XBP Europe Holdings, Inc. (“XBP Europe” or “the Company”) (NASDAQ:
XBP), a pan-European integrator of bills, payments, and related
solutions and services seeking to enable the digital transformation
of its clients, announced today its financial results for the
quarter ended September 30, 2024.
“Our focus on expanding technology sales and cost structure
optimization contributed to our performance in the quarter. Our
backlog is rising, and we are ramping up prudently and as fast as
we can. We expect these efforts to result in a continued top and
bottom line improvement. We are additionally excited by
opportunities available to us as a result of being selected for the
UK government’s G-cloud 14 framework” said Andrej Jonovic, Chief
Executive Officer of XBP Europe.
- Revenue: Total Revenue was $35.4 million, a
decline of 5.6% year-over-year and an increase of 5.5%
sequentially, primarily due to completion of projects, lower
volumes, and client contract ends, offset by positive impact of new
business, some of which is in early stage of ramp.
- Bills & Payments segment revenue was $24.6
million, a decline of 3.1% year-over-year, primarily attributable
to lower postage revenue, lower volumes and client contract ends,
offset by the positive impact of newly won business, some of which
is in early stage of ramp.
- Technology segment revenue was $10.8 million,
a decrease of 10.8% year-over-year, largely due to lower license
sales offset by implementation and professional services
revenue.
- Operating Profit: Operating Profit was $2.5
million, compared to $0.3 million in 3Q 2023. This was driven
primarily by higher gross margins coupled with SG&A
improvement. Our operating expenses include costs associated with
accelerated migration to the cloud.
- Net Loss: Net loss was $2.8 million, compared
with a net loss of $2.9 million in 3Q 2023. The year-over-year
decrease was primarily driven by higher Operating Profit, offset by
higher Income tax expense and interest expense.
- Adjusted
EBITDA(1):
Adjusted EBITDA from Continuing Operations was $4.8 million, an
increase of $2.6 million or 116% compared to $2.2 million in 3Q
2023. Adjusted EBITDA margin was 13.7%, an increase of 770 basis
points from 6.0% in 3Q 2023.
- Capital Expenditures: Capital expenditures
were 2.0% of revenue compared to 0.7% of revenue in 3Q 2023, with
the increase primarily due to higher investments for growth during
the quarter versus a year ago.
- Adequate Liquidity: The Company’s cash and
cash equivalents totaled $7.8 million as of September 30, 2024 and
additional funding available under secured borrowing facilities
including the €15 million factoring facility.
Other Highlights:
- Pending Divestiture: During the third quarter
of fiscal year 2024, the Company determined that its certain
on-demand printing operation met the criteria to be classified as a
discontinued operation, and, as a result, disposable group’s
historical financial results are reflected in the Company’s
condensed consolidated financial statements as discontinued
operations and are presented separately from continuing operations.
On a YTD basis, this business had revenue of approximately $6.8
million and negative Adjusted EBITDA of approximately $3.3
million.
Segment Revenue and Profitability:
|
Three months ended September 30, 2024 |
|
Bills & Payments |
|
Technology |
|
Total |
Revenue, net |
$ |
24,555 |
|
$ |
10,845 |
|
$ |
35,400 |
Cost of revenue |
19,402 |
|
4,446 |
|
23,848 |
Segment Gross
Profit |
5,153 |
|
6,399 |
|
11,552 |
|
|
|
|
|
|
|
Three months ended September 30, 2023 |
|
Bills & Payments |
|
Technology |
|
Total |
Revenue, net |
$ |
25,344 |
|
$ |
12,152 |
|
$ |
37,496 |
Cost of revenue |
22,604 |
|
5,637 |
|
28,241 |
Segment Gross
Profit |
2,740 |
|
6,515 |
|
9,255 |
Below is the note referenced above:
(1) Adjusted EBITDA is a
non-GAAP measure. A reconciliation of Adjusted EBITDA is attached
to this release.
Supplemental Investor Presentation An investor
presentation relating to our third quarter 2024 performance is
available at investors.xbpeurope.com. This
information has also been furnished to the SEC in a current report
on Form 8-K.
About Non-GAAP Financial MeasuresThis press
release includes constant currency, EBITDA and Adjusted EBITDA,
each of which is a financial measure that is not prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”). XBP Europe believes that the presentation of these
non-GAAP financial measures will provide useful information to
investors in assessing our financial performance, results of
operations and liquidity and allows investors to better understand
the trends in our business and to better understand and compare our
results. XBP Europe’s board of directors and management use
constant currency, EBITDA and Adjusted EBITDA to assess XBP
Europe’s financial performance, because it allows them to compare
XBP Europe’s operating performance on a consistent basis across
periods by removing the effects of XBP Europe’s capital structure
(such as varying levels of debt and interest expense, as well as
transaction costs resulting from the combination with CF
Acquisition Corp. VIII. on November 29, 2023). Adjusted EBITDA also
seeks to remove the effects of restructuring and related expenses
and other similar non-routine items, some of which are outside the
control of our management team. Restructuring expenses are
primarily related to the implementation of strategic actions and
initiatives related to right sizing of the business. All of these
costs are variable and dependent upon the nature of the actions
being implemented and can vary significantly driven by business
needs. Accordingly, due to that significant variability, we exclude
these charges since we do not believe they truly reflect our past,
current or future operating performance. The constant currency
presentation excludes the impact of fluctuations in foreign
currency exchange rates. We calculate constant currency revenue on
a constant currency basis by converting our current-period local
currency revenue using the exchange rates from the corresponding
prior-period and compare these adjusted amounts to our
corresponding prior period reported results. XBP Europe does not
consider these non-GAAP measures in isolation or as an alternative
to liquidity or financial measures determined in accordance with
GAAP. A limitation of these non-GAAP financial measures is that
they exclude significant expenses and income that are required by
GAAP to be recorded in XBP Europe’s financial statements. In
addition, they are subject to inherent limitations as they reflect
the exercise of judgments by management about which expenses and
income are excluded or included in determining these non-GAAP
financial measures and therefore the basis of presentation for
these measures may not be comparable to similarly-titled measures
used by other companies. These non-GAAP financial measures are not
required to be uniformly applied, are not audited and should not be
considered in isolation or as substitutes for results prepared in
accordance with GAAP. Net loss is the GAAP measure most directly
comparable to the non-GAAP measures presented here. For
reconciliation of the comparable GAAP measures to these non-GAAP
financial measures, see the schedules attached to this release.
Forward-Looking Statements This press release
contains certain “forward-looking statements” within the meaning of
the United States Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Exchange Act, including
certain financial forecasts and projections. All statements other
than statements of historical fact contained in this press release,
including statements as to future results of operations and
financial position, revenue and other metrics planned products and
services, business strategy and plans, objectives of management for
future operations of XBP Europe, market size and growth
opportunities, competitive position and technological and market
trends, are forward-looking statements. Some of these
forward-looking statements can be identified by the use of
forward-looking words, including “may,” “should,” “expect,”
“intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,”
“plan,” “targets,” “projects,” “could,” “would,” “continue,”
“forecast” or the negatives of these terms or variations of them or
similar expressions. All forward-looking statements are subject to
risks, uncertainties, and other factors which could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements. All forward-looking statements are
based upon estimates, forecasts and assumptions that, while
considered reasonable by XBP Europe and its management, as the case
may be, are inherently uncertain and many factors may cause the
actual results to differ materially from current expectations which
include, but are not limited to: (1) the outcome of any legal
proceedings that may be instituted against XBP Europe or others and
any definitive agreements with respect thereto; (2) the inability
to meet the continued listing standards of Nasdaq or another
securities exchange; (3) the risk that the business combination
disrupts current plans and operations of XBP Europe and its
subsidiaries; (4) the inability to recognize the anticipated
benefits of the business combination, which may be affected by,
among other things, competition, the ability of XBP Europe and its
subsidiaries to grow and manage growth profitably, maintain
relationships with customers and suppliers and retain its
management and key employees; (5) costs related to the business
combination; (6) changes in applicable laws or regulations; (7) the
possibility that XBP Europe or any of its subsidiaries may be
adversely affected by other economic, business and/or competitive
factors; (8) risks related to XBP Europe’s potential inability to
achieve or maintain profitability and generate cash; (9) the impact
of the COVID-19 pandemic, including any mutations or variants
thereof, and its effect on business and financial conditions; (10)
volatility in the markets caused by geopolitical and economic
factors; (11) the ability of XBP Europe to retain existing clients;
(12) the potential inability of XBP Europe to manage growth
effectively; (13) the ability to recruit, train and retain
qualified personnel, and (14) other risks and uncertainties set
forth in the sections entitled “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements” in the Annual Reports on Form
10-K filed on April 1, 2024 and, our subsequent quarterly reports
on Form 10-Q and our current reports on Form 8-K as filed with the
Securities and Exchange Commission (the “SEC”). These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements. Nothing in this
press release should be regarded as a representation by any person
that the forward-looking statements set forth herein will be
achieved or that any of the contemplated results of such
forward-looking statements will be achieved. Readers should not
place undue reliance on forward-looking statements, which speak
only as of the date they are made. XBP Europe gives no assurance
that either XBP Europe or any of its subsidiaries will achieve its
expected results. XBP Europe undertakes no duty to update these
forward-looking statements, except as otherwise required by
law.
About XBP EuropeXBP Europe is a pan-European
integrator of bills, payments and related solutions and services
seeking to enable digital transformation of its more than 2,000
clients. The Company’s name – ‘XBP’ stands for ‘exchange for bills
and payments’ and reflects the Company’s strategy to connect buyers
and suppliers, across industries, including banking, healthcare,
insurance, utilities and the public sector, to optimize clients’
bills and payments and related digitization processes. The Company
provides business process management solutions with proprietary
software suites and deep domain expertise, serving as a technology
and services partner for its clients. Its cloud-based structure
enables it to deploy its solutions across the European market,
along with the Middle East and Africa. The physical footprint of
XBP Europe spans 15 countries and 32 locations and a team of
approximately 1,500 individuals. XBP Europe believes its business
ultimately advances digital transformation, improves market wide
liquidity by expediting payments, and encourages sustainable
business practices. For more information, please visit:
www.xbpeurope.com.
For more XBP Europe news, commentary, and industry
perspectives, visit: https://www.xbpeurope.com/
And please follow us on social: X:
https://X.com/XBPEurope LinkedIn:
https://www.linkedin.com/company/xbp-europe/
The information posted on XBP Europe's website and/or via its
social media accounts may be deemed material to investors.
Accordingly, investors, media and others interested in XBP Europe
should monitor XBP Europe’s website and its social media accounts
in addition to XBP Europe’s press releases, SEC filings and public
conference calls and webcasts. Investor and/or Media Contacts:
investors@xbpeurope.com
XBP Europe
Holdings, Inc.Condensed Consolidated Balance
SheetsAs of September 30, 2024 and December 31,
2023(in thousands of United States dollars except share
and per share amounts)(unaudited)
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2024 |
|
2023 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
7,770 |
|
$ |
6,537 |
Accounts receivable, net of
allowance for credit losses of $1,435 and $1,183, respectively |
|
|
24,576 |
|
|
30,238 |
Inventories, net |
|
|
4,056 |
|
|
4,045 |
Prepaid expenses and other
current assets |
|
|
6,912 |
|
|
6,550 |
Current assets held for
sale |
|
|
4,197 |
|
|
2,497 |
Total current assets |
|
|
47,511 |
|
|
49,867 |
Property, plant and equipment,
net of accumulated depreciation of $42,707 and $39,876,
respectively |
|
|
12,284 |
|
|
12,811 |
Operating lease right-of-use
assets, net |
|
|
6,726 |
|
|
5,206 |
Goodwill |
|
|
23,281 |
|
|
22,823 |
Intangible assets, net |
|
|
1,274 |
|
|
1,498 |
Deferred income tax
assets |
|
|
7,689 |
|
|
6,811 |
Other noncurrent assets |
|
|
882 |
|
|
705 |
Noncurrent assets held for
sale |
|
|
— |
|
|
3,018 |
Total assets |
|
$ |
99,647 |
|
$ |
102,739 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
11,271 |
|
$ |
13,281 |
Related party payables |
|
|
5,523 |
|
|
13,350 |
Accrued liabilities |
|
|
22,152 |
|
|
23,850 |
Accrued compensation and
benefits |
|
|
16,623 |
|
|
16,268 |
Customer deposits |
|
|
723 |
|
|
323 |
Deferred revenue |
|
|
6,500 |
|
|
6,004 |
Current portion of finance
lease liabilities |
|
|
26 |
|
|
91 |
Current portion of operating
lease liabilities |
|
|
2,118 |
|
|
1,562 |
Current portion of long-term
debts |
|
|
5,047 |
|
|
3,863 |
Current liabilities held for
sale |
|
|
4,529 |
|
|
3,479 |
Total current liabilities |
|
|
74,512 |
|
|
82,071 |
Related party notes
payable |
|
|
1,559 |
|
|
1,542 |
Long-term debt, net of current
maturities |
|
|
26,406 |
|
|
12,763 |
Finance lease liabilities, net
of current portion |
|
|
— |
|
|
23 |
Pension liabilities |
|
|
11,430 |
|
|
12,208 |
Operating lease liabilities,
net of current portion |
|
|
4,781 |
|
|
3,785 |
Other long-term
liabilities |
|
|
1,720 |
|
|
1,635 |
Noncurrent liabilities held
for sale |
|
|
— |
|
|
1,280 |
Total liabilities |
|
$ |
120,408 |
|
$ |
115,307 |
Commitments and Contingencies
(Note 12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT |
|
|
|
|
|
|
Preferred stock, par value of
$0.0001 per share; 10,000,000 shares authorized; none issued and
outstanding as of September 30, 2024 and
December 31, 2023, respectively |
|
|
— |
|
|
— |
Common Stock, par value of
$0.0001 per share; 200,000,000 shares authorized; 30,166,102 shares
issued and outstanding as of September 30, 2024 and
December 31, 2023, respectively |
|
|
30 |
|
|
30 |
Additional paid in
capital |
|
|
885 |
|
|
— |
Accumulated deficit |
|
|
(21,039) |
|
|
(11,339) |
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
|
(1,609) |
|
|
(1,416) |
Unrealized pension actuarial
gains, net of tax |
|
|
972 |
|
|
157 |
Total accumulated
other comprehensive loss |
|
|
(637) |
|
|
(1,259) |
Total stockholders’ deficit |
|
|
(20,761) |
|
|
(12,568) |
Total liabilities and stockholders’ deficit |
|
$ |
99,647 |
|
$ |
102,739 |
XBP Europe
Holdings, Inc.Condensed Consolidated
Statements of OperationsFor the three and
nine months ended September 30, 2024 and 2023(in
thousands of United States dollars except share and per share
amounts)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue, net |
|
$ |
35,330 |
|
$ |
37,429 |
|
$ |
106,770 |
|
$ |
116,248 |
Related party revenue,
net |
|
|
70 |
|
|
67 |
|
|
217 |
|
|
163 |
Cost of revenue (exclusive of
depreciation and amortization) |
|
|
23,841 |
|
|
28,229 |
|
|
78,769 |
|
|
85,531 |
Related party cost of
revenue |
|
|
7 |
|
|
12 |
|
|
35 |
|
|
75 |
Selling, general and
administrative expenses (exclusive of depreciation and
amortization) |
|
|
6,818 |
|
|
6,846 |
|
|
19,785 |
|
|
21,448 |
Related party expense |
|
|
1,421 |
|
|
1,316 |
|
|
3,527 |
|
|
3,589 |
Depreciation and
amortization |
|
|
804 |
|
|
745 |
|
|
2,387 |
|
|
2,207 |
Operating
profit |
|
|
2,509 |
|
|
348 |
|
|
2,484 |
|
|
3,561 |
Other expense
(income), net |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
1,820 |
|
|
1,246 |
|
|
4,698 |
|
|
3,641 |
Related party interest expense
(income), net |
|
|
23 |
|
|
5 |
|
|
64 |
|
|
(1) |
Foreign exchange losses
(gains), net |
|
|
668 |
|
|
(530) |
|
|
2,016 |
|
|
405 |
Changes in fair value of
warrant liability |
|
|
(5) |
|
|
— |
|
|
(45) |
|
|
— |
Pension income, net |
|
|
(435) |
|
|
(200) |
|
|
(1,278) |
|
|
(589) |
Net income (loss)
before income taxes |
|
|
438 |
|
|
(173) |
|
|
(2,971) |
|
|
105 |
Income tax expense |
|
|
1,664 |
|
|
1,046 |
|
|
2,666 |
|
|
1,523 |
Net loss from
continuing operations |
|
|
(1,226) |
|
|
(1,219) |
|
|
(5,637) |
|
|
(1,418) |
Net loss from discontinuing
operations, net of income taxes |
|
|
(1,543) |
|
|
(1,668) |
|
|
(4,063) |
|
|
(4,533) |
Net loss |
|
$ |
(2,769) |
|
$ |
(2,887) |
|
$ |
(9,700) |
|
$ |
(5,951) |
Loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted - continuing operations |
|
$ |
(0.04) |
|
$ |
(0.05) |
|
$ |
(0.19) |
|
$ |
(0.06) |
Basic and diluted - discontinuing operations |
|
|
(0.05) |
|
|
(0.08) |
|
|
(0.13) |
|
|
(0.21) |
Basic and diluted |
|
$ |
(0.09) |
|
$ |
(0.13) |
|
$ |
(0.32) |
|
$ |
(0.27) |
XBP Europe
Holdings, Inc.Condensed Consolidated
Statements of Cash FlowsFor the nine months
ended September 30, 2024 and 2023(in thousands of United
States dollars)(Unaudited)
|
|
|
|
|
|
|
|
|
Nine months ended September 30, |
|
|
2024 |
|
2023 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(9,700) |
|
$ |
(5,951) |
Adjustments to reconcile net
loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
2,265 |
|
|
2,662 |
Amortization of intangible assets |
|
|
554 |
|
|
289 |
Impairment of goodwill |
|
|
87 |
|
|
— |
Credit loss expense |
|
|
249 |
|
|
271 |
Changes in fair value of warrant liability |
|
|
(45) |
|
|
— |
Stock-based compensation expense |
|
|
885 |
|
|
— |
Unrealized foreign currency losses |
|
|
1,976 |
|
|
215 |
Change in deferred income taxes |
|
|
(761) |
|
|
(357) |
|
|
|
|
|
|
|
Change in operating assets and liabilities |
|
|
|
|
|
|
Accounts receivable |
|
|
5,741 |
|
|
2,874 |
Inventories |
|
|
163 |
|
|
326 |
Prepaid expense and other assets |
|
|
(855) |
|
|
1,125 |
Accounts payable |
|
|
(2,555) |
|
|
(2,599) |
Related parties payable |
|
|
(8,350) |
|
|
(2,246) |
Accrued expenses and other liabilities |
|
|
(1,428) |
|
|
4,758 |
Deferred revenue |
|
|
280 |
|
|
790 |
Customer deposits |
|
|
340 |
|
|
(414) |
Net cash provided by
(used in) operating activities |
|
|
(11,154) |
|
|
1,743 |
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(1,124) |
|
|
(2,254) |
Additions to internally developed software |
|
|
(317) |
|
|
— |
Net cash used in
investing activities |
|
|
(1,441) |
|
|
(2,254) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Borrowings under secured borrowing facility |
|
|
— |
|
|
87,769 |
Principal repayment on borrowings under secured borrowing
facility |
|
|
(79) |
|
|
(90,357) |
Borrowings under 2024 Term Loan A Facility |
|
|
3,830 |
|
|
— |
Borrowings under 2024 Term Loan B Facility |
|
|
11,413 |
|
|
— |
Borrowings under 2024 Revolving Credit Facility |
|
|
15,425 |
|
|
— |
Cash paid for debt issuance costs |
|
|
(734) |
|
|
— |
Principal payments on 2024 Term Loan A Facility |
|
|
(192) |
|
|
— |
Principal payments on 2024 Term Loan B Facility |
|
|
(571) |
|
|
— |
Principal payments on long-term obligations |
|
|
(15,256) |
|
|
(690) |
Proceeds from Secured Credit Facility |
|
|
679 |
|
|
— |
Principal payments on finance leases |
|
|
(282) |
|
|
(660) |
Net cash provided by
(used in) financing activities |
|
|
14,233 |
|
|
(3,938) |
Effect of exchange rates on
cash and cash equivalents |
|
|
(583) |
|
|
(205) |
Net increase
(decrease) in cash and cash equivalents |
|
|
1,055 |
|
|
(4,654) |
|
|
|
|
|
|
|
Cash and equivalents,
beginning of period, including cash from discontinued
operations |
|
|
6,905 |
|
|
7,473 |
Cash and equivalents,
end of period, including cash from discontinued
operations |
|
$ |
7,960 |
|
$ |
2,819 |
|
|
|
|
|
|
|
Supplemental cash flow
data: |
|
|
|
|
|
|
Income tax payments, net of
refunds received |
|
|
424 |
|
|
1,112 |
Interest paid |
|
|
1,869 |
|
|
1,309 |
XBP Europe Holdings,
Inc.Schedule 1: Reconciliation of Adjusted EBITDA
and constant currency revenues
Reconciliation of Non-GAAP Financial Measures to GAAP
Measures |
|
|
|
|
|
|
|
Non-GAAP
constant currency revenue reconciliation |
|
|
|
|
|
Three Months ended September 30, |
($ in thousands) |
|
2024 |
|
2023 |
|
|
|
|
|
Revenues, as reported
(GAAP) |
|
35,400 |
|
37,496 |
Foreign currency exchange
impact (1) |
|
(688) |
|
|
Revenues, at constant
currency (Non-GAAP) |
|
34,712 |
|
37,496 |
|
|
|
|
|
Reconciliation of Adjusted EBITDA from Continuing
Operations |
|
|
|
|
|
|
|
|
|
|
|
Three Months ended September 30, |
($ in thousands) |
|
2024 |
|
2023 |
|
|
|
|
|
Net loss from
Continuing Operations (GAAP) |
|
(1,226) |
|
(1,219) |
Income tax expense |
|
1,664 |
|
1,046 |
Interest expense
including related party interest expense, net |
1,843 |
|
1,251 |
Depreciation and
amortization |
|
804 |
|
745 |
EBITDA from Continuing
Operations (Non-GAAP) |
|
3,085 |
|
1,823 |
Restructuring and related
expenses (2) |
|
316 |
|
309 |
Employment litigation matter
(3) |
|
57 |
|
64 |
Related party management fee
and royalties |
|
- |
|
334 |
Foreign exchange losses,
net |
|
668 |
|
(530) |
Non-cash equity compensation
(4) |
|
725 |
|
- |
Changes in fair value of
warrant liability |
|
(5) |
|
- |
Transaction Fees (5) |
|
- |
|
244 |
Adjusted EBITDA from
Continuing Operations (Non-GAAP) (6) |
|
4,846 |
|
2,244 |
Reconciliation of Adjusted EBITDA from Discontinuing
Operations |
|
|
|
|
|
|
|
|
|
|
|
Three Months ended September 30, |
($ in thousands) |
|
2024 |
|
2023 |
|
|
|
|
|
Net loss from
Discontinuing Operations, Net of Income Taxes (GAAP) |
|
(1,543) |
|
(1,668) |
Income tax expense |
|
72 |
|
- |
Interest expense,
net |
3 |
|
19 |
Depreciation and
amortization |
|
135 |
|
350 |
EBITDA from
Discontinuing Operations (Non-GAAP) |
|
(1,333) |
|
(1,299) |
Restructuring and related
expenses (7) |
|
- |
|
- |
Related party service fees and
royalties |
|
- |
|
- |
Impairment of goodwill |
|
87 |
|
- |
Foreign exchange losses,
net |
|
2 |
|
1 |
Adjusted EBITDA from
Discontinuing Operations (Non-GAAP)
(6) |
|
(1,244) |
|
(1,298) |
|
|
|
|
|
(1) Constant currency excludes the impact of
foreign currency fluctuations and is computed by applying the
average exchange rates for the quarter ended September 30, 2023, to
the revenues during the corresponding period in 2024.
(2) Adjustment represents costs associated with
restructuring, including employee severance and vendor and lease
termination costs.
(3) Represents the litigation settlement and
associated expenses incurred in connection with the Company
subsidiary litigation.
(4) Represents the non-cash charges related to
restricted stock units and options.
(5) Represents transaction costs incurred as
part of the Business Combination.
(6) Supplemental financial measures that are
not required by, or presented in accordance with, accounting
principles generally accepted in the United States (“GAAP”). These
non-GAAP financial measures should not be considered as
alternatives to operating or net income or cash flows from
operating activities, in each case determined in accordance with
GAAP. These non-GAAP financial measures are among the indicators
used by management to measure the performance of the Company’s
operations, and also among the criteria upon which
performance-based compensation may be based. Adjusted EBITDA also
is used by our lenders for debt covenant compliance purposes.
Similar non-GAAP financial measures may be calculated
differently by other companies, including other companies in our
industry, limiting their usefulness as comparative measures.
Because of these limitations, you should consider the non-GAAP
financial measures alongside other performance measures and
liquidity measures, including operating income, various cash flow
metrics, net income and our other GAAP results.
(7) Adjustment represents costs associated with
restructuring related to employee severance.
Source: XBP Europe Holdings, Inc.
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