Consolidated Statements of Cash FlowsFor the years ended December 31, 2024 and 2023(in thousands of United States dollars) Years ended December 31, 2024 2023Cash flows from operating activities Net loss$(12,366) $(11,047)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 2,965 3,467Amortization of intangible assets 750 384Debt issuance cost amortization 216 —Impairment of goodwill 87 —Credit loss expense 16 343Changes in fair value of warrant liability (43) (597)Stock-based compensation expense 1,611 —Unrealized foreign currency losses (gains) 2,428 (616)Change in deferred income taxes (247) (422) Change in operating assets and liabilities Accounts receivable 9,568 5,990Inventories 240 (58)Prepaid expense and other assets 2,297 2,123Accounts payable (365) (2,417)Related party payables (8,446) (843)Accrued expenses and other liabilities (4,848) 2,629Deferred revenue 1,099 67Customer deposits (189) (538)Net cash used in operating activities (5,227) (1,535) Cash flows from investing activities Purchase of property, plant and equipment (1,263) (2,330)Cash paid for costs of fulfilling a contract — (339)Additions to internally developed software (447) —Net cash used in investing activities (1,710) (2,669) Cash flows from financing activities Borrowings under secured borrowing facility — 87,635Principal repayment on borrowings under secured borrowing facility (79) (91,662)Borrowings under 2024 Term Loan A Facility 3,834 —Borrowings under 2024 Term Loan B Facility 11,360 —Borrowings under 2024 Revolving Credit Facility 15,352 —Cash paid for debt issuance costs (1,527) —Principal payments on 2024 Term Loan A Facility (383) —Principal payments on 2024 Term Loan B Facility (1,136) —Principal payments on long-term obligations (15,270) (920)Proceeds from Secured Credit Facility 930 223Principal payments on finance leases (635) (786)Proceeds from Business Combination, net of transaction expenses — 5,205Net cash provided by (used in) financing activities 12,446 (305)Effect of exchange rates on cash and cash equivalents (308) 3,941Net increase (decrease) in cash and cash equivalents 5,201 (568) Cash and equivalents, beginning of period, including cash from discontinued operations 6,905 7,473Cash and equivalents, end of period, including cash from discontinued operations$ 12,106 $ 6,905 Supplemental cash flow data: Income tax payments, net of refunds received 567 1,059Interest paid 3,429 1,798 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 Twelve Months ended December 31, ($ in thousands) 2024 2023Revenues, as reported (GAAP) 142,772 155,177Foreign currency exchange impact (1) (1,055) - Revenues, at constant currency (Non-GAAP) 141,717 155,177 Reconciliation of Adjusted EBITDA from Continuing Operations Year Ended December 31, (dollars in thousands) 2024 2023Net loss from continuing operations $(6,533) $(5,568)Income tax expense 2,911 606Interest expense including related party interest expense, net 6,322 7,006Depreciation and amortization 3,160 2,944EBITDA from continuing operations 5,860 4,988Restructuring and related expenses (2) 1,879 5,053Employee litigation matter (3) 1,283 1,431Related party management fee and royalties (4) — 1,330Foreign exchange losses, net 2,520 599Non-cash equity compensation (5) 1,611 —Changes in fair value of warrant liability (43) (597)Transaction Fees (6) 280 2,970Adjusted EBITDA from continuing operations $13,390 $15,774 (1) Constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the year ended December 31, 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 litigation settlement and associated expenses incurred in connection with the Company subsidiary litigation.(4) Primarily represents management fee incurred in exchange for services, which included provision of legal, human resources, corporate finance, and marketing support.
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”).
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