 | 5,999 |
Total liabilities | 1,529,501 | 1,703,795 |
Commitments and Contingencies (Note 14) | ||
Stockholders' equity (deficit) | ||
Common Stock, par value of $0.0001 per share; 1,600,000,000 shares authorized; 278,777,820 shares issued and 278,655,235 shares outstanding at December 31, 2022 and 13,382,333 shares issued and 13,259,748 shares outstanding at December 31, 2021 | 162 | 37 |
Additional paid in capital | 1,102,619 | 838,853 |
Less: Common Stock held in treasury, at cost; 122,585 shares at December 31, 2022 and December 31, 2021 | (10,949) | (10,949) |
Equity-based compensation | 56,958 | 56,123 |
Accumulated deficit | (1,948,009) | (1,532,428) |
Accumulated other comprehensive loss: | ||
Foreign currency translation adjustment | (4,788) | (7,463) |
Unrealized pension actuarial losses, net of tax | (3,583) | (10,946) |
Total accumulated other comprehensive loss | (8,371) | (18,409) |
Total stockholders' deficit | (807,589) | (666,772) |
Total liabilities and stockholders' deficit | 721,912 | 1,037,023 |
Series A Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock | 1 | 1 |
Series B Preferred Stock | ||
Stockholders' equity (deficit) | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for doubtful accounts | $ 6,402 | $ 6,049 |
Accumulated depreciation | $ 207,520 | $ 196,683 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 278,777,820 | 13,382,333 |
Common stock, shares outstanding | 278,655,235 | 13,259,748 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Treasury shares | 122,585 | 122,585 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, shares authorized | 2,800,000 | |
Preferred stock, shares issued | 2,778,111 | 2,778,111 |
Preferred stock, shares outstanding | 2,778,111 | 2,778,111 |
Series B Preferred Stock | ||
Preferred stock, shares issued | 3,029,900 | 0 |
Preferred stock, shares outstanding | 3,029,900 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 1,077,157 | $ 1,166,606 | $ 1,292,562 |
Cost of revenue (exclusive of depreciation and amortization) | 877,474 | 889,095 | 1,023,544 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 176,524 | 169,781 | 186,104 |
Depreciation and amortization | 71,831 | 77,150 | 93,953 |
Impairment of goodwill and other intangible assets | 171,182 | ||
Related party expense | 8,923 | 9,191 | 5,381 |
Operating profit (loss) | (228,777) | 21,389 | (16,420) |
Other expense (income), net: | |||
Interest expense, net | 164,870 | 168,048 | 173,878 |
Debt modification and extinguishment costs (gain), net | 4,522 | (16,689) | 9,589 |
Sundry expense (income), net | (957) | 363 | (153) |
Other expense (income), net | 14,170 | 401 | (34,788) |
Net loss before income taxes | (411,382) | (130,734) | (164,946) |
Income tax expense | (4,199) | (11,656) | (13,584) |
Net loss | (415,581) | (142,390) | (178,530) |
Net loss attributable to common stockholders | $ (422,834) | $ (143,966) | $ (179,839) |
Basic (in dollars per share) | $ (6.86) | $ (24.40) | $ (73.19) |
Diluted (in dollars per share) | $ (6.86) | $ (24.40) | $ (73.19) |
Series A Preferred Stock | |||
Other expense (income), net: | |||
Cumulative dividends for Preferred Stock | $ (3,588) | $ (1,576) | $ (1,309) |
Series B Preferred Stock | |||
Other expense (income), net: | |||
Cumulative dividends for Preferred Stock | $ (3,665) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Loss | |||
Net loss | $ (415,581) | $ (142,390) | $ (178,530) |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments | 2,675 | (44) | (90) |
Unrealized pension actuarial gains (losses), net of tax | 7,363 | 6,118 | (9,005) |
Total other comprehensive loss, net of tax | $ (405,543) | $ (136,316) | $ (187,625) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock Private Placement | Common Stock Subscription Agreements | Common Stock | Preferred Stock Series A Preferred Stock | Preferred Stock Series B Preferred Stock | Treasury Stock | Additional Paid in Capital Private Placement | Additional Paid in Capital Subscription Agreements | Additional Paid in Capital | Equity-based compensation | Foreign currency translation adjustment | Unrealized Pension Actuarial Losses, net of tax | Accumulated Deficit | Private Placement | Subscription Agreements | Series B Preferred Stock | Total |
Beginning balance at Dec. 31, 2019 | $ 15,000 | $ 1,000 | $ (10,949,000) | $ 445,452,000 | $ 49,337,000 | $ (7,329,000) | $ (8,059,000) | $ (1,211,508,000) | $ (743,040,000) | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 2,514,195 | 4,294,233 | 46,452 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||||||||||||
Net loss | (178,530,000) | (178,530,000) | |||||||||||||||
Equity-based compensation | 2,846,000 | 2,846,000 | |||||||||||||||
Foreign currency translation adjustment | (90,000) | (90,000) | |||||||||||||||
Net realized pension actuarial gains, net of tax | (9,005,000) | (9,005,000) | |||||||||||||||
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares) | (76,179) | 76,179 | |||||||||||||||
Preferred shares converted to Common Stock (in shares) | 20,462 | (1,004,183) | |||||||||||||||
Settlement gain on related party payable to Ex-Sigma 2 LLC | 1,287,000 | 1,287,000 | |||||||||||||||
Common Stock issued for vested RSUs (in shares) | 3,587 | ||||||||||||||||
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018 | 46 | (46) | |||||||||||||||
Ending balance at Dec. 31, 2020 | $ 15,000 | $ 1,000 | $ (10,949,000) | 446,739,000 | 52,183,000 | (7,419,000) | (17,064,000) | (1,390,038,000) | (926,532,000) | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | 2,462,111 | 3,290,050 | 122,585 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||||||||||||
Net loss | (142,390,000) | (142,390,000) | |||||||||||||||
Equity-based compensation | 3,940,000 | 3,940,000 | |||||||||||||||
Foreign currency translation adjustment | (44,000) | (44,000) | |||||||||||||||
Net realized pension actuarial gains, net of tax | 6,118,000 | 6,118,000 | |||||||||||||||
Preferred shares converted to Common Stock (in shares) | 11,199 | (511,939) | |||||||||||||||
Payment for fractional shares on reverse stock split in 2021 | (14,000) | (14,000) | |||||||||||||||
Payment for fractional shares on Reverse Stock Split (in shares) | (272) | ||||||||||||||||
Issuance of Common Stock | $ 1,000 | $ 21,000 | $ 25,079,000 | $ 530,000 | 366,519,000 | $ 25,080,000 | $ 530,000 | 366,540,000 | |||||||||
Issuance of Common Stock (in shares) | 486,591 | 20,188 | 10,279,931 | ||||||||||||||
Ending balance at Dec. 31, 2021 | $ 37,000 | $ 1,000 | $ (10,949,000) | 838,853,000 | 56,123,000 | (7,463,000) | (10,946,000) | (1,532,428,000) | (666,772,000) | ||||||||
Ending balance (in shares) at Dec. 31, 2021 | 13,259,748 | 2,778,111 | 122,585 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||||||||||||
Net loss | (415,581,000) | (415,581,000) | |||||||||||||||
Equity-based compensation | 970,000 | 970,000 | |||||||||||||||
Foreign currency translation adjustment | 2,675,000 | 2,675,000 | |||||||||||||||
Net realized pension actuarial gains, net of tax | 7,363,000 | 7,363,000 | |||||||||||||||
Common Stock exchanged for Series B Preferred Stock | $ (6,000) | 6,000 | |||||||||||||||
Common Stock exchanged for Series B Preferred Stock (in shares) | (3,029,900) | 3,029,900 | |||||||||||||||
Issuance of Common Stock | $ 131,000 | 266,724,000 | 266,855,000 | ||||||||||||||
Issuance of Common Stock (in shares) | 268,701,695 | ||||||||||||||||
Withholding of employee taxes on vested RSUs | (192,000) | (192,000) | |||||||||||||||
Common Stock issued for vested RSUs (in shares) | 56,854 | ||||||||||||||||
Agreed cancellation of Common Stock issued for Director's vested RSUs (in shares) | (31,082) | ||||||||||||||||
Dividend declared and paid on Preferred Stock | (2,532,000) | (2,532,000) | |||||||||||||||
Common Stock repurchased and retired | (487,000) | (487,000) | |||||||||||||||
Common Stock repurchased and retired (in shares) | (357,461) | ||||||||||||||||
Reversal of excess withholding of employee taxes on vested RSUs | 57,000 | 57,000 | |||||||||||||||
Issuance of Common Stock to Executive Chairman under certain subscription agreement | 100,000 | 100,000 | |||||||||||||||
Issuance of Common Stock to Executive Chairman under certain subscription agreement, shares | 70,921 | ||||||||||||||||
Payment for fractional shares Common Stock on Reverse Stock Split in 2022 | (45,000) | $ (45,000) | |||||||||||||||
Cancellation of fractional Common Stock on Reverse Stock Split (in shares) | (15,540) | ||||||||||||||||
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018 | 8,998 | ||||||||||||||||
Preferred stock converted to Common Stock (in shares) | 3,029,900 | ||||||||||||||||
Ending balance at Dec. 31, 2022 | $ 162,000 | $ 1,000 | $ 3,029,900 | $ (10,949,000) | $ 1,102,619,000 | $ 56,958,000 | $ (4,788,000) | $ (3,583,000) | $ (1,948,009,000) | $ (807,589,000) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 278,655,235 | 2,778,111 | 122,585 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Deficit (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Series B Preferred Stock | |
Dividend declared and paid on Series B Preferred Stock | $ 0.835 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net loss | $ (415,581) | $ (142,390) | $ (178,530) |
Adjustments to reconcile net loss | |||
Depreciation and amortization | 71,831 | 77,150 | 93,953 |
Original issue discount and debt issuance cost amortization | 15,261 | 16,319 | 15,117 |
Debt modification and extinguishment costs (gain), net | (1,803) | (30,613) | 8,296 |
Impairment of goodwill and other intangible assets | 171,182 | ||
Provision for doubtful accounts | 1,573 | 2,714 | 422 |
Deferred income tax provision | 147 | 6,649 | 7,940 |
Share-based compensation expense | 970 | 3,940 | 2,846 |
Unrealized foreign currency losses (gain) | (1,288) | 173 | (414) |
Loss (Gain) on sale of assets | 707 | (960) | (43,338) |
Fair value adjustment for interest rate swap | (125) | (375) | |
Change in operating assets and liabilities, net of effect from acquisitions | |||
Accounts receivable | 77,650 | 17,438 | 54,538 |
Prepaid expenses and other assets | (7,813) | (1,597) | (1,379) |
Accounts payable and accrued liabilities | (520) | (61,068) | 12,015 |
Related party payables | 945 | 1,382 | (353) |
Additions to outsource contract costs | (423) | (546) | (519) |
Net cash used in operating activities | (87,162) | (111,534) | (29,781) |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (18,299) | (14,574) | (11,663) |
Additions to patents | (15) | ||
Additions to internally developed software | (3,650) | (1,954) | (3,825) |
Cash paid for acquisition, net of cash received | (12,500) | ||
Cash paid for earnouts | (700) | ||
Proceeds from sale of assets | 194 | 7,267 | 50,126 |
Net cash provided by (used in) investing activities | (21,770) | (9,261) | 21,438 |
Cash flows from financing activities | |||
Dividend paid on Series B Preferred Stock | (2,532) | ||
Repurchases of Common Stock for retirement | (487) | ||
Cash paid for equity issuance costs from at the market offerings | (9,482) | (13,423) | |
Borrowings under factoring arrangement and Securitization Facility | 123,353 | 142,501 | 297,673 |
Principal repayment on borrowings under factoring arrangement and Securitization Facility | (216,812) | (144,965) | (203,841) |
Cash paid for withholding taxes on vested RSUs | (135) | (7) | |
Lease terminations | 3 | (1,303) | (337) |
Cash paid for debt issuance costs | (7,125) | (1,181) | (16,205) |
Principal payments on finance lease obligations | (5,523) | (11,471) | (12,758) |
Borrowings from senior secured revolving facility and BRCC revolver | 20,000 | 11,000 | 29,750 |
Repayments on senior secured revolving facility | (49,477) | (55) | (14,200) |
Proceeds from issuance of 2026 Notes | 70,269 | 3,574 | |
Repayments on senior secured term loan and 2023 Notes as part of debts exchanges | (309,305) | ||
Borrowings from other loans | 10,095 | 126,352 | 29,260 |
Cash paid for debt repurchases | (4,712) | (71,184) | |
Repayment of BRCC term loan | (66,471) | ||
Principal repayments on senior secured term loans and other loans | (30,717) | (37,186) | (45,973) |
Net cash provided by financing activities | 106,639 | 98,651 | 63,362 |
Effect of exchange rates on cash | (700) | (105) | 1,191 |
Net increase (decrease) in cash and cash equivalents | (2,993) | (22,249) | 56,210 |
Cash, restricted cash, and cash equivalents | |||
Beginning of period | 48,060 | 70,309 | 14,099 |
End of period | 45,067 | 48,060 | 70,309 |
Supplemental cash flow data: | |||
Income tax payments, net of refunds received | 5,790 | 3,765 | 2,695 |
Interest paid | 98,602 | 188,802 | 152,678 |
Noncash investing and financing activities: | |||
Assets acquired through right-of-use arrangements | 4,790 | 3,270 | 4,372 |
Leasehold improvements funded by lessor | 125 | ||
Common Stock exchanged for Series B Preferred Stock | 6 | ||
Accrued liability for true-up obligation settled through the issuance of 2026 Notes | 10,351 | ||
Settlement gain on related party payable to Ex-Sigma 2 LLC | 1,287 | ||
Accrued capital expenditures | 1,851 | 1,652 | $ 2,124 |
Private Placement | |||
Cash flows from financing activities | |||
Proceeds from issuance of stocks | 55 | 25,065 | |
At the Market Offering | |||
Cash flows from financing activities | |||
Proceeds from issuance of stocks | $ 276,337 | 379,963 | |
Subscription Agreements | |||
Cash flows from financing activities | |||
Proceeds from issuance of stocks | $ 269 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Description of the Business | |
Description of the Business | 1. Description of the Business Organization Exela Technologies, Inc. (the “Company” or “Exela”) is a global provider of transaction processing solutions, enterprise information management, document management and digital business process services. The Company provides mission-critical information and transaction processing solutions services to clients across three major industry verticals: (1) Information & Transaction Processing, (2) Healthcare Solutions, and (3) Legal and Loss Prevention Services. The Company manages information and document driven business processes and offers solutions and services to fulfill specialized knowledge-based processing and consulting requirements, enabling clients to concentrate on their core competencies. Through its outsourcing solutions, the Company enables businesses to streamline their internal and external communications and workflows. The Company was originally incorporated in Delaware on July 15, 2014 as a special purpose acquisition company under the name Quinpario Acquisition Corp 2 (“Quinpario”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving Quinpario and one or more businesses or entities. On July 12, 2017 (the “Closing”), the Company consummated its business combination with SourceHOV Holdings, Inc. (“SourceHOV”) and Novitex Holdings, Inc. (“Novitex”) pursuant to the Business Combination Agreement, dated February 21, 2017, among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., SourceHOV, Novitex, HOVS LLC, HandsOn Fund 4 I, LLC and Novitex Parent, L.P., as amended (the “Novitex Business Combination”). In connection with the Closing, the Company changed its name from Quinpario Acquisition Corp 2 to Exela Technologies, Inc. Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Novitex Business Combination, “Quinpario” refers to the Company prior to the closing of the Novitex Business Combination, “SourceHOV” refers to SourceHOV prior to the Novitex Business Combination or SourceHOV on a standalone basis and “Novitex” refers to Novitex prior to the Novitex Business Combination. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements. Basis of Presentation The accompanying consolidated financial statements and related notes to the consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation The accompanying consolidated financial statements and related notes to the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Use of Estimates in Preparation of the Financial Statements Estimates and judgments relied upon in preparing these consolidated financial statements include revenue recognition for multiple element arrangements, allowance for doubtful accounts, income taxes, depreciation, amortization, employee benefits, equity-based compensation, contingencies, goodwill, intangible assets, right of use assets and obligation, pension obligations, pension assets, fair value of assets and liabilities acquired in acquisitions, and asset and liability valuations. The Company regularly assesses these estimates and records changes in estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. Reverse Stock Split On July 25, 2022, we effected a one-for- twenty twenty Going Concern In accordance with ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern In performing this evaluation, we concluded that under the standards of ASC 205-40 the following conditions raised substantial doubt about our ability to continue as a going concern: a history of net losses, net operating cash outflows, working capital deficits and significant cash payments for interest on our long-term debt in addition to $9.4 million principal amount of 2023 Notes and $88.3 million principal amount of senior secured term loans (all as defined in Note 5 and after considering events described in Note 21) both of which mature within the next twelve months from the filing date of this report. Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s obligations due before April 3, 2024. As required under ASC 205-40, management’s evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company, such as access to equity financing (despite the Company’s track record in raising nearly $725.6 million of such funds). The Company has undertaken and completed the following plans and actions to improve its available cash balances, liquidity or cash generated from operations, over the twelve month period from the date these financial statements are issued: ● completed the Revolver Exchange (see Note 11); ● paid off its remaining obligations relating to the settlement of the Appraisal Action (see Note 14); ● executed a $150.0 million financing with PNC Bank to replace the existing securitization facility that generated annual interest rate savings of approximately $5.0 million; ● raised proceeds of $347.5 million from the sale of equity and debt during the year ended December 31, 2022; ● obtained $51.0 million of new funding from BRCC, consisting of $35.0 million of junior secured financing, a separate sale of receivables and an increase in availability under a revolving line of credit ● repurchased $13.4 million of senior notes due 2023 subsequent to December 31, 2022; and ● identified and in the process of executing on estimated cost savings in the range of $65 - $75 million for fiscal year 2023 Despite these actions, the Company will need to take further action to raise additional funds in the capital markets. In order to access the capital markets, the Company filed registration statements providing for the sale of common stock, preferred stock, warrants, debt securities and/or units. Based on our knowledge of the Company and the financial market, we believe that we will be able to raise additional funds from the sale of equity and debt in the future. However, the Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry and considering these factors are outside of the Company’s control, substantial doubt about the Company’s ability to continue as a going concern exists under the standards of ASC 205-40. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. Impact of COVID-19 The COVID-19 pandemic remains a threat and certain countries, such as China and Japan, are still subject to restrictions related to COVID-19. While the threat level has declined to a significant extent in the U.S. and globally, any resurgence could have a material adverse effect on our business operations, results of operations, cash flows and financial position. We continue to see impacts of global supply chain challenges, availability of staff at some of our key operating centers and pending customers’ decision to resume work from office. However, all of our production-related facilities remain operational and are continuing to provide ongoing services to our customers. Network Outage In late June 2022, the Company experienced a network security incident impacting certain of the Company’s operational and information technology systems. The Company immediately took steps to isolate the impact and prevent additional systems from being affected, including taking large parts of its network offline as a precaution and thereby disrupting some access to our applications and services by our employees and customers. Promptly upon our detection of this incident, we initiated response and containment protocols and our security teams, supplemented by leading cyber forensic and defense firms, worked to remediate this incident. We notified law enforcement, contacted our customers to apprise them of the situation, and provided and will provide any notices that may be required by applicable law. We maintain a variety of insurance policies, including cyber insurance and business interruption insurance that have and may continue to partially off-set the costs related to this incident. We undertook extensive efforts to identify, contain and recover from this incident quickly and securely. We systematically brought our information systems back online in a controlled, phased approach. Our teams worked to maintain our business operations and minimize the impact on our customers, operating partners, and employees. The Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, however, the incident did result in some loss of revenue as well as certain incremental costs. During the year ended December 31, 2022, expenses associated with this incident including remediation cost and various third party consulting services including forensic experts, legal counsel and other IT professional expenses, all of which are included in other expense, net in the consolidated statements of operations, totaled $3.7 million, net of insurance recoveries of $6.2 million. In addition, we reduced our revenue for the net settlement amount of claims paid to customer by less than $0.1 million, net of insurance recovery of $0.2 million for the year ended December 31, 2022. We have reduced our revenue by the estimated settlement amount of $5.1 million representing the incident-related customer claims which are not settled as of December 31, 2022. The Company has not recorded a corresponding receivable for expected insurance that may be recovered for these customer claims. Amounts that may be payable to customers to settle customer claims are recorded as customer payables in accrued liabilities on our consolidated balance sheet. Due to insurance recoverability of these customer claims and expenses, we do not believe the cyber-attack will have a significant impact on our consolidated financial statements. We expect to incur additional costs related to the incident, but these are not expected to be significant. The Company is also seeking to recover a portion, if not all, of any profit impact including the profit associated with any loss of revenue resulting from this event. The Company will record insurance recovery when it is probable of collection. To date, no litigation has resulted from the data incident. Segment Reporting The Company consists of the following three segments: 1. Information & Transaction Processing Solutions (“ITPS”). 2. Healthcare Solutions (“HS”). 3. Legal and Loss Prevention Services (“LLPS”). Cash and Cash Equivalents Cash and cash equivalents include cash deposited with financial institutions and liquid investments with original maturity dates equal to or less than three months. All bank deposits and money market accounts are considered cash and cash equivalents. The Company holds cash and cash equivalents at major financial institutions, which often exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to bank depository concentration. Certificates of deposit and fixed deposits whose original maturity is greater than three months and one year or less are classified as short-term investments, and certificates of deposit and fixed deposits whose maturity is greater than one year at the balance sheet date are classified as non-current assets in the consolidated balance sheets. The purchase of any certificates of deposit or fixed deposits that are classified as short-term investments or non-current assets appear in the investing section of the consolidated statements of cash flows. Restricted Cash Restricted cash is the carrying amount of cash and cash equivalents which are restricted under contract or otherwise as to withdrawal or usage. These include deposits held as compensating balances against obligation for claim payment or under agreements entered into with others, but exclude compensating balance arrangements that do not legally restrict the use of cash amounts shown on the balance sheet. Obligation for Claim Payment As part of the Company’s legal claims processing service, the Company holds cash for various settlement funds. Some of the cash is used to pay tax obligations and other liabilities of the settlement funds. The Company has recorded a liability for the settlement funds received, which is included in obligation for claim payment in the consolidated balance sheets, of $44.4 million and $46.9 million at December 31, 2022 and 2021, respectively. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at the original invoice amount less an estimate made for doubtful accounts. Revenue that has been earned but remains unbilled at the end of the period is recorded as a component of accounts receivable, net. The Company specifically analyzes accounts receivable and historical bad debts, customer credit-worthiness, current economic trends, and changes in customer payment terms and collection trends when evaluating the adequacy of its allowance for doubtful accounts. The Company writes off accounts receivable balances against the allowance for doubtful accounts, net of any amounts recorded in deferred revenue, when it becomes probable that the receivable will not be collected. Inventories Our inventories primarily include heavy-duty scanners and related parts, toner, paper stock, envelopes and postage supplies. Inventories are stated at the lower of cost or net realizable values and include the cost of raw materials, labor, and purchased subassemblies. Cost is determined using the weighted average method. Property, Plant and Equipment Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method (which approximates the use of the assets) over the estimated useful lives of the assets. When these assets are sold or otherwise disposed of, the asset and related depreciation is relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Leasehold improvements are amortized over the lease term or the useful life of the asset, whichever is shorter. Repair and maintenance costs are expensed as incurred. Intangible Assets Customer Relationships Customer relationship intangible assets represent customer contracts and relationships obtained as part of acquired businesses. Customer relationship values are estimated by evaluating various factors including historical attrition rates, contractual provisions and customer growth rates, among others. The estimated average useful lives of customer relationships range from 4 Trade Names The Company has determined that its trade name intangible assets are indefinite-lived assets and therefore are not subject to amortization. Trade names are tested for impairment as per the Company’s policy for impairment of indefinite-lived assets. Trademarks The Company has determined that its trademark intangible assets resulting from acquisitions are definite-lived assets and therefore are subject to amortization. The Company amortizes such trademarks on a straight-line basis over the estimated useful life, which is typically one year. As of December 31, 2022 these trademarks were fully amortized. Developed Technology The Company has acquired various developed technologies embedded in its technology platform. Developed technology is an integral asset to the Company in providing solutions to customers and is recorded as an intangible asset. The Company amortizes developed technology on a straight-line basis over the estimated useful life, which is typically 5 Capitalized Software Costs The Company capitalizes certain costs incurred to develop software products to be sold, leased or otherwise marketed after establishing technological feasibility in accordance with ASC section 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed Intangibles—Goodwill and Other— Internal-Use Software 3 Outsourced Contract Costs Costs of outsourcing contracts, including costs incurred for bid and proposal activities, are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract are deferred and expensed on a straight-line basis over the estimated contract term. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment activities and can be separated into two principal categories: contract commissions and set-up/fulfillment costs. Contract fulfillment costs are capitalized only if they are directly attributable to a specifically anticipated future contract; represent the enhancement of resources that will be used in satisfying a future performance obligation (the services under the anticipated contract); and are expected to be recovered. Non-compete Agreements The Company acquired certain non-compete agreements in connection with the Novitex Business Combination. These were related to four Novitex executives that were terminated following the acquisition. As of December 31, 2022 these agreements were fully amortized. Assembled Workforce The Company acquired an assembled workforce in an asset purchase transaction in the fourth quarter of 2018. The Company recognized an intangible asset for the acquired assembled workforce and fully amortized the asset on a straight-line basis over the estimated useful life of four years Impairment of Indefinite-Lived Assets The Company conducts its annual indefinite-lived assets impairment tests on October 1 st Refer to Note 9- Intangible Assets and Goodwill for additional discussion of impairment of trade names. Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, including finite-lived trade names, trademarks, customer relationships, developed technology, capitalized software costs, outsourced contract costs, acquired software, workforce, and property, plant and equipment, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows based in part on the financial results and the expectation of future performance. The Company did not record any material impairment related to its property, plant, and equipment, customer relationships, trademarks, developed technology, capitalized software cost, assembled workforce or outsourced contract costs for the years ended December 31, 2022, 2021, and 2020. Goodwill Goodwill represents the excess purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations. Goodwill is generally allocated to reporting units based upon relative fair value (taking into consideration other factors such as synergies) when an acquired business is integrated into multiple reporting units. The Company’s reporting units are at the operating segment level, for which discrete financial information is prepared and regularly reviewed by management. When a business within a reporting unit is disposed of, goodwill is allocated to the disposed business using the relative fair value method. The Company conducts its annual goodwill impairment tests on October 1st of each year, or more frequently if indicators of impairment exist. When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would be required to perform a quantitative impairment analysis for goodwill. The quantitative analysis requires a comparison of fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company uses a combination of the Guideline Public Company Method of the Market Approach and the Discounted Cash Flow Method of the Income Approach to determine the reporting unit fair value. Refer to Note 9- Intangible Assets and Goodwill Derivative Instruments and Hedging Activities As required by ASC 815— Derivatives and Hedging The Company’s objective in using interest rate derivatives was to manage its exposure to variable interest rates related to its term loans under the Credit Agreement. In order to accomplish this objective, in November 2017, the Company entered into a three year, one-month LIBOR interest rate contract with a notional amount of $347.8 million, which at the time was the remaining principal balance of such term loans. The swap contract swapped out the floating rate interest risk related to the LIBOR with a fixed interest rate of 1.9275% paid semi-annually starting January 12, 2018. There are no open swap positions as of December 31, 2022 and 2021 as the existing interest rate swap contract expired in January 2021. The interest rate swap, which was used to manage the Company’s exposure to interest rate movements and other identified risks, was not designated as a hedge. As such, the change in the fair value of the derivative was recorded directly in other income (expense), net. Other income (expense), net includes a gain of $0.1 million and $0.4 million related to the change in fair value of the interest rate swap for the years ended December 31, 2021 and 2020, respectively. The fair value of the interest rate swap was recorded in the accrued liabilities on the consolidated balance sheet. Benefit Plan Accruals The Company has defined benefit plans in the U.K and Germany, under which participants earn a retirement benefit based upon a formula set forth in the respective plans. The Company records annual amounts relating to its pension plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, and compensation increases. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. Leases The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s consolidated balance sheet. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and finance lease liabilities, net of current portion in the Company’s consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date, and exclude lease incentives. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are not recorded on the balance sheet. Finance lease ROU assets are amortized over the lease term or the useful life of the asset, whichever is shorter. The amortization of finance lease ROU assets is recorded in depreciation expense in the consolidated statements of operations. For operating leases, we recognize expense for lease payments on a straight-line basis over the lease term. Stock-Based Compensation The Company accounts for all equity-classified awards under stock-based compensation plans at their “fair value”. This fair value is measured at the fair value of the awards at the grant date and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the awards on the grant date is determined using the stock price on the respective grant date in the case of restricted stock units and using an option pricing model in the case of stock options. The expense resulting from share-based payments is recorded in selling, general and administrative expense in the accompanying consolidated statements of operations. Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers of our segments. We do not have any significant extended payment terms, as payment is received shortly after goods are delivered or services are provided. Nature of Services Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract. Disaggregation of Revenues The following tables disaggregate revenue from contracts by geographic region and by segment for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 ITPS HS LLPS Total ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 566,621 $ 239,270 $ 72,753 $ 878,644 $ 649,505 $ 217,839 $ 74,641 $ 941,985 $ 769,487 $ 219,047 $ 68,472 $ 1,057,006 EMEA 180,502 — — 180,502 205,772 — — 205,772 213,418 — — 213,418 Other 18,011 — — 18,011 18,849 — — 18,849 22,138 — — 22,138 Total $ 765,134 $ 239,270 $ 72,753 $ 1,077,157 $ 874,126 $ 217,839 $ 74,641 $ 1,166,606 $ 1,005,043 $ 219,047 $ 68,472 $ 1,292,562 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at December 31, 2022 and 2021: December 31, December 31, 2022 2021 Accounts receivable, net $ 101,616 $ 184,102 Deferred revenues 17,585 17,518 Customer deposits 16,955 17,707 Costs to obtain and fulfill a contract 1,674 2,328 Accounts receivable, net includes $25.7 million and $22.6 million as of December 31, 2022 and 2021, respectively, representing amounts not billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers. Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $16.5 million during the year ended December 31, 2022 that had been deferred as of December 31, 2021. Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. We recognized $1.1 million, $1.5 million and $2.4 million of amortization for these costs in 2022, 2021 and 2020, respectively, within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material. Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed. Performance Obligations At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes. Certain of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained. When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts gives rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration. We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue. Transaction Price Allocated to the Remaining Performance Obligations In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of December 31, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations 2023 $ 37,816 2024 30,384 2025 25,738 202 |
Sale of Non-Core Assets and Div
Sale of Non-Core Assets and Divestiture | 12 Months Ended |
Dec. 31, 2022 | |
Sale of Non-Core Assets and Divestiture | |
Sale of Non-Core Assets and Divestiture | 3. Sale of Non-Core Assets and Divestiture Sale of Non-Core Assets On March 16, 2020, the Company and its indirect wholly owned subsidiaries, Merco Holdings, LLC and SourceHOV Tax, LLC entered into a Membership Interest Purchase Agreement with Gainline Source Intermediate Holdings LLC at which time Gainline Source Intermediate Holdings LLC acquired all of the outstanding membership interests of SourceHov Tax, LLC for $40.0 million subject to adjustment as set forth in the purchase agreement. The Company recognized a gain of $35.5 million on the sale of SourceHOV Tax, LLC during the first quarter of 2020. The gain on sale of SourceHOV Tax, LLC is included in other expense (income), net in the consolidated statements of operations for the year ended December 31, 2020. On July 22, 2020, the Company completed the sale of its physical records storage and logistics business for a purchase price of $12.3 million. The Company recognized a gain of $8.7 million on the sale of physical records storage and logistics business during the third quarter of 2020. The gain on sale of physical records storage and logistics business is included in other expense (income), net in the consolidated statements of operations for the year ended December 31, 2020. Merger Agreement On October 9, 2022, the Company entered into a definitive merger agreement (the “merger agreement”) to merge our European business with CF Acquisition Corp. VIII (“CFFE”), a special purpose acquisition company, to form a new publicly-traded company which will be called XBP Europe Holdings, Inc. Upon closing of the transaction, we will indirectly own a majority of the outstanding capital stock of XBP Europe Holdings, Inc. The completion of these transactions is subject to customary closing conditions, several of which are outside the control of the parties, and there can be no assurance as to whether or when a closing will occur. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Inventories | 4. Inventories Inventories, net consist of the following: December 31, 2022 2021 Work in process $ 1,178 $ 973 Finished goods 10,804 11,480 Supplies and parts 8,991 7,028 Less: Allowance for obsolescence (4,125) (4,266) 16,848 15,215 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable. | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable, net consist of the following: December 31, 2022 2021 Billed receivables $ 72,852 $ 160,407 Unbilled receivables 25,741 22,570 Other 9,425 7,174 Less: Allowance for doubtful accounts (6,402) (6,049) $ 101,616 $ 184,102 Unbilled receivables represent balances recognized as revenue that have not been billed to the customer. The Company’s allowance for doubtful accounts is based on a policy developed by historical experience and management judgment. Adjustments to the allowance for doubtful accounts may occur based on market conditions or specific client circumstances. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | 6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: December 31, 2022 2021 Prepaids $ 23,347 $ 22,880 Deposits 2,859 8,919 $ 26,206 $ 31,799 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 7. Leases The Company leases numerous facilities worldwide with larger concentrations of space in Texas, Michigan, Connecticut, California, India, Mexico, the Philippines, and China. The Company’s facilities house general offices, sales offices, service locations, and production facilities. Substantially all of the Company’s operations facilities are leased under long-term leases with varying expiration dates, except for the few owned locations. The Company regularly obtains various machinery, equipment, vehicles and furniture on leases. The machinery and equipment leases mainly include leasing of computers, servers, other IT equipment, mailing system, production equipment, generators, office equipment, printers, copiers and miscellaneous warehouse equipment. The Company’s ROU assets and lease liabilities as of December 31, 2022 and 2021 recorded on the consolidated balance sheet are as follows: December 31, December 31, 2022 2021 Balance sheet location: Operating Lease Operating lease right-of-use assets, net $ 40,734 $ 53,937 Current portion of operating lease liabilities 11,867 15,923 Operating lease liabilities, net of current portion 31,030 41,170 Finance Lease Finance lease right-of-use assets, net (included in property, plant and equipment, net) 11,943 8,918 Current portion of finance lease liabilities 5,485 6,683 Finance lease liabilities, net of current portion 9,448 9,156 Supplemental balance sheet information related to leases is as follows: December 31, December 31, 2022 2021 Weighted-average remaining lease term Operating leases 4.2 Years 4.3 Years Finance leases 3.6 Years 2.4 Years Weighted-average discount rate Operating leases 13.9% 13.1% Finance leases 13.4% 12.4% The interest on financing lease liabilities was $1.8 million and $2.3 million for the year ended December 31, 2022 and 2021, respectively. The amortization expense on finance lease right-of-use assets was $4.9 million and $9.1 million for the year ended December 31, 2022 and 2021, respectively. Maturities of finance and operating lease liabilities based on lease term for the next five years are as follows: Finance Operating Leases Leases 2023 $ 6,774 $ 16,823 2024 5,166 13,343 2025 3,719 9,101 2026 1,034 7,381 2027 795 5,684 2028 and thereafter 1,642 4,767 Total lease payments 19,130 57,099 Less: Imputed interest (4,197) (14,202) Present value of lease liabilities $ 14,933 $ 42,897 Consolidated rental expense for all operating leases was $48.0 million, $51.8 million, and $69.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table summarizes the cash paid and related right-of-use operating finance or operating lease recognized for the years ended December 31, 2022 and 2021. Year Ended Year Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21,560 $ 25,950 Financing cash flows from finance leases 5,523 11,471 Right-of-use lease assets obtained in the exchange for lease liabilities: Operating leases 6,940 6,507 Finance leases 4,790 3,270 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | 8. Property, Plant and Equipment, Net Property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation, and amortization, and consist of the following: Estimated Useful Lives December 31, (in Years) 2022 2021 Land N/A $ 6,687 $ 6,688 Buildings and improvements 7 – 40 24,307 20,268 Leasehold improvements Shorter of life of improvement or lease term 37,383 36,289 Vehicles 5 – 7 289 311 Machinery and equipment 5 – 15 26,820 26,346 Computer equipment and software 3 – 8 108,898 102,746 Furniture and fixtures 5 – 15 8,574 8,478 Finance lease right-of-use assets Shorter of life of the asset or lease term 66,256 69,006 279,214 270,132 Less: Accumulated depreciation and amortization (207,520) (196,683) Property, plant and equipment, net $ 71,694 $ 73,449 Depreciation expense related to property, plant and equipment was $24.5 million, $26.7 million, and $39.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 9. Intangible Assets and Goodwill Intangibles Intangible assets are stated at cost or acquisition-date fair value less amortization and impairment and consist of the following: Weighted Average December 31, 2022 Remaining Useful Life Gross Carrying Accumulated Intangible (in Years) Amount (a) Amortization Asset, net Customer relationships 9.0 $ 507,723 $ (351,240) $ 156,483 Developed technology 2.1 88,553 (88,000) 553 Patent 1.2 15 (6) 9 Trade names (b) Indefinite-lived 8,400 (3,100) 5,300 Outsource contract costs 3.0 17,184 (15,509) 1,675 Internally developed software 2.9 52,441 (35,095) 17,346 Purchased software 11.0 26,749 (7,133) 19,616 Intangibles, net $ 701,065 $ (500,083) $ 200,982 Weighted Average December 31, 2021 Remaining Useful Life Gross Carrying Accumulated Intangible (in Years) Amount (a) Amortization Asset, net Customer relationships 9.5 $ 508,241 $ (316,084) $ 192,157 Developed technology 2.8 88,553 (87,612) 941 Trade names (b) Indefinite-lived 8,400 (3,100) 5,300 Outsource contract costs 3.6 16,814 (14,486) 2,328 Internally developed software 3.2 49,108 (27,812) 21,296 Assembled workforce 1.0 4,473 (3,355) 1,118 Purchased software 12.0 26,749 (5,350) 21,399 Intangibles, net $ 702,338 $ (457,799) $ 244,539 (a) Amounts include intangibles acquired in business combinations and asset acquisitions . (b) The carrying amount of trade names for 2022 and 2021 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at December 31, 2022 represents indefinite-lived intangible asset. The Company tests for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis. The Company concluded that a sustained decline in its stock price and its debt price, consistent with broad trends in the global financial markets during the first half of 2022 represented triggering event for impairment. Accordingly, the Company performed an interim impairment analysis at June 30, 2022, and concluded that no impairment relating to goodwill existed at June 30, 2022. During the third quarter of 2022, the Company evaluated factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, and concluded that a triggering event for an interim impairment analysis had occurred. As part of the assessment, long-term projections were revised resulting in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. As a result of the interim impairment analysis at September 30, 2022, the Company recorded an impairment charge of $29.6 million, including taxes to goodwill relating to ITPS. The Company did not update its analysis for purposes of the annual impairment test as of October 1, 2022 as the measurement date of the impairment test performed during the quarter-ended September 30, 2022 was one day from the annual impairment test date. Additionally, later during the fourth quarter of 2022, the Company conducted its annual budgeting process along with an update to its long-range plan. Following the completion of that process, the Company made an evaluation based on factors such as changes in the Company’s growth rate and recent trends in the Company’s market capitalization, concluding that a third triggering event for an impairment analysis had occurred. Revised long-term projections coupled with a decline in the market capitalization, resulted in lower than previously projected long-term future cash flows for the reporting units which reduced the estimated fair value to below carrying value. Accordingly, we performed another quantitative impairment test as of December 31, 2022, resulting in an additional impairment charge of $141.6 million, including taxes to goodwill relating to ITPS. Therefore, as a result of these two interim impairment assessments in the third and fourth quarters of 2022, impairment charges totaling $171.2 million, including taxes were recorded to goodwill for the year ended December 31, 2022. In connection with the completion of the annual impairment tests as of October 1, 2021 and 2020, the Company recorded no impairment charge to goodwill and trade names. The impairment charges are included within impairment of goodwill and other intangible assets in the consolidated statements of operations. Aggregate amortization expense related to intangible assets was $47.3 million, $50.5 million, and $54.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. Estimated intangibles amortization expense for the next five years and thereafter consists of the following: Estimated Amortization Expense 2023 $ 39,717 2024 32,004 2025 24,401 2026 20,076 2027 16,885 Thereafter 62,363 $ 195,446 Goodwill Goodwill by reporting segment consists of the following: Balances as at January 1, 2021 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2021 (a) ITPS $ 254,130 $ — $ (825) $ — $ (633) $ 252,672 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 359,781 $ — $ (825) $ — $ (633) $ 358,323 Balances as at January 1, 2022 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2022 (a) ITPS $ 252,672 $ — $ — $ (171,182) $ (339) $ 81,151 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ (171,182) $ (339) $ 186,802 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $487.7 million, $316.5 million and $317.5 million as at December 31, 2022, December 31, 2021 and December 31, 2020, respectively. Accumulated impairment relating to LLPS is $243.4 million as at December 31, 2022, December 31, 2021 and December 31, 2020. |
Accrued Liabilities and Other L
Accrued Liabilities and Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Other Long-Term Liabilities | |
Accrued Liabilities and Other Long-Term Liabilities | 10. Accrued Liabilities and Other Long-Term Liabilities Accrued liabilities consist of the following: December 31, 2022 2021 Accrued taxes (exclusive of income taxes) $ 9,797 $ 9,858 Accrued lease exit obligations — 36 Accrued professional and legal fees 37,366 29,119 Accrued Appraisal Action liability — 63,422 Accrued legal reserve for pending litigation 10,322 8,046 Accrued transaction costs 2,763 2,305 Other accruals 1,092 733 $ 61,340 $ 113,519 Other Long-term liabilities consist of the following: December 31, 2022 2021 Deferred revenue $ 1,180 $ 901 Accrued lease exit obligations 373 195 Accrued compensation expense 1,021 1,578 Other 3,530 3,325 $ 6,104 $ 5,999 |
Long-Term Debt and Credit Facil
Long-Term Debt and Credit Facilities | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Credit Facilities | |
Long-Term Debt and Credit Facilities | 11. Long-Term Debt and Credit Facilities Senior Credit Facilities On July 12, 2017, subsidiaries of the Company entered into a First Lien Credit Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, Natixis, New York Branch and KKR Corporate Lending LLC (the “Credit Agreement”) providing Exela Intermediate LLC, a wholly owned subsidiary of the Company, upon the terms and subject to the conditions set forth in the Credit Agreement, (i) a $350.0 million senior secured term loan maturing July 12, 2023 with an original issue discount of $7.0 million, and (ii) a $100.0 million senior secured revolving facility that matured on July 12, 2022 (the “Revolving Credit Facility”). The Credit Agreement provided for the following interest rates for borrowings under the senior secured term facility and the Revolving Credit Facility: at the borrower’s option, either (1) an adjusted LIBOR, subject to a 1.0% floor in the case of term loans, or (2) a base rate, in each case plus an applicable margin. The initial applicable margin for the senior secured term facility was 7.5% with respect to LIBOR borrowings and 6.5% with respect to base rate borrowings. The initial applicable margin for the Revolving Credit Facility was 7.0% with respect to LIBOR borrowings and 6.0% with respect to base rate borrowings. The applicable margin for borrowings under the Revolving Credit Facility is subject to step-downs based on leverage ratios. The senior secured term loan is subject to amortization payments, commencing on the last day of the first full fiscal quarter of the Company following the closing date, of 0.6% of the aggregate principal amount for each of the first eight payments and 1.3% of the aggregate original principal amount for payments thereafter, with any balance due at maturity. Term Loan Repricing On July 13, 2018, Exela executed a transaction to reprice the $343.4 million of term loans outstanding under its senior secured credit facilities (the “Repricing”). The Repricing was accomplished pursuant to a First Amendment to the First Lien Credit Agreement (the “First Amendment”), dated as of July 13, 2018, by and among the Company’s subsidiaries Exela Intermediate Holdings LLC, Exela Intermediate, LLC, each “Subsidiary Loan Party” listed on the signature pages thereto, Royal Bank of Canada, as administrative agent, and each of the lenders party thereto, whereby such subsidiaries borrowed $343.4 million of refinancing term loans (the “Repricing Term Loans”) to refinance their existing senior secured term loans. In accordance with ASC 470 – Debt – Modifications and Extinguishments, The Repricing Term Loans will bear interest at a rate per annum of, at the borrower’s option, either (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.0% floor, or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.5%, (ii) the prime rate and (iii) the one-month adjusted LIBOR plus 1.0%, in each case plus an applicable margin of 6.5% for LIBOR loans and 5.5% for base rate loans. The interest rates applicable to the Repricing Term Loans are 100 basis points lower than the interest rates applicable to the existing senior secured term loans that were incurred on July 12, 2017 pursuant to the Credit Agreement. The Repricing Term Loans will mature on July 12, 2023, the same maturity date as the prior senior secured term loans. 2018 Incremental Term Loans On July 13, 2018, the Company’s subsidiaries borrowed an additional $30.0 million pursuant to incremental term loans (the “Incremental Term Loans”) under the First Amendment. The proceeds of the Incremental Term Loans may be used by the Company for general corporate purposes and to pay fees and expenses in connection with the First Amendment. The interest rates applicable to the Incremental Term Loans are the same as those for the Repricing Term Loans. The borrower may voluntarily repay the Repricing Term Loans and the Incremental Term Loans at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans. The Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Repricing Term Loans and prior senior secured term loans. Other than as described above, the terms, conditions and covenants applicable to the Repricing Term Loans and the Incremental Term Loans are consistent with the terms, conditions and covenants that were applicable to the existing senior secured loans under the Credit Agreement. 2019 Incremental Term Loan On April 16, 2019, the Company’s subsidiaries borrowed an additional $30.0 million pursuant to incremental term loans (the “2019 Incremental Term Loans”) under the Second Amendment to First Lien Credit Agreement (the “Second Amendment”). The proceeds of the 2019 Incremental Term Loans were used to replace the cash spent for acquisitions, pay related fees, expenses and related borrowings and for general corporate purposes. The 2019 Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Incremental Term Loans, Repricing Term Loans and prior senior secured term loans under the Credit Agreement (collectively, the “Term Loans”). The 2019 Incremental Term Loans will bear interest at a rate per annum that is the same as the Repricing Term Loans under the senior credit facility. The 2019 Incremental Term Loans will mature on July 12, 2023, the same maturity date as the Term Loans. The borrower may voluntarily repay the 2019 Incremental Term Loans at any time, without prepayment premium or penalty, subject to customary “breakage” costs with respect to LIBOR rate loans. Other than as described above, the terms, conditions and covenants applicable to the 2019 Incremental Term Loans are consistent with the terms, conditions and covenants that are applicable to the Repricing Term Loans and 2018 Incremental Term Loans under the Credit Agreement. The Repricing and issuance of the 2018 and 2019 Incremental Term Loans resulted in a partial debt extinguishment, for which Exela recognized $1.4 million in debt extinguishment costs during the year ended December 31, 2019, reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations. Third Amendment On May 18, 2020, subsidiaries of the Company amended the Credit Agreement (the Third Amendment to First Lien Credit Agreement (the “Third Amendment”)) to, among other things, extend the time for delivery of its audited financial statements for the year ended December 31, 2019 and its financial statements for the quarter ended March 31, 2020. Upon the Company’s delivery of the annual and quarterly financial statements within the time frames stated therein (which the Company satisfied during the month of June 2020), the borrower became in compliance with respect to the financial statement delivery requirements set forth in the Credit Agreement. Pursuant to the Third Amendment, the borrowers also amended the Credit Agreement to, among other things: restrict the borrower and its subsidiaries’ ability to designate or invest in unrestricted subsidiaries; incur certain debt; create certain liens; make certain investments; pay certain dividends or other distributions on account of its equity interests; make certain asset sales or other dispositions (or utilize the proceeds of certain asset sales to reinvest in the business); or enter into certain affiliate transactions pursuant to the negative covenants under the Credit Agreement. Further, pursuant to the amendment, the borrower under the Credit Agreement was also required to maintain a minimum Liquidity (as defined in the amendment) of $35.0 million. In connection with this amendment, the borrower paid a forbearance fee of $5.0 million to the consenting lenders. The Company concluded that the amendment represents modification of debt under ASC 470-50. Accordingly, the forbearance fee paid was added to unamortized debt issuance cost which shall be amortized using updated effective interest rate based on modified cash flows. Private Exchange On December 9, 2021, in a separate transaction referred to here as the “Private Exchange” (as distinguished from the “Public Exchange” described below), subsidiaries of the Company agreed with three (3) of their Term Loan lenders to exchange $212.1 million of Term Loans under the Credit Agreement for $84.3 million in cash and in $127.8 million principal amount of new 11.500% First-Priority Senior Secured Notes due 2026 (the “2026 Notes”). In connection with the Private Exchange, the exchanging lenders provided consents to amend the Credit Agreement to (i) eliminate all affirmative covenants, (ii) eliminate all negative covenants and (iii) eliminate certain events of default (other than events of default relating to payment obligations). The Company concluded that the exchange of senior secured term loan for 2026 Notes and cash under Private Exchange represented modification of debt under ASC 470-50. Accordingly, $1.0 million of the fees paid to third parties was charged to consolidated statement of operations and reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations for the year ended December 31, 2021. As a result of the Private Exchange, repurchases (as discussed below) and periodic principal repayments, $72.6 million aggregate principal amount of the Term Loans maturing July 12, 2023 remains outstanding as of December 31, 2022. Revolving Credit Facility; Letters of Credit As of December 31, 2021, our $100 million Revolving Credit Facility was fully drawn taking into account letters of credit issued thereunder. As of December 31, 2021, there were outstanding irrevocable letters of credit totaling approximately $0.5 million under the Revolving Credit Facility. As of December 31, 2022, the Revolving Credit Facility had been prepaid and terminated as described below. On March 7, 2022, subsidiaries of the Company entered into a Revolving Loan Exchange and Prepayment Agreement with Royal Bank of Canada, Credit Suisse AG, Cayman Islands Branch, KKR Corporate Lending LLC, Granite State Capital Master Fund LP, Credit Suisse Loan Funding LLC and Revolvercap Partners Fund LP exchanging $100.0 million of outstanding Revolving Credit Facility owed by Exela Intermediate LLC, upon the terms and subject to the conditions set forth in the Revolver Exchange agreement, for (i) $50.0 million in cash, and (ii) $50.0 million of 2026 Notes (such exchange, the “Revolver Exchange” and such 2026 Notes, the “Exchange Notes”). Prepayment of Revolving Credit Facility was treated as an extinguishment of debt under ASC 470-50. Accordingly, the Company wrote off the unamortized balance of $0.2 million of debt issuance costs related to Revolving Credit Facility and reported it within Debt modification and extinguishment costs (gain), net in our consolidated statements of operations for the year ended December 31, 2022. The Exchange Notes were subject to a guarantee in the form of a true-up mechanism whereby the Company was responsible to make a payment to the holders of the Exchange Notes to true-up the shortfall below certain agreed thresholds if holders of the Exchange Notes sold their notes at a price below that threshold during agreed periods in 2022. As security for the true-up obligation under the Revolver Exchange, the Company issued $10.0 million of principal amount of 2026 Notes as collateral (the “Collateral Notes”). The Collateral Notes were not reflected in the consolidated financial statements unless and until they were sold to third parties. On March 7, 2022, we recognized $17.4 million (the fair value of the true-up obligation as accounted for under ASC 450, Contingencies Guarantees On May 6, 2022, subsidiaries of the Company amended the true-up mechanism and placed an additional $20.0 million of principal amount of Collateral Notes and paid $5.0 million as true-up advance. We remeasured our obligation under the amended terms of the true-up mechanism as of June 30, 2022 and accrued an additional $7.4 million liability based on the fair value of our obligation as of such date in other expense, net in the consolidated statements of operations during second quarter of 2022. As of June 30, 2022, there was a net accrued liability balance of $26.0 million for the true-up obligation included in Accrued liabilities on the consolidated balance sheet after adjusting $5.0 million of true-up advance paid for this liability during the second quarter of 2022. In July 2022, $9.0 million of principal amount of the Collateral Notes were sold by the holders of the Exchange Notes for net proceeds of $2.6 million and the proceeds were adjusted against the true-up amount payable. Additionally, in July 2022, the Company made a cash payment of $2.1 million which was adjusted against the true-up amount payable. In August 2022, the remaining balance of $20.2 million of net true-up liability was settled with cash payments of $9.9 million and by permitting the holders of the Exchange Notes to keep the $21.0 million of principal amount of 2026 Notes previously placed as Collateral Notes constituting an issuance. The Company made a net reversal of $1.1 million of accrued true-up liability in other expense, net in the consolidated statements of operations during third quarter of 2022. Senior Secured 2023 Notes On July 12, 2017, subsidiaries of the Company issued $1.0 billion in aggregate principal amount of 10.0% First Priority Senior Secured Notes due 2023 (the “2023 Notes”). The 2023 Notes are guaranteed by nearly all U.S. subsidiaries of Exela Intermediate LLC. The 2023 Notes bear interest at a rate of 10.0% per year. The issuers pay interest on the 2023 Notes on January 15 and July 15 of each year, commencing on January 15, 2018. The 2023 Notes mature on July 15, 2023. As a result of the Public Exchange and repurchases (as discussed below), $22.8 million aggregate principal amount of the 2023 Notes remains outstanding as of December 31, 2022 maturing on July 15, 2023. As of December 31, 2022, the Company was in compliance with the 2023 Notes and there have been no events of default under the 2023 Notes through the date of this Annual Report. Public Exchange On October 27, 2021, the Company launched an offer to exchange (the “Public Exchange”) up to $225.0 million in cash and new 2026 Notes for the Company’s outstanding 2023 Notes. The Public Exchange was for $900 in cash per $1,000 principal amount of 2023 Notes tendered subject to proration. The maximum amount of cash to be paid was $225.0 million and the offer was not subject to any minimum participation condition. In case of oversubscription to the cash offer, tendered 2023 Notes would be accepted for cash on a pro rata basis (as a single class). The balance of any tendered 2023 Notes not accepted for cash would be exchanged into 2026 Notes on the basis of $1,000 principal amount of new 2026 Notes for each $1,000 principal amount of outstanding 2023 Notes tendered. As of the expiration time of the Public Exchange, $912.7 million aggregate principal amount, or approximately 91.3%, of the 2023 Notes had been validly tendered pursuant to the Public Exchange. On December 9, 2021, upon the settlement of the Public Exchange, $662.7 million aggregate principal amount of the 2026 Notes were issued and an aggregate $225.0 million in cash (plus accrued but unpaid interest) was paid to participating holders in respect of the validly tendered 2023 Notes. The Company concluded that the exchange of notes under Public Exchange represented modification of debt under ASC 470-50. Accordingly, $12.9 million of the fees paid to third parties was charged to consolidated statement of operations and reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations for the year ended December 31, 2021. Third Supplemental Indenture In conjunction with the Public Exchange, the Company also solicited consents to amend certain provisions in the indenture governing the 2023 Notes (“Notes Amendments”). On December 1, 2021, on receipt of the requisite consents to the Notes Amendments, the Company, and Wilmington Trust, National Association, as trustee (the “2023 Notes Trustee”), entered into a third supplemental indenture (the “Third Supplemental Indenture”) to the indenture, dated as of July 12, 2017 (as amended and supplemented by (i) the first supplemental indenture, dated as of July 12, 2017 and (ii) the second supplemental indenture, dated as of May 20, 2020, the “2023 Notes Indenture”) governing the outstanding 2023 Notes. The Third Supplemental Indenture amends the 2023 Notes Indenture and the 2023 Notes to eliminate substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and consolidations and modify or eliminate certain other provisions, including certain provisions relating to future guarantors and defeasance, contained in the 2023 Notes Indenture and the 2023 Notes. In addition, all of the collateral securing the 2023 Notes was released pursuant to the Third Supplemental Indenture. Senior Secured 2026 Notes As of December 31, 2021, subsidiaries of the Company had $795.0 million aggregate principal amount of the 2026 Notes outstanding including $790.5 million in aggregate principal amount issued under the Public Exchange and Private Exchange transactions described above. During the year ended December 31, 2022, subsidiaries of the Company sold $129.0 million in aggregate of principal amount of the 2026 Notes generating net proceeds of $64.7 million. On March 18, 2022, the subsidiaries of the Company issued $50.0 million of the 2026 Notes to satisfy the exchange obligation under the Revolver Exchange. In August 2022, subsidiaries of the Company issued $21.0 million in aggregate of principal amount of the 2026 Notes to holder of the Exchange Notes (as described above) to settle $10.3 million of accrued liability for net true-up obligation under the Revolver Exchange. The 2026 Notes are guaranteed by nearly all U.S. subsidiaries of Exela Intermediate LLC. The 2026 Notes bear interest at a rate of 11.5% per year. We pay interest on the 2026 Notes on January 15 and July 15 of each year, and commenced on July 15, 2022. The 2026 Notes mature on July 12, 2026. As of December 31, 2022, the Company was in compliance with the 2026 Notes and there have been no events of default under the 2026 Notes through the date of this Annual Report. On or after December 1, 2022, the issuers may redeem the 2026 Notes in whole or in part from time to time, at a redemption price of 100%, plus accrued and unpaid interest, if any, but excluding, the applicable redemption date. In addition, prior to December 1, 2022, the issuers may redeem the 2026 Notes in whole or in part from time to time, at a redemption price equal to 100% of the principal amount of the 2026 Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. “Applicable Premium” means, with respect to any 2026 Note on any applicable redemption date, as determined by the issuers, the greater of: (1) 1% of the then outstanding principal amount of the 2026 Note; and (2) the excess of: (a) the present value at such redemption date of (i) the redemption price of the 2026 Note, at December 1, 2022 plus (ii) all required interest payments due on the 2026 Note through December 1, 2022 (excluding accrued but unpaid interest), computed using a discount rate equal to the treasury rate as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of the 2026 Note. During the fourth quarter of 2022 one of our subsidiaries that is not bound by the 2026 Indenture purchased a portion of the onsite business and certain related assets from another subsidiary that is bound by the 2026 Indenture generating net proceeds to the seller of approximately $125.0 million. If the Company does not reinvest or otherwise utilize such proceeds as contemplated by the 2026 Indenture within one year of this transaction, then the Issuers of the 2026 Notes may be required to make an "Asset Sales Offer" with the unused proceeds to the extent they exceed $75.0 million as described in the 2026 Indenture. If such proceeds are not available to the Company to satisfy this obligation at the date required, the Company would not be in compliance with the 2026 Indenture at that time. $980.0 million aggregate principal amount of 2026 Notes were outstanding as of December 31, 2022. Repurchases In July 2021 the Company commenced a debt buyback program to repurchase senior secured indebtedness, which is ongoing. During the year ended December 31, 2021, we repurchased $64.5 million of the outstanding principal amount of our 2023 Notes for a net cash consideration of $48.4 million. The gain on early extinguishment of debt for the 2023 Notes during the year ended December 31, 2021 totaled $15.3 million and is inclusive of $0.6 million and $0.2 million write off of original issue discount and debt issuance costs, respectively. During the year ended December 31, 2021, we also repurchased $40.0 million of the outstanding principal amount of our senior secured term loans under the Credit Agreement for a net cash consideration of $22.8 million. The gain on early extinguishment of debt for the senior secured term loans during the year ended December 31, 2021 totaled $15.3 million and is inclusive of $0.4 million and $1.5 million write off of original issue discount and debt issuance costs, respectively. During the year ended December 31, 2022, we repurchased $15.0 million principal amount of Exchange Notes issued under the Revolver Exchange (as discussed above) for a net cash consideration of $4.7 million. The gain on early extinguishment of debt for the Exchange Notes during the year ended December 31, 2022 totaled $5.3 million and is inclusive of $5.0 million and $0.1 million write off of original issue discount and debt issuance costs, respectively. Gain on the early extinguishment of debt and debt extinguishment costs during the years ended December 31, 2022 and 2021 are reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations. BRCC Facility On November 17, 2021, GP2 XCV, LLC, a subsidiary of the Company (“GP2 XCV”), entered into a borrowing facility with B. Riley Commercial Capital, LLC pursuant to which the Company was able to borrow an original principal amount of $75.0 million, which was later increased to $115.0 million as of December 7, 2021 (as the same may be amended from time to time, the “BRCC Term Loan”). On March 31, 2022, GP2 XCV entered into an amendment to the borrowing facility with B. Riley Commercial Capital, LLC pursuant to which the Company will be able to borrow up to $51.0 million under a separate revolving loan (the “BRCC Revolver”, collectively with the BRCC Term Loan, the “BRCC Facility”). The BRCC Facility is secured by a lien on all the assets of GP2 XCV and by a pledge of the equity of GP2 XCV. GP2 XCV is a bankruptcy-remote entity and as such its assets are not available to other creditors of the Company or any of its subsidiaries other than GP2 XCV. The BRCC Facility will mature on June 10, 2023. However, the BRCC Revolver is subject to certain automatic maturity extensions of six months, unless B. Riley Commercial Capital, LLC or the Company notifies the other party about its election not to extend. In such event, the outstanding principal amount of the BRCC Revolver as of the maturity shall be due and payable in 12 equal installments on the last business day of each calendar month thereafter. Interest under the BRCC Facility accrues at a rate of 11.5% per annum and is payable quarterly on the last business day of each March, June, September and December. The purpose of BRCC Term Loan was to fund certain repurchases of the secured indebtedness and to provide funding for the Public Exchange transaction and Private Exchange transaction described above. The purpose of BRCC Revolver is to fund general corporate purposes. During the year ended December 31, 2022, we repaid $66.5 million of outstanding principal amount under the BRCC Term Loan along with $2.0 million of exit fees. The exit fees paid on the partial prepayment of BRCC Term Loan were treated as a debt extinguishment cost under ASC 470-50 and reported within Debt modification and extinguishment costs (gain), net in our consolidated statements of operations. As of December 31, 2022, there were borrowings of $48.5 million and $20.0 million outstanding under the BRCC Term Loan and BRCC Revolver, respectively, maturing June 10, 2023. There was no availability under the BRCC Revolver as of December 31, 2022. As of December 31, 2022, the Company was in compliance with all covenants required under the BRCC Facility. Securitization Facility On January 10, 2020, certain subsidiaries of the Company entered into a $160.0 million accounts receivable securitization facility with a five year term (“A/R Facility”). On December 17, 2020, the Company repaid in full the loans outstanding under the A/R Facility. The aggregate outstanding principal amount of loans under the A/R Facility as of such date was approximately $83.0 million. The early termination of the A/R Facility triggered an early termination fee of $0.8 million and required repayment of approximately $0.5 million in respect of principal, accrued interest and fees. All obligations under the A/R Facility (other than contingent indemnification obligations that expressly survive termination) terminated upon repayment. The A/R Facility was replaced by the Securitization Facility as described below. Repayment of A/R Facility was treated as an extinguishment of debt under ASC 470-50. Accordingly, the Company wrote off the unamortized balance of $8.2 million of debt issuance costs related to A/R facility. These early termination charges and unamortized balance of the debt issuance cost written off during the year ended December 31, 2020 are reported within Debt modification and extinguishment costs (gain), net within our consolidated statements of operations. On December 17, 2020, certain subsidiaries of the Company entered into a $145.0 million securitization facility with a five year term (the “Securitization Facility”). Borrowings under the Securitization Facility were subject to a borrowing base definition that consists of receivables and, subject to contribution, further supported by inventory and intellectual property, in each case, subject to certain eligibility criteria, concentration limits and reserves. The Securitization Facility provided for an initial funding of approximately $92.0 million supported by the receivables portion of the borrowing base and, subject to contribution, a further funding of approximately $53.0 million supported by inventory and intellectual property. On December 17, 2020, Exela Receivables 3, LLC (the “Securitization Borrower”) made the initial borrowing of approximately $92.0 million under the Securitization Facility and used a portion of the proceeds to repay $83.0 million of the aggregate outstanding principal amount of loans as of December 17, 2020 under A/R Facility and used the remaining proceeds for general corporate purposes. On April 11, 2021, the Company amended the Securitization Loan Agreement and agreed to, among other things, extend the option to access further funding of approximately $53.0 million in additional borrowings from April 10, 2021 to September 30, 2021 upon the contribution of inventory and intellectual property to support the borrowing base. The documentation for the Securitization Facility included (i) a Loan and Security Agreement (the “Securitization Loan Agreement”), dated as of December 10, 2020, by and among the Securitization Borrower, a wholly-owned indirect subsidiary of the Company, the lenders (each, a “Securitization Lender” and collectively the “Securitization Lenders”), Alter Domus (US), LLC, as administrative agent (the “Securitization Administrative Agent”) and the Company, as initial servicer, pursuant to which the Securitization Lenders will make loans to the Securitization Borrower to be used to purchase receivables and related assets from the Securitization Parent SPE (as defined below), (ii) a First Tier Receivables Purchase and Sale Agreement (dated as of December 17, 2020, by and among Exela Receivables 3 Holdco, LLC (the “Securitization Parent SPE”)), a wholly-owned indirect subsidiary of the Company, and certain other indirect, wholly-owned subsidiaries of the Company listed therein (collectively, the “Securitization Originators”), and the Company, as initial servicer, pursuant to which each Securitization Originator has sold or contributed and will sell or contribute to the Securitization Parent SPE certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Parent SPE, (iii) a Second Tier Receivables Purchase and Sale Agreement, dated as of December 17, 2020, by and among, the Securitization Borrower, the Securitization Parent SPE and the Company, as initial servicer, pursuant to which Securitization Parent SPE has sold or contributed and will sell or contribute to the Securitization Borrower certain receivables and related assets in consideration for a combination of cash and equity in the Securitization Borrower, (iv) the Sub-Servicing Agreement, dated as of December 17, 2020, by and among the Company and each Securitization Originator, (v) the Pledge and Guaranty, dated as of the December 10, 2020, between the Securitization Parent SPE and the Administrative Agent, and (vi) the Performance Guaranty, dated as of December 17, 2020, between the Company, as performance guarantor, and the Securitization Administrative Agent (and together with all other certificates, instruments, UCC financing statements, reports, notices, agreements and documents executed or delivered in connection with the Securitization Loan Agreement, the “Securitization Agreements”). The Securitization Borrower, the Company, the Securitization Parent SPE and the Securitization Originators provide customary representations and covenants under the Securitization Agreements. The Securitization Loan Agreement provides for certain events of default upon the occurrence of which the Securitization Administrative Agent may declare the facility’s termination date to have occurred and declare the outstanding Securitization Loan and all other obligations of the Securitization Borrower to be immediately due and payable, however the Securitization Facility does not include an ongoing liquidity covenant like the A/R Facility and aligns reporting obligations with the Company’s other material indebtedness agreements. The Securitization Borrower and Securitization Parent SPE were formed in December 2020, and are identified as VIEs and consolidated into the Company’s financial statements following VIE consolidation model under ASC 810. The Securitization Borrower and Securitization Parent SPE are bankruptcy remote entities and as such their assets are not available to creditors of the Company or any of its subsidiaries. Each loan under the Securitization Facility bears interest on the unpaid principal amount as follows: (i) if a Base Rate Loan, at a rate per annum equal to (x) the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the Adjusted LIBOR Rate (as defined in the Securitization Loan Agreement) plus 1.00%, plus (y) 8.75%; or (ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus 9.75%. On June 17, 2022, the Company repaid in full the loans outstanding under the Securitization Facility. The aggregate outstanding principal amount of loans under the Securitization Facility as of such date was approximately $91.9 million. The early termination of the Securitization Facility triggered a prepayment premium of $2.7 million and required payment of approximately $0.5 million and $1.3 million in respect of accrued interest and fees, respectively. All obligations under the Securitization Facility (other than contingent indemnification obligations that expressly survive termination) terminated upon repayment. The Securitization Facility was replaced by the Amended Receivables Purchase Agreement de |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company provides for income taxes using an asset and liability approach, under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable. For financial reporting purposes, income/ (loss) before income taxes includes the following components: Year Ended December 31, 2022 2021 2020 United States $ (422,135) $ (135,299) $ (158,186) Foreign 10,754 4,565 (6,760) $ (411,381) $ (130,734) $ (164,946) The provision for federal, state, and foreign income taxes consists of the following: Year Ended December 31, 2022 2021 2020 Federal Current $ — $ — $ — Deferred (1,597) 5 480 State Current 636 1,232 1,325 Deferred (123) 351 1,542 Foreign Current 3,416 3,775 4,318 Deferred 1,867 6,293 5,919 Income Tax Expense $ 4,199 $ 11,656 $ 13,584 The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows: Year Ended December 31, 2022 2021 2020 Tax at statutory rate $ (86,390) $ (27,454) $ (34,639) Add (deduct) State income taxes (8,520) (1,626) (5,234) Foreign income taxes 1,290 1,567 (516) Nondeductible goodwill impairment 34,967 — — Cancellation of debt income 6,429 (6,429) — Permanent differences 1,061 359 218 Litigation settlement — 2 71 Changes in valuation allowance 75,210 11,857 53,115 Unremitted earnings 891 1,072 (275) GILTI Inclusion 639 — (4,996) Expiration and reduction of tax attributes (30,103) 31,014 4,944 Debt related basis differences 10,994 — — Other (2,269) 1,294 896 Income Tax Expense $ 4,199 $ 11,656 $ 13,584 The Tax Cuts and Jobs Act (“TCJA”) was signed by the President of the United States and enacted into law on December 22, 2017. This overhaul of the US tax law made a number of substantial changes, including the reduction of the corporate tax rate from 35% to 21%, establishing a dividends received deduction for dividends paid by foreign subsidiaries to the US, elimination or limitation of certain deductions (interest, domestic production activities and executive compensation), imposing a mandatory tax on previously unrepatriated earnings accumulated offshore since 1986 and establishing global minimum income tax and base erosion tax provisions related to offshore activities and affiliated party payments. The TCJA subjects a US shareholder to tax on Global Intangible Low-taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected the accounting policy to recognize the tax expense related to GILTI in the year the tax is incurred as a period expense. At December 31 2022, the Company has GILTI inclusion of $3.0 million related to current-year operations. On July 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations which will allow an annual election to exclude from the U.S. tax return certain GILTI amounts when the taxes paid by a foreign affiliate exceed 18.9% (90% of U.S. statutory rate of 21%) of the GILTI amount for that foreign affiliate (the “high-tax exception”). These regulations are effective for the 2022 taxable year with an election to apply to any taxable year beginning after 2017. In many of the countries in which the Company operates there are differences between local tax rules used to determine the tax base and the U.S. tax principles used to determine GILTI. Therefore, while many of the countries have a statutory tax rate above the 18.9% threshold, separate affiliates may not meet the 18.9% threshold each year and, as such, may not qualify for this exclusion. The Company plans to make the high-tax exception election for the 2022 tax year resulting in a GILTI inclusion of $0.6 million for the 2022 tax year. Additionally, the Company made the high-tax exception election for 2021 and 2020 on its 2021 and 2020 tax returns and made the election for 2018 by filing an amended tax return. The 2018 amended return resulted in an estimated income tax benefit of $5 million recorded in 2020. Beginning in 2018, the TCJA also subjects a U.S. shareholder of a controlled foreign corporation to current tax on certain payments from corporations subject to US tax to related foreign persons, also referred to as base erosion and anti-abuse tax ("BEAT"). The BEAT provisions in the Tax Reform Act eliminates the deduction of certain base-erosion payments made to related foreign corporations and impose a minimum tax if greater than regular tax. The Company has recorded no tax liability related to BEAT for the year ended December 31, 2022 and 2021. On March 27, 2020, Congress enacted the Coronavirus Aid Relief and Economic Security Act ("CARES Act"), in response to the COVID-19 pandemic. The CARES Act contain numerous income tax provisions, including refundable payroll tax credits, 100% utilization of net operating loss (NOL) for taxable income in 2018, 2019 and 2020, 5 years NOL carryback from 2018, 2019 and 2020, interest limitation increase to 50% adjusted taxable income from 30% for tax years beginning January 1, 2019 and 2020, and immediate deduction on qualified improvement costs instead of depreciating them over 39 years. The components of deferred income tax liabilities and assets are as follows: Year Ended December 31, 2022 2021 Deferred income tax liabilities: Book over tax basis of intangible assets and fixed assets $ (44,632) $ (55,449) Unremitted foreign earnings (8,154) (7,135) Operating lease and finance lease right-of-use assets (7,883) (9,573) Other, net $ (2,005) $ (1,584) Total deferred income tax liabilities (62,674) (73,741) Deferred income tax assets: Allowance for doubtful accounts and receivable adjustments $ 2,018 $ 1,816 Inventory 3,141 2,362 Accrued liabilities 16,536 12,606 Net operating loss and tax credit carryforwards 156,180 141,946 Tax deductible goodwill 2,534 4,424 Disallowed interest deduction 146,923 106,449 Operating lease and finance lease liabilities 7,981 10,211 Other, net 22,832 18,197 Total deferred income tax assets $ 358,145 $ 298,011 Valuation allowance (305,168) (233,755) Total net deferred income tax assets (liabilities) $ (9,697) $ (9,485) Gross deferred tax assets are reduced by valuation allowances to the extent the Company determines it is not more-likely-than-not the deferred tax assets are expected to be realized. At December 31, 2022, the Company recognized $305.2 million of valuation allowances against gross deferred tax assets primarily related to net operating loss and tax credit carryforwards. Of this amount, approximately $59.6 million and $4.0 million of the total valuation allowance relates to U.S. federal and state limitations, respectively, on the utilization of net operating loss carryforwards due to numerous changes in ownership. Approximately $123.9 million and $16.3 million of the total valuation allowance relates to U.S. federal and state disallowed interest deduction pursuant to the TCJA. The remaining $101.5 million of the valuation allowance relates to non-limited U.S. and non-U.S. net operating losses, capital losses, and tax credits that are not expected to be realizable. The net change during the year in the total valuation allowance was an increase of $71.4 million primarily related to the increase of deferred tax assets related to disallowed interest deduction. Section 382 of the Internal Revenue Code of 1986, as amended (the Code), limits the amount of U.S. tax attributes (net operating loss and tax credit carryforwards) following a change in ownership. The Company has determined that an ownership change occurred under Section 382 on April 3, 2014 and October 31, 2014 for the Pangea group and on October 31, 2014 for the SourceHOV Holdings group ("2014 Reorganization"). The Section 382 limitations significantly limit the pre-acquisition Pangea net operating losses. Accordingly, upon the October 31, 2014 change in control, most of the historic Pangea federal net operating losses were limited and a valuation allowance has been established against the related deferred tax asset. With regard to Pangea's foreign subsidiaries, it was determined that most deferred tax assets are not likely to be realized and valuation allowances have been established. The Section 382 limit that applied to the historic SourceHOV LLC group is greater than the net operating losses and tax credits generated in the predecessor periods. For the years ended December 31, 2022 and 2021, the Company determined an ownership change occurred on August 5, 2022, March 15, 2021 and another successive ownership change occurred on December 8, 2021. The Company can increase its annual Section 382 limitation for the amount of recognized built-in gain ("RBIG") pursuant to the application of Notice 2003-65. The Company determined the annual Section 382 limitation should enable the Company to utilize all its NOL and credit carryforwards, therefore, no additional valuation allowances were established relating to Section 382 limitations other than the pre-2014 Section 382 limitations that applied. Under the debt buy-back program a substantial amount of the Company’s debt was extinguished. Absent an exception, a debtor recognizes cancelation of debt income (“CODI”) upon discharge of its outstanding indebtedness for an amount of consideration that is less than the outstanding debt. The Internal Revenue Code of 1986, as amended, (the Code), provides that a debtor may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of CODI. For the year ended December 31, 2022 and 2021, the Company excluded $8.7 million and $20.6 million, respectively, of CODI from taxable income and reduced the gross U.S. federal net operating loss by the corresponding amount. Included in deferred tax assets are federal, foreign and state net operating loss carryforwards, federal capital loss carryforwards, federal general business credit carryforwards and state tax credit carryforwards due to expire beginning in 2022 through 2041. As of December 31, 2022, the Company has federal and state income tax net operating loss (NOL) carryforwards of $519.4 million and 456.7 million, which will expire at various dates from 2023 through 2041, and $22.2 million of federal NOLs and $78.8 million of state NOLs that carry forward indefinitely. Such NOL carryforwards expire as follows: State and Local Federal NOL NOL 2023 – 2027 $ 154,719 $ 59,917 2028 – 2032 100,776 89,062 2033 – 2041 241,754 228,914 Indefinite 22,186 78,847 $ 519,435 $ 456,740 As of December 31, 2022, the Company has foreign net operating loss carryforwards of $17.3 million, $0.1 million of which were generated by Exela Poland, $0.2 million were generated in Hungary and Serbia, $0.6 million is generated in Netherlands, $0.2 million is generated in Finland, and will expire in 2026, 2027, 2028 and 2032, respectively. The remainder of the foreign net operating losses will be carried forward indefinitely. The Company adopted the provision of accounting for uncertainty in income taxes in the Topic of the ASC 740. ASC 740 clarifies the accounting for uncertain tax positions in the Company's financial statements and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on tax returns. The total amount of unrecognized tax benefits, exclusive of interest and penalties, is $2.2 million, $2.1 million and $1.8 million at December 31, 2022, 2021, and 2020, respectively. Included in the balance of unrecognized tax benefits as of December 31, 2022, 2021 and 2020 are $0.8 million, $0.8 million and $0.7 million, respectively, of tax benefits that, if recognized, would benefit the effective tax rate. Total accrued interest and penalties recorded on the Consolidated Balance Sheet were $2.0 million, $2.4 million and $2.1 million at December 31, 2022, 2021, and 2020, respectively. The total amount of interest and penalties recognized in the consolidated statement of operations at December 31, 2022, 2021 and 2020 was $(0.4) million, $(0.3) million and $(0.0) million, respectively. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits: Year Ended December 31, 2022 2021 2020 Unrecognized tax benefits — January 1 $ 2,077 $ 1,836 $ 4,314 Gross increases—tax positions in prior period — — (21) Gross decreases — (20) (129) (2,608) Gross increases — 106 460 151 Settlement — (90) — Unrecognized tax benefits—December 31 $ 2,163 $ 2,077 $ 1,836 The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The statute of limitations for U.S. purposes is open for tax years ending on or after December 31, 2017, However, NOLs generated in years prior to 2016 and utilized in future periods may be subject to examination by U.S. tax authorities. State jurisdictions that remain subject to examination are not considered significant. The Company has significant foreign operations in India and EMEA. The Company may be subject to examination by the India tax authorities for tax periods ending on or after March 31, 2014. At December 31, 2022, the Company maintains its prior indefinite reinvestment assertion on undistributed earnings related to certain foreign subsidiaries. Accordingly, no deferred taxes have been provided for withholding taxes or other taxes that would result upon repatriation of approximately $153.4 million of undistributed earnings from these foreign subsidiaries as those earnings continue to be permanently reinvested. However, the Company does not indefinitely reinvest earnings in Canada, China, India, Mexico and Philippines. The Company recorded $7.9 million and $7.1 million of foreign withholding taxes on the undistributed earnings of these jurisdictions at December 31, 2022 and 2021, respectively. The Company recorded $0.8 million deferred expense, $1.1 million of deferred expense and $0.3 million of deferred benefit in the consolidated statement of operations at December 31, 2022, 2021 and 2020, respectively. The foreign withholding taxes deferred expense recorded in the current year is attributable to the current year undistributed earnings. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plans | |
Employee Benefit Plans | 13. Employee Benefit Plans German Pension Plan The Company’s subsidiary in Germany provides pension benefits to certain retirees. Employees eligible for participation include all employees who started working for the Company or its predecessors prior to September 30, 1987 and have finished a qualifying period of at least 10 years. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. The German pension plan is an unfunded plan and therefore has no plan assets. No new employees are registered under this plan and the participants who are already eligible to receive benefits under this plan are no longer employees of the Company. U.K. Pension Plan The Company’s subsidiary in the United Kingdom provides pension benefits to certain retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to October 2001. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or December 31, 2015. The expected rate of return assumptions for plan assets relate solely to the UK plan and are based mainly on historical performance achieved over a long period of time (15 to 20 years) encompassing many business and economic cycles. The Company assumed a weighted average expected long-term rate on plan assets of 2.72%. Norway Pension Plan The Company’s subsidiary in Norway provides pension benefits to eligible retirees and eligible dependents. Employees eligible for participation include all employees who were more than three years from retirement prior to March 2018. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the later of two dates, the participants leaving the Company or April 30, 2018. Asterion Pension Plan The Company acquired in 2018 through the Asterion Business Combination the obligation to provide pension benefits to eligible retirees and eligible dependents. Employees eligible for participation included all full-time regular employees who were more than three years from retirement prior to July 2003. A retirement pension or a lump-sum payment may be paid dependent upon length of service at the mandatory retirement age. The Company accrues the cost of these benefits over the service lives of the covered employees based on an actuarial calculation. The Company uses a December 31 measurement date for this plan. No new employees are registered under this plan and the pension obligation for the existing participants of the plan is calculated based on actual salary of the participants as at the earlier of two dates, the participants leaving the Company or April 10, 2018. Funded Status The change in benefit obligations, the change in the fair value of the plan assets and the funded status of the Company’s pension plans (except for the German pension plan which is unfunded) and the amounts recognized in the Company’s consolidated financial statements are as follows: Year ended December, 2022 2021 Change in Benefit Obligation: Benefit obligation at beginning of period $ 117,472 $ 122,011 Service cost 53 68 Interest cost 1,910 1,686 Actuarial gain (44,778) (2,296) Plan amendments 149 (28) Plan curtailment — 98 Benefits paid (1,915) (2,497) Foreign-exchange rate changes (11,159) (1,570) Benefit obligation at end of year $ 61,732 $ 117,472 Change in Plan Assets: Fair value of plan assets at beginning of period $ 89,972 $ 87,215 Actual return on plan assets (36,679) 2,950 Employer contributions 2,866 3,189 Plan participants’ contributions — 16 Benefits paid (1,818) (2,393) Foreign-exchange rate changes (8,647) (1,005) Fair value of plan assets at end of year 45,694 89,972 Funded status at end of year $ (16,038) $ (27,500) Net amount recognized in the Consolidated Balance Sheets: Pension liability, net (a) $ (16,917) $ (28,383) Amounts recognized in accumulated other comprehensive loss, net of tax consist of: Net actuarial loss (3,583) (10,946) Net amount recognized in accumulated other comprehensive loss, net of tax $ (3,583) $ (10,946) Plans with underfunded or non-funded accumulated benefit obligation: Aggregate projected benefit obligation $ 61,732 $ 117,472 Aggregate accumulated benefit obligation $ 61,732 $ 117,472 Aggregate fair value of plan assets $ 45,694 $ 89,972 (a) Consolidated balance of $16.9 million as of December 31, 2022 includes pension liabilities of $13.7 million, $1.7 million, $1.2 million and $(0.6) million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.8 million. Consolidated balance of $28.4 million as of December 31, 2021 includes pension liabilities of $23.0 million, $2.5 million, $2.1 million and less than $0.1 million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.7 million. Tax Effect on Accumulated Other Comprehensive Loss As of December 31, 2022 and 2021, the Company recorded actuarial losses of $3.6 million and $10.9 million, respectively, which is net of a deferred tax benefit of $2.0 million for each period. Pension and Postretirement Expense The components of the net periodic benefit cost are as follows: Year ended December 31, 2022 2021 2020 Service cost $ 53 $ 68 $ 74 Interest cost 1,910 1,686 1,984 Expected return on plan assets (2,856) (2,410) (2,530) Amortization: Amortization of prior service cost 273 224 150 Amortization of net loss 1,616 3,340 1,739 Settlement loss — — 552 Net periodic benefit cost $ 996 $ 2,908 $ 1,969 Valuation The Company uses the corridor approach and projected unit credit method in the valuation of its defined benefit plans for the UK, Germany, and Norway respectively. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. For defined benefit pension plans, these unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over 9 years. Similarly, the Company used the Projected Unit Credit Method for the German Plan, and evaluated the assumptions used to derive the related benefit obligations consisting primarily of financial and demographic assumptions including commencement of employment, biometric decrement tables, retirement age, staff turnover. The projected unit credit method determines the present value of the Company’s defined benefit obligations and related service costs by taking into account each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately in building up the final obligation. Benefit is attributed to periods of service using the plan’s benefit formula, unless an employee’s service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight-line basis is used. The following tables set forth the principal actuarial assumptions used to determine benefit obligation and net periodic benefit costs: December 31, 2022 2021 2022 2021 2022 2021 2022 2021 UK Germany Norway Asterion Weighted-average assumptions used to determine benefit obligations: Discount rate 5.00 % 1.80 % 3.80 % 1.00 % 3.00 % 1.90 % 3.80 % 1.13 % Rate of compensation increase N/A N/A N/A N/A 3.50 % 2.75 % N/A N/A Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 1.80 % 1.40 % 3.80 % 1.00 % 3.00 % 1.90 % 3.80 % 1.13 % Expected asset return 3.45 % 2.72 % N/A % N/A % 4.15 % 3.10 % 3.80 % 1.13 % Rate of compensation increase N/A N/A N/A N/A 3.50 % 2.75 % N/A N/A The Germany plan is an unfunded plan and therefore has no plan assets. The expected rate of return assumptions for plan assets are based mainly on historical performance achieved over a long period of time (10 to 20 years) encompassing many business and economic cycles. Adjustments, upward and downward, may be made to those historical returns to reflect future capital market expectations; these expectations are typically derived from expert advice from the investment community and surveys of peer company assumptions. The Company assumed a weighted average expected long-term rate of return on plan assets for the overall scheme of 3.49%. The Company’s long-term expected rate of return on cash is determined by reference to UK government 10 year bond yields at the balance sheet dates. The long-term expected return on bonds is determined by reference to corporate bond yields at the balance sheet date. The long-term expected rate of return on equities and diversified growth funds is based on the rate of return on UK long dated government bonds with an allowance for out-performance. The long-term expected rate of return on the liability driven investments holdings is determined by reference to UK government 20 year bond yields at the balance sheet date. The discount rate assumption was developed considering the current yield on an investment grade non-gilt index with an adjustment to the yield to match the average duration of the index with the average duration of the plan’s liabilities. The index utilized reflected the market’s yield requirements for these types of investments. The inflation rate assumption was developed considering the difference in yields between a long-term government stocks index and a long-term index-linked stocks index. This difference was modified to consider the depression of the yield on index-linked stocks due to the shortage of supply and high demand, the premium for inflation above the expectation built into the yield on fixed-interest stocks and the government’s target rate for inflation (CPI) at 2.3%. The assumptions used are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered, may not necessarily be borne out in practice. Plan Assets The investment objective for the plan is to earn, over moving fifteen The Company’s investment policy related to the defined benefit plan is to continue to maintain investments in government gilts and highly rated bonds as a means to reduce the overall risk of assets held in the fund. No specific targeted allocation percentages have been set by category, but are set at the direction and discretion of the plan trustees. The weighted average allocation of plan assets by asset category is as follows: December 31, 2022 2021 2020 U.K. and other international equities 27.0 % 32.8 % 31.4 % U.K. government and corporate bonds 5.5 2.5 2.7 Diversified growth fund 18.5 25.7 21.0 Liability driven investments 44.3 34.6 40.6 Multi-asset credit fund 4.7 4.4 4.3 Total 100.0 % 100.0 % 100.0 % The following tables set forth, by category and within the fair value hierarchy, the fair value of the Company’s pension assets at December 31, 2022 and 2021: December 31, 2022 Total Level 1 Level 2 Level 3 Asset Category: Cash $ 932 $ 932 $ — $ — Equity funds: U.K. — — — — Other international 11,399 — 11,399 — Fixed income securities: Corporate bonds / U.K. Gilts 2,529 — 2,529 — Other investments: Diversified growth fund 8,417 — 8,417 — Liability driven investments 20,258 — 20,258 — Multi-asset credit fund 2,158 — 2,158 — Total fair value $ 45,693 $ 932 $ 44,761 $ — December 31, 2021 Total Level 1 Level 2 Level 3 Asset Category: Cash $ 149 $ 149 $ — $ — Equity funds: U.K. 17,423 — 17,423 — Other international 11,909 — 11,909 — Fixed income securities: Corporate bonds / U.K. Gilts 2,292 — 2,292 — Other investments: Diversified growth fund 23,122 — 23,122 — Liability driven investments 31,158 — 31,158 — Multi-asset credit fund 3,919 — 3,919 — Total fair value $ 89,972 $ 149 $ 89,823 $ — The plan assets are categorized as follows, as applicable: Level 1: Any asset for which a unit price is available and used without adjustment, cash balances, etc. Level 2: Any asset for which the amount disclosed is based on market data, for example a fair value measurement based on a present value technique (where all calculation inputs are based on data). Level 3: Other assets. For example, any asset value with a fair value adjustment made not based on available indices or data. Employer Contributions The Company’s funding is based on governmental requirements and differs from those methods used to recognize pension expense. The Company made contributions of $2.9 million and $3.2 million to its pension plans during the years ended December 31, 2022 and 2021, respectively. The Company has fully funded the pension plans for 2022 based on current plan provisions. The Company expects to contribute $2.7 million to the pension plans during 2023, based on current plan provisions. Estimated Future Benefit Payments The estimated future pension benefit payments expected to be paid to plan participants are as follows: Estimated Benefit Payments Year ended December 31, 2023 $ 1,872 2024 2,067 2025 2,656 2026 2,674 2027 2,978 2028 – 2032 13,615 Total $ 25,862 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Litigation The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe these actions will have a material, adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows. Appraisal Action On March 26, 2020, the Delaware Court of Chancery entered a judgment against the Company’s subsidiary SourceHOV Holdings, Inc. (“SourceHOV”) in the amount of $57.7 million inclusive of costs and interest arising out of the petition for appraisal pursuant to 8 Del. C. § 262 in the Delaware Court of Chancery, captioned Manichaean Capital, LLC, et al. v. SourceHOV Holdings, Inc., C.A. No. 2017 0673 JRS (the “Appraisal Action”). The Appraisal Action arose out of a preliminary transaction in connection with the acquisition of SourceHOV and Novitex Holdings, Inc., by Quinpario in July 2017 (“Novitex Business Combination”), and the petitioners sought, among other things, a determination of the fair value of their SourceHOV shares at the time of the Novitex Business Combination; an order that SourceHOV pay that value to the petitioners, together with interest at the statutory rate; and an award of costs, attorneys’ fees, and other expenses. On December 31, 2021, the Company agreed to settle the Appraisal Action along with a separate case brought by the same plaintiffs for Adverse Arbitration Order In April 2020, one of the Company’s Nordic subsidiaries commenced an arbitration in Finland against a customer alleging breach of contract and other damages in connection with an outsourcing services agreement and transition services agreement executed in 2017. In September 2020, the customer submitted counterclaims against the Company in an aggregate amount in excess of €10.0 million. Following an expedited arbitration, in late November 2020, the arbitrator awarded the customer approximately $13.0 million in the aggregate for the counterclaimed damages and costs. The Company filed an application to annul the award in late January 2021 with the relevant court asserting, among other bases, that the arbitrator violated due process and procedural rules by disallowing the Company’s witness and expert testimony and maintaining the expedited format following the assertion of significant counterclaims which would ordinarily have required the application of normal rather than expedited rules. On May 28, 2021, the parties entered into a settlement agreement resolving this dispute for a total of $8.8 million including the reimbursement of certain third party charges. As of December 31, 2022 and 2021, there was a net outstanding balance of $1.6 million and $3.3 million, respectively for this matter included in Accrued liabilities on our consolidated balance sheets. Contract-Related Contingencies The Company has certain contingent obligations that arise in the ordinary course of providing services to its customers. These contingencies are generally the result of contracts that require the Company to comply with certain performance measurements or the delivery of certain services to customers by a specified deadline. The Company believes the adjustments to the transaction price, if any, under these contract provisions will not result in a significant revenue reversal or have a material adverse effect on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurement | |
Fair Value Measurement | 15. Fair Value Measurement Assets and Liabilities Measured at Fair Value The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of other debt approximated their fair value as of December 31, 2022 and 2021, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan, secured 2023 notes and secured 2026 notes at approximately 64.0%, 65.0% and 15.5% respectively, of the respective principal balance outstanding as of December 31, 2022. The fair values of secured borrowings under the Company’s securitization facility and BRCC facility are equal to the respective carrying values. Other debt represents the Company’s outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company and as such, the cost incurred would approximate fair value. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value. The Company determined the fair value of its long-term debt and current portion of long-term debts using Level 2 inputs including the recent issue of the debt, the Company’s credit rating, and the current risk-free rate. The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of December 31, 2022 and December 31, 2021: Carrying Fair Fair Value Measurements As of December 31, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 942,035 $ 184,968 $ — $ 184,968 $ — Current portion of long-term debts 154,802 121,893 — 121,893 — Nonrecurring assets and liabilities: Goodwill 186,802 186,802 — — 186,802 Carrying Fair Fair Value Measurements As of December 31, 2021 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,012,452 $ 803,668 $ — $ 803,668 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 16. Stock-Based Compensation Exela 2018 Stock Incentive Plan On January 17, 2018, Exela’s 2018 Stock Incentive Plan (the “2018 Plan”) became effective. The 2018 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other stock-based compensation to eligible participants. The Company was initially authorized to issue up to 138,729 shares of Common Stock under the 2018 Plan. On June 27, 2022, the shareholders of the Company approved our Amended and Restated 2018 Stock Incentive Plan increasing the number of shares of Common Stock reserved for issuance from an original 138,729 shares to 892,404. Restricted Stock Unit Grants Restricted stock unit awards generally vest ratably over a one A summary of restricted stock unit activities under the 2018 Plan for the year ended December 31, 2022 is summarized in the following table: Average Weighted Remaining Number Average Grant Contractual Life Aggregate of Units Date Fair Value (Years) Intrinsic Value Outstanding Balance as of December 31, 2021 68,450 $ 34.95 0.11 $ 2,393 Granted — — Forfeited — — Vested (66,935) 35.00 Outstanding Balance as of December 31, 2022 1,515 $ 33.00 0.41 $ 50 Certain RSUs that vested during the year ended December 31, 2022 were net-share settled such that the Company withheld shares with value equivalent to the employee’s minimum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were 8,998 shares and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payment for the employee’s tax obligations to taxing authorities was $0.1 million and is reflected as a financing activity within the consolidated statements of cash flows. Options Under the 2018 Plan, stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying stock at the grant date. The vesting period for each option award is established on the grant date, and the options generally expire 10 years from the grant date. Options granted under the 2018 Plan generally require no less than a two four Average Weighted Weighted Remaining Average Grant Average Vesting Period Aggregate Outstanding Date Fair Value Exercise Price (Years) Intrinsic Value (2) Outstanding Balance as of December 31, 2021 72,265 $ 112.60 $ 235.69 0.69 $ — Granted — — Exercised — — Forfeited (1,881) 106.16 Expired — — Outstanding Balance as of December 31, 2022 (1) 70,384 $ 112.77 $ 235.59 0.20 $ — (1) 52,158 of the outstanding options are exercisable as of December 31, 2022. (2) Exercise prices of all of the outstanding options as of December 31, 2022 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value was zero. As of December 31, 2022, there was approximately $0.2 million of total unrecognized compensation expense related to non-vested restricted stock unit awards and stock option awards under the 2018 Plan, which will be recognized over the respective service period. Stock-based compensation expense is recorded within Selling, general, and administrative expenses. The Company incurred total compensation expense of $1.0 million, $2.7 million, and $2.8 million related to restricted stock unit awards and stock option awards under the 2018 Plan awards for the years ended December 31, 2022, 2021, and 2020, respectively. The Company reversed compensation expense of $0.6 million on account of agreed cancellation of Common Stock issued for Director’s vested restricted stock units during the year ended December 31, 2022. Market Performance Units On September 14, 2021, the Company granted its Executive Chairman performance units with a market performance condition, which are notional units representing the right to receive one share of Common Stock (or the cash value of one share of Common Stock). Until such time that the Company obtained the approval of the stockholders of the Company regarding an increase to the number of shares authorized for issuance under its 2018 Plan in accordance with Nasdaq Listing Rule 5635(a), these performance units would be settled in cash, and following such shareholder approval, at the election of the compensation committee of the Company, might be settled in cash or in shares of Common Stock. The performance units provide that until an increase to the share reserve is approved, such performance units are subject to the terms and conditions of the 2018 Plan as though granted thereunder, but not be considered an award that is outstanding under the plan, and following such time that the plan amendment is approved, constitute an award under the 2018 Plan. Fifty percent of the performance units covered by the award will vest if, at any time during the period commencing September 14, 2021 and ending June 30, 2024, the volume weighted average of the reported closing price of the Company’s Common Stock is $200 per share or greater on (x) 60 consecutive trading days or (y) 90 non-consecutive trading days in any 180 day period (the “Tranche 1”). In addition, the remaining 50% of the performance units will vest if, at any time during the period commencing September 14, 2021 and ending June 30, 2025, the volume weighted average of the reported closing prices of the Company’s Common Stock is $400 per share or greater on (x) 60 consecutive trading days or (y) 90 non-consecutive trading days in any 180 day period (the “Tranche 2”). Any Tranche 1 and Tranche 2 units that are not earned by June 30, 2024 and June 30, 2025, respectively, will be forfeited for no consideration and will no longer be eligible to vest. In addition, if a change in control occurs prior to the applicable expiration date, if the performance units are assumed by the acquirer, the units will remain outstanding and eligible to vest based solely on his continued service to the Company. If in connection with such change in control the performance units are not assumed by an acquirer, a number of performance units will vest based on the per share price paid in the transaction, with On June 27, 2022, the Company obtained the approval of the stockholders of the Company for the 2018 Plan amendment regarding an increase to the number of shares authorized for issuance under its 2018 Plan. After approval of the amended and restated 2018 Plan, the performance units are an award that is outstanding under the amended and restated 2018 Plan. Therefore, the performance units may be settled in cash or in shares of Common Stock of the Company at the election of the compensation committee of the Company. The fair value of per unit of the awards was determined to be $29.60 and $30.20 for Tranche 1 and Tranche 2, respectively, on the grant date by application of the Monte Carlo simulation model. Until December 31, 2021, the performance units were cash-settled awards and therefore accounted for as a liability classified award. On December 31, 2021, upon the approval of the amended and restated 2018 Plan, the performance units may be settled in cash or in shares of Common Stock of the Company at the election of the compensation committee of the Company, therefore the award was reclassified to equity. On December 31, 2021, the modification date fair value of per unit of the awards was determined to be $8.80 and $9.40 for Tranche 1 and Tranche 2, respectively, by application of the Monte Carlo simulation model. The following table summarizes the activity for the market performance restricted stock units for the year ended December 31, 2022: Weighted Average Weighted Period Over Number Average Which Expected of Units Fair Value to be Recognized Outstanding Balance as of December 31, 2021 425,000 $ 9.10 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of December 31, 2022 425,000 $ 9.10 2.98 As of December 31, 2022, there was approximately $1.8 million of total unrecognized compensation expense related to non-vested performance unit awards, which will be recognized over the remaining requisite service period. We recognized $0.9 million and $1.2 million compensation expense associated with the performance unit award for the years ended December 31, 2022 and 2021, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 17. Stockholders’ Equity The following description summarizes the material terms and provisions of the securities that the Company has authorized. Common Stock The Company is authorized to issue 1,600,000,000 shares of Common Stock. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of our Common Stock and Tandem Preferred Stock (that provides a vote to holders of our Series B Preferred Stock, as described below) possess all voting power for the election of our Board of Directors (the “Board”) and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of Exela stockholders. Holders of our Common Stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of our Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the Board in its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions. The holders of the Common Stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the Common Stock. As of December 31, 2022 and December 31, 2021, there were 278,655,235 and 13,259,748 shares of Common Stock outstanding, respectively. Reverse Stock Split On July 25, 2022, we effected the one-for- twenty twenty Giving effect to the Reverse Stock Split the Company’s issued and outstanding stock decreased from 265,194,961 to 13,259,748 as at December 31, 2021. Common Stock At-The-Market Sales Program On May 27, 2021, the Company entered into an At Market Issuance Sales Agreement (“First ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) and Cantor Fitzgerald & Co. (“Cantor”), as distribution agents, under which the Company may offer and sell shares of the Company’s Common Stock from time to time through the Distribution Agents, acting as sales agent or principal. On September 30, 2021, the Company entered into a second At Market Issuance Sales Agreement with B. Riley, BNP Paribas Securities Corp., Cantor, Mizuho Securities USA LLC and Needham & Company, LLC, as distribution agents (together with the First ATM Agreement, the “ATM Agreement”). Sales of the shares of Common Stock under the ATM Agreement, have been in “at the market offerings” as defined in Rule 415 under the Securities Act, including, without limitation, sales made directly on or through the Nasdaq or on any other existing trading market for the Common Stock, as applicable, or to or through a market maker or any other method permitted by law, including, without limitation, negotiated transactions and block trades. Shares of Common Stock sold under the ATM Agreement have been offered pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-255707), filed with the SEC on May 3, 2021, and declared effective on May 12, 2021 and the Company’s Registration Statement on Form S-3 (File No. 333-263909), filed with the SEC on March 28, 2022, and declared effective on May 10, 2022, and the prospectuses and related prospectus supplements included therein for sales of shares of Common Stock as follows: Supplement Period Number of Shares Sold Weighted Average Price Per Share Gross Proceeds Net Proceeds Prospectus supplement dated May 27, 2021 with an aggregate offering price of up to $100.0 million (“Common ATM Program–1”) May 28, 2021 through July 1, 2021 2,471,185 $40.164 $99.3 million $95.7 million Prospectus supplement dated June 30, 2021 with an aggregate offering price of up to $150.0 million (“Common ATM Program–2”) June 30, 2021 through September 2, 2021 2,879,023 $52.069 $149.9 million $144.4 million Prospectus supplement dated September 30, 2021 with an aggregate offering price of up to $250.0 million (“Common ATM Program–3”) October 6, 2021 through March 31, 2022 16,743,797 $14.931 $250.0 million $241.0 million Prospectus supplement dated May 23, 2022 with an aggregate offering price of up to $250.0 million (“Common ATM Program–4”) May 24, 2022 through December 31, 2022 256,887,619 $0.612 $157.1 million $152.3 million Due to the late filing of this Annual Report the Company expects to lose eligibility to use Form S-3 for twelve full calendar months following the date this Annual Report was due. Share Buyback Program On August 10, 2022, the Company’s Board authorized a share buyback program (the “2022 Share Buyback Program”), pursuant to which the Company was permitted to repurchase up to 10,000,000 shares of Common Stock over the next two-year period. The 2022 Share Buyback Program does not obligate the Company to repurchase any shares of Common Stock. During the year ended December 31, 2022, we repurchased and concurrently retired 357,461 shares of Common Stock at an average share price of $1.348 per share pursuant to the 2022 Share Buyback Program. The Company records such stock repurchases as a reduction to stockholders’ equity. The Company allocates the excess of the repurchase price over the par value of shares acquired to Accumulated Deficit and Additional Paid-in Capital. The portion allocated to Additional Paid-in Capital is determined by dividing the number of shares to be retired by the number of shares issued multiplied by the balance of Additional Paid-in Capital as of the retirement date. Series A Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board. The Company has designated 2,800,000 shares of its authorized preferred stock as Series A Preferred Stock. At December 31, 2022 and December 31, 2021, the Company had 2,778,111 shares of Series A Preferred Stock outstanding. The par value of the Series A Preferred Stock is $0.0001 per share. Each share of Series A Preferred Stock is convertible at the holder’s option, at any time into the number of shares of Common Stock determined as of the date of conversion using a certain conversion formula that takes into account the amount of Liquidation Preference per share as adjusted for accrued but unpaid dividends, as described below. As of December 31, 2022, after taking into account the effect of the Reverse Stock Split, each outstanding share of Series A Preferred Stock was convertible into 0.0263 shares of Common Stock using this conversion formula. Accordingly, as of December 31, 2022, 73,058 shares of Common Stock were issuable upon conversion of the remaining 2,778,111 shares of Series A Preferred Stock. Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate per annum of 10 % of the dollar amount of per share liquidation preference (plus accumulated but unpaid dividends, the “Series A Liquidation Preference”) per share of Series A Preferred Stock, paid or accrued quarterly in arrears on the 15 th day of each March, June, September and December. From the issue date through December 31, 2022, the amount of all accrued but unpaid dividends on the Series A Preferred Stock have been added to the Series A Liquidation Preference. The Company shall add the amount of all accrued but unpaid dividends on each quarterly dividend payment date to the Series A Liquidation Preference, except to the extent the Company elects to make all or any portion of such payment in cash on or prior to the applicable dividend payment date, in which case, the amount of the accrued but unpaid dividends that is added to the Series A Liquidation Preference shall be reduced on a dollar-for-dollar basis by the amount of any such cash payment. The Company is not required to make any payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series A Preferred Stock or for dividends on the shares of Common Stock issued upon conversion of such shares. The dividend accumulation for the years ended December 31, 2022 and 2021 was $3.6 million and $1.6 million, respectively as reflected on the Consolidated Statement of Operations. As of December 31, 2022, the total accumulated but unpaid dividends on the Series A Preferred Stock since inception on July 12, 2017 was $15.9 million. The per share average of cumulative preferred dividends is $5.7 . In addition, holders of the Series A Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Series B Preferred Stock and Tandem Preferred Stock In two separate exchange offers made on February 24, 2022 (the “First Share Exchange Offer”) and May 2, 2022 (the “Second Share Exchange Offer”), the Company offered its common stockholders the opportunity to exchange shares of Common Stock for its Series B Preferred Stock, par value $0.0001 per share, with each 20 shares of Common Stock being exchangeable for one share of Series B Preferred Stock having a liquidation preference of $25.00 per share (without giving effect to the Reverse Stock Split). On March 11, 2022, the Company designated 5,000,000 shares of its authorized and unissued preferred stock as Series B Preferred Stock and filed a Certificate of Designation of Series B Preferred Stock of Exela Technologies Inc., or the Series B Certificate of Designation. The First Share Exchange Offer expired on March 10, 2022, and 18,006,560 shares of Common Stock were validly tendered for exchange (without giving effect to the Reverse Stock Split). On March 11, 2022, the Company issued a total of 900,328 shares of Series B Preferred Stock in exchange of all such tendered and accepted shares of Common Stock. The Second Share Exchange Offer expired on May 17, 2022, and 42,591,440 shares of Common Stock were validly tendered for exchange (without giving effect to the Reverse Stock Split). On May 18, 2022, the Company issued a total of 2,129,572 shares of Series B Preferred Stock in exchange of all such tendered and accepted shares of Common Stock. The tendered and accepted shares of Common Stock were cancelled. The Series B Preferred Stock are listed on the Nasdaq under the symbol “XELAP”. At December 31, 2022, the Company had 3,029,900 shares of Series B Preferred Stock outstanding. Each share of Series B Preferred Stock is convertible at the holder’s option, at any time into the number of shares of Common Stock determined as of the date of conversion using a certain conversion formula that takes into account the amount of liquidation preference per share as adjusted for accrued but unpaid dividends, as described below. As of December 31, 2022, after taking into account the effect of the Reverse Stock Split and payment of the accrued dividend, each outstanding share of Series B Preferred Stock was convertible into 1.0150 share of Common Stock using this conversion formula. Accordingly, as of December 31, 2022, 3,075,349 shares of Common Stock were issuable upon conversion of 3,029,900 shares of outstanding Series B Preferred Stock. Holders of the Series B Preferred Stock are entitled to receive cumulative dividends at a rate per annum of 6% of the dollar amount of per share liquidation preference (plus accumulated but unpaid dividends, the “Series B Liquidation Preference”) per share of Series B Preferred Stock, paid or accrued quarterly in arrears on the last day of each of March, June, September and December. The Company shall add the amount of all accrued but unpaid dividends on each quarterly dividend payment date to the Series B Liquidation Preference, except to the extent the Company elects to make all or any portion of such payment in cash on or prior to the applicable dividend payment date, in which case, the amount of the accrued but unpaid dividends that is added to the Series B Liquidation Preference shall be reduced on a dollar-for-dollar basis by the amount of any such cash payment. The Company is not required to make any payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series B Preferred Stock or for dividends on the shares of Common Stock issued upon conversion of such shares. The dividend accumulation for the year ended December 31, 2022 was $3.6 million as reflected on the Consolidated Statement of Operations. The per share average of cumulative preferred dividends is $1.21. During the year ended December 31, 2022, the Company paid accumulated dividend of $2.5 million. As of December 31, 2022, there was $1.1 million of accumulated but unpaid dividend balance on the Series B Preferred Stock. In addition, holders of the Series B Preferred Stock will participate in any dividend or distribution of cash or other property paid in respect of the Common Stock pro rata with the holders of the Common Stock (other than certain dividends or distributions that trigger an adjustment to the conversion rate, as described in the Certificate of Designations), as if all shares of Series B Preferred Stock had been converted into Common Stock immediately prior to the date on which such holders of the Common Stock became entitled to such dividend or distribution. Holders of Series B Preferred Stock also have rights to vote for the election of one additional director to serve on the Board, if dividends on Series B Preferred Stock are in arrears for eight or more consecutive quarters, until all unpaid and accumulated dividends on the Series B Preferred Stock have been paid or declared and a sum sufficient for payment is set aside for such payment. On May 17, 2022, the Company issued one share of tandem preferred stock, par value $0.0001 per share (the “Tandem Preferred Stock”), as a dividend on its existing shares of outstanding Series B Preferred Stock. Any issuance of Series B Preferred Stock after this date shall be automatically accompanied by an equal number of shares of Tandem Preferred Stock. Tandem Preferred Stock are embedded in the Series B Preferred Stock and they provide voting rights to the existing shares of Series B Preferred Stock. Each share of Series B Preferred Stock disclosed in the consolidated balance sheet, the consolidated statements of stockholders’ deficit and the notes to the consolidated financial statements embeds one share of Tandem Preferred Stock. On all matters submitted to a vote of the stockholders of the Company, the holders of the Series B Preferred Stock through their holdings of Tandem Preferred Stock will be entitled to vote with the holders of the Common Stock as a single class. Each share of Tandem Preferred Stock entitles the holder to one vote per share, subject to adjustment for issuance of any shares of Common Stock pursuant to any dividend or distribution on shares of Common Stock, share split or share combination or other transactions as specified in the Certificate of Designation of Tandem Preferred Stock. Shares of Tandem Preferred Stock are not entitled to receive dividends of any kind. In the case of a transfer of the underlying Series B Preferred Stock by a holder to any transferee, the Tandem Preferred Stock shall be automatically transferred simultaneously to such transferee without any further action by such Holder. Upon the redemption of a holder’s shares of Series B Preferred Stock or the conversion of shares of Series B Preferred Stock into Common Stock, an equal number of such holder’s shares of Tandem Preferred Stock shall, without any further action required by the holder, be automatically transferred to the Company for cancellation without the payment of any additional consideration by the Company. In the event of any liquidation, winding-up or dissolution of the Company each holder of the Tandem Preferred Stock shall be entitled to receive and to be paid out of the assets of the Company available for distribution to its stockholders an amount in cash equal to the par value of such Tandem Preferred Stock with respect to each share of Tandem Preferred Stock held by such holder. Treasury Stock As of December 31, 2022, the Company has 46,452 shares repurchased and held as treasury stock under a prior expired share buyback program authorized on November 8, 2017. During the first quarter of 2020, 76,179 shares of Common Stock were returned to the Company in connection with the Appraisal Action. These shares are also included in treasury stock. The Company records treasury stock using the cost method. Warrants At December 31, 2022, there were warrants outstanding to purchase 486,591 shares of our Common Stock, consisting of 9,731,819 warrants to purchase one-twentieth of one share from the private placement that was completed in March 2021. Private Placement of Unregistered Shares and Warrants On March 15, 2021, the Company, entered into a securities purchase agreement with certain accredited institutional investors pursuant to which the Company issued and sold to ten accredited institutional investors in a private placement an aggregate of 486,591 unregistered shares of the Company’s Common Stock at a price of $55.00 per share and an equal number of warrants, generating gross proceeds to the Company of $26.8 million. Cantor Fitzgerald acted as underwriter in connection with such sale of unregistered securities and received a placement fee of 5.5% of gross proceeds in connection with such service. In selling the shares without registration, the Company relied on exemptions from registration available under Section 4(a)(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. The Company filed a registration statement on Form S-3 on May 3, 2021 that registered these shares and the shares underlying these private placement warrants. Each private placement warrant entitles the holder to purchase one-twentieth of one share of Common Stock, at an exercise price of $80.00 per share and will expire on September 19, 2026. The private placement warrants are not traded as of December 31, 2022 and are not subject to redemption by the Company. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related-Party Transactions | |
Related-Party Transactions | 18. Related-Party Transactions Relationship with HandsOn Global Management The Company incurred reimbursable travel expenses to HOVS LLC and HandsOn Fund 4 I, LLC (collectively, and together with certain of their affiliated entities managed by HandsOn Global Management LLC, including such entity, “HGM”) of less than $0.1 million, less than $0.1 million and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. Certain members of our Board, including our Executive Chairman, Par Chadha, Sharon Chadha, Ron Cogburn, and James Reynolds are, have been, or may be deemed to be affiliated with HGM. Pursuant to a master agreement dated January 1, 2015 between Rule 14, LLC, a portfolio company of HGM, and a subsidiary of the Company, the Company incurs marketing fees to Rule 14, LLC. Similarly, the Company is party to ten master agreements with entities affiliated with HGM’s managed funds, each of which were entered into during 2015 and 2016. Each master agreement provides the Company with use of certain technology and includes a reseller arrangement pursuant to which the Company is entitled to sell these services to third parties. Any revenue earned by the Company in such third-party sales is shared 75%/25% with each of HGM’s venture affiliates in favor of the Company. The brands Zuma, Athena, Peri, BancMate, Spring, Jet, Teletype, CourtQ and Rewardio are part of the HGM managed funds. The Company has the license to use and resell such brands, as described in the master agreements. The Company incurred fees relating to these agreements of $6.9 million, $5.7 million, and $1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Certain operating companies lease their operating facilities from HOV RE, LLC and HOV Services Limited, which are affiliates under common control with HGM. The rental expense for these operating leases was $0.2 million, $0.2 million, and $0.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. In addition, HOV Services, Ltd. provides the Company data capture and technology services. The expense recognized for these services was approximately $1.5 million, $1.3 million, and $1.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. These expenses are included in cost of revenue in the consolidated statements of operations. Certain premium payments, secondary offering fees and legal expenses were reimbursed to Ex-Sigma 2, LLC, our principal stockholder at the Closing of the Novitex Business Combination (“Ex-Sigma 2”), pursuant to the terms of the Consent, Waiver and Amendment dated June 15, 2017, by and among the Company, Quinpario Merger Sub I, Inc., Quinpario Merger Sub II, Inc., SourceHOV, Novitex, Novitex Parent, L.P., Ex Sigma LLC, HOVS LLC and HandsOn Fund 4 I, LLC, amending the Novitex Business Combination agreement (the “Consent, Waiver and Amendment”). These expenses are included in related party expense in the consolidated statements of operations. The Company recorded related party expenses of $0.3 million for the year ended December 31, 2020 for reimbursable legal expenses of Ex-Sigma 2. The Company made payments totaling $5.6 million to Ex-Sigma 2 during the fourth quarter of 2019. Separately, the Company determined it was obligated to reimburse premium payments of $6.9 million made by Ex-Sigma 2 on the Margin Loan under the terms of the Consent, Waiver and Amendment. Pursuant to a written settlement agreement entered into in June 2020, Ex-Sigma, SourceHOV and the Company agreed that the $5.6 million of payments made during the fourth quarter of 2019 would be accepted to fully discharge the Company’s obligation to reimburse Ex-Sigma 2 for the $6.9 million of premium payments. The Company recorded the difference of $1.3 million between the obligation amount and the settlement amount as an increase to additional paid in capital in the consolidated statements of stockholders’ deficit for the year ended December 31, 2020. Consulting Agreement The Company receives services from Oakana Holdings, Inc. The Company and Oakana Holdings, Inc. are related through a family relationship between certain shareholders and the president of Oakana Holdings, Inc. The expense recognized for these services was approximately less than $0.1 million, $0.2 million and $0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Subscription Agreements During the year ended December 31, 2021, the Company entered into separate subscription agreements with five of its directors. Pursuant to these subscription agreements, the Company issued and sold 3,125, 7,936, 3,174, 3,968 and 1,984 shares of Common Stock of the Company to Sharon Chadha, Par Chadha, Martin Akins, J. Coley Clark and John Rexford, respectively, for a purchase price of $0.1 million, $0.2 million, less than $0.1 million, $0.1 million and less than $0.1 million, respectively. On July 21, 2022, the Company entered into a subscription agreement with its Executive Chairman. Pursuant to this subscription agreement, on August 11, 2022, the Company issued and sold 70,921 shares of Common Stock of the Company to Par Chadha for a purchase price of $0.1 million. Subscription, Voting and Redemption Agreement On May 19, 2022, the Company issued 1,000,000 shares of special voting preferred stock, par value $0.0001 per share (“Redeemable Special Voting Preferred Stock”) at par value of $100 to GP-HGM LLC, an entity affiliated to the Executive Chairman of the Company, pursuant to a certain subscription, voting and redemption agreement (the “Subscription, Voting and Redemption Agreement”). The Company designated 1,000,000 shares of its authorized and unissued preferred stock as special voting preferred stock and filed a certificate of designations, preferences, rights and limitations for the special voting preferred stock. The Executive Chairman of the Company was the designated manager of GP-HGM LLC. As a sole holder of the Redeemable Special Voting Preferred Stock, GP-HGM LLC was entitled to 20,000 votes per share, to be voted together and in proportion with the holders of the Company’s voting capital stock as a single class at the Company’s 2022 annual meeting of the stockholders on two specific proposals: (a) approval of the adoption of an amendment to the Company’s certificate of incorporation to effect a reverse split of its outstanding Common Stock (the “Reverse Stock Split Proposal”) and (b) approval of an amendment to the Company’s certificate of incorporation to increase the number of authorized shares of preferred stock from 20,000,000 shares to 40,000,000 shares (the “Preferred Stock Increase Proposal”). The Redeemable Super Voting Preferred Stock were redeemed at par on June 28, 2022. Relationship with Apollo Global Management, LLC The Company provided services to and received services from certain Apollo Global Management, LLC (“Apollo”) affiliated companies. Funds managed by Apollo held the second largest position in our Common Stock following the Novitex Business Combination and had the right to designate two of the Company’s directors pursuant to a director nomination agreement. Apollo has announced that its affiliated funds ceased being shareholders on March 11, 2020. The Company excluded disclosure of transactions related to Apollo after March 31, 2020 as the related party relationship with Apollo ceased during the first quarter of 2020. On November 18, 2014, one of the Company’s subsidiaries entered into a master services agreement with an indirect wholly owned subsidiary of Apollo. Pursuant to this master services agreement, the Company provided printer supplies and maintenance services, including toner maintenance, training, quarterly business review and printer procurement. The Company recognized revenue of $0.1 million under this agreement for the year ended December 31, 2020 in its consolidated statements of operations. In April 2016, one of the Company’s subsidiaries entered into a master services agreement with Presidio Networked Solutions Group, LLC ("Presidio Group"), a wholly owned subsidiary of Presidio, Inc., a portion of which is owned by affiliates of Apollo. Pursuant to this master services agreement, Presidio Group provided the Company with employees, subcontractors, and/or goods and services. For the year ended December 31, 2020, there were related party expenses of $0.2 million for this service. On January 18, 2017, one of the Company’s subsidiaries entered into a master purchase and professional services agreement with Caesars Enterprise Services, LLC (‘‘Caesars’’). Caesars is controlled by investment funds affiliated with Apollo. Pursuant to this master purchase and professional services agreement, the Company provided managed print services to Caesars, including general equipment operation, supply management, support services and technical support. The Company recognized revenue of $0.9 million for year ended December 31, 2020. On May 5, 2017, one of the Company’s subsidiaries entered into a master services agreement with ADT LLC. ADT LLC is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, the Company provided ADT LLC with mailroom and onsite mail delivery services at an ADT LLC office location and managed print services, including supply management, equipment maintenance and technical support services. The Company recognized revenue of $0.3 million in our consolidated statements of operations from ADT LLC under this master services agreement for the year ended December 31, 2020. On July 20, 2017, one of the Company’s subsidiaries entered into a master services agreement with Diamond Resorts Centralized Services Company. Diamond Resorts Centralized Services Company is controlled by investment funds affiliated with Apollo. Pursuant to this master services agreement, the Company provided commercial print and promotional product procurement services to Diamond Resorts Centralized Services Company, including sourcing, inventory management and fulfillment services . The Company recognized revenue of $0.9 million for the year ended December 31, 2020 and cost of revenue of less than $0.1 million for the year ended December 31, 2020 from Diamond Resorts Centralized Services Company under this master services agreement Payable and Receivable/Prepayment Balances with Affiliates Payable and receivable/prepayment balances with affiliates as of December 31, 2022 and December 31, 2021 are as follows below: December 31, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 412 $ — $ 708 $ — Rule 14 — 2,473 — 1,483 HGM 347 — 7 — Oakana — — — 1 $ 759 $ 2,473 $ 715 $ 1,484 |
Segment and Geographic Area Inf
Segment and Geographic Area Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment and Geographic Area Information | |
Segment and Geographic Area Information | 19. Segment and Geographic Area Information The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with its clients. The Company is organized into three segments: ITPS, HS, and LLPS. ITPS: HS: LLPS: The chief operating decision maker reviews segment profit to evaluate operating segment performance and determine how to allocate resources to operating segments. “Segment profit” is defined as revenue less cost of revenue (exclusive of depreciation and amortization). The Company does not allocate Selling, general, and administrative expenses, depreciation and amortization, interest expense and sundry, net. The Company manages assets on a total company basis, not by operating segment, and therefore asset information and capital expenditures by operating segments are not presented. A reconciliation of segment profit to net loss before income taxes is presented below. Year ended December 31, 2022 ITPS HS LLPS Total Revenue $ 765,134 $ 239,270 $ 72,753 $ 1,077,157 Cost of revenue (exclusive of depreciation and amortization) 633,673 190,835 52,966 877,474 Segment profit 131,461 48,435 19,787 199,683 Selling, general and administrative expenses (exclusive of depreciation and amortization) 176,524 Depreciation and amortization 71,831 Impairment of goodwill and other intangible assets 171,182 Related party expense 8,923 Interest expense, net 164,870 Debt modification and extinguishment costs (gain), net 4,522 Sundry income, net (957) Other expense, net 14,170 Net loss before income taxes $ (411,382) Year ended December 31, 2021 ITPS HS LLPS Total Revenue $ 874,126 $ 217,839 $ 74,641 $ 1,166,606 Cost of revenue (exclusive of depreciation and amortization) 672,191 163,445 53,459 889,095 Segment profit 201,935 54,394 21,182 277,511 Selling, general and administrative expenses (exclusive of depreciation and amortization) 169,781 Depreciation and amortization 77,150 Impairment of goodwill and other intangible assets — Related party expense 9,191 Interest expense, net 168,048 Debt modification and extinguishment costs (gain), net (16,689) Sundry income, net 363 Other expense, net 401 Net loss before income taxes $ (130,734) Year ended December 31, 2020 ITPS HS LLPS Total Revenue $ 1,005,043 $ 219,047 $ 68,472 $ 1,292,562 Cost of revenue (exclusive of depreciation and amortization) 815,013 159,917 48,614 1,023,544 Segment profit 190,030 59,130 19,858 269,018 Selling, general and administrative expenses (exclusive of depreciation and amortization) 186,104 Depreciation and amortization 93,953 Impairment of goodwill and other intangible assets — Related party expense 5,381 Interest expense, net 173,878 Debt modification and extinguishment costs (gain), net 9,589 Sundry expense, net (153) Other expense, net (34,788) Net loss before income taxes $ (164,946) The following table presents revenues by principal geographic area where the Company’s customers are located for the years ended December 31, 2022, 2021, and 2020. Years ended December 31, 2022 2021 2020 United States $ 878,644 $ 941,985 $ 1,057,006 EMEA 180,502 205,772 213,418 Other 18,011 18,849 22,138 Total Consolidated Revenue $ 1,077,157 $ 1,166,606 $ 1,292,562 |
Selected Quarterly Financial Re
Selected Quarterly Financial Results (Unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Selected Quarterly Financial Results (Unaudited) | |
Selected Quarterly Financial Results (Unaudited) | 20. Selected Quarterly Financial Results (Unaudited) The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2022 and 2021 (dollars in thousands, except per share data): Q1 2022 Q2 2022 Q3 2022 Q4 2022 Revenue: ITPS $ 205,007 $ 190,005 $ 185,309 $ 184,813 HS 56,596 56,390 60,955 65,329 LLPS 17,795 20,375 17,774 16,809 Total Revenue 279,398 266,770 264,038 266,951 Cost of revenue: ITPS 163,586 156,704 157,269 156,114 HS 46,731 45,719 48,316 50,069 LLPS 13,187 14,854 12,257 12,668 Cost of revenue (exclusive of depreciation and amortization) 223,504 217,277 217,842 218,851 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,040 50,195 44,369 38,920 Depreciation and amortization 18,212 17,993 17,737 17,889 Impairment of goodwill and other intangible assets — — 29,565 141,617 Related party expense 1,987 2,186 2,016 2,734 Operating income (loss) (7,345) (20,881) (47,491) (153,060) Other expense (income), net: Interest expense, net 39,760 42,271 40,897 41,942 Debt modification and extinguishment costs (gain) 884 8,117 (4,696) 217 Sundry expense (income), net 307 (741) 781 (1,304) Other expense (income), net 6,159 7,375 (1,115) 1,751 Net loss before income taxes (54,455) (77,903) (83,358) (195,666) Income tax (expense) benefit (2,501) (1,296) (1,924) 1,522 Net loss (56,956) (79,199) (85,282) (194,144) Cumulative dividends for Series A Preferred Stock (864) (876) (908) (940) Cumulative dividends for Series B Preferred Stock (75) (1,317) (1,136) (1,137) Net loss attributable to common stockholders $ (57,895) $ (81,392) $ (87,326) $ (196,221) Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2) 17,186,649 25,288,449 63,145,001 139,393,466 Earnings per share: Basic and diluted $ (3.37) $ (3.22) $ (1.38) $ (1.41) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Revenue: ITPS $ 231,875 $ 217,260 $ 208,304 $ 216,687 HS 51,093 56,204 53,995 56,547 LLPS 17,088 19,545 16,930 21,078 Total Revenue 300,056 293,009 279,229 294,312 Cost of revenue: ITPS 185,502 156,669 157,721 172,299 HS 35,818 38,973 41,945 46,709 LLPS 11,267 13,438 12,065 16,689 Cost of revenue (exclusive of depreciation and amortization) 232,587 209,080 211,731 235,697 Selling, general and administrative expenses (exclusive of depreciation and amortization) 41,885 36,390 43,244 48,262 Depreciation and amortization 19,599 19,420 19,094 19,037 Related party expense 1,707 2,748 2,744 1,992 Operating income (loss) 4,278 25,371 2,416 (10,676) Other expense (income), net: Interest expense, net 43,131 42,867 41,757 40,293 Debt modification and extinguishment costs (gain) — — (28,070) 11,381 Sundry expense (income), net 213 (787) 136 801 Other expense, net 152 651 366 (768) Net loss before income taxes (39,218) (17,360) (11,773) (62,383) Income tax (expense) benefit 18 (2,007) (1,441) (8,226) Net loss (39,200) (19,367) (13,214) (70,609) Cumulative dividends for Series A Preferred Stock 896 (798) (822) (852) Net loss attributable to common stockholders $ (38,304) $ (20,165) $ (14,036) $ (71,461) Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2) 2,532,324 3,073,701 7,532,751 10,357,524 Earnings per share: — Basic and diluted $ (15.13) $ (6.56) $ $ (6.90) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events. | |
Subsequent Events | 21. Subsequent Events Common Stock At-The-Market Sales Program During January 1, 2023 through March 31, 2023, we issued an aggregate of 995,548,819 shares of Common Stock under the Common ATM Program–4 at a weighted average price of $0.070 per share, generating gross proceeds of $69.3 million and net proceeds of $67.0 million, after offering expenses. Repurchase of 2023 Notes In February 2023, the Company repurchased $13.4 million principal amount of 2023 Notes. Receivables Purchase Agreement Effective February 15, 2023, certain of the Company’s subsidiaries entered into a Receivables Purchase Agreement pursuant to which they agreed to sell certain existing receivables and all of their future receivables to BR EXAR, LLC, an affiliate of B. Riley Commercial Capital, LLC until such time as BR EXAR, LLC shall have collected $13.5 million, net of any costs, expenses or other amounts paid to or owing to the buyer under the agreement. The Company received $10.0 million dollars in purchase price for this arrangement. New Note, Amendments to PNC Accounts Receivables Purchase and Sale Documents, Amended BRCC Facility On February 27, 2023, a subsidiary of the Company, Exela Receivables 3 Holdco, LLC and its subsidiary Exela Receivables 3, LLC (“ER3”) and B. Riley Commercial Capital, LLC entered into a new Secured Promissory Note pursuant to which the lender agreed to lend up to $35.0 million, secured by a second lien pledge of ER3. The Company borrowed $31.5 million at closing. This new securitization facility matures in June 2025 and bears interest at a per annum rate of one-month Term SOFR plus 7.5%. Both subsidiaries are party to the existing accounts receivables purchase and sale agreement with PNC Bank, thus the transactions necessitated amendments to that agreement and related documents to permit the addition of subordinated debt and additional borrowing capacity into that transaction structure, in addition to providing for a $5.0 million fee to PNC for facilitating the transaction. In connection with the above-described facility, we also amended the BRCC Term Loan and BRCC Revolver to provide for $9.6 million of borrowing capacity, which was drawn as described below. Repayments on BRCC Facility During January 1, 2023 through April 3, 2023, the Company repaid $32.8 million of outstanding principal amount under the BRCC Term Loan and borrowed $9.6 million of principal amount under BRCC Revolver. Accordingly, the BRCC Term Loan balance is $15.7 million and the amount outstanding under the BRCC Revolver is $29.6 million, as of April 3, 2023. Subscription, Voting and Redemption Agreement, Nasdaq Listing, Special Meeting On March 7, 2023, the Company entered into the Voting Agreement with GP-HGM LLC (“GP-HGM”), an entity controlled by our Executive Chairman, pursuant to which GP-HGM purchased 1,000,000 shares of a new class of preferred stock designated as “Special Voting Stock” for an aggregate purchase price of $100 and agreed to vote all of the shares of Special Voting Stock at a special meeting of stockholders, scheduled for May 4, 2023 (the “Special Meeting"), in proportion to the votes cast at the Special Meeting. Each share of Special Voting Stock is entitled to At the Special Meeting, stockholders will be asked to approve the adoption of an amendment to the Company’s certificate of incorporation to effect a reverse split of the Company’s outstanding Common Stock at a ratio in the range of 1 200 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes to the consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements and related notes to the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, the Company evaluates its relationships with other entities to identify whether they are variable interest entities as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810-10, Consolidation and whether the Company is the primary beneficiary. Consolidation is required if both of these criteria are met. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. |
Use of Estimates in Preparation of the Financial Statements | Use of Estimates in Preparation of the Financial Statements Estimates and judgments relied upon in preparing these consolidated financial statements include revenue recognition for multiple element arrangements, allowance for doubtful accounts, income taxes, depreciation, amortization, employee benefits, equity-based compensation, contingencies, goodwill, intangible assets, right of use assets and obligation, pension obligations, pension assets, fair value of assets and liabilities acquired in acquisitions, and asset and liability valuations. The Company regularly assesses these estimates and records changes in estimates in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Reverse Stock Split | Reverse Stock Split On July 25, 2022, we effected a one-for- twenty twenty |
Going Concern | Going Concern In accordance with ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern In performing this evaluation, we concluded that under the standards of ASC 205-40 the following conditions raised substantial doubt about our ability to continue as a going concern: a history of net losses, net operating cash outflows, working capital deficits and significant cash payments for interest on our long-term debt in addition to $9.4 million principal amount of 2023 Notes and $88.3 million principal amount of senior secured term loans (all as defined in Note 5 and after considering events described in Note 21) both of which mature within the next twelve months from the filing date of this report. Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s obligations due before April 3, 2024. As required under ASC 205-40, management’s evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company, such as access to equity financing (despite the Company’s track record in raising nearly $725.6 million of such funds). The Company has undertaken and completed the following plans and actions to improve its available cash balances, liquidity or cash generated from operations, over the twelve month period from the date these financial statements are issued: ● completed the Revolver Exchange (see Note 11); ● paid off its remaining obligations relating to the settlement of the Appraisal Action (see Note 14); ● executed a $150.0 million financing with PNC Bank to replace the existing securitization facility that generated annual interest rate savings of approximately $5.0 million; ● raised proceeds of $347.5 million from the sale of equity and debt during the year ended December 31, 2022; ● obtained $51.0 million of new funding from BRCC, consisting of $35.0 million of junior secured financing, a separate sale of receivables and an increase in availability under a revolving line of credit ● repurchased $13.4 million of senior notes due 2023 subsequent to December 31, 2022; and ● identified and in the process of executing on estimated cost savings in the range of $65 - $75 million for fiscal year 2023 Despite these actions, the Company will need to take further action to raise additional funds in the capital markets. In order to access the capital markets, the Company filed registration statements providing for the sale of common stock, preferred stock, warrants, debt securities and/or units. Based on our knowledge of the Company and the financial market, we believe that we will be able to raise additional funds from the sale of equity and debt in the future. However, the Company’s ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry and considering these factors are outside of the Company’s control, substantial doubt about the Company’s ability to continue as a going concern exists under the standards of ASC 205-40. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. |
Network Outage | Network Outage In late June 2022, the Company experienced a network security incident impacting certain of the Company’s operational and information technology systems. The Company immediately took steps to isolate the impact and prevent additional systems from being affected, including taking large parts of its network offline as a precaution and thereby disrupting some access to our applications and services by our employees and customers. Promptly upon our detection of this incident, we initiated response and containment protocols and our security teams, supplemented by leading cyber forensic and defense firms, worked to remediate this incident. We notified law enforcement, contacted our customers to apprise them of the situation, and provided and will provide any notices that may be required by applicable law. We maintain a variety of insurance policies, including cyber insurance and business interruption insurance that have and may continue to partially off-set the costs related to this incident. We undertook extensive efforts to identify, contain and recover from this incident quickly and securely. We systematically brought our information systems back online in a controlled, phased approach. Our teams worked to maintain our business operations and minimize the impact on our customers, operating partners, and employees. The Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, however, the incident did result in some loss of revenue as well as certain incremental costs. During the year ended December 31, 2022, expenses associated with this incident including remediation cost and various third party consulting services including forensic experts, legal counsel and other IT professional expenses, all of which are included in other expense, net in the consolidated statements of operations, totaled $3.7 million, net of insurance recoveries of $6.2 million. In addition, we reduced our revenue for the net settlement amount of claims paid to customer by less than $0.1 million, net of insurance recovery of $0.2 million for the year ended December 31, 2022. We have reduced our revenue by the estimated settlement amount of $5.1 million representing the incident-related customer claims which are not settled as of December 31, 2022. The Company has not recorded a corresponding receivable for expected insurance that may be recovered for these customer claims. Amounts that may be payable to customers to settle customer claims are recorded as customer payables in accrued liabilities on our consolidated balance sheet. Due to insurance recoverability of these customer claims and expenses, we do not believe the cyber-attack will have a significant impact on our consolidated financial statements. We expect to incur additional costs related to the incident, but these are not expected to be significant. The Company is also seeking to recover a portion, if not all, of any profit impact including the profit associated with any loss of revenue resulting from this event. The Company will record insurance recovery when it is probable of collection. To date, no litigation has resulted from the data incident. |
Segment Reporting | Segment Reporting The Company consists of the following three segments: 1. Information & Transaction Processing Solutions (“ITPS”). 2. Healthcare Solutions (“HS”). 3. Legal and Loss Prevention Services (“LLPS”). |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash deposited with financial institutions and liquid investments with original maturity dates equal to or less than three months. All bank deposits and money market accounts are considered cash and cash equivalents. The Company holds cash and cash equivalents at major financial institutions, which often exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to bank depository concentration. Certificates of deposit and fixed deposits whose original maturity is greater than three months and one year or less are classified as short-term investments, and certificates of deposit and fixed deposits whose maturity is greater than one year at the balance sheet date are classified as non-current assets in the consolidated balance sheets. The purchase of any certificates of deposit or fixed deposits that are classified as short-term investments or non-current assets appear in the investing section of the consolidated statements of cash flows. |
Restricted Cash | Restricted Cash Restricted cash is the carrying amount of cash and cash equivalents which are restricted under contract or otherwise as to withdrawal or usage. These include deposits held as compensating balances against obligation for claim payment or under agreements entered into with others, but exclude compensating balance arrangements that do not legally restrict the use of cash amounts shown on the balance sheet. |
Obligation for Claim Payment | Obligation for Claim Payment As part of the Company’s legal claims processing service, the Company holds cash for various settlement funds. Some of the cash is used to pay tax obligations and other liabilities of the settlement funds. The Company has recorded a liability for the settlement funds received, which is included in obligation for claim payment in the consolidated balance sheets, of $44.4 million and $46.9 million at December 31, 2022 and 2021, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at the original invoice amount less an estimate made for doubtful accounts. Revenue that has been earned but remains unbilled at the end of the period is recorded as a component of accounts receivable, net. The Company specifically analyzes accounts receivable and historical bad debts, customer credit-worthiness, current economic trends, and changes in customer payment terms and collection trends when evaluating the adequacy of its allowance for doubtful accounts. The Company writes off accounts receivable balances against the allowance for doubtful accounts, net of any amounts recorded in deferred revenue, when it becomes probable that the receivable will not be collected. |
Inventories | Inventories Our inventories primarily include heavy-duty scanners and related parts, toner, paper stock, envelopes and postage supplies. Inventories are stated at the lower of cost or net realizable values and include the cost of raw materials, labor, and purchased subassemblies. Cost is determined using the weighted average method. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method (which approximates the use of the assets) over the estimated useful lives of the assets. When these assets are sold or otherwise disposed of, the asset and related depreciation is relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal. Leasehold improvements are amortized over the lease term or the useful life of the asset, whichever is shorter. Repair and maintenance costs are expensed as incurred. |
Intangible Assets | Intangible Assets Customer Relationships Customer relationship intangible assets represent customer contracts and relationships obtained as part of acquired businesses. Customer relationship values are estimated by evaluating various factors including historical attrition rates, contractual provisions and customer growth rates, among others. The estimated average useful lives of customer relationships range from 4 Trade Names The Company has determined that its trade name intangible assets are indefinite-lived assets and therefore are not subject to amortization. Trade names are tested for impairment as per the Company’s policy for impairment of indefinite-lived assets. Trademarks The Company has determined that its trademark intangible assets resulting from acquisitions are definite-lived assets and therefore are subject to amortization. The Company amortizes such trademarks on a straight-line basis over the estimated useful life, which is typically one year. As of December 31, 2022 these trademarks were fully amortized. Developed Technology The Company has acquired various developed technologies embedded in its technology platform. Developed technology is an integral asset to the Company in providing solutions to customers and is recorded as an intangible asset. The Company amortizes developed technology on a straight-line basis over the estimated useful life, which is typically 5 Capitalized Software Costs The Company capitalizes certain costs incurred to develop software products to be sold, leased or otherwise marketed after establishing technological feasibility in accordance with ASC section 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed Intangibles—Goodwill and Other— Internal-Use Software 3 Outsourced Contract Costs Costs of outsourcing contracts, including costs incurred for bid and proposal activities, are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract are deferred and expensed on a straight-line basis over the estimated contract term. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment activities and can be separated into two principal categories: contract commissions and set-up/fulfillment costs. Contract fulfillment costs are capitalized only if they are directly attributable to a specifically anticipated future contract; represent the enhancement of resources that will be used in satisfying a future performance obligation (the services under the anticipated contract); and are expected to be recovered. Non-compete Agreements The Company acquired certain non-compete agreements in connection with the Novitex Business Combination. These were related to four Novitex executives that were terminated following the acquisition. As of December 31, 2022 these agreements were fully amortized. Assembled Workforce The Company acquired an assembled workforce in an asset purchase transaction in the fourth quarter of 2018. The Company recognized an intangible asset for the acquired assembled workforce and fully amortized the asset on a straight-line basis over the estimated useful life of four years |
Impairment of Indefinite-Lived Assets | Impairment of Indefinite-Lived Assets The Company conducts its annual indefinite-lived assets impairment tests on October 1 st Refer to Note 9- Intangible Assets and Goodwill for additional discussion of impairment of trade names. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, including finite-lived trade names, trademarks, customer relationships, developed technology, capitalized software costs, outsourced contract costs, acquired software, workforce, and property, plant and equipment, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows based in part on the financial results and the expectation of future performance. The Company did not record any material impairment related to its property, plant, and equipment, customer relationships, trademarks, developed technology, capitalized software cost, assembled workforce or outsourced contract costs for the years ended December 31, 2022, 2021, and 2020. |
Goodwill | Goodwill Goodwill represents the excess purchase price over tangible and intangible assets acquired less liabilities assumed arising from business combinations. Goodwill is generally allocated to reporting units based upon relative fair value (taking into consideration other factors such as synergies) when an acquired business is integrated into multiple reporting units. The Company’s reporting units are at the operating segment level, for which discrete financial information is prepared and regularly reviewed by management. When a business within a reporting unit is disposed of, goodwill is allocated to the disposed business using the relative fair value method. The Company conducts its annual goodwill impairment tests on October 1st of each year, or more frequently if indicators of impairment exist. When performing the annual impairment test, the Company has the option of performing a qualitative or quantitative assessment to determine if an impairment has occurred. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would be required to perform a quantitative impairment analysis for goodwill. The quantitative analysis requires a comparison of fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company uses a combination of the Guideline Public Company Method of the Market Approach and the Discounted Cash Flow Method of the Income Approach to determine the reporting unit fair value. Refer to Note 9- Intangible Assets and Goodwill |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As required by ASC 815— Derivatives and Hedging The Company’s objective in using interest rate derivatives was to manage its exposure to variable interest rates related to its term loans under the Credit Agreement. In order to accomplish this objective, in November 2017, the Company entered into a three year, one-month LIBOR interest rate contract with a notional amount of $347.8 million, which at the time was the remaining principal balance of such term loans. The swap contract swapped out the floating rate interest risk related to the LIBOR with a fixed interest rate of 1.9275% paid semi-annually starting January 12, 2018. There are no open swap positions as of December 31, 2022 and 2021 as the existing interest rate swap contract expired in January 2021. The interest rate swap, which was used to manage the Company’s exposure to interest rate movements and other identified risks, was not designated as a hedge. As such, the change in the fair value of the derivative was recorded directly in other income (expense), net. Other income (expense), net includes a gain of $0.1 million and $0.4 million related to the change in fair value of the interest rate swap for the years ended December 31, 2021 and 2020, respectively. The fair value of the interest rate swap was recorded in the accrued liabilities on the consolidated balance sheet. |
Benefit Plan Accruals | Benefit Plan Accruals The Company has defined benefit plans in the U.K and Germany, under which participants earn a retirement benefit based upon a formula set forth in the respective plans. The Company records annual amounts relating to its pension plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, and compensation increases. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. |
Leases | Leases The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s consolidated balance sheet. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and finance lease liabilities, net of current portion in the Company’s consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date, and exclude lease incentives. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are not recorded on the balance sheet. Finance lease ROU assets are amortized over the lease term or the useful life of the asset, whichever is shorter. The amortization of finance lease ROU assets is recorded in depreciation expense in the consolidated statements of operations. For operating leases, we recognize expense for lease payments on a straight-line basis over the lease term. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for all equity-classified awards under stock-based compensation plans at their “fair value”. This fair value is measured at the fair value of the awards at the grant date and recognized as compensation expense on a straight-line basis over the vesting period. The fair value of the awards on the grant date is determined using the stock price on the respective grant date in the case of restricted stock units and using an option pricing model in the case of stock options. The expense resulting from share-based payments is recorded in selling, general and administrative expense in the accompanying consolidated statements of operations. |
Revenue Recognition | Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers of our segments. We do not have any significant extended payment terms, as payment is received shortly after goods are delivered or services are provided. Nature of Services Our primary performance obligations are to stand ready to provide various forms of business processing services, consisting of a series of distinct services that are substantially the same and have the same pattern of transfer over time, and accordingly are combined into a single performance obligation. Our promise to our customers is typically to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of transactions processed, requests fulfilled, etc.); as such, the total transaction price is variable. We allocate the variable fees to the single performance obligation charged to the distinct service period in which we have the contractual right to bill under the contract. Disaggregation of Revenues The following tables disaggregate revenue from contracts by geographic region and by segment for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 ITPS HS LLPS Total ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 566,621 $ 239,270 $ 72,753 $ 878,644 $ 649,505 $ 217,839 $ 74,641 $ 941,985 $ 769,487 $ 219,047 $ 68,472 $ 1,057,006 EMEA 180,502 — — 180,502 205,772 — — 205,772 213,418 — — 213,418 Other 18,011 — — 18,011 18,849 — — 18,849 22,138 — — 22,138 Total $ 765,134 $ 239,270 $ 72,753 $ 1,077,157 $ 874,126 $ 217,839 $ 74,641 $ 1,166,606 $ 1,005,043 $ 219,047 $ 68,472 $ 1,292,562 Contract Balances The following table presents contract assets, contract liabilities and contract costs recognized at December 31, 2022 and 2021: December 31, December 31, 2022 2021 Accounts receivable, net $ 101,616 $ 184,102 Deferred revenues 17,585 17,518 Customer deposits 16,955 17,707 Costs to obtain and fulfill a contract 1,674 2,328 Accounts receivable, net includes $25.7 million and $22.6 million as of December 31, 2022 and 2021, respectively, representing amounts not billed to customers. We have accrued the unbilled receivables for work performed in accordance with the terms of contracts with customers. Deferred revenues relate to payments received in advance of performance under a contract. A significant portion of this balance relates to maintenance contracts or other service contracts where we received payments for upfront conversions or implementation activities which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term. We recognized revenue of $16.5 million during the year ended December 31, 2022 that had been deferred as of December 31, 2021. Costs incurred to obtain and fulfill contracts are deferred and presented as part of intangible assets, net and expensed on a straight-line basis over the estimated benefit period. We recognized $1.1 million, $1.5 million and $2.4 million of amortization for these costs in 2022, 2021 and 2020, respectively, within depreciation and amortization expense. These costs represent incremental external costs or certain specific internal costs that are directly related to the contract acquisition or fulfillment and can be separated into two principal categories: contract commissions and fulfillment costs. Applying the practical expedient in ASC 340-40-25-4, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. These costs are included in Selling, general and administrative expenses. The effect of applying this practical expedient was not material. Customer deposits consist primarily of amounts received from customers in advance for postage. These advanced postage deposits are used to cover the costs associated with postage, with the corresponding postage revenue being recognized as services are performed. Performance Obligations At the inception of each contract, we assess the goods and services promised in our contracts and identify each distinct performance obligation. The majority of our contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts. For the majority of our business and transaction processing service contracts, revenues are recognized as services are provided based on an appropriate input or output method, typically based on the related labor or transactional volumes. Certain of our contracts have multiple performance obligations, including contracts that combine software implementation services with post-implementation customer support. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected cost plus a margin approach, under which we estimate our expected costs of satisfying a performance obligation and add an appropriate margin for that distinct good or service. We also use the adjusted market approach whereby we estimate the price that customers in the market would be willing to pay. In assessing whether to allocate variable consideration to a specific part of the contract, we consider the nature of the variable payment and whether it relates specifically to its efforts to satisfy a specific part of the contract. Certain of our software implementation performance obligations are satisfied at a point in time, typically when customer acceptance is obtained. When evaluating the transaction price, we analyze, on a contract-by-contract basis, all applicable variable consideration. The nature of our contracts gives rise to variable consideration, including volume discounts, contract penalties, and other similar items that generally decrease the transaction price. We estimate these amounts based on the expected amount to be provided to customers and reduce revenues recognized. We do not anticipate significant changes to our estimates of variable consideration. We include reimbursements from customers, such as postage costs, in revenue, while the related costs are included in cost of revenue. Transaction Price Allocated to the Remaining Performance Obligations In accordance with optional exemptions available under ASC 606, we did not disclose the value of unsatisfied performance obligations for (a) contracts with an original expected length of one year or less, and (b) contracts for which variable consideration relates entirely to an unsatisfied performance obligation, which comprise the majority of our contracts. We have certain non-cancellable contracts where we receive a fixed monthly fee in exchange for a series of distinct services that are substantially the same and have the same pattern of transfer over time, with the corresponding remaining performance obligations as of December 31, 2022 in each of the future periods below: Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations 2023 $ 37,816 2024 30,384 2025 25,738 2026 1,346 2027 512 2028 and thereafter — Total $ 95,796 |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs expensed for the years ended December 31, 2022, 2021, and 2020 were $1.5 million, $1.3 million, and $1.1 million, respectively. |
Advertising | Advertising Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2022, 2021, and 2020, were $0.5 million, $0.4 million, and $0.7 million, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes by using the asset and liability method. The Company accounts for income taxes regarding uncertain tax positions and recognized interest and penalties related to uncertain tax positions in income tax benefit/(expense) in the consolidated statements of operations. Deferred income taxes are recognized on the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as determined under tax laws and rates. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized. Due to numerous ownership changes, the Company is subject to limitations on existing net operating losses under Section 382 of the Internal Revenue Code (the “Code”). Accordingly, valuation allowances have been established against a portion of the net operating losses to reflect estimated Section 382 limitations. The Company also considered the realizability of net operating losses not limited by Section 382. The Company did not consider future book income as a source of taxable income when assessing if a portion of the deferred tax assets are more likely than not to be realized. However, scheduling the reversal of existing deferred tax liabilities indicated that a portion of the deferred tax assets are likely to be realized. Therefore, partial valuation allowances were established against a portion of the Company’s deferred tax assets. In the event the Company determines that it would be able to realize deferred tax assets that have valuation allowances established, an adjustment to the net deferred tax assets would be recognized as a component of income tax expense through continuing operations. The Company engages in transactions (i.e. acquisitions) in which the tax consequences may be subject to uncertainty and examination by the varying taxing authorities. Therefore, judgment is required by the Company in assessing and estimating the tax consequences of these transactions. While the Company’s tax returns are prepared and based on the Company’s interpretation of tax laws and regulations, in the normal course of business the tax returns are subject to examination by the various taxing authorities. Such examinations may result in future assessments of additional tax, interest and penalties. For purposes of the Company’s income tax provision, a tax benefit is not recognized if the tax position is not more likely than not to be sustained based solely on its technical merits. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. Refer to Note 12 – Income Taxes |
Loss Contingencies | Loss Contingencies The Company reviews the status of each significant matter, if any, and assesses its potential financial exposure considering all available information including, but not limited to, the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information and events pertaining to a particular matter. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to loss contingencies, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to its pending claims and litigation, and may revise its estimates. These revisions in the estimates of the potential liabilities could have a material impact on the results of operations and financial position of the Company. The Company’s liabilities exclude any estimates for legal costs not yet incurred associated with handling these matters. |
Operations | Operations A portion of the Company’s labor and operations is situated outside of the United States in India and other locations. The carrying value of long-lived assets that are situated outside of the United States is approximately $29.6 million and $26.8 million as of December 31, 2022 and 2021, respectively. |
Foreign Currency Translation | Foreign Currency Translation The functional currency for the Company’s production operations located in India, Philippines, China, and Mexico is the United States dollar. Included in other expense as sundry expense (income), net in the consolidated statements of operations are net exchange gain of $1.3 million, net exchange loss of $0.2 million and net exchange gain of $0.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company has determined all other international subsidiaries’ functional currency is the local currency. These assets and liabilities are translated at exchange rates in effect at the balance sheet date while income and expense amounts are translated at average exchange rates during the period. The resulting foreign currency translation adjustments are disclosed as a separate component of other comprehensive loss. |
Beneficial Conversion Feature | Beneficial Conversion Feature The Company’s Series A Perpetual Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) contains a beneficial conversion feature, which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock at the commitment date. The Company recognized the beneficial conversion feature by allocating the intrinsic value of the conversion option, which is the number of shares of Common Stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of Common Stock per share on the commitment date, to additional paid-in capital, resulting in a discount on the Series A Preferred Stock. As a result of the occurrence of events meeting the definition of a “Fundamental Change” as defined in the Certificate of Designations, Preferences, Rights and Limitations of Series A Perpetual Convertible Preferred Stock of the Company during the period, the Company recognized the entire dividend equivalent of $16.4 million as of December 31, 2017. There was no dividend equivalent recognized in 2020, 2021 and 2022. |
Net Loss per Share | Net Loss per Share Earnings per share (“EPS”) is computed by dividing net loss available to holders of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share (“Common Stock”) by the weighted average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method and if-converted method in periods of earnings. The two class method is an earnings allocation method that determines earnings per share (when there are earnings) for Common Stock and participating securities. The if-converted method assumes all convertible securities are converted into Common Stock. Diluted EPS excludes all dilutive potential shares of Common Stock if their effect is anti-dilutive. As the Company experienced net losses for the periods presented, the impact of the Company’s Series A Perpetual Convertible Preferred Stock (“Series A Preferred Stock”) and Series B Cumulative Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”), was calculated using the if-converted method. As of December 31, 2022, the outstanding shares of the Company’s Series A Preferred Stock and Series B Preferred Stock, if converted would have resulted in an additional 73,058 shares and 3,075,349 shares of Common Stock outstanding, respectively, however, they were not included in the computation of diluted loss per share as their effects were anti-dilutive (i.e., if included, would reduce the net loss per share). Similarly, the Company also did not include the effect of 486,591 shares of Common Stock issuable upon exercise of 9,731,819 warrants sold in a private placement of securities on March 18, 2021 or the effect of the aggregate number of shares issuable pursuant to outstanding restricted stock units, performance units and options (496,899, 565,715 and 83,108 as of December 31, 2022, 2021 and 2020, respectively) in the calculation of diluted loss per share for the years ended December 31, 2022, 2021 and 2020, because their effects were anti-dilutive. The components of basic and diluted EPS are as follows. All shares and per share amounts for the years 2021 and 2020 have been adjusted for a one Year Ended December 31, 2022 2021 2020 Net loss attributable to common stockholders (A) $ (422,834) $ (143,966) $ (179,839) Weighted average common shares outstanding – basic and diluted (B) 61,593,381 5,900,058 2,457,221 Loss Per Share: Basic and diluted (A/B) $ (6.86) $ (24.40) $ (73.19) |
Business Combinations | Business Combinations The Company includes the results of operations of the businesses acquired as of the respective dates of acquisition. The Company allocates the fair value of the purchase price of acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. |
Fair Value Measurements | Fair Value Measurements The Company records the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 — unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value. Refer to Note 15 — Fair Value Measurement |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and trade receivables. The Company maintains its cash and cash equivalents and certain other financial instruments with highly rated financial institutions and limits the amount of credit exposure with any one financial institution. From time to time, the Company assesses the credit worthiness of its customers. Credit risk on trade receivables is minimized because of the large number of entities comprising the Company’s client base and their dispersion across many industries and geographic areas. The Company generally has not experienced any material losses related to receivables from any individual customer or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable, net. The Company does not have any significant customers that account for 10% or more of the total consolidated revenues. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) no. 2021-05, Leases (Topic 842): Lessors — Certain Leases with Variable Lease Payments Effective January 1, 2022, the Company adopted ASU no. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force) Effective January 1, 2022, the Company adopted ASU no. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU no. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued ASU no. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Financial Instruments—Credit Losses (Topic 326) Codification Improvements to Topic 326, Financial Instruments—Credit Losses |
COVID 19 | |
Impact of COVID-19 | Impact of COVID-19 The COVID-19 pandemic remains a threat and certain countries, such as China and Japan, are still subject to restrictions related to COVID-19. While the threat level has declined to a significant extent in the U.S. and globally, any resurgence could have a material adverse effect on our business operations, results of operations, cash flows and financial position. We continue to see impacts of global supply chain challenges, availability of staff at some of our key operating centers and pending customers’ decision to resume work from office. However, all of our production-related facilities remain operational and are continuing to provide ongoing services to our customers. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of disaggregated revenue from contracts by geographic region and by segment | Year Ended December 31, 2022 2021 2020 ITPS HS LLPS Total ITPS HS LLPS Total ITPS HS LLPS Total U.S.A. $ 566,621 $ 239,270 $ 72,753 $ 878,644 $ 649,505 $ 217,839 $ 74,641 $ 941,985 $ 769,487 $ 219,047 $ 68,472 $ 1,057,006 EMEA 180,502 — — 180,502 205,772 — — 205,772 213,418 — — 213,418 Other 18,011 — — 18,011 18,849 — — 18,849 22,138 — — 22,138 Total $ 765,134 $ 239,270 $ 72,753 $ 1,077,157 $ 874,126 $ 217,839 $ 74,641 $ 1,166,606 $ 1,005,043 $ 219,047 $ 68,472 $ 1,292,562 |
Schedule of contract balances | December 31, December 31, 2022 2021 Accounts receivable, net $ 101,616 $ 184,102 Deferred revenues 17,585 17,518 Customer deposits 16,955 17,707 Costs to obtain and fulfill a contract 1,674 2,328 |
Schedule of estimated remaining fixed consideration for unsatisfied performance obligations | Estimated Remaining Fixed Consideration for Unsatisfied Performance Obligations 2023 $ 37,816 2024 30,384 2025 25,738 2026 1,346 2027 512 2028 and thereafter — Total $ 95,796 |
Schedule of components of basic and diluted EPS | Year Ended December 31, 2022 2021 2020 Net loss attributable to common stockholders (A) $ (422,834) $ (143,966) $ (179,839) Weighted average common shares outstanding – basic and diluted (B) 61,593,381 5,900,058 2,457,221 Loss Per Share: Basic and diluted (A/B) $ (6.86) $ (24.40) $ (73.19) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Schedule of inventories | December 31, 2022 2021 Work in process $ 1,178 $ 973 Finished goods 10,804 11,480 Supplies and parts 8,991 7,028 Less: Allowance for obsolescence (4,125) (4,266) 16,848 15,215 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable. | |
Schedule of accounts receivable, net | December 31, 2022 2021 Billed receivables $ 72,852 $ 160,407 Unbilled receivables 25,741 22,570 Other 9,425 7,174 Less: Allowance for doubtful accounts (6,402) (6,049) $ 101,616 $ 184,102 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | December 31, 2022 2021 Prepaids $ 23,347 $ 22,880 Deposits 2,859 8,919 $ 26,206 $ 31,799 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of balance sheet location | December 31, December 31, 2022 2021 Balance sheet location: Operating Lease Operating lease right-of-use assets, net $ 40,734 $ 53,937 Current portion of operating lease liabilities 11,867 15,923 Operating lease liabilities, net of current portion 31,030 41,170 Finance Lease Finance lease right-of-use assets, net (included in property, plant and equipment, net) 11,943 8,918 Current portion of finance lease liabilities 5,485 6,683 Finance lease liabilities, net of current portion 9,448 9,156 Supplemental balance sheet information related to leases is as follows: December 31, December 31, 2022 2021 Weighted-average remaining lease term Operating leases 4.2 Years 4.3 Years Finance leases 3.6 Years 2.4 Years Weighted-average discount rate Operating leases 13.9% 13.1% Finance leases 13.4% 12.4% |
Schedule of maturities of operating lease liabilities | Finance Operating Leases Leases 2023 $ 6,774 $ 16,823 2024 5,166 13,343 2025 3,719 9,101 2026 1,034 7,381 2027 795 5,684 2028 and thereafter 1,642 4,767 Total lease payments 19,130 57,099 Less: Imputed interest (4,197) (14,202) Present value of lease liabilities $ 14,933 $ 42,897 |
Schedule of maturities of finance lease liabilities | Finance Operating Leases Leases 2023 $ 6,774 $ 16,823 2024 5,166 13,343 2025 3,719 9,101 2026 1,034 7,381 2027 795 5,684 2028 and thereafter 1,642 4,767 Total lease payments 19,130 57,099 Less: Imputed interest (4,197) (14,202) Present value of lease liabilities $ 14,933 $ 42,897 |
Schedule of cash paid and lease recognition | Year Ended Year Ended December 31, 2022 December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 21,560 $ 25,950 Financing cash flows from finance leases 5,523 11,471 Right-of-use lease assets obtained in the exchange for lease liabilities: Operating leases 6,940 6,507 Finance leases 4,790 3,270 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment, Net | |
Schedule of property, plant, and equipment, which include assets recorded under finance leases, are stated at cost less accumulated depreciation and amortization | Estimated Useful Lives December 31, (in Years) 2022 2021 Land N/A $ 6,687 $ 6,688 Buildings and improvements 7 – 40 24,307 20,268 Leasehold improvements Shorter of life of improvement or lease term 37,383 36,289 Vehicles 5 – 7 289 311 Machinery and equipment 5 – 15 26,820 26,346 Computer equipment and software 3 – 8 108,898 102,746 Furniture and fixtures 5 – 15 8,574 8,478 Finance lease right-of-use assets Shorter of life of the asset or lease term 66,256 69,006 279,214 270,132 Less: Accumulated depreciation and amortization (207,520) (196,683) Property, plant and equipment, net $ 71,694 $ 73,449 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets and Goodwill | |
Schedule of intangible assets | Weighted Average December 31, 2022 Remaining Useful Life Gross Carrying Accumulated Intangible (in Years) Amount (a) Amortization Asset, net Customer relationships 9.0 $ 507,723 $ (351,240) $ 156,483 Developed technology 2.1 88,553 (88,000) 553 Patent 1.2 15 (6) 9 Trade names (b) Indefinite-lived 8,400 (3,100) 5,300 Outsource contract costs 3.0 17,184 (15,509) 1,675 Internally developed software 2.9 52,441 (35,095) 17,346 Purchased software 11.0 26,749 (7,133) 19,616 Intangibles, net $ 701,065 $ (500,083) $ 200,982 Weighted Average December 31, 2021 Remaining Useful Life Gross Carrying Accumulated Intangible (in Years) Amount (a) Amortization Asset, net Customer relationships 9.5 $ 508,241 $ (316,084) $ 192,157 Developed technology 2.8 88,553 (87,612) 941 Trade names (b) Indefinite-lived 8,400 (3,100) 5,300 Outsource contract costs 3.6 16,814 (14,486) 2,328 Internally developed software 3.2 49,108 (27,812) 21,296 Assembled workforce 1.0 4,473 (3,355) 1,118 Purchased software 12.0 26,749 (5,350) 21,399 Intangibles, net $ 702,338 $ (457,799) $ 244,539 (a) Amounts include intangibles acquired in business combinations and asset acquisitions . (b) The carrying amount of trade names for 2022 and 2021 is net of accumulated impairment losses of $44.1 million. Carrying amount of $5.3 million as at December 31, 2022 represents indefinite-lived intangible asset. |
Schedule of estimated intangibles amortization expense | Estimated Amortization Expense 2023 $ 39,717 2024 32,004 2025 24,401 2026 20,076 2027 16,885 Thereafter 62,363 $ 195,446 |
Schedule of goodwill by reporting segment | Balances as at January 1, 2021 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2021 (a) ITPS $ 254,130 $ — $ (825) $ — $ (633) $ 252,672 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 359,781 $ — $ (825) $ — $ (633) $ 358,323 Balances as at January 1, 2022 (a) Additions Deletions Impairments Currency Translation Adjustments Balances as at December 31, 2022 (a) ITPS $ 252,672 $ — $ — $ (171,182) $ (339) $ 81,151 HS 86,786 — — — — 86,786 LLPS 18,865 — — — — 18,865 Total $ 358,323 $ — $ — $ (171,182) $ (339) $ 186,802 (a) The goodwill amount for all periods presented is net of accumulated impairment amounts. Accumulated impairment relating to ITPS is $487.7 million, $316.5 million and $317.5 million as at December 31, 2022, December 31, 2021 and December 31, 2020, respectively. Accumulated impairment relating to LLPS is $243.4 million as at December 31, 2022, December 31, 2021 and December 31, 2020. |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Other Long-Term Liabilities | |
Schedule of accrued liabilities | December 31, 2022 2021 Accrued taxes (exclusive of income taxes) $ 9,797 $ 9,858 Accrued lease exit obligations — 36 Accrued professional and legal fees 37,366 29,119 Accrued Appraisal Action liability — 63,422 Accrued legal reserve for pending litigation 10,322 8,046 Accrued transaction costs 2,763 2,305 Other accruals 1,092 733 $ 61,340 $ 113,519 |
Schedule of other Long-term liabilities | December 31, 2022 2021 Deferred revenue $ 1,180 $ 901 Accrued lease exit obligations 373 195 Accrued compensation expense 1,021 1,578 Other 3,530 3,325 $ 6,104 $ 5,999 |
Long-Term Debt and Credit Fac_2
Long-Term Debt and Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Credit Facilities | |
Schedule of outstanding long-term debt instruments | December 31, December 31, 2021 2022 (Restated) Other (a) $ 25,117 29,296 Term loan under first lien credit agreement (b) 71,470 89,585 2023 notes (c) 22,762 22,616 2026 notes (d) 908,959 801,306 Secured borrowings under BRCC Facility 68,529 115,000 Secured borrowings under Securitization Facility — 91,947 Revolving Credit Facility — 99,477 Total debt 1,096,837 1,249,227 Less: Current portion of long-term debt (154,802) (236,775) Long-term debt, net of current maturities $ 942,035 $ 1,012,452 (a) Other debt represents outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company. (b) Net of unamortized original issue discount and debt issuance costs of $0.2 million and $0.9 million as of December 31, 2022 and $0.8 million and $2.8 million as of December 31, 2021. (c) Net of unamortized original issue discount and debt issuance costs of $0.1 million and less than $0.1 million as of December 31, 2022 and $0.2 million and $0.1 million as of December 31, 2021. (d) Net of unamortized net original issue discount and debt issuance costs of $58.8 million and $12.1 million as of December 31, 2022; and unamortized net debt exchange premium and carried forward debt issuance costs of $15.4 million and $9.0 million as of December 31, 2021. |
Schedule of maturities of long-term debt | Maturity 2023 $ 156,030 2024 2,940 2025 28,970 2026 980,156 2027 962 Thereafter — Total long-term debt 1,169,058 Less: Unamortized discount and debt issuance costs (72,221) $ 1,096,837 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of income/ (loss) before income taxes | Year Ended December 31, 2022 2021 2020 United States $ (422,135) $ (135,299) $ (158,186) Foreign 10,754 4,565 (6,760) $ (411,381) $ (130,734) $ (164,946) |
Schedule of provision for federal, state, and foreign income taxes | Year Ended December 31, 2022 2021 2020 Federal Current $ — $ — $ — Deferred (1,597) 5 480 State Current 636 1,232 1,325 Deferred (123) 351 1,542 Foreign Current 3,416 3,775 4,318 Deferred 1,867 6,293 5,919 Income Tax Expense $ 4,199 $ 11,656 $ 13,584 |
Schedule of income tax reconciliation | Year Ended December 31, 2022 2021 2020 Tax at statutory rate $ (86,390) $ (27,454) $ (34,639) Add (deduct) State income taxes (8,520) (1,626) (5,234) Foreign income taxes 1,290 1,567 (516) Nondeductible goodwill impairment 34,967 — — Cancellation of debt income 6,429 (6,429) — Permanent differences 1,061 359 218 Litigation settlement — 2 71 Changes in valuation allowance 75,210 11,857 53,115 Unremitted earnings 891 1,072 (275) GILTI Inclusion 639 — (4,996) Expiration and reduction of tax attributes (30,103) 31,014 4,944 Debt related basis differences 10,994 — — Other (2,269) 1,294 896 Income Tax Expense $ 4,199 $ 11,656 $ 13,584 |
Schedule of components of deferred income tax liabilities and assets | Year Ended December 31, 2022 2021 Deferred income tax liabilities: Book over tax basis of intangible assets and fixed assets $ (44,632) $ (55,449) Unremitted foreign earnings (8,154) (7,135) Operating lease and finance lease right-of-use assets (7,883) (9,573) Other, net $ (2,005) $ (1,584) Total deferred income tax liabilities (62,674) (73,741) Deferred income tax assets: Allowance for doubtful accounts and receivable adjustments $ 2,018 $ 1,816 Inventory 3,141 2,362 Accrued liabilities 16,536 12,606 Net operating loss and tax credit carryforwards 156,180 141,946 Tax deductible goodwill 2,534 4,424 Disallowed interest deduction 146,923 106,449 Operating lease and finance lease liabilities 7,981 10,211 Other, net 22,832 18,197 Total deferred income tax assets $ 358,145 $ 298,011 Valuation allowance (305,168) (233,755) Total net deferred income tax assets (liabilities) $ (9,697) $ (9,485) |
Schedule of NOL carryforwards expiry | State and Local Federal NOL NOL 2023 – 2027 $ 154,719 $ 59,917 2028 – 2032 100,776 89,062 2033 – 2041 241,754 228,914 Indefinite 22,186 78,847 $ 519,435 $ 456,740 |
Schedule of reconciliation of the total amounts of unrecognized tax benefits | Year Ended December 31, 2022 2021 2020 Unrecognized tax benefits — January 1 $ 2,077 $ 1,836 $ 4,314 Gross increases—tax positions in prior period — — (21) Gross decreases — (20) (129) (2,608) Gross increases — 106 460 151 Settlement — (90) — Unrecognized tax benefits—December 31 $ 2,163 $ 2,077 $ 1,836 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plans | |
Schedule of change in benefit obligations, fair value of the plan assets and funded status of Company's pension plans and the amounts recognized in the Company's consolidated financial statements | Year ended December, 2022 2021 Change in Benefit Obligation: Benefit obligation at beginning of period $ 117,472 $ 122,011 Service cost 53 68 Interest cost 1,910 1,686 Actuarial gain (44,778) (2,296) Plan amendments 149 (28) Plan curtailment — 98 Benefits paid (1,915) (2,497) Foreign-exchange rate changes (11,159) (1,570) Benefit obligation at end of year $ 61,732 $ 117,472 Change in Plan Assets: Fair value of plan assets at beginning of period $ 89,972 $ 87,215 Actual return on plan assets (36,679) 2,950 Employer contributions 2,866 3,189 Plan participants’ contributions — 16 Benefits paid (1,818) (2,393) Foreign-exchange rate changes (8,647) (1,005) Fair value of plan assets at end of year 45,694 89,972 Funded status at end of year $ (16,038) $ (27,500) Net amount recognized in the Consolidated Balance Sheets: Pension liability, net (a) $ (16,917) $ (28,383) Amounts recognized in accumulated other comprehensive loss, net of tax consist of: Net actuarial loss (3,583) (10,946) Net amount recognized in accumulated other comprehensive loss, net of tax $ (3,583) $ (10,946) Plans with underfunded or non-funded accumulated benefit obligation: Aggregate projected benefit obligation $ 61,732 $ 117,472 Aggregate accumulated benefit obligation $ 61,732 $ 117,472 Aggregate fair value of plan assets $ 45,694 $ 89,972 (a) Consolidated balance of $16.9 million as of December 31, 2022 includes pension liabilities of $13.7 million, $1.7 million, $1.2 million and $(0.6) million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.8 million. Consolidated balance of $28.4 million as of December 31, 2021 includes pension liabilities of $23.0 million, $2.5 million, $2.1 million and less than $0.1 million under U.K., Asterion, German and Norway pension plans, respectively, and minimum regulatory benefit for a Philippines legal entity of $0.7 million. |
Schedule of components of the net periodic benefit cost | Year ended December 31, 2022 2021 2020 Service cost $ 53 $ 68 $ 74 Interest cost 1,910 1,686 1,984 Expected return on plan assets (2,856) (2,410) (2,530) Amortization: Amortization of prior service cost 273 224 150 Amortization of net loss 1,616 3,340 1,739 Settlement loss — — 552 Net periodic benefit cost $ 996 $ 2,908 $ 1,969 |
Schedule of principal assumptions used to determine benefit obligation and net periodic benefit costs | December 31, 2022 2021 2022 2021 2022 2021 2022 2021 UK Germany Norway Asterion Weighted-average assumptions used to determine benefit obligations: Discount rate 5.00 % 1.80 % 3.80 % 1.00 % 3.00 % 1.90 % 3.80 % 1.13 % Rate of compensation increase N/A N/A N/A N/A 3.50 % 2.75 % N/A N/A Weighted-average assumptions used to determine net periodic benefit cost: Discount rate 1.80 % 1.40 % 3.80 % 1.00 % 3.00 % 1.90 % 3.80 % 1.13 % Expected asset return 3.45 % 2.72 % N/A % N/A % 4.15 % 3.10 % 3.80 % 1.13 % Rate of compensation increase N/A N/A N/A N/A 3.50 % 2.75 % N/A N/A |
Schedule of weighted average allocation of plan assets by asset category | December 31, 2022 2021 2020 U.K. and other international equities 27.0 % 32.8 % 31.4 % U.K. government and corporate bonds 5.5 2.5 2.7 Diversified growth fund 18.5 25.7 21.0 Liability driven investments 44.3 34.6 40.6 Multi-asset credit fund 4.7 4.4 4.3 Total 100.0 % 100.0 % 100.0 % |
Schedule of fair value of pension assets | December 31, 2022 Total Level 1 Level 2 Level 3 Asset Category: Cash $ 932 $ 932 $ — $ — Equity funds: U.K. — — — — Other international 11,399 — 11,399 — Fixed income securities: Corporate bonds / U.K. Gilts 2,529 — 2,529 — Other investments: Diversified growth fund 8,417 — 8,417 — Liability driven investments 20,258 — 20,258 — Multi-asset credit fund 2,158 — 2,158 — Total fair value $ 45,693 $ 932 $ 44,761 $ — December 31, 2021 Total Level 1 Level 2 Level 3 Asset Category: Cash $ 149 $ 149 $ — $ — Equity funds: U.K. 17,423 — 17,423 — Other international 11,909 — 11,909 — Fixed income securities: Corporate bonds / U.K. Gilts 2,292 — 2,292 — Other investments: Diversified growth fund 23,122 — 23,122 — Liability driven investments 31,158 — 31,158 — Multi-asset credit fund 3,919 — 3,919 — Total fair value $ 89,972 $ 149 $ 89,823 $ — |
Schedule of estimated future benefit payments | Estimated Benefit Payments Year ended December 31, 2023 $ 1,872 2024 2,067 2025 2,656 2026 2,674 2027 2,978 2028 – 2032 13,615 Total $ 25,862 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurement | |
Schedule of fair value of financial instruments | Carrying Fair Fair Value Measurements As of December 31, 2022 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 942,035 $ 184,968 $ — $ 184,968 $ — Current portion of long-term debts 154,802 121,893 — 121,893 — Nonrecurring assets and liabilities: Goodwill 186,802 186,802 — — 186,802 Carrying Fair Fair Value Measurements As of December 31, 2021 Amount Value Level 1 Level 2 Level 3 Recurring assets and liabilities: Long-term debt $ 1,012,452 $ 803,668 $ — $ 803,668 $ — Nonrecurring assets and liabilities: Goodwill 358,323 358,323 — — 358,323 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Summary of the status of restricted stock units | Average Weighted Remaining Number Average Grant Contractual Life Aggregate of Units Date Fair Value (Years) Intrinsic Value Outstanding Balance as of December 31, 2021 68,450 $ 34.95 0.11 $ 2,393 Granted — — Forfeited — — Vested (66,935) 35.00 Outstanding Balance as of December 31, 2022 1,515 $ 33.00 0.41 $ 50 |
Schedule of stock option activity | Average Weighted Weighted Remaining Average Grant Average Vesting Period Aggregate Outstanding Date Fair Value Exercise Price (Years) Intrinsic Value (2) Outstanding Balance as of December 31, 2021 72,265 $ 112.60 $ 235.69 0.69 $ — Granted — — Exercised — — Forfeited (1,881) 106.16 Expired — — Outstanding Balance as of December 31, 2022 (1) 70,384 $ 112.77 $ 235.59 0.20 $ — (1) 52,158 of the outstanding options are exercisable as of December 31, 2022. (2) Exercise prices of all of the outstanding options as of December 31, 2022 were higher than the market price of the shares of the Company. Therefore, aggregate intrinsic value was zero. |
Summary of activity for the market performances of RSU | Weighted Average Weighted Period Over Number Average Which Expected of Units Fair Value to be Recognized Outstanding Balance as of December 31, 2021 425,000 $ 9.10 2.98 Granted — — Forfeited — — Vested — — Outstanding Balance as of December 31, 2022 425,000 $ 9.10 2.98 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Schedule of sales of shares of Common Stock | Supplement Period Number of Shares Sold Weighted Average Price Per Share Gross Proceeds Net Proceeds Prospectus supplement dated May 27, 2021 with an aggregate offering price of up to $100.0 million (“Common ATM Program–1”) May 28, 2021 through July 1, 2021 2,471,185 $40.164 $99.3 million $95.7 million Prospectus supplement dated June 30, 2021 with an aggregate offering price of up to $150.0 million (“Common ATM Program–2”) June 30, 2021 through September 2, 2021 2,879,023 $52.069 $149.9 million $144.4 million Prospectus supplement dated September 30, 2021 with an aggregate offering price of up to $250.0 million (“Common ATM Program–3”) October 6, 2021 through March 31, 2022 16,743,797 $14.931 $250.0 million $241.0 million Prospectus supplement dated May 23, 2022 with an aggregate offering price of up to $250.0 million (“Common ATM Program–4”) May 24, 2022 through December 31, 2022 256,887,619 $0.612 $157.1 million $152.3 million |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related-Party Transactions | |
Schedule of payable and receivable balances with affiliates | December 31, 2022 December 31, 2021 Receivables and Prepaid Expenses Payables Receivables and Prepaid Expenses Payables HOV Services, Ltd $ 412 $ — $ 708 $ — Rule 14 — 2,473 — 1,483 HGM 347 — 7 — Oakana — — — 1 $ 759 $ 2,473 $ 715 $ 1,484 |
Segment and Geographic Area I_2
Segment and Geographic Area Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment and Geographic Area Information | |
Schedule of reconciliation of segment profit to net loss before income taxes by segment information | Year ended December 31, 2022 ITPS HS LLPS Total Revenue $ 765,134 $ 239,270 $ 72,753 $ 1,077,157 Cost of revenue (exclusive of depreciation and amortization) 633,673 190,835 52,966 877,474 Segment profit 131,461 48,435 19,787 199,683 Selling, general and administrative expenses (exclusive of depreciation and amortization) 176,524 Depreciation and amortization 71,831 Impairment of goodwill and other intangible assets 171,182 Related party expense 8,923 Interest expense, net 164,870 Debt modification and extinguishment costs (gain), net 4,522 Sundry income, net (957) Other expense, net 14,170 Net loss before income taxes $ (411,382) Year ended December 31, 2021 ITPS HS LLPS Total Revenue $ 874,126 $ 217,839 $ 74,641 $ 1,166,606 Cost of revenue (exclusive of depreciation and amortization) 672,191 163,445 53,459 889,095 Segment profit 201,935 54,394 21,182 277,511 Selling, general and administrative expenses (exclusive of depreciation and amortization) 169,781 Depreciation and amortization 77,150 Impairment of goodwill and other intangible assets — Related party expense 9,191 Interest expense, net 168,048 Debt modification and extinguishment costs (gain), net (16,689) Sundry income, net 363 Other expense, net 401 Net loss before income taxes $ (130,734) Year ended December 31, 2020 ITPS HS LLPS Total Revenue $ 1,005,043 $ 219,047 $ 68,472 $ 1,292,562 Cost of revenue (exclusive of depreciation and amortization) 815,013 159,917 48,614 1,023,544 Segment profit 190,030 59,130 19,858 269,018 Selling, general and administrative expenses (exclusive of depreciation and amortization) 186,104 Depreciation and amortization 93,953 Impairment of goodwill and other intangible assets — Related party expense 5,381 Interest expense, net 173,878 Debt modification and extinguishment costs (gain), net 9,589 Sundry expense, net (153) Other expense, net (34,788) Net loss before income taxes $ (164,946) |
Schedule of revenues by principal geographic area | Years ended December 31, 2022 2021 2020 United States $ 878,644 $ 941,985 $ 1,057,006 EMEA 180,502 205,772 213,418 Other 18,011 18,849 22,138 Total Consolidated Revenue $ 1,077,157 $ 1,166,606 $ 1,292,562 |
Selected Quarterly Financial _2
Selected Quarterly Financial Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Selected Quarterly Financial Results (Unaudited) | |
Schedule of selected quarterly financial information | The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2022 and 2021 (dollars in thousands, except per share data): Q1 2022 Q2 2022 Q3 2022 Q4 2022 Revenue: ITPS $ 205,007 $ 190,005 $ 185,309 $ 184,813 HS 56,596 56,390 60,955 65,329 LLPS 17,795 20,375 17,774 16,809 Total Revenue 279,398 266,770 264,038 266,951 Cost of revenue: ITPS 163,586 156,704 157,269 156,114 HS 46,731 45,719 48,316 50,069 LLPS 13,187 14,854 12,257 12,668 Cost of revenue (exclusive of depreciation and amortization) 223,504 217,277 217,842 218,851 Selling, general and administrative expenses (exclusive of depreciation and amortization) 43,040 50,195 44,369 38,920 Depreciation and amortization 18,212 17,993 17,737 17,889 Impairment of goodwill and other intangible assets — — 29,565 141,617 Related party expense 1,987 2,186 2,016 2,734 Operating income (loss) (7,345) (20,881) (47,491) (153,060) Other expense (income), net: Interest expense, net 39,760 42,271 40,897 41,942 Debt modification and extinguishment costs (gain) 884 8,117 (4,696) 217 Sundry expense (income), net 307 (741) 781 (1,304) Other expense (income), net 6,159 7,375 (1,115) 1,751 Net loss before income taxes (54,455) (77,903) (83,358) (195,666) Income tax (expense) benefit (2,501) (1,296) (1,924) 1,522 Net loss (56,956) (79,199) (85,282) (194,144) Cumulative dividends for Series A Preferred Stock (864) (876) (908) (940) Cumulative dividends for Series B Preferred Stock (75) (1,317) (1,136) (1,137) Net loss attributable to common stockholders $ (57,895) $ (81,392) $ (87,326) $ (196,221) Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2) 17,186,649 25,288,449 63,145,001 139,393,466 Earnings per share: Basic and diluted $ (3.37) $ (3.22) $ (1.38) $ (1.41) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Revenue: ITPS $ 231,875 $ 217,260 $ 208,304 $ 216,687 HS 51,093 56,204 53,995 56,547 LLPS 17,088 19,545 16,930 21,078 Total Revenue 300,056 293,009 279,229 294,312 Cost of revenue: ITPS 185,502 156,669 157,721 172,299 HS 35,818 38,973 41,945 46,709 LLPS 11,267 13,438 12,065 16,689 Cost of revenue (exclusive of depreciation and amortization) 232,587 209,080 211,731 235,697 Selling, general and administrative expenses (exclusive of depreciation and amortization) 41,885 36,390 43,244 48,262 Depreciation and amortization 19,599 19,420 19,094 19,037 Related party expense 1,707 2,748 2,744 1,992 Operating income (loss) 4,278 25,371 2,416 (10,676) Other expense (income), net: Interest expense, net 43,131 42,867 41,757 40,293 Debt modification and extinguishment costs (gain) — — (28,070) 11,381 Sundry expense (income), net 213 (787) 136 801 Other expense, net 152 651 366 (768) Net loss before income taxes (39,218) (17,360) (11,773) (62,383) Income tax (expense) benefit 18 (2,007) (1,441) (8,226) Net loss (39,200) (19,367) (13,214) (70,609) Cumulative dividends for Series A Preferred Stock 896 (798) (822) (852) Net loss attributable to common stockholders $ (38,304) $ (20,165) $ (14,036) $ (71,461) Weighted average outstanding common shares (Refer to Net Loss per Share discussion in Note 2) 2,532,324 3,073,701 7,532,751 10,357,524 Earnings per share: — Basic and diluted $ (15.13) $ (6.56) $ $ (6.90) |
Description of the Business (De
Description of the Business (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Description of the Business | |
Number of segments | 3 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Mar. 07, 2023 | Jan. 01, 2023 USD ($) | Jul. 25, 2022 $ / shares shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Feb. 27, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 $ / shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Outstanding balance of debt | $ 1,169,058 | |||||||
Reverse stock split | 0.05 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Conversion of shares (in shares) | shares | 1 | |||||||
Principal amount of debt | $ 66,471 | |||||||
Estimated annual interest rate savings | 5,000 | |||||||
Proceeds to be raised | 347,500 | |||||||
Minimum | Forecast | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Estimated amount of cost savings in next fiscal year | $ 65,000 | |||||||
Minimum | Subsequent Events | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Reverse stock split | 0.01 | |||||||
Maximum | Forecast | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Estimated amount of cost savings in next fiscal year | $ 75,000 | |||||||
Maximum | Subsequent Events | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Reverse stock split | 0.005 | |||||||
Network Security Incident | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Data incident expenses included in Other expense, net | 3,700 | |||||||
Estimated Insurance Recoveries | 6,200 | |||||||
Insurance recovery | 200 | |||||||
Settlement of additional claims | 5,100 | |||||||
Network Security Incident | Maximum | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Claims paid | 100 | |||||||
Senior secured term loan | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Principal amount of debt | 88,300 | |||||||
PNC Bank Commitment | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Maximum borrowing capacity | 150,000 | |||||||
Secured 2023 notes | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Principal amount of debt | 9,400 | |||||||
BRCC Facility | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Past amounts raised | 725,600 | |||||||
Maximum borrowing capacity | $ 51,000 | |||||||
BRCC Facility | Subsequent Events | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Maximum borrowing capacity | $ 35,000 | |||||||
BRCC Facility | Senior secured revolving facility | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Maximum borrowing capacity | 51,000 | |||||||
Secured 2026 notes | Subsequent Events | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Repurchase of loan | $ 13,400 | |||||||
Junior secured financing | Senior secured revolving facility | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Principal amount of debt | $ 35,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Number of segments | 3 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Obligation For Claim Payment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Restricted Cash | ||
Obligation for claim payment | $ 44,380 | $ 46,902 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 category item | |
Customer relationships | Minimum | |
Intangible Assets | |
Estimated useful life | 4 years |
Customer relationships | Maximum | |
Intangible Assets | |
Estimated useful life | 16 years |
Trademarks | |
Intangible Assets | |
Estimated useful life | 1 year |
Developed technology | Minimum | |
Intangible Assets | |
Estimated useful life | 5 years |
Developed technology | Maximum | |
Intangible Assets | |
Estimated useful life | 8 years 6 months |
Capitalized Software Costs | Minimum | |
Intangible Assets | |
Estimated useful life | 3 years |
Capitalized Software Costs | Maximum | |
Intangible Assets | |
Estimated useful life | 5 years |
Outsource contract costs | |
Intangible Assets | |
Number of principal categories | category | 2 |
Non compete agreements | |
Intangible Assets | |
Number of executives terminated | item | 4 |
Assembled workforce | |
Intangible Assets | |
Estimated useful life | 4 years |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Impairment of Indefinite-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Impairment related to property, plant and equipment, customer relationships, trademarks, developed technology, capitalized software or outsourced contract costs | $ 0 | $ 0 | $ 0 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Derivative Instruments and Hedging Activities (Details) - Interest rate swap - Not designated as hedging instrument - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Term of hedging contract (in years) | 3 years | ||
Notional amount | $ 347.8 | ||
Weighted Average Interest Rate | 1.9275% | ||
Gain (loss) on interest rate swaps | $ 0.1 | $ (0.4) |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Leases (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Options to terminate - operating lease | true |
Options to extend - finance lease | true |
Options to extend - operating lease | true |
Options to terminate - finance lease | true |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenues | |||||||||||
Revenue | $ 266,951 | $ 264,038 | $ 266,770 | $ 279,398 | $ 294,312 | $ 279,229 | $ 293,009 | $ 300,056 | $ 1,077,157 | $ 1,166,606 | $ 1,292,562 |
United States | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 878,644 | 941,985 | 1,057,006 | ||||||||
EMEA | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 180,502 | 205,772 | 213,418 | ||||||||
Other. | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 18,011 | 18,849 | 22,138 | ||||||||
ITPS | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 184,813 | 185,309 | 190,005 | 205,007 | 216,687 | 208,304 | 217,260 | 231,875 | 765,134 | 874,126 | 1,005,043 |
ITPS | United States | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 566,621 | 649,505 | 769,487 | ||||||||
ITPS | EMEA | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 180,502 | 205,772 | 213,418 | ||||||||
ITPS | Other. | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 18,011 | 18,849 | 22,138 | ||||||||
HS | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 65,329 | 60,955 | 56,390 | 56,596 | 56,547 | 53,995 | 56,204 | 51,093 | 239,270 | 217,839 | 219,047 |
HS | United States | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | 239,270 | 217,839 | 219,047 | ||||||||
LLPS | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | $ 16,809 | $ 17,774 | $ 20,375 | $ 17,795 | $ 21,078 | $ 16,930 | $ 19,545 | $ 17,088 | 72,753 | 74,641 | 68,472 |
LLPS | United States | |||||||||||
Disaggregation of Revenues | |||||||||||
Revenue | $ 72,753 | $ 74,641 | $ 68,472 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Accounts receivable, net | $ 101,616 | $ 184,102 | |
Deferred revenues | 17,585 | 17,518 | |
Customer deposits | 16,955 | 17,707 | |
Costs to obtain and fulfill a contract | 1,674 | 2,328 | |
Unbilled receivables, net | 25,741 | 22,570 | |
Amortization of contract costs | $ 1,100 | $ 1,500 | $ 2,400 |
Practical expedient on incremental costs of obtaining contracts | true | ||
Revenue Recognized | $ 16,500 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Performance Obligations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Contracts with an original expected length | true |
2023 | $ 37,816 |
2024 | 30,384 |
2025 | 25,738 |
2026 | 1,346 |
2027 | 512 |
Total | $ 95,796 |
Basis of Presentation and Su_14
Basis of Presentation and Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Research and development costs | $ 1.5 | $ 1.3 | $ 1.1 |
Basis of Presentation and Su_15
Basis of Presentation and Summary of Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Advertising costs | $ 0.5 | $ 0.4 | $ 0.7 |
Basis of Presentation and Su_16
Basis of Presentation and Summary of Significant Accounting Policies - Operations (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Outside United States | ||
Long-Lived Assets | $ 29.6 | $ 26.8 |
Basis of Presentation and Su_17
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Net exchange gains (losses) | $ 1,288 | $ (173) | $ 414 |
Basis of Presentation and Su_18
Basis of Presentation and Summary of Significant Accounting Policies - Beneficial Conversion Feature (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Preferred Stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Dividend equivalent on Series A Preferred Stock | $ 0 | $ 0 | $ 0 | $ 16.4 |
Basis of Presentation and Su_19
Basis of Presentation and Summary of Significant Accounting Policies - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Mar. 18, 2021 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 25, 2022 | |
Net loss per share | |||||||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 496,899 | 565,715 | 83,108 | ||||||||||
Net loss attributable to common stockholders | $ (196,221) | $ (87,326) | $ (81,392) | $ (57,895) | $ (71,461) | $ (14,036) | $ (20,165) | $ (38,304) | $ (422,834) | $ (143,966) | $ (179,839) | ||
Weighted average common shares outstanding - basic | 139,393,466 | 63,145,001 | 25,288,449 | 17,186,649 | 10,357,524 | 7,532,751 | 3,073,701 | 2,532,324 | 61,593,381 | 5,900,058 | 2,457,221 | ||
Weighted average common shares outstanding - diluted | 139,393,466 | 63,145,001 | 25,288,449 | 17,186,649 | 10,357,524 | 7,532,751 | 3,073,701 | 2,532,324 | 61,593,381 | 5,900,058 | 2,457,221 | ||
Basic (in dollars per share) | $ (1.41) | $ (1.38) | $ (3.22) | $ (3.37) | $ (6.90) | $ (1.86) | $ (6.56) | $ (15.13) | $ (6.86) | $ (24.40) | $ (73.19) | ||
Diluted (in dollars per share) | $ (1.41) | $ (1.38) | $ (3.22) | $ (3.37) | $ (6.90) | $ (1.86) | $ (6.56) | $ (15.13) | $ (6.86) | $ (24.40) | $ (73.19) | ||
Private Placement | |||||||||||||
Net loss per share | |||||||||||||
Warrants sold | 9,731,819 | ||||||||||||
Series A Preferred Stock | |||||||||||||
Net loss per share | |||||||||||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 73,058 | ||||||||||||
Series B Preferred Stock | |||||||||||||
Net loss per share | |||||||||||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 3,075,349 | ||||||||||||
Warrant | Private Placement | |||||||||||||
Net loss per share | |||||||||||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 9,731,819 | ||||||||||||
Common Stock | |||||||||||||
Net loss per share | |||||||||||||
Number of anti-dilutive shares excluded from computation of diluted loss per share | 486,591 |
Sale of Non-Core Assets and D_2
Sale of Non-Core Assets and Divestiture (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jul. 22, 2020 | Mar. 16, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | |
SourceHOV | ||||
Membership interests | $ 40 | |||
Gain on sale of investments | $ 35.5 | |||
Physical Records Storage Business | Disposed of by sale not discontinued operations | ||||
Gain on sale of investments | $ 8.7 | |||
Proceeds from sale of business | $ 12.3 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventories | ||
Work in process | $ 1,178 | $ 973 |
Finished goods | 10,804 | 11,480 |
Supplies and parts | 8,991 | 7,028 |
Less: Allowance for obsolescence | (4,125) | (4,266) |
Inventory, Net, Total | $ 16,848 | $ 15,215 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable. | ||
Billed receivables | $ 72,852 | $ 160,407 |
Unbilled receivables | 25,741 | 22,570 |
Other | 9,425 | 7,174 |
Less: Allowance for doubtful accounts | (6,402) | (6,049) |
Accounts Receivable, net | $ 101,616 | $ 184,102 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets | ||
Prepaids | $ 23,347 | $ 22,880 |
Deposits | 2,859 | 8,919 |
Prepaid expenses and other current assets | $ 26,206 | $ 31,799 |
Leases - Balance Sheet Location
Leases - Balance Sheet Location (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating lease right-of-use assets, net | $ 40,734 | $ 53,937 |
Current portion of operating lease liabilities | 11,867 | 15,923 |
Operating lease liabilities, net of current portion | 31,030 | 41,170 |
Finance Lease | ||
Finance lease right-of-use asset, net | $ 11,943 | $ 8,918 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Current portion of finance lease liabilities | $ 5,485 | $ 6,683 |
Finance lease liabilities, net of current portion | $ 9,448 | $ 9,156 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Weighted-average remaining lease term of operating leases | 4 years 2 months 12 days | 4 years 3 months 18 days |
Weighted-average remaining lease term of finance leases | 3 years 7 months 6 days | 2 years 4 months 24 days |
Weighted-average discount rate for operating leases | 13.90% | 13.10% |
Weighted-average discount rate for finance leases | 13.40% | 12.40% |
Interest on financing lease liabilities | $ 1.8 | $ 2.3 |
Amortization expense on finance lease right-of-use assets | $ 4.9 | $ 9.1 |
Leases - Maturities of Finance
Leases - Maturities of Finance and Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities of operating lease liabilities: | |
2023 | $ 16,823 |
2024 | 13,343 |
2025 | 9,101 |
2026 | 7,381 |
2027 | 5,684 |
2028 and thereafter | 4,767 |
Total lease payments | 57,099 |
Less: Imputed interest | (14,202) |
Present value of lease liabilities | 42,897 |
Maturities of finance lease liabilities | |
2023 | 6,774 |
2024 | 5,166 |
2025 | 3,719 |
2026 | 1,034 |
2027 | 795 |
2028 and thereafter | 1,642 |
Total lease payments | 19,130 |
Less: imputed interest | (4,197) |
Present value of finance lease liabilities | $ 14,933 |
Leases - Rental Expenses (Detai
Leases - Rental Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Rental expenses | |||
Rental expense on operating leases under ASC 842 | $ 48 | $ 51.8 | |
Rent expense for operating leases under ASC 840 | $ 69.1 |
Leases - Cash Paid and Lease Re
Leases - Cash Paid and Lease Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 21,560 | $ 25,950 |
Financing cash flows from finance leases | 5,523 | 11,471 |
Right-of-use lease assets obtained in the exchange for lease liabilities: | ||
Operating leases | 6,940 | 6,507 |
Finance leases | $ 4,790 | $ 3,270 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment, Net | |||
Finance lease right-of-use assets | $ 66,256 | $ 69,006 | |
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, before Accumulated Depreciation and Amortization | 279,214 | 270,132 | |
Less: Accumulated depreciation and amortization | (207,520) | (196,683) | |
Property, plant and equipment, net | 71,694 | 73,449 | |
Depreciation expense | |||
Depreciation expense | 24,500 | 26,700 | $ 39,200 |
Land | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 6,687 | 6,688 | |
Buildings and improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 24,307 | 20,268 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 7 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 40 years | ||
Leasehold improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 37,383 | 36,289 | |
Vehicles | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 289 | 311 | |
Vehicles | Minimum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 5 years | ||
Vehicles | Maximum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 7 years | ||
Machinery and equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 26,820 | 26,346 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 5 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 15 years | ||
Computer equipment and software | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 108,898 | 102,746 | |
Computer equipment and software | Minimum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 3 years | ||
Computer equipment and software | Maximum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 8 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 8,574 | $ 8,478 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 5 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment, Net | |||
Estimated Useful Lives (in Years) | 15 years |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Intangibles (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangibles | ||||||
Gross Carrying Amount | $ 701,065 | $ 701,065 | $ 702,338 | |||
Accumulated Amortization | (500,083) | (500,083) | (457,799) | |||
Intangible Asset, net | 200,982 | 200,982 | 244,539 | |||
Impairment of goodwill | $ 0 | 171,182 | ||||
Impairment charge | 0 | |||||
Impairment of goodwill and other intangible assets | 141,617 | $ 29,565 | 171,182 | |||
Carrying amount of indefinite-lived trade names which are not amortizable | 5,300 | 5,300 | ||||
Aggregated amortization expense | $ 47,300 | $ 50,500 | $ 54,700 | |||
Customer relationships | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 9 years | 9 years 6 months | ||||
Gross Carrying Amount | 507,723 | $ 507,723 | $ 508,241 | |||
Accumulated Amortization | (351,240) | (351,240) | (316,084) | |||
Intangible Asset, net | 156,483 | $ 156,483 | $ 192,157 | |||
Developed technology | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 2 years 1 month 6 days | 2 years 9 months 18 days | ||||
Gross Carrying Amount | 88,553 | $ 88,553 | $ 88,553 | |||
Accumulated Amortization | (88,000) | (88,000) | (87,612) | |||
Intangible Asset, net | 553 | $ 553 | 941 | |||
Patent | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 1 year 2 months 12 days | |||||
Gross Carrying Amount | 15 | $ 15 | ||||
Accumulated Amortization | (6) | (6) | ||||
Intangible Asset, net | 9 | 9 | ||||
Trade names | ||||||
Intangibles | ||||||
Gross Carrying Amount | 8,400 | 8,400 | 8,400 | |||
Accumulated Amortization | (3,100) | (3,100) | (3,100) | |||
Intangible Asset, net | 5,300 | 5,300 | 5,300 | |||
Accumulated impairment losses | 44,100 | $ 44,100 | $ 44,100 | |||
Outsource contract costs | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 3 years | 3 years 7 months 6 days | ||||
Gross Carrying Amount | 17,184 | $ 17,184 | $ 16,814 | |||
Accumulated Amortization | (15,509) | (15,509) | (14,486) | |||
Intangible Asset, net | 1,675 | $ 1,675 | $ 2,328 | |||
Internally developed software | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 2 years 10 months 24 days | 3 years 2 months 12 days | ||||
Gross Carrying Amount | 52,441 | $ 52,441 | $ 49,108 | |||
Accumulated Amortization | (35,095) | (35,095) | (27,812) | |||
Intangible Asset, net | 17,346 | $ 17,346 | $ 21,296 | |||
Assembled workforce | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 1 year | |||||
Gross Carrying Amount | $ 4,473 | |||||
Accumulated Amortization | (3,355) | |||||
Intangible Asset, net | $ 1,118 | |||||
Purchased software | ||||||
Intangibles | ||||||
Weighted Average Useful Life (in years) | 11 years | 12 years | ||||
Gross Carrying Amount | 26,749 | $ 26,749 | $ 26,749 | |||
Accumulated Amortization | (7,133) | (7,133) | (5,350) | |||
Intangible Asset, net | $ 19,616 | $ 19,616 | $ 21,399 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Intangibles - Amortization expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Intangibles amortization expense | |
2023 | $ 39,717 |
2024 | 32,004 |
2025 | 24,401 |
2026 | 20,076 |
2027 | 16,885 |
Thereafter | 62,363 |
Intangible assets, net | $ 195,446 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Goodwill (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill | ||||||
Number of segments | segment | 3 | |||||
Beginning of Year Balance | $ 358,323 | $ 359,781 | ||||
Deletions | (825) | |||||
Impairments | $ 0 | (171,182) | ||||
Currency Translation Adjustments | (339) | (633) | ||||
End of Year Balance | $ 186,802 | 186,802 | 358,323 | |||
Impairment of goodwill and other intangible assets | 141,617 | $ 29,565 | 171,182 | |||
Impairment charge , including taxes | 171,200 | |||||
ITPS | ||||||
Goodwill | ||||||
Beginning of Year Balance | 252,672 | 254,130 | ||||
Deletions | (825) | |||||
Impairments | (171,182) | |||||
Currency Translation Adjustments | (339) | (633) | ||||
End of Year Balance | 81,151 | 81,151 | 252,672 | |||
Accumulated impairment losses | 487,700 | 487,700 | 316,500 | $ 317,500 | ||
Impairment of goodwill and other intangible assets | $ 29,600 | |||||
Impairment charge , including taxes | 141,600 | |||||
HS | ||||||
Goodwill | ||||||
Beginning of Year Balance | 86,786 | 86,786 | ||||
End of Year Balance | 86,786 | 86,786 | 86,786 | |||
LLPS | ||||||
Goodwill | ||||||
Beginning of Year Balance | 18,865 | 18,865 | ||||
End of Year Balance | 18,865 | 18,865 | 18,865 | |||
Accumulated impairment losses | $ 243,400 | $ 243,400 | $ 243,400 | $ 243,400 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued liabilities | ||
Accrued taxes (exclusive of income taxes) | $ 9,797 | $ 9,858 |
Accrued lease exit obligations | 36 | |
Accrued professional and legal fees | 37,366 | 29,119 |
Accrued Appraisal Action liability | 63,422 | |
Accrued legal reserve for pending litigation | 10,322 | 8,046 |
Accrued transaction costs | 2,763 | 2,305 |
Other accruals | 1,092 | 733 |
Total accrued liabilities including accrued interest | 61,340 | 113,519 |
Other Long-term liabilities | ||
Deferred revenue | 1,180 | 901 |
Accrued lease exit obligations | 373 | 195 |
Accrued compensation expense | 1,021 | 1,578 |
Other | 3,530 | 3,325 |
Other Long-term liabilities | $ 6,104 | $ 5,999 |
Long-Term Debt and Credit Fac_3
Long-Term Debt and Credit Facilities - Senior Credit Facilities (Details) - USD ($) $ in Millions | Jul. 12, 2017 | Dec. 31, 2021 |
Senior secured term loan | ||
Long-Term Debt and Credit Facilities. | ||
Debt Instrument, Face Amount | $ 350 | |
Original issue discount | $ 7 | |
Principal percentage of each of first eight payments (as a percent) | 0.60% | |
Principal percentage of each payment thereafter (as a percent) | 1.30% | |
Senior secured term loan | LIBOR | ||
Long-Term Debt and Credit Facilities. | ||
Applicable margin rate | 7.50% | |
Floor interest rate | 1% | |
Senior secured term loan | Base rate | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 6.50% | |
Senior secured revolving facility | ||
Long-Term Debt and Credit Facilities. | ||
Maximum borrowing capacity | $ 100 | |
Letters of credit outstanding | $ 0.5 | |
Credit facility drawn | $ 100 | |
Senior secured revolving facility | LIBOR | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 7% | |
Senior secured revolving facility | Base rate | ||
Long-Term Debt and Credit Facilities. | ||
Principal percentage of each payment thereafter (as a percent) | 6% |
Long-Term Debt and Credit Fac_4
Long-Term Debt and Credit Facilities - Term Loan Repricing (Details) - USD ($) $ in Thousands | Jul. 13, 2018 | Dec. 31, 2022 | Dec. 31, 2021 |
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 1,096,837 | $ 1,249,227 | |
First Amendment | |||
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 343,400 | ||
Reduction in interest rate (in percentage) | 1% | ||
First Amendment | Federal funds rate | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 0.50% | ||
First Amendment | LIBOR | |||
Long-Term Debt and Credit Facilities. | |||
Floor interest rate | 1% | ||
Variable interest rate (as a percent) | 6.50% | ||
First Amendment | One-month adjusted LIBOR | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 1% | ||
First Amendment | Base rate | |||
Long-Term Debt and Credit Facilities. | |||
Variable interest rate (as a percent) | 5.50% | ||
Senior secured revolving facility | |||
Long-Term Debt and Credit Facilities. | |||
Outstanding amount of term loans | $ 343,400 | ||
Maximum debt issuance costs for new lenders exceeded 10% test | 100 | ||
Senior secured revolving facility | First Amendment | |||
Long-Term Debt and Credit Facilities. | |||
Debt issuance costs | 1,000 | ||
Amortization expense of debt issuance costs | 1,000 | ||
Write off of previously recognized debt issuance costs | $ 100 |
Long-Term Debt and Credit Fac_5
Long-Term Debt and Credit Facilities - 2018 and 2019 Incremental Term Loan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Apr. 16, 2019 | Jul. 13, 2018 | Dec. 31, 2019 | |
Long-Term Debt and Credit Facilities. | |||
Proceeds from incremental term loans | $ 30 | $ 30 | |
Repricing Term Loan | |||
Long-Term Debt and Credit Facilities. | |||
Debt extinguishment costs | $ 1.4 |
Long-Term Debt and Credit Fac_6
Long-Term Debt and Credit Facilities - Securitization (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 17, 2022 | Mar. 07, 2022 | Dec. 17, 2020 | Jan. 10, 2020 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 31, 2022 | May 18, 2020 | Jul. 12, 2017 | |
Securitization Facility, Prepayment Premium | $ 2,700 | ||||||||||
Facility term (years) | 5 years | ||||||||||
Outstanding balance of debt | $ 1,169,058 | ||||||||||
Proceeds from initial borrowings | 20,000 | $ 11,000 | $ 29,750 | ||||||||
Senior secured notes | |||||||||||
Write off of previously recognized debt issuance costs | 200 | ||||||||||
Senior secured revolving facility | |||||||||||
Outstanding borrowings under the facility | $ 100,000 | ||||||||||
Available facility amount | $ 100,000 | ||||||||||
A/R Facility | |||||||||||
Minimum liquidity for A/R facility | $ 35,000 | ||||||||||
Forbearance fee | $ 5,000 | ||||||||||
Write off of previously recognized debt issuance costs | $ 8,200 | ||||||||||
Repayment of principal, accrued interest and fees | 500 | ||||||||||
Outstanding borrowings under the facility | $ 83,000 | ||||||||||
Early termination fee | 800 | ||||||||||
Securitization Facility | |||||||||||
Accounts Receivable from Securitization | $ 160,000 | ||||||||||
Accounts Receivable, Securitization, Term | 5 years | ||||||||||
Variable interest rate (as a percent) | 8.75% | ||||||||||
Write off of previously recognized debt issuance costs | 3,300 | ||||||||||
Repayment of principal, accrued interest and fees | 500 | ||||||||||
Securitization facility, payment of accrued interest and fees | 1,300 | ||||||||||
Outstanding borrowings under the facility | 91,900 | ||||||||||
Available facility amount | 145,000 | ||||||||||
Initial funding supported by receivables | 92,000 | ||||||||||
Accounts Receivable, Sale | $ 85,000 | ||||||||||
Accounts Receivable De-Recognized | 408,900 | ||||||||||
Percentage of face value of accounts receivable | 100% | ||||||||||
Further funding supported by inventory and intellectual property | $ 53,000 | ||||||||||
Proceeds from additional borrowings | $ 53,000 | ||||||||||
Proceeds from issuance of debt used for repayment of previous debt | $ 83,000 | ||||||||||
Remitted amount | 308,700 | ||||||||||
Accounts receivable, Unsold, Pledged as collateral | 46,500 | ||||||||||
Pre-tax loss | $ 3,100 | ||||||||||
Securitization Facility | Federal funds rate | |||||||||||
Variable interest rate (as a percent) | 0.50% | ||||||||||
Securitization Facility | One-month adjusted LIBOR | |||||||||||
Variable interest rate (as a percent) | 1% | ||||||||||
Securitization Facility | LIBOR | |||||||||||
Variable interest rate (as a percent) | 9.75% | ||||||||||
Revolving Loan Exchange and Prepayment Agreement | |||||||||||
Principal amount | $ 9,000 | ||||||||||
Write off of previously recognized debt issuance costs | $ 200 |
Long-Term Debt and Credit Fac_7
Long-Term Debt and Credit Facilities (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
May 06, 2022 USD ($) | Mar. 18, 2022 USD ($) | Mar. 07, 2022 USD ($) | Dec. 09, 2021 USD ($) | Nov. 17, 2021 USD ($) | Oct. 27, 2021 USD ($) | Jan. 10, 2020 USD ($) | Aug. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) installment | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) installment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 07, 2021 USD ($) | Jul. 12, 2017 USD ($) | |
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
automatic maturity extensions | 6 months | ||||||||||||||||||||
Debt repayment in cash | $ 225,000,000 | $ 225,000,000 | |||||||||||||||||||
Public exchange in cash | 900 | ||||||||||||||||||||
Debt instrument cash exchanged | 84,300,000 | ||||||||||||||||||||
Debt instrument face amount exchanged | 912,700,000 | ||||||||||||||||||||
Outstanding debt | $ 1,096,837,000 | $ 1,249,227,000 | $ 1,096,837,000 | $ 1,249,227,000 | |||||||||||||||||
Debt modification and extinguishment costs (gain) | (217,000) | $ 4,696,000 | $ (8,117,000) | $ (884,000) | (11,381,000) | $ 28,070,000 | (4,522,000) | 16,689,000 | $ (9,589,000) | ||||||||||||
A/R Facility | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Write off of previously recognized debt issuance costs | $ 8,200,000 | ||||||||||||||||||||
Secured 2023 notes | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Principal amount | $ 1,000,000,000 | ||||||||||||||||||||
Interest rate (in percent) | 10% | ||||||||||||||||||||
Debt instrument principle amount denomination | $ 1,000 | ||||||||||||||||||||
Debt instrument face amount exchanged percentage | 91.30% | ||||||||||||||||||||
Debt instrument face amount exchanged outstanding | 22,800,000 | 22,800,000 | |||||||||||||||||||
Debt modification and extinguishment costs (gain) | 12,900,000 | ||||||||||||||||||||
Secured 2026 notes | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Principal amount | $ 127,800,000 | $ 21,000,000 | $ 129,000,000 | 790,500,000 | 129,000,000 | 790,500,000 | |||||||||||||||
Net proceeds from 2026 notes | $ 64,700,000 | ||||||||||||||||||||
Interest rate (in percent) | 0.115% | 11.50% | 11.50% | ||||||||||||||||||
Debt instrument principle amount denomination | $ 1,000 | ||||||||||||||||||||
Debt instrument face amount exchanged | $ 662,700,000 | ||||||||||||||||||||
Debt instrument face amount exchanged outstanding | $ 980,000,000 | $ 980,000,000 | |||||||||||||||||||
Outstanding debt | 795,000,000 | 795,000,000 | |||||||||||||||||||
Line of credit facility on notes | $ 50,000,000 | ||||||||||||||||||||
True-up advance paid | $ 5,000,000 | ||||||||||||||||||||
Principal amount of true-up mechanism | 10,300,000 | ||||||||||||||||||||
Debt modification and extinguishment costs (gain) | $ 1,000,000 | ||||||||||||||||||||
Debt instrument, redemption price percentage | 100% | ||||||||||||||||||||
Debt instrument redemption price premium, percentage on principle amount | 1% | ||||||||||||||||||||
Debt Instrument Redemption price premium, basis spread on variable rate | 0.50% | ||||||||||||||||||||
BRCC Facility | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Principal amount | $ 75,000,000 | $ 115,000,000 | |||||||||||||||||||
Interest rate (in percent) | 11.50% | ||||||||||||||||||||
Outstanding debt | 68,529,000 | $ 115,000,000 | $ 68,529,000 | $ 115,000,000 | |||||||||||||||||
Debt instrument, repayment made in cash | 66,500,000 | ||||||||||||||||||||
Maximum borrowing capacity | $ 51,000,000 | $ 51,000,000 | |||||||||||||||||||
Availability under credit facility | $ 0 | $ 0 | |||||||||||||||||||
Number of installments | installment | 12 | 12 | |||||||||||||||||||
Debt modification and extinguishment costs (gain) | $ 2,000,000 | ||||||||||||||||||||
BRCC Term Loan | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Outstanding debt | $ 48,500,000 | 48,500,000 | |||||||||||||||||||
BRCC Revolver | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Outstanding debt | 20,000,000 | 20,000,000 | |||||||||||||||||||
Senior secured term loan | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Outstanding debt | $ 212,100,000 | $ 72,600,000 | 72,600,000 | ||||||||||||||||||
Exchange Notes | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Debt modification and extinguishment costs (gain) | 5,300,000 | ||||||||||||||||||||
Write off of previously recognized debt issuance costs | 100,000 | ||||||||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Principal amount | $ 9,000,000 | ||||||||||||||||||||
Net proceeds from 2026 notes | 2,600,000 | ||||||||||||||||||||
Debt repayment in cash | $ 2,100,000 | ||||||||||||||||||||
Outstanding debt | 20,200,000 | ||||||||||||||||||||
Outstanding revolving credit facility | $ 100,000,000 | ||||||||||||||||||||
Line of credit facility cash | 50,000,000 | ||||||||||||||||||||
Debt instruments liability recognized on original issuance discount | 17,400,000 | ||||||||||||||||||||
Debt instruments accrued additional true up liability | $ 6,200,000 | 7,400,000 | |||||||||||||||||||
Accrued liability for true-up obligation | 26,000,000 | ||||||||||||||||||||
True-up advance paid | 9,900,000 | 5,000,000 | |||||||||||||||||||
Write off of previously recognized debt issuance costs | 200,000 | ||||||||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | Other expense | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Amount of accrued true up liability expense | $ 1,100,000 | ||||||||||||||||||||
Revolving Loan Exchange and Prepayment Agreement | Secured 2026 notes | |||||||||||||||||||||
Long-Term Debt and Credit Facilities. | |||||||||||||||||||||
Principal amount | $ 21,000,000 | ||||||||||||||||||||
Line of credit facility on notes | 50,000,000 | ||||||||||||||||||||
Collateral amount | $ 20,000,000 | $ 10,000,000 |
Long-Term Debt and Credit Fac_8
Long-Term Debt and Credit Facilities - Repurchases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 07, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 31, 2022 | Jul. 12, 2017 | |
Net cash consideration | $ 4,712 | $ 71,184 | ||||||||||
Gain (Loss) on Extinguishment of Debt | $ (217) | $ 4,696 | $ (8,117) | $ (884) | $ (11,381) | $ 28,070 | (4,522) | $ 16,689 | $ (9,589) | |||
Revolving Loan Exchange and Prepayment Agreement | ||||||||||||
Write off of Deferred Debt Issuance Cost | $ 200 | |||||||||||
Principal amount | $ 9,000 | |||||||||||
Exchange Notes | ||||||||||||
Repurchase of principal amount | 15,000 | 15,000 | ||||||||||
Net cash consideration | 4,700 | |||||||||||
Original issue discount written off | 5,000 | |||||||||||
Write off of Deferred Debt Issuance Cost | 100 | |||||||||||
Gain (Loss) on Extinguishment of Debt | 5,300 | |||||||||||
Senior secured notes | ||||||||||||
Repurchase of principal amount | 64,500 | 64,500 | ||||||||||
Net cash consideration | 48,400 | |||||||||||
Original issue discount written off | 600 | |||||||||||
Write off of Deferred Debt Issuance Cost | 200 | |||||||||||
Gain (Loss) on Extinguishment of Debt | 15,300 | |||||||||||
Senior secured term loan | ||||||||||||
Repurchase of principal amount | $ 40,000 | 40,000 | ||||||||||
Net cash consideration | 22,800 | |||||||||||
Original issue discount written off | 400 | |||||||||||
Write off of Deferred Debt Issuance Cost | 1,500 | |||||||||||
Gain (Loss) on Extinguishment of Debt | $ 15,300 | |||||||||||
Principal amount | $ 350,000 |
Long-Term Debt and Credit Fac_9
Long-Term Debt and Credit Facilities - Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 1,096,837 | $ 1,249,227 |
Less: Current portion of long-term debt | (154,802) | (236,775) |
Long-term debt, net of current maturities | 942,035 | 1,012,452 |
Other | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 25,117 | 29,296 |
First lien credit agreement | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 71,470 | 89,585 |
Debt discount | 200 | 800 |
Unamortized debt issuance costs | 900 | 2,800 |
Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Debt discount | 100 | 200 |
Unamortized debt issuance costs | 100 | 100 |
Revolver | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 99,477 | |
Securitization Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 91,947 | |
Secured 2023 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 22,762 | 22,616 |
Secured 2026 notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 795,000 | |
Secured 2026 notes | Senior secured notes | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | 908,959 | 801,306 |
Debt discount | 58,800 | 15,400 |
Unamortized debt issuance costs | 12,100 | 9,000 |
BRCC Facility | ||
Long-Term Debt and Credit Facilities. | ||
Total debt | $ 68,529 | $ 115,000 |
Long-Term Debt and Credit Fa_10
Long-Term Debt and Credit Facilities - Maturities of long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Maturities of long-term debt | ||
2022 | $ 156,030 | |
2023 | 2,940 | |
2024 | 28,970 | |
2025 | 980,156 | |
2026 | 962 | |
Total long-term debt | 1,169,058 | |
Less: Unamortized discount and debt issuance costs | (72,221) | |
Total debt | $ 1,096,837 | $ 1,249,227 |
Income Taxes - Components And P
Income Taxes - Components And Provisions (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components income/ (loss) before income taxes | |||||||||||
United States | $ (422,135) | $ (135,299) | $ (158,186) | ||||||||
Foreign | 10,754 | 4,565 | (6,760) | ||||||||
Net loss before income taxes | $ (195,666) | $ (83,358) | $ (77,903) | $ (54,455) | $ (62,383) | $ (11,773) | $ (17,360) | $ (39,218) | (411,382) | (130,734) | (164,946) |
Provision for federal, state, and foreign income taxes | |||||||||||
Federal - Deferred | (1,597) | 5 | 480 | ||||||||
State - Current | 636 | 1,232 | 1,325 | ||||||||
State - Deferred | (123) | 351 | 1,542 | ||||||||
Foreign - Current | 3,416 | 3,775 | 4,318 | ||||||||
Foreign - Deferred | 1,867 | 6,293 | 5,919 | ||||||||
Income tax expense | $ (1,522) | $ 1,924 | $ 1,296 | $ 2,501 | $ 8,226 | $ 1,441 | $ 2,007 | $ (18) | $ 4,199 | $ 11,656 | $ 13,584 |
Income Taxes - Income tax recon
Income Taxes - Income tax reconciliation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||||||||||||
Statutory tax rate | 21% | 35% | ||||||||||
Reconciliation of effective income tax amount | ||||||||||||
Tax at statutory rate | $ (86,390,000) | $ (27,454,000) | $ (34,639,000) | |||||||||
State income taxes | (8,520,000) | (1,626,000) | (5,234,000) | |||||||||
Foreign income taxes | 1,290,000 | 1,567,000 | (516,000) | |||||||||
Nondeductible goodwill impairment | 34,967,000 | |||||||||||
Cancellation of debt income | 6,429,000 | (6,429,000) | ||||||||||
Permanent differences | 1,061,000 | 359,000 | 218,000 | |||||||||
Litigation settlement | 2,000 | 71,000 | ||||||||||
Changes in valuation allowance | 75,210,000 | 11,857,000 | 53,115,000 | |||||||||
Unremitted earnings | 891,000 | 1,072,000 | (275,000) | |||||||||
GILTI Inclusion | 639,000 | (4,996,000) | ||||||||||
Expiration and reduction of tax attributes | (30,103,000) | 31,014,000 | 4,944,000 | |||||||||
Debt related basis differences | 10,994,000 | |||||||||||
Other | (2,269,000) | 1,294,000 | 896,000 | |||||||||
Income tax expense | $ (1,522,000) | $ 1,924,000 | $ 1,296,000 | $ 2,501,000 | $ 8,226,000 | $ 1,441,000 | $ 2,007,000 | $ (18,000) | 4,199,000 | 11,656,000 | 13,584,000 | |
Income tax expense (benefit) GILTI | 3,000,000 | |||||||||||
Estimated income tax expense (benefit) GILT | $ 5,000,000 | |||||||||||
Income tax expense (benefit) BEAT | $ 0 | $ 0 |
Income Taxes - Components of de
Income Taxes - Components of deferred income tax liabilities and assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred income tax liabilities: | ||
Book over tax basis of intangible assets and fixed assets | $ (44,632) | $ (55,449) |
Unremitted foreign earnings | (8,154) | (7,135) |
Operating lease and finance lease right-of-use assets | (7,883) | (9,573) |
Other, net | (2,005) | (1,584) |
Total deferred income tax liabilities | (62,674) | (73,741) |
Deferred income tax assets: | ||
Allowance for doubtful accounts and receivable adjustments | 2,018 | 1,816 |
Inventory | 3,141 | 2,362 |
Accrued liabilities | 16,536 | 12,606 |
Net operating loss and tax credit carryforwards | 156,180 | 141,946 |
Tax deductible goodwill | 2,534 | 4,424 |
Disallowed interest deduction | 146,923 | 106,449 |
Operating lease and finance lease liabilities | 7,981 | 10,211 |
Other, net | 22,832 | 18,197 |
Total deferred income tax assets | 358,145 | 298,011 |
Valuation allowance | (305,168) | (233,755) |
Total net deferred income tax assets (liabilities) | (9,697) | $ (9,485) |
Increase (decrease) in valuation allowance | 71,400 | |
Federal | ||
Deferred income tax assets: | ||
Valuation allowance related to disallowed interest deduction | 123,900 | |
Valuation allowance related to limitation of utilization of NOL carryforwards | 59,600 | |
State | ||
Deferred income tax assets: | ||
Valuation allowance related to disallowed interest deduction | 16,300 | |
Valuation allowance related to limitation of utilization of NOL carryforwards | 4,000 | |
Foreign. | ||
Deferred income tax assets: | ||
Valuation allowance related to limitation of utilization of NOL carryforwards | $ 101,500 |
Income Taxes - Net operating lo
Income Taxes - Net operating loss carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 8,700 | $ 20,600 |
Federal | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 519,435 | |
Net operating loss carryforward indefinitely | 22,186 | |
Federal | 2023 - 2027 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 154,719 | |
Federal | 2028 - 2032 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 100,776 | |
Federal | 2033 - 2041 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 241,754 | |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 456,740 | |
Net operating loss carryforward indefinitely | 78,847 | |
State | 2023 - 2027 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 59,917 | |
State | 2028 - 2032 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 89,062 | |
State | 2033 - 2041 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 228,914 | |
Foreign. | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 17,300 | |
Foreign. | 2026 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 100 | |
Foreign. | 2027 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 200 | |
Foreign. | 2028 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 600 | |
Foreign. | 2032 | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 200 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Recognized tax benefit | $ 800 | $ 800 | $ 700 |
Unrecognized tax benefits | 2,163 | 2,077 | 1,836 |
Accrued interest and penalties on unrecognized tax benefits | 2,000 | 2,400 | 2,100 |
Interest and penalties recorded on unrecognized tax benefits | (400) | (300) | 0 |
Reconciliation of total amounts of unrecognized tax benefits | |||
Balance at beginning of the period | 2,077 | 1,836 | 4,314 |
Gross increases - tax positions in current period | 106 | 460 | 151 |
Settlement | (90) | ||
Balance at end of the period | 2,163 | 2,077 | 1,836 |
Deferred taxes provided for withholding or other taxes for repatriation of foreign earnings | 0 | ||
Undistributed earnings from foreign subsidiaries | 153,400 | ||
Foreign withholding taxes on the undistributed earnings | 7,900 | 7,100 | |
Undistributed foreign earnings | 800 | 1,100 | 300 |
Prior tax period 1 | |||
Reconciliation of total amounts of unrecognized tax benefits | |||
Gross increases - tax positions in prior period | (21) | ||
Prior tax period 2 | |||
Reconciliation of total amounts of unrecognized tax benefits | |||
Gross decreases - tax positions in prior period | $ (20) | $ (129) | $ (2,608) |
Employee Benefit Plans - German
Employee Benefit Plans - Germany & UK (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension plans | |||
Plan assets | $ 45,693 | $ 89,972 | $ 87,215 |
Weighted average expected long-term rate | 3.49% | ||
German Pension Plan | Unfunded Plan | |||
Pension plans | |||
Plan assets | $ 0 | ||
German Pension Plan | Unfunded Plan | Minimum | |||
Pension plans | |||
Qualifying period | 10 years | ||
U.K. Pension Plan | |||
Pension plans | |||
Historical performance period | 10 years | ||
Weighted average expected long-term rate | 3.45% | 2.72% | |
U.K. Pension Plan | Minimum | |||
Pension plans | |||
Minimum required years prior to retirement for eligibility | 3 years | ||
Historical performance period | 15 years | 10 years | |
U.K. Pension Plan | Maximum | |||
Pension plans | |||
Historical performance period | 20 years | 20 years | |
Asterion Pension Plan | |||
Pension plans | |||
Weighted average expected long-term rate | 3.80% | 1.13% | |
Asterion Pension Plan | Minimum | |||
Pension plans | |||
Minimum required years prior to retirement for eligibility | 3 years | ||
Norway Pension Plan | |||
Pension plans | |||
Weighted average expected long-term rate | 4.15% | 3.10% | |
Norway Pension Plan | Minimum | |||
Pension plans | |||
Minimum required years prior to retirement for eligibility | 3 years |
Employee Benefit Plans - Funded
Employee Benefit Plans - Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Benefit Obligation: | ||
Benefit obligation at beginning of period | $ 117,472 | $ 122,011 |
Service cost | 53 | 68 |
Interest cost | $ 1,910 | $ 1,686 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense. | Selling, General and Administrative Expense. |
Actuarial loss (gain) | $ (44,778) | $ (2,296) |
Plan amendments | 149 | (28) |
Plan curtailment | 98 | |
Benefits paid | (1,915) | (2,497) |
Foreign-exchange rate changes | (11,159) | (1,570) |
Benefit obligation at end of year | 61,732 | 117,472 |
Change in Plan Assets: | ||
Fair value of plan assets at beginning of period | 89,972 | 87,215 |
Actual return on plan assets | (36,679) | 2,950 |
Employer contributions | 2,866 | 3,189 |
Plan participants' contributions | 16 | |
Benefits paid | (1,818) | (2,393) |
Foreign-exchange rate changes | (8,647) | (1,005) |
Fair value of plan assets at end of period | 45,693 | 89,972 |
Funded status at end of year | (16,038) | (27,500) |
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (16,917) | (28,383) |
Minimum regulatory benefit for Philippine legal entity | 800 | 700 |
Amounts recognized in accumulated other comprehensive loss, net of tax consist of: | ||
Net actuarial loss | (3,583) | (10,946) |
Net amount recognized in accumulated other comprehensive loss | 3,583 | 10,946 |
Plans with underfunded or non-funded accumulated benefit obligation: | ||
Aggregate fair value of plan assets | 45,693 | 89,972 |
Defined Benefit Plan, Overfunded Plan [Member] | ||
Change in Plan Assets: | ||
Fair value of plan assets at end of period | 45,694 | |
Plans with underfunded or non-funded accumulated benefit obligation: | ||
Aggregate fair value of plan assets | 45,694 | |
Defined Benefit Plan, Underfunded Plan [Member] | ||
Change in Plan Assets: | ||
Fair value of plan assets at beginning of period | 89,972 | |
Fair value of plan assets at end of period | 89,972 | |
Plans with underfunded or non-funded accumulated benefit obligation: | ||
Aggregate fair value of plan assets | 89,972 | |
Underfunded Or Unfunded Plan [Member] | ||
Change in Plan Assets: | ||
Fair value of plan assets at beginning of period | 89,972 | |
Fair value of plan assets at end of period | 45,694 | 89,972 |
Plans with underfunded or non-funded accumulated benefit obligation: | ||
Aggregate projected benefit obligation | 61,732 | 117,472 |
Aggregate accumulated benefit obligation | 61,732 | 117,472 |
Aggregate fair value of plan assets | 45,694 | 89,972 |
U.K. And Asterion Plans | ||
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (16,917) | (28,383) |
U.K. Pension Plan | ||
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (13,700) | (23,000) |
Asterion Pension Plan | ||
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (1,700) | (2,500) |
Norway Pension Plan | ||
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (600) | (100) |
German Pension Plan | ||
Net amount recognized in the Consolidated Balance Sheets: | ||
Pension liability (a) | (1,200) | $ (2,100) |
German Pension Plan | Unfunded Plan | ||
Change in Plan Assets: | ||
Fair value of plan assets at end of period | 0 | |
Plans with underfunded or non-funded accumulated benefit obligation: | ||
Aggregate fair value of plan assets | $ 0 |
Employee Benefit Plans - Tax Ef
Employee Benefit Plans - Tax Effect on Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Amounts in Accumulated Other Comprehensive Loss Expected to be Recognized in Net Periodic Benefit Costs | ||||
Net actuarial loss | $ (3,583) | $ (10,946) | ||
Deferred tax benefit | $ 2,000 | $ 2,000 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net periodic benefit cost | |||
Service cost | $ 53 | $ 68 | |
Interest cost | $ 1,910 | $ 1,686 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense. | Selling, General and Administrative Expense. | |
Employer contributions | $ 2,866 | $ 3,189 | |
Total employer contributions to pension plans | 2,900 | 3,200 | |
Pension And Postretirement | |||
Net periodic benefit cost | |||
Service cost | 53 | 68 | $ 74 |
Interest cost | 1,910 | 1,686 | 1,984 |
Expected return on plan assets | (2,856) | (2,410) | (2,530) |
Amortization of prior service cost | 273 | 224 | 150 |
Amortization of net loss | 1,616 | 3,340 | 1,739 |
Settlement loss | 552 | ||
Net periodic benefit cost | $ 996 | $ 2,908 | $ 1,969 |
Employee Benefit Plans - Valuat
Employee Benefit Plans - Valuation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation | |||
Maximum percentage of unrecognized gains (losses) for amortization | 10% | ||
Amortization period for gains (losses) of defined benefit plans | 9 years | ||
Fair value of plan assets | $ 45,693 | $ 89,972 | $ 87,215 |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Expected asset return | 3.49% | ||
U.K. Pension Plan | |||
Valuation | |||
Historical performance period | 10 years | ||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 5% | 1.80% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 1.80% | 1.40% | |
Expected asset return | 3.45% | 2.72% | |
U.K. Pension Plan | Minimum | |||
Valuation | |||
Historical performance period | 15 years | 10 years | |
U.K. Pension Plan | Maximum | |||
Valuation | |||
Historical performance period | 20 years | 20 years | |
Asterion Pension Plan | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3.80% | 1.13% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.80% | 1.13% | |
Expected asset return | 3.80% | 1.13% | |
Norway Pension Plan | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3% | 1.90% | |
Rate of compensation increase | 3.50% | 2.75% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3% | 1.90% | |
Expected asset return | 4.15% | 3.10% | |
Rate of compensation increase | 3.50% | 2.75% | |
German Pension Plan | |||
Weighted-average assumptions used to determine benefit obligations: | |||
Discount rate | 3.80% | 1% | |
Weighted-average assumptions used to determine net periodic benefit cost: | |||
Discount rate | 3.80% | 1% | |
Unfunded Plan | German Pension Plan | |||
Valuation | |||
Fair value of plan assets | $ 0 |
Employee Benefit Plans - Plan A
Employee Benefit Plans - Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 100% | 100% | 100% |
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 45,693 | $ 89,972 | $ 87,215 |
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Investment objective period to earn long-term expected rate of return | 15 years | ||
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Investment objective period to earn long-term expected rate of return | 20 years | ||
Level 1 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 932 | 149 | |
Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | 44,761 | 89,823 | |
Cash. | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | 932 | 149 | |
Cash. | Level 1 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 932 | $ 149 | |
UK and international equities | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 27% | 32.80% | 31.40% |
U.S. | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 17,423 | ||
U.S. | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | 17,423 | ||
International | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 11,399 | 11,909 | |
International | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 11,399 | $ 11,909 | |
UK government and corporate bonds | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 5.50% | 2.50% | 2.70% |
Corporate bonds / UK Gilts | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 2,529 | $ 2,292 | |
Corporate bonds / UK Gilts | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 2,529 | $ 2,292 | |
Diversified growth fund | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 18.50% | 25.70% | 21% |
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 8,417 | $ 23,122 | |
Diversified growth fund | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 8,417 | $ 23,122 | |
Multi Asset Credit Fund | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 4.70% | 4.40% | 4.30% |
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 2,158 | $ 3,919 | |
Multi Asset Credit Fund | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 2,158 | $ 3,919 | |
Liability Driven Investments | |||
Defined Benefit Plan, Plan Assets, Allocations [Abstract] | |||
Weighted average allocation of plan assets (as a percent) | 44.30% | 34.60% | 40.60% |
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 20,258 | $ 31,158 | |
Liability Driven Investments | Level 2 | |||
Defined Benefit Plan Pension Assets Fair Value By Category [Abstract] | |||
Fair value of plan assets | $ 20,258 | $ 31,158 |
Employee Benefit Plans - Employ
Employee Benefit Plans - Employer Contributions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Employer Contributions | ||
Total employer contributions to pension plans | $ 2,900 | $ 3,200 |
Employer contributions to pension plans expected during 2021 | 2,700 | |
Estimated Future Benefit Payments | ||
2023 | 1,872 | |
2024 | 2,067 | |
2025 | 2,656 | |
2026 | 2,674 | |
2027 | 2,978 | |
2028 - 2032 | 13,615 | |
Total estimated future benefit payments | $ 25,862 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
May 28, 2021 USD ($) | Mar. 26, 2020 USD ($) | Nov. 30, 2020 USD ($) | Sep. 30, 2020 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Commitments and Contingencies | ||||||
Amount awarded to petitioners | $ 57.7 | $ 63.4 | ||||
Accrued liability | 63.4 | $ 0 | ||||
Adverse Arbitration Order | ||||||
Commitments and Contingencies | ||||||
Accrued liability | $ 3.3 | $ 1.6 | ||||
Amount awarded to customer | $ 13 | |||||
Amount paid towards judgement | $ 8.8 | |||||
Earnout sought | € | € 10 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 186,802 | $ 358,323 | $ 359,781 |
Senior secured term loan | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 64% | ||
Secured 2023 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 65% | ||
Secured 2026 notes | |||
Assets and liabilities measured at fair value | |||
Fair value percentage | 15.50% | ||
Carrying Amount | |||
Carrying amounts and estimated fair values of financial instruments | |||
Current portion of long-term debts | $ 154,802 | ||
Carrying Amount | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 942,035 | 1,012,452 | |
Carrying Amount | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 186,802 | 358,323 | |
Fair Value | |||
Carrying amounts and estimated fair values of financial instruments | |||
Current portion of long-term debts | 121,893 | ||
Fair Value | Level 2 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Current portion of long-term debts | 121,893 | ||
Fair Value | Recurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 184,968 | 803,668 | |
Fair Value | Recurring assets and liabilities | Level 2 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Long-term debt | 184,968 | 803,668 | |
Fair Value | Nonrecurring assets and liabilities | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | 186,802 | 358,323 | |
Fair Value | Nonrecurring assets and liabilities | Level 3 | |||
Carrying amounts and estimated fair values of financial instruments | |||
Goodwill | $ 186,802 | $ 358,323 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Grants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | |||
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018 | 8,998 | ||
Payment, Tax Withholding, Share-based Payment Arrangement | $ 135 | $ 7 | |
RSU's | 2018 Plan | |||
Number of Units | |||
Outstanding Balance as of December 31, 2021 | 68,450 | ||
Vested | (66,935) | ||
Outstanding Balance as of September 30, 2022 | 1,515 | 68,450 | |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period | $ 34.95 | ||
Vested | 35 | ||
Balance at the end of the period | $ 33 | $ 34.95 | |
Average Remaining Contractual Life (Years) | |||
Weighted average remaining contractual life (in years) | 4 months 28 days | 1 month 9 days | |
Aggregate Intrinsic Value | |||
Aggregate intrinsic value outstanding | $ 50 | $ 2,393 | |
RSU's | 2018 Plan | Minimum | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
RSU's | 2018 Plan | Maximum | |||
Stock-Based Compensation | |||
Vesting period | 2 years | ||
Common Stock | |||
Stock-Based Compensation | |||
Adjustment to number of shares withheld in lieu of tax obligation of RSU holders in the year 2018 | 46 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 20, 2017 |
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 1,600,000,000 | 1,600,000,000 | |
2018 Plan | |||
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 892,404 | 138,729 | |
2018 Plan | Maximum | |||
Exela 2018 Stock Incentive Plan | |||
Common stock shares authorized | 138,729 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jan. 18, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2013 Plan and 2018 Plan | Selling, general and administrative expense | ||||
Unrecognized compensation expense | ||||
Total compensation expense | $ 1 | $ 2.7 | $ 2.8 | |
2018 Plan | ||||
Unrecognized compensation expense | ||||
Reversed compensation expense | $ 0.6 | |||
Stock options | ||||
Outstanding | ||||
Exercised (in shares) | 52,158 | |||
Stock options | 2013 Plan and 2018 Plan | ||||
Unrecognized compensation expense | ||||
Unrecognized compensation expense | $ 0.2 | |||
Stock options | 2018 Plan | ||||
Stock-based compensation | ||||
Minimum fair market value per share of underlying stock used to determine option grant price, as a percent | 100% | |||
Expiration of stock options | 10 years | |||
Outstanding | ||||
Outstanding Balance at beginning of the year (in shares) | 72,265 | |||
Forfeited (in shares) | (1,881) | |||
Outstanding Balance at the end of the year (in shares) | 70,384 | 72,265 | ||
Weighted average Grant Date fair Value | ||||
Outstanding balance at the beginning of the period | $ 112.60 | |||
Forfeited | 106.16 | |||
Outstanding balance at the end of the period | 112.77 | $ 112.60 | ||
Weighted Average Exercise Price | ||||
Outstanding Balance at the beginning of the year | 235.69 | |||
Outstanding Balance at the end of the year (in shares) | $ 235.59 | $ 235.69 | ||
Additional information | ||||
Average Remaining Vesting Period | 2 months 12 days | 8 months 8 days | ||
Aggregate Intrinsic Value | $ 0 | |||
Stock options | 2018 Plan | Minimum | ||||
Stock-based compensation | ||||
Vesting period | 2 years | |||
Stock options | 2018 Plan | Maximum | ||||
Stock-based compensation | ||||
Vesting period | 4 years |
Stock-Based Compensation - Mark
Stock-Based Compensation - Market Performance Units (Details) - Market Performance Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 14, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of the awards | $ 9.10 | $ 9.10 | |
Unrecognized compensation expense | $ 1.8 | ||
Compensation expense | $ 0.9 | $ 1.2 | |
Share Price (Less or equal to $40.00 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 0% | ||
Share Price | $ 40 | ||
Tranche 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50% | ||
Share Price | $ 200 | ||
Number of consecutive trading days | 60 days | ||
Number of non-consecutive trading days | 90 days | ||
Number of trading days under arrangement | 180 days | ||
Fair value of the awards | 29.60 | ||
Modification date fair value | 8.80 | ||
Tranche 1 | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | 40 | ||
Tranche 1 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 200 | ||
Tranche 1 | Share Price (Less or equal to $200 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100% | ||
Share Price | $ 200 | ||
Tranche 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50% | ||
Share Price | $ 400 | ||
Number of consecutive trading days | 60 days | ||
Number of non-consecutive trading days | 90 days | ||
Number of trading days under arrangement | 180 days | ||
Consideration for forfeited unearned shares | $ 0 | ||
Fair value of the awards | $ 30.20 | ||
Modification date fair value | 9.40 | ||
Tranche 2 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 400 | ||
Tranche 2 | Share Price (Less or equal to $400 per share) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 100% | ||
Share Price | $ 400 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of activity for the Market Performance RSUs (Details) - Market Performance Units - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Units | ||
Outstanding Balance as of December 31, 2021 | 425,000 | |
Outstanding Balance as of September 30, 2022 | 425,000 | 425,000 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 9.10 | |
Balance at the end of the period | $ 9.10 | $ 9.10 |
Weighted Average Period Over Which Expected to be Recognized | ||
Weighted average remaining contractual life (in years) | 2 years 11 months 23 days | 2 years 11 months 23 days |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2022 Vote shares | Dec. 31, 2021 shares | |
Common Stock | ||
Common Stock, shares authorized | 1,600,000,000 | 1,600,000,000 |
Number of voting rights entitled for each share of Common Stock held | Vote | 1 | |
Common stock, shares outstanding | 278,655,235 | 13,259,748 |
Stockholders' Equity - Share Bu
Stockholders' Equity - Share Buyback Program (Details) - 2022 Share Buyback Program - $ / shares | 12 Months Ended | |
Aug. 10, 2022 | Dec. 31, 2022 | |
Share Buyback Program | ||
Authorized amount (in shares) | 10,000,000 | |
Term of share buyback program | 2 years | |
Common Stock repurchased and retired (in shares) | 357,461 | |
Weighted average price | $ 1.348 |
Stockholders' Equity - Reverse
Stockholders' Equity - Reverse Stock Split (Details) | Jul. 25, 2022 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares |
STOCKHOLDERS' EQUITY | |||
Reverse stock split | 0.05 | ||
Conversion of shares (in shares) | 1 | ||
Common stock, shares issued | 278,777,820 | 13,382,333 | |
Common stock, shares outstanding | 278,655,235 | 13,259,748 | |
Prior To Stock Split [Member] | |||
STOCKHOLDERS' EQUITY | |||
Common stock, shares issued | 265,194,961 |
Stockholders' Equity - Sales of
Stockholders' Equity - Sales of Shares of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||
Aggregate offering price | $ 266,855 | $ 366,540 |
Common ATM Program-1 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 100,000 | |
Number of Shares Sold | 2,471,185 | |
Weighted Average Price Per Share | $ 40.164 | |
Gross proceeds | $ 99,300 | |
Net proceeds | 95,700 | |
Common ATM Program-2 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 150,000 | |
Number of Shares Sold | 2,879,023 | |
Weighted Average Price Per Share | $ 52.069 | |
Gross proceeds | $ 149,900 | |
Net proceeds | 144,400 | |
Common ATM Program-3 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 250,000 | |
Number of Shares Sold | 16,743,797 | |
Weighted Average Price Per Share | $ 14.931 | |
Gross proceeds | $ 250,000 | |
Net proceeds | 241,000 | |
Common ATM Program-4 | ||
Class of Stock [Line Items] | ||
Aggregate offering price | $ 250,000 | |
Number of Shares Sold | 256,887,619 | |
Weighted Average Price Per Share | $ 0.612 | |
Gross proceeds | $ 157,100 | |
Net proceeds | $ 152,300 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||||
Jul. 25, 2022 shares | May 18, 2022 shares | Mar. 11, 2022 shares | Dec. 31, 2022 USD ($) director $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | May 17, 2022 $ / shares shares | May 02, 2022 $ / shares | Mar. 10, 2022 shares | Jul. 12, 2017 USD ($) | |
Preferred Stock | |||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Dividends, Preferred Stock | $ | $ 3.6 | ||||||||
Conversion of shares (in shares) | 1 | ||||||||
Reverse stock split | 0.05 | ||||||||
Series A Preferred Stock | |||||||||
Preferred Stock | |||||||||
Preferred stock, shares authorized | 2,800,000 | ||||||||
Preferred stock, shares outstanding | 2,778,111 | 2,778,111 | |||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||||
Preferred Stock, cumulative dividends rate (in percentage) | 10% | ||||||||
Accumulated preferred stock, Dividends | $ | $ 3.6 | $ 1.6 | |||||||
Additional common stock issuable upon conversion of remaining convertible shares | 73,058 | ||||||||
Cumulative accrued but unpaid dividends | $ | $ 15.9 | ||||||||
Per share average of cumulative preferred dividends (in dollars per share) | $ / shares | $ 5.7 | ||||||||
Reverse stock split | 0.0263 | ||||||||
Series B Preferred Stock | |||||||||
Preferred Stock | |||||||||
Preferred stock, shares authorized | 5,000,000 | ||||||||
Preferred stock, shares outstanding | 3,029,900 | 0 | |||||||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||
Conversion of Series A Preferred stock to common shares | 3,029,900 | ||||||||
Dividends, Preferred Stock | $ | $ 2.5 | ||||||||
Conversion of shares (in shares) | 3,075,349 | ||||||||
Third anniversary expected liquidation preference (in dollars per share) | $ / shares | $ 25 | ||||||||
Cumulative accrued but unpaid dividends | $ | $ 1.1 | ||||||||
Per share average of cumulative preferred dividends (in dollars per share) | $ / shares | $ 1.21 | ||||||||
Reverse stock split | 1.0150 | ||||||||
Number of common stock tendered | 42,591,440 | 18,006,560 | |||||||
Issuances of preferred stock | 2,129,572 | 900,328 | |||||||
Preferred stock cumulative dividend | 6% | ||||||||
Number of directors | director | 1 | ||||||||
Number of directors in arrears | director | 8 |
Stockholders' Equity - Treasury
Stockholders' Equity - Treasury Stock (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2022 | |
Stockholders' Equity | ||
Shares repurchased (in shares) | 46,452 | |
Shares returned in connection with the Appraisal Action following repayment of Margin Loan (in shares) | 76,179 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 15, 2021 | Dec. 31, 2022 | Mar. 18, 2021 |
Warrants | |||
Warrants outstanding | 486,591 | ||
Private Placement | |||
Warrants | |||
Warrants sold | 9,731,819 | ||
Exercise price of warrant per one Common Stock (in US$ per share) | $ 80 | ||
Shares issued in stock | 486,591 | ||
Common stock issued price | $ 55 | ||
Gross proceeds from offering expected | $ 26.8 | ||
Warrant | Private Placement | |||
Warrants | |||
Placement fee Percentage on Gross proceeds | 5.50% |
Related-Party Transactions - Re
Related-Party Transactions - Relationship with HandsOn Global Management (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) agreement | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2016 | |
Related-Party Transactions | |||||||||||||
Amount of related party transaction | $ 8,923 | $ 9,191 | $ 5,381 | ||||||||||
Related party expense | $ 2,734 | $ 2,016 | $ 2,186 | $ 1,987 | $ 1,992 | $ 2,744 | $ 2,748 | $ 1,707 | 8,923 | 9,191 | 5,381 | ||
Settlement gain on related party payable to Ex-Sigma 2 LLC | 1,287 | ||||||||||||
Rental expenses | 48,000 | 51,800 | |||||||||||
HGM | Travel Expense | |||||||||||||
Related-Party Transactions | |||||||||||||
Amount of related party transaction | $ 100 | 100 | 100 | ||||||||||
HGM | Master Service Agreement | |||||||||||||
Related-Party Transactions | |||||||||||||
Number of master agreements | agreement | 10 | ||||||||||||
Entities affiliated with HGM managed funds | Master Service Agreement | |||||||||||||
Related-Party Transactions | |||||||||||||
Revenue share percentage | 25% | ||||||||||||
Affiliate of largest stockholder | |||||||||||||
Related-Party Transactions | |||||||||||||
Rental expenses | $ 200 | 200 | 200 | ||||||||||
HOV Services, Ltd | Data Capture And Technology Services | Cost of revenue | |||||||||||||
Related-Party Transactions | |||||||||||||
Amount of related party transaction | 1,500 | 1,300 | 1,400 | ||||||||||
Sigma 2, LLC | |||||||||||||
Related-Party Transactions | |||||||||||||
Cash Reimbursed To Related Parties | $ 5,600 | ||||||||||||
Sigma 2, LLC | Margin Loan | |||||||||||||
Related-Party Transactions | |||||||||||||
Due to Related Parties | $ 6,900 | 6,900 | |||||||||||
Settlement gain on related party payable to Ex-Sigma 2 LLC | 1,300 | ||||||||||||
Sigma 2, LLC | Legal Expenses | |||||||||||||
Related-Party Transactions | |||||||||||||
Related party expense | 300 | ||||||||||||
SourceHOV | Master Service Agreement | |||||||||||||
Related-Party Transactions | |||||||||||||
Revenue share percentage | 75% | ||||||||||||
SourceHOV | Entities affiliated with HGM managed funds | Master Service Agreement | |||||||||||||
Related-Party Transactions | |||||||||||||
Related party expense | $ 6,900 | $ 5,700 | $ 1,900 |
Related-Party Transactions - Co
Related-Party Transactions - Consulting Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related-Party Transactions | |||||||||||
Related party expense | $ 2,734 | $ 2,016 | $ 2,186 | $ 1,987 | $ 1,992 | $ 2,744 | $ 2,748 | $ 1,707 | $ 8,923 | $ 9,191 | $ 5,381 |
Consulting Services | Oakana Holdings Inc | |||||||||||
Related-Party Transactions | |||||||||||
Related party expense | $ 100 | $ 200 | $ 200 |
Related-Party Transactions - Su
Related-Party Transactions - Subscription Agreements (Details) - Subscription Agreements $ in Thousands | 12 Months Ended | |
Aug. 11, 2022 USD ($) shares | Dec. 31, 2021 USD ($) director shares | |
Related Party Transaction [Line Items] | ||
Number of directors | director | 5 | |
Proceeds from issuance of stocks | $ | $ 269 | |
Sharon Chandha [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of Common Stock (in shares) | shares | 3,125 | |
Proceeds from issuance of stocks | $ | $ 100 | |
Par Chadha [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of Common Stock (in shares) | shares | 70,921 | 7,936 |
Proceeds from issuance of stocks | $ | $ 100 | $ 200 |
Martin Akins [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of Common Stock (in shares) | shares | 3,174 | |
Proceeds from issuance of stocks | $ | $ 100 | |
Martin Akins [Member] | Maximum | ||
Related Party Transaction [Line Items] | ||
Proceeds from issuance of stocks | $ | $ 100 | |
J. Coley Clark [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of Common Stock (in shares) | shares | 3,968 | |
John Rexford [Member] | ||
Related Party Transaction [Line Items] | ||
Issuance of Common Stock (in shares) | shares | 1,984 |
Related-Party Transactions - _2
Related-Party Transactions - Subscription, Voting and Redemption Agreement (Details) | May 19, 2022 Vote $ / shares shares | Dec. 31, 2022 $ / shares | May 18, 2022 shares | Dec. 31, 2021 $ / shares |
Related Party Transaction [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Redeemable Special Voting Preferred Stock | ||||
Related Party Transaction [Line Items] | ||||
Shares issued in stock | shares | 1,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
GP-HGM LLC [Member] | Redeemable Special Voting Preferred Stock | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 100 | |||
Voting preferred stock, authorized shares | shares | 1,000,000 | |||
Number of votes per share | Vote | 20,000 | |||
Preferred stock, shares authorized, increase proposal | shares | 40,000,000 | 20,000,000 |
Related Party Transactions - Re
Related Party Transactions - Relationship with Apollo Global Management, LLC (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related-Party Transactions | |||||||||||
Related party expense | $ 2,734 | $ 2,016 | $ 2,186 | $ 1,987 | $ 1,992 | $ 2,744 | $ 2,748 | $ 1,707 | $ 8,923 | $ 9,191 | $ 5,381 |
Management Holdings | Master Service Agreement | |||||||||||
Related-Party Transactions | |||||||||||
Revenue from related parties | 100 | ||||||||||
Caesars | Master Service Agreement | |||||||||||
Related-Party Transactions | |||||||||||
Revenue from related parties | 900 | ||||||||||
ADT LLC | Master Service Agreement | |||||||||||
Related-Party Transactions | |||||||||||
Revenue from related parties | 300 | ||||||||||
Diamond Resorts Centralized Services | Master Service Agreement | |||||||||||
Related-Party Transactions | |||||||||||
Revenue from related parties | 900 | ||||||||||
Diamond Resorts Centralized Services | Master Service Agreement | Maximum | |||||||||||
Related-Party Transactions | |||||||||||
Related party cost of revenue | 100 | ||||||||||
Presidio Group | Master Service Agreement | |||||||||||
Related-Party Transactions | |||||||||||
Related party expense | $ 200 |
Related-Party Transactions - _3
Related-Party Transactions - Receivable and Payable Balance with Affiliates (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | $ 759 | $ 715 |
Payables | 2,473 | 1,484 |
HOV Services, Ltd | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | 412 | 708 |
Rule 14, LLC | ||
Payable and Receivable Balances with Affiliates | ||
Payables | 2,473 | 1,483 |
HGM | ||
Payable and Receivable Balances with Affiliates | ||
Receivables and Prepaid Expenses | $ 347 | 7 |
Oakana Holdings Inc | ||
Payable and Receivable Balances with Affiliates | ||
Payables | $ 1 |
Segment and Geographic Area I_3
Segment and Geographic Area Information - Revenue by segment information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment information | |||||||||||
Number of segments | segment | 3 | ||||||||||
Revenue | $ 266,951 | $ 264,038 | $ 266,770 | $ 279,398 | $ 294,312 | $ 279,229 | $ 293,009 | $ 300,056 | $ 1,077,157 | $ 1,166,606 | $ 1,292,562 |
Cost of revenue (exclusive of depreciation and amortization) | 218,851 | 217,842 | 217,277 | 223,504 | 235,697 | 211,731 | 209,080 | 232,587 | 877,474 | 889,095 | 1,023,544 |
Segment profit | 199,683 | 277,511 | 269,018 | ||||||||
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 38,920 | 44,369 | 50,195 | 43,040 | 48,262 | 43,244 | 36,390 | 41,885 | 176,524 | 169,781 | 186,104 |
Depreciation and amortization | 17,889 | 17,737 | 17,993 | 18,212 | 19,037 | 19,094 | 19,420 | 19,599 | 71,831 | 77,150 | 93,953 |
Impairment of goodwill and other intangible assets | 141,617 | 29,565 | 171,182 | ||||||||
Related party expense | 8,923 | 9,191 | 5,381 | ||||||||
Interest expense, net | 41,942 | 40,897 | 42,271 | 39,760 | 40,293 | 41,757 | 42,867 | 43,131 | 164,870 | 168,048 | 173,878 |
Debt modification and extinguishment costs (gain), net | 217 | (4,696) | 8,117 | 884 | 11,381 | (28,070) | 4,522 | (16,689) | 9,589 | ||
Sundry expense (income), net | (1,304) | 781 | (741) | 307 | 801 | 136 | (787) | 213 | (957) | 363 | (153) |
Other expense (income), net | 1,751 | (1,115) | 7,375 | 6,159 | (768) | 366 | 651 | 152 | 14,170 | 401 | (34,788) |
Net loss before income taxes | (195,666) | (83,358) | (77,903) | (54,455) | (62,383) | (11,773) | (17,360) | (39,218) | (411,382) | (130,734) | (164,946) |
I T P S Segment | |||||||||||
Segment information | |||||||||||
Revenue | 184,813 | 185,309 | 190,005 | 205,007 | 216,687 | 208,304 | 217,260 | 231,875 | 765,134 | 874,126 | 1,005,043 |
Cost of revenue (exclusive of depreciation and amortization) | 156,114 | 157,269 | 156,704 | 163,586 | 172,299 | 157,721 | 156,669 | 185,502 | 633,673 | 672,191 | 815,013 |
Segment profit | 131,461 | 201,935 | 190,030 | ||||||||
H S Segment | |||||||||||
Segment information | |||||||||||
Revenue | 65,329 | 60,955 | 56,390 | 56,596 | 56,547 | 53,995 | 56,204 | 51,093 | 239,270 | 217,839 | 219,047 |
Cost of revenue (exclusive of depreciation and amortization) | 50,069 | 48,316 | 45,719 | 46,731 | 46,709 | 41,945 | 38,973 | 35,818 | 190,835 | 163,445 | 159,917 |
Segment profit | 48,435 | 54,394 | 59,130 | ||||||||
L L P S Segment | |||||||||||
Segment information | |||||||||||
Revenue | 16,809 | 17,774 | 20,375 | 17,795 | 21,078 | 16,930 | 19,545 | 17,088 | 72,753 | 74,641 | 68,472 |
Cost of revenue (exclusive of depreciation and amortization) | $ 12,668 | $ 12,257 | $ 14,854 | $ 13,187 | $ 16,689 | $ 12,065 | $ 13,438 | $ 11,267 | 52,966 | 53,459 | 48,614 |
Segment profit | $ 19,787 | $ 21,182 | $ 19,858 |
Segment and Geographic Area I_4
Segment and Geographic Area Information - Revenues by principal geographic area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues by principal geographic area | |||||||||||
Revenue | $ 266,951 | $ 264,038 | $ 266,770 | $ 279,398 | $ 294,312 | $ 279,229 | $ 293,009 | $ 300,056 | $ 1,077,157 | $ 1,166,606 | $ 1,292,562 |
United States | |||||||||||
Revenues by principal geographic area | |||||||||||
Revenue | 878,644 | 941,985 | 1,057,006 | ||||||||
EMEA | |||||||||||
Revenues by principal geographic area | |||||||||||
Revenue | 180,502 | 205,772 | 213,418 | ||||||||
Other. | |||||||||||
Revenues by principal geographic area | |||||||||||
Revenue | $ 18,011 | $ 18,849 | $ 22,138 |
Selected Quarterly Financial _3
Selected Quarterly Financial Results (Unaudited) - Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selected Quarterly Financial Results (Unaudited) | |||||||||||
Revenue | $ 266,951 | $ 264,038 | $ 266,770 | $ 279,398 | $ 294,312 | $ 279,229 | $ 293,009 | $ 300,056 | $ 1,077,157 | $ 1,166,606 | $ 1,292,562 |
Cost of revenue (exclusive of depreciation and amortization) | 218,851 | 217,842 | 217,277 | 223,504 | 235,697 | 211,731 | 209,080 | 232,587 | 877,474 | 889,095 | 1,023,544 |
Selling, general and administrative expenses (exclusive of depreciation and amortization) | 38,920 | 44,369 | 50,195 | 43,040 | 48,262 | 43,244 | 36,390 | 41,885 | 176,524 | 169,781 | 186,104 |
Depreciation and amortization | 17,889 | 17,737 | 17,993 | 18,212 | 19,037 | 19,094 | 19,420 | 19,599 | 71,831 | 77,150 | 93,953 |
Impairment of goodwill and other intangible assets | 141,617 | 29,565 | 171,182 | ||||||||
Related party expense | 2,734 | 2,016 | 2,186 | 1,987 | 1,992 | 2,744 | 2,748 | 1,707 | 8,923 | 9,191 | 5,381 |
Operating profit (loss) | (153,060) | (47,491) | (20,881) | (7,345) | (10,676) | 2,416 | 25,371 | 4,278 | (228,777) | 21,389 | (16,420) |
Other expense (income), net: | |||||||||||
Interest expense, net | 41,942 | 40,897 | 42,271 | 39,760 | 40,293 | 41,757 | 42,867 | 43,131 | 164,870 | 168,048 | 173,878 |
Debt modification and extinguishment costs (gain), net | 217 | (4,696) | 8,117 | 884 | 11,381 | (28,070) | 4,522 | (16,689) | 9,589 | ||
Sundry expense (income), net | (1,304) | 781 | (741) | 307 | 801 | 136 | (787) | 213 | (957) | 363 | (153) |
Other expense (income), net | 1,751 | (1,115) | 7,375 | 6,159 | (768) | 366 | 651 | 152 | 14,170 | 401 | (34,788) |
Net loss before income taxes | (195,666) | (83,358) | (77,903) | (54,455) | (62,383) | (11,773) | (17,360) | (39,218) | (411,382) | (130,734) | (164,946) |
Income tax (expense) benefit | 1,522 | (1,924) | (1,296) | (2,501) | (8,226) | (1,441) | (2,007) | 18 | (4,199) | (11,656) | (13,584) |
Net loss | (194,144) | (85,282) | (79,199) | (56,956) | (70,609) | (13,214) | (19,367) | (39,200) | (415,581) | (142,390) | (178,530) |
Net loss attributable to common stockholders | $ (196,221) | $ (87,326) | $ (81,392) | $ (57,895) | $ (71,461) | $ (14,036) | $ (20,165) | $ (38,304) | $ (422,834) | $ (143,966) | $ (179,839) |
Weighted average common shares outstanding - basic | 139,393,466 | 63,145,001 | 25,288,449 | 17,186,649 | 10,357,524 | 7,532,751 | 3,073,701 | 2,532,324 | 61,593,381 | 5,900,058 | 2,457,221 |
Weighted average common shares outstanding - diluted | 139,393,466 | 63,145,001 | 25,288,449 | 17,186,649 | 10,357,524 | 7,532,751 | 3,073,701 | 2,532,324 | 61,593,381 | 5,900,058 | 2,457,221 |
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ (1.41) | $ (1.38) | $ (3.22) | $ (3.37) | $ (6.90) | $ (1.86) | $ (6.56) | $ (15.13) | $ (6.86) | $ (24.40) | $ (73.19) |
Diluted (in dollars per share) | $ (1.41) | $ (1.38) | $ (3.22) | $ (3.37) | $ (6.90) | $ (1.86) | $ (6.56) | $ (15.13) | $ (6.86) | $ (24.40) | $ (73.19) |
Series A Preferred Stock | |||||||||||
Other expense (income), net: | |||||||||||
Cumulative dividends | $ (940) | $ (908) | $ (876) | $ (864) | $ (852) | $ (822) | $ (798) | ||||
Cumulative dividends for Series A Preferred Stock | $ 896 | ||||||||||
Series B Preferred Stock | |||||||||||
Other expense (income), net: | |||||||||||
Cumulative dividends | (1,137) | (1,136) | (1,317) | (75) | |||||||
I T P S Segment | |||||||||||
Selected Quarterly Financial Results (Unaudited) | |||||||||||
Revenue | 184,813 | 185,309 | 190,005 | 205,007 | 216,687 | 208,304 | 217,260 | 231,875 | $ 765,134 | $ 874,126 | $ 1,005,043 |
Cost of revenue (exclusive of depreciation and amortization) | 156,114 | 157,269 | 156,704 | 163,586 | 172,299 | 157,721 | 156,669 | 185,502 | 633,673 | 672,191 | 815,013 |
H S Segment | |||||||||||
Selected Quarterly Financial Results (Unaudited) | |||||||||||
Revenue | 65,329 | 60,955 | 56,390 | 56,596 | 56,547 | 53,995 | 56,204 | 51,093 | 239,270 | 217,839 | 219,047 |
Cost of revenue (exclusive of depreciation and amortization) | 50,069 | 48,316 | 45,719 | 46,731 | 46,709 | 41,945 | 38,973 | 35,818 | 190,835 | 163,445 | 159,917 |
L L P S Segment | |||||||||||
Selected Quarterly Financial Results (Unaudited) | |||||||||||
Revenue | 16,809 | 17,774 | 20,375 | 17,795 | 21,078 | 16,930 | 19,545 | 17,088 | 72,753 | 74,641 | 68,472 |
Cost of revenue (exclusive of depreciation and amortization) | $ 12,668 | $ 12,257 | $ 14,854 | $ 13,187 | $ 16,689 | $ 12,065 | $ 13,438 | $ 11,267 | $ 52,966 | $ 53,459 | $ 48,614 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Mar. 07, 2023 Vote $ / shares shares | Feb. 27, 2023 USD ($) | Feb. 15, 2023 USD ($) | Jul. 25, 2022 | Apr. 16, 2019 USD ($) | Jul. 13, 2018 USD ($) | Apr. 03, 2023 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 28, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Subsequent Events | |||||||||||||
Borrowings from senior secured revolving facility and BRCC revolver | $ 20,000 | $ 11,000 | $ 29,750 | ||||||||||
Proceeds from incremental term loans | $ 30,000 | $ 30,000 | |||||||||||
Outstanding amount of term loans | 1,096,837 | 1,249,227 | |||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.05 | ||||||||||||
BRCC Facility | |||||||||||||
Subsequent Events | |||||||||||||
Debt instrument, repayment made in cash | 66,500 | ||||||||||||
Maximum borrowing capacity | $ 51,000 | ||||||||||||
Outstanding amount of term loans | $ 68,529 | $ 115,000 | |||||||||||
Common ATM Program-3 | |||||||||||||
Subsequent Events | |||||||||||||
Shares issued | shares | 16,743,797 | ||||||||||||
Weighted average price | $ / shares | $ 14.931 | ||||||||||||
Gross proceeds | $ 250,000 | ||||||||||||
Net proceeds | $ 241,000 | ||||||||||||
Subsequent Events | |||||||||||||
Subsequent Events | |||||||||||||
Minimum Bid Price Per Share For Listing Requirement | $ / shares | $ 1 | ||||||||||||
Stockholders' Equity Note, Reverse Stock Split, Shares Combined From Reclassified Shares | shares | 1 | ||||||||||||
Subsequent Events | Minimum | |||||||||||||
Subsequent Events | |||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.01 | ||||||||||||
Stockholders' Equity Note, Reverse Stock Split, Shares Reclassified And Combined | shares | 100 | ||||||||||||
Subsequent Events | Maximum | |||||||||||||
Subsequent Events | |||||||||||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.005 | ||||||||||||
Stockholders' Equity Note, Reverse Stock Split, Shares Reclassified And Combined | shares | 200 | ||||||||||||
Subsequent Events | BRCC Facility | |||||||||||||
Subsequent Events | |||||||||||||
Debt instrument, repayment made in cash | $ 32,800 | ||||||||||||
Borrowings from senior secured revolving facility and BRCC revolver | 9,600 | ||||||||||||
Receivables collected | $ 13,500 | ||||||||||||
Proceeds from the sale of receivables | $ 10,000 | ||||||||||||
Maximum borrowing capacity | $ 35,000 | ||||||||||||
Proceeds from incremental term loans | $ 31,500 | ||||||||||||
Credit facility drawn | 29,600 | ||||||||||||
Transaction fee | $ 5,000 | ||||||||||||
Outstanding amount of term loans | $ 15,700 | ||||||||||||
Subsequent Events | BRCC Facility | SOFR | |||||||||||||
Subsequent Events | |||||||||||||
Variable interest rate (as a percent) | 7.50% | ||||||||||||
Subsequent Events | Secured 2023 notes | |||||||||||||
Subsequent Events | |||||||||||||
Repurchase of principal amount | $ 13,400 | ||||||||||||
Subsequent Events | Special Voting Preferred Stock | GP-HGM LLC [Member] | |||||||||||||
Subsequent Events | |||||||||||||
Issuance of Common Stock (in shares) | shares | 1,000,000 | ||||||||||||
Common stock issued price | $ / shares | $ 100 | ||||||||||||
Number of votes per share | Vote | 75,000 | ||||||||||||
Special Voting Stock for an aggregate price | $ / shares | $ 100 | ||||||||||||
Subsequent Events | Common ATM Program-3 | |||||||||||||
Subsequent Events | |||||||||||||
Shares issued | shares | 995,548,819 | ||||||||||||
Weighted average price | $ / shares | $ 0.070 | ||||||||||||
Gross proceeds | $ 69,300 | ||||||||||||
Net proceeds | $ 67,000 |