XELA - Earnings call transcript Q1 2020 | Exela Technologies, Inc.

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Operator

Good day and welcome to the Exela Technologies First Quarter 2020 Financial Results Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Will Maina, Investor Relations. Please go ahead.

William Maina

Thank you, Sean. welcome Exela and XXXX first everyone call. conference afternoon, to Technologies the quarter Good by Exela's Ron and here joined I'm Cogburn, our Financial Shrikant Chief Chief Officer. Sortur, Officer; Executive

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

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

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

Investor and the accompanies CEO, the our like page Ron Ron? of turn website. between found Investor now measures. to Cogburn. Relations and accessible believe provide investor the of information views discuss call our additional on in conference today's call we performance our the over management call, Relations refer measures note presentation website. our would be sheet are business. also financial can GAAP During these on non-GAAP non-GAAP Reconciliations will I fact the results certain of We page that Please we non-GAAP this today to to how financial operating

Ronald Cogburn

joining for months today. Form announce March XX-Q we Good that filed three XX, the us XXXX to pleased I'm ended afternoon everyone and our last evening. thanks for

current We Shrikant SEC quarter all legal a hard agreements, this to forward. and reporting expect review XXXX work I I'll outlook. business debt their under our current back we and and XXXX of timely come to for pandemic. COVID-XX response will more with the the begin updates, overview requirements quarter about and thank and be first our our our and discuss to completing to will recent and some priorities over to for results, failure highlights now our detailed I all Shrikant's trends. presentation of are business QX our to teams call Sortur on talk second going of our in After including process. I want an performance for XXXX then finance and turn our

let's turn number to Now X. Slide

EBITDA million, on but currency XXXX total in X% expectations. We adjusted $XX.X million above a revenue currency generated our first a down $XXX.X QX. quarter was basis Our year-over-year, of constant on constant basis

excluding liquidity, global was the million $XX $XXX of million which with has margin customer to And, margin by pass-through ended second when QX revenue. EBITDA the adjusted Our exit XX% of quarter. and increased we low end

of our the reflects vision. fit Our customer work, to from Exela's are mainly revenue exit for statements performance, strategic first quarter not certain which contracts and

this recall on that may June our call You we strategy well. as X discussed

long will near achieve flow and an as the today us impact provide cash it I of would our enable ongoing transformation However, detail you improved strategy the term free performance income results operating or is business part our of to to to that will over important our like and continue in term.

for focus especially XXXX as within we BFSI, drive As our long-term is our ourselves with among discussed existing in is to expanding our non-recurring base Top and QX as new to from by our portfolios continue growth customers, margin the business revenue to same beyond customer we our XXX away our on our time, unlikely Healthcare winning unpredictable targets. achieve At well that customer are aligning logos. call,

transition continue During contribution refer XXXX, margin we through opportunity of automation. We certain transformation contracts work statements and will improve or to to from contracts exit these little digital their no contribution and no revenue. and as with revenues to

absorb had our As to approximately annual the we exit of growth we year will transition will as $XXX of such, million we transition line over in top revenue and of January course this X, continue that this metrics.

note However, expected profile. impact transition is margin on it's our have declining that positive gross revenue to also to important a

have year. diligently for plan our reduction we in cost, and are We optimize our this working low rebalance resources, and a these to debt a place margin in business revenues

provide future calls. to you by on continue updates on revenue with transition in will We information our results the and supplemental impact

which is potential best focused what we our very success growth, We strong future going Our of for business base forward. indicator our are a be represents we will is base and the where for our foundation performance. business improved believe believe growth

on the to normalize. and market the most trends. the the visibility, customer in volumes second of XXXX before recent half business From current conditions second year our some of a expect in impact we improvement based the begin on moving significant as to showing of volume Now perspective, quarter COVID-XX be to

million $XXX and $XX quarter, second reflecting total million, negative to between a million we $XX the to $XXX For from expect COVID-XX. million be impact revenue

FTEs first slowdown, another by current our part we in the the or quarter. and the approximately improvement to by response the reduced active second As FTEs in headcount workforce we operational of reduced X,XXX efforts, quarter, XXX our year-over-year X% in

to we will anticipate to This Americas, and the effectively effect transition a improvement our volumes revenue. exit offerings. continue Overall, a year. process against our the of office, of automation in new by deals having trend new of opportunities and with year-over-year our EMEA, costs in wins balance or in year-to-date increasingly From normal. to for new XX% have to what positive our customers volume and them to as gross perspective, improved we XXXX. showing the our are XXXX, increased On payment closed mailroom from COVID-XX second base cost increased business well this one a far operate business solutions a the Looking XX% as home reduce home that so on initiatives of solutions work driven our half for basis, we cost enable by will call demand in second digital combined growth the strong is explore carefully performance the realities initiatives increased lead leading our expectation our margin half

half XXXX pleased and we're the with and Shrikant? our results turn we're are momentum detail. to XXXX. over I'll it our in Shrikant our into of We discuss will greater in the seeing to at point in that sales growth optimistic call the second this metrics benefit

Shrikant Sortur

thank and all afternoon us. In Good both my will Ron. and I Thanks non-GAAP you joining results. discussion today, to for GAAP refer

reconciliations metrics reference the earnings XXXX. for in XXXX reminder, material. of corresponding results interim our these a period available to Any are the period As to fiscal includes of restated

with representing of currency $XXX.X our quarter totaled decline a results. review X first for a Slide basis, million. on constant of X.X% million, XXXX start $XXX.X year-over-year. On quarter the first revenue Let's a QX Revenue was

of segments. of quarter in XX.X% the year-over-year a our ITPS $XXX.X for segment first to from Moving was our Revenue million XXXX. $XXX.X decrease million,

revenue long-term growth our target driven statements by decline As work not Ron our achieve was strategic exited contracts mentioned, primarily and this offset we long-term by was wins. from unlikely This or transition partially that margins. of to and were as to vision customers new existing our

year-over-year from Our Healthcare Solutions X.X% segment $XX.X of up million, first million revenue quarter the in totaled $XX XXXX.

the in Solutions Healthcare attributable results with to clients. increased Our existing was volumes

was decline more primarily and is on reduction to initiatives. LLPs to cost flat the in XXX that $XX.X the and the important first our first was quarter the was in by with of impact The QX stranded transition Legal year-over-year $XX.X the our XXXX. profit decline to transformation million It's decline costs Our first margin was margins Prevention compared transition associated revenue quarter Loss segment revenue. significant gross revenue down million of savings as of preceding our note basis margin XX%. with revenue the quarter revenue points for at Gross relatively or due offset continued

to revenue. million $XX.X initiatives. saving expenses XXXX transition we SG&A unchanged of transaction Looking margin by gross percentage the our but down $XX.X new as income first The revenue represented loss initiatives, amortization from year-over-year primarily driven $XX.X our and the from associated totaled increase volumes, million, of million XXXX, customer and due second reducing in of cost quarter costs particularly income decrease higher profit. SG&A of sale from expenses our one-time million, to was expect our was Payments the in operating lower QX up of QX cost revenue. year-over-year of TBG and costs was for facility, operating benefiting million for revenue with lower X% Operating related QX declined a $X.X and revenue. stranded to of for at AR Depreciation half and in gross of essentially $XX.X and of year-over-year XXXX, compared including Care in our Health X.X% XXXX. and Net XX.X% business with

Turning up period. of XXXX, generated the from adjusted million, QX of EBITDA and million to in EBITDA $XX.X $XX.X EBITDA. In we prior

expenses, other also income included and arrive as called O&R at to expenses. largest restructuring charges, non-cash and adjustments Our EBITDA and the optimization and adjusted

We adjusted backs X. to will the EBITDA more on Slide discuss add detail

the million million million expenses Our XXXX, totaled $XX.X for of in quarter $XX.X sequentially adjustment year-over-year. first O&R and $X.X down

anticipate O&R QX facility. asset We quarter. $XX per million to Looking of TBG and at costs to million the $XX transaction XXXX, related rest AR land recorded our XXXX million between and the sale we $X expenses in of

related additional to the these and off in amendment expect transaction roll expenses our cost We agreement second down book for to half credit of QX XXXX. in of to the

to by was non-cash XXXX. other includes $XX.X of non-cash income the one-time non-cash we quarter a Finally, $X a of nut a of first million in and that other and related of sale asset million adjustments $XX gain This offset charges. had million TBG negative

in XXXX XXX the million, line For XX.X% adjusted XXXX the XXXX. for asset the of which in EBITDA QX for a one-time or the prior sale, charges XX.X% to decrease one-off. remainder Adjusted recent quarter compared reduction. million quarters of be of $XX.X period, $XX.X first like from some of trends basis XXXX, TBG Adjusted we prior was in a first or QX year point expect our EBITDA with quarter gains with for was was margin

lower driven in comparative exit, in model the turn O&R was the Excluding on declining gross our impacting cost client the was and pressure mainly adjusted margin pass-through margin attributable EBITDA revenue was reduction period reduction of put by our revenue QX and The remaining expenses. resulting adjusted that decline The low comparative the XXXX the profit and XX%. EBITDA. to

to Now prior Slide liquidity. QX discuss move let's upon these would call. covered our to items refresh on our and like all earnings We've our X to I build discussion.

million March year-end $XX our debt $X.XX XX, up liquidity was at million, XXXX at Our from total billion. was XXXX, net $XX approximately and

our May XX of As the we discussed to $XXX and has end quarter. through our on improved the second as call, of total last consistent million liquidity remained

first and the XXXX, we During several liquidity to improve took stabilize steps half our of position.

a receivable we our approximately $XXX As on also million. for facility $XX completed and we asset executed announced, first accounts previously sale million new

aid applied certain for match our have remainder of Act for relief CARES and the stimulus of COVID-XX deferral other government tax we addition, exercised including and have U.S. we provisions payroll XXXX. regional In federal

planned this actions additional including capital-light asset year. alignment We revenue. cutting model million our traditionally complete will working implement between with continue and associated to and business to This and our $XXX $XXX liquidity million includes cost of to executing improve additional of our the accelerating to our sales our initiatives our plan expenses stranded against explore transition

call like outlook. Before discuss quarter I XXXX and second back to now I full hand to Ron, our year would the

$X expect For primarily business. attributable TBG BFSI in total and revenue of from million of we from result $XXX as the be pandemic the a $XX COVID-XX decline second $XX Healthcare clients lower million million the to sale range to of quarter $XXX to certain volumes, of includes the and million approximately to million, which of XXXX, impact negative

mentioned will guidance and call, impacts balance its X our on on that we we XXXX. providing full to surrounding As the financial our of given year the reiterate I factors our June expect visibility, would uncertainty the impact performance year. for COVID-XX in however, this for like delay

performance. our impact and COVID-XX First, have we further effects cautioned, XXXX. our mentioned, continuation and Ron expect financial volumes before COVID-XX in adverse of impact the go improving second the market of as the QX, customer half the to results of outbreaks however, on most the We've

to rest continue of XXXX. will see as we exit we contracts these a of decline through Second, statement in revenue transition work and

our we including are certain response scaling to capacity structure discretionary and cost and in back compensation. adjusting our COVID-XX, Third, FTEs

with the improving will reducing the standard policy transition margin prioritize cost with performance addition, combined and In our second initiatives capital the gross finally, Improved to our be our we cash in of to of costs lead half associated should revenue. the liquidity is flow. operating And XXXX more our year. volumes in allocation second half normalized

to an continue pursue $XXX sales over the Ron? of months. $XXX Ron. back turn non-core We million to to incremental our will next With strategy support call million asset the in that, over in I XX

Ronald Cogburn

Thanks Shrikant.

flow objectives improved Let's and now key XX generation. income to turn our discuss to Slide XXXX and number driving cash operating

are heavy there a need home for capital like the model, collecting the that alignment capital accelerating is running upfront the revenue acquired FTE businesses payroll to the then need office no as carried and or FTE-based from and or DMR Exela minimal, the cost later traditional services model since collecting First, cost but away working is before which the to contracts XXXX, is first of intensive less moving revenue. be is

services Second, base payment segments existing with of financial we growth billing expanding we business. includes and and mission solutions. are and within provide our new industry This focused critical healthcare driving customers where insurance, our and on banking,

examples. partnership recent and are launching with U.K. in or our Bank of The confirmation relationship extended with the Co-operative to Pay Our solutions payee great by services Mastercard-Vocalink Request

focus our matter. this we Our a year-over-year trend, illustrates signings is that on increase believe and business

are we the wake focus digital COVID-XX. on address solutions our helping accelerate customers that new of normal transformation their in increasing Third, the with

or As solutions Mailroom customers Payment an office, solutions I mentioned increase seeking from seen earlier, we Digital have from and home home our offerings. work

portal XX,XXX We XX,XXX already boarded. have an users additional being our home on users live with on office

drive count short-term our the for caused long quarter count X% focused margins optimize are COVID-XX head reduced head slowdown exit base by transition We our both to cost the of the first and react of in higher will we to to the we continue improve year-over-year through over Third, remainder our by and revenue the and improving XXXX. our cost on to structure term.

of improving emphasis exit part our via base as also continue our sale. we Finally, liquidity, on to and our non-strategic certain businesses will asset business

$XXX of $XXX of incremental proceeds this As $XXX million we $XXX discussed, a million. raise our process to to goal or an is through total million million to

our as Now well environment XX, response to would I stronger and why emerge we with begin we Slide to COVID-XX to summarize ending believe like and company to improve. positioned are conditions current weather this a

employee onset to First, customers. to continuity our the put our in with after rigorous enabled business the continuity rapid of response employees and safety we uninterrupted our place nearly us of business plans. Shortly pandemic, services and safety ensure the

of We safety time a provide work our enabled essential with health team’s in comply ward a to adequate and states business up U.S. facilities We've in safe have COVID-XX solutions standards. globally a our with enabled customer set room environment minimize to We for we Exela, monitoring From account ensure continuity. customers and clients technology touch continuous interruption business pivoted points high our our their enhanced managers helped a perspective, functions. frequency global our we communications sites to with SLAs. to business which solution, and We and supplied to PPE real connectivity home and certification most upgraded the working with to from new between

our unaffected in our helping volumes As XX% differentiate our to demand our we've customers. strong our office. has SLAs diverted we we seen office solutions sales competitors to our us we or by locations. rapidly I which market. home for finally, finally growth And mentioned, to We offshore strong our in the metrics, is delivery home with to us enabled pleased are performance Overall, from of believe our maintain execution, driven

FTEs XX% to volume have COVID-XX. due estimated demand match quickly to moved levels in our and to reduction margins. to the adjusted we Second, an by to adjust our impact active mitigate XX% order capacity approximately operating our response of We lower in volumes on

changes volume customers' which explore including our is and digital as digital transformation in Some due when pipeline, to the is well as in payments this billing to larger delays priorities of increased our reduction partly transitions our of they result this solutions. DMR, in environment,

Third, of uncertain In our have support of our the excess discipline we've we helped in four, liquidity $XXX further has needs. million. a ongoing this improved our today COVID-XX position liquidity in environment, situation. total navigate And and turnaround operational us

are customer with and on-site resilient a which by We favorable customer we global unique and with the supported is are fortunate Operator, near-shore delivery base, questions. normalize the perspective believe in the XXXX. our That model mission-critical of business operational nature of open an volumes please comments. prepared to combines contracts, for are We model, formal to delivery. strong second our line we have our solutions up well expected our that half provide, offshore from as that, concludes

Operator

from [Operator will Instructions] today with ahead. Porter The Please Nuveen. first go question Trent come

Trent Porter

I My $XX might a able looks today, minimum million plan July, appealing tough not you of to be you it by million be $XX that threshold. close answer, now to the getting first think today because asked like but judgment liquidity the one, year to a you pay got quarter, on it you last if you've Matt would one had is

things is that follow-up? unfavorable. of, sale wonder And I other if immediately, could it or get asset pay just to our have one proceeds, liquidity then typically appeal So do in pay you notwithstanding out, have these you you the I other typically considerations broad thinking let's we're say, the Would talk maybe and time terms, play it. how goes potential to not

Ronald Cogburn

level. high it keep to try will I question. the for thanks Trent,

call question, steps a submit ahead Supreme Delaware we that appeal has We involved, days process that are an they months. can the are fairly have anywhere proscribed do from I and XX then COVID-XX, provide from months be to the six That's longer. status the with for light nine brief in timeline to And of typically update as going it Court the last But your what appeal. appeals could you.

I something payout, the is of that probably but full payout terms its to happen, take the the that expected imminent there here, that probably appeal will feels In immediate confident company you since I will potentially discuss what's going tell process in no to want time. details

Trent Porter

last a the get And little to into could yours vulnerable more of bit in I'll better just you decline then, what wondering about and in call, this you I of on the could flush exposure of talked have And related what was a second remember talk a after talked about, bit the back quantify don't that or - seeing you've baked to COVID and if volumes then verticals that you've half. the your forgive kinds this improving just where me, understanding are covering assumptions you that, ballpark you're the out COVID-XX accounts if little queue. volume get maybe that, I

Shrikant Sortur

is? impact I companies. Our Yes - overall as our sector that a healthcare to Therefore of probably look was and in answer, at the the whatever is the The print level some customer I've and the Ron you way. it context to like integrated then call of where sure, I'll huge communication of but the and concentration can would probably perspective that, put and services is for as business travel was not add to very have not give us we customer answer missed. Trent, hospitality, other on on it right. broader impacted, or would high financial it's healthcare, which our concentration some

Trent Porter

sorry, as talking. you're I'm writing I'm

transition whatever I out decline. quarter $XXX If - I'm just strip is to one clarify target estimate there that's $XX COVID coming million your for primarily quarter? second it. I want quick that $XXX leave, to impacted million you to impact, one call the target, the the I Just from before the first assuming still wanted revenue million accounts

Shrikant Sortur

but that's correct. a It's of both, combination

Operator

Propolis] go Please question Unum. will from come [David from next ahead. The

Unidentified Analyst

you at way you here, of I'm quarter I EBITDA Is on just about to revenue to transition that, for that how the LMCE talked does so as that, this annualized had Page line there - you any you working said it can XX.X% X, related just cost your margins $XXX presentation kind million the year, quarter. how last revenue. trying the stranded this was curious on we of just on the with XX% for the margins out are a the take see how revenue looks versus you're of year. up like cost you're profitability,

So bit a drill I in just further wanted stranded the to really little cost?

Ronald Cogburn

looking David? from at perspective you're it a And right, QX

Unidentified Analyst

Absolutely, yes.

Ronald Cogburn

I will answer a you Again, directional give here. Okay.

of stranded X% quick at a know, the there were revenue anywhere the later to The and involved to you revenue As not to trends QX out the as internal keep you out mind. 'XX, timing do It's element X% 'XX is line cost If in from Number versus that if of off, been one stranded in call of estimates one was right. is the XXX% the is fixed answer, element adjusted X, you involved QX cost versus estimate I QX thing we down granted not enough. the should a reasons XX% right, revenue margins at drop have I we XX% way look to comes system. well. the still give look in it, direct are is cost with go we as a there decline, That's have to variable costs key there down, only are costs costs margins, versus not

lot simple cost the So terms, a in to need in up do the Broader it back margins there. get to we of X% still more where was terms, to X% is stranded historically. to quarter

Unidentified Analyst

another have question. I

divestitures about that, talked that the you have XXXX and looking - are calibrate hard and that In do timeframe, further that? way that happen, foresee is but to guys it's at of, at know terms I is these you is guys you when

Ronald Cogburn

out as the XX. but XX XX possible probably original concerns perspective, like From get XX possible, we'd all November, we to still I'd timeline to XX like to soon to months, said there, to as in shooting to for it liquidity of as a that's when stick we said timeline to as this of the months. but management are alleviate we soon the XX done remains right,

Unidentified Analyst

with such. QX, then When second, positive final kind you exit margin you're, flow would margins And gross that, be talked is, coming in volumes thinking gross you'd stranded if margins. what we and my about do costs think of with QX? be and question that off you're about And improvement you cash normalized

Ronald Cogburn

about and talking about That's the publicly point our we're we our me, three kind of are question, the talking two me our costs, Right. whatnot. as let goal. talking you we're question thought That's let and out goal, since David I'll one give you transition or me a from of disclosed about are to asking revenue, past. the early cost transition because items of standard

million right. anywhere last saw In LMCE you one the growth, basis, net that case or to $XXX was element postage pass-through it you not have on even is year, key GAAP a As of from $XXX revenue we of X.X% though costs. saw million

listed Now, number In we That's slides, our one, had you business, to is to then margin of with perspective. don't where - some QX When the the go element higher the wrong. and XX% world, for is top another one XX% it then And but of me literally company for and margin. at transformation that's back if you it, just to margin, line XX%, it is us, there there pass margins of it's integrated XX% XX% sense of our to we business solution, QX, a low if margins. side doesn't like see make we have So still no an get through of to refer QX revenues. and right. it, an see And ideal XX% right? you'll back want get will becomes

is, 'XX, can at versus 'XX versus our look Third factsheet where margins. point FY what our gross 'XX you

revenue, costs, want trend. it's the it flows at of with better That's end to follow. getting looking reverse that. whether the and our the We you're fixing our both of transition cash seen have - the a then declining element day, margins gross key We will about now calling

Unidentified Analyst

Thank you.

Ronald Cogburn

Sean, on? you Sean? are still

Operator

apologies. difficulties, else. Excuse team like and may filling sorry I'm momentarily. I'll technical just me It conference we difficulty] [Technical management to be had looks the some operator, everyone at have the here

the we question. So proceed to next

Ronald Cogburn

please. Yes,

Operator

question Please will go from Bryan of next The ahead. come King Congruent.

Bryan King

just pricing. provide if on you wondered I could color more

on corona and customers on that light would trying Our to of that, pushing speak Can going just be you more I are harder forward. in pricing think helpful?

Ronald Cogburn

is No, Ron. great This a that's question.

So you navigate think into about this, were us these downdraft call customers we But that we to relationship as and We have company we have, more technology came the the term five The because have March I have through that and the the longer range. year a volumes with late kind world moment they it and to an of that the years. April. have some give contracts in have are from nature XX in from we relationship for seven them you way year long-term XX the that. to now of the XX to stopped of been top able an agreements so I'll the with the with The example. customers. average XX, three with years

solution partnered minimum we they before. to to able have offsite and as look pivot long-term pricing We home guaranteed to technology with or us contracts, have We're from our them. of anyway didn't partner or but a work be remote that, in to their result they that

the which another give conversation see is for it of in cry you terms, financial essential there. is us for Can it help, out We never deemed that traffic. less just more So and us, service did especially partner. longer was is not was do for a healthcare It question probably money. you can an in about, services, of Exela a kind

our customers helped as the matter and mission clients we ones a offers. critical that fact, services these are the companies, So, to of that move

and XXX So at call. of was you women didn't but could the you of ensure And I video it in XX, men from deck, for Can Exela type XX% front the look call see you and break it? maintain not testimonials what like solve that And firefight. during this our sort work the customers - our if I help storm. Slide work of to we really The line about see that think to on a did I'll were I said, service. XX/X the SLAs that able talk were

Operator

And from have of Allen will will the Beach Capital. we next come question, Point Kato

Allen Kato

callers' help what associated that of stranded one is could first, with those a understand cost and and services the bit opportunity questions. from or guess, contribution of other of I actual within revenues? trouble I transitional transitional EBITDA us more you are the had revenue the a bit What the understanding what is

Shrikant Sortur

we out right. impact our customer we - talked to long-term a about and things create margins, continuing I That's the couple To of mentioned kind expansion LMCE right, customer transitional look postage reverse questions, more right. of by go about I emphasize business a both certain XXX our revenue and revenue. in the at growth, and - address as to Allen. wouldn't achieve categorize focus we continues margin our bucket. recent which a margin on past. closely I'll it or have focus, pivoted customers is, want why that's revenue Take to top to to to compression focus. is is, return be let's our actually growth what be to there Sure, talk is revenue unlikely Ron margin your our to of LMCE continues any the What non-recurring low need back we've unpredictable kind want margin or base of that back that,

If doesn't of focus margins So we transition on it's make nothing margin more exit the summarize pushing that's need where still but we start business, - so or for that improvements. customers, are kind looking customer this the the better at we sense focus revenue it, for it areas to margin dollars. on when I is margins,

of you when to cost So if ask kind not least what that we is more again, no categorization at that quarter has a it's also industry, whether comes the call one. two, same me managing much slower call. bigger it in facility have term to capacity. customer, exercise. bucket, off, a have it come fixed to consolidations, It's we than is that Stranded revenue Number relatable using but cost here revenue a it XXX% don't eventually, on looking this decline, we element a an indicate month of same the variable are way think there not the talk out to cost, we drop, at we the that what work, about, I of what assets number

gave where revenue the cost that happening to mean variable declining. in fixes adjust in be that filtered to has cost That's it right were concept. stranded not our out not leftover So comparison go has we out it's need by system. the or of, when making the XX%, now that of the a is margins hey, the I XX% cost, past, what we time is We when the

Allen Kato

then between timing kind lost Is or causes guess, And what's the just it headcount what then, of planning I driver the disconnect for revenue the costs? that? underlying and associated reductions for

Shrikant Sortur

I would headcount say capacity It's the really majority and management. that. is

better the we way quicker can are. off we more time it, real do better So

Allen Kato

employed labeled the So the still Is as non-active, those been have are that X,XXX FTEs that right? firm. by

Shrikant Sortur

That declines the is if COVID. so to is, from our we FTEs more X,XXX and at point related right, The presentation, related savings don't there is is versus to XXX Only inactive you even perspective volume that want, there there a is or the - a difference. about X,XXX looked in I between QX talk correct.

and mind to volumes back Once employees workforce. QX we but COVID. FTE the to to that what in the I those know back - when pinpoint transition the to want there be at there and to between could an up, interplay is QX, to the get the are specific revenue number, keep while hard that's and COVID-related you in X,XXX be is say, revenue, related it's decline So look going which more

Allen Kato

XXXX? Just two you high see was more company as EBITDA, bringing quick XXXs that as back the consideration, you ones. of do low take path into When the what to do you of the EBITDA - case in XXXs like cash adjusted to see all

Shrikant Sortur

it's terms in put Right. we one at some growth, terms, same that in but revenue I'll in revenue growth. percentage need growth. line, margin there are as not the dollar need think well. very revenue, profitable I it time, just important We But

lot recent is see So focus of seeing improve as the a what are this, I our past do think margins. we how we toward you

Allen Kato

transitional the out? a it basis, about basis, take accretive talk expanded but gross going being on dollars pretty cost to you by the when is margin revenue back So on margin a you much be percentage offset

Shrikant Sortur

Right.

Allen Kato

guess one And I question, last then just at of liquidity. on - kind looking

level flow. I year, I of implies service think when recently delever amount you debt end of guys based sales of liquidity EBITDA six times $XXX relative that million But what June, doing unlevered asset said to of on some about per company. $XXX there think at free the adjusted moderate the think you more is at cash and which million necessarily

support how the think guess capital structure be is judgment, So how that, thing and for when I the provide of one and long-term a add to appeal required liquidity kind the on is to do forgot to posted? bond I there about needed you you

Shrikant Sortur

few different an it's important realize questions, Allen, question I well. as

has any way. this always That's it The number one. these put met payments. company of I'll toward So its Right. obligation

generating to livers may on liquidity, long-term, Right. going I is We options, we here two, and back is we improve we focusing have number obviously have but to additional been financing level execution the talking have our all levers, whatnot, we execution, other operational cash it operational as about further goal start it is operational flows. performance. have fall long-term to mean be have

there the saying know pay by legal bond. I early probably proceed do asked, I without legal here have from time. I is to that, the the to a or maybe last and caveat what folks something not this in of having point you do with and probably some our at I'll least options again, team need that are I should the But legal little appeal terms discuss team the not with on In enough to I that's bit we said, know as question just that it whatnot, potentially at then address

Operator

from question go will ahead. Please Carlyle. next Jerry Wang come with The

Jerry Wang

XX just and in dollar I you the in can Page quick think, on associated the was that EMEA? one, Americas say amount quarter had is a pretty with up Just what we closed have, your materially, sales when

Ronald Cogburn

we - I don't did Jerry. did know This information level But, disclosed we you we? had detail. is think I that Shrikant quantified, Ron. of me have that excuse don't that

Shrikant Sortur

Jerry. Yes.

time. for on Let's point and of do you don't at percentage have way. off do it this. probably We let numbers I a can get me a the year-over-year know later growth. not put basis it that We

Operator

over That will remarks. closing session. back Ronald today's to conference any Cogburn like would the conclude turn question-and-answer for to I

Ronald Cogburn

for call myself we'll to know Maina, the and everybody in once can us you or on you we in Shrikant. directly see to to through the this to Thanks environment. directly or everybody participating questions Thanks. we QX appreciate today safe your and out again Thanks. through Bye. want And call, always again, stay thank as and you reach Will and ICR

Operator

disconnect. The attending for you may conference and concluded. now Thank today’s has presentation, you now

Exela (XELA) 30 Jun 202020 Q1 Earnings call transcript