Exela Technologies, Inc.

Good day and welcome to the Accela Technology fourth quarter 2022 financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Vince Condavidi. Please go ahead.

Thank you, Dave, and thank you, everyone, for dialing in to discuss our fourth quarter annual results for the period ended December 31st, 2022. Earlier, our earnings release and presentation were posted to our website. Speakers on today's call are Par Chadha, Executive Chairman, and Srikanth Sotar, our Chief Financial Officer. Today's agenda will be similar to previous calls. Paul will provide an overview of our results and update you on our strategic initiatives, and Srikanth will walk you through our financial performance. We've been in communication with many investors via SpeakUp, and we hope that you're finding it useful. We expect this call to last under an hour. Some of the matters we will discuss in today's call are forward-looking and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from the to those in such forward-looking statements. Such written uncertainties are set forth in our press release. And with that, I'll turn over the call to Par, our Executive Chairman. Par?

Thank you. Good evening, and thanks for dialing into our call. We managed to accomplish many of our objectives that we set out for 2022. However, I'll be remiss in not pointing out this was a very challenging year for us. Through all this, we maintained our focus to make operational improvements and balance sheet improvements. I'll cover that along with jury content in some more detail in our presentation today. Let's start with slide number three. Let me call out some highlights for our shareholders familiar with Accella and our new shareholders. Accella is a leader in business process management solution with 1.1 billion in revenue, proven track record in many of the services we offer, referenceable customers, I'd like to point out some of the stats have changed. Because we adopted work from anywhere business model, it has led to some positive reduction of operating facilities worldwide. We also were able to reduce our overall headcount. Now we stand at 16,000 people strong. We added some new services that you see in the box on the right, data science and analytics, hyper automation, work from anywhere, finance and accounting are some of the additional services that were smaller that are beginning to grow. These investments we hope will add to our profitable revenue growth in future periods. And that's an example of our award-winning services solutions from our customers. Let's switch to slide number four. We are proud of the fact XBP Europe solutions reach most of the populations in key markets. Our goal in 2023 and beyond is to leverage the foundation we have built over many years for further profitable growth. More on that later also. Let's switch to, let's look at slide number five. Many of the industrial research organizations that cover our industry are beginning to cover Accela over the last several years since we went public. In that period, we have won many awards, recognitions, and some of our services are moving up in the food chain, into the box, sometimes referred as the magic quadrant. Our goal, focus, is to achieve more of the solution of services into the box. It's a very important endorsement of our strategic value proposition and that we are confirmation that we are on the right path. This extra seal of approval is also important for our new customers acquisitions and for our existing customers as they look to vendors for new service offerings. You can count on us to keep this in our focus. Let's look at slide number six, please. Our revenue for 2022 came in at $1.077 billion. And our EBDA, adjusted EBDA, came in at $139.9 million. 7.7% revenue drop, while revenue dropped only 4% if you exclude the impact of rising costs, including inflation, tight job market, business mix, rising dollar, which was very negative against us this past year, and one-time events. I refer to the network outage that we suffered in the middle of the year. Our annual revenue, I'm sorry, our adjusted EBDA was materially impacted as well to the tune of $33.4 million. In addition to the cost management that we shared with you earlier in the quarter, the first quarter of this year, the operational improvements we are working on in the range of 65 to 75 million are primarily meant to improve our earnings over 2021 for 2022. However, the macro events and the one-time events made our actions less potent. With these actions still continuing, we hope to do better in 2023 and restore our adjusted EBDA percentage to historical levels. That means prior to 2022, when our margins were much better. In 2022, our ITPS and healthcare services segment both demonstrated good wins for our services. Healthcare segment grew 10.9%, while ITPS was lower by 12.9%. We are very, we are particularly happy with the progress our digital assets portfolio continues to make. I'll cover that in a little more detail further in my presentation. It's hard not to as they continue to clock higher growth rates. It's a good example of value we offer and of course, the success of digital marketing. As you know, we filed the merger proxy with SEC for pending merger with NASDAQ and the NASDAQ listing for our XPP Europe business and look forward to unlocking the value that will accrue to our shareholders. We continue to be the largest holder owner of that issue by a subsidiary Excel Intermediate, we added a little more in the first quarter of 2023 by purchasing some of the 2023 notes. The other very important item to note is that we, in 2022, reduced our debt by $141 million. But the total amount of debt we either purchased or distinguished or modified was over $296 million, broken up into $162.9 million that was due in 2022 and $133.3 million that was due in 2022. Considering the macro rent, this was not an easy task. but we accomplished and there is more for us to do. Let's switch to slide number eight. What's our objective for 2023? Our goal for 2023 is to reduce our debt in the range of 250 to 500 million. This is incremental reduction to what we did in 2022. We are in discussion with certain lenders to accomplish this. With the support of Accela entities, we will be able to accomplish a smaller quantum of production. However, with the support of our lenders, we can accomplish a much larger quantum of production. That's our goal. And if we succeed, we would have achieved our objective of having a sustainable balance sheet for Accela Intermediate. As many of you know, but it's important to highlight, this is the only entity in Accela remaining with high leverage, as all other Accela entities are almost debt-free. Let's switch to slide number nine. I'd like to emphasize that our shareholders own both the box on the left and the right. The difference on the box on the right is that it alone has a value of about 390 million and is materially debt-free. And the box on the left, which also you as our shareholders own, our goal there is to enable the company to reduce the debt that's carried by the Accela Intermediate, as I mentioned in my previous slide, which will enable us to start marching towards reducing the deep, deep discount, the deep intrinsic value discount our company suffers. We have much to do to accomplish this. And I hope to share with you those, as shared with those results, as we progress through this year. Let's look at slide number 10. These are impressive numbers, and our goal for 2023 is to finally achieve growth, both in revenue and our adjusted EBITDA. I would be remiss if I did not say barring any new wins. I do not want to visit the hazards of the past three years. where best laid plans were modified or we were not able to meet due to pandemic and many other issues. Let's look at slide number 11. We've done an extensive, as you can see on this slide, extensive amount of work to improve our operations. In summary, our estimate is between 65 to 75 million in savings. We anticipate material amount of these savings will flow through in 2023. In my experience, there is always some movement. And if Mr. Murphy, who struck each of the last three years, does not strike we hope to accomplish a turnaround, both in our operating performance, as well as reduction of interest and reduction of the quantum of debt within the fellow intermediate that has a lot of debt outstanding. I do expect some of these savings will roll into 2024. Our strategic goal with these actions is to get back on track before, where we were before the pandemic and the economic uncertainty that took us off the course. With that, I will hand over to our CFO, Shiri Kansorkar, to discuss additional details about our financials And I'll join you back for questions later.