XELA - Earnings call transcript Q4 2018 | Exela Technologies, Inc.

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Operator

Good day everyone and welcome to the Exela Technologies fourth quarter 2018 financial results conference call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. today's being that note please event recorded. is And to conference of over I Relations. would Jim the like now President And to turn Mathias, Investor Vice Please go ahead.

Jim Mathias

you, Executive I am to here today Financial and quarter Thank Officer. Cogburn, year-end Jim joined afternoon Exela's Reynolds, Ron Technologies Chief Chief and call. Exela and fourth welcome conference XXXX with Good William. Officer the everyone our

via replay of take webcast, be is made XXXX. listed this A by website. Exela's the is Exela's is being Ron until replay Information press your today's will March questions. on remarks release, which we is of of Today's prepared the XX, call will Following broadcast in on also Jim, live the which available page page to Relations Investor call conference access available available Investor and Relations exelatech.com. website,

on call, During of subject financial be and could risks that any statements. reflect may Exela expectations certain events occur Securities uncertainties unknown to this that the future based Reform actual statements make no forward-looking Private and today's statements statements are performance These the forward-looking Litigation as will current update characterized from are known regarding under and XXXX. undertake events and assumptions. to and call after differ obligation to materially and results We any forward-looking Act

Relations the Exela's XX-K, filings with risk or Copies in other Investor page most Exela's SEC. available along periodic press the the on discussed website. refer the factors are more to Form please of SEC the For information, recently filed release the with reports from company's associated and

discuss the measures these page today's on management call Reconciliations Relations be how additional financial on call, GAAP our results we today's found can will During of performance information non-GAAP we Investor to non-GAAP certain and provide our operating the between of business. on measures. website. believe We non-GAAP refer views

Please the for also call pro on call the reminder, which Investor results combined on Holdings our and page and Novitex accompanies note, SourceHOV of presentation As Holdings, are website. forma on this fact company business that discussed financial XX, combination sheet accessible today's the results closed XXXX. reflect investor of a Relations an July conference

begin the will our CEO, Ron? We turning over Cogburn. call by Ron to now

Ron Cogburn

Thanks thanks for us Jim. today. joining Good afternoon and everyone

Let's and start both number with our summary. revised XXXX four for achieved We our discuss a slide revenue financial EBITDA. XXXX and and had adjusted guidance solid

well a growth customer our with a we results. a focus awareness with concentration we with top made high a Our showing in XX% as and operate investments low customers. FTE increased of and as continued substantial $XX,XXX. revenue growth on in goal our These are departmental to growing helped have With our Now investments industry-specific customer XXXX rate revenue customers. existing growth and expansion XXX in achieved our $XXX XXX XX%, customer and customers. believe market Digital we and for for full-year addressable the approximately on the million beyond had developing to XXXX, rate our We top of large customer per success is In difference. provides runway of good and awareness increase us retention and solutions increased achieve the X% replicate

on and of year a basis, margin. of increase XXX recorded rates. adjusted in growth year-over-year XX.X% an industry basis continued sensibly points $XXX.X sheet to to of an EBITDA reaching focus resulted We reported committed also result increase We are margins topline a compared to our the EBITDA growth and XX.X% XXXX, time. billion, while million X.X% strong of We pursuing adjusted a $X.XXX on balance our the growth over deleveraging for ahead

ongoing savings topline to our initiatives, strategy. executed our year the of on EBITDA, our during addition we part adjusted and growing an In important

our the growth million we and initial million. drive Through we and of we made drove solutions increase to here in converting Now, basis combination savings, awareness, adjusted million customer important by new XXXX, $XX year-over-year margin. to of successfully during a into EBITDA or we improvement XXXX. in savings reach investments our customers achieved opportunity fact. providing growth During expand is on We a meaningful in an $XX $XX the And topline demand are to our to goal strong a to achieving exceeding offset pipeline response invested set we In Digital for as our revenue. see segments whitespace of we

and will the Beyond result XXXX, convergence will optimization gradually adjusted and and we be decline. believe the our our This EBITDA current savings of expenses achieved remaining will in restructuring majority of EBITDA. increasingly

to long-term ahead will greater generate for are Reynolds beyond, growth. XXXX we cover to shortly. well-positioned sustainable in detail outlook Jim our and XXXX Looking

agree of of Additionally, use this XXXX come of leverage has many EBITDA year. which ratio growth, reduce with as one Through to we spent speaking leverage we a to time lot up our is X% investors with cash we theme are recurring net during X% the prudent need that. reduce and to working and and our times

further we is ratio leverage in the group. that peer achieve Over long-term, more are working and to line with deleverage a our

financial Adjusted EBITDA increase growth pleased to the an million, basis. compared of and of quarter QX comparison sequentially. XX%, is well investments. as of of XX% slide as XXXX. are points the fourth I topline, combination compared that more totaled of increase of are very to a Revenue for the basis. Now let's improvement customer bank than walk driven was X% significant. turn these at on provides and The look million just to on five sequential impact a our Digital Now on focus few of highlighted efforts I global a the quarterly the facts factors, by number X% geographies of I adjusted through went proof quarter talked a January is increase our on an year-over-year and EBITDA an of in we fourth of $XXX providing year-over-year contract the XX% value $XXX with million, that ongoing QX X% contract total of on by to to XXX the are resulting including Along the quarter in compared to year-over-year quarter year. of interest of adjusted it live little noteworthy. a generating X core. and working. a which years want are was strategy best metrics a with $XX of in totaled Remember to first million their two this basis we customer, $XX.X an Exela fourth margin $XXX.X about five-year decided term now that contract and a further basis the million. a on this duration number see they In for XXXX, with Impressive increase approximately quarter EBITDA with the QX The clean our was in of discussions That XXXX

with our existing of reduce is that with won waste strategy employee connected SmartOffice SmartOffice. that management, on-demand the services This were green investor were the and existing the level. several of complementary new in enterprise Now SmartOffice and energy for offerings and ultimately initiatives, year, we Exela these workplace Additionally, to global which the Both facilities two the engagements banks of and will also for deals logistics power are Digital interconnected which of that XXXX, devices facilitate are front technologies These services introducing fulfillment including were and customers. office office, we future to help enhance transform visitor our today. provide experience. customers.

in is a per turn FTE lower engagements to Revenue this number solutions applying believe automation We and closely. metric our bring cost. six. effectiveness slide to the let's demonstrates variable to Now very tracked we our metric

X% increased by from have basis and an $XX,XXX which is FTE the of We per FTE on organic $XX,XXX XX% revenue per at end approximately overall XXXX. to up

BPO in revenue Our is which our without the industry. people highest among group FTE peer Exela very driving adding metric is for our growth industry. the is per unique in

is including operations other the marketing, Looking by finance the Where closely to technology our areas our Exela at in people headcount lowering been been key within have we areas sales, have key of and we strength. throughout effective organization. headcount, leveraging adding

Exela's grow launched in an Going we a to team. a Amsterdam successful is our model, collaboration cross-border a footprint. there leadership thought opportunity recently forward, and U.S. our for model strategy model hub continue the and office team driving to and business is growth, we Exela's EMEA team. go-to-market for opened follows tech European see our implemented Amsterdam thriving significant execution. closely This We strategy

generates our the of process gross our XX% XX% business Amsterdam well for improvement closely needs opening our world customers. rest in XX% automation opening mixture the positioned revenue effect the during the U.S. XX% and our It's total The the of followed of Our this continues headcount. margin brings headcount. as This of total XXXX with story speaking, multinational London. the in Geographically significant The the is innovation office to with revenue to center to automation is majority the revenue. unfold. address the team of of headcount potential of

to number Now let's slide turn seven.

avenues to example platforms customer is Our like been they global our are as solutions, strategy some in us. of very are that their the outsourced of the I they have our processes grow to decision change before solutions outsource drive significant to cases, within In bank never to newfound benefits mentioned, the of realizing These customers and breadth understands resonating the make transformation. existing organization. digital seeking just after opportunity the

build Our increase expand work opportunities existing seek digital our to number them identifying while these top on successful within engagements the journeys. customers. service on within of agreements strategic to customers focused to teams statements master are our their of deal with and these on We partnering

our with management digital challenges and of to information just recruit few. revenue process business to management, address mention Exela a robotics, enterprise our and customers course platforms such Exela management, as that contract workflow their automation, hire, SmartOffice, mission are discussing solutions critical management, room, cycle our mail We

at broad a end the base revenue concentration QX. and customer with of have sticky We low

Our XX% our of XXX contributed our top contributed XX XX% revenue. of top top XXX XX% The revenue. The of our contributed customers revenue.

year-over-year. and customer retention way, in result. and very revenues XX% these of expanding with have XX% at Fortune We great grow has in customers the our over the XXX grew, measurable presence America very XX% list to XX% which an a Customer a positive high ability within EMEA with remain our by and of rates

rest we optimistic XX% $XX very about generating for annual had prospects based on only world revenue. XXXX. XXXX. Closing our XX of the the Today revenue the million are in of We generates customers XXXX,

Now six of at this XXXX. is $X up from million the close

important customers in $X generating customers. which annual million revenue XXX highlight is over in totals added XXXX Another now we XX

of in wallet is increase XXXX. our to grow efforts our from of existing shares. This this effectiveness gain XXX Now the the up while within and end demonstrates customers

have pipeline we in are investments Additionally, pleased existing I the to in resulted with strategy, have Consistent year. increasing in facing substantial am effectively are our our increase proportion adding from last customers. an share of doubling and customer the made within pipeline, with automation that we streams and higher deals we work revenue you organization from it the seeing additional our

customer we remaining to Slide the possible first Exela turn increasing been to and results amazing top was our top customer XX%, development XXXX replicate about before slide awareness, acceleration customers segments for solutions. which customer suite hand and presentation our the XXX which provide. customers. in a XX%, for than was in arguably less focused covers Exela's strategy And X%, was focus the grew These significantly grow us of continue Jim throughout were our the our in investments organic. customers the million office is call among in an Of closing, top topline and give the slides of growth XX% innovation of I of Exela's two efforts strategy, our In growth. our accelerating years Technologies let's of illustrates note a business eight. opportunity what's demonstration could organic. consolidated and the hear presence a with and Exela overall growth one Europe year our the They Since important to Digital of detail impressive, result discussion Now And of The first is highlighted scale today. ago, rollout sales the number grew customers. financials, were and the most the by of X% and growth eight XXX in increasing other XXXX and $XX a and direct to to and our have invest continued initiatives. made great expanded the confidence is rate number probable. We a to organic. Exela Now saving of most awareness. our opening conception of the of over it's we combined slide with results XX solutions in This which center was This in achieved top the

We which XXXX, to are and excited start off great market penetration. has with greater opportunities a about gotten more

are growth forward call greater and on I We like to going customers their Jim to now looking for our over to digital to would Now Exela hand we with results enable discuss who will continuing positioned believe is financial And the well Digital forward. in Reynolds, Jim? our detail. journeys

Jim Reynolds

Thanks Ron.

our will want filing with The let day of Report Form to of the Form Securities U.S. Annual intend we XXXX following Report. to for grants XXb-XX extension because would XX-K Exchange know, I today's late start, automatic for be filing file XX everybody the XXb-XX I of a deadline. year filing on our Commission and we Form Annual Before the an notification fiscal after

be the management filing conclude not in to prior We the in the results such procedures, expects an the XX-K XX statements to disclosure that the accounting tuck-in Form operations business we relating one are anticipate position, of review to disclosure delay of completed present company's with effective. XXXX. in to expects and our conclude certain the because the all the management Based procedures This day unanticipated on company's consolidated conformity filing were its presented Form postponing financial periods for flows GAAP. material company's is not experienced financial the weaknesses, of to acquisitions we will Form the period. material and that Notwithstanding company's of be requested controls information of control extension our during cash respects, to XX-K fairly, the XX-K in to completing results. included in our and company's the We expiration

of QX with Fourth XXXX, totaled slide million an XX. revenue X.X%. in start of compared to increase Let's quarter $XXX.X $XXX.X million

Our of largest on XX% revenue, basis. quarterly year-over-year represents grew X.X% segment our ITPS, which a

X.X% Fourth XX% legal Our $XX.X fourth XXXX. and declined XX.X%, quarter quarter and solutions improved healthcare and million $XX.X and by segments million or was from of prevention loss adjusted the EBITDA respectively.

non-cash charges that quarter, our two During the were there impacted results.

changed our branding Exela. First, in early we go-to-market and strategy XXXX, as

This As and $XX.X the this, $X.X increased we of fourth a our amortization asset write-off expense by result during had our in legacy all million to for of year. names the quarter trade XXXX. million

operating recorded part Second, our million a goodwill of our to LLPS segment related of annual test, impairment non-cash charge to $XX.X we as impairment of lower the in and results. intangibles due

ITPS driven From perspective, revenue the ITPS approximately growth, The year, model. in Now $X.XXX revenue Digital innovation our X%. by we Digital solutions For the results XXXX, forma totaled on top the a revenue Now billion growth XXXX, during result business well by XX.X%. which of XXXX one development Healthcare We new of pro rate. of was business inorganic increase a from is XXXX and contract small billion, who our from $X.XXX totaled over in during the a driven increase revenue This offset decline up impact its Revenue was largely X.X% consolidated the along revenue an team, for business. $XXX a the of XX% of saw growth investments ahead The is customer with customers. acquisitions, decline lost of decrease this single positive by centers revenue from in made was increase totaled tuck-in due of volumes and in to ramp-up a a full basis. in our group a X.X%. to XXX year compared year customers our million, segment when

in $XX.X help healthcare revenue in December year. growth we will recent believe addition, LLPS, decline asset of In our that for a acquisition segment. totaled drive million, this we announced In the X.X% the

practices. cost few expense business Gross of impacted our primarily a XXXX and have million our optimization were sale discussed, project-based. of segment claims is in is we driven decrease net revenue. this approximately results consulting recorded due revenue services the in from $X.X incurred which to higher XX.X% As are lower by The from administration the non-core legal and event and margins in

was our public our in of continued XX.X% revenue. We our well organization million paid decline as being expect These SG&A totaled SG&A margin company's due continued The is deal by in customer facing periods. flow-through customer position will improve in $XXX.X actions in initiatives, from gross was ongoing offset to to XXXX, digital we impact and as cost on to for as associated contracts. impact us no this with deliver continue savings savings a as of company. and gross higher costs as well margins to investment the future XXXX transformation our

Moving to taxes.

of the during we resulted interest ability to year. our passed income. laws in in net received in globally. As carryforwards XX, limitations. deduct December increase income an pretax expense loss to taxes paid This we million our available approximately from XXXX, on debt tax of tax perspective, At about benefit million result operating historical to subject the $XX we XXXX, $XXX a in the approximately of was $X.X From have income cash million a offset our

XX.X% Our and year of margin for adjusted points. adjusted improved or of increase basis to XXXX EBITDA XX.X% EBITDA for million, $XXX.X totaled XXX an our the

Moving XX. to slide

from EBITDA. to Looking adjusted EBITDA the at bridge

and million to in item of our on asset bridge our is includes savings. these of employee other, in remainder disposal The made walk XXXX. box and $XX.X million the is to to costs in which non-cash expense The investments relate XXXX extinguishment LLPS costs. business the optimization cost This restructuring next achieve relates stock and adjustment option charges. of debt and impairment first and The charges costs $XXX.X the

these million the $XX.X incurred the $X.X XXXX. the is vendor EBITDA is to integration in in and breakout create narrowed costs $XXX.X with adjusted facility related model. believe adjustment quarter to And decline to and optimization represented Exela fourth The between of fourth expect converge $XX.X XXXX. million of optimization by the costs. restructuring million implement the and water expenses gradually as in EBITDA headcount and costs, million summarize, adjusted transaction in to consistent costs restructuring EBITDA year million and gap for have expenses. in third mark The final were consisted our the transformational over million To and the This time. costs and $X.X of quarter. time, we goal high XXXX We which of in our in XXXX, we EBITDA quarter During terms $XX.X in totaled

XX. Turning slide credit to liquidity cash structure and excluding revolving net XX, debt $XX.X total of $XX We $XXX the which billion. the letters an on $XXX our credit set of capital On standby for aside million was million restricted cash credit. for December had undrawn and million XXXX, agreement was was million of $X.XXX facility,

Since Our we XXXX, continue buyback and in launched remains we have effect buyback approximately X.X total opportunistic. to the program purchased in shares. million be in will we

On the next slide, our business outlook.

XXXX full-year currency X% in a X% resulting billion our to $X.X billion on $X.XX year-over-year constant to be of basis. expect growth revenue to in range We the of

XXXX, quarter million. estimate $XXX For the to of revenue we first $XXX to be million between

For to XXXX, the be of expected growth million X% to to X% between X.X% $XXX CapEx representing a between XX%. be to adjusted year EBITDA between $XXX year-over-year million revenue. for of to is

for priority capital pay Our is allocation debt. to XXXX a down

pay to In includes growth of with This closing, EBITDA open using Operator, to questions. down achieved X%. we for pleased That and cash a the formal results. debt. Our let's a X% goal the XXXX through be between had leverage our solid our will up queue are comments. in reduce reduction combination net to is and

Operator

today first go our Fitzgerald. Morgan line be Please Brian today's Cantor your questioner Joseph with is with Stanley. And be ahead. will Foresi Please will And go next ahead. Essex open. Instructions]. [Operator questioner Joseph Foresi,

Jonathan Lee

Thanks for It's my for on Jonathan, Hi. Brian. taking question.

of fiscal growth. XXXX walk Can that? through Your revenue guidance implies you deceleration

Jim Reynolds

good growth, our at I currently think feel XXXX, to Now. So the Digital approximately when results if right, the X% from And X%. was guiding look are look about really for you you revenue inorganic. at revenue of course, X% We growth we

an we looking increase guidance, are we which from X% organic are our XXXX growth, at the quoting when would So reported. be

Jonathan Lee

last Where BPO you relative growth And about quarter, talked the fall it. in XXXX? Got fiscal market will you for to space. that

Ron Cogburn

Well, Ron. this is

really a that part We of are market. addressable still small

industries We X% are we financial between little remember, have they those and are two you the largest and If our banking services serve. just two, over good really a between The growth And that healthcare feel segments. X%. X%. insurance we about and

So we those feel comfortable two on we sit where with very industries.

Jonathan Lee

Appreciate it. Thanks guys.

Operator

today will questioner Nomura. with be our go And Dolev Dan ahead. next Please

Dan Dolev

Can guys. hear Hi me? you

Ron Cogburn

Yes.

Jim Reynolds

we Yes, can.

Dan Dolev

Yes. of to actually other am trade. going this take I side the

mean, the an it's very, I for XXXX. us as like give your achieving of our above And maybe also have you is organic in Thank the accelerating guidance level feel Can you strong. guidance said that it's I And seems looks very our like, on basis. numbers So sort guidance? you of it confidence above numbers. you. EBITDA

Jim Reynolds

Dan. Thanks Sure.

discussed have XX% have if revenue, with That somewhat we the the you about large we typically But the the beginning historically, fall, bank. remember, at months. XX in As range. back up ramped announced a visibility transaction of the next to year. wide respect we of contract With the we the into have

we So pleased very that. with are

the and at closed the acquisition healthcare that help drive In also end for XXXX. December, of results a will we addition

Operator

Please Capital be today will questioner And ahead. our Matthew Markets. Roswell RBC with go next

Matthew Roswell

Yes. Two questions.

am the just quarter gave First, for of kind know you question it I apples-to-apples I I it. you sorry now. if a numbers Do growth? have missed full fourth organic year and the

Jim Reynolds

I available. don't that have readily

Sorry.

Matthew Roswell

that are circle sign you I like for you And later. was second you can the XXXX? any wondering about about could back if it we thinking looks in Maybe Thanks. what large the clients but fine. That's question talk possibility the I Okay. FY sort of not guess is, quarter, in then number did

Ron Cogburn

fourth that call signed exactly deals able didn't said, expand think we it, Matthew. land what the late existing have we to process customers enterprise what that year. the used we two we were those global When give last banks But which deals two guidance we were about well. kind don't strategy that not and per and about you identify were enterprise so we That's talked We quarter. We quarter. typically of for

talked also expansion you of types the of We And that the Digital assets. engagements journey for related if Now last doubled has effectively year in about pipeline these year our early remember, mentioned to also are digital I the the customers. will healthcare for our or this

we feel about that. So very strongly

Matthew Roswell

Okay. of Maybe number it. more I it missed Was The with $XX than of annual revenue? million clients XX?

Ron Cogburn

It's from XXXX. XX, growing Yes in six

Matthew Roswell

Right. of the And I guess XX I but until the end up of quarter, ramp the obviously had third January, as large bank didn't contract right?

Jim Reynolds

That's right.

Matthew Roswell

Okay. Thank you much. very

Operator

next Joseph the Foresi with questioner will today ahead. go Fitzgerald. Cantor And be Please

Joseph Foresi

me Can Hi. you hear okay?

Ron Cogburn

Yes, Joe.

Jim Reynolds

Joe. We can now,

Joseph Foresi

Okay. didn't Maybe so they Yes. question, muted like my they me.

year-over-year Sorry fairly about the doubling, Anyways, problem. mentioned the phone rate of pipeline but the kind growth consistent. you is

So rates you topline us conversion changed? year? and on Is the next the about the about? for element tell there anything Is expectations an rate? of we conservatism in conversion should Have what can know topline

Jim Reynolds

for rate. Joe. conversion about feel Thanks question, good the our We Yes.

hit revised this the of like is And the guidance. year, full upward we size the actually strong. for think revenue I year, just pipeline

we So have great revenue and into the good. feel pretty visibility

think conservative Digital gaining we traction to which we or at XX our Now, the front we are a still and company, months trying I public potential for in so new be look is as are office. somewhat

come would the we that on out rather with feeling visibility So topline. good XX%

Joseph Foresi

about sort puts we of into bottom I $XXX of quarter, should at million. think I the on you topline just year, then first it's think guidance. How run the seasonality million around $XXX year? If said it to that was through next that And you heading numbers the end the Okay.

Jim Reynolds

a second that Sure. happens perspective, Typically QX at starts into and seasonality we what have the strong to the volume transaction from quarter. end hit of

bit. down tends come a little quarter to Third

We to be are little impacted. going more a

our Europe now remember, you the of year. for total about revenue XX% If up makes

So And people within QX, budgets. hit their tend deductibles, there. then time, And we see most guess, of to as people tend spending I the enrollment. healthcare, over an are uptick people have the vacation, go do open along transactions to increase with on so then for

Joseph Foresi

margin $XXX think the to what on on at And versus million, then million it. I guidance, you $XXX the it's the the Got low-end puts top-end margin side?

Jim Reynolds

there us on of So transaction. is have we we what gets working been feel launched flow-through things savings. it. We the one the since our about That's good the on really

tuck-in a take that. the these we it's how quickly deals profile is costs we implement looking still close suite out that then change type margin are we of There to as So acquisitions combination achieve on of and we that and some can to of the we And our margin. need of technology.

Joseph Foresi

Got it.

mean it I like year. sort I margins So that if will sounds the that, improve Is extrapolate the throughout gradually fair? of

Jim Reynolds

give throughout continue don't implement. quarterly guidance, we to the We year as that's but

Joseph Foresi

talk Any for And how think ITPS line? out about last Okay. and to the Any you want businesses? things a just me. your have around contracts? question expectations know point and bit for thoughts the should this we both could about got little but by specific you business on healthcare I legal, maybe you

Jim Reynolds

is, we But rolls which we And strong. healthcare really strong finance, very banking into. would From a that's So just and where an is feel say to event in perspective, have They payor in We ITPS driven. and within in legal, look from segments. and provider business, are healthcare we expand I industry's clearly perspective, within still where deal growing. that's strong with both this are then closed invested December. which we our

We as we on. in invested two but really we our that focusing have are have not industries much other as invested

Joseph Foresi

you. Thank Okay.

Operator

our Citigroup. questioner David will go Please ahead. today be And next Phipps with

David Phipps

ITPS us size or for for healthcare sales taking components the the acquisition businesses? give that of the to a exist that about maybe? the made Thanks Could might bit Kind the my you you acquisition? what Hi. little healthcare Or talk questions. in either

Jim Reynolds

it when amount would all perform the you, healthcare a We through I and tell coding fair out way then solution. the So delivery. the us the incurred claim helps round what is our beginning to from

that helps have relationship round So that transaction. volumes. we as just incremental of out exciting really an a result it out It's

Ron Cogburn

Yes. Ron. It's

Let me more several this a we provide. that give What detail. covers little you does, it the already services of

squarely management, globally acquisition. XXX our a as puts added did medical we coding, for for this resolution. us when We claims payment And year. this processing, So segment employees healthcare trajectory dispute records growth it

very about So excited acquisition. we this are

David Phipps

about talk as And of bit impacts into of a XXXX could forward the able the to had some look you cash Do deduct we interest? being we little not XXXX? in

Jim Reynolds

Sure.

If you from operating million shielding we have think losses, taxes. cash which about it, are any us net of $XXX about still

anticipate, year, be still sheltered a our majority NOLs. we to similar of this that with to So disallowance

cash be So we $X feel will there $XX million. million and still between taxes

Joseph Foresi

both in I a had first be that guidance, fourth that you from forward big quarterly going would different particular know to quarter last in don't sales give but year? this year, there jump you anything Is and quarter, from margins.

Jim Reynolds

I all think of towards that fourth it would a use budgets. it on is the and say lose quarter, goes under spending typically end year there's of lot the or I

see mean we from there's I Europe, solid a a that aspect. typically push. in benefit that So And typically

Joseph Foresi

standard. And the pretty then you delayed final XX-K, Okay. question, that's

You out will Could next have little the you there? and have controls talk you that bit procedures in about the a days. that language XX

Jim Reynolds

together have think under acquisitions complicated to which controls to this is, all put enough when SOX operating. all year through compliance, highly I I you would the our time of achieve companies test say that the are and first is is rules, actually

ability that, have there either it's think, our I numbers. to control good in we within And substantive feel of said, or address as We deficiencies. good feel a kind our I it's the we it's So issues perspective, from no not.

Joseph Foresi

Okay. my questions. Those Thank were you.

Operator

Lynch. Marlane America go of questioner next Please be Bank with Pereiro will today ahead. And our Merrill

Marlane Pereiro

are I question. see you target little indicate my your have you can taking bit could roughly business? one. my were the is repeat leverage you very Thank for just leverage that And a talking comfortable When you leverage, about just running range connection just where you again, you. out, with the of Thank quick going? what was a you also Hi.

Jim Reynolds

this to to was would XXXX, get goal will X% is is times. ratio, EBITDA have our we three achieved to When historically debt. quoted pay Sure. our like we using to capital reduce pay our around through between with growth down and peers, the From and what more which in is a leverage do combination cash It about of allocation and a is our talking be our I X%. down debt be to year to leverage line

Marlane Pereiro

Okay. you. Great. Thank

Operator

questioner And Levine next Jared go Cowen. be will our Please ahead. today with

Jared Levine

And noticing any you. in competitive notable you the been Hi. there just follow-up changes one have Thank Are have I then environment? question.

Ron Cogburn

what lot years. call is the or now, or relationship all of we with At a higher enabled relationship with strategy are looking of When automation ourselves Digital are or the that a things the stronger market the for Digital These about, our combination that Now of our is the we AI. platforms the and through would this process we it's have customers go we or in forward Jared, cognitive. the they folks whether that services Now deployed technology allows to adopt end have built day, AI in our existing business Ron. provide us go have will relationship. Yes. have, we a strategy, stack, our a say, automation It technologies along the the And to this stickier I technology talked deeper as them. have

the proprietary customers, automation that XX at years. we you is our only over and look tenure It's that provide we roll built possible is average and technology when well year-after-year. out the XX continually the As now top have that we with an example,

Jared Levine

in any Thank the then center builds, successes you. strategy? And sales with your seeing you are terms innovation of

Ron Cogburn

Yes.

the here's the centers? you been thing have So to one of and innovation beautiful

Jared Levine

City The Yes. New York one.

Ron Cogburn

Okay. Yes.

we We customers a was York customers a are That many the through have through our the brought that what $X through our location, you London Shard. And and customers, that's Charles that happens, million. was talked about location, one. of So Street, Dallas showcase. over that the if typically first customer we New group sort

target. the are they So prime

things doing competitors. We things larger two So other enterprise do are for several a for their one in customer. folks same we industry. maybe the but and Not them competitors, or

toward them in able marketing benefits, and the that have we how go the insurance, to help a banking are if we for in for are them about dialogue able we interactive services to them We with the with it's through are to or a with we you that them do customers. their say technology we offer consumers. services. to their demos, in to When the live real-time provide, their services showcase these particular trying features requirements pointed are to are And and market meet demonstrations, the environment, demos, very that active all able

Jared Levine

you. Thank Perfect.

Operator

for questioner today final will the with ahead. Seshadri And Arun be Please Credit go Suisse.

Caroline Joyce

today. Joyce, Caroline for is Arun on This guys. Hi

few. a Just

the GAAP First, expect be you to range EBITDA XXXX? in how

Jim Reynolds

haven't on and What out is, customers range with new the you we contracts. the optimization for as perspective. our of GAAP XXXX, a we transition So tell given occur to existing given business some any guidance will I we have that still we costs expect

of which amount will stock have and charges, RSUs non-cash been primarily to have granted. related is option similar We plan our

kind that's looks. of So it how

Caroline Joyce

that XXXX? and Okay. could and And at line, what guess for optimization for and transaction Great. I Thanks. all expect on same outline you you expenses then restructuring then integration

Jim Reynolds

we on tell that done cost incurring to We There's out continued associated And we have guidance are we work to this to What these we take as incurring going not tuck-in number. still is technology, there. our have are will still be still duplicate be out. roll roll I you as to given acquisitions. with

Caroline Joyce

it And Great. EBITDA a about from sequentially, Could then talk seems like you. adjusted gap increased sense. between Okay. a lastly, little. guys Thank just the That sequential and standpoint? EBITDA you that makes

Jim Reynolds

in think that amortization and year thing to I no charges related are impacted additional non-cash that impairment were some cash were really that big recorded the the that one-time during impact. nature have us So

Caroline Joyce

Yes. Okay. Thanks. makes sense. That

Operator

for conclude to closing Ron Cogburn, And the our this over to now will conference like any I the question-and-answer would turn remarks. CEO, session. back

Ron Cogburn

really really Thanks. the we participating We call everybody today the questions. in and appreciate appreciate

us follow-up and directly this most You know with after of you you can do.

one we We centers. out much. If for a next at and centers, us will innovation know. had visit our participating you chance love reach you Thanks and Jim Mathias to host Thank and you your to please meaningful you these let make one very will of It the impact. team haven't would call. the on to quarter's of see

Operator

you now The attending Thank may for your presentation all disconnect conference concluded. and now today's you lines. has

Exela (XELA) 18 Mar 192018 Q4 Earnings call transcript