XELA - Earnings call transcript Q2 2020 | Exela Technologies, Inc.

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Operator

Good day, everyone, and welcome to the Exela Technologies Second Quarter 2020 Financial Results Conference Call. [Operator Instructions]. At this time, I'd like to turn the conference call over to Will Maina, Investor Relations. Sir, please go ahead.

William Maina

Thank you. welcome Technologies and Conference Quarter everyone, Call. morning, to Second Exela XXXX Good by Chief Cogburn, Shrikant joined Ron I'm today Exela's Chief Officer. Sortur, Financial Executive our and Officer;

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

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

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

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

Ron Cogburn

Good morning, earnings us joining our and second today thanks, on everyone, for quarter call.

have begin, #X presentation a I Exela we we Slide of new highlight for snapshot on that or is just our refresh quick Before anyone who business. new Exela would on like a wants our to of

today #X. Now let's Slide with begin

with quarter despite are many by generate focused second COVID-XX. challenges this response to execution priorities key We combination that mission-critical were and in us enabled second above which our current results, our against our solutions, quick results reflect the The expectations. pleased of customers' our our objectives environment, focus caused quarter to

basis $XXX.X Our above second quarter currency was XXXX is million, our constant prior which guidance. total a revenue on

from prior points year We Our the basis QX currency We revenue. generated of quarter, of our declined revenue our on adjusted basis was up transition delivered gross profit margin and on improvement of a impact million constant QX. in versus $XX.X the second of the the sequential on elimination XXX XXXX. which period, reflects volumes in mainly COVID-XX QX EBITDA

total points liquidity, the of coupon margin payment $XX XX.X% exit ended July EBITDA customer semiannual post and excluding low-margin the and the And was pass-through adjusted Our of we $XX with of up basis XXX month when was sequentially. revenue of million million.

realize fourth sequential XXXX, to of quarter moment. -- -- Overall, to on this in gross outlook than Sortur our million a our positive XXXX our We margins total are in our post just initiatives. the a will months in our levels our estimate provide third our substantially XXXX. to revenue the cost-saving margin trajectory the currently second half and the profit detail our as we recover currently outlook more in expect and improvement XXXX. continue of In continue opportunities levels, for not X our We on We benefits EBITDA in to results upward of objectives in our only COVID-XX while third growth of margins against quarter the in of June, continue business, back volumes month our preceding in and with QX environment, to this Shrikant to core half liquidity. momentum and pre-COVID-XX $XXX storm ability all to the back long-term $XXX into were executing new to our better million. adjusted our underscore find ability our the but to in into the trend margins improving profitability of our to similar our and growing increasing expect weather and

and we focus Let me are provide momentum. you with that forward how driving illustrate with highlights some

$XX the the offerings. our are our $XX coming home address on wins. customers solutions work-from-home and to million have from solutions them automation million includes partners has in employees that XX% of We this can demand trend world. that pipeline that to specifically Exela by Digital wherever post-COVID-XX for tailored solid a impact our Mailroom, solutions working across are a provide and or a launched $XX our and business end-to-end achieve at Americas seeing office, payments a of the for we increased new and payment EMEA $XX plays Since in in the mission-critical our groups million Technologies targeting for enable and our our more million from business customers' customers and needs environment, process year-over-year. having expectations which closed March seeking won increased Year-to-date, these efficiently meet pipeline and customers, offerings in their strengths by Mailroom be. This operate remaining to with To and solutions growth industry our are XX% that this, programs partner a sales is may new positive increased that solutions Digital will remote scale. campaigns is and This XXXX, the our same of reflects the

first As half workforce the with saving during of reduced our to by the part of approximately environment, initiatives QX we ongoing XXXX. cost X% our align headcount our demand

cost consideration our second into we this the transition to expectation to balance year, our volumes increased taking further elimination of the costs associated carefully well as revenue. half Looking of as base stranded with continue of will

across savings major cost entire second organization of the sequential on gross this a execution behind is and and half our the in in focus of expectation margins our Our year. improvement EBITDA adjusted reason

completed core like that to sale noncore -- a I'd last note another we asset Lastly, month.

assets, X As initiative $XXX we of announced our on divestment storage the total of XX, between sell July $XX.X logistics record we milestone $XXX nonstrategic is for physical million another This our years. million the next proceeds business completed transaction in and over business and with to million.

helping I'll to back call outlook to initiatives our the Shrikant turn our to financial in sale, more Shrikant, detail. million executed strengthen $XXX flexibility. Sortur now cover this I After of have and this Shrikant, over remaining million our $XXX $XX now The greater detail. completion XXXX in the With over we you. plan, on to schedule. results million are come to of to will discuss

Shrikant Sortur

and Ron's you, Good comments. you Ron. joining Thank for all want morning, to thank echo us. I

business with are in quarter challenging execution environment. the of and our We light momentum pleased second

that touch cover results and I the I against quarter, on our earnings Before call. how of to our last areas you financial X performed for shared upon with we impact second would managed we the like

of transition the delivered customer provided and I revenues high the and on In margin our end impact quarter cost areas. of of to normalized of achieving activity improving performance; each of the our guidance two, progression cash on of improving flows. our bring with three, and overcome and about range line lower margin on actions call. provide the above to our and One, additional were: on across capital revenue a revenue have areas service impact across I'm expectation macro April our the most trend aggressive transition COVID-XX four, most management took in capacity managed second results would an policy COVID-XX in impact in June. financial liquidity goal negative of performance that experienced results, our pleased we costs the that We revenue; effects trends our earnings expected X will we X these structure lines the monthly and reminder, the volumes during a QX volumes the talk the context levels. quarter. environment, focused our with and of team solid gross to adverse QX May To managed gross As and and allocation report saw We QX; delivered challenging and in

of Our of achieving XX% and to gross goal quarters the range margins gross May after XXXX. the margin month for and was XX% prior our of June QX in consecutive higher X margins with in of line

remained throughout Our has liquidity the quarter. strong

flexibility. financial July assets sell of on the indicated, we record for to our $XX.X XX, physical and business to Ron our storage divestment business of nonstrategic completed strengthen million help as our part logistics initiative As

and Now to for GAAP In let's I'll discussion today, turn to our second non-GAAP results. quarter. the results refer my both

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

a on with XXXX Let's Slide start review of quarter results. our X second

we discussed that XXXX. plan $XXX million call, X, on quarter As transition quarter's had of the we January by annual approximately we exit revenue last of on to end second

long remove diligently have that our transition of gross We resources is a profile XXXX. the revenue to term. transition remember and costs over to associated are impact our have in It's rebalance the declining working by place the our important and margin with revenue to plan expected a end positive on stranded

of or currency a $XXX.X exit second With totaled million, the year-over-year. revenue to the revenue. $XX we'll representing quarter XX% stranded On costs, Revenue a of million. basis, million QX our elimination for lag $XXX.X was continue of the decline transition constant

segment to an revenue and and impacts volume of Our from $XX Exela's million second fit revenue are mainly in of which transition from of look segment. revenue. our at of the strategic negative $XXX.X XXXX. On contracts work, for our estimate was COVID-XX. million year-over-year QX transition statement million year-over-year a to quick certain $XX to the vision. Revenue as QX not segments. in this ITPS performance The COVID-XX except revenue million, And A XX.X% from impact the were ITPS highest decrease we our reflects the a indicated had impact quarter negative pandemic was refer call, earnings due on $XXX we to of customer

was revenue, our compared or totaled points of year-over-year quarter and segment from reflecting for the the year-over-year XXX of million XX.X% revenue in first up quarter year our savings and $XX.X segment Loss million the basis decrease Solutions Gross XXXX. of $XX.X a from the Healthcare million, And sequentially points with $XX.X initiatives. LLPS, XX management Our but profit million ago basis was $XX.X Prevention XX.X%, cost second margin period. second cost quarter to Legal down in XXXX,

care revenue. with revenue, health down gross our half $XX.X our from from saving the lift XX.X% cost continue $XX transition million Looking SG&A reflecting QX million, XXXX, by expenses offset cost revenues stranded customer and expect X.X% year-over-year was totaled including improve, our and margin to reduced of reducing expenses of we associated payment our particularly million, was year-over-year. at management, $X the continued Depreciation volumes, revenue that amortization from and to benefiting down second initiatives. represented for costs higher and in

in our by primarily Operating the revenue XXXX. our CapEx levels. QX half expect million The the driven of We saving the actions. continue expenses D&A decline went facility, decrease of a gross profit of driven quarter quarter. the was due income of operating our cost to by offset adjustment cost second lower in in quarter, on AR in income including lower million partly compared was with second from to loss $X.X catch-up interest XXXX, up by the prior Interest and operating the million $X to for XXXX year-over-year expense $X.X by

EBITDA. million $XX.X QX with of the of to quarter Turning year was adjusted of the million $XX.X XXXX. $XX.X the quarter million EBITDA down million, Adjusted In period. second we prior EBITDA million of and $XX.X in and $XX.X EBITDA generated from QX prior XXXX, in for compared

$X.X decline reflecting our decline EBITDA strong adjusted focus just our Our sequentially, on despite saving and execution million million initiatives. in revenue, was cost a $XX

basis XXX EBITDA margin of quarter in up was adjusted the XX.X% Our sequentially XXXX QX. from points second for XX%,

our EBITDA adjusted XX.X%, XXXX Excluding low-margin and XXX basis pass-through client was QX from exit, of up points XXXX. QX revenues the margin

other We O&R call and EBITDA on the and Our transaction in largest Slide included integration and expenses expenses. more adjusted and and restructuring costs adjustments arrive to also charges, #X. noncash at adjusted add-backs discuss less EBITDA, to detail optimization income

and quarter of Our million X adjustment the $XX.X $XX.X expenses XXXX. second O&R for in first the totaled in million months

to Our first half XXXX. year-over-year charges XXXX approximately are $XX half O&R down million the compared first of

X total $XX XXXX full between We to second of implying year $X.X and transaction Looking anticipate at of million months respectively. $X in million to was $XX the we in costs up million from $X sales. for of a to of periods million, by related trade land $XX respective the QX in million half XXXX, fees XXXX, recent of as $X.X asset million and O&R million $XX first recorded XXXX. XXXX, and and million of onetime our expenses the increase amendment compared to primarily The agreements

decline $X to costs XXXX million in expect the million half to We transaction of range. the to our $X second

noncash of and X the had of $X.X the $XX.X TBG months This onetime we includes second in first sale Finally, income and million gain XXXX. on a a of million $XX other quarter the adjustments positive business. million in negative our the

charges in category to second between million decline million. and $X to the expect $XX We XXXX our half

improving have in margins progress a of second upward continued strong the XXXX. with illustrates the in setting for and slide our stage the the This margins half quarter XX. Slide trajectory our to we second Moving made in

As margins associated we accounting and noted, you points profit year, first of our adjusted improvement a QX, delivered our for positive and XXX transition of for basis margins low reflecting with In and sequential EBITDA and reduction adjusted cost on levels, revenues. and our in gross in our This recall, reached basis gross currency when impact is XX% the XXX ongoing on profit points see, we million you margin focus result revenue. direct impacts can improvement, our EBITDA. the the the margins EBITDA basis stranded June XXX COVID-XX-related costs points of as profit the quarter despite month volume reached Furthermore, impact gross $XX may of our management foreign initiatives. cost with of in which XXXX XX% laser for saving adjusted our point

to the a We order as for current exit environment leaner, improvement time this more a environment in are organization. using continued efficient

in as that for initiatives currently costs, driving under cost-saving COVID-XX example. additional are examination our have the policies pandemic also may reductions We beyond that such work-from-home extend facility

past move to XX to of covered these discuss earnings Slide some call. X our over Let's liquidity. our We items

I However, build discussion. refresh our would upon like prior to and

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

was As of our $XX of June payment liquidity million million XX. after July XX, our $XX coupon

liquidity asset facility to $XXX million During sales XXXX, proceeds you our the half executed announced improve and of position. X a took first We divestiture steps first stabilize as on for our may we completed know, $XX new of aggregate our and plans. million receivable of several accounts approximately as part

call like quarter back Now before the discuss third would I to Ron, our to guidance. hand I XXXX

QX basis, For of quarter sequential decline million the a be the to transition third -- $XXX revenue partially expect assets of total a result year-over-year reflects of of sale million. a exit our as volumes aforementioned offset guidance On quarter revenue. the of to On QX of COVID-XX revenue XXXX, in third transition -- revenue the $XXX be quarter improving of third revenue lower XXXX, our to attributable range from of we primarily absorption quarter volumes basis, well exit. asset our XXXX, to and our impacted is the compared sale the of expected by to negatively as the of as with

Given annual the maintaining we suspension XXXX the COVID-XX, guidance. are our uncertainty of surrounding

the our year. like balance would to I expect reiterate of we for will that impact the performance factors However, this

on impact performance. that COVID-XX we XXXX. results customer had caution, to market and as volumes effect outbreaks the half impact and in QX expect We First, in the could second improving continuation the our most of have financial discussed, of adverse before however, further COVID-XX our of

and XXXX. continue as we quarter impact of statement revenue we'll work second these of exit half contracts the of transition second -- see through of the to Second,

capacity operating policy year. improving expected cash liquidity Third, to our And structure, and stranded improved the we performance are to made our with costs the gross lead have to is finally, EBITDA our associated and flow. margin allocation of the prioritize adjustment our and half cost adjusted in including revenue capital eliminating margin second to transition

We XXXX. focus in November initiative to announced our improvement continue on liquidity back

announced XX of originally targeted of of noncore $XXX as million million proceeds sales we of divestitures the to to part from support date an $XXX the next to Since the then, will have million $XX had million $XXX plan over noncore I months. part certain million in completed assets. With asset the and $XXX initiative, over turn our pursue As of company in sale the back incremental strategy Ron. Ron? that, to call

Ron Cogburn

Shrikant. Thanks,

turn I the #XX. let's to Slide response our would COVID-XX Now briefly like to pandemic. review to

constantly customers situation, and way. while organization, team evolving health our and an safety have As our a the to of key remained our sustainable priorities this adapting in serving

teams and and FTEs Our gross the also our quickly demand the our to impact. to deliver response to operational nearly our by half of while levels react have our match demand or enabled mitigate in to us recent rapid We XXXX -- response during X,XXX capacity customers, heads service to environment. first operating the uninterrupted adjusting margin X% reduced

our of we well consideration increasing during up will and is ensuring Looking the bench our extremely based this monitoring nature for pandemic XXXX. growth recover in We're unprecedented highest demand ahead, situation. continue level adapt of of and on team are evolving to delivery. time to continue meet volume closely customers to the second our we that of strength, stepping service with half very the when expected this positioned to in provide the the proud of I'm

the between study, walk of study Solutions is coder and This I progression Slide volumes provider to X you case Healthcare of in Now to March very let's June important. our weeks case business would XX. our the like #XX. reviews turn through which a

the hold. take to week in beginning see, can started of the experienced pandemic drop-off the March XX, significant the volumes of you as we shock As a

resurgence health from return with provider to care to approximately Our before currently April end Based beginning the the alone. the and started of of million Healthcare June, volumes and procedures, X the of at and adapt week in patients levels release. April we providers pent-up to to medical volumes beginning we The in in started -- the gradually height elective XX seeing what elective weeks demand through for the is trends X, our business, are QX the trough in continued recover as procedures. decline the XX these estimate of on just we business units of May the hitting see pandemic the of

Now pent-up revenue in the this we Healthcare next drive help expect demand to our quarters. growth few

We also coding improving volumes continue our indication XXXX. health back care, confidence payments. other increased similar good providing give provider trends to businesses believe in of services the a recovery as and of many the see is recovery in across is we such where Exela us for results These to half essential expect the

reviewing Now our improved to let's Slide cash #XX objectives income XXXX flow. turn key by and conclude to drive and operating

away the are before traditional our upfront the as acquired First, businesses to where the you no carried which contracts the is model there need we minimal accelerating is and where need working you to later working payroll be of collect FTE FTE-based then where cost front the capital-intensive collecting services and first revenue. capital cost alignment that since are model, the revenue the from less heavy is XXXX,

the transition XXXX. stranding the by related these effort, end QX revenue revenues of to and will As continue XXXX of of exit end costs part the eliminate we by this to

also for continue our optimize line management from revenue to position maintain manage profitable has an will post-COVID-XX environment. of the our environment down increased demand a evolving prepare growth focus Exela incremental COVID-XX. to headcount and the and light in with stable per FTE We metrics in our

care are within This core on to provide and banking, we expanding target customers we financial margins focused and the our related where with of gross new includes Second, goal, mission-critical XXXX. business driving existing industry achieve to segments experienced adjusted solutions. insurance services, EBITDA we like first growth and closely in health and our

sales. including work-from-home for strong our In office, from home of such addition, part DMR as new the place, you will continue we demand means any to can which convert solutions, work as

also launched saw and solutions DrySign. recently are newly sales our like We with management effort our human capital expanding what you most our

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

we Third, target achieve total will liquidity to $XXX million. of look a

will asset via we part As to nonstrategic businesses this exit of sale. continue effort, certain

to results backdrop. million. Our a challenging of goal for is incremental this are to light In with quarter process to in the million through million of $XXX proceeds $XXX of $XXX raise better-than-expected our an million total pleased closing, $XXX we second

Our and in will results. normalized expectations to combined continued our the half XXXX, produce savings positive cost execution initiatives, volumes of of with return for the a focus the second continued

incredibly deep for business of global We automation uncertain are into gain domain This confident proud and team solutions the that concludes formal that, for process we Exela economic questions. will share all our enable us in open expertise the members to to line commitment our environment. our unique their with end-to-end customers up market please of this our Operator, I'm serve. comments.

Operator

[Operator Unum. Instructions]. question David And comes our first Foropoulos from today from

David Foropoulos

those clarity? I'm paid give a have Or just reduction are Is are. Or permanent X% what people you looks are that can more I'm there in permanent? on it little -- like still workers. So as Are reductions? the furloughed these furlough? possibly curious a just economics -- getting headcount. you so

Shrikant Sortur

the that the levels particularly optimization, They the not the on furloughed we QX. and that's -- that we getting as do being question. X% employees. looking how activity no David, bench. you're we for to flexibility The is term the is operational It's That's a how thanks or for better we for at, have manage made full revenues. mostly payment there are call

David Foropoulos

increase, payroll? volumes your of on like... these as come -- will these theoretically, the back Kind employees So

Shrikant Sortur

Absolutely. That's right. Yes.

David Foropoulos

Okay.

Great. there. flexibility some have you So

on cadence through I as talked went gross the Can guess, improved profit exited what we quarter costs questioning provide the you meaningfully that from about -- would like of and of margin X can I on this Can impact to talk profit you follow-up the margins, a as part of question as you questions. June. that -- question, have I'm the that? they second stranded quarter -- this percentage? gross just the So review your you gross pretty kind part profit you And margin about is, double

Shrikant Sortur

right? Yes. impact are David, breakout stranded specific we let that from are But on let's stranded have working -- not okay, last this cost. kind not said it the and way. that's focus line bottom about the we again, for quarter, important if improving also this, focusing line gross costs top us. -- margins the a getting when do on It's for results driven talked it say system, by we have We gross there out paramount a of were the revenue, we me -- without just on growth Obviously, of margin impact. profitable

in margins. XX% last a not to XX% at range. talked higher XX%, give I'm X% Now cost from you've the apart to about, in we think ideal in were X%. optimization margins on grow is cost were past, that margins the sure structure a knew -- the laser I of XX% to the from should with X% at said and to going the of that our QX to wanting focus from XXXX, we alignment revenue to going But QX margins apart that Again, to from make XXXX gross call, we particular as again, having the impact the we be and

This two, and that, we've I see remarks, optimization -- optimization; revenue, in we to on pleasing it -- is, explained And stranded you'll number down. costs whatnot, one, you and and focused will have weekly that the fixed Yes, I'll more an costs give or of world that back Since are off not very come my that We as transition margins. what that as now has our stranded on in, nature monthly facility-related where been mandated glad there's slowly. that are could cost up to has where XX.X%. the base said, June it goes either are are the are we I example to element reverse. just costs, optimizing it's that XX% savings and in Very current cushions potential also had initiatives. headcount, we our operating almost May that on costs in we the operational related clear trend coming back prepared QX, -- to, contracts

of kind answer, but it's yes. long So

David Foropoulos

Right.

be XX% clear, you at gross there? June Now margin in to exited

Shrikant Sortur

That is correct.

Operator

from Schutz And from Capital. your next question Mendon Anton comes

Anton Schutz

Yes. worst that what it look work-from-home the as firm How new up? as of as clients? as well does does there picking ongoing we're like work your COVID-XX? possibility positive initiatives could a Is past home well affect your from contributor initiatives once a really business And be

Ron Cogburn

this Ron. Anton, Those questions. great is are

home So geographies day, we platforms pandemic strength the height were flexibility not end able and push in the a environment. work-from-home the at initiatives have. pivot demonstrated the at workers the of that to, the of the to many where to currently you to Like and companies, we could of come an office,

certain built So in of amounts efficiencies. we have

environment, their a home Mailroom, DrySign let's have to you But day, being and for continue. use efficiency cost efficiency we're part our at and think able our workforce remotely current office to awaiting or at just which have facilitate of platforms. there about they to for the Digital be house, levels remote our the when of be all a can like anywhere they able that kind or remote be operate anxiously be worker, sitting benefit the of target applications, to you that call was and launched, that which consideration like to don't a saw efficiency We above what certainly our that can because we kind post-COVID to will them worker a homeworker have specifically call on

the conversations. Our same customers have

of on offices us until our came QX said, and we're look, customers to Some of not to early our open going XXXX.

not read to Some have said until XXXX. have QX open some of you've going -- about, said, they're and

the So challenge the thing biggest receiving they're they the biggest sending of is, mail. have, and

a stepped think that can users a their up. in location, remote environment. I public, are look, And customers, result our tool I from the almost Mailroom now of employees we're Mailroom last Digital all which at And difference. XXX,XXX makes saying, do saw, as a solutions So it's this is a we our figures this and just the Digital

Operator

Our from Allen question Capital. comes Point Kato next Beach from

Allen Kato

guess, the like I of about from it QX, even at X,XXX, I bench to headcount looks when first, including people that look declined end QX QX. the of by and at

So to new think of about? kind XX,XXX the is right normal

Shrikant Sortur

Shrikant. Allen, this is

obviously, as take me to back right, other. It normal. one But then, to a pre-COVID to there's come know, new if way or the were be levels, you the going that question. volumes adjustment Let is

in cost about. number. I goes, We -- peg on to savings, want current good bring at efficiencies that's to to onto wouldn't will far utilization continue cost management It's but initiatives to still be number a the focused as think volumes, as that

Allen Kato

it. Got

Sorry.

So if a would recover, rehire -- were is time? there you'd revenues possibility potentially around have people to to over X,XXX it

Shrikant Sortur

said, Yes. to X,XXX be want to line increases the in a Like don't that It's with going we volume say see. number. I as I

Allen Kato

then that it. guys mentioned you Got it. Got Okay. And August was X, Q, think I million. liquidity around in $XX the

offset slightly. most the So the it coupon of million end like at of $XX it's July looks July but that's payment, versus down

So when kind creation a function in intra-month? and of receivables the spike payables on made a of receivables should that partially as we or interpret timing are

Shrikant Sortur

is. That's It's working capital exactly it what movements.

Allen Kato

it. Got Okay. Yes.

being from quarter $XX think add-backs we slide? other costs should of and baseline per the kind $XX margins, EBITDA charges there the and on about O&R the XX% to grow transaction then And a being as on Okay. million million based with

Shrikant Sortur

way. it, put deck, There's at but look let have correct. could enough material is we guided, this Allen, again, where on it think can earnings if it. you the not you about me That

up baseline perspective, to a normalized your You right yes, from expectations onetimers. data. our now look point, at other it'll the that's are go From than there. And

Allen Kato

impact the amount I can if any you stranded us the this, of you give previous is still think the give And approximate it. business? on embedded in the costs, can't caller quantification asked or about the there estimate margin Got but that's dollar

Shrikant Sortur

Okay.

customers. of We gross next. the at have and talked very couple when comes So first about a But me process you related transition We I'll the the certain small about example. revenue, individual it to we it's give this a for to follow. revenue, quick costs look transition quarters, When that of revenue talk right? it a margin comes let stranded

Once a what's the mix, And customer optimize goal. each margins could won our to of growth. contract the -- We quite from factor it know That's on threshold we can want business the things revenue as grow of this needs a It's that could be right? or be, work in with to like margin customer-by-customer well, our have to what than more basis. line the future you value. We to honestly, the as gross a we often differ it we at. business

want work all our it but customers was involved margin not a in optimizing say not. with With it's Transition I again, margin sometimes works, timing revenue like Now focus and X on usually the specific, when in that There's mind, or gross the It's goes Usually, it liquidity growth drop. and we do mix, make is on growth. spend to this mutually to transition or a the to It's personnel month LMCE a unpack is the the LMCE, headcount a let exit. tends example, print agreed part. of or let's a it customer example that, The later. In It headcount LMCE, for the amicable In a transition. articulate was like facility. situation would take is away. that the easy me better, to situation I In the like impact. an use this. right, -- explain. sometimes to to example -- be could general

equipment, this We lease the the the maintenance, exit have revenue, is operating be It cost, none commitments. we could going facility When that certain of costs, away. maintenance, costs. utilization, actually lease

or build exit of way stranded have costs absorb or certain for facility the out the the or -- options to a those higher-margin We longer figure take we out, the X cost consolidate period until in that bring of the can either to X customers there, capacity system. out

that It the like which stranded cost So backdrop, of why not a within really your simple It's percentage. the a what's range when we there's being a impact on certain function margin, work. question it's that's like varies. a

Allen Kato

Got Okay. it.

margin. and the fluid contracts can in of individual customer of potentially -- kind depends it's terms and you as what on So gross to get

Shrikant Sortur

Yes. Yes.

Allen Kato

Got question. back last circling it. liquidity, to Okay. then And

So with August within think paid guys you capital in the I June $XX working And month end roughly. from ended of the you then you July the of decline kind talked X. of to about million July, coupon. $XX being million seasonal of liquidity, But the bond

so Is liquidity lot to collection? a the Any quickly kind end So be the snap would of color at or back flow of how month? of it helpful. that I guess receivables cash did just free on

Shrikant Sortur

the It's in as and swings. facilities million well. capital availability the have our on the In Q, between have a you mix. the was It's may we It's a $XX seen mix. It's cash working split free cash XX-Q, flow. facility. And

all availability will see as -- tend of facilities tend So a under It's -- our fluctuate well. that combination you to revolvers to revolvers our three.

Operator

Our comes from question Yim Howard next Avenue from Capital.

Howard Yim

the the availability X additional says as on the Just on borrowing it million of for And AR facilities. August a follow-up of of It then X, under few also source from Page company has Q that drawn liquidity that fully question August $XX.X says lines that on liquidity the the a X. remaining down, facility.

million So is $XX.X AR from August else? as something facility? capacity it the Or just clarify, X, for remaining of to is that

Shrikant Sortur

of doing AR for well. is Yes, but first in asking. down Howard, the just -- it's Thanks U.S. slating all,

Let availability facilities other under me as clarify. It's our global just well.

Howard Yim

Got it.

as of okay. -- So

maybe so have just it So correct. I

facility AR out? of is August X, as fully So maxed your

Shrikant Sortur

check. AR fluctuates the on I are from was $XX maybe AR depends breakup the the I'll have much facility, it our as a can to don't. on and there borrow we It way that available million days to how don't when works, double have day. from specific the we Technically, day, the on collections base and loan availability. AR every related base borrowing the The and Howard. borrowing

Operator

from next Baglanis question James And ExodusPoint. comes our from

James Baglanis

about the can One for long And we And short that more potential is term and bit talk initiative? just the question of Vocalink Mastercard think follow-up me kind then there. term? and I'll for both the the just how from about you a in and it

Ron Cogburn

Yes. Thanks, This James. Ron. is

this about excited relationship. really we're So

the technology all the provide platform U.K. probably of Pay had that we read the banks. I all development validated Request to Pay.UK to Mastercard you recently think where to in of terms

with to to as same plans host BXC these And well. is be So agreement going the with -- U.K. offer markets. then this is current Exela e-commerce. to to our BXB other in for its banks U.K. to solutions in -- the first we focused solutions these the customers solutions have and market

all about assets have forms of broader a that, other payments. bit will we on update rollouts and little plans the We other digital of the of things the these in countries and a later have kind in terms like

James Baglanis

a Okay. Is or transactional-based of on stream paid you get Understood. I a subscription to revenue how this? do But more it customers? guess, your

Ron Cogburn

question. That's a good

So business-process-as-a-service. we have -- this called is

So you a have and have you a SaaS component. service component

So there's a base. subscription as transactional base well as a

James Baglanis

Got it.

where, to am is, more to one expansion guess too, think far that, Or going new you I And about Does this markets should bought presence? had guess, it of Mastercard the Vocalink before expand too on Okay. as getting here? myself as, other just I like geographies ahead a look that? I I large

Ron Cogburn

No. No.

I right a think it's question.

opportunities relationship Vocalink years. presented themselves. So to have different we gone have with And have had geographies the a with many the we when them for

larger this footprint Mastercard, for by a opened up acquisition the With us.

XX So we countries have we're right in -- customers now.

other we're the to going about, serving, we are at And in with have. that partner opportunities not a we're that then geography Vocalink So there we're currently look certainly, if to excited to customer Mastercard, that. going base first,

James Baglanis

thing Makes a you last product? BXB do is, or a sense. for this And me being bigger BXC envision product then bigger

Ron Cogburn

and sort many see what BXB bread been I for has of butter Well, years. lots is of you'll think our

rollout a home to are like of be the environments you has assets that's information going in enabled that wherever will, got digital function DrySign, to might clearly of the lots the we've be. play they distance consumer, or BXC if to instance, remote that for able So be because or so or

year to plans assets later these around So announcements we look forward and digital market those. to you our more and this can look forward

James Baglanis

to forward future updates. looking And Great.

emerging is angle think payments I really interesting there. the

Ron Cogburn

You bet. you. Thank

Operator

time, ladies back end I'd today's any and session. Cogburn conference call turn this like And for the Ron we'll closing to to gentlemen, question-and-answer at over remarks.

Ron Cogburn

the really We the participating Jamie. We questions. QX appreciate today call. appreciate in Thanks, everyone

on the reach your As to invitation fall. to always, if get the call didn't questions everybody forward QX Thanks, And there's answered. we later everyone. look open out seeing you an in off-line,

Operator

thank do call. conclude And attending. conference we'll today's ladies with We for and gentlemen, you that,

now disconnect may You lines. your

Exela (XELA) 11 Aug 202020 Q2 Earnings call transcript