XBP Europe Holdings, Inc. Reports Third Quarter 2024 Results
XBP Europe Holdings reported Q3 2024 financial results with revenue of $35.4 million, showing a 5.6% year-over-year decrease but a 5.5% sequential increase. The company achieved significant improvements in profitability metrics, with gross margin increasing to 32.6% and operating profit reaching $2.5 million. The Bills & Payments segment generated $24.6 million in revenue, while the Technology segment contributed $10.8 million. Despite operational improvements, the company recorded a net loss of $2.8 million, including $0.7 million in FX losses. Adjusted EBITDA from continuing operations rose to $4.8 million, marking a substantial year-over-year improvement.
XBP Europe Holdings ha riportato i risultati finanziari per il terzo trimestre del 2024 con un fatturato di 35,4 milioni di dollari, evidenziando una diminuzione del 5,6% rispetto all'anno precedente, ma un aumento del 5,5% rispetto al trimestre precedente. L'azienda ha raggiunto miglioramenti significativi nei parametri di redditività, con un margine lordo aumentato al 32,6% e un utile operativo che ha raggiunto 2,5 milioni di dollari. Il segmento Bills & Payments ha generato un fatturato di 24,6 milioni di dollari, mentre il segmento Technology ha contribuito con 10,8 milioni di dollari. Nonostante i miglioramenti operativi, l'azienda ha registrato una perdita netta di 2,8 milioni di dollari, inclusi 0,7 milioni di dollari di perdite da cambio. L'EBITDA rettificato dalle operazioni continuative è aumentato a 4,8 milioni di dollari, segnando un sostanziale miglioramento rispetto all'anno precedente.
XBP Europe Holdings reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 35,4 millones de dólares, mostrando una disminución del 5,6% en comparación con el año anterior, pero un aumento del 5,5% secuencialmente. La compañía logró mejoras significativas en los indicadores de rentabilidad, con un margen bruto que aumentó al 32,6% y un beneficio operativo alcanzando 2,5 millones de dólares. El segmento de Bills & Payments generó 24,6 millones de dólares en ingresos, mientras que el segmento de Technology contribuyó con 10,8 millones de dólares. A pesar de las mejoras operativas, la compañía registró una pérdida neta de 2,8 millones de dólares, incluyendo 0,7 millones de dólares en pérdidas por tipo de cambio. El EBITDA ajustado de las operaciones continuas aumentó a 4,8 millones de dólares, marcando una mejora sustancial en comparación con el año anterior.
XBP 유럽 홀딩스는 2024년 3분기 재무 결과를 발표하며 매출은 3,540만 달러라고 밝혔습니다. 이는 전년 대비 5.6% 감소했지만, 전 분기 대비 5.5% 증가한 수치입니다. 회사는 수익성 지표에서 유의미한 개선을 이루었으며, 총 마진이 32.6%으로 증가하고 운영 이익이 250만 달러에 도달했습니다. Bills & Payments 부문은 2,460만 달러의 매출을 올렸고, Technology 부문은 1,080만 달러를 기여했습니다. 운영 개선에도 불구하고, 회사는 280만 달러의 순손실을 기록했으며, 그 중 70만 달러는 외환 손실입니다. 지속적인 운영에서 조정된 EBITDA는 480만 달러로 증가하여 전년 대비 큰 개선을 보였습니다.
XBP Europe Holdings a annoncé les résultats financiers du troisième trimestre 2024 avec un chiffre d'affaires de 35,4 millions de dollars, enregistrant une baisse de 5,6% par rapport à l'an précédent mais une augmentation de 5,5% par rapport au trimestre précédent. L'entreprise a réalisé des améliorations significatives des indicateurs de rentabilité, avec une marge brute passant à 32,6% et un bénéfice opérationnel atteignant 2,5 millions de dollars. Le segment Bills & Payments a généré un chiffre d'affaires de 24,6 millions de dollars, tandis que le segment Technologie a contribué avec 10,8 millions de dollars. Malgré ces améliorations opérationnelles, l'entreprise a enregistré une perte nette de 2,8 millions de dollars, y compris 0,7 million de dollars de pertes de change. L'EBITDA ajusté des activités poursuivies a augmenté à 4,8 millions de dollars, marquant une amélioration substantielle par rapport à l'année précédente.
XBP Europe Holdings berichtete über die finanziellen Ergebnisse des 3. Quartals 2024 mit einem Umsatz von 35,4 Millionen USD, was einen Rückgang von 5,6% im Vergleich zum Vorjahr, jedoch einen Anstieg von 5,5% im Vergleich zum vorherigen Quartal zeigt. Das Unternehmen erzielte bedeutende Verbesserungen in den Rentabilitätskennzahlen, wobei die Bruttomarge auf 32,6% anstieg und der operative Gewinn 2,5 Millionen USD erreichte. Das Segment Bills & Payments generierte 24,6 Millionen USD Umsatz, während das Segment Technology 10,8 Millionen USD beisteuerte. Trotz betrieblicher Verbesserungen verzeichnete das Unternehmen einen Nettoverlust von 2,8 Millionen USD, einschließlich 0,7 Millionen USD in FX-Verlusten. Das bereinigte EBITDA aus fortgeführten Aktivitäten stieg auf 4,8 Millionen USD, was eine erhebliche Verbesserung im Vergleich zum Vorjahr darstellt.
- Gross margin increased significantly by 800 bps YoY to 32.6%
- Operating profit improved by $2.2M YoY to $2.5M
- Adjusted EBITDA increased 116% YoY to $4.8M
- Sequential revenue growth of 5.5% quarter-over-quarter
- Revenue declined 5.6% YoY to $35.4M
- Net loss of $2.8M in Q3 2024
- Technology segment revenue decreased 10.8% YoY
- Bills & Payments segment revenue declined 3.1% YoY
- Higher capital expenditures at 2.0% of revenue vs 0.7% in Q3 2023
Insights
The Q3 2024 results present a mixed financial picture. While revenue decreased
The planned divestiture of the unprofitable on-demand printing operation (negative EBITDA of
The technology segment's performance raises some concerns, with revenue declining
The accelerated cloud migration costs impact operating expenses but position the company for future scalability. The rising backlog mentioned by management, combined with the G-cloud 14 framework opportunity, indicates potential future growth. The focus on expanding technology sales amid digital transformation trends could drive recovery, though the current performance suggests careful execution is needed.
Third Quarter Highlights
- Revenue of
$35.4 million , decrease of5.6% year-over-year and increase of5.5% sequentially - Gross margin increased to
32.6% , a 800 bps increase year-over-year and 1,300 bps increase sequentially - Operating profit of
$2.5 million , an increase of$2.2 million year-over-year and$3.8 million sequentially - Net loss of
$2.8 million includes$0.7 million of FX losses, a decrease of$0.1 million year-over-year and$2.0 million sequentially - Adjusted EBITDA from continuing operations of
$4.8 million , an increase of$2.6 million year-over-year and$3.6 million sequentially - Announced plans to divest on-demand printing operation
LONDON and SANTA MONICA, Calif., Nov. 12, 2024 (GLOBE NEWSWIRE) -- 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 of5.6% year-over-year and an increase of5.5% 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 of3.1% 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 of10.8% year-over-year, largely due to lower license sales offset by implementation and professional services revenue.
- Bills & Payments segment revenue was
- 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 or116% compared to$2.2 million in 3Q 2023. Adjusted EBITDA margin was13.7% , an increase of 770 basis points from6.0% in 3Q 2023. - Capital Expenditures: Capital expenditures were
2.0% of revenue compared to0.7% 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 Measures
This 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 Europe
XBP 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 Sheets
As 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 | 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 | 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 | — | — | ||||
| Common Stock, par value of | 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 Operations
For 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 Flows
For 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.
FAQ
What was XBP's revenue in Q3 2024?
How much was XBP's operating profit in Q3 2024?
What was XBP's Adjusted EBITDA in Q3 2024?
What was XBP's gross margin in Q3 2024?
